EnPro Industries, Inc. (NYSE:NPO) Q1 2015 Earnings Conference Call - Final Transcript
Apr 30, 2015 • 10:00 am ET
Good morning. My name is Susan, and I will be your conference operator today. At this time, I would like to welcome everyone to the EnPro Industries' First Quarter 2015 Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions)
Thank you. Mr. Dan Grgurich, Director of Investor Relations. You may begin your conference.
Thank you, Susan. Good morning. And welcome to EnPro Industries quarterly earnings conference call. I'll remind you that our call is also being webcast at enproindustries.com, where you can find the slides accompanying the call. Steve Macadam, our President and CEO; and Milt Childress, Senior Vice President and CFO will begin their review of our first quarter performance and our outlook in a moment.
(Forward Looking Cautionary Statements)
And now, I will turn the call over to Steve.
Thank you, Dan, and good morning, everyone. Activity levels in our markets were mixed in the first quarter. Our North American heavy-duty truck markets benefited from higher demand from both fleet operators and original equipment manufacturers, and we saw strength in other markets, including defense, chemical and aerospace. However, lower commodity prices let the softness in the other sectors, most notably, in oil and gas, and steel.
In North America refinery maintenance activity was lower as oil and gas companies took advantage of profitable conditions in refining to offset lower profit and slowing upstream operations and projects. Steel mill activity was also negatively impacted by the slowdown in pipeline building projects and the repel effect from doc strikes on imported goods from the West Coast. These conditions affected deconsolidated GST, as well as CPI. The strong dollar as evidence by the 17% year-over-year decline in the euro to dollar exchange rate was also a significant macroeconomic factor affecting our result in the first quarter.
Our consolidated sales were down 3% for the quarter and pro forma sales, which include the results from deconsolidated GST were down 4%. Excluding the impact of currency translation and the year-over-year impact of our acquisitions net of a divestiture consolidated sales were up 1% and pro forma sales were level to last year. The loss provision on FME's contract with EDF that we announced last week, currency translation and other unusual items that Milt will cover in more detail shortly had a substantial impact on our profitability in the quarter.
Our consolidated adjusted EBITDA of $28 million was down 14% from a year ago and our pro forma adjusted EBITDA of $39 million was down 15%. Excluding the EDF loss provision and the negative effect of foreign exchange translation, adjusted EBITDA would have been up 10% over a year ago. During last month Investor Day we highlighted growth strategies for three of our six operating divisions, Technetics Group and Stemco in our Sealing Products segment and Fairbanks Morse our Power Systems business.
These three businesses delivered strong results for the quarter supported by healthy heavy-duty trucking and