While "the trend is your friend" when it comes to short-term investing or trading, timing entries into the trend is a key determinant of success. And increasing the odds of success by making sure the sustainability of a trend isn't easy.The trend often reverses before exiting the trade, leading to a short-term capital loss for investors. So, for a profitable trade, one should confirm factors such as sound fundamentals, positive earnings estimate revisions, etc. that could keep the momentum in the stock aliv ...

Enpro (NPO) appears an attractive pick, as it has been recently upgraded to a Zacks Rank #1 (Strong Buy). This upgrade primarily reflects an upward trend in earnings estimates, which is one of the most powerful forces impacting stock prices.The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure -- the Zacks Consensus Estimate.Since a changing earnings pictu ...

Core Viewpoint - The article emphasizes the importance of confirming the sustainability of stock trends through sound fundamentals and positive earnings estimates to enhance the likelihood of successful short-term investments [1][2]. Group 1: Stock Performance - Enpro (NPO) has shown a solid price increase of 22.9% over the past 12 weeks, indicating strong investor interest in its potential upside [4]. - NPO has also maintained a price increase of 9.4% over the last four weeks, suggesting that the upward trend is still intact [5]. - The stock is currently trading at 95.5% of its 52-week high-low range, indicating a potential breakout [5]. Group 2: Fundamental Strength - NPO holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises [6]. - The stock has an Average Broker Recommendation of 1 (Strong Buy), reflecting high optimism from the brokerage community regarding its near-term price performance [7]. Group 3: Investment Strategy - The "Recent Price Strength" screen is a useful tool for identifying stocks like NPO that are on an uptrend supported by strong fundamentals [3]. - There are additional stocks that meet the criteria of the "Recent Price Strength" screen, providing further investment opportunities [8].

Group 1 - Enpro has been upgraded to a Zacks Rank 1 (Strong Buy) due to an upward trend in earnings estimates, which significantly impacts stock prices [1][3] - The Zacks rating system is based on the Zacks Consensus Estimate, which reflects EPS estimates from sell-side analysts for the current and following years [1][2] - Rising earnings estimates indicate an improvement in Enpro's underlying business, which is expected to positively influence its stock price [5][10] Group 2 - The correlation between changes in earnings estimates and stock price movements is strong, with institutional investors playing a role in this relationship [4][6] - Over the past three months, the Zacks Consensus Estimate for Enpro has increased by 3.8%, with expected earnings of $7.69 per share for the fiscal year ending December 2025 [8] - The Zacks Rank system has a proven track record, with Zacks Rank 1 stocks generating an average annual return of +25% since 1988 [7][9]

Core Insights - Enpro reported Q2 2025 earnings with GAAP revenue of $288.1 million, exceeding estimates by $4.5 million, but non-GAAP EPS of $2.03 fell short of the $2.07 consensus, reflecting a 2.4% decline year-over-year [1][2] - The company raised its full-year 2025 guidance, citing strong demand in key markets despite margin pressures and increased operating expenses [1][9] Financial Performance - Q2 2025 non-GAAP EPS was $2.03, down from $2.08 in Q2 2024, a decrease of 2.4% [2] - GAAP revenue increased by 6.0% year-over-year, from $271.9 million in Q2 2024 to $288.1 million in Q2 2025 [2] - Adjusted EBITDA for Q2 2025 was $71.1 million, down 3.9% from $74.0 million in Q2 2024 [2] Segment Performance - Sealing Technologies segment revenue was $187.5 million, up 1.9% year-over-year, but adjusted segment EBITDA fell by 3.2% [5][6] - Advanced Surface Technologies segment revenue reached $100.9 million, a 14.5% increase year-over-year, with adjusted segment EBITDA improving by 3.7% [6] Strategic Focus - Enpro is concentrating on high-growth markets with strong barriers to entry, focusing on proprietary products and ongoing R&D investments [4] - The company has made strategic acquisitions and divestitures to enhance its core market alignment and improve margins [4][8] Future Outlook - Full-year 2025 revenue growth guidance was raised to 5%-7%, with adjusted EBITDA projected between $270 million and $280 million [9][10] - Management expressed confidence in demand for Advanced Surface Technologies, while acknowledging soft demand in commercial vehicle original equipment [10]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=2&type=section&id=Item%201.