Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 30, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-31225 | |
Entity Registrant Name | ENPRO INDUSTRIES, INC | |
Entity Incorporation, State or Country Code | NC | |
Entity Tax Identification Number | 01-0573945 | |
Entity Address, Street | 5605 Carnegie Boulevard | |
Entity Address, Suite | Suite 500 | |
Entity Address, City | Charlotte | |
Entity Address, State | NC | |
Entity Address, Postal Zip Code | 28209 | |
City Area Code | 704 | |
Local Phone Number | 731-1500 | |
Title of each class | Common stock, $0.01 par value | |
Trading Symbol(s) | NPO | |
Name of each exchange on which registered | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 20,536,015 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001164863 | |
Current Fiscal Year End Date | --12-31 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Net sales | $ 268.3 | $ 299 | $ 798 | $ 919.2 |
Cost of sales | 173.8 | 201.3 | 525.7 | 613.5 |
Gross profit | 94.5 | 97.7 | 272.3 | 305.7 |
Operating expenses: | ||||
Selling, general and administrative | 73.2 | 77.1 | 214.6 | 235.4 |
Other | 28.8 | 1.5 | 42.9 | 3.9 |
Total operating expenses | 102 | 78.6 | 257.5 | 239.3 |
Operating income (loss) | (7.5) | 19.1 | 14.8 | 66.4 |
Interest expense | (4) | (4.1) | (12.6) | (13.8) |
Interest income | 0.1 | 0.3 | 1.2 | 1.3 |
Other expense | (17.2) | (24.6) | (15.5) | (27.3) |
Income (loss) from continuing operations before income taxes | (28.6) | (9.3) | (12.1) | 26.6 |
Income tax benefit (expense) | 7.3 | 0.9 | (2.2) | (10.6) |
Income (loss) from continuing operations | (21.3) | (8.4) | (14.3) | 16 |
Less: income attributable to redeemable non-controlling interest, net of tax | 0.3 | 0 | 0.5 | 0 |
Income (loss) from continuing operations attributable to EnPro Industries, Inc. | (21.6) | (8.4) | (14.8) | 16 |
Income from discontinued operations, net of tax | 1.9 | 6.9 | 207.3 | 19.5 |
Net income (loss) attributable to EnPro Industries, Inc. | (19.7) | (1.5) | 192.5 | 35.5 |
Comprehensive income (loss) | (13.1) | 3.7 | 200.8 | 44.9 |
Less: comprehensive income attributable to redeemable non-controlling interest | 0.5 | 0 | 2 | 0 |
Comprehensive income (loss) attributable to EnPro Industries, Inc. | $ (13.6) | $ 3.7 | $ 198.8 | $ 44.9 |
Basic earnings (loss) per share attributable to EnPro Industries, Inc.: | ||||
Continuing operations (in dollars per share) | $ (1.05) | $ (0.41) | $ (0.72) | $ 0.77 |
Discontinued operations (in dollars per share) | 0.09 | 0.33 | 10.09 | 0.94 |
Net income per share (in dollars per share) | (0.96) | (0.08) | 9.37 | 1.71 |
Diluted earnings (loss) per share attributable to EnPro Industries, Inc.: | ||||
Continuing operations (in dollars per share) | (1.05) | (0.41) | (0.72) | 0.77 |
Discontinued operations (in dollars per share) | 0.09 | 0.33 | 10.09 | 0.94 |
Net income (loss) per share (in dollars per share) | $ (0.96) | $ (0.08) | $ 9.37 | $ 1.71 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
OPERATING ACTIVITIES OF CONTINUING OPERATIONS | ||
Net income attributable to EnPro Industries, Inc. | $ 192.5 | $ 35.5 |
Adjustments to reconcile net income attributable to EnPro Industries, Inc. to net cash provided by operating activities of continuing operations: | ||
Income from discontinued operations, net of taxes | (207.3) | (19.5) |
Taxes paid related to sale of discontinued operations | (35.4) | 0 |
Depreciation | 22.4 | 22.4 |
Amortization | 29.1 | 25.6 |
Deferred income taxes | (2.4) | (3.8) |
Stock-based compensation | 4.1 | 5 |
Other non-cash adjustments | 31.5 | 14 |
Change in assets and liabilities, net of effects of acquisitions and divestitures of businesses: | ||
Asbestos insurance receivables | 2.5 | 5.8 |
Accounts receivable, net | (3.4) | (3.1) |
Inventories | 11.7 | 3.4 |
Accounts payable | (5.9) | (18.4) |
Other current assets and liabilities | 12.5 | 8.4 |
Other non-current assets and liabilities | (3.5) | 15.8 |
Net cash provided by operating activities of continuing operations | 48.4 | 91.1 |
INVESTING ACTIVITIES OF CONTINUING OPERATIONS | ||
Purchases of property, plant and equipment | (11.8) | (15.1) |
Proceeds from sale of businesses | 453.9 | 3.6 |
Acquisitions, net of cash acquired | 0.1 | |
Acquisitions, net of cash acquired | (310.4) | |
Other | (2.7) | (2.1) |
Net cash provided by (used in) investing activities of continuing operations | 439.5 | (324) |
FINANCING ACTIVITIES OF CONTINUING OPERATIONS | ||
Proceeds from debt | 24.9 | 566.9 |
Repayments of debt | (161.4) | (365.1) |
Repurchase of common stock | (5.3) | (15) |
Dividends paid | (16.2) | (15.7) |
Other | (2) | (5) |
Net cash provided by (used in) financing activities of continuing operations | (160) | 166.1 |
CASH FLOWS OF DISCONTINUED OPERATIONS | ||
Operating cash flows | (6.2) | 59.6 |
Investing cash flows | 0 | (8.7) |
Net cash provided by (used in) discontinued operations | (6.2) | 50.9 |
Effect of exchange rate changes on cash and cash equivalents | (1.9) | (1.6) |
Net increase (decrease) in cash and cash equivalents | 319.8 | (17.5) |
Cash and cash equivalents at beginning of period | 121.2 | 129.6 |
Cash and cash equivalents at end of period | 441 | 112.1 |
Cash paid during the period for: | ||
Interest, net | 6.1 | 7.9 |
Income taxes, net | 52 | 2.5 |
Non-cash investing and financing activities: | ||
Non-cash acquisitions of property, plant, and equipment | $ 1.2 | $ 0.1 |
CONSOLIDATED BALANCE SHEETS (UN
CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 441 | $ 121.2 |
Accounts receivable, net | 163.4 | 160.8 |
Inventories | 124.8 | 157.1 |
Prepaid expenses and other current assets | 46.1 | 56.3 |
Current assets held for sale | 41.2 | 254.1 |
Total current assets | 816.5 | 749.5 |
Property, plant and equipment, net | 182.5 | 218.8 |
Goodwill | 486.9 | 485.3 |
Other intangible assets, net | 422.5 | 466.9 |
Other assets | 115.6 | 114.6 |
Total assets | 2,024 | 2,035.1 |
Current liabilities | ||
Current maturities of long-term debt | 3.9 | 4.1 |
Accounts payable | 69 | 82.7 |
Accrued expenses | 154.1 | 137.3 |
Current liabilities held for sale | 16.1 | 89.5 |
Total current liabilities | 243.1 | 313.6 |
Long-term debt | 489.3 | 625.2 |
Deferred taxes and non-current income taxes payable | 97.9 | 74.6 |
Other liabilities | 97.3 | 106.8 |
Total liabilities | 927.6 | 1,120.2 |
Commitments and contingencies | ||
Redeemable non-controlling interest | 30.5 | 28 |
Shareholders’ equity | ||
Common stock – $.01 par value; 100,000,000 shares authorized; issued, 20,718,526 shares in 2020 and 20,785,346 shares in 2019 | 0.2 | 0.2 |
Additional paid-in capital | 288.5 | 292.1 |
Retained earnings | 808.5 | 632.2 |
Accumulated other comprehensive loss | (30.1) | (36.4) |
Common stock held in treasury, at cost – 183,418 shares in 2020 and 186,516 shares in 2019 | (1.2) | (1.2) |
Total shareholders’ equity | 1,065.9 | 886.9 |
Total liabilities and equity | $ 2,024 | $ 2,035.1 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 20,718,526 | 20,785,346 |
Treasury stock, shares (in shares) | 183,418 | 186,516 |
Overview, Basis of Presentation
Overview, Basis of Presentation and Recently Issued Authoritative Accounting Guidance | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Overview, Basis of Presentation and Recently Issued Authoritative Accounting Guidance | Overview, Basis of Presentation and Recently Issued Authoritative Accounting Guidance Overview EnPro Industries, Inc. (“we,” “us,” “our,” “EnPro” or the “Company”) is a leader in the design, development, manufacture, and marketing of proprietary engineered industrial products, applying material science expertise largely across the portfolio. Our industrial products primarily include: sealing products; heavy-duty truck wheel-end component systems; self-lubricating non-rolling bearing products; precision engineered components and lubrication systems for reciprocating compressors; hoses and fittings for the hygienic process industries; bellows and bellow assemblies; pedestals for semiconductor manufacturing; and PTFE products. In addition to these products, we also provide cleaning and refurbishment services for critical components and assemblies used in state-of-the-art semiconductor equipment. Basis of Presentation The accompanying interim consolidated financial statements are unaudited, and certain related information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted in accordance with Rule 10-01 of Regulation S-X. They were prepared following the same policies and procedures used in the preparation of our annual financial statements except as disclosed below and reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of results for the periods presented. The Consolidated Balance Sheet as of December 31, 2019 was derived from the audited financial statements included in our annual report on Form 10-K for the year ended December 31, 2019. The results of operations for the interim periods are not necessarily indicative of the results for the fiscal year. These consolidated financial statements should be read in conjunction with our annual consolidated financial statements for the year ended December 31, 2019 included within our annual report on Form 10-K. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amount of assets and liabilities and the disclosures regarding contingent assets and liabilities at period end and the reported amounts of revenue and expenses during the reporting period. The recent outbreak of the coronavirus, or COVID-19, which has been declared by the World Health Organization to be a "pandemic," has caused us to evaluate our accounting estimates that require the consideration of forecasted financial information, including, but not limited to, our allowance for credit losses and the carrying value of our goodwill, intangible assets, and other long-lived assets. In the second quarter of 2020 we moved the oil and gas component of our Garlock Pipeline Technologies ("GPT") business from the Sealing Products segment to the Engineered Products segment. This move allowed us to group our two oil and gas businesses, GPT and Compressor Products International, together so that they can be managed as one business unit. This change is reflected in all periods presented in Note 13, "Business Segment Information " . The change also involved the transfer of $5.8 million of goodwill from the Sealing Products Segment to the Engineered Products segment which is reflected in all periods presented in Note 8, "Goodwill and Other Intangible Assets" . As a result of the move of the oil and gas component of the GPT business, an interim goodwill impairment test was performed in the second quarter of 2020 for all reporting units and we determined that the carrying amount of our goodwill was not impaired either before or after the move. This interim goodwill impairment assessment, performed in the second quarter, was conducted in the context of information that was reasonably available to us, as well as our consideration of the future potential impacts of COVID-19 on our business. The fair value of our Technetics Group reporting unit within the Sealing Products segment, which was allocated $243.7 million of goodwill as of June 30, 2020, exceeded its carrying value by an estimated 5% as of the interim testing date. The fair values of all of our other reporting units exceeded their carrying values by at least 20%. However, because of uncertainties at this time with respect to the severity and duration of the COVID-19 outbreak, the duration and terms of related governmental orders restricting activities, and the timing and pace of any economic recovery as COVID-19 impacts ultimately abate, we cannot predict with specificity the extent and duration of any future impact on our business and financial results from COVID-19. In addition, although most of our operations have been treated as “essential” operations under applicable government orders restricting business activities that have been issued to date, and accordingly have been permitted to continue to operate, it is possible that they may not continue to be so treated under future government orders, or, even if so treated, site-specific health and safety concerns might otherwise require certain of our operations to be halted for some period of time. Accordingly, if the impact is more severe or longer in duration than we have projected, such impact could potentially result in impairments of assets in future periods. We will conduct our next annual goodwill impairment assessment as of October 1, 2020. All intercompany accounts and transactions between our consolidated operations have been eliminated. Our acquisition of all of the equity securities of LeanTeq Co, Ltd. and its affiliate LeanTeq LLC (collectively "LeanTeq") in 2019 resulted in rollover equity from two of the LeanTeq sellers (the “Sellers”) who were executives of the acquired entity. This rollover equity gives the Sellers approximately a 10% ownership share (the "Rollover Equity") of Lunar Investment LLC, our subsidiary that purchased LeanTeq. We have the right to buy, and the non-controlling interest holders have the right to sell, the Rollover Equity within 90 days following the third anniversary of the closing of the acquisition of LeanTeq. We have accounted for this transaction as a redeemable non-controlling interest which is recorded in the mezzanine section on our accompanying consolidated balance sheets, located between liabilities and equity. Earnings associated with the redeemable non-controlling interest are reflected as income attributable to redeemable non-controlling interest, net of tax in the accompanying consolidated statements of operations. In January 2020, we adopted a new accounting standard that changes how we measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income, including trade receivables. The standard requires us to estimate our lifetime “expected credit loss” for such assets at inception, and record an allowance that, when deducted from the amortized cost basis of the financial asset, presents the net amount expected to be collected on the financial asset. We applied a current expected credit loss model (" CECL We applied our CECL model to our trade receivables at January 1, 2020 using a modified retrospective transition approach. Upon adoption, we recorded a $0.1 million increase to our allowance for credit losses with a corresponding decrease to retained earnings. Changes in our allowance for doubtful accounts for the nine months ended September 30, 2020 were as follows: (in millions) Balance at December 31, 2019 $ 3.7 Adoption of new accounting standard 0.1 Charge to expense 1.2 Write-off of receivables (1.0) Other (0.2) Balance at September 30, 2020 $ 3.8 Additionally, in January 2020, we adopted a standard to simplify annual and interim goodwill impairment testing. Under the standard, we will perform our annual or interim goodwill impairment tests by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. We still have the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. Upon adoption, there was no impairment of goodwill recorded and this standard is applied following adoption on a prospective basis for all annual and interim goodwill impairment assessments. Recently Issued Authoritative Accounting Guidance In December 2019, a standard was issued that will simplify the accounting for income taxes in nine unrelated areas. The standard is effective for fiscal years beginning after December 15, 2020 with early adoption permitted. We are currently evaluating the new guidance and do not expect its impact to be material to our consolidated financial statements. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued OperationsDuring the fourth quarter of 2019, we entered into an agreement to sell the Fairbanks Morse division, which comprised our entire Power Systems segment. The sale of Fairbanks Morse to an affiliate of funds managed by private equity firm Arcline Investment Management closed on January 21, 2020 for a sales price of $450.0 million. The pre-tax gain on the disposition of Fairbanks Morse was $274.3 million. We have reported, for all periods presented, the financial condition, results of operations, and cash flows of Fairbanks Morse as discontinued operations in the accompanying financial statements. Tax expense of $65.9 million on the sale of discontinued operations was recorded for the nine months ended September 30, 2020. This is a decrease in tax expense of $1.9 million in the quarter ended September 30, 2020, which is due to the increase of the foreign derived intangible income ("FDII") tax benefit and a decrease in the global intangible low taxed income ("GILTI") tax expense that are allocated to discontinued operations. For the quarters and nine months ended September 30, 2020 and 2019, the results of operations for Fairbanks Morse were as follows: Quarters Ended Nine Months Ended 2020 2019 2020 2019 (in millions) Net sales $ — $ 74.7 $ 7.6 $ 203.1 Cost of sales — 57.4 7.6 155.6 Gross profit — 17.3 — 47.5 Operating expenses: Selling, general, and administrative expenses — 7.0 1.5 20.3 Other — 0.8 (0.1) 0.8 Total operating expenses — 7.8 1.4 21.1 Income (loss) from discontinued operations before income taxes — 9.5 (1.4) 26.4 Income tax benefit (expense) — (2.6) 0.3 (6.9) Income (loss) from discontinued operations, net of taxes — 6.9 (1.1) 19.5 Gain from sale of discontinued operations, net of taxes 1.9 — 208.4 — Income from discontinued operations, net of taxes $ 1.9 $ 6.9 $ 207.3 $ 19.5 The major classes of assets and liabilities for Fairbanks Morse as of December 31, 2019 are shown below: (in millions) Assets: Accounts receivable $ 107.8 Inventories 60.2 Property, plant, and equipment 63.0 Goodwill 11.8 Other assets 11.3 Total assets of discontinued operations $ 254.1 Liabilities: Accounts payable $ 36.9 Accrued expenses 48.2 Other liabilities 4.4 Total liabilities of discontinued operations $ 89.5 |
Acquisitions and Divestitures
