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Business Segment Information | 6 Months Ended
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Jun. 30, 2023
Segment Reporting [Abstract] |
Business Segment Information | Business Segment Information We aggregate our operating businesses into two reportable segments. The factors considered in determining our reportable segments are the economic similarity of the businesses, the nature of products sold, or solutions provided, the production processes and the types of customers and distribution methods. Our reportable segments are managed separately based on these differences. Our Sealing Technologies segment designs and manufactures value-added products and solutions that safeguard a variety of critical environments, including: metallic, non-metallic and composite material gaskets, dynamic seals, compression packing, resilient metal seals, elastomeric seals, custom-engineered mechanical seals for applications in the aerospace industry and other markets, hydraulic components, expansion joints, sanitary gaskets, hoses and fittings for the hygienic process industries, fluid transfer products for the pharmaceutical and biopharmaceutical industries, and heavy-duty commercial vehicle parts used in wheel-end and suspension components that customers rely upon to ensure safety on our roadways. These products are used in a variety of markets, including chemical and petrochemical processing, nuclear energy, food and biopharmaceutical processing, primary metal manufacturing, mining, water and waste treatment, heavy-duty trucking, aerospace, medical, filtration and semiconductor fabrication. In all of these industries, performance and durability of our proprietary products and solutions are vital for the safety and environmental protection of our customers' processes. Many of our products and solutions are used in highly demanding applications in harsh environments, e.g., where extreme temperatures, extreme pressures, corrosive environments, strict tolerances, and/or worn equipment create challenges for product performance. Sealing Technologies offers customers widely recognized applied engineering, innovation, process know how and enduring reliability, driving aftermarket demand for many of our solutions. Our Advanced Surface Technologies ("AST") segment applies proprietary technologies, processes, and capabilities to deliver a highly differentiated suite of products and solutions for challenging applications in high growth markets. The segment’s products and solutions are used in highly demanding environments requiring performance, precision and repeatability, with a low tolerance for failure. The segment’s solutions include cleaning, coating, testing, refurbishment and verification for critical components and assemblies used in state-of-the-art advanced node semiconductor manufacturing equipment. AST designs, manufactures and sells specialized optical filters and proprietary thin-film coatings for challenging applications in the industrial technology, life sciences, and semiconductor markets and complex front-end wafer processing sub-systems, new and refurbished electrostatic chuck pedestals, and edge-welded metal bellows for the semiconductor equipment industry and for critical applications in the space, aerospace and defense markets. In many instances, AST capabilities drive solutions that enable the maintenance of our customers’ processes through an entire life cycle. We measure operating performance based on segment earnings before interest, income taxes, depreciation, amortization, and other selected items ("Adjusted Segment EBITDA"), which is segment revenue reduced by operating expenses and other costs identifiable with the segment, excluding acquisition and divestiture expenses, restructuring costs, impairment charges, non-controlling interest compensation, amortization of the fair value adjustment to acquisition date inventory, and depreciation and amortization. Adjusted Segment EBITDA is not defined under GAAP and may not be comparable to similarly-titled measures used by other companies. Corporate expenses include general corporate administrative costs. Expenses not directly attributable to the segments, corporate expenses, net interest expense, gains and losses related to the sale