%20Financial%20Statements) This section presents Enpro Inc.'s unaudited consolidated financial statements and comprehensive notes for the periods ended June 30, 2025 and 2024 [Consolidated Statements of Operations (Unaudited)](index=2&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS%20(UNAUDITED)) This section provides the unaudited consolidated statements of operations for Q2 and 6M 2025 and 2024, detailing net sales, gross profit, operating income, and net income Consolidated Statements of Operations (Unaudited) - Key Figures (in millions, except per share amounts) | Metric | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :-------------------------- | :------ | :------ | :------ | :------ | | Net sales | $288.1 | $271.9 | $561.3 | $529.4 | | Gross profit | $124.8 | $119.0 | $243.0 | $225.2 | | Operating income | $45.7 | $48.0 | $87.5 | $76.0 | | Income before income taxes | $35.5 | $36.4 | $67.8 | $50.7 | | Net income | $26.4 | $26.7 | $50.9 | $39.2 | | Basic earnings per share | $1.26 | $1.27 | $2.42 | $1.87 | | Diluted earnings per share | $1.25 | $1.27 | $2.40 | $1.86 | - Net sales increased by **6.0%** for both the quarter and six months ended June 30, 2025, compared to the prior year[7](index=7&type=chunk) - Net income for Q2 2025 slightly decreased to **$26.4 million** from $26.7 million in Q2 2024, while for the six months ended June 30, 2025, it increased to **$50.9 million** from $39.2 million in the prior year[7](index=7&type=chunk) [Consolidated Statements of Cash Flows (Unaudited)](index=3&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS%20(UNAUDITED)) This section presents the unaudited consolidated statements of cash flows for the six months ended June 30, 2025 and 2024, detailing operating, investing, and financing activities Consolidated Statements of Cash Flows (Unaudited) - Key Figures (in millions) for Six Months Ended June 30 | Activity | 2025 | 2024 | | :------------------------------------ | :----- | :----- | | Net cash provided by operating activities | $73.2 | $49.5 | | Net cash used in investing activities | $(19.6) | $(223.1) | | Net cash used in financing activities | $(194.9) | $(19.0) | | Net decrease in cash and cash equivalents | $(129.2) | $(193.9) | | Cash and cash equivalents at end of period | $107.1 | $175.9 | - Net cash provided by operating activities increased to **$73.2 million** in 6M 2025 from $49.5 million in 6M 2024, primarily due to higher net income and lower incentive compensation payments[10](index=10&type=chunk)[145](index=145&type=chunk) - Net cash used in investing activities significantly decreased to **$19.6 million** in 6M 2025 from $223.1 million in 6M 2024, mainly due to the absence of a large acquisition comparable to AMI in 2024[10](index=10&type=chunk)[146](index=146&type=chunk) - Financing activities used **$194.9 million** in 6M 2025, driven by debt repayments ($851.5 million) and debt issuance costs ($7.7 million), partially offset by new debt proceeds ($680 million)[10](index=10&type=chunk)[147](index=147&type=chunk) [Consolidated Balance Sheets (Unaudited)](index=4&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS%20(UNAUDITED)) This section provides the unaudited consolidated balance sheets as of June 30, 2025, and December 31, 2024, detailing assets, liabilities, and shareholders' equity Consolidated Balance Sheets (Unaudited) - Key Figures (in millions) as of | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Total current assets | $424.7 | $512.3 | | Total assets | $2,375.3 | $2,491.5 | | Total current liabilities | $170.4 | $198.0 | | Long-term debt | $464.9 | $624.1 | | Total liabilities | $879.2 | $1,062.9 | | Total shareholders' equity | $1,496.1 | $1,428.6 | - Total assets decreased from **$2,491.5 million** at December 31, 2024, to **$2,375.3 million** at June 30, 2025, primarily due to a decrease in cash and cash equivalents[12](index=12&type=chunk) - Long-term debt significantly decreased from **$624.1 million** at December 31, 2024, to **$464.9 million** at June 30, 2025, reflecting debt repayments[12](index=12&type=chunk) - Total shareholders' equity increased to **$1,496.1 million** at June 30, 2025, from $1,428.6 million at December 31, 2024[12](index=12&type=chunk) [Notes to Consolidated Financial Statements (Unaudited)](index=5&type=section&id=NOTES%20TO%20CONSOLIDATED%20FINANCIAL%20STATEMENTS%20(UNAUDITED)) This section provides detailed notes to the unaudited consolidated financial statements, covering accounting policies, taxes, EPS, inventories, goodwill, debt, and other key financial areas [1. Overview and Basis of Presentation](index=5&type=section&id=1.%20Overview%20and%20Basis%20of%20Presentation) Enpro Inc. is an industrial technology company focused on critical applications, with interim financial statements prepared in accordance with GAAP - Enpro Inc. is a leading-edge industrial technology company focused on critical applications in diverse growth markets such as semiconductor, industrial process, commercial vehicle, and sustainable power generation[15](index=15&type=chunk) - Strategic initiatives have focused the portfolio on proprietary, industrial technology products with high barriers to entry, compelling margins, strong cash flow, and perpetual recurring/aftermarket revenue streams[16](index=16&type=chunk) - New accounting guidance issued in December 2023 for income tax disclosures is not expected to have a significant impact, while guidance issued in November 2024 for cost and expense disaggregation is currently being evaluated[20](index=20&type=chunk)[21](index=21&type=chunk) [2. Income Taxes](index=5&type=section&id=2.