Acquisitions and Divestitures | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Acquisitions and Divestitures | Acquisitions and Divestitures Acquisitions On September 25, 2019, we acquired all of the equity securities of LeanTeq. LeanTeq primarily provides refurbishment services for critical components and assemblies used in state-of-the-art semiconductor equipment. This equipment is used to produce the latest and most technologically advanced microchips for smartphones, autonomous vehicles, high-speed wireless connectivity, artificial intelligence, and other leading-edge applications. Founded in 2011 and headquartered in Taoyuan City, Taiwan, LeanTeq has two locations in Taiwan and one in the United States (Silicon Valley). LeanTeq is included as part of our Technetics Group within the Sealing Products segment. On July 2, 2019, we acquired 100% of the stock of The Aseptic Group (comprising Aseptic Process Equipment SAS and Aseptic Services SARL, collectively referred to as “Aseptic”), which distributes, designs and manufactures aseptic fluid transfer products for the pharmaceutical and biopharmaceutical industries. Aseptic, headquartered in Limonest, France, is included as part of our Garlock group of companies within the Sealing Products segment. The following pro forma condensed consolidated financial results of operations for the quarter and nine months ended September 30, 2019 are presented as if the acquisitions had been completed prior to 2019: Quarter Ended September 30, 2019 Nine Months Ended September 30, 2019 (in millions) Pro forma net sales $ 305.8 $ 948.2 Pro forma income (loss) from continuing operations $ (5.4) $ 17.0 These amounts have been calculated after applying our accounting policies and adjusting the results of LeanTeq and Aseptic to reflect the additional depreciation and amortization that would have been charged assuming the fair value adjustments to property, plant and equipment and intangible assets had been applied prior to 2019 as well as additional interest expense to reflect financing required, together with the consequential tax effects. These pro forma financial results have been prepared for comparative purposes only and do not reflect the effect of synergies that would have been expected to result from the integration of these acquisitions. The pro forma information does not purport to be indicative of the results of operations that actually would have resulted had the acquisitions occurred prior to 2019, or of future results of the consolidated entities. We received $0.1 million in the first quarter of 2020 as a result of the final working capital adjustment that related to our LeanTeq acquisition. Since the completion of the acquisition of Taiwan-based LeanTeq in September 2019, we commenced an analysis regarding whether we would permanently retain LeanTeq’s earnings in Taiwan or repatriate them to the United States. During the second quarter of 2020 we finalized our analysis and determined that, given the significance of the incremental tax cash cost to EnPro of repatriating LeanTeq earnings to the United States, we will retain any earnings generated by LeanTeq in Taiwan as long as there was a significant incremental tax cash cost of repatriating amounts to the United States. As a result of the decision to retain earnings in Taiwan, the income tax rate utilized in establishing deferred tax liabilities in the acquisition date balance sheet of LeanTeq was increased from 20% to 23.6%, reflecting a local tax of approximately 3.6% on undistributed earnings. The increase in the income tax rate results in an increase in goodwill and deferred tax liabilities in the acquisition date balance sheet of $7.2 million, which was initially reflected in the consolidated balance sheet as of June 30, 2020. The decision on our retention of LeanTeq’s earnings in Taiwan was our final required purchase accounting determination. Management concluded that the purchase accounting for the LeanTeq acquisition was finalized at June 30, 2020. Divestitures In August of 2020, subsequent to announcing the exit of our Motor Wheel® brake drum and Crewson® brake adjuster brands in the second quarter of 2020, we identified a buyer and entered into a definitive agreement to sell the assets related to the businesses. On September 2, 2020, we completed the sale for $8.9 million, net of transaction fees. This transaction resulted in a $3.7 million reversal of previously accrued restructuring charges consisting of severance, contract cancellation costs, and other costs recorded in other operating expense on our consolidated statements of operations. In the third quarter of 2020, we also recorded a $3.6 million loss on sale of the business in other non-operating expense on our consolidated statements of operations. On August 3, 2020 we announced that we entered into a definitive agreement to sell the Air Springs portion of our heavy-duty trucking business for $32.0 million in cash and a long-term promissory note with a face value of $7.5 million that will be stated at fair value. Subsequent to the announcement, we agreed with the purchaser to retain the outstanding accounts receivable in the United States, which aggregated $7.2 million at September 30, 2020. The purchase price is subject to adjustment based on the amount of cash and working capital on the closing date. We expect a negative net working capital adjustment on the closing date that approximates the net book value of the accounts receivable retained as a result of our agreement to retain the accounts receivable. The sale is expected to close in the fourth quarter of 2020 and is subject to antitrust approvals and typical closing conditions. We expect the gain or loss to be at approximately breakeven. As a result of this definitive agreement, we classified the Air Springs business as held for sale and reclassified all assets and liabilities of the business to be sold as current assets and current liabilities held for sale on our consolidated balance sheet as of September 30, 2020. On June 18, 2020, we communicated our intent to exit the bushing block business of the Engineered Products segment principally located in Dieuze, France. Because the restructuring charges associated with that planned exit were not estimable, we did not record any restructuring charges related to this plan in the second quarter. During the third quarter, we continued to explore the possible sale of the business as we proceeded with plans to exit the business through a shutdown and identified a buyer to purchase the business operated at the Dieuze facility. We have classified the assets and liabilities of the business as held for sale on our consolidated balance sheet at September 30, 2020 and we have entered into a binding put option agreement with such buyer, which provides GGB France the right to sell the business to such buyer pending conclusion of a review process by the Works Councils representing the employees at the Dieuze facility. We recorded an impairment of the business, which includes non-cash impairments of long-lived assets and cash payable to the buyer upon closing. For a further discussion of the impairment charges recorded in connection with the sale of the Dieuze Facility, see Note 4, " Restructuring and Impairment " . In the second quarter of 2020 we entered into an agreement to sell the Lunar® air disc brake business and subsequently classified the business as held for sale. An impairment charge of $2.1 million was recognized in the second quarter. A subsequent increase in the fair value of the business in the third quarter resulted in a partial reversal of the second quarter impairment charge of $0.2 million. The sale of the U.S. assets of the business closed in the third quarter of 2020 for $0.3 million, resulting in a gain of $0.2 million. The sale of the Lunar® manufacturing facility located in Shanghai, China is expected to close in the fourth quarter of 2020 and its related assets and liabilities have been classified as current assets and liabilities held for sale on our consolidated balance sheet since June 30, 2020. We estimate the closing to result in an approximately breakeven pretax gain or loss. Current assets and liabilities held for sale as of September 30, 2020 are comprised of the following items: ($ in millions) Assets Accounts receivable $ 3.1 Inventory 12.6 Property, plant and equipment, net 12.6 Other assets 12.9 Current assets held for sale $ 41.2 Liabilities Accounts payable $ 6.9 Accrued expenses 5.2 Other liabilities 4.0 Current liabilities held for sale $ 16.1 |
Restructuring and Impairment
Restructuring and Impairment | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Impairment | Restructuring and ImpairmentIn the second quarter of 2020, we announced a restructuring plan to exit our STEMCO Brake Products business involving the exit of manufacturing operations related to our Motor Wheel® brake drum and Crewson® brake adjuster brands and the sale of our Lunar® air disc brake product line and related manufacturing facility in Shanghai, China. Additionally, we had a number of smaller restructuring activities at several of our other divisions. In the third quarter of 2020, we announced the sale of our Motor Wheel® brake drum and Crewson® brake adjuster brands, the Air Springs portion of our heavy duty trucking business, our bushing block business located in Dieuze, France, evaluated several indefinite-lived trademarks for impairment, and took several restructuring actions. For a further discussion of the businesses held for sale, see Note 3, "Acquisitions and Di vestitures . " For the quarter and nine months ended September 30, 2020, respectively, we recorded $21.1 million and $40.0 million of restructuring and impairment charges. Of these charges, $21.1 million and $35.1 million are recorded in other operating expense on our consolidated income statements for the respective periods. For the nine months ended September 30, 2020, $4.9 million were recorded as cost of sales on our consolidated income statements as they pertain to impairments of inventory. In the third quarter of 2020, sales declines by businesses utilizing two of the indefinite-lived trademarks within our Sealing Products segment were determined to be triggering events for an interim impairment analysis. Based on the results of this analysis, we recorded a $16.1 million impairment of indefinite-lived trademarks in the third quarter. As a result of classifying the bushing block business operated at the Dieuze facility as held for sale at September 30, 2020, we evaluated the business and determined it was impaired. We recorded a $6.2 million impairment charge that consists of $1.8 million of non-cash impairments of long-lived assets and $4.4 million (3.7 million EUR) of cash payments to be due to the buyer at closing. The exit from our Motor Wheel® brake drum and Crewson® brake adjuster brands resulted in restructuring and impairment charges of $11.1 million in the second quarter of 2020, of which $3.6 million was related to inventory impairment charges, $3.5 million was impairment of intangible assets, and $4.0 million related to severance, contract cancellation costs, and other expenses. Subsequent to announcing the exit of our Motor Wheel® brake drum and Crewson® brake adjuster brands, we identified a buyer and completed the sale of the business in the third quarter of 2020. As a result of our ability to sell the business, we reversed $3.7 million of expenses accrued in the second quarter related to severance, contract cancellation costs, and other expenses and recognized a loss on sale of the business of $3.6 million. In the second quarter of 2020, we entered into an agreement to sell the Lunar® air disc brake business. As a result of this agreement, we recorded the business as held for sale and incurred $2.1 million in impairment charges, of which $1.6 million related to impairment of long-lived assets and $0.5 million related to impairment of inventory. The sale of U.S. assets closed in the third quarter and the sale of the assets located in Shanghai, China is expected to close in the fourth quarter of 2020. In the third quarter of 2020, a subsequent increase in the Lunar® air disc brake assets fair value resulted in a partial reversal of the second quarter impairment charge of $0.2 million. For the quarter and nine months ended September 30, 2019, respectively, we recorded $1.4 million and $3.7 million of restructuring and impairment charges. These charges are recorded in other expense on our consolidated income statements. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the quarter ended September 30, 2020, in accordance with applicable accounting guidance, we modified our interim period income tax provision methodology. The volatility in jurisdictional income impacts our ability to effectively determine an annual effective tax rate. Accounting guidance provides an alternate approach under these circumstances, whereby the actual effective tax rate for the interim period is used. We applied this approach as it is a better representation of the tax expense allocable to the third quarter results. The effective tax rates for the quarters ended September 30, 2020 and 2019 were 25.4% and 8.9%, respectively. The effective tax rate for the three months ended September 30, 2020 is primarily the result of lower pre-tax income overall, a geographical mix of lower pre-tax income in the U.S. combined with higher pre-tax income in higher tax foreign jurisdictions as well as the recognition of a deferred tax liability in the amount of $4.5 million associated with the Air Springs business classification as held for sale at September 30, 2020, and a $4.9 million tax benefit associated with the final regulations issued during the third quarter of 2020 under the Tax Cuts and Jobs Act. The effective tax rates for the nine months ended September 30, 2020 and 2019 were (17.9)% and 40.0%, respectively. The effective tax rate for the nine months ended September 30, 2020 is primarily the result of lower pre-tax income overall, a geographical mix of lower pre-tax income in the U.S. combined with the minimum tax on certain non-U.S. earnings, current year increase of valuation allowance against certain net operating losses, and higher tax rates in most foreign jurisdictions. The effective tax rate for the nine months ended September 30, 2019 reflects the minimum tax on certain non-U.S. earnings, higher tax rates in most foreign jurisdictions and adjustments to state net operating losses. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Quarters Ended Nine months ended September 30, 2020 2019 2020 2019 (in millions, except per share amounts) Numerator (basic and diluted): Income (loss) from continuing operations attributable to EnPro Industries, Inc. $ (21.6) $ (8.4) $ (14.8) $ 16.0 Income from discontinued operations, net of taxes 1.9 6.9 207.3 19.5 Net income (loss) attributable to EnPro Industries, Inc. $ (19.7) $ (1.5) $ 192.5 $ 35.5 Denominator: Weighted-average shares – basic 20.5 20.6 20.5 20.7 Share-based awards — — — 0.1 Weighted-average shares – diluted 20.5 20.6 20.5 20.8 Basic earnings (loss) per share attributable to EnPro Industries, Inc.: Continuing operations $ (1.05) $ (0.41) $ (0.72) $ 0.77 Discontinued operations 0.09 0.33 10.09 0.94 Net income (loss) per share $ (0.96) $ (0.08) $ 9.37 $ 1.71 Diluted earnings (loss) per share attributable to EnPro Industries, Inc.: Continuing operations $ (1.05) $ (0.41) $ (0.72) $ 0.77 Discontinued operations 0.09 0.33 10.09 0.94 Net income (loss) per share $ (0.96) $ (0.08) $ 9.37 $ 1.71 In the quarter and nine months ended September 30, 2020 and the quarter ended September 30, 2019, there were losses from continuing operations attributable to common shares. There were 0.1 million of potentially dilutive shares excluded from the calculation of diluted earnings per share during each of those periods since they were antidilutive. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories September 30, December 31, (in millions) Finished products $ 56.6 $ 80.6 Work in process 23.1 23.7 Raw materials and supplies 48.7 56.1 128.4 160.4 Reserve to reduce certain inventories to LIFO basis (3.6) (3.3) Total inventories $ 124.8 $ 157.1 We use the last-in, first-out (“LIFO”) method of valuing certain of our inventories. An actual valuation of inventory under the LIFO method can be made only at the end of each year based on the inventory levels and costs at that time. Accordingly, interim LIFO calculations are based on management’s estimates of expected year-end inventory levels and costs, which are subject to change until the final year-end LIFO inventory valuation. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The changes in the net carrying value of goodwill by reportable segment for the nine months ended September 30, 2020, are as follows: Sealing Engineered Total (in millions) Goodwill as of December 31, 2019 $ 468.6 $ 16.7 $ 485.3 Acquisition of business 7.1 — 7.1 Divestiture of businesses (7.0) — (7.0) Foreign currency translation 1.6 (0.1) 1.5 Goodwill as of September 30, 2020 $ 470.3 $ 16.6 $ 486.9 The goodwill balances reflected above are net of accumulated impairment losses of $27.8 million for the Sealing Products segment and $154.8 million for the Engineered Products segment as of September 30, 2020 and December 31, 2019. Identifiable intangible assets are as follows: As of September 30, 2020 As of December 31, 2019 Gross Accumulated Gross Accumulated (in millions) Amortized: Customer relationships $ 455.8 $ 168.2 $ 470.1 $ 166.2 Existing technology 98.8 38.3 117.5 50.8 Trademarks 37.5 24.7 39.4 24.1 Other 33.4 24.8 33.6 24.0 625.5 256.0 660.6 265.1 Indefinite-Lived: Trademarks 53.0 — 71.4 — Total $ 678.5 $ 256.0 $ 732.0 $ 265.1 Amortization for the quarters ended September 30, 2020 and 2019 were $8.9 million, and $7.4 million, respectively. Amortization for the nine months ended September 30, 2020 and 2019 were $26.8 million and $21.4 million, respectively. |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Sep. 30, 2020 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued Expenses September 30, December 31, (in millions) Salaries, wages and employee benefits $ 45.9 $ 43.7 Interest 9.7 5.1 Environmental 26.1 25.2 Income taxes 9.7 13.5 Taxes other than income taxes 9.7 9.1 Operating lease liabilities 8.9 9.3 Legal settlement 7.8 0.4 Other 36.3 31.0 $ 154.1 $ 137.3 |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Revolving Credit Facility On September 25, 2019, we entered into a First Amendment (the "First Amendment") to our Second Amended and Restated Credit Agreement (the "Credit Agreement”) among EnPro Industries, Inc. and EnPro Holdings, Inc., a wholly owned subsidiary of the Company (“EnPro Holdings”), as borrowers, the guarantors party thereto, the lenders party thereto and Bank of America, N.A., as Administrative Agent, Swing Line Lender and Letter of Credit Issuer. The Credit Agreement provides for a five-year, senior secured revolving credit facility of $400.0 million (the “Revolving Credit Facility”) and a five-year, senior secured term loan facility of $150.0 million (the "Term Loan Facility" and, together with the Revolving Credit Facility, the "Facilities"). The Amended Credit Agreement also provides that the borrowers may seek incremental term loans and/or additional revolving credit commitments in an amount equal to the greater of $225.0 million and 100% of consolidated EBITDA (as defined) for the most recently ended four-quarter period for which we have reported financial results, plus additional amounts based on a consolidated senior secured leverage ratio. Initially, borrowings under the Facilities bore interest at an annual rate of LIBOR plus 1.50% or base rate plus 0.50%, with the interest rates under the Facilities being subject to incremental increases based on a consolidated total net leverage ratio. In addition, a commitment fee accrues with respect to the unused amount of the Revolving Credit Facility at an annual rate of 0.175%, which rate is also subject to incremental increase or decrease based on a consolidated total net leverage ratio. The Term Loan Facility amortizes on a quarterly basis in an annual amount equal to 2.50% of the original principal amount of the Term Loan Facility in each of years one through three, 5.00% of such original principal amount in year four, and 1.25% of such original principal amount in each of the first three quarters of year five, with the remaining outstanding principal amount payable at maturity. The Facilities are subject to prepayment with the net cash proceeds of certain asset sales, casualty or condemnation events, and non-permitted debt issuances. EnPro and EnPro Holdings are the permitted borrowers under the Revolving Credit Facility. We have the ability to add foreign subsidiaries as borrowers under the Revolving Credit Facility for up to $100.0 million (or its foreign currency equivalent) in aggregate borrowings, subject to certain conditions. Each of our domestic, consolidated