of assets, and income taxes are not included in the computation of Adjusted Segment EBITDA. The accounting policies of the reportable segments are the same as those for EnPro. Non-controlling interest compensation allocation represents compensation expense associated with the rollover equity subject to put and call options from the acquisitions of LeanTeq and Alluxa subject to reduction for certain types of employment terminations of the respective sellers. This expense is recorded in selling, general, and administrative expenses on our Consolidated Statements of Operations and is directly related to the terms of the acquisition. This expense is recognized as compensation expense over the term of the respective put and call options unless certain employment terminations occur. The LeanTeq non-controlling interests were acquired by EnPro in December 2022 and, accordingly, the non-controlling interest compensation for the quarters and six months ended June 30, 2023 is attributable solely to the Alluxa rollover equity. Segment operating results and other financial data for the quarters and six months ended June 30, 2023 and 2022 were as follows:
| Quarters Ended June 30, |  | Six Months Ended June 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
| (in millions)
Sales |  |  |  |  |  |  |
Sealing Technologies | $ | 176.7 |  |  | $ | 155.9 |  |  | $ | 350.0 |  |  | $ | 309.5 |
Advanced Surface Technologies | 100.3 |  |  | 121.5 |  |  | 209.7 |  |  | 238.2 |
| 277.0 |  |  | 277.4 |  |  | 559.7 |  |  | 547.7 |
Intersegment sales | (0.1) |  |  | (0.3) |  |  | (0.2) |  |  | (0.5) |
Total sales | $ | 276.9 |  |  | $ | 277.1 |  |  | $ | 559.5 |  |  | $ | 547.2 |
Adjusted Segment EBITDA |  |  |  |  |  |  |
Sealing Technologies | $ | 56.2 |  |  | $ | 44.1 |  |  | $ | 105.9 |  |  | $ | 78.4 |
Advanced Surface Technologies | 24.1 |  |  | 37.8 |  |  | 53.6 |  |  | 72.7 |
| $ | 80.3 |  |  | $ | 81.9 |  |  | $ | 159.5 |  |  | $ | 151.1 |
Reconciliation of Adjusted Segment EBITDA to income (loss) from continuing operations before income taxes |  |  |  |  |  |  |
Income (loss) from continuing operations before income taxes | $ | (28.6) |  |  | $ | 33.5 |  |  | $ | 5.5 |  |  | $ | 48.9 |
Acquisition and divestiture expenses | — |  |  | 0.3 |  |  | — |  |  | 0.4 |
Non-controlling interest compensation allocation | (0.7) |  |  | 1.4 |  |  | (0.3) |  |  | 0.5 |
Amortization of fair value adjustment to acquisition date inventory | — |  |  | 1.0 |  |  | — |  |  | 11.3 |
Restructuring and impairment expense | 0.3 |  |  | 0.8 |  |  | 0.7 |  |  | 1.1 |
Depreciation and amortization expense | 23.8 |  |  | 26.1 |  |  | 47.3 |  |  | 52.1 |
Corporate expenses | 15.0 |  |  | 9.4 |  |  | 25.7 |  |  | 22.3 |
Interest expense, net | 8.6 |  |  | 7.7 |  |  | 16.5 |  |  | 14.6 |
Goodwill impairment | 60.8 |  |  | — |  |  | 60.8 |  |  | — |
Other expense (income), net | 1.1 |  |  | 1.7 |  |  | 3.3 |  |  | (0.1) |
Adjusted Segment EBITDA | $ | 80.3 |  |  | $ | 81.9 |  |  | $ | 159.5 |  |  | $ | 151.1 |
Segment assets are as follows:
| June 30, 2023 |  | December 31, 2022
| (in millions)
Sealing Technologies | $ | 706.4 |  |  | $ | 689.6 |
Advanced Surface Technologies | 1,426.5 |  |  | 1,519.6 |
Corporate | 500.2 |  |  | 422.7 |
Discontinued operations | — |  |  | 15.9 |
| $ | 2,633.1 |  |  | $ | 2,647.8 |
Backlog As of June 30, 2023, the aggregate amount of transaction price of remaining performance obligations, or backlog, on a consolidated basis was $270.0 million. Approximately 95% of these obligations are expected to be satisfied within one year. There is no certainty these orders will result in actual sales at the times or in the amounts ordered. In addition, for most of our business, this total is not particularly predictive of future performance because of our short lead times and some seasonality. Revenue by End Market Due to the diversified nature of our business and the wide array of products that we offer, we sell into a number of end markets. Underlying economic conditions within these markets are a major driver of our segments' sales performance. Below is a summary of our third-party sales by major end market with which we did business for the quarters and six months ended June 30, 2023 and 2022:
| Quarter Ended June 30, 2023
