Enpro Industries (NPO)

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EnPro Industries, Inc. (NPO)

Q1 2020 Earnings Call

May 6, 2010 10:00 am ET

Executives

Donald Washington – Director, Investor Relations

Stephan Macadam – President, Chief Executive Officer

William Dries – Senior Vice President, Chief Financial Officer

Analysts

Joseph Mondillo – Sidoti & Company

Gary Farber – C.L. King & Associates

Kevin Bennett – Davenport & Co.

Presentation

Operator

I would like to welcome everyone to the EnPro Industries first quarter earnings release conference call. (Operator Instructions) I would now like to turn the call over to Mr. Don Washington, Director of Investor Relations.

Donald Washington

Good morning, everyone and welcome to EnPro Industries quarterly earnings call. In just a moment, Steve Macadam, our President and CEO and Bill Dries, our Senior Vice President and CFO will review the first quarter 2010 for you and then we’ll open the line for a question and answer session.

Slides of the company conference call are available on our website and you can access the presentation through the webcast link on our internet home page at www.EnProindustries.com.

Before Steve and Bill make their remarks, I’d like to remind you that you may hear statements during the course of this call that express the belief, expectation or intention as well as those that are not historical fact.

These statements are forward-looking and involve a number of risks and uncertainties that may cause actual events and results to differ materially from such forward-looking statements. These risks and uncertainties are referenced in the Safe Harbor statement included in our press release and are described in more detail along with other risks and uncertainties in our filings with the SEC including the Form 10-K for the year ended December 31, 2009. We do not undertake to update any forward-looking statements made on this conference call to reflect any change in management’s expectations or any change in assumptions or circumstances, all of which such statements are based. The call is being webcast on our website and a reply of the call will also be available on the website.

Before I turn the call over to Steve, I’d like to mention our investor day in New York on June 10. Invitations went out earlier this week. This will be a half-day event that will include presentations by our senior managers. More information about the agenda is in the presentation of the company’s call.

We have a web based registration system you can access by following the RSVP link found in the presentation by selecting the events tab in our investor relations section of our website. We’ve got a very exciting and information day lined up for you, so we hope you’ll be able to join us, and if you’re interested in knowing more, you can contact me directly as well.

As I mentioned, we’ll conclude the call with a question and answer session after Steve and Bill make their remarks. If you have questions that aren’t answered or if you have follow up questions, call me please at 704-731-1527. And now I’ll turn the call over to Steve.

Stephan Macadam

Good morning everyone and thanks for joining us. As you can see from our first quarter results, the momentum that we picked up at the end of 2009 is continuing in 2010. We finished last year with a nice sequential improvement in our performance and we’ve begun 2010 by reporting better year over year results for the first time since 2008.

All of our businesses reported double digit increases in sales over the first quarter of 2009 and our segment profits and profit margins were each more than twice what they were a year ago. Quincy compressor is accounted for as a discontinued operation in this comparison, but to underscore the strength of our recovery, the sales and income numbers we reported this year without Quincy, are better than the numbers we reported last year with Quincy.

A significant portion of the improvement in our profitability is the result of the cost we took out of our businesses last year as well as our ongoing enterprise excellence improvement initiatives. All of our operations benefited from these efforts, and we saw improved profits and higher margins across the board.

GGB, our bearings business, showed the greatest year over year improvement and was solidly profitable after reporting a sizeable loss in the first quarter of last year. GGB has made a nice turnaround over the last 12 months. The business is automotive and industrial markets have strengthened significantly.

As I’m sure you will recall, those markets were in a demand freefall a year ago as the global recession devastated GGB’s end use markets. The team at GGB completed a very important and effective restructuring in their French operations, which has allowed GGB to significantly and permanently reduce costs in a generally high cost country.

The GGB facility that we built and opened in Slovakia back in 2004, will absorb much of the increased European volume going forward, which will position the business well from a cost perspective.

GGB also recently realigned its organization from one that serves customers based on geography to one that serves customers based on global market segment, such a automotive, construction and agricultural equipment, renewal energy pumps and compressors and so forth.

This is proving to be a very successful model in helping to drive growth in GGB, because it allows the business to tailor its offering and value proposition directly to these target segments. Bill will go into more details about GGB’s contribution to our results in the quarter, but each of those factors was important to an impressive turnaround.

Read the rest of this transcript for free on seekingalpha.com