subsidiaries are required to guarantee the obligations of the borrowers under the Revolving Credit Facility, and each of our existing domestic, consolidated subsidiaries has entered into the Credit Agreement to provide such a guarantee. Borrowings under the Revolving Credit Facility are secured by a first-priority pledge of certain assets. The Credit Agreement contains certain financial covenants and required financial ratios including a maximum consolidated total net leverage and a minimum consolidated interest coverage as defined in the Credit Agreement. We were in compliance with all covenants of the Credit Agreement as of September 30, 2020. The borrowing availability under the Revolving Credit Facility at September 30, 2020 was $388.6 million after giving consideration to $11.4 million of outstanding letters of credit. We have $147.1 million outstanding on our Term Loan Facility borrowings. The Credit Agreement requires us to apply the net cash proceeds of certain asset sales and involuntary dispositions that are not invested in operating assets (other than current assets) within 365 days after receipt, in the event the aggregate net proceeds in any fiscal year equal or exceed $5.0 million, to prepay loans outstanding under the Credit Agreement and establish cash collateral equal to the amount of any outstanding letters of credit issued under the Credit Agreement. This requirement applies to the net cash proceeds received in the divestiture of Fairbanks Morse and could require us to prepay in the first quarter of 2021 amounts then outstanding under the Facilities, including the Term Loan Facility, and provide cash collateral for outstanding letters of credit issued under the Credit Agreement, to the extent we do not sufficiently invest in such operating assets by then. In such event, the Credit Agreement would permit continued borrowing under the Revolving Credit Agreement after the prepayment of such amounts, though no further borrowing would be available under the Term Loan Facility. Senior Notes In October 2018, we completed the offering of $350.0 million aggregate principal amount of 5.75% Senior Notes due 2026 (the "Senior Notes"). The Senior Notes are unsecured, unsubordinated obligations of EnPro and mature on October 15, 2026. Interest on the Senior Notes accrues at a rate of 5.75% per annum and is payable semi-annually in cash in arrears on April 15 and October 15 of each year, commencing on April 15, 2019. The Senior Notes are required to be guaranteed on a senior unsecured basis by each of EnPro's existing and future direct and indirect domestic subsidiaries that is a borrower under, or guarantees, our indebtedness under the Revolving Credit Facility or guarantees any other Capital Markets Indebtedness (as defined in the indenture governing the Senior Notes) of EnPro or any of the guarantors. On or after October 15, 2021, we may, on any one or more occasion, redeem all or part of the Senior Notes at specified redemption prices plus accrued and unpaid interest. In addition, we may redeem a portion of the aggregate principal amount of the Senior Notes before October 15, 2021 with the net cash proceeds from certain equity offerings at a specified redemption price plus accrued and unpaid interest, if any, to, but not including, the redemption price. We may also redeem some or all of the Senior Notes before October 15, 2021 at a redemption price of 100% of the principal amount, plus accrued and unpaid interest, if any, but not including, the redemption date, plus a "make whole" premium. Each holder of the Senior Notes may require us to repurchase some or all of the Senior Notes held by such holder for cash upon the occurrence of a defined "change of control" event. |
Pensions and Postretirement Ben
Pensions and Postretirement Benefits | 9 Months Ended |
Sep. 30, 2020 | |
Retirement Benefits [Abstract] | |
Pensions and Postretirement Benefits | Pensions and Postretirement Benefits The components of net periodic benefit cost for our U.S. and foreign defined benefit pension and other postretirement plans for the nine months ended September 30, 2020 and 2019, are as follows: Quarters Ended September 30, Nine months ended September 30, Pension Benefits Other Benefits Pension Benefits Other Benefits 2020 2019 2020 2019 2020 2019 2020 2019 (in millions) Service cost $ 1.2 $ 1.1 $ — $ — $ 3.4 $ 3.4 $ — $ 0.1 Interest cost 2.5 3.1 — — 7.9 9.2 0.1 0.1 Expected return on plan assets (4.8) (4.0) — — (14.3) (12.0) — — Amortization of prior service cost — — — 0.1 — 0.1 — 0.1 Amortization of net loss (gain) 1.4 1.7 0.1 — 4.0 5.0 (1.0) — Curtailment loss — — 0.3 — Net periodic benefit cost $ 0.3 $ 1.9 $ 0.1 $ 0.1 $ 1.3 $ 5.7 $ (0.9) $ 0.3 No contributions were made in the nine months ended September 30, 2020 to our U.S. defined benefit pension plans. We currently expect to make approximately $4.0 million in contributions to our U.S. defined benefit pension plans in the fourth quarter of 2020. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders' Equity Changes in shareholders' equity for the first three quarters of calendar 2020 are as follows: Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Total Permanent Shareholders' Equity Redeemable Non-controlling Interest (in millions, except per share data) Shares Amount Balance, December 31, 2019 20.6 $ 0.2 $ 292.1 $ 632.2 $ (36.4) $ (1.2) $ 886.9 $ 28.0 Adoption of new accounting standard — — — (0.1) — — (0.1) — Net income — — — 218.7 — — 218.7 0.1 Other comprehensive income (loss) — — — — (22.5) — (22.5) 0.9 Dividends ($0.26 per share) — — — (5.3) — — (5.3) — Share repurchases (0.1) — (5.3) — — — (5.3) — Incentive plan activity — — 1.0 — — — 1.0 — Other — — (1.5) — — — (1.5) — Balance, March 31, 2020 20.5 0.2 286.3 845.5 (58.9) (1.2) 1,071.9 29.0 Net income (loss) — — — (6.5) — — (6.5) 0.1 Other comprehensive income — — — — 22.7 — 22.7 0.6 Dividends ($0.26 per share) — — — (5.4) — — (5.4) — Incentive plan activity — — 1.5 — — — 1.5 — Balance, June 30, 2020 20.5 0.2 287.8 833.6 (36.2) (1.2) 1,084.2 29.7 Net income (loss) — — — (19.7) — — (19.7) 0.3 Other comprehensive income — — — — 6.1 — 6.1 0.5 Dividends ($0.26 per share) — — — (5.4) — — (5.4) — Incentive plan activity — — 0.7 — — — 0.7 — Balance, September 30, 2020 20.5 $ 0.2 $ 288.5 $ 808.5 $ (30.1) $ (1.2) $ 1,065.9 $ 30.5 Changes in shareholders' equity for the first three quarters of calendar 2019 are as follows: Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Total Shareholders' Equity Redeemable non-controlling interest (in millions, except per share data) Shares Amount Balance, December 31, 2018 20.7 $ 0.2 $ 301.0 $ 603.3 $ (45.5) $ (1.3) $ 857.7 $ — Adoption of new accounting standard — — — 11.5 (11.5) — — — Net income — — — 13.1 — — 13.1 — Other comprehensive income — — — — 6.8 — 6.8 — Dividends ($0.25 per share) — — — (5.3) — — (5.3) — Share repurchases — — (2.4) — — — (2.4) — Incentive plan activity 0.1 — 1.2 — — — 1.2 — Balance, March 31, 2019 20.8 0.2 299.8 622.6 (50.2) (1.3) 871.1 — Net income — — — 23.9 — — 23.9 — Other comprehensive loss — — — — (2.6) — (2.6) — Dividends ($0.25 per share) — — — (5.2) — — (5.2) — Share repurchases (0.2) — (12.6) — — — (12.6) — Incentive plan activity — — 1.6 — — — 1.6 — Balance, June 30, 2019 20.6 0.2 288.8 641.3 (52.8) (1.3) 876.2 — LeanTeq acquisition — — — — — — — 28.0 Net loss — — — (1.5) — — (1.5) — Other comprehensive income — — — — 5.2 — 5.2 — Dividends ($0.25 per share) — — — (5.2) — — (5.2) — Incentive plan activity — — 1.7 — — — 1.7 — Balance, September 30, 2019 20.6 $ 0.2 $ 290.5 $ 634.6 $ (47.6) $ (1.3) $ 876.4 $ 28.0 We intend to declare regular quarterly cash dividends on our common stock, as determined by our board of directors, after taking into account our current and projected cash flows, earnings, financial position, debt covenants and other relevant factors. In accordance with the board of directors declarations, total dividend payments of $16.2 million were made during the nine months ended September 30, 2020. In October 2020, our board of directors declared a dividend of $0.26 per share, payable on December 16, 2020 to all shareholders of record as of December 2, 2020. In October 2018, our board of directors authorized the expenditure of up to $50.0 million for the repurchase of our outstanding common shares. During the nine months ended September 30, 2020 we repurchased 0.1 million shares for $5.3 million. Prior to the expiration of the authorization in October 2020, we repurchased 0.3 million shares for $20.3 million. In October 2020, our board of directors authorized the expenditure of up to $50 million for the repurchase of our outstanding common shares through October 2022. In February 2020, we issued stock options to certain key executives for 0.1 million common shares with an exercise price of $53.78 per share. The options vest pro-rata on the first, second and third anniversaries of the grant date, subject to continued employment. No options have a term greater than 10 years. We determine the fair value of stock options using the Black-Scholes option pricing formula as of the grant date. Key inputs into this formula include expected term, expected volatility, expected dividend yield, and the risk-free interest rate. This fair value is amortized on a straight line basis over the vesting period. The expected term represents the period that our stock options are expected to be outstanding, and is determined based on historical experience of similar awards, given the contractual terms of the awards, vesting schedules, and expectations of future employee behavior. The fair value of stock options reflects a volatility factor calculated using historical market data for EnPro's common stock. The time frame used was approximated as a six-year period from the grant date for the awards. The dividend assumption is based on our expectations as of the grant date. We base the risk-free interest rate on the yield to maturity at the time of the stock option grant on zero-coupon U.S. government bonds having a remaining life equal to the option's expected life. When estimating forfeitures, we consider voluntary termination behaviors as well as analysis of actual option forfeitures. The option awards issued in 2020 had a fair value of $13.64 per share at their grant date. The following assumptions were used to estimate the fair value of the 2020 option awards: Average expected term 6 years Expected volatility 31.53 % Risk-free interest rate 1.17 % Expected dividend yield 1.93 % |
Business Segment Information
Business Segment Information | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Business Segment Information | Business Segment Information We aggregate our operating businesses into two reportable segments. The factors considered in determining our reportable segments are the economic similarity of the businesses, the nature of products sold or services provided, the production processes and the types of customers and distribution methods. Our reportable segments are managed separately based on these differences. Our Sealing Products segment designs, manufactures and sells sealing products, including: metallic, non-metallic and composite material gaskets, dynamic seals, compression packing, resilient metal seals, elastomeric seals, custom-engineered mechanical seals for applications in the aerospace industry and other markets, hydraulic components, expansion joints, modular sealing systems for sealing pipeline penetrations and pipe casing isolators and end seals, sanitary gaskets, hoses and fittings for the hygienic process industries, fluid transfer products for the pharmaceutical and biopharmaceutical industries, hole forming products, manhole infiltration sealing systems, bellows and bellows assemblies, pedestals for semiconductor manufacturing, PTFE products, and heavy-duty commercial vehicle parts used in the wheel-end and suspension. In addition to these products, we also provide cleaning and refurbishment services for critical components and assemblies used in state-of-the-art semiconductor equipment. The equipment serviced is used to produce advanced microchips for smartphones, autonomous vehicles, high-speed wireless connectivity, artificial intelligence, and other applications. Our Engineered Products segment includes operations that design, manufacture and sell self-lubricating, non-rolling metal-polymer, solid polymer and filament wound bearing products, aluminum blocks for hydraulic applications, bolted flange and welded joint isolation for pipelines, and precision engineered components and lubrication systems for reciprocating compressors. Segment profit is total segment revenue reduced by operating expenses, restructuring and other costs identifiable with the segment. Corporate expenses include general corporate administrative costs. Expenses not directly attributable to the segments, corporate expenses, net interest expense, gains and losses related to the sale of assets, impairments of indefinite-lived trademarks and income taxes are not included in the computation of segment profit. The accounting policies of the reportable segments are the same as those for EnPro. Segment operating results and other financial data for the quarters and nine months ended September 30, 2020 and 2019 were as follows: Quarters Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in millions) Sales Sealing Products $ 201.8 $ 219.5 $ 601.4 $ 668.0 Engineered Products 67.7 81.1 201.4 255.8 269.5 300.6 802.8 923.8 Intersegment sales (1.2) (1.6) (4.8) (4.6) Net sales $ 268.3 $ 299.0 $ 798.0 $ 919.2 Segment profit (loss) Sealing Products $ 33.0 $ 17.8 $ 69.5 $ 66.2 Engineered Products (3.5) 10.6 (0.2) 28.7 Total segment profit 29.5 28.4 69.3 94.9 Corporate expenses (11.7) (8.1) (27.3) (25.5) Interest expense, net (3.9) (3.8) (11.4) (12.5) Other expense, net (42.5) (25.8) (42.7) (30.3) Income (loss) from continuing operations before income taxes $ (28.6) $ (9.3) $ (12.1) $ 26.6 Segment assets are as follows: September 30, December 31, (in millions) Sealing Products $ 1,255.4 $ 1,316.5 Engineered Products 253.6 259.4 Corporate 515.0 205.1 Discontinued operations — 254.1 $ 2,024.0 $ 2,035.1 Backlog As of September 30, 2020, the aggregate amount of transaction price of remaining performance obligations, or backlog, on a consolidated basis was $201.1 million. Approximately 95% of these obligations are expected to be satisfied within one year. There is no certainty these orders will result in actual sales at the times or in the amounts ordered. In addition, for most of our business, this total is not particularly predictive of future performance because of our short lead times and some seasonality. Revenue by End Market Due to the diversified nature of our business and the wide array of products that we offer, we sell into a number of end markets. Underlying economic conditions within these markets are a major driver of our segments' sales performance. Below is a summary of our third party sales by major end market with which we did business for the quarters and nine months ended September 30, 2020 and 2019: Quarter Ended September 30, 2020 (in millions) Sealing Products Engineered Products Total Aerospace $ 12.0 $ 0.9 $ 12.9 Automotive 0.4 16.7 17.1 Chemical and material processing 9.3 11.0 20.3 Food and pharmaceutical 12.7 0.4 13.1 General industrial 38.5 15.9 54.4 Medium-duty/heavy-duty truck 66.0 — 66.0 Oil and gas 5.5 17.0 22.5 Power generation 9.5 5.5 15.0 Semiconductors 46.1 — 46.1 Other 0.8 0.1 0.9 Total third party sales $ 200.8 $ 67.5 $ 268.3 Quarter Ended September 30, 2019 (in millions) Sealing Products Engineered Products Total Aerospace $ 16.1 $ 3.8 $ 19.9 Automotive 0.5 17.8 18.3 Chemical and material processing 14.7 11.3 26.0 Food and pharmaceutical 13.0 0.4 13.4 General industrial 37.7 22.1 59.8 Medium-duty/heavy-duty truck 89.7 0.6 90.3 Oil and gas 7.6 21.0 28.6 Power generation 11.9 2.5 14.4 Semiconductors 25.5 — 25.5 Other 1.5 1.3 2.8 Total third party sales $ 218.2 $ 80.8 $ 299.0 Nine Months Ended September 30, 2020 (in millions) Sealing Products Engineered Products Total Aerospace $ 37.0 $ 4.4 $ 41.4 Automotive 0.8 44.5 45.3 Chemical and material processing 35.0 32.7 67.7 Food and pharmaceutical 37.5 1.2 38.7 General industrial 121.1 54.0 175.1 Medium-duty/heavy-duty truck 188.9 0.1 189.0 Oil and gas 19.0 49.3 68.3 Power generation 30.5 14.3 44.8 Semiconductors 124.3 — 124.3 Other 3.2 0.2 3.4 Total third party sales $ 597.3 $ 200.7 $ 798.0 Nine Months Ended September 30, 2019 (in millions) Sealing Products Engineered Products Total Aerospace $ 43.0 $ 9.5 $ 52.5 Automotive 2.0 63.6 65.6 Chemical and material processing 43.3 37.2 80.5 Food and pharmaceutical 32.2 0.7 32.9 General industrial 123.6 69.0 192.6 Medium-duty/heavy-duty truck 276.7 0.9 277.6 Oil and gas 22.6 62.9 85.5 Power generation 35.2 7.2 42.4 Semiconductors 78.0 — 78.0 Other 7.7 3.9 11.6 Total third party sales $ 664.3 $ 254.9 $ 919.2 |
Derivatives and Hedging
Derivatives and Hedging | 9 Months Ended |
Sep. 30, 2020 | |
Summary of Credit Derivatives [Abstract] | |
Derivatives and Hedging | Derivatives and Hedging In September 2018, we entered into cross-currency swap agreements (the "Original Swap") with a notional amount of $200.0 million to manage foreign currency risk by effectively converting a portion of the interest payments related to our fixed-rate U.S. Dollar (“USD”)-denominated Senior Notes, including the semi-annual interest payments thereunder, to interest payments on fixed-rate Euro-denominated debt of 172.8 million EUR with a weighted average interest rate of 2.8%, with interest payment dates of March 15 and September 15 of each year. The Original Swap agreement matures on September 15, 2022. In May 2019, we entered into additional cross-currency swap agreements (the "Additional Swap") with a notional amount of $100.0 million to manage an increased portion of our foreign currency risk by effectively converting a portion of the interest payments related to our fixed-rate USD-denominated Senior Notes, including the semi-annual interest payments thereunder, to interest payments on fixed-rate Euro-denominated debt of 89.6 million EUR with a weighted average interest rate of 3.5%, with interest payment dates of April 15 and October 15 of each year. The Additional Swap agreement matures on October 15, 2026. During the term of the swap agreements, we will receive semi-annual payments from the counterparties due to the difference between the interest rate on the Senior Notes and the interest rate on the Euro debt underlying each of the swaps. There was no principal exchange at the inception of the arrangements, and there will be no exchange at maturity. At maturity (or earlier at our option), we and the counterparties will settle the swap agreements at their fair value in cash based on the aggregate notional amount and the then-applicable currency exchange rate compared to the exchange rate at the time the swap agreements were entered into. We have designated these cross-currency swaps as qualifying hedging instruments and are accounting for them as a net investment hedge. At September 30, 2020, the combined fair values of the Original Swap and the Additional Swap were recorded as a $9.6 million asset within other assets on the Consolidated Balance Sheet. The gains and losses resulting from fair value adjustments to the cross currency-swap agreements, excluding interest accruals related to the above receipts, are recorded in accumulated other comprehensive loss within our cumulative foreign currency translation adjustment, as the swaps are effective in hedging the designated risk. Cash flows related to the cross-currency swaps are included in operating activities in the Consolidated Statements of Cash Flows, aside from the ultimate settlement at maturity with the counterparties, which will be included in investing activities. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Assets and liabilities measured at fair value on a recurring basis are summarized as follows: Fair Value Measurements as of September 30, 2020 December 31, 2019 (in millions) Assets Time deposits $ 36.1 $ 22.9 Foreign currency derivatives 9.6 12.3 Deferred compensation assets 6.8 10.9 $ 52.5 $ 46.1 Liabilities Deferred compensation liabilities $ 7.0 $ 11.3 Foreign currency derivatives — 0.6 $ 7.0 $ 11.9 Our time deposits and deferred compensation assets and liabilities are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices. Our foreign currency derivatives are classified as Level 2 as their value is calculated based upon observable inputs including market USD/Euro exchange rates and market interest rates. The carrying values of our significant financial instruments reflected in the Consolidated Balance Sheets approximated their respective fair values except for the following instruments: September 30, 2020 December 31, 2019 Carrying Fair Carrying Fair (in millions) Long-term debt $ 493.2 $ 518.8 $ 629.3 $ 658.0 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 9 Months Ended |
