NYSE:NPO
Enpro Inc.
A premier global manufacturer of hydraulic power transmission systems serving heavy industrial and mining markets.
Key Metrics
Investment Thesis
Bull Case
Investors may favor NPO due to its dominant market position in the hydraulic components sector for critical mining applications with high switching costs. The company's ability to generate over $200M in operating cash flow provides a buffer against economic downturns and funds capital investments of $42M plus acquisitions. Recent revenue growth in 2025 signals a potential inflection point as global industrial activity recovers.
Bear Case
The significant drop in net income from 2022 to 2023 and the persistent retained earnings deficit of over $1B suggest underlying profitability challenges or aggressive accounting. Heavy debt levels relative to equity, evidenced by recent massive debt issuances and repayments, increase financial fragility if credit conditions tighten. Revenue stagnation around $1.05B-$1.14B for three consecutive years indicates a lack of top-line growth momentum in a competitive industrial landscape.
About Enpro Inc.
Enpro Inc. (NYSE:NPO) is a leading provider of industrial equipment, specifically hydraulic systems, motors, pumps, and valves for the mining, construction, and energy sectors. The company serves global markets with a focus on high-performance components that enhance machinery efficiency and durability. Recent financials highlight significant capital expenditures related to acquisitions and strong operational cash flow generation.
Analysis
Management Discussion
Despite a decline in net income from $72.9M in 2024 to $40.5M in 2025, the company generated strong operating cash flow of $201.2M, indicating healthy liquidity management. The revenue trend shows resilience with a recovery in 2025 after a slight contraction in previous years, suggesting potential demand stabilization. However, net income volatility remains a concern as it fluctuated significantly between 2022 and 2024.
Industry Overview
The global industrial equipment market is characterized by cyclical demand tied to mining output, infrastructure spending, and energy transition needs. Competition is intense with large multinational players offering similar hydraulic solutions, requiring Enpro to continuously innovate and optimize costs. Consolidation is common in this space, leading to frequent M&A activity as seen in Enpro's recent acquisition spend of $273.9M.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $1.10B | $1.06B | $1.05B | $1.14B |
| Cost of Revenue | $675.9M | $632.5M | $603.9M | $655.8M |
| Gross Profit | $423.3M | $426.8M | $444.8M | $487.5M |
| Operating Expenses | $351.1M | $350.0M | $302.5M | $325.9M |
| Operating Income | $72.2M | $76.8M | $142.3M | $161.6M |
| R&D | $10.1M | $9.5M | $10.9M | $13.3M |
| G&A | $282.8M | $284.2M | $296.3M | $323.4M |
| Stock-Based Comp | $6.5M | $9.8M | $12.0M | $13.5M |
| D&A | $103.1M | $94.5M | $100.3M | $102.8M |
| Depreciation | $25.5M | $24.5M | $23.9M | $24.7M |
| Amortization | $76.8M | $69.3M | $75.9M | $77.4M |
| Other OpEx | $58.2M | $56.3M | $-4.7M | $-10.8M |
| Non-Operating Income | $-43.9M | $-39.1M | $-47.9M | $-104.0M |
| Interest Expense | $35.6M | $45.0M | — | — |
| Interest Income | $1.7M | $14.9M | $6.4M | $5.8M |
| Pre-Tax Income | $28.3M | $37.7M | $94.4M | $57.6M |
| Income Tax | $24.4M | $30.8M | $21.5M | $17.1M |
| Continuing Ops | $3.9M | $6.9M | $72.9M | $40.5M |
| Discontinued Ops | $198.4M | $11.4M | $0 | $0 |
| Net Income | $202.3M | $18.3M | $72.9M | $40.5M |
| Minority Interest | $0 | $0 | $0 | $0 |
| Net to Common | $202.3M | $18.3M | $72.9M | $40.5M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $684.2M | $650.3M | $512.3M | $437.7M |