%20Income%20Taxes) This section details Enpro's effective tax rates for Q2 and 6M 2025 and 2024, and discusses the impact of foreign tax rates and recent U.S. tax law changes Effective Tax Rates | Period | 2025 | 2024 | | :-------------------- | :----- | :----- | | Quarter Ended June 30 | 25.5% | 26.7% | | Six Months Ended June 30 | 24.9% | 22.7% | - The effective tax rates are higher than the U.S. Federal tax rate primarily due to higher tax rates in most foreign jurisdictions and state tax on domestic earnings, partially offset by various tax credits[23](index=23&type=chunk)[24](index=24&type=chunk) - The recently enacted 'One Big Beautiful Bill Act' in the U.S. includes provisions for 100% bonus depreciation and immediate expensing of R&E expenditures. The company is evaluating its impact on the effective tax rate, deferred tax assets/liabilities, and cash taxes payable, with effects to be reflected in Q3 2025[26](index=26&type=chunk) [3. Earnings Per Share](index=6&type=section&id=3.%20Earnings%20Per%20Share) This section outlines the calculation of basic and diluted earnings per share for the quarters and six months ended June 30, 2025 and 2024 Earnings Per Share (in millions, except per share amounts) | Metric | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :-------------------------- | :------ | :------ | :------ | :------ | | Net income | $26.4 | $26.7 | $50.9 | $39.2 | | Weighted-average shares – basic | 21.0 | 21.0 | 21.0 | 20.9 | | Weighted-average shares – diluted | 21.2 | 21.1 | 21.2 | 21.1 | | Basic earnings per share | $1.26 | $1.27 | $2.42 | $1.87 | | Diluted earnings per share | $1.25 | $1.27 | $2.40 | $1.86 | [4. Inventories](index=6&type=section&id=4.%20Inventories) This section details the company's inventory composition, showing an increase in total inventories driven by work in process at June 30, 2025 Inventories (in millions) | Category | June 30, 2025 | December 31, 2024 | | :--------------- | :------------ | :---------------- | | Finished products | $45.9 | $47.5 | | Work in process | $35.0 | $29.5 | | Raw materials | $62.4 | $61.8 | | Total inventories | $143.3 | $138.8 | - Work in process inventory increased by **$5.5 million** from December 31, 2024, to June 30, 2025[28](index=28&type=chunk) [5. Goodwill and Other Intangible Assets](index=7&type=section&id=5.%20Goodwill%20and%20Other%20Intangible%20Assets) Goodwill increased to $904.6 million at June 30, 2025, primarily due to foreign currency translation adjustments in the Sealing Technologies segment. Identifiable intangible assets, mainly customer relationships and existing technology, had a gross carrying amount of $1,207.5 million at June 30, 2025, with amortization expense of $38.1 million for the six months ended June 30, 2025 Goodwill by Segment (in millions) | Segment | December 31, 2024 | Foreign Currency Translation | June 30, 2025 | | :-------------------------- | :---------------- | :--------------------------- | :------------ | | Sealing Technologies | $364.0 | $8.4 | $372.4 | | Advanced Surface Technologies | $532.2 | — | $532.2 | | Total | $896.2 | $8.4 | $904.6 | Identifiable Intangible Assets (in millions) as of June 30, 2025 | Category | Gross Carrying Amount | Accumulated Amortization | | :-------------------------- | :-------------------- | :----------------------- | | Customer relationships | $497.0 | $225.7 | | Existing technology | $570.1 | $166.0 | | Trademarks (definite-lived) | $70.4 | $38.8 | | Other (definite-lived) | $25.1 | $22.6 | | In-process R&D (indefinite-lived) | $14.0 | — | | Trademarks (indefinite-lived) | $30.9 | — | | Total | $1,207.5 | $453.1 | - Amortization expense for identifiable intangible assets was **$38.1 million** for the six months ended June 30, 2025, compared to $37.7 million in the prior-year period[30](index=30&type=chunk) [6. Accrued Expenses](index=7&type=section&id=6.%20Accrued%20Expenses) Total accrued expenses decreased to $100.6 million at June 30, 2025, from $116.0 million at December 31, 2024, primarily due to decreases in salaries, wages, employee benefits, and environmental liabilities Accrued Expenses (in millions) | Category | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Salaries, wages and employee benefits | $39.5 | $52.6 | | Interest | $2.7 | $4.4 | | Environmental | $8.6 | $11.3 | | Income taxes | $14.9 | $11.5 | | Taxes other than income taxes | $5.2 | $3.5 | | Operating lease liabilities | $11.1 | $10.2 | | Other | $18.6 | $22.5 | | Total | $100.6 | $116.0 | [7. Long-Term Debt](index=7&type=section&id=7.%20Long-Term%20Debt) Enpro amended its senior secured credit facility and issued new senior notes in 2025, managing its long-term debt structure and maintaining covenant compliance - On April 9, 2025, Enpro entered into an Amended Credit Facility Agreement, providing an **$800.0 million** senior secured revolving credit facility maturing on April 9, 2030[34](index=34&type=chunk) - The company repaid remaining term loan borrowings using funds from the new Revolving Credit Facility and **$59.8 million** of available cash[34](index=34&type=chunk) - On May 29, 2025, Enpro issued **$450 million** of 6.125% Senior Notes due 2033 and used a portion of the proceeds to redeem all outstanding 5.75% Senior Notes due 2026 (**$350 million**)[40](index=40&type=chunk)[43](index=43&type=chunk) - As of June 30, 2025, borrowing availability under the Revolving Credit Facility was **$770.4 million**, and the company was in compliance with all covenants[39](index=39&type=chunk)[43](index=43&type=chunk) [8. Pension](index=9&type=section&id=8.