Sep. 30, 2020 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Changes in accumulated other comprehensive loss by component (after tax) for the quarter ended September 30, 2020 are as follows: (in millions) Unrealized Pension and Total Beginning balance $ 8.6 $ (44.8) $ (36.2) Other comprehensive income before reclassifications 5.6 — 5.6 Amounts reclassified from accumulated other comprehensive loss — 1.0 1.0 Net current-period other comprehensive income 5.6 1.0 6.6 Less: other comprehensive income attributable to redeemable non-controlling interests 0.5 — 0.5 Net current-period other comprehensive income attributable to EnPro Industries, Inc. 5.1 1.0 6.1 Ending balance $ 13.7 $ (43.8) $ (30.1) Changes in accumulated other comprehensive loss by component (after tax) for the quarter ended September 30, 2019 are as follows: (in millions) Unrealized Pension and Total Beginning balance $ (8.8) $ (44.0) $ (52.8) Other comprehensive income before reclassifications 3.9 — 3.9 Amounts reclassified from accumulated other comprehensive loss — 1.3 1.3 Net current-period other comprehensive income 3.9 1.3 5.2 Ending balance $ (4.9) $ (42.7) $ (47.6) Changes in accumulated other comprehensive loss by component (after tax) for the nine months ended September 30, 2020 are as follows: (in millions) Unrealized Pension and Total Beginning balance $ 9.8 $ (46.2) $ (36.4) Other comprehensive income before reclassifications 5.9 — 5.9 Amounts reclassified from accumulated other comprehensive loss — 2.4 2.4 Net current-period other comprehensive income 5.9 2.4 8.3 Less: other comprehensive income attributable to redeemable non-controlling interests 2.0 — 2.0 Net current-period other comprehensive income attributable to EnPro Industries, Inc. 3.9 2.4 6.3 Ending balance $ 13.7 $ (43.8) $ (30.1) Changes in accumulated other comprehensive loss by component (after tax) for the nine months ended September 30, 2019 are as follows: (in millions) Unrealized Pension and Total Beginning balance $ (10.6) $ (34.9) $ (45.5) Adoption of new accounting standard — (11.5) (11.5) Adjusted beginning balance (10.6) (46.4) (57.0) Other comprehensive income before reclassifications 5.7 — 5.7 Amounts reclassified from accumulated other comprehensive loss — 3.7 3.7 Net current-period other comprehensive income 5.7 3.7 9.4 Ending balance $ (4.9) $ (42.7) $ (47.6) Reclassifications out of accumulated other comprehensive loss for the quarters and nine months ended September 30, 2020 and 2019 are as follows: Details about Accumulated Other Comprehensive Loss Components Amount Reclassified from Accumulated Other Affected Statement of Quarters Ended Nine Months Ended (in millions) 2020 2019 2020 2019 Pension and other postretirement plans adjustments: Actuarial losses $ 1.5 $ 1.7 $ 3.0 $ 5.0 (1) Prior service costs — 0.1 — 0.2 (1) Curtailment — — 0.3 — (1) Total before tax 1.5 1.8 3.3 5.2 Income before income taxes Tax benefit (0.5) (0.5) (0.9) (1.5) Income tax expense Net of tax $ 1.0 $ 1.3 $ 2.4 $ 3.7 Net income (1) These accumulated other comprehensive loss components are included in the computation of net periodic pension cost. As these are components of net periodic pension cost other than service cost, the affected Statement of Operations captions are other expense and income from discontinued operations, net of taxes (See Note 11, “Pensions and Postretirement Benefits ” for additional details). |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies General A detailed description of environmental and other legal matters relating to certain of our subsidiaries is included in this section. In addition to the matters noted herein, we are from time to time subject to, and are presently involved in, other litigation and legal proceedings arising in the ordinary course of business. We believe the outcome of such other litigation and legal proceedings will not have a material adverse effect on our financial condition, results of operations and cash flows. Expenses for administrative and legal proceedings are recorded when incurred. Environmental Our facilities and operations are subject to federal, state and local environmental and occupational health and safety requirements of the U.S. and foreign countries. We take a proactive approach in our efforts to comply with environmental, health and safety laws as they relate to our manufacturing operations and in proposing and implementing any remedial plans that may be necessary. We also regularly conduct comprehensive environmental, health and safety audits at our facilities to maintain compliance and improve operational efficiency. Although we believe past operations were in substantial compliance with the then applicable regulations, we or one or more of our subsidiaries are involved with various remediation activities or an investigation to determine responsibility for environmental conditions at 20 sites. At 17 of these sites, the future cost per site for us or our subsidiary is expected to exceed $100,000. Of these 20 sites, 18 are sites where we or one or more of our subsidiaries formerly conducted business operations but no longer do, and 2 are sites where we conduct manufacturing operations. Investigations have been completed for 16 sites and are in progress at 3 sites. An investigation to determine responsibility for environmental conditions is ongoing at one site. Our costs at 14 of the 20 sites relate to remediation projects for soil and/or groundwater contamination at or near former operating facilities that were sold or closed. Our policy is to accrue environmental investigation and remediation costs when it is probable that a liability has been incurred and the amount can be reasonably estimated. The measurement of the liability is based on an evaluation of currently available facts with respect to each individual situation and takes into consideration factors such as existing technology, presently enacted laws and regulations and prior experience in the remediation of similar contaminated sites. Liabilities are established for all sites based on these factors. As assessments and remediation progress at individual sites, these liabilities are reviewed periodically and adjusted to reflect additional technical data and legal information. As of September 30, 2020 and December 31, 2019, we had accrued liabilities aggregating $31.4 million and $36.0 million, respectively, for estimated future expenditures relating to environmental contingencies. These amounts have been recorded on an undiscounted basis in the Consolidated Balance Sheets. Given the uncertainties regarding the status of laws, regulations, enforcement policies, the impact of other parties potentially being fully or partially liable, technology and information related to individual sites, we do not believe it is possible to develop an estimate of the range of reasonably possible environmental loss in excess of our recorded liabilities. Except as described below, we believe that our accruals for specific environmental liabilities are adequate for those liabilities based on currently available information. Actual costs to be incurred in future periods may vary from estimates because of the inherent uncertainties in evaluating environmental exposures due to unknown and changing conditions, changing government regulations and legal standards regarding liability. Based on our prior ownership of Crucible Steel Corporation a/k/a Crucible, Inc. (“Crucible”), we may have additional contingent liabilities in one or more significant environmental matters. One such matter, which is included in the 20 sites referred to above, is the Lower Passaic River Study Area of the Diamond Alkali Superfund Site in New Jersey. Crucible operated a steel mill abutting the Passaic River in Harrison, New Jersey from the 1930s until 1974, which was one of many industrial operations on the river dating back to the 1800s. Certain contingent environmental liabilities related to this site were retained by a predecessor of our EnPro Holdings, Inc. subsidiary (which, including its corporate predecessors is referred to as "EnPro Holdings") when it sold a majority interest in Crucible Materials Corporation (the successor of Crucible) in 1985. The United States Environmental Protection Agency (the “EPA”) notified our subsidiary in September 2003 that it is a potentially responsible party (“PRP”) for Superfund response actions in the lower 17-mile stretch of the Passaic River known as the Lower Passaic River Study Area. EnPro Holdings and approximately 70 of the numerous other PRPs, known as the Cooperating Parties Group, are parties to a May 2007 Administrative Order on Consent with the EPA to perform a Remedial Investigation/Feasibility Study (“RI/FS”) of the contaminants in the Lower Passaic River Study Area. In September 2018, EnPro Holdings withdrew from the Cooperating Parties Group but remains a party to the May 2007 Administrative Order on Consent. The RI/FS was completed and submitted to the EPA at the end of April 2015. The RI/FS recommends a targeted dredge and cap remedy with monitored natural recovery and adaptive management for the Lower Passaic River Study Area. The cost of such remedy is estimated to be $726 million. Previously, on April 11, 2014, the EPA released its Focused Feasibility Study (the “FFS”) with its proposed plan for remediating the lower eight miles of the Lower Passaic River Study Area. The FFS calls for bank-to-bank dredging and capping of the riverbed of that portion of the river and estimates a range of the present value of aggregate remediation costs of approximately $953 million to approximately $1.73 billion, although estimates of the costs and the timing of costs are inherently imprecise. On March 3, 2016, the EPA issued the final Record of Decision (ROD) as to the remedy for the lower eight miles of the Lower Passaic River Study Area, with the maximum estimated cost being reduced by the EPA from $1.73 billion to $1.38 billion, primarily due to a reduction in the amount of cubic yards of material that will be dredged. In October 2016, Occidental Chemical Corporation, the successor to the entity that operated the Diamond Alkali chemical manufacturing facility, reached an agreement with the EPA to develop the design for this proposed remedy at an estimated cost of $165 million. The EPA has estimated that it will take approximately four years to develop this design. No final allocations of responsibility have been made among the numerous PRPs that have received notices from the EPA, there are numerous identified PRPs that have not yet received PRP notices from the EPA, and there are likely many PRPs that have not yet been identified. In September 2017, EPA hired a third-party allocator to develop an allocation of costs among a large number of the parties identified by EPA as having potential responsibility, including the Company. On June 30, 2018, Occidental Chemical Corporation sued over 120 parties, including the Company, in the United States District Court for New Jersey seeking recovery of response costs under the Federal Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"). Based on our evaluation of the site, during 2014 we accrued a liability of $3.5 million related to environmental remediation costs associated with the lower eight miles of the Lower Passaic River Study Area, which is our estimate of the low end of a range of reasonably possible costs, with no estimate within the range being a better estimate than the minimum. Since 2016, we incurred $0.9 million in costs related to this matter. Our future remediation costs could be significantly greater than the $2.6 million remaining accrual at September 30, 2020. With respect to the upper nine miles of the Lower Passaic River Study Area, we are unable to estimate a range of reasonably possible costs. Except with respect to the Lower Passaic River Study Area, we are unable to estimate a reasonably possible range of loss related to any other contingent environmental liability based on our prior ownership of Crucible. See the section entitled “Crucible Steel Corporation a/k/a Crucible, Inc.” in this footnote for additional information. In addition to the Crucible environmental matters discussed above, EnPro Holdings received a notice from the EPA dated February 19, 2014 asserting that EnPro Holdings is a potentially responsible party under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA") as the successor to a former operator in 1954 and 1955 of two uranium mines in Arizona. On October 15, 2015, EnPro Holdings received another notice from the EPA asserting that it is a potentially responsible party as the successor to the former operator of six additional uranium mines in Arizona. In 2015, we reserved $1.1 million for the minimum amount of probable loss associated with the first two mines identified by the EPA, including the cost of the investigative work to be conducted at such mines. During 2016, we reserved an additional $1.1 million for the minimum amount of probable loss associated with the six additional mines, which includes estimated costs of investigative work to be conducted at the eight mines. We entered into an Administrative Settlement Agreement and Order on Consent for Interim Removal Action with the EPA effective November 7, 2017 for the performance of this work. In the third quarter of 2017, we increased the reserve by $1.9 million to perform investigations required by the Settlement Agreement to determine the nature and extent of contamination at each site with the investigations anticipated to be completed by the end of 2020. In the fourth quarter of 2018, we increased the reserve by $1.0 million for the estimated reimbursement of the EPA's costs to oversee these investigations. The balance in the reserve as of September 30, 2020 is $1.0 million. We cannot at this time estimate a reasonably possible range of loss associated with remediation or other incremental costs related to these mines. In connection with the former operation of a division of EnPro Holdings located in Water Valley, Mississippi, which was divested to BorgWarner, Inc. ("BorgWarner") in 1996, EnPro Holdings has been managing trichloroethylene soil and groundwater contamination at the site. In February 2016, the Mississippi Department of Environmental Quality (MDEQ) issued an order against EnPro Holdings requiring evaluation of potential vapor intrusion into residential properties and commercial facilities located over the groundwater plume as well as requiring additional groundwater investigation and remediation. MDEQ performed the initial vapor intrusion investigations at certain residential and commercial sites, with the findings all being below the applicable screening level. In April 2016, the parties entered into a new order including negotiated time frames for groundwater remediation. Pursuant to that order, MDEQ performed a second round of vapor intrusion sampling beginning in August 2016. Results from sampling outside of three residences were above screening levels. Follow-up sampling directly underneath those residences (either sub-slab or in crawl spaces) were all below applicable screening levels. Two separate sampling events at another residence were also below applicable screening levels. Due to an increasing trend in vapor concentrations, MDEQ requested that we develop and implement initial corrective action measures to address vapor intrusion resulting from groundwater contamination in this residential area. These measures were developed and approved by MDEQ. Due to an inability to obtain access to private properties where the corrective action system was to be located, we developed an alternate remedial approach which has been approved by MDEQ. In addition, vapor intrusion sampling at the manufacturing facility owned by BorgWarner was conducted during the first quarter of 2017. The results showed exceedances of screening levels at various areas in the plant and exceedances of levels requiring responsive actions in a limited area of the plant. Implementation of the immediate responsive actions at the plant has been completed and corrective action consisting of a permanent vapor intrusion remediation system became operational in May 2017 with further improvements made to the system in December 2017 and January 2018. Indoor air sampling is conducted at four locations quarterly and results have been below levels requiring responsive action at three sampling locations since June 2017 and at all four locations since February 2018. We are also continuing soil and groundwater investigation work in the area inside the plant where the vapor intrusion remediation system is located and around the outside of the plant and implementing corrective action plans for both the contamination remaining at the plant as well as contamination that has migrated off-site. All of the work to be performed at the residential area, the plant and off-site is set forth in an agreed Order that we and MDEQ entered into on September 11, 2017. During 2016, we established an additional $1.3 million reserve with respect to this matter. During the year ended December 31, 2017, we reserved an additional $5.7 million for further investigation, additional remediation, long-term monitoring costs, and legal fees to support regulatory compliance for the above noted actions. In the fourth quarter of 2018, we reserved an additional $3.5 million for additional remediation, long-term monitoring costs and legal fees to support regulatory compliance for the above noted activities. On April 7, 2017, the State of Mississippi through its Attorney General filed suit against EnPro Holdings and Goodrich Corporation (EnPro's former corporate parent), in Mississippi Circuit Court in Yalobusha County seeking recovery of all costs and expenses to be incurred by the State in remediating the groundwater contamination, punitive damages and attorney’s fees. The additional reserve established in the year ended December 31, 2017, noted above, did