Enpro (NPO) Q4 2024 earnings summary

Executive summary

• 2024 sales declined 1.0% year-over-year to $1,048.7M, with organic sales down 3.9%, reflecting semiconductor and commercial vehicle market weakness offset by strength in nuclear, aerospace, and food/pharma.

• Adjusted EBITDA rose 7.1% to $254.8M, with margin expanding 180 bps to 24.3% due to improved mix, cost initiatives, and lower share-based compensation.

• Q4 2024 sales grew 3.7% year-over-year to $258.4M, with gross margin up 360 bps and adjusted diluted EPS up 31.9% to $1.57.

• Sealing Technologies segment offset softness in Advanced Surface Technologies, driving improved year-over-year bottom line results.

• Launched Enpro 3.0, focusing on higher revenue growth, best-in-class profitability, and strong returns on invested capital.

Financial highlights

• Full-year adjusted EBITDA margin reached 24.3%, up from 22.5% in 2023.

• Free cash flow for 2024 was $130.0M, down from $174.1M in 2023 due to higher cash taxes.

• Adjusted diluted EPS for Q4 was $1.57, up 32% from prior year; full-year adjusted diluted EPS was $6.96, up 6.4%.

• Paid $25.3M in dividends in 2024; quarterly dividend increased to $0.31 per share, marking the tenth consecutive annual increase.

• Net debt at year-end was $406M, with $236.3M in cash and $390M available under the credit facility.

Outlook and guidance

• 2025 revenue growth expected in the low to mid-single digits.

• 2025 adjusted EBITDA guidance: $262M–$277M; adjusted diluted EPS: $7.00–$7.70.

• Sealing Technologies: low- to mid-single-digit revenue growth, adjusted segment EBITDA margin to exceed 30%.

• Advanced Surface Technologies: mid to high single-digit sales growth, margins above 20%, with stronger second half expected.

• 2025 capital expenditures expected to be ~$50M (4.5% of sales); assumptions include $101–103M depreciation/amortization and $34–36M net interest.