%20Pension) Net periodic benefit cost for pension plans increased in 6M 2025, with the company planning to terminate its remaining U.S. defined benefit plan by year-end 2025 Net Periodic Benefit Cost (in millions) | Component | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :-------------------------- | :------ | :------ | :------ | :------ | | Service cost | $0.1 | $0.1 | $0.2 | $0.2 | | Interest cost | $1.6 | $3.2 | $3.2 | $6.4 | | Expected return on plan assets | $(1.4) | $(3.5) | $(2.8) | $(7.1) | | Amortization of net loss | $0.6 | $0.4 | $1.2 | $0.8 | | Net periodic benefit cost | $0.9 | $0.2 | $1.8 | $0.3 | - Enpro plans to terminate and settle its remaining U.S. defined benefit pension plan by the end of 2025, with approximately **$2.5 million** of pension liabilities related to this plan at June 30, 2025[46](index=46&type=chunk) [9. Shareholders' Equity](index=10&type=section&id=9.%20Shareholders%27%20Equity) Total shareholders' equity increased to $1,496.1 million at June 30, 2025, driven by net income and other comprehensive income, with ongoing dividend payments and share repurchase authorization Changes in Shareholders' Equity (in millions) for Six Months Ended June 30, 2025 | Component | Balance, Dec 31, 2024 | Net Income | Other Comprehensive Income | Dividends | Incentive Plan Activity | Balance, June 30, 2025 | | :-------------------------- | :-------------------- | :--------- | :------------------------- | :-------- | :---------------------- | :--------------------- | | Total Shareholders' Equity | $1,428.6 | $50.9 | $23.9 | $(13.1) | $5.8 | $1,496.1 | - Total dividend payments of **$13.2 million** were made during the six months ended June 30, 2025, with a dividend of **$0.31 per share** declared for September 2025[49](index=49&type=chunk)[50](index=50&type=chunk) - A new share repurchase authorization of up to **$50.0 million** was approved in October 2024, replacing a prior expired authorization, and expires in October 2026[51](index=51&type=chunk) - In February 2025, stock options for approximately **32,000 common shares** were issued to key executives with an exercise price of **$199.78 per share** and a fair value of **$85.99 per share**[52](index=52&type=chunk)[55](index=55&type=chunk) [10. Business Segment Information](index=11&type=section&id=10.%20Business%20Segment%20Information) Enpro operates through Sealing Technologies and Advanced Surface Technologies (AST) segments, both showing sales growth in 6M 2025, with detailed sales data by geography and end market - Enpro's two reportable segments are Sealing Technologies and Advanced Surface Technologies (AST)[56](index=56&type=chunk) - Sealing Technologies focuses on metallic, non-metallic, and composite material gaskets, dynamic seals, and commercial vehicle solutions for industries like chemical processing, nuclear energy, and food/biopharmaceutical[57](index=57&type=chunk)[58](index=58&type=chunk) - AST applies proprietary technologies for critical applications in high-growth markets, including cleaning, coating, testing for semiconductor manufacturing, specialized optical filters, wafer processing sub-systems, and edge-welded metal bellows[59](index=59&type=chunk) Segment Sales and Adjusted Segment EBITDA (in millions) | Metric | Q2 2025 Sales | Q2 2024 Sales | 6M 2025 Sales | 6M 2024 Sales | Q2 2025 Adj. EBITDA | Q2 2024 Adj. EBITDA | 6M 2025 Adj. EBITDA | 6M 2024 Adj. EBITDA | | :-------------------------- | :------------ | :------------ | :------------ | :------------ | :------------------ | :------------------ | :------------------ | :------------------ | | Sealing Technologies | $187.5 | $184.0 | $367.1 | $355.6 | $63.3 | $65.4 | $122.0 | $118.4 | | Advanced Surface Technologies | $100.6 | $87.9 | $194.2 | $173.8 | $19.8 | $19.1 | $40.3 | $36.4 | | Total Consolidated Sales | $288.1 | $271.9 | $561.3 | $529.4 | | | | | | Total Adjusted Segment EBITDA | | | | | $83.1 | $84.5 | $162.3 | $154.8 | Net Sales by Geographic Area (in millions) | Region | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :------------- | :------ | :------ | :------ | :------ | | United States | $163.1 | $161.7 | $317.8 | $308.7 | | Europe | $42.4 | $40.0 | $83.0 | $77.8 | | Rest of world | $82.6 | $70.2 | $160.5 | $142.9 | | Total | $288.1 | $271.9 | $561.3 | $529.4 | Total Third-Party Sales by Major End Market (in millions) for Six Months Ended June 30, 2025 | End Market | Sealing Technologies | Advanced Surface Technologies | Total | | :---------------- | :------------------- | :---------------------------- | :---- | | Aerospace | $38.2 | $7.6 | $45.8 | | Commercial vehicle | $85.3 | — | $85.3 | | Food and pharmaceutical | $37.7 | — | $37.7 | | General industrial | $135.6 | $13.4 | $149.0 | | Oil and gas | $30.8 | $3.1 | $33.9 | | Power generation | $35.4 | — | $35.4 | | Semiconductors | $4.1 | $170.1 | $174.2 | | Total | $367.1 | $194.2 | $561.3 | [11. Derivatives and Hedging](index=17&type=section&id=11.