not include any estimate of contingent loss associated with this lawsuit other than due to remediation and other actions with respect to this site based on existing MDEQ orders described above. Mediation of the case was conducted on October 20 and 21, 2020. We entered into a Definitive Agreement with the State to settle these claims requiring payment by EnPro Holdings of $14 million. Payment is to be made by no later than November 10, 2020. In connection with this settlement, we increased our accrual for liabilities associated with this matter to $17.7 million at September 30, 2020 and recorded an associated expense of $14 million in the quarter and nine months ended September 30, 2020. In light of the settlement of a prior lawsuit brought by Yalobusha County and the Board of Trustees of the Yalobusha County General Hospital, and installation and operation of additional remediation systems, in the fourth quarter of 2019, we further increased our reserve for this matter, including the remediation matters described above, by $4.7 million. The balance in the reserve as of September 30, 2020 is $17.7 million. Based upon limited information regarding any incremental remediation or other actions that may be required at the site, we cannot estimate any further loss or a reasonably possible range of loss related to this matter. Crucible Steel Corporation a/k/a Crucible, Inc. Crucible, which was engaged primarily in the manufacture and distribution of high technology specialty metal products, was a wholly owned subsidiary of EnPro Holdings until 1983 when its assets and liabilities were distributed to a new subsidiary, Crucible Materials Corporation. EnPro Holdings sold a majority of the outstanding shares of Crucible Materials Corporation in 1985 and divested its remaining minority interest in 2004. Crucible Materials Corporation filed for Chapter 11 bankruptcy protection in May 2009 and is no longer conducting operations. We have certain ongoing obligations, which are included in other liabilities in our Consolidated Balance Sheets, including workers’ compensation, retiree medical and other retiree benefit matters, in addition to those mentioned previously related to EnPro Holdings' period of ownership of Crucible. Based on EnPro Holdings' prior ownership of Crucible, we may have certain additional contingent liabilities, including liabilities in one or more significant environmental matters included in the matters discussed in “Environmental” above. We are investigating these matters. Except with respect to those matters for which we have an accrued liability as discussed in "Environmental" above, we are unable to estimate a reasonably possible range of loss related to these contingent liabilities. Warranties We provide warranties on many of our products. The specific terms and conditions of these warranties vary depending on the product and the market in which the product is sold. We record a liability based upon estimates of the costs we may incur under our warranties after a review of historical warranty experience and information about specific warranty claims. Adjustments are made to the liability as claims data, historical experience, and trends result in changes to our estimate. Changes in the product warranty liability for the nine months ended September 30, 2020 and 2019 are as follows: 2020 2019 (in millions) Balance at beginning of year $ 10.1 $ 9.4 Net charges to expense 1.4 6.2 Settlements made (3.5) (3.8) Balance at end of period $ 8.0 $ 11.8 BorgWarner A subsidiary of BorgWarner asserted claims against our subsidiary, GGB France E.U.R.L. (“GGB France”), regarding certain bearings supplied by GGB France to BorgWarner and used by BorgWarner in manufacturing hydraulic control units included in motor vehicle automatic transmission units supplied to a customer of BorgWarner, mainly that the bearings caused performance problems with and/or damage to the transmission units, leading to associated repairs and replacements. BorgWarner and GGB France participated in a technical review before a panel of experts to determine, among other things, whether there were any defects in such bearings that were a cause of the damages claimed by BorgWarner, including whether GGB France was required to notify BorgWarner of a change in the source of a raw material used in the manufacture of such bearings. This technical review was a required predicate to the commencement of a legal proceeding for damages. The expert panel issued a final report on technical and financial matters on April 6, 2017. On October 25, 2017, BorgWarner initiated a legal proceeding against GGB France with respect to this matter by filing a writ of claim with the Commercial Court of Brive, France. The parties briefed their legal positions and court hearings concluded in late 2019. The Commercial Court of Brive, France, issued its ruling on September 21, 2020. In responding to the BorgWarner claim of approximately 31 million EUR and BorgWarner's customer's claim for costs, the Court found in favor of BorgWarner in the amount of 10.4 million EUR as damages for financial loss, 931,000 EUR as reimbursement for expenses, 256,000 EUR for expert proceedings, and 100,000 EUR for reimbursement for expenses incurred by BorgWarner's customer. The court did not enforce BorgWarner's demand for payment of the award and ruled that payment of the award is stayed through appeal, noting the factual complexity of the case. On November 2, 2020, GGB France and BorgWarner entered into an agreement to settle the claims against each other, pursuant to which GGB France will pay to BorgWarner 6.6 million EUR and the parties will release each other for all claims against each other related to the lawsuit. Accordingly, we have increased the accrual for the matter at September 30, 2020 to 6.6 million EUR from the accrual of 0.4 million EUR associated with this matter established in the second quarter of 2016 and recorded an associated expense of 6.2 million EUR in the third quarter. Asbestos Insurance Matters The historical business operations of certain of our subsidiaries resulted in a substantial volume of asbestos litigation in which plaintiffs alleged personal injury or death as a result of exposure to asbestos fibers. In 2010, certain of these subsidiaries, including Garlock Sealing Technologies, LLC ("GST"), filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court for the Western District of North Carolina (the "Bankruptcy Court"). An additional subsidiary filed a Chapter 11 bankruptcy petition with the Bankruptcy Court in 2017. The filings were part of a claims resolution process for an efficient and permanent resolution of all pending and future asbestos claims through court approval of a plan of reorganization to establish a facility to resolve and pay these asbestos claims. These claims against GST and other subsidiaries were resolved pursuant to a joint plan of reorganization (the "Joint Plan") filed with the Bankruptcy Court which was consummated on July 29, 2017. Under the Joint Plan, GST and EnPro Holdings retained their rights to seek reimbursement under insurance policies for any amounts they have paid in the past to resolve asbestos claims, including contributions made to the asbestos claims resolution trust established under the Joint Plan (the "Trust"). These policies include a number of primary and excess general liability insurance policies that were purchased by EnPro Holdings and were in effect prior to January 1, 1976 (the “Pre-GST Coverage Block”). The policies provide coverage for “occurrences” happening during the policy periods and cover losses associated with product liability claims against EnPro Holdings and certain of its subsidiaries. Asbestos claims against GST are not covered under these policies because GST was not a subsidiary of EnPro Holdings prior to 1976. The Joint Plan provides that EnPro Holdings may retain the first $25 million of any settlements and judgments collected for non-GST asbestos claims related to insurance policies in the Pre-GST Coverage Block and EnPro Holdings and the Trust will share equally in any settlements and judgments EnPro Holdings may collect in excess of $25 million. To date, EnPro Holdings has collected almost $22 million in settlements for non-GST asbestos claims related to the Pre-GST Coverage Block and anticipates further collections once the Trust begins making claims payments on non-GST Claims. As of September 30, 2020, approximately $4.2 million of available products hazard limits or insurance receivables existed under primary and excess general liability insurance policies other than the Pre-GST Coverage Block (the "GST Coverage Block") from solvent carriers, which we believe is available to cover contributions made to the Trust under the Joint Plan as the Trust uses those contributions to pay GST asbestos claims covered by policies in the GST Coverage Block. There are specific agreements in place with carriers regarding the remaining available coverage. We believe that all of the $4.2 million of insurance proceeds will ultimately be collected, although there can be no assurance that the insurance companies will make the payments as and when due. In the fourth quarter of 2020, we anticipate billing an insurer in the GST Coverage Block at least $0.7 million for GST Claims paid by the Trust to date. We also believe that EnPro Holdings will bill, and could collect over time, as much as $10 million of insurance coverage for non-GST asbestos claims to reimburse it for Trust payments to non-GST Trust claimants. After EnPro Holdings collects the first approximately $3 million of that coverage, remaining collections for non-GST asbestos claims from the Pre-GST Coverage Block will be shared equally with the Trust. GST has received $8.8 million of insurance recoveries from insolvent carriers since 2007, and may receive additional payments from insolvent carriers in the future. No anticipated insolvent carrier collections are included in the $4.2 million of anticipated collections. The insurance available to cover current and future asbestos claims is from comprehensive general |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event On September 28, 2020, we entered into an agreement to acquire Alluxa, Inc. ("Alluxa"), a privately held, California-based company. Alluxa is an industrial technology company that provides specialized optical filters and thin-film coatings for the most challenging applications in the industrial technology, life sciences, and semiconductor markets. The company’s products are developed through a proprietary coating process using state-of-the-art advanced equipment. Alluxa works in collaboration with customers across major end markets to provide customized, complex precision coating solutions through the company’s specialized technology platform and proprietary processes. The company has cultivated long-standing customer relationships across its diversified customer base. Alluxa’s global distribution capabilities support the company’s international reach, serving customers across the Americas, Europe, and Asia. Founded in 2007, Alluxa has two locations in California and is headquartered in Santa Rosa, California. The cash purchase price of Alluxa was $237 million, subject to a closing date net working capital adjustment. The purchase closed on October 26, 2020. We funded the purchase with available cash and rollover equity from Alluxa executives (the "Rollover Sellers"). |
Overview, Basis of Presentati_2
Overview, Basis of Presentation and Recently Issued Authoritative Accounting Guidance (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying interim consolidated financial statements are unaudited, and certain related information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted in accordance with Rule 10-01 of Regulation S-X. They were prepared following the same policies and procedures used in the preparation of our annual financial statements except as disclosed below and reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of results for the periods presented. The Consolidated Balance Sheet as of December 31, 2019 was derived from the audited financial statements included in our annual report on Form 10-K for the year ended December 31, 2019. The results of operations for the interim periods are not necessarily indicative of the results for the fiscal year. These consolidated financial statements should be read in conjunction with our annual consolidated financial statements for the year ended December 31, 2019 included within our annual report on Form 10-K. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amount of assets and liabilities and the disclosures regarding contingent assets and liabilities at period end and the reported amounts of revenue and expenses during the reporting period. The recent outbreak of the coronavirus, or COVID-19, which has been declared by the World Health Organization to be a "pandemic," has caused us to evaluate our accounting estimates that require the consideration of forecasted financial information, including, but not limited to, our allowance for credit losses and the carrying value of our goodwill, intangible assets, and other long-lived assets. In the second quarter of 2020 we moved the oil and gas component of our Garlock Pipeline Technologies ("GPT") business from the Sealing Products segment to the Engineered Products segment. This move allowed us to group our two oil and gas businesses, GPT and Compressor Products International, together so that they can be managed as one business unit. This change is reflected in all periods presented in Note 13, "Business Segment Information " . The change also involved the transfer of $5.8 million of goodwill from the Sealing Products Segment to the Engineered Products segment which is reflected in all periods presented in Note 8, "Goodwill and Other Intangible Assets" . As a result of the move of the oil and gas component of the GPT business, an interim goodwill impairment test was performed in the second quarter of 2020 for all reporting units and we determined that the carrying amount of our goodwill was not impaired either before or after the move. This interim goodwill impairment assessment, performed in the second quarter, was conducted in the context of information that was reasonably available to us, as well as our consideration of the future potential impacts of COVID-19 on our business. The fair value of our Technetics Group reporting unit within the Sealing Products segment, which was allocated $243.7 million of goodwill as of June 30, 2020, exceeded its carrying value by an estimated 5% as of the interim testing date. The fair values of all of our other reporting units exceeded their carrying values by at least 20%. However, because of uncertainties at this time with respect to the severity and duration of the COVID-19 outbreak, the duration and terms of related governmental orders restricting activities, and the timing and pace of any economic recovery as COVID-19 impacts ultimately abate, we cannot predict with specificity the extent and duration of any future impact on our business and financial results from COVID-19. In addition, although most of our operations have been treated as “essential” operations under applicable government orders restricting business activities that have been issued to date, and accordingly have been permitted to continue to operate, it is possible that they may not continue to be so treated under future government orders, or, even if so treated, site-specific health and safety concerns might otherwise require certain of our operations to be halted for some period of time. Accordingly, if the impact is more severe or longer in duration than we have projected, such impact could potentially result in impairments of assets in future periods. We will conduct our next annual goodwill impairment assessment as of October 1, 2020. All intercompany accounts and transactions between our consolidated operations have been eliminated. |
Recently Issued Authoritative Accounting Guidance | In January 2020, we adopted a new accounting standard that changes how we measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income, including trade receivables. The standard requires us to estimate our lifetime “expected credit loss” for such assets at inception, and record an allowance that, when deducted from the amortized cost basis of the financial asset, presents the net amount expected to be collected on the financial asset. We applied a current expected credit loss model (" CECL We applied our CECL model to our trade receivables at January 1, 2020 using a modified retrospective transition approach. Upon adoption, we recorded a $0.1 million increase to our allowance for credit losses with a corresponding decrease to retained earnings. Changes in our allowance for doubtful accounts for the nine months ended September 30, 2020 were as follows: (in millions) Balance at December 31, 2019 $ 3.7 Adoption of new accounting standard 0.1 Charge to expense 1.2 Write-off of receivables (1.0) Other (0.2) Balance at September 30, 2020 $ 3.8 Additionally, in January 2020, we adopted a standard to simplify annual and interim goodwill impairment testing. Under the standard, we will perform our annual or interim goodwill impairment tests by comparing the fair value of a reporting unit with its carrying amount and recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. We still have the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. Upon adoption, there was no impairment of goodwill recorded and this standard is applied following adoption on a prospective basis for all annual and interim goodwill impairment assessments. Recently Issued Authoritative Accounting Guidance In December 2019, a standard was issued that will simplify the accounting for income taxes in nine unrelated areas. The standard is effective for fiscal years beginning after December 15, 2020 with early adoption permitted. We are currently evaluating the new guidance and do not expect its impact to be material to our consolidated financial statements. |
Overview, Basis of Presentati_3
Overview, Basis of Presentation and Recently Issued Authoritative Accounting Guidance (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Financing Receivable, Allowance for Credit Loss | Changes in our allowance for doubtful accounts for the nine months ended September 30, 2020 were as follows: (in millions) Balance at December 31, 2019 $ 3.7 Adoption of new accounting standard 0.1 Charge to expense 1.2 Write-off of receivables (1.0) Other (0.2) Balance at September 30, 2020 $ 3.8 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations | For the quarters and nine months ended September 30, 2020 and 2019, the results of operations for Fairbanks Morse were as follows: Quarters Ended Nine Months Ended 2020 2019 2020 2019 (in millions) Net sales $ — $ 74.7 $ 7.6 $ 203.1 Cost of sales — 57.4 7.6 155.6 Gross profit — 17.3 — 47.5 Operating expenses: Selling, general, and administrative expenses — 7.0 1.5 20.3 Other — 0.8 (0.1) 0.8 Total operating expenses — 7.8 1.4 21.1 Income (loss) from discontinued operations before income taxes — 9.5 (1.4) 26.4 Income tax benefit (expense) — (2.6) 0.3 (6.9) Income (loss) from discontinued operations, net of taxes — 6.9 (1.1) 19.5 Gain from sale of discontinued operations, net of taxes 1.9 — 208.4 — Income from discontinued operations, net of taxes $ 1.9 $ 6.9 $ 207.3 $ 19.5 The major classes of assets and liabilities for Fairbanks Morse as of December 31, 2019 are shown below: (in millions) Assets: Accounts receivable $ 107.8 Inventories 60.2 Property, plant, and equipment 63.0 Goodwill 11.8 Other assets 11.3 Total assets of discontinued operations $ 254.1 Liabilities: Accounts payable $ 36.9 Accrued expenses 48.2 Other liabilities 4.4 Total liabilities of discontinued operations $ 89.5 |
