EnPro Industries Reports Second Quarter 2003 Results

EnPro Industries Reports Second Quarter 2003 Results EnPro Industries (USA) reported improved second quarter 2003 sales over 2002, helped by a strong Euro, as it continues to wrestle with asbestos claims and litigation inherited in its spinoff from Goodrich in 2002. Sales hit $198.3 million in the quarter, up from $191.2 million in 2002, while operating income rose to $180.4 million from $177 million. Net income in 2003 was $11.4 million, reversing a $1.3 million loss in 2002. 2002's loss was related to a one-time expense charge, boosting severance and environmental reserves as part of the EnPro spinoff. The comparative numbers are estimates because EnPro was spun off from Goodrich Corporation (USA) in June 2002. It did not exist as a separate entity during 2002's second quarter. EnPro represents all of Goodrich's Engineered Industrial Products business unit. • article: Goodrich spinning off bearing division as EnPro Industries About the spinoff, CEO Ernie Schaub said, "EnPro is an industry leader in sealing products, metal polymer bearings and compressor systems, as well as a manufacturer of other engineered products for a variety of critical applications in industrial markets." The bearing component of EnPro is Glacier Garlock Bearings, made up of Garlock and the Glacier Industrial Bearing Division, acquired from Dana in May 2001. Glacier was rolled under Goodrich's Garlock self-lubricated polymer bearings business and renamed Glacier Garlock Bearings. • article: Goodrich's Garlock acquires Glacier Industrial Bearing About 2003's second quarter, Mr. Schaub said, "The steps we took in 2002 to improve operating performance benefited second quarter 2003 results, but difficult markets and reduced levels of demand for certain products continue to slow our growth. Although we believe the businesses we operate are fundamentally strong, the decline in the profitability of our Engineered Products segment illustrates the challenges we face in today's marketplace. Echoing concerns voiced by other manufacturers in their quarterly results, Mr. Schaub said, "The U.S. manufacturing sector is increasingly faced with lower cost global competition, and U.S. market activity remains low. Similar circumstances exist in Europe." Mr. Schaub went on to indicate EnPro is considering shifting production to Asia and eastern Europe: "We are addressing these issues through our TCV program ... and we are moving to develop manufacturing facilities in low-cost areas." EnPro's Glacier Garlock Bearings division operates in its Engineered Products segment. Engineered Products sales in the quarter improved to $112.5 million from $108.1 million in 2002. However, segment profit fell to $10.5 million from $11.4 million as margins eroded to only 9.4%. About Glacier, the company said, "Despite the benefit of a stronger Euro, earnings declined at Glacier Garlock Bearings, reflecting pricing pressure and a less profitable product mix." European operations of Glacier Garlock Bearings benefited from the stronger Euro, however.