%20Derivatives%20and%20Hedging) Enpro uses derivative instruments, including cross-currency swaps, to manage foreign currency risks and hedge net investments, with a forward contract settled in March 2025 - Enpro uses derivative instruments to control foreign currency exposure from foreign subsidiaries, intercompany loans, and foreign currency transactions[69](index=69&type=chunk) - A forward contract hedging a **95 million Euro** intercompany note, with a notional amount of **$103.7 million** at December 31, 2024, was settled in March 2025[69](index=69&type=chunk)[173](index=173&type=chunk) - Cross-currency swap agreements with a **$100.0 million** notional amount effectively convert fixed-rate USD Senior Notes interest payments to Euro-denominated debt interest payments, maturing October 15, 2026[71](index=71&type=chunk)[174](index=174&type=chunk) - The cross-currency swap is designated as a net investment hedge, with fair value adjustments recorded in accumulated other comprehensive income[74](index=74&type=chunk) [12. Fair Value Measurements](index=18&type=section&id=12.%20Fair%20Value%20Measurements) This section details assets and liabilities measured at fair value on a recurring basis, including deferred compensation and foreign currency derivatives Fair Value Measurements (in millions) as of | Category | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | **Assets:** | | | | Foreign currency derivatives | — | $7.9 | | Deferred compensation assets | $14.0 | $14.0 | | **Liabilities:** | | | | Deferred compensation liabilities | $14.8 | $14.8 | | Foreign currency derivatives | $4.4 | — | - Deferred compensation assets and liabilities are classified as Level 1, while foreign currency derivatives are classified as Level 2 in the fair value hierarchy[75](index=75&type=chunk) [13. Accumulated Other Comprehensive Income (Loss)](index=18&type=section&id=13.%20Accumulated%20Other%20Comprehensive%20Income%20(Loss)) Accumulated other comprehensive income (loss) improved to $(41.5) million at June 30, 2025, primarily due to positive unrealized translation adjustments Changes in Accumulated Other Comprehensive Income (Loss) by Component (after tax, in millions) for Six Months Ended June 30, 2025 | Component | Beginning Balance | Other Comprehensive Income before Reclassifications | Amounts Reclassified | Ending Balance | | :-------------------------- | :---------------- | :------------------------------------------ | :------------------- | :------------- | | Unrealized Translation Adjustments | $(5.4) | $22.9 | — | $17.5 | | Pension Plans | $(60.0) | — | $1.0 | $(59.0) | | Total | $(65.4) | $22.9 | $1.0 | $(41.5) | - Net current-period other comprehensive income for the six months ended June 30, 2025, was **$23.9 million**, a significant improvement from a loss of $11.6 million in the prior-year period[78](index=78&type=chunk) [14. Commitments and Contingencies](index=19&type=section&id=14.%20Commitments%20and%20Contingencies) Enpro is involved in environmental remediation activities at 21 sites with $38.7 million in liabilities, and faces personal injury claims related to TCE contamination - Enpro is involved in environmental investigation and remediation activities at **21 sites**, with total liabilities of **$38.7 million** recorded at June 30, 2025[82](index=82&type=chunk)[83](index=83&type=chunk) - For the Lower Passaic River Study Area, Enpro Holdings paid **$5.9 million** as part of a settlement in September 2022, with a remaining reserve of **$0.7 million** for ongoing work[89](index=89&type=chunk) - For the Arizona Uranium Mines, the reserve at June 30, 2025, was **$11.6 million**, reflecting estimated costs for on-site waste consolidation and enhanced caps. The U.S. government will reimburse **35%** of necessary response costs, estimated at **$3.8 million**[91](index=91&type=chunk)[93](index=93&type=chunk) - At the Water Valley Facility, 148 individuals filed workers' compensation petitions alleging injury from workplace exposure to toxic chemicals. No reserves have been accrued for these legal proceedings due to their early stage, but a **$7.9 million** reserve exists for ongoing cleanup and monitoring costs[97](index=97&type=chunk)[98](index=98&type=chunk) Product Warranty Liability (in millions) | Metric | 2025 | 2024 | | :-------------------------- | :--- | :--- | | Balance at beginning of year | $5.7 | $6.4 | | Net charges to expense | $0.2 | $0.4 | | Settlements made | $(1.0) | $(0.7) | | Balance at end of period | $4.9 | $6.1 | [15. Acquisitions](index=23&type=section&id=15.