Acquisitions and Divestitures (
Acquisitions and Divestitures (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Business Acquisition, Pro Forma Information | The following pro forma condensed consolidated financial results of operations for the quarter and nine months ended September 30, 2019 are presented as if the acquisitions had been completed prior to 2019: Quarter Ended September 30, 2019 Nine Months Ended September 30, 2019 (in millions) Pro forma net sales $ 305.8 $ 948.2 Pro forma income (loss) from continuing operations $ (5.4) $ 17.0 |
Schedule of Assets and Liabilities | Current assets and liabilities held for sale as of September 30, 2020 are comprised of the following items: ($ in millions) Assets Accounts receivable $ 3.1 Inventory 12.6 Property, plant and equipment, net 12.6 Other assets 12.9 Current assets held for sale $ 41.2 Liabilities Accounts payable $ 6.9 Accrued expenses 5.2 Other liabilities 4.0 Current liabilities held for sale $ 16.1 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Earnings Per Share | Quarters Ended Nine months ended September 30, 2020 2019 2020 2019 (in millions, except per share amounts) Numerator (basic and diluted): Income (loss) from continuing operations attributable to EnPro Industries, Inc. $ (21.6) $ (8.4) $ (14.8) $ 16.0 Income from discontinued operations, net of taxes 1.9 6.9 207.3 19.5 Net income (loss) attributable to EnPro Industries, Inc. $ (19.7) $ (1.5) $ 192.5 $ 35.5 Denominator: Weighted-average shares – basic 20.5 20.6 20.5 20.7 Share-based awards — — — 0.1 Weighted-average shares – diluted 20.5 20.6 20.5 20.8 Basic earnings (loss) per share attributable to EnPro Industries, Inc.: Continuing operations $ (1.05) $ (0.41) $ (0.72) $ 0.77 Discontinued operations 0.09 0.33 10.09 0.94 Net income (loss) per share $ (0.96) $ (0.08) $ 9.37 $ 1.71 Diluted earnings (loss) per share attributable to EnPro Industries, Inc.: Continuing operations $ (1.05) $ (0.41) $ (0.72) $ 0.77 Discontinued operations 0.09 0.33 10.09 0.94 Net income (loss) per share $ (0.96) $ (0.08) $ 9.37 $ 1.71 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | September 30, December 31, (in millions) Finished products $ 56.6 $ 80.6 Work in process 23.1 23.7 Raw materials and supplies 48.7 56.1 128.4 160.4 Reserve to reduce certain inventories to LIFO basis (3.6) (3.3) Total inventories $ 124.8 $ 157.1 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Net Carrying Value of Goodwill by Reportable Segment | The changes in the net carrying value of goodwill by reportable segment for the nine months ended September 30, 2020, are as follows: Sealing Engineered Total (in millions) Goodwill as of December 31, 2019 $ 468.6 $ 16.7 $ 485.3 Acquisition of business 7.1 — 7.1 Divestiture of businesses (7.0) — (7.0) Foreign currency translation 1.6 (0.1) 1.5 Goodwill as of September 30, 2020 $ 470.3 $ 16.6 $ 486.9 |
Schedule of Identifiable Intangible Assets | Identifiable intangible assets are as follows: As of September 30, 2020 As of December 31, 2019 Gross Accumulated Gross Accumulated (in millions) Amortized: Customer relationships $ 455.8 $ 168.2 $ 470.1 $ 166.2 Existing technology 98.8 38.3 117.5 50.8 Trademarks 37.5 24.7 39.4 24.1 Other 33.4 24.8 33.6 24.0 625.5 256.0 660.6 265.1 Indefinite-Lived: Trademarks 53.0 — 71.4 — Total $ 678.5 $ 256.0 $ 732.0 $ 265.1 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | September 30, December 31, (in millions) Salaries, wages and employee benefits $ 45.9 $ 43.7 Interest 9.7 5.1 Environmental 26.1 25.2 Income taxes 9.7 13.5 Taxes other than income taxes 9.7 9.1 Operating lease liabilities 8.9 9.3 Legal settlement 7.8 0.4 Other 36.3 31.0 $ 154.1 $ 137.3 |
Pensions and Postretirement B_2
Pensions and Postretirement Benefits (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Retirement Benefits [Abstract] | |
Schedule of Net Periodic Benefit Cost | The components of net periodic benefit cost for our U.S. and foreign defined benefit pension and other postretirement plans for the nine months ended September 30, 2020 and 2019, are as follows: Quarters Ended September 30, Nine months ended September 30, Pension Benefits Other Benefits Pension Benefits Other Benefits 2020 2019 2020 2019 2020 2019 2020 2019 (in millions) Service cost $ 1.2 $ 1.1 $ — $ — $ 3.4 $ 3.4 $ — $ 0.1 Interest cost 2.5 3.1 — — 7.9 9.2 0.1 0.1 Expected return on plan assets (4.8) (4.0) — — (14.3) (12.0) — — Amortization of prior service cost — — — 0.1 — 0.1 — 0.1 Amortization of net loss (gain) 1.4 1.7 0.1 — 4.0 5.0 (1.0) — Curtailment loss — — 0.3 — Net periodic benefit cost $ 0.3 $ 1.9 $ 0.1 $ 0.1 $ 1.3 $ 5.7 $ (0.9) $ 0.3 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Schedule of Stockholders Equity | Changes in shareholders' equity for the first three quarters of calendar 2020 are as follows: Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Total Permanent Shareholders' Equity Redeemable Non-controlling Interest (in millions, except per share data) Shares Amount Balance, December 31, 2019 20.6 $ 0.2 $ 292.1 $ 632.2 $ (36.4) $ (1.2) $ 886.9 $ 28.0 Adoption of new accounting standard — — — (0.1) — — (0.1) — Net income — — — 218.7 — — 218.7 0.1 Other comprehensive income (loss) — — — — (22.5) — (22.5) 0.9 Dividends ($0.26 per share) — — — (5.3) — — (5.3) — Share repurchases (0.1) — (5.3) — — — (5.3) — Incentive plan activity — — 1.0 — — — 1.0 — Other — — (1.5) — — — (1.5) — Balance, March 31, 2020 20.5 0.2 286.3 845.5 (58.9) (1.2) 1,071.9 29.0 Net income (loss) — — — (6.5) — — (6.5) 0.1 Other comprehensive income — — — — 22.7 — 22.7 0.6 Dividends ($0.26 per share) — — — (5.4) — — (5.4) — Incentive plan activity — — 1.5 — — — 1.5 — Balance, June 30, 2020 20.5 0.2 287.8 833.6 (36.2) (1.2) 1,084.2 29.7 Net income (loss) — — — (19.7) — — (19.7) 0.3 Other comprehensive income — — — — 6.1 — 6.1 0.5 Dividends ($0.26 per share) — — — (5.4) — — (5.4) — Incentive plan activity — — 0.7 — — — 0.7 — Balance, September 30, 2020 20.5 $ 0.2 $ 288.5 $ 808.5 $ (30.1) $ (1.2) $ 1,065.9 $ 30.5 Changes in shareholders' equity for the first three quarters of calendar 2019 are as follows: Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Total Shareholders' Equity Redeemable non-controlling interest (in millions, except per share data) Shares Amount Balance, December 31, 2018 20.7 $ 0.2 $ 301.0 $ 603.3 $ (45.5) $ (1.3) $ 857.7 $ — Adoption of new accounting standard — — — 11.5 (11.5) — — — Net income — — — 13.1 — — 13.1 — Other comprehensive income — — — — 6.8 — 6.8 — Dividends ($0.25 per share) — — — (5.3) — — (5.3) — Share repurchases — — (2.4) — — — (2.4) — Incentive plan activity 0.1 — 1.2 — — — 1.2 — Balance, March 31, 2019 20.8 0.2 299.8 622.6 (50.2) (1.3) 871.1 — Net income — — — 23.9 — — 23.9 — Other comprehensive loss — — — — (2.6) — (2.6) — Dividends ($0.25 per share) — — — (5.2) — — (5.2) — Share repurchases (0.2) — (12.6) — — — (12.6) — Incentive plan activity — — 1.6 — — — 1.6 — Balance, June 30, 2019 20.6 0.2 288.8 641.3 (52.8) (1.3) 876.2 — LeanTeq acquisition — — — — — — — 28.0 Net loss — — — (1.5) — — (1.5) — Other comprehensive income — — — — 5.2 — 5.2 — Dividends ($0.25 per share) — — — (5.2) — — (5.2) — Incentive plan activity — — 1.7 — — — 1.7 — Balance, September 30, 2019 20.6 $ 0.2 $ 290.5 $ 634.6 $ (47.6) $ (1.3) $ 876.4 $ 28.0 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The option awards issued in 2020 had a fair value of $13.64 per share at their grant date. The following assumptions were used to estimate the fair value of the 2020 option awards: Average expected term 6 years Expected volatility 31.53 % Risk-free interest rate 1.17 % Expected dividend yield 1.93 % |
Business Segment Information (T
Business Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Operating Results and Other Financial Data | Segment operating results and other financial data for the quarters and nine months ended September 30, 2020 and 2019 were as follows: Quarters Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (in millions) Sales Sealing Products $ 201.8 $ 219.5 $ 601.4 $ 668.0 Engineered Products 67.7 81.1 201.4 255.8 269.5 300.6 802.8 923.8 Intersegment sales (1.2) (1.6) (4.8) (4.6) Net sales $ 268.3 $ 299.0 $ 798.0 $ 919.2 Segment profit (loss) Sealing Products $ 33.0 $ 17.8 $ 69.5 $ 66.2 Engineered Products (3.5) 10.6 (0.2) 28.7 Total segment profit 29.5 28.4 69.3 94.9 Corporate expenses (11.7) (8.1) (27.3) (25.5) Interest expense, net (3.9) (3.8) (11.4) (12.5) Other expense, net (42.5) (25.8) (42.7) (30.3) Income (loss) from continuing operations before income taxes $ (28.6) $ (9.3) $ (12.1) $ 26.6 |
Schedule of Total Assets Segment | Segment assets are as follows: September 30, December 31, (in millions) Sealing Products $ 1,255.4 $ 1,316.5 Engineered Products 253.6 259.4 Corporate 515.0 205.1 Discontinued operations — 254.1 $ 2,024.0 $ 2,035.1 |
Disaggregation of Revenue | Below is a summary of our third party sales by major end market with which we did business for the quarters and nine months ended September 30, 2020 and 2019: Quarter Ended September 30, 2020 (in millions) Sealing Products Engineered Products Total Aerospace $ 12.0 $ 0.9 $ 12.9 Automotive 0.4 16.7 17.1 Chemical and material processing 9.3 11.0 20.3 Food and pharmaceutical 12.7 0.4 13.1 General industrial 38.5 15.9 54.4 Medium-duty/heavy-duty truck 66.0 — 66.0 Oil and gas 5.5 17.0 22.5 Power generation 9.5 5.5 15.0 Semiconductors 46.1 — 46.1 Other 0.8 0.1 0.9 Total third party sales $ 200.8 $ 67.5 $ 268.3 Quarter Ended September 30, 2019 (in millions) Sealing Products Engineered Products Total Aerospace $ 16.1 $ 3.8 $ 19.9 Automotive 0.5 17.8 18.3 Chemical and material processing 14.7 11.3 26.0 Food and pharmaceutical 13.0 0.4 13.4 General industrial 37.7 22.1 59.8 Medium-duty/heavy-duty truck 89.7 0.6 90.3 Oil and gas 7.6 21.0 28.6 Power generation 11.9 2.5 14.4 Semiconductors 25.5 — 25.5 Other 1.5 1.3 2.8 Total third party sales $ 218.2 $ 80.8 $ 299.0 Nine Months Ended September 30, 2020 (in millions) Sealing Products Engineered Products Total Aerospace $ 37.0 $ 4.4 $ 41.4 Automotive 0.8 44.5 45.3 Chemical and material processing 35.0 32.7 67.7 Food and pharmaceutical 37.5 1.2 38.7 General industrial 121.1 54.0 175.1 Medium-duty/heavy-duty truck 188.9 0.1 189.0 Oil and gas 19.0 49.3 68.3 Power generation 30.5 14.3 44.8 Semiconductors 124.3 — 124.3 Other 3.2 0.2 3.4 Total third party sales $ 597.3 $ 200.7 $ 798.0 Nine Months Ended September 30, 2019 (in millions) Sealing Products Engineered Products Total Aerospace $ 43.0 $ 9.5 $ 52.5 Automotive 2.0 63.6 65.6 Chemical and material processing 43.3 37.2 80.5 Food and pharmaceutical 32.2 0.7 32.9 General industrial 123.6 69.0 192.6 Medium-duty/heavy-duty truck 276.7 0.9 277.6 Oil and gas 22.6 62.9 85.5 Power generation 35.2 7.2 42.4 Semiconductors 78.0 — 78.0 Other 7.7 3.9 11.6 Total third party sales $ 664.3 $ 254.9 $ 919.2 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Measured at Fair Value on Recurring Basis | Assets and liabilities measured at fair value on a recurring basis are summarized as follows: Fair Value Measurements as of September 30, 2020 December 31, 2019 (in millions) Assets Time deposits $ 36.1 $ 22.9 Foreign currency derivatives 9.6 12.3 Deferred compensation assets 6.8 10.9 $ 52.5 $ 46.1 Liabilities Deferred compensation liabilities $ 7.0 $ 11.3 Foreign currency derivatives — 0.6 $ 7.0 $ 11.9 |
Schedule of Carrying Value of Financial Instruments | The carrying values of our significant financial instruments reflected in the Consolidated Balance Sheets approximated their respective fair values except for the following instruments: September 30, 2020 December 31, 2019 Carrying Fair Carrying Fair (in millions) Long-term debt $ 493.2 $ 518.8 $ 629.3 $ 658.0 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Summary of Changes in Accumulated Other Comprehensive Loss by Component | Changes in accumulated other comprehensive loss by component (after tax) for the quarter ended September 30, 2020 are as follows: (in millions) Unrealized Pension and Total Beginning balance $ 8.6 $ (44.8) $ (36.2) Other comprehensive income before reclassifications 5.6 — 5.6 Amounts reclassified from accumulated other comprehensive loss — 1.0 1.0 Net current-period other comprehensive income 5.6 1.0 6.6 Less: other comprehensive income attributable to redeemable non-controlling interests 0.5 — 0.5 Net current-period other comprehensive income attributable to EnPro Industries, Inc. 5.1 1.0 6.1 Ending balance $ 13.7 $ (43.8) $ (30.1) Changes in accumulated other comprehensive loss by component (after tax) for the quarter ended September 30, 2019 are as follows: (in millions) Unrealized Pension and Total Beginning balance $ (8.8) $ (44.0) $ (52.8) Other comprehensive income before reclassifications 3.9 — 3.9 Amounts reclassified from accumulated other comprehensive loss — 1.3 1.3 Net current-period other comprehensive income 3.9 1.3 5.2 Ending balance $ (4.9) $ (42.7) $ (47.6) Changes in accumulated other comprehensive loss by component (after tax) for the nine months ended September 30, 2020 are as follows: (in millions) Unrealized Pension and Total Beginning balance $ 9.8 $ (46.2) $ (36.4) Other comprehensive income before reclassifications 5.9 — 5.9 Amounts reclassified from accumulated other comprehensive loss — 2.4 2.4 Net current-period other comprehensive income 5.9 2.4 8.3 Less: other comprehensive income attributable to redeemable non-controlling interests 2.0 — 2.0 Net current-period other comprehensive income attributable to EnPro Industries, Inc. 3.9 2.4 6.3 Ending balance $ 13.7 $ (43.8) $ (30.1) Changes in accumulated other comprehensive loss by component (after tax) for the nine months ended September 30, 2019 are as follows: (in millions) Unrealized Pension and Total Beginning balance $ (10.6) $ (34.9) $ (45.5) Adoption of new accounting standard — (11.5) (11.5) Adjusted beginning balance (10.6) (46.4) (57.0) Other comprehensive income before reclassifications 5.7 — 5.7 Amounts reclassified from accumulated other comprehensive loss — 3.7 3.7 Net current-period other comprehensive income 5.7 3.7 9.4 Ending balance $ (4.9) $ (42.7) $ (47.6) |
Summary of Reclassifications Out of Accumulated Other Comprehensive Loss | Reclassifications out of accumulated other comprehensive loss for the quarters and nine months ended September 30, 2020 and 2019 are as follows: Details about Accumulated Other Comprehensive Loss Components Amount Reclassified from Accumulated Other Affected Statement of Quarters Ended Nine Months Ended (in millions) 2020 2019 2020 2019 Pension and other postretirement plans adjustments: Actuarial losses $ 1.5 $ 1.7 $ 3.0 $ 5.0 (1) Prior service costs — 0.1 — 0.2 (1) Curtailment — — 0.3 — (1) Total before tax 1.5 1.8 3.3 5.2 Income before income taxes Tax benefit (0.5) (0.5) (0.9) (1.5) Income tax expense Net of tax $ 1.0 $ 1.3 $ 2.4 $ 3.7 Net income (1) These accumulated other comprehensive loss components are included in the computation of net periodic pension cost. As these are components of net periodic pension cost other than service cost, the affected Statement of Operations captions are other expense and income from discontinued operations, net of taxes (See Note 11, “Pensions and Postretirement Benefits ” for additional details). |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Changes in Carrying Amount of Product Warranty Liability | Changes in the product warranty liability for the nine months ended September 30, 2020 and 2019 are as follows: 2020 2019 (in millions) Balance at beginning of year $ 10.1 $ 9.4 Net charges to expense 1.4 6.2 Settlements made (3.5) (3.8) Balance at end of period $ 8.0 $ 11.8 |
Overview, Basis of Presentati_4
Overview, Basis of Presentation and Recently Issued Authoritative Accounting Guidance - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2020 | Sep. 30, 2020 | Jan. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle | |||||
Goodwill | $ 486.9 | $ 485.3 | |||
Allowance for credit losses | 3.8 | 3.7 | |||
Decrease in retained earnings | $ (808.5) | (632.2) | |||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | ||||
Cumulative Effect, Period of Adoption, Adjustment | |||||
New Accounting Pronouncements or Change in Accounting Principle | |||||
Allowance for credit losses | 0.1 | ||||
Cumulative Effect, Period of Adoption, Adjustment | Accounting Standards Update 2016-13 | |||||
New Accounting Pronouncements or Change in Accounting Principle | |||||
Allowance for credit losses | $ 0.1 | ||||
Decrease in retained earnings | $ 0.1 | ||||
Sealing Products | |||||
New Accounting Pronouncements or Change in Accounting Principle | |||||
Goodwill transfers | $ (5.8) | ||||
Goodwill | $ 470.3 | 468.6 | |||
Engineered Products | |||||
New Accounting Pronouncements or Change in Accounting Principle | |||||
Goodwill transfers | 5.8 | ||||
Goodwill | $ 16.6 | $ 16.7 | |||
Technetics Group | Sealing Products | |||||
New Accounting Pronouncements or Change in Accounting Principle | |||||
Goodwill | $ 243.7 | ||||
Percentage above carrying value (percent) | 5.00% | ||||
Other Reporting Units | |||||
New Accounting Pronouncements or Change in Accounting Principle | |||||
Percentage above carrying value (percent) | 20.00% |
Overview, Basis of Presentati_5
Overview, Basis of Presentation and Recently Issued Authoritative Accounting Guidance - Schedule of Changes in Allowance for Doubtful Account (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Accounts Receivable, Allowance for Credit Loss | |
Balance at December 31, 2019 | $ 3.7 |
Charge to expense | 1.2 |
Write-off of receivables | (1) |
Other | (0.2) |
Balance at September 30, 2020 | 3.8 |
Cumulative Effect, Period of Adoption, Adjustment | |
Accounts Receivable, Allowance for Credit Loss | |
Balance at December 31, 2019 | $ 0.1 |
Discontinued Operations - Addit
Discontinued Operations - Additional Information (Details) - USD ($) $ in Millions | Jan. 21, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||
Tax expense, discontinued operations | $ 65.9 | ||||
Decrease in income tax expense | $ 1.9 | ||||
Discontinued Operations, Disposed of by Sale | Fairbanks Morse | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||
Proceeds from sale of investment projects | $ 450 | ||||
The pre-tax gain on the disposition | $ 274.3 | ||||
Gain from sale of discontinued operations, net of taxes | $ 1.9 | $ 0 | $ 208.4 | $ 0 |
Discontinued Operations - Resul
Discontinued Operations - Results of Operations (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Operating expenses: | ||||
Income (loss) from discontinued operations, net of taxes | $ 207.3 | $ 19.5 | ||
Income from discontinued operations, net of taxes | $ 1.9 | $ 6.9 | 207.3 | 19.5 |
Discontinued Operations, Disposed of by Sale | Fairbanks Morse | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | ||||
Net sales | 0 | 74.7 | 7.6 | 203.1 |
Cost of sales | 0 | 57.4 | 7.6 | 155.6 |
Gross profit | 0 | 17.3 | 0 | 47.5 |
Operating expenses: | ||||
Selling, general, and administrative expenses | 0 | 7 | 1.5 | 20.3 |
Other | 0 | 0.8 | 0.8 | |
Other | (0.1) | |||
