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EnPro Industries Inc. Reports Operating Results (10-Q)

November 06, 2009 | About:

EnPro Industries Inc. (NYSE:NPO) filed Quarterly Report for the period ended 2009-09-30.

EnPro Industries Inc. is a leader in sealing products metal polymer bearings compressor systems and other engineered products for use in critical applications by industries worldwide. Enpro Industries Inc. has a market cap of $481.8 million; its shares were traded at around $23.88 with a P/E ratio of 11.5 and P/S ratio of 0.4. Enpro Industries Inc. had an annual average earning growth of 19.2% over the past 5 years.

Highlight of Business Operations:

On March 3, 2008, pursuant to a $100 million share repurchase authorization approved by our board of directors, we entered into an accelerated share repurchase (ASR) agreement with a financial institution to provide for the immediate retirement of $50 million of our common stock. Under the ASR agreement, we purchased approximately 1.7 million shares of our common stock from a financial institution at an initial price of $29.53 per share. Total consideration paid at initial settlement to repurchase these shares, including commissions and other fees, was approximately $50.2 million and was recorded in shareholders equity as a reduction of common stock and additional paid-in capital. The price adjustment period under the ASR terminated on August 29, 2008. In connection with the finalization of the ASR, we remitted in cash a final settlement adjustment of $11.9 million to the financial institution that executed the ASR. The final settlement adjustment, recorded as a reduction of additional paid-in capital, was based on the average of the reported daily volume-weighted average price of our common stock during the term of the ASR. It resulted in a remittance to the financial institution because the volume-weighted average price of our common stock during the term of the ASR exceeded the initial price of $29.53 per share. After the final settlement adjustment, we had completed about $62 million of the share repurchase authorization.

We recorded an income tax benefit of $2.8 million on a loss before income taxes of $(1.0) million in the third quarter of 2009. During the third quarter of 2008, we recorded income tax expense of $4.6 million on income before income taxes of $17.0 million. The income tax expense in the third quarter of 2009 was impacted by the jurisdictional mix of earnings and losses as well as adjustments of prior year accruals based on return-to-accrual adjustments.

Net income was $1.8 million, or $0.09 per share, in the third quarter of 2009 compared to net income of $12.4 million, or $0.59 per share, in the same quarter of 2008. Earnings (loss) per share are expressed on a diluted basis.

Net loss was $100.7 million, or $5.05 per share, for the first nine months of 2009 compared to net income of $45.3 million, or $2.12 per share, in the same period last year. Earnings (loss) per share are expressed on a diluted basis.

Investing activities used $20.0 million and $60.0 million of cash during the first nine months of 2009 and 2008, respectively. We made net payments for acquisitions of $6.2 million in 2009 compared to $37.4 million in 2008. In addition, capital expenditures in 2009 were $17.6 million less than in 2008 as most businesses reduced spending in response to the current economic environment.

The maximum amount available for borrowings under the facility is $75 million. Under certain conditions, we may request that the facility be increased by up to $25 million, to $100 million in total. Actual borrowing availability at any date is determined by reference to a borrowing base of specified percentages of eligible accounts receivable and inventory and is reduced by usage of the facility, which includes outstanding letters of credit, and any reserves. The actual borrowing availability at September 30, 2009 under our senior secured revolving credit facility was $67.5 million.

Read the The complete ReportNPO is in the portfolios of John Keeley of Keeley Fund Management.

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