%20Acquisitions) Enpro acquired Advanced Micro Instruments (AMI) in January 2024 and all remaining non-controlling interests in Alluxa in February 2024 - On January 29, 2024, Enpro acquired Advanced Micro Instruments, Inc. (AMI), a leading provider of highly-engineered analyzers and sensing technologies, integrated into the Sealing Technologies segment[104](index=104&type=chunk)[119](index=119&type=chunk) Unaudited Pro Forma Condensed Consolidated Financial Results (in millions) for 2024 (as if AMI acquisition completed prior to 2024) | Metric | Quarter Ended June 30, 2024 | Six Months Ended June 30, 2024 | | :-------------------------- | :-------------------------- | :----------------------------- | | Pro forma net sales | $271.9 | $532.2 | | Pro forma net income | $26.9 | $41.6 | - In February 2024, Enpro acquired all outstanding non-controlling equity interests in Alluxa for **$17.9 million**, making Enpro the sole owner[106](index=106&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.](index=24&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) This section provides management's perspective on Enpro's financial condition, cash flows, and operating results, including forward-looking statements and non-GAAP financial measures [Forward-Looking Information](index=24&type=section&id=Forward-Looking%20Information) This section highlights that the report contains forward-looking statements subject to various risks and uncertainties, including economic and geopolitical factors - The report contains forward-looking statements regarding future financial condition, results of operations, and business, which are subject to risks and uncertainties[108](index=108&type=chunk) - Key risk factors include economic conditions, geopolitical activity (e.g., Ukraine, Middle East, Taiwan), government tariffs and embargoes, raw material prices, ability to achieve growth in technology markets (semiconductor, life sciences), foreign currency fluctuations, interest rate changes, and contingent liabilities from discontinued operations[109](index=109&type=chunk)[115](index=115&type=chunk) [Non-GAAP Financial Information](index=25&type=section&id=Non-GAAP%20Financial%20Information) Enpro uses non-GAAP financial measures like adjusted net income and EBITDA to evaluate operating performance, providing additional insights for investors - Enpro utilizes non-GAAP financial measures such as adjusted net income, adjusted diluted earnings per share, adjusted EBITDA, and total adjusted segment EBITDA to evaluate operating performance[112](index=112&type=chunk) - These non-GAAP metrics are considered useful for investors to assess ongoing operations and performance, but are not necessarily comparable to similarly titled measures used by other companies[112](index=112&type=chunk) [Overview](index=25&type=section&id=Overview) Enpro is an industrial technology company operating through Sealing Technologies and Advanced Surface Technologies segments, with key financial highlights for Q2 and 6M 2025 - Enpro is an industrial technology company focused on critical applications across diverse end markets, operating 15 primary manufacturing and service facilities in 8 countries[113](index=113&type=chunk) - The company manages its business through two segments: Sealing Technologies and Advanced Surface Technologies (AST)[114](index=114&type=chunk) Financial Highlights (in millions, except per share data) | Metric | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :-------------------------- | :------ | :------ | :------ | :------ | | Net sales | $288.1 | $271.9 | $561.3 | $529.4 | | Net income | $26.4 | $26.7 | $50.9 | $39.2 | | Diluted earnings per share | $1.25 | $1.27 | $2.40 | $1.86 | | Adjusted net income | $43.1 | $43.9 | $83.4 | $77.0 | | Adjusted diluted earnings per share | $2.03 | $2.08 | $3.93 | $3.65 | | Adjusted EBITDA | $71.1 | $74.0 | $138.9 | $132.5 | [Results of Operations](index=27&type=section&id=Results%20of%20Operations) This section analyzes Enpro's consolidated and segment-level operating results for Q2 and 6M 2025 compared to 2024, detailing sales growth and EBITDA performance [Second Quarter of 2025 Compared to the Second Quarter of 2024](index=28&type=section&id=Second%20Quarter%20of%202025%20Compared%20to%20the%20Second%20Quarter%20of%202024) Consolidated net sales increased 6.0% in Q2 2025, driven by growth in both Sealing Technologies and Advanced Surface Technologies, despite slight margin pressure Sales Growth (Q2 2025 vs. Q2 2024) | Entity | Organic | Foreign Currency | Total | | :-------------------------- | :------ | :--------------- | :---- | | Enpro Inc. | 5.6% | 0.4% | 6.0% | | Sealing Technologies | 1.5% | 0.4% | 1.9% | | Advanced Surface Technologies | 14.5% | —% | 14.5% | - Sealing Technologies' sales increased by **$3.5 million** to **$187.5 million**, with organic growth of **1.5%** ($2.7 million) driven by aerospace, food & pharmaceutical, and strategic pricing[125](index=125&type=chunk) - Advanced Surface Technologies' sales increased by **$12.8 million** to **$100.9 million**, driven by growth in precision cleaning, optical coatings, and semiconductor tools[127](index=127&type=chunk) - Sealing Technologies' Adjusted Segment EBITDA decreased **3.2%** to **$63.3 million**, with margin narrowing to **33.8%** due to transactional foreign exchange headwinds and mix variations[126](index=126&type=chunk) - Advanced Surface Technologies' Adjusted Segment EBITDA increased **3.7%** to **$19.8 million**, but margin decreased to **19.6%** due to unfavorable foreign currency exchange rates ($2.8 million) and increased labor/overhead ($2.5 