(in millions) | Sealing Technologies |  | Advanced Surface Technologies |  | Total
Aerospace | $ | 13.7 |  |  | $ | 2.4 |  |  | $ | 16.1 |
Chemical and material processing | 22.9 |  |  | — |  |  | 22.9 |
Food and pharmaceutical | 16.2 |  |  | — |  |  | 16.2 |
General industrial | 44.3 |  |  | 6.0 |  |  | 50.3 |
Commercial vehicle | 53.3 |  |  | — |  |  | 53.3 |
Oil and gas | 4.7 |  |  | 2.9 |  |  | 7.6 |
Power generation | 19.5 |  |  | — |  |  | 19.5 |
Semiconductors | 2.1 |  |  | 88.9 |  |  | 91.0 |
Total third-party sales | $ | 176.7 |  |  | $ | 100.2 |  |  | $ | 276.9 |
| Quarter Ended June 30, 2022
(in millions) | Sealing Technologies |  | Advanced Surface Technologies |  | Total
Aerospace | $ | 10.7 |  |  | $ | 1.1 |  |  | $ | 11.8 |
Chemical and material processing | 19.7 |  |  | — |  |  | 19.7 |
Food and pharmaceutical | 17.1 |  |  | — |  |  | 17.1 |
General industrial | 43.1 |  |  | 9.1 |  |  | 52.2 |
Commercial vehicle | 43.4 |  |  | — |  |  | 43.4 |
Oil and gas | 5.5 |  |  | 1.1 |  |  | 6.6 |
Power generation | 14.6 |  |  | — |  |  | 14.6 |
Semiconductors | 1.4 |  |  | 110.3 |  |  | 111.7 |
Total third-party sales | $ | 155.5 |  |  | $ | 121.6 |  |  | $ | 277.1 |
| Six Months Ended June 30, 2023
(in millions) | Sealing Technologies |  | Advanced Surface Technologies |  | Total
Aerospace | $ | 26.2 |  |  | $ | 4.0 |  |  | $ | 30.2 |
Chemical and material processing | 44.5 |  |  | — |  |  | 44.5 |
Food and pharmaceutical | 34.9 |  |  | — |  |  | 34.9 |
General industrial | 88.2 |  |  | 14.8 |  |  | 103.0 |
Commercial vehicle | 105.7 |  |  | — |  |  | 105.7 |
Oil and gas | 10.6 |  |  | 4.5 |  |  | 15.1 |
Power generation | 35.6 |  |  | — |  |  | 35.6 |
Semiconductors | 4.3 |  |  | 186.2 |  |  | 190.5 |
Total third-party sales | $ | 350.0 |  |  | $ | 209.5 |  |  | $ | 559.5 |
| Six Months Ended June 30, 2022
(in millions) | Sealing Technologies |  | Advanced Surface Technologies |  | Total
Aerospace | $ | 18.8 |  |  | $ | 3.1 |  |  | $ | 21.9 |
Chemical and material processing | 40.0 |  |  | — |  |  | 40.0 |
Food and pharmaceutical | 34.7 |  |  | — |  |  | 34.7 |
General industrial | 86.0 |  |  | 16.9 |  |  | 102.9 |
Commercial vehicle | 88.2 |  |  | — |  |  | 88.2 |
Oil and gas | 10.6 |  |  | 1.7 |  |  | 12.3 |
Power generation | 27.8 |  |  | 0.1 |  |  | 27.9 |
Semiconductors | 3.0 |  |  | 216.3 |  |  | 219.3 |
Total third-party sales | $ | 309.1 |  |  | $ | 238.1 |  |  | $ | 547.2 |
In 2023, we refined the end market classification of certain sales in the Sealing Technologies segment for the quarter and six months ended June 30, 2022. This refinement resulted in a reduction in sales reported for the quarter ended June 30, 2022 in the general industrial and other and food and pharmaceutical markets by approximately $0.9 million and $1.4 million, respectively. There was an offsetting increase in the power generation and semiconductor markets of $2.1 million and $0.2 million, respectively. This refinement resulted in a reduction in sales reported for the six months ended June 30, 2022 in the general industrial and other and food and pharmaceutical markets by approximately $2.6 million and $2.8 million, respectively with an offsetting increase in the power generation and semiconductor markets of $4.9 million and $0.5 million, respectively.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 22 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-22 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-15 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 31 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-31 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 42 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-42 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 40 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-40 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//280/tableOfContent Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 26 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-26 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 34 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-34 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 41 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-41 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 + Details
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