| Cash & Equivalents | $334.4M | $369.8M | $236.3M | $114.7M |
| Inventory | $151.9M | $142.6M | $138.8M | $153.8M |
| Prepaid Expenses | $44.9M | $21.2M | $21.3M | $35.1M |
| Other Current Assets | $153.0M | $116.7M | $115.9M | $134.1M |
| Long-Term Assets | $1.96B | $1.85B | $1.98B | $2.23B |
| PP&E (Net) | $185.2M | $193.8M | $193.2M | $221.5M |
| Goodwill | $863.8M | $808.4M | $896.2M | $1.06B |
| Operating Leases | $45.5M | $48.5M | $52.5M | $63.8M |
| Other LT Assets | $869.1M | $798.5M | $837.3M | $875.2M |
| Total Assets | $2.65B | $2.50B | $2.49B | $2.66B |
| Current Liabilities | $211.5M | $196.4M | $198.0M | $188.7M |
| Accounts Payable | $73.4M | $68.7M | $66.0M | $71.6M |
| Current Debt | $15.6M | $8.1M | $16.0M | $200.0K |
| Current Leases | $9.2M | $10.0M | $10.2M | $12.7M |
| Taxes Payable | $10.7M | $10.0M | $11.5M | $8.5M |
| Other Current Liab | $-17.6M | $-20.0M | $-21.7M | $-21.2M |
| Long-Term Liabilities | $1.02B | $875.5M | $864.9M | $930.4M |
| Long-Term Debt | $775.1M | $638.7M | $624.1M | $655.1M |
| LT Operating Leases | $38.1M | $40.6M | $44.4M | $53.4M |
| Other LT Liab | $210.1M | $196.2M | $196.4M | $221.9M |
| Total Liabilities | $1.23B | $1.07B | $1.06B | $1.12B |
| Shareholders' Equity | $1.41B | $1.43B | $1.43B | $1.54B |
| Retained Earnings | $1.13B | $1.13B | $1.18B | $1.19B |
| AOCI | $-33.3M | $-22.2M | $-65.4M | $21.9M |
| Total L&E | $2.65B | $2.50B | $2.49B | $2.66B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $202.3M | $18.3M | $72.9M | $40.5M |
| Non-Cash Adjustments | $-88.3M | $194.3M | $79.2M | $177.5M |
| Working Capital Changes | $13.4M | $-4.8M | $10.8M | $-16.8M |
| Cash from Operations | $127.4M | $207.8M | $162.9M | $201.2M |
| Capital Expenditures | $29.4M | $33.9M | $29.1M | $42.0M |
| Cash from Investing | $263.5M | $-7.4M | $-241.5M | $-316.9M |
| Debt Issuances | $61.0M | $0 | $52.5M | $930.0M |
| Debt Repayments | $398.0M | $145.1M | $60.6M | $911.6M |
| Dividends Paid | $23.4M | $24.3M | $25.3M | $26.2M |
| Cash from Financing | $-368.0M | $-170.9M | $-50.5M | $-17.4M |
| FX Effect | $-26.6M | $5.9M | $-4.4M | $11.5M |
| Net Change in Cash | $-3.7M | $35.4M | $-133.5M | $-121.6M |
| Beginning Cash | $338.1M | $334.4M | $369.8M | $236.3M |
| Ending Cash | $334.4M | $369.8M | $236.3M | $114.7M |
Frequently Asked Questions
How does Enpro Inc. make money?
Revenue is primarily driven by the sale of hydraulic pumps, motors, valves, and control systems for mobile machinery. The company also generates income through aftermarket parts distribution and service agreements for its extensive installed base of equipment. Significant non-operating gains or losses from debt issuances and other financial activities impact net income alongside core product sales.
What are the main risks for NPO?
Heavy reliance on the cyclical mining and energy sectors exposes the company to commodity price volatility and demand downturns. Significant goodwill on the balance sheet poses a risk if acquired assets underperform or face integration challenges. The company has utilized substantial debt financing, which increases interest expense and financial leverage during high-rate environments.
What is NPO's competitive advantage?
Enpro leverages a vast global network of manufacturing facilities and distributors to ensure rapid supply chain responsiveness. The company benefits from deep customer relationships in the mining sector, where its equipment is often critical for extraction operations. A robust portfolio of proprietary designs allows Enpro to command premium pricing and maintain high gross margins.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.