million)[128](index=128&type=chunk) - Net income for Q2 2025 was **$26.4 million** (**$1.25 diluted EPS**), slightly down from $26.7 million ($1.27 diluted EPS) in Q2 2024[132](index=132&type=chunk) [Six Months Ended June 30, 2025 Compared to the Six Months Ended June 30, 2024](index=29&type=section&id=Six%20Months%20Ended%20June%2030%2C%202025%20Compared%20to%20the%20Six%20Months%20Ended%20June%2030%2C%202024) Consolidated net sales increased 6.0% for the first six months of 2025, with both segments contributing to growth and a significant increase in net income Sales Growth (6M 2025 vs. 6M 2024) | Entity | Organic | Acquisition | Foreign Currency | Total | | :-------------------------- | :------ | :---------- | :--------------- | :---- | | Enpro Inc. | 5.8% | 0.6% | (0.4)% | 6.0% | | Sealing Technologies | 3.0% | 0.9% | (0.7)% | 3.2% | | Advanced Surface Technologies | 11.8% | —% | —% | 11.8% | - Sealing Technologies' sales increased by **$11.5 million** to **$367.1 million**, with organic growth of **2.9%** ($10.4 million) driven by aerospace, food & pharmaceutical, and strategic pricing/mix[134](index=134&type=chunk) - Advanced Surface Technologies' sales increased by **$20.6 million** to **$194.7 million**, driven by growth in precision cleaning solutions, optical coatings, and semiconductor tools[136](index=136&type=chunk) - Sealing Technologies' Adjusted Segment EBITDA increased **3.0%** to **$122.0 million**, with margin remaining flat at **33.2%**[135](index=135&type=chunk) - Advanced Surface Technologies' Adjusted Segment EBITDA increased **10.7%** to **$40.3 million**, but margin slightly decreased to **20.7%** due to unfavorable foreign currency exchange rates ($3.0 million) and increased operating expenses ($4.3 million)[137](index=137&type=chunk) - Net income for 6M 2025 was **$50.9 million** (**$2.40 diluted EPS**), up from $39.2 million ($1.86 diluted EPS) in 6M 2024[141](index=141&type=chunk) [Backlog](index=30&type=section&id=Backlog) The consolidated backlog was $273.8 million as of June 30, 2025, with approximately 95% expected to be satisfied within one year - As of June 30, 2025, the consolidated backlog (remaining performance obligations) was **$273.8 million**[142](index=142&type=chunk) - Approximately **95%** of these obligations are expected to be satisfied within one year[142](index=142&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) Enpro funds cash requirements through cash balances, revolver borrowings, and operations, with $14.8 million cash in the U.S. and $92.3 million outside the U.S. as of June 30, 2025 - Cash requirements are funded from cash balances, revolver borrowings, and cash generated from operations, with proactive pursuit of acquisition opportunities[143](index=143&type=chunk) - As of June 30, 2025, Enpro held **$14.8 million** of cash in the U.S. and **$92.3 million** outside the U.S.[143](index=143&type=chunk) - Undistributed earnings of foreign subsidiaries, estimated at **$174 million** as of June 30, 2025, are not expected to incur significant incremental U.S. or foreign tax upon repatriation[144](index=144&type=chunk) [Cash Flows](index=30&type=section&id=Cash%20Flows) Operating cash flow increased in 6M 2025, while investing activities decreased significantly due to the absence of a large acquisition, and financing activities were driven by debt management - Operating activities provided **$73.2 million** of cash in 6M 2025, up from $49.5 million in 6M 2024, driven by higher net income and lower incentive compensation payments[145](index=145&type=chunk) - Investing activities used **$19.6 million** in 6M 2025, a significant decrease from $223.1 million in 6M 2024, primarily due to the 2024 acquisition of AMI[146](index=146&type=chunk) - Financing activities used **$194.9 million** in 6M 2025, mainly due to **$851.5 million** in debt repayments and **$7.7 million** in debt issuance costs, partially offset by **$680 million** in debt proceeds[147](index=147&type=chunk) [Capital Resources](index=30&type=section&id=Capital%20Resources) Enpro amended its credit facility and issued new senior notes in 2025, maintaining an $800.0 million revolving credit facility and a $50.0 million share repurchase authorization - Enpro entered into an Amended Credit Facility Agreement on April 9, 2025, providing an **$800.0 million** senior secured revolving credit facility maturing on April 9, 2030[148](index=148&type=chunk) - Borrowings under the Revolving Credit Facility bear interest at either an alternate base rate or Term SOFR rate plus an applicable margin, subject to adjustment based on consolidated total net leverage ratio[149](index=149&type=chunk) - The Amended Credit Facility Agreement includes financial covenants such as a maximum consolidated total net leverage ratio of **4.0 to 1.0** and a minimum consolidated interest coverage ratio of **2.5 to 1.0**[152](index=152&type=chunk) - On May 29, 2025, Enpro issued **$450 million** of 6.125% Senior Notes due 2033, which are unsecured, unsubordinated obligations[155](index=155&type=chunk) - The company has a share repurchase authorization of up to **$50.0 million**, approved in October 2024 and expiring in October 