Total operating expenses | 0 | 7.8 | 1.4 | 21.1 |
Income (loss) from discontinued operations before income taxes | 0 | 9.5 | (1.4) | 26.4 |
Income tax benefit (expense) | 0 | (2.6) | 0.3 | (6.9) |
Income (loss) from discontinued operations, net of taxes | 0 | 6.9 | (1.1) | 19.5 |
Gain from sale of discontinued operations, net of taxes | 1.9 | 0 | 208.4 | 0 |
Income from discontinued operations, net of taxes | $ 1.9 | $ 6.9 | $ 207.3 | $ 19.5 |
Discontinued Operations - Class
Discontinued Operations - Classes of Assets and Liabilities (Details) - Fairbanks Morse - Discontinued Operations, Disposed of by Sale $ in Millions | Dec. 31, 2019USD ($) |
Assets: | |
Accounts receivable | $ 107.8 |
Inventories | 60.2 |
Property, plant, and equipment | 63 |
Goodwill | 11.8 |
Other assets | 11.3 |
Total assets of discontinued operations | 254.1 |
Liabilities: | |
Accounts payable | 36.9 |
Accrued expenses | 48.2 |
Other liabilities | 4.4 |
Total liabilities of discontinued operations | $ 89.5 |
Acquisitions and Divestitures -
Acquisitions and Divestitures - Narrative (Details) $ in Millions | 3 Months Ended | |||
Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Sep. 25, 2019location | Jul. 02, 2019 | |
LeanTeq | ||||
Business Acquisition | ||||
Payment received as a result of final working capital adjustment | $ 0.1 | |||
Income tax rate utilized (percent) | 23.60% | 20.00% | ||
Income tax rate utilized, local (percent) | 3.60% | |||
Goodwill | $ 7.2 | |||
Deferred tax liability | $ 7.2 | |||
LeanTeq | Taiwan | ||||
Business Acquisition | ||||
Number of locations (locations) | location | 2 | |||
LeanTeq | U.S. | ||||
Business Acquisition | ||||
Number of locations (locations) | location | 1 | |||
Aseptic | ||||
Business Acquisition | ||||
Percent acquired (percent) | 100.00% |
Acquisitions and Divestitures_2
Acquisitions and Divestitures - Proforma Results (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Business Combinations [Abstract] | ||
Pro forma net sales | $ 305.8 | $ 948.2 |
Pro forma income (loss) from continuing operations | $ (5.4) | $ 17 |
Acquisitions and Divestitures_3
Acquisitions and Divestitures - Divestitures (Details) - USD ($) | Sep. 02, 2020 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | ||||||
Proceeds from sale of businesses | $ 453,900,000 | $ 3,600,000 | ||||
Disposal by Sale | Motor Wheel Brake Drum and Crewson Brake | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | ||||||
Proceeds from sale of businesses | $ 8,900,000 | |||||
Previously accrued cash restructuring charges | $ 3,700,000 | $ 3,700,000 | ||||
Gain (loss) on sales of business | (3,600,000) | |||||
Disposal by Sale | Air Springs | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | ||||||
Outstanding account receivable | 7,200,000 | $ 7,200,000 | ||||
Disposal by Sale | Air Springs | Forecast | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | ||||||
Proceeds from sale of businesses | $ 32,000,000 | |||||
Accounts receivable face amount | $ 7,500,000 | |||||
Disposal by Sale | Lunar Air Disc Brake | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | ||||||
Proceeds from sale of businesses | 300,000 | |||||
Previously accrued cash restructuring charges | $ (2,100,000) | |||||
Gain (loss) on sales of business | 200,000 | |||||
Impairment and (adjustments) of impaired long lived assets | (200,000) | 1,600,000 | ||||
Assets held for sale | Lunar Air Disc Brake | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | ||||||
Impairment and (adjustments) of impaired long lived assets | $ (200,000) | $ 2,100,000 |
Acquisitions and Divestitures_4
Acquisitions and Divestitures - Asset and Liabilities Held For Sale (Details) - Assets held for sale $ in Millions | Sep. 30, 2020USD ($) |
Business Combination, Separately Recognized Transactions | |
Current assets held for sale | $ 41.2 |
Current liabilities held for sale | 16.1 |
Accounts receivable | |
Business Combination, Separately Recognized Transactions | |
Current assets held for sale | 3.1 |
Inventory | |
Business Combination, Separately Recognized Transactions | |
Current assets held for sale | 12.6 |
Property, plant and equipment, net | |
Business Combination, Separately Recognized Transactions | |
Current assets held for sale | 12.6 |
Other assets | |
Business Combination, Separately Recognized Transactions | |
Current assets held for sale | 12.9 |
Accounts payable | |
Business Combination, Separately Recognized Transactions | |
Current liabilities held for sale | 6.9 |
Accrued expenses | |
Business Combination, Separately Recognized Transactions | |
Current liabilities held for sale | 5.2 |
Other liabilities | |
Business Combination, Separately Recognized Transactions | |
Current liabilities held for sale | $ 4 |
Restructuring and Impairment (D
Restructuring and Impairment (Details) € in Millions, $ in Millions | Sep. 30, 2020USD ($) | Sep. 30, 2020EUR (€) | Sep. 02, 2020USD ($) | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) |
Restructuring Cost and Reserve | ||||||||
Restructuring and impairment charges | $ 21.1 | $ 1.4 | $ 40 | $ 3.7 | ||||
Other restructuring and impairment charges | 21.1 | 35.1 | ||||||
Impairments of inventory | $ 4.9 | |||||||
Bushing Block Business | Held-for-sale | ||||||||
Restructuring Cost and Reserve | ||||||||
Asset impairment | $ 6.2 | |||||||
Impairment and (adjustments) of impaired long lived assets | 1.8 | |||||||
Payments due to buyer at closing | $ 4.4 | € 3.7 | ||||||
Motor Wheel Brake Drum and Crewson Brake | Disposal by Sale | ||||||||
Restructuring Cost and Reserve | ||||||||
Restructuring and impairment charges | $ 11.1 | |||||||
Impairments of inventory | 3.6 | |||||||
Impairment of intangible assets | 3.5 | |||||||
Severance costs | 4 | |||||||
Incurred impairment charges | $ (3.7) | (3.7) | ||||||
Loss on sales of business | 3.6 | |||||||
Lunar Air Disc Brake | Disposal by Sale | ||||||||
Restructuring Cost and Reserve | ||||||||
Impairments of inventory | 0.5 | |||||||
Impairment and (adjustments) of impaired long lived assets | (0.2) | 1.6 | ||||||
Incurred impairment charges | $ 2.1 | |||||||
Loss on sales of business | (0.2) | |||||||
Trademarks | ||||||||
Restructuring Cost and Reserve | ||||||||
Impairment of intangible assets | $ 16.1 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 25.40% | 8.90% | (17.90%) | 40.00% |
Deferred tax liabilities | $ 4.5 | $ 4.5 | ||
Held for sale tax benefit | $ 4.9 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Computation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Numerator (basic and diluted): | ||||
Income (loss) from continuing operations attributable to EnPro Industries, Inc. | $ (21.6) | $ (8.4) | $ (14.8) | $ 16 |
Income from discontinued operations, net of taxes | 1.9 | 6.9 | 207.3 | 19.5 |
Net income (loss) attributable to EnPro Industries, Inc. | $ (19.7) | $ (1.5) | $ 192.5 | $ 35.5 |
Denominator: | ||||
Weighted-average shares – basic (in shares) | 20.5 | 20.6 | 20.5 | 20.7 |
Share-based awards (in shares) | 0 | 0 | 0 | 0.1 |
Weighted-average shares – diluted (in shares) | 20.5 | 20.6 | 20.5 | 20.8 |
Basic earnings (loss) per share attributable to EnPro Industries, Inc.: | ||||
Continuing operations (in dollars per share) | $ (1.05) | $ (0.41) | $ (0.72) | $ 0.77 |
Discontinued operations (in dollars per share) | 0.09 | 0.33 | 10.09 | 0.94 |
Net income per share (in dollars per share) | (0.96) | (0.08) | 9.37 | 1.71 |
Diluted earnings (loss) per share attributable to EnPro Industries, Inc.: | ||||
Continuing operations (in dollars per share) | (1.05) | (0.41) | (0.72) | 0.77 |
Discontinued operations (in dollars per share) | 0.09 | 0.33 | 10.09 | 0.94 |
Net income (loss) per share (in dollars per share) | $ (0.96) | $ (0.08) | $ 9.37 | $ 1.71 |
Antidilutive securities excluded (in shares) | 0.1 | 0.1 | 0.1 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Detail) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Finished products | $ 56.6 | $ 80.6 |
Work in process | 23.1 | 23.7 |
Raw materials and supplies | 48.7 | 56.1 |
Gross inventories | 128.4 | 160.4 |
Reserve to reduce certain inventories to LIFO basis | (3.6) | (3.3) |
Total inventories | $ 124.8 | $ 157.1 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Schedule of Changes in Net Carrying Value of Goodwill by Reportable Segment (Detail) $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Goodwill | |
Goodwill, beginning balance | $ 485.3 |
Acquisition of business | 7.1 |
Divestiture of businesses | (7) |
Foreign currency translation | 1.5 |
Goodwill, ending balance | 486.9 |
Sealing Products | |
Goodwill | |
Goodwill, beginning balance | 468.6 |
Acquisition of business | 7.1 |
Divestiture of businesses | (7) |
Foreign currency translation | 1.6 |
Goodwill, ending balance | 470.3 |
Engineered Products | |
Goodwill | |
Goodwill, beginning balance | 16.7 |
Acquisition of business | 0 |
Divestiture of businesses | 0 |
Foreign currency translation | (0.1) |
Goodwill, ending balance | $ 16.6 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Schedule of Identifiable Intangible Assets (Detail) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | $ 625.5 | $ 660.6 |
Accumulated Amortization | 256 | 265.1 |
Total | 678.5 | 732 |
Trademarks | ||
Indefinite-lived Intangible Assets | ||
Indefinite-Lived: | 53 | 71.4 |
Customer relationships | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | 455.8 | 470.1 |
Accumulated Amortization | 168.2 | 166.2 |
Existing technology | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | 98.8 | 117.5 |
Accumulated Amortization | 38.3 | 50.8 |
Trademarks | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | 37.5 | 39.4 |
Accumulated Amortization | 24.7 | 24.1 |
Other | ||
Finite-Lived Intangible Assets | ||
Gross Carrying Amount | 33.4 | 33.6 |
Accumulated Amortization | $ 24.8 | $ 24 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Segment Reporting Information | |||||
Amortization expense | $ 8.9 | $ 7.4 | $ 26.8 | $ 21.4 | |
Trademarks | |||||
Segment Reporting Information | |||||
Impairment losses | 16.1 | 18.2 | |||
Sealing Products | |||||
Segment Reporting Information | |||||
Accumulated impairment losses | 27.8 | 27.8 | $ 27.8 | ||
Engineered Products | |||||
Segment Reporting Information | |||||
Accumulated impairment losses | $ 154.8 | $ 154.8 | $ 154.8 |
Accrued Expenses - Schedule of
Accrued Expenses - Schedule of Accrued Expenses (Detail) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | ||
Salaries, wages and employee benefits | $ 45.9 | $ 43.7 |
Interest | 9.7 | 5.1 |
Environmental | 26.1 | 25.2 |
Income tax payable | 9.7 | 13.5 |
Taxes other than income taxes | 9.7 | 9.1 |
Operating lease liabilities | 8.9 | 9.3 |
Legal settlement | 7.8 | 0.4 |
Other | 36.3 | 31 |
Accrued expenses | $ 154.1 | $ 137.3 |
Long-Term Debt - Narrative (Det
Long-Term Debt - Narrative (Details) - USD ($) | Sep. 25, 2019 | Oct. 31, 2018 | Sep. 30, 2020 |
Revolving Credit Facility | |||
Line of Credit Facility | |||
Expansion threshold | $ 225,000,000 | ||
Expansion threshold (percent) | 100.00% | ||
Capacity available for specific purpose | $ 100,000,000 | ||
Credit facility borrowing capacity | 388,600,000 | ||
Letter of credit outstanding | 11,400,000 | ||
Maximum aggregate net proceeds trigger | $ 5,000,000 | ||
Revolving Credit Facility | LIBOR | |||
Line of Credit Facility | |||
Basis spread on variable rate (percent) | 1.50% | ||
Revolving Credit Facility | Base Rate | |||
Line of Credit Facility | |||
Basis spread on variable rate (percent) | 0.50% | ||
Line of Credit | Revolving Credit Facility | |||
Line of Credit Facility | |||
Debt term | 5 years | ||
Borrowing capacity | $ 400,000,000 | ||
Commitment fee on unused amount | 0.175% | ||
Term Loan | |||
Line of Credit Facility | |||
Periodic payment, years one to three, percentage of original principal amount (percent) | 2.50% | ||
Loan facility for one year (percent) | 5.00% | ||
Loan facility for two years (percent) | 1.25% | ||
Term Loan | Revolving Credit Facility | |||
Line of Credit Facility | |||
Borrowing capacity | $ 150,000,000 | ||
Long-term line of credit | $ 147,100,000 | ||
Senior Notes | |||
Line of Credit Facility | |||
Senior notes | $ 350,000,000 | ||
Stated interest rate (percent) | 5.75% | ||
Redemption price as a percentage of principal | 100.00% |
Pensions and Postretirement B_3
Pensions and Postretirement Benefits - Schedule of Net Periodic Benefit Cost (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Pension Benefits | ||||
Defined Benefit Plan Disclosure | ||||
Service cost | $ 1,200,000 | $ 1,100,000 | $ 3,400,000 | $ 3,400,000 |
Interest cost | 2,500,000 | 3,100,000 | 7,900,000 | 9,200,000 |
Expected return on plan assets | (4,800,000) | (4,000,000) | (14,300,000) | (12,000,000) |
Amortization of prior service cost | 0 | 0 | 0 | 100,000 |
Amortization of net loss (gain) | 1,400,000 | 1,700,000 | 4,000,000 | 5,000,000 |
Curtailment loss | 0 | 300,000 | ||
Net periodic benefit cost | 300,000 | 1,900,000 | 1,300,000 | 5,700,000 |
Other Benefits | ||||
Defined Benefit Plan Disclosure | ||||
Service cost | 0 | 0 | 0 | 100,000 |
Interest cost | 0 | 0 | 100,000 | 100,000 |
Expected return on plan assets | 0 | 0 | 0 | 0 |
Amortization of prior service cost | 0 | 100,000 | 0 | 100,000 |
Amortization of net loss (gain) | 100,000 | 0 | (1,000,000) | 0 |
Curtailment loss | 0 | 0 | ||
Net periodic benefit cost | 100,000 | $ 100,000 | (900,000) | $ 300,000 |
U.S. | ||||
Defined Benefit Plan Disclosure | ||||
Contributions by employer | 0 | |||
Expected future contributions | $ 4,000,000 | $ 4,000,000 |
Shareholders' Equity - Changes
Shareholders' Equity - Changes in Shareholders' Equity (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Increase (Decrease) in Stockholders' Equity | ||||||||
Other comprehensive income (loss) | $ 6.6 | $ 5.2 | $ 8.3 | $ 9.4 | ||||
LeanTeq acquisition | $ 28 | |||||||
Cash dividends per share, declared (in dollars per share) | $ 0.26 | $ 0.26 | $ 0.26 | $ 0.25 | $ 0.25 | $ 0.25 | ||
Total Permanent Shareholders' Equity | ||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Beginning balance | $ 1,084.2 | $ 1,071.9 | $ 886.9 | $ 876.2 | $ 871.1 | $ 857.7 | 886.9 | 857.7 |
Net income (loss) | (19.7) | (6.5) | 218.7 | (1.5) | 23.9 | 13.1 | ||
Other comprehensive income (loss) | 6.1 | 22.7 | (22.5) | 5.2 | (2.6) | 6.8 | ||
Dividends | (5.4) | (5.4) | (5.3) | (5.2) | (5.2) | (5.3) | ||
Share repurchases | (5.3) | (12.6) | (2.4) | |||||
Incentive plan activity | 0.7 | 1.5 | 1 | 1.7 | 1.6 | 1.2 | ||
Other | (1.5) | |||||||
Ending balance | 1,065.9 | 1,084.2 | 1,071.9 | 876.4 | 876.2 | 871.1 | 1,065.9 | 876.4 |
Total Permanent Shareholders' Equity | Cumulative Effect, Period of Adoption, Adjustment | ||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Beginning balance | (0.1) | (0.1) | ||||||
Common Stock | ||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Beginning balance | $ 0.2 | $ 0.2 | $ 0.2 | $ 0.2 | $ 0.2 | $ 0.2 | $ 0.2 | $ 0.2 |
Balance (in shares) | 20.5 | 20.5 | 20.6 | 20.6 | 20.8 | 20.7 | 20.6 | 20.7 |
Shares repurchases (in shares) | (0.1) | (0.2) | ||||||
Incentive plan activity (in shares) | 0.1 | |||||||
Ending balance | $ 0.2 | $ 0.2 | $ 0.2 | $ 0.2 | $ 0.2 | $ 0.2 | $ 0.2 | $ 0.2 |
Balance (in shares) | 20.5 | 20.5 | 20.5 | 20.6 | 20.6 | 20.8 | 20.5 | 20.6 |
Additional Paid-in Capital | ||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Beginning balance | $ 287.8 | $ 286.3 | $ 292.1 | $ 288.8 | $ 299.8 | $ 301 | $ 292.1 | $ 301 |
Share repurchases | (5.3) | (12.6) | (2.4) | |||||
Incentive plan activity | 0.7 | 1.5 | 1 | 1.7 | 1.6 | 1.2 | ||
Other | (1.5) | |||||||
Ending balance | 288.5 | 287.8 | 286.3 | 290.5 | 288.8 | 299.8 | 288.5 | 290.5 |
Retained Earnings | ||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Beginning balance | 833.6 | 845.5 | 632.2 | 641.3 | 622.6 | 603.3 | 632.2 | 603.3 |
Net income (loss) | (19.7) | (6.5) | 218.7 | (1.5) | 23.9 | 13.1 | ||
Dividends | (5.4) | (5.4) | (5.3) | (5.2) | (5.2) | (5.3) | ||
Ending balance | 808.5 | 833.6 | 845.5 | 634.6 | 641.3 | 622.6 | 808.5 | 634.6 |
Retained Earnings | Cumulative Effect, Period of Adoption, Adjustment | ||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Beginning balance | (0.1) | 11.5 | (0.1) | 11.5 | ||||
Accumulated Other Comprehensive Loss | ||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Beginning balance | (36.2) | (58.9) | (36.4) | (52.8) | (50.2) | (45.5) | (36.4) | (45.5) |
Other comprehensive income (loss) | 6.1 | 22.7 | (22.5) | 5.2 | (2.6) | 6.8 | ||
Ending balance | (30.1) | (36.2) | (58.9) | (47.6) | (52.8) | (50.2) | (30.1) | (47.6) |
Accumulated Other Comprehensive Loss | Cumulative Effect, Period of Adoption, Adjustment | ||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Beginning balance | (11.5) | (11.5) | ||||||
Treasury Stock | ||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Beginning balance | (1.2) | (1.2) | (1.2) | (1.3) | (1.3) | (1.3) | (1.2) | (1.3) |
Ending balance | (1.2) | (1.2) | (1.2) | (1.3) | $ (1.3) | $ (1.3) | (1.2) | (1.3) |
Redeemable Non-controlling Interest | ||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Beginning balance | 29.7 | 29 | 28 | 28 | ||||
Net income (loss) | 0.3 | 0.1 | 0.1 | |||||
Other comprehensive income (loss) | 0.5 | 0.6 | 0.9 | |||||
Ending balance | $ 30.5 | $ 29.7 | $ 29 | $ 28 | $ 30.5 | $ 28 |
Shareholders' Equity - Narrativ
Shareholders' Equity - Narrative (Details) - USD ($) $ / shares in Units, shares in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | 25 Months Ended | ||||||||
Oct. 31, 2020 | Feb. 29, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Oct. 31, 2020 | Oct. 31, 2018 | |
Subsequent Event | ||||||||||||
Dividends paid | $ (16,200,000) | $ (15,700,000) | ||||||||||
Cash dividends per share, declared (in dollars per share) | $ 0.26 | $ 0.26 | $ 0.26 | $ 0.25 | $ 0.25 | $ 0.25 | ||||||
Repurchase of common stock | $ 5,300,000 | $ 15,000,000 | ||||||||||
Employee Stock Options | ||||||||||||
Subsequent Event | ||||||||||||
Option term | 10 years | |||||||||||
Average expected term | 6 years | |||||||||||
Fair value (in dollars per share) | $ 13.64 | |||||||||||
Common Stock | ||||||||||||
Subsequent Event | ||||||||||||
Shares repurchases (in shares) | 0.1 | |||||||||||
Common Stock | Employee Stock Options | ||||||||||||
Subsequent Event | ||||||||||||
Options issued (in shares) | 0.1 | |||||||||||
Exercise price (in dollars per share) | $ 53.78 | |||||||||||
Share Repurchase Plan | ||||||||||||
Subsequent Event | ||||||||||||
Stock repurchase program, authorized amount (up to) | $ 50,000,000 | |||||||||||
Repurchase of common stock | $ 5,300,000 | |||||||||||
Subsequent Event | ||||||||||||
Subsequent Event | ||||||||||||
Cash dividends per share, declared (in dollars per share) | $ 0.26 | |||||||||||
Subsequent Event | Common Stock | ||||||||||||
Subsequent Event | ||||||||||||
Shares repurchases (in shares) | 0.3 | |||||||||||
Subsequent Event | Share Repurchase Plan | ||||||||||||
Subsequent Event | ||||||||||||
Stock repurchase program, authorized amount (up to) | $ 50,000,000 | $ 50,000,000 | ||||||||||
Repurchase of common stock | $ 20,300,000 |
Shareholders' Equity - Schedule
Shareholders' Equity - Schedule of Assumptions Used (Details) - Employee Stock Options | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Average expected term | 6 years |
Expected volatility | 31.53% |
Risk-free interest rate | 1.17% |
Expected dividend yield | 1.93% |
Business Segment Information -
