EnPro Industries Inc. (NPO, Financial) filed Annual Report for the period ended 2011-12-16.
Enpro Indus Inc has a market cap of $790.43 million; its shares were traded at around $38.13 with a P/E ratio of 15.85 and P/S ratio of 0.72.
Segment profit of $81.2 million in 2011 increased 16% compared to the $70.3 million reported in 2010. Despite higher volumes, some contribution from the acquisitions, and price increases, which nearly offset all cost increases, Garlock earnings declined because of the deconsolidation of GST LLC effective on the Petition Date. Segment profit for GST LLC in 2010 through the Petition Date was $14.0 million. Earnings at Technetics increased compared to 2010, but the increase was less than the improvement in sales because the incremental earnings at the acquired businesses are still developing. Stemco reported an increase in profit in connection with its higher volumes, including its acquired business, which was reduced by cost increases in excess of selected price increases in 2011. Operating margins for the Stemco brake products acquisition in 2011 were lower than the historical business, which is likely to be the case going forward due to the nature of the brake products market. Operating margins for the segment decreased to 15.2% in 2011 from 17.7% in 2010.
The segment reported a profit of $30.6 million in 2011 compared to $35.5 million in 2010. A lower margin mix of engine shipments in 2011, the decrease in higher margin aftermarket parts and services activity, and net cost increases contributed to the decrease in segment profit. In addition, the segment recorded a $1.4 million estimated warranty expense to repair a specific engine component in a series of U.S. Navy ships. The segment also recorded a $3 million estimated loss on an engine contract. The expected contract loss is a result of detrimental changes in the market for nuclear power plant emergency power engines after the tsunami in Japan, which caused costs per nuclear-related engine to be higher than expected, and the original engine costs for the program were underestimated. These large costs were partially offset by: cost reimbursements related to the canceled South Texas Project of approximately $1.8 million, which reduced expenses in the third quarter of 2011; the resolution of a legal matter, which reduced legal expenses by $0.5 million; and approximately $1.5 million of incremental profit related to the use of percentage-of-completion accounting beginning in the third quarter of 2011. Operating margins dropped from 21.4% in 2010 to 16.5% this year.
Segment profit of $70.3 million in 2010 increased 26% compared to the $55.8 million reported in 2009. The increase in profit in our Garlock group of companies reflected a benefit from higher volumes, the inclusion of the acquired Technetics business, and various net price increases partially offset by the deconsolidation of GST LLC, which reported segment profit of $16.5 million subsequent to its deconsolidation, and various cost increases. Stemco reported a significant increase in profit primarily due to increased production and demand in heavy-duty vehicle markets partially offset by cost increases. Likewise, higher volume bolstered Plastomer Technologies 2010 results as it also reported improved earnings compared to last year. Operating margins for the segment increased to 17.7% in 2010 from 14.0% in 2009.
The segment reported a profit of $35.5 million in 2010 compared to $30.5 million in 2009. The 16% year-over-year improvement was a result of the aftermarket volume increase combined with net cost decreases and pricing increases. Operating margins for the segment increased to 21.4% in 2010 from 18.3% in 2009.
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Enpro Indus Inc has a market cap of $790.43 million; its shares were traded at around $38.13 with a P/E ratio of 15.85 and P/S ratio of 0.72.
Highlight of Business Operations:
Sales of $1,105.5 million in 2011 increased 28% from $865.0 million in 2010. Sales from acquisitions completed since 2010 contributed about 20 percentage points to the increase. In addition, sales increased as a result of higher volumes in the Sealing Products and Engineered Products segments as we have taken advantage of improvements in nearly all of our customer markets and we are actively pursuing increased market share. Selected price increases we have instituted also contributed to the increase in sales compared to last year. Sales in the Engine Products and Services segment grew 12% primarily due to shipping more engines, with higher average revenue per engine, in 2011 versus 2010, and incremental revenue related to using the percentage-of-completion accounting method beginning in the third quarter of 2011. Changes in foreign exchange rates added two percentage points to the sales increase. Sales in 2010 included GST LLC through the Petition Date while sales in 2011 excluded GST LLCs sales for the full year as a result of the deconsolidation of GST LLC effective on the Petition Date. Sales from GST LLC to third parties in 2010 through the Petition Date were $77.7 million.Segment profit of $81.2 million in 2011 increased 16% compared to the $70.3 million reported in 2010. Despite higher volumes, some contribution from the acquisitions, and price increases, which nearly offset all cost increases, Garlock earnings declined because of the deconsolidation of GST LLC effective on the Petition Date. Segment profit for GST LLC in 2010 through the Petition Date was $14.0 million. Earnings at Technetics increased compared to 2010, but the increase was less than the improvement in sales because the incremental earnings at the acquired businesses are still developing. Stemco reported an increase in profit in connection with its higher volumes, including its acquired business, which was reduced by cost increases in excess of selected price increases in 2011. Operating margins for the Stemco brake products acquisition in 2011 were lower than the historical business, which is likely to be the case going forward due to the nature of the brake products market. Operating margins for the segment decreased to 15.2% in 2011 from 17.7% in 2010.
The segment reported a profit of $30.6 million in 2011 compared to $35.5 million in 2010. A lower margin mix of engine shipments in 2011, the decrease in higher margin aftermarket parts and services activity, and net cost increases contributed to the decrease in segment profit. In addition, the segment recorded a $1.4 million estimated warranty expense to repair a specific engine component in a series of U.S. Navy ships. The segment also recorded a $3 million estimated loss on an engine contract. The expected contract loss is a result of detrimental changes in the market for nuclear power plant emergency power engines after the tsunami in Japan, which caused costs per nuclear-related engine to be higher than expected, and the original engine costs for the program were underestimated. These large costs were partially offset by: cost reimbursements related to the canceled South Texas Project of approximately $1.8 million, which reduced expenses in the third quarter of 2011; the resolution of a legal matter, which reduced legal expenses by $0.5 million; and approximately $1.5 million of incremental profit related to the use of percentage-of-completion accounting beginning in the third quarter of 2011. Operating margins dropped from 21.4% in 2010 to 16.5% this year.
Segment profit of $70.3 million in 2010 increased 26% compared to the $55.8 million reported in 2009. The increase in profit in our Garlock group of companies reflected a benefit from higher volumes, the inclusion of the acquired Technetics business, and various net price increases partially offset by the deconsolidation of GST LLC, which reported segment profit of $16.5 million subsequent to its deconsolidation, and various cost increases. Stemco reported a significant increase in profit primarily due to increased production and demand in heavy-duty vehicle markets partially offset by cost increases. Likewise, higher volume bolstered Plastomer Technologies 2010 results as it also reported improved earnings compared to last year. Operating margins for the segment increased to 17.7% in 2010 from 14.0% in 2009.
The segment reported a profit of $35.5 million in 2010 compared to $30.5 million in 2009. The 16% year-over-year improvement was a result of the aftermarket volume increase combined with net cost decreases and pricing increases. Operating margins for the segment increased to 21.4% in 2010 from 18.3% in 2009.
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