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In the third quarter of 2009, the company reported a pre-tax loss of $1.0 million and a tax benefit of $2.8 million.
Before asbestos-related expenses and other selected items, the company earned $10.6 million, or $0.52 a share, compared with $20.9 million, or $0.99 a share in the third quarter of 2008. A table showing the effect of asbestos-related expenses and other selected items in both periods is included in this announcement. Per share amounts are expressed on a diluted basis.
In a release on October 29, the Company noted that sales in the third quarter decreased to $219.7 million, a 21 percent decline from the third quarter of 2008 when they were $278.6 million. Excluding the effect of foreign exchange, sales declined 19 percent from the third quarter of 2008. The decline in sales reflects the continued weak conditions of the worldwide markets served by EnPro's Sealing Products and Engineered Products segments.
Earnings before interest, income taxes, depreciation, amortization, asbestos-related expenses and other selected items (EBITDAA) were $27.3 million in the third quarter of 2009, compared with $44.8 million in the third quarter of 2008. As a percentage of sales, EBITDAA fell to 12.4 percent from 16.1 percent a year ago.
"We are pleased with our performance in the third quarter, given the state of most of our markets," said Steve Macadam, president and chief executive officer of EnPro Industries. "Our results exceeded our expectations from earlier in the year, despite weak demand and the seasonality that typically affects our Sealing Products and Engineered Products segments. Sales in these segments were about the same as in the second quarter and their profits and margins increased over the second quarter, while our Engine Products and Services segment continued to perform well.
"Our performance in the third quarter reflects the effectiveness of the cost reductions we began last year as well as the important benefits of other programs we have initiated to establish high standards of excellence, company-wide," Macadam continued.
For the first nine months of 2009, EnPro reported a net loss of $100.7 million, or $5.05 a share, compared with net income of $45.3 million, or $2.12 a share, in the first nine months of 2008. The loss in the first nine months of 2009 includes a non-cash goodwill impairment charge of $96.1 million, or $4.81 a share, after tax. Before asbestos-related expenses and other selected items, the company earned $26.2 million, or $1.29 a share, in the first nine months of 2009 compared with $71.9 million, $3.37 a share, in 2008.
Sales in the first nine months of the year were $671.4 million, 24 percent below the first nine months of 2008 when they were $878.5 million. Before the negative effect of foreign exchange and a small benefit from acquisitions, sales were 20 percent below the first nine months of last year.
Outlook
"While activity remains well below the levels of a year ago, demand has stabilized in most of our markets and is showing signs of modest improvement in portions of our energy markets and in some industrial markets," said Macadam. "We expect these conditions, along with the performance of Fairbanks Morse and our company-wide improvement programs, to continue to benefit our segment results over the remaining months of 2009."
"As our third quarter results indicate, we have adjusted well to the difficult conditions of the past year, and we are in a position to return to a pattern of growth," Macadam said. "Stable markets, a healthy balance sheet, ample liquidity and our strategic discipline will enable us to take advantage of the many exciting opportunities we expect our businesses to encounter in the future."
EnPro Industries, Inc. is a company providing sealing products, metal polymer and filament wound bearings, compressor systems and components, diesel and dual-fuel engines and other engineered products for use in critical applications by industries worldwide.
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