Business Segment Information - Additional Information (Detail) $ in Millions | 9 Months Ended |
Sep. 30, 2020USD ($)segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | segment | 2 |
Performance obligation | $ | $ 201.1 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-10-01 | |
Segment Reporting Information | |
Remaining performance obligation, percentage | 95.00% |
Remaining performance obligation, expected timing | 1 year |
Business Segment Information _2
Business Segment Information - Schedule of Segment Operating Results and Other Financial Data (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Segment Reporting Information | ||||
Net sales | $ 268.3 | $ 299 | $ 798 | $ 919.2 |
Segment profit | (7.5) | 19.1 | 14.8 | 66.4 |
Other expense, net | (17.2) | (24.6) | (15.5) | (27.3) |
Income (loss) from continuing operations before income taxes | (28.6) | (9.3) | (12.1) | 26.6 |
Operating segments | ||||
Segment Reporting Information | ||||
Net sales | 269.5 | 300.6 | 802.8 | 923.8 |
Segment profit | 29.5 | 28.4 | 69.3 | 94.9 |
Intersegment sales | ||||
Segment Reporting Information | ||||
Net sales | (1.2) | (1.6) | (4.8) | (4.6) |
Corporate | ||||
Segment Reporting Information | ||||
Segment profit | (11.7) | (8.1) | (27.3) | (25.5) |
Interest expense, net | (3.9) | (3.8) | (11.4) | (12.5) |
Other expense, net | (42.5) | (25.8) | (42.7) | (30.3) |
Sealing Products | ||||
Segment Reporting Information | ||||
Net sales | 200.8 | 218.2 | 597.3 | 664.3 |
Sealing Products | Operating segments | ||||
Segment Reporting Information | ||||
Net sales | 201.8 | 219.5 | 601.4 | 668 |
Segment profit | 33 | 17.8 | 69.5 | 66.2 |
Engineered Products | ||||
Segment Reporting Information | ||||
Net sales | 67.5 | 80.8 | 200.7 | 254.9 |
Engineered Products | Operating segments | ||||
Segment Reporting Information | ||||
Net sales | 67.7 | 81.1 | 201.4 | 255.8 |
Segment profit | $ (3.5) | $ 10.6 | $ (0.2) | $ 28.7 |
Business Segment Information _3
Business Segment Information - Schedule of Assets and Long Lived Assets Segment (Detail) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Segment Reporting Information | ||
Assets | $ 2,024 | $ 2,035.1 |
Continuing Operations | Operating segments | Sealing Products | ||
Segment Reporting Information | ||
Assets | 1,255.4 | 1,316.5 |
Continuing Operations | Operating segments | Engineered Products | ||
Segment Reporting Information | ||
Assets | 253.6 | 259.4 |
Continuing Operations | Corporate | ||
Segment Reporting Information | ||
Assets | 515 | 205.1 |
Discontinued operations | ||
Segment Reporting Information | ||
Assets | $ 0 | $ 254.1 |
Business Segment Information _4
Business Segment Information - Revenue by End Market (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue | ||||
Net sales | $ 268.3 | $ 299 | $ 798 | $ 919.2 |
Sealing Products | ||||
Disaggregation of Revenue | ||||
Net sales | 200.8 | 218.2 | 597.3 | 664.3 |
Engineered Products | ||||
Disaggregation of Revenue | ||||
Net sales | 67.5 | 80.8 | 200.7 | 254.9 |
Aerospace | ||||
Disaggregation of Revenue | ||||
Net sales | 12.9 | 19.9 | 41.4 | 52.5 |
Aerospace | Sealing Products | ||||
Disaggregation of Revenue | ||||
Net sales | 12 | 16.1 | 37 | 43 |
Aerospace | Engineered Products | ||||
Disaggregation of Revenue | ||||
Net sales | 0.9 | 3.8 | 4.4 | 9.5 |
Automotive | ||||
Disaggregation of Revenue | ||||
Net sales | 17.1 | 18.3 | 45.3 | 65.6 |
Automotive | Sealing Products | ||||
Disaggregation of Revenue | ||||
Net sales | 0.4 | 0.5 | 0.8 | 2 |
Automotive | Engineered Products | ||||
Disaggregation of Revenue | ||||
Net sales | 16.7 | 17.8 | 44.5 | 63.6 |
Chemical and material processing | ||||
Disaggregation of Revenue | ||||
Net sales | 20.3 | 26 | 67.7 | 80.5 |
Chemical and material processing | Sealing Products | ||||
Disaggregation of Revenue | ||||
Net sales | 9.3 | 14.7 | 35 | 43.3 |
Chemical and material processing | Engineered Products | ||||
Disaggregation of Revenue | ||||
Net sales | 11 | 11.3 | 32.7 | 37.2 |
Food and pharmaceutical | ||||
Disaggregation of Revenue | ||||
Net sales | 13.1 | 13.4 | 38.7 | 32.9 |
Food and pharmaceutical | Sealing Products | ||||
Disaggregation of Revenue | ||||
Net sales | 12.7 | 13 | 37.5 | 32.2 |
Food and pharmaceutical | Engineered Products | ||||
Disaggregation of Revenue | ||||
Net sales | 0.4 | 0.4 | 1.2 | 0.7 |
General industrial | ||||
Disaggregation of Revenue | ||||
Net sales | 54.4 | 59.8 | 175.1 | 192.6 |
General industrial | Sealing Products | ||||
Disaggregation of Revenue | ||||
Net sales | 38.5 | 37.7 | 121.1 | 123.6 |
General industrial | Engineered Products | ||||
Disaggregation of Revenue | ||||
Net sales | 15.9 | 22.1 | 54 | 69 |
Medium-duty/heavy-duty truck | ||||
Disaggregation of Revenue | ||||
Net sales | 66 | 90.3 | 189 | 277.6 |
Medium-duty/heavy-duty truck | Sealing Products | ||||
Disaggregation of Revenue | ||||
Net sales | 66 | 89.7 | 188.9 | 276.7 |
Medium-duty/heavy-duty truck | Engineered Products | ||||
Disaggregation of Revenue | ||||
Net sales | 0 | 0.6 | 0.1 | 0.9 |
Oil and gas | ||||
Disaggregation of Revenue | ||||
Net sales | 22.5 | 28.6 | 68.3 | 85.5 |
Oil and gas | Sealing Products | ||||
Disaggregation of Revenue | ||||
Net sales | 5.5 | 7.6 | 19 | 22.6 |
Oil and gas | Engineered Products | ||||
Disaggregation of Revenue | ||||
Net sales | 17 | 21 | 49.3 | 62.9 |
Power generation | ||||
Disaggregation of Revenue | ||||
Net sales | 15 | 14.4 | 44.8 | 42.4 |
Power generation | Sealing Products | ||||
Disaggregation of Revenue | ||||
Net sales | 9.5 | 11.9 | 30.5 | 35.2 |
Power generation | Engineered Products | ||||
Disaggregation of Revenue | ||||
Net sales | 5.5 | 2.5 | 14.3 | 7.2 |
Semiconductors | ||||
Disaggregation of Revenue | ||||
Net sales | 46.1 | 25.5 | 124.3 | 78 |
Semiconductors | Sealing Products | ||||
Disaggregation of Revenue | ||||
Net sales | 46.1 | 25.5 | 124.3 | 78 |
Semiconductors | Engineered Products | ||||
Disaggregation of Revenue | ||||
Net sales | 0 | 0 | 0 | 0 |
Other | ||||
Disaggregation of Revenue | ||||
Net sales | 0.9 | 2.8 | 3.4 | 11.6 |
Other | Sealing Products | ||||
Disaggregation of Revenue | ||||
Net sales | 0.8 | 1.5 | 3.2 | 7.7 |
Other | Engineered Products | ||||
Disaggregation of Revenue | ||||
Net sales | $ 0.1 | $ 1.3 | $ 0.2 | $ 3.9 |
Derivatives and Hedging (Detail
Derivatives and Hedging (Details) € in Millions | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) | May 31, 2019USD ($) | May 31, 2019EUR (€) | Sep. 30, 2018USD ($) | Sep. 30, 2018EUR (€) |
Summary of Credit Derivatives [Abstract] | ||||||
Notional amount | $ 100,000,000 | $ 200,000,000 | ||||
Amount of hedged item | € | € 89.6 | € 172.8 | ||||
Weighted average interest rate | 3.50% | 3.50% | 2.80% | 2.80% | ||
Derivative asset | $ 9,600,000 | $ 12,300,000 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Assets | ||
Time deposits | $ 36.1 | $ 22.9 |
Foreign currency derivatives | 9.6 | 12.3 |
Deferred compensation assets | 6.8 | 10.9 |
Assets | 52.5 | 46.1 |
Liabilities | ||
Deferred compensation liabilities | 7 | 11.3 |
Foreign currency derivatives | 0 | 0.6 |
Liabilities | $ 7 | $ 11.9 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Carrying Value of Financial Instruments (Detail) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Fair Value Disclosures [Abstract] | ||
Carrying Value | $ 493.2 | $ 629.3 |
Fair Value | $ 518.8 | $ 658 |
Fair Value Measures and Disclos
Fair Value Measures and Disclosures - Narratives (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2020 | |
Trademarks | |||
Indefinite-lived Intangible Assets | |||
Impairment losses | $ 16.1 | $ 18.2 | |
Trademarks And Existing Technology | |||
Indefinite-lived Intangible Assets | |||
Impairment losses | $ 4.2 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss - Summary of Changes in Accumulated Other Comprehensive Loss by Component (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Accumulated Other Comprehensive Income | ||||||||
Other comprehensive income (loss) before reclassifications | $ 5.6 | $ 3.9 | $ 5.9 | $ 5.7 | ||||
Amounts reclassified from accumulated other comprehensive loss | 1 | 1.3 | 2.4 | 3.7 | ||||
Net current-period other comprehensive income | 6.6 | 5.2 | 8.3 | 9.4 | ||||
Unrealized Translation Adjustments | ||||||||
Accumulated Other Comprehensive Income | ||||||||
Beginning balance | 8.6 | $ 9.8 | (8.8) | $ (10.6) | 9.8 | (10.6) | ||
Other comprehensive income (loss) before reclassifications | 5.6 | 3.9 | 5.9 | 5.7 | ||||
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | 0 | 0 | ||||
Net current-period other comprehensive income | 5.6 | 3.9 | 5.9 | 5.7 | ||||
Less: other comprehensive income attributable to redeemable non-controlling interests | 0.5 | 2 | ||||||
Net current-period other comprehensive income attributable to EnPro Industries, Inc. | 5.1 | 3.9 | ||||||
Ending balance | 13.7 | $ 8.6 | (4.9) | $ (8.8) | 13.7 | (4.9) | ||
Unrealized Translation Adjustments | Cumulative Effect, Period of Adoption, Adjustment | ||||||||
Accumulated Other Comprehensive Income | ||||||||
Beginning balance | 0 | 0 | ||||||
Unrealized Translation Adjustments | Cumulative Effect, Period of Adoption, Adjusted Balance | ||||||||
Accumulated Other Comprehensive Income | ||||||||
Beginning balance | (10.6) | (10.6) | ||||||
Pension and Other Postretirement Plans | ||||||||
Accumulated Other Comprehensive Income | ||||||||
Beginning balance | (44.8) | (46.2) | (44) | (34.9) | (46.2) | (34.9) | ||
Other comprehensive income (loss) before reclassifications | 0 | 0 | 0 | 0 | ||||
Amounts reclassified from accumulated other comprehensive loss | 1 | 1.3 | 2.4 | 3.7 | ||||
Net current-period other comprehensive income | 1 | 1.3 | 2.4 | 3.7 | ||||
Less: other comprehensive income attributable to redeemable non-controlling interests | 0 | 0 | ||||||
Net current-period other comprehensive income attributable to EnPro Industries, Inc. | 1 | 2.4 | ||||||
Ending balance | (43.8) | (44.8) | (42.7) | (44) | (43.8) | (42.7) | ||
Pension and Other Postretirement Plans | Cumulative Effect, Period of Adoption, Adjustment | ||||||||
Accumulated Other Comprehensive Income | ||||||||
Beginning balance | (11.5) | (11.5) | ||||||
Pension and Other Postretirement Plans | Cumulative Effect, Period of Adoption, Adjusted Balance | ||||||||
Accumulated Other Comprehensive Income | ||||||||
Beginning balance | (46.4) | (46.4) | ||||||
Accumulated Other Comprehensive Loss | ||||||||
Accumulated Other Comprehensive Income | ||||||||
Beginning balance | (36.2) | (58.9) | (36.4) | (52.8) | (50.2) | (45.5) | (36.4) | (45.5) |
Net current-period other comprehensive income | 6.1 | 22.7 | (22.5) | 5.2 | (2.6) | 6.8 | ||
Less: other comprehensive income attributable to redeemable non-controlling interests | 0.5 | 2 | ||||||
Net current-period other comprehensive income attributable to EnPro Industries, Inc. | 6.1 | 6.3 | ||||||
Ending balance | $ (30.1) | $ (36.2) | $ (58.9) | $ (47.6) | $ (52.8) | (50.2) | $ (30.1) | (47.6) |
Accumulated Other Comprehensive Loss | Cumulative Effect, Period of Adoption, Adjustment | ||||||||
Accumulated Other Comprehensive Income | ||||||||
Beginning balance | (11.5) | (11.5) | ||||||
Accumulated Other Comprehensive Loss | Cumulative Effect, Period of Adoption, Adjusted Balance | ||||||||
Accumulated Other Comprehensive Income | ||||||||
Beginning balance | $ (57) | $ (57) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Loss - Summary of Reclassifications Out of Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income | ||||
Income before income taxes | $ (28.6) | $ (9.3) | $ (12.1) | $ 26.6 |
Tax benefit | 7.3 | 0.9 | (2.2) | (10.6) |
Reclassification out of accumulated other comprehensive income | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income | ||||
Income before income taxes | 1.5 | 1.8 | 3.3 | 5.2 |
Tax benefit | (0.5) | (0.5) | (0.9) | (1.5) |
Net income (loss) | 1 | 1.3 | 2.4 | 3.7 |
Reclassification out of accumulated other comprehensive income | Actuarial losses | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income | ||||
Actuarial losses | 1.5 | 1.7 | 3 | 5 |
Reclassification out of accumulated other comprehensive income | Prior service costs | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income | ||||
Actuarial losses | 0 | 0.1 | 0 | 0.2 |
Reclassification out of accumulated other comprehensive income | Curtailment | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income | ||||
Actuarial losses | $ 0 | $ 0 | $ 0.3 | $ 0 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) | Nov. 02, 2020EUR (€) | Oct. 21, 2020USD ($) | Sep. 21, 2020EUR (€) | Jun. 30, 2018site | Dec. 31, 2017USD ($) | Oct. 31, 2016USD ($) | Mar. 03, 2016USD ($) | Apr. 11, 2014USD ($)mi | Aug. 31, 2016residencesampling_event | Sep. 30, 2020EUR (€) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2020USD ($)sitePotentially_Responsible_Partymi | Dec. 31, 2016USD ($)site | Dec. 31, 2015USD ($)site | Sep. 30, 2020USD ($)sitemi | Sep. 30, 2020EUR (€)sitemi | Jun. 30, 2016EUR (€) | Oct. 15, 2015mine | Apr. 30, 2015USD ($) | Dec. 31, 2014USD ($) | Feb. 19, 2014site |
Site Contingency | |||||||||||||||||||||||
Number of sites subject to remediation (sites) | site | 20 | 20 | 20 | ||||||||||||||||||||
Number of sites, cost in excess of 100K (sites) | site | 17 | 17 | 17 | ||||||||||||||||||||
Cost per site minimis threshold | $ 100,000 | ||||||||||||||||||||||
Number of sites, discontinued operations (sites) | site | 18 | 18 | 18 | ||||||||||||||||||||
Number of sites, active operations (sites) | site | 2 | 2 | 2 | ||||||||||||||||||||
Number of sites, investigation completed (sites) | site | 16 | 16 | 16 | ||||||||||||||||||||
Number of sites investigation in progress (sites) | site | 3 | 3 | 3 | ||||||||||||||||||||
Number of sites remediation for soil and groundwater contamination (sites) | site | 14 | 14 | 14 | ||||||||||||||||||||
Environmental | $ 36,000,000 | $ 31,400,000 | $ 31,400,000 | ||||||||||||||||||||
Portion of site subject to remediation (miles) | mi | 8 | ||||||||||||||||||||||
Number of other potentially responsible parties | 120 | 70 | |||||||||||||||||||||
Estimate of cost | $ 726,000,000 | ||||||||||||||||||||||
Estimate low end | $ 165,000,000 | ||||||||||||||||||||||
Estimated development time | 4 years | ||||||||||||||||||||||
Investigate sites notice from EPA (sites) | site | 6 | ||||||||||||||||||||||
Provision for new losses | $ 1,000,000 | $ 1,900,000 | $ 1,100,000 | $ 1,100,000 | |||||||||||||||||||
Investigative sites (sites) | site | 8 | ||||||||||||||||||||||
Accrual component amount | $ 1,000,000 | 1,000,000 | |||||||||||||||||||||
Number of residences above applicable screening levels (residences) | residence | 3 | ||||||||||||||||||||||
Number of sampling events below applicable screening levels | sampling_event | 2 | ||||||||||||||||||||||
Estimated insurance recoveries | 25,000,000 | 25,000,000 | |||||||||||||||||||||
Insurance recoveries to date | 22,000,000 | ||||||||||||||||||||||
Estimated recovery for non-GST Trust claimants | 10,000,000 | 10,000,000 | |||||||||||||||||||||
Threshold of recovery before shared in trust | 3,000,000 | 3,000,000 | |||||||||||||||||||||
Coltec Industries Inc. | |||||||||||||||||||||||
Site Contingency | |||||||||||||||||||||||
Environmental | 17,700,000 | $ 1,300,000 | 17,700,000 | ||||||||||||||||||||
Provision for new losses | $ 5,700,000 | $ 3,500,000 | |||||||||||||||||||||
Lower passaic river study area, focused feasibility study, April 11, 2014 | |||||||||||||||||||||||
Site Contingency | |||||||||||||||||||||||
Environmental | $ 2,600,000 | $ 2,600,000 | $ 3,500,000 | ||||||||||||||||||||
Minimum | Lower passaic river study area, focused feasibility study, April 11, 2014 | |||||||||||||||||||||||
Site Contingency | |||||||||||||||||||||||
Site contingency, loss exposure in excess of accrual best estimate | $ 1,380,000,000 | $ 953,000,000 | |||||||||||||||||||||
Maximum | |||||||||||||||||||||||
Site Contingency | |||||||||||||||||||||||
Portion of site subject to remediation (miles) | mi | 9 | 9 | 9 | ||||||||||||||||||||
Maximum | Lower passaic river study area, focused feasibility study, April 11, 2014 | |||||||||||||||||||||||
Site Contingency | |||||||||||||||||||||||
Site contingency, loss exposure in excess of accrual best estimate | $ 1,730,000,000 | ||||||||||||||||||||||
Mississippi Circuit Court in Yalobusha County | |||||||||||||||||||||||
Site Contingency | |||||||||||||||||||||||
Loss accrual current | $ 17,700,000 | $ 17,700,000 | |||||||||||||||||||||
Legal settlement expense | 14,000,000 | ||||||||||||||||||||||
Borgwarner | |||||||||||||||||||||||
Site Contingency | |||||||||||||||||||||||
Amount sought | € | € 31,000,000 | ||||||||||||||||||||||
Amount awarded to other party | € | 10,400,000 | ||||||||||||||||||||||
Legal fees | € | 256,000 | ||||||||||||||||||||||
Reimbursement charges | € | 931,000 | ||||||||||||||||||||||
Reimbursement for expenses incurred by customer | € | € 100,000 | ||||||||||||||||||||||
Loss accrual | € | € 6,600,000 | € 400,000 | |||||||||||||||||||||
Legal settlement expense | € | € 6,200,000 | ||||||||||||||||||||||
Subsequent Event | Mississippi Circuit Court in Yalobusha County | |||||||||||||||||||||||
Site Contingency | |||||||||||||||||||||||
Amount awarded to other party | $ 14,000,000 | ||||||||||||||||||||||
Arizona | |||||||||||||||||||||||
Site Contingency | |||||||||||||||||||||||
Investigate sites notice from EPA (sites) | 2 | 6 | 2 | ||||||||||||||||||||
Mississippi | |||||||||||||||||||||||
Site Contingency | |||||||||||||||||||||||
Provision for new losses | $ 4,700,000 | ||||||||||||||||||||||
GGB France | Borgwarner | Subsequent Event | Borgwarner | |||||||||||||||||||||||
Site Contingency | |||||||||||||||||||||||
Payment to settle litigation | € | € 6,600,000 | ||||||||||||||||||||||
Environmental Remediation | |||||||||||||||||||||||
Site Contingency | |||||||||||||||||||||||
Loss in period | 900,000 | ||||||||||||||||||||||
Asbestos Issue | |||||||||||||||||||||||
Site Contingency | |||||||||||||||||||||||
Insurance coverage amount | 4,200,000 | 4,200,000 | |||||||||||||||||||||
Estimated insurance recoveries, current year | 700,000 | 700,000 | |||||||||||||||||||||
Asbestos Issue | GST, LLC | |||||||||||||||||||||||
Site Contingency | |||||||||||||||||||||||
Insurance recoveries from insolvent carriers | $ 8,800,000 | $ 8,800,000 | |||||||||||||||||||||
Affiliated Entity | Crucible Steel Corporation | |||||||||||||||||||||||
Site Contingency | |||||||||||||||||||||||
Portion of site subject to remediation (miles) | mi | 17 | 17 | 17 |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Changes in Carrying Amount of Product Warranty Liability (Detail) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Movement in Standard Product Warranty Accrual | ||
Balance at beginning of year | $ 10.1 | $ 9.4 |
Net charges to expense | 1.4 | 6.2 |
Settlements made | (3.5) | (3.8) |
Balance at end of year | $ 8 | $ 11.8 |
Subsequent Event (Details)
Subsequent Event (Details) $ in Thousands | Oct. 26, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 28, 2020location |
Subsequent Event | |||
Payments to acquire business | $ 310,400 | ||
Alluxa, Inc., | |||
Subsequent Event | |||
Number of locations (locations) | location | 2 | ||
Subsequent Event | Alluxa, Inc., | |||
Subsequent Event | |||
Payments to acquire business | $ 237,000 | ||
Subsequent Event | Rollover Sellers | Acquisition Subsidiary | |||
Subsequent Event | |||
Ownership interest, minority interest | 7.00% | ||
Equity interest | $ 17,850 |