2026[160](index=160&type=chunk) [Critical Accounting Estimates](index=33&type=section&id=Critical%20Accounting%20Estimates) This section refers to the annual report for a discussion of critical accounting estimates - The company refers to its annual report on Form 10-K for the fiscal year ended December 31, 2024, for a discussion of its critical accounting estimates[161](index=161&type=chunk) [Contingencies](index=33&type=section&id=Contingencies) This section refers to Note 14 of the Consolidated Financial Statements for a description of the company's contingencies - A description of the company's contingencies is included in Note 14 to the Consolidated Financial Statements in this report[163](index=163&type=chunk) [Reconciliations of Non-GAAP Financial Measures to the Comparable GAAP Measures](index=34&type=section&id=Reconciliations%20of%20Non-GAAP%20Financial%20Measures%20to%20the%20Comparable%20GAAP%20Measures) This section provides reconciliations of non-GAAP financial measures, including adjusted net income and adjusted EBITDA, to their comparable GAAP measures - Reconciliations of net income to adjusted net income, adjusted diluted earnings per share, and adjusted EBITDA are provided to help readers understand the impact of certain selected items[164](index=164&type=chunk)[165](index=165&type=chunk) Reconciliation of Net Income to Adjusted Net Income and Adjusted Diluted EPS (in millions, except per share amounts) | Metric | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :-------------------------- | :------ | :------ | :------ | :------ | | Net income | $26.4 | $26.7 | $50.9 | $39.2 | | Adjusted income before income taxes | $57.5 | $58.5 | $111.1 | $102.7 | | Adjusted income tax expense | $(14.4) | $(14.6) | $(27.7) | $(25.7) | | Adjusted net income | $43.1 | $43.9 | $83.4 | $77.0 | | Adjusted diluted earnings per share | $2.03 | $2.08 | $3.93 | $3.65 | Reconciliation of Net Income to Adjusted EBITDA (in millions) | Metric | Q2 2025 | Q2 2024 | 6M 2025 | 6M 2024 | | :-------------------------- | :------ | :------ | :------ | :------ | | Net income | $26.4 | $26.7 | $50.9 | $39.2 | | Adjusted EBITDA | $71.1 | $74.0 | $138.9 | $132.5 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Enpro manages market risks from foreign currency exchange rates and interest rates through operating activities and derivative instruments, while commodity risk is mitigated by passing costs to customers [Foreign Currency Risk](index=38&type=section&id=Foreign%20Currency%20Risk) Enpro manages foreign currency risks from subsidiary balance sheet translations, intercompany loans, and transactions using derivative instruments like cross-currency swaps - Enpro is exposed to foreign currency risks from foreign subsidiary balance sheet translations, intercompany loans, and foreign currency transactions[172](index=172&type=chunk) - A forward contract hedging a **95 million Euro** intercompany note, with a notional amount of **$103.7 million** at December 31, 2024, was settled in March 2025[172](index=172&type=chunk)[173](index=173&type=chunk) - Cross-currency swap agreements with a **$100.0 million** notional amount are used to convert fixed-rate USD Senior Notes interest payments to Euro-denominated debt interest payments, maturing October 15, 2026[174](index=174&type=chunk) [Commodity Risk](index=39&type=section&id=Commodity%20Risk) Enpro is exposed to commodity price fluctuations for raw materials, which are mitigated by passing costs to customers and lean initiatives, without using hedging instruments - The company is exposed to price fluctuations in commodity raw materials such as steel, engineered plastics, copper, and polymers[176](index=176&type=chunk) - Enpro aims to mitigate commodity risk by passing price increases to customers and implementing lean initiatives, and does not hedge commodity risk with market risk sensitive instruments[176](index=176&type=chunk) [Item 4. Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) Enpro's CEO and CFO concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting - The CEO and CFO concluded that disclosure controls and procedures were effective as of June 30, 2025[178](index=178&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[179](index=179&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings.](index=40&type=section&id=Item%201.%20Legal%20Proceedings.) This section refers to Note 14 for environmental and legal matters, stating that other ordinary course litigation is not expected to have a material adverse effect - A description of environmental and other legal matters is incorporated by reference from Note 14 to the Consolidated Financial Statements[181](index=181&type=chunk) - The company believes that the outcome of other ordinary course litigation will not materially adversely affect its financial condition, results of operations, and cash flows[181](index=181&type=chunk) [Item 1A. Risk Factors.](index=40&type=section&id=Item%201A.%20Risk%20Factors.) This section refers to the Annual Report on Form 10-K for detailed risk factors, noting increased raw material costs and supply chain disruptions as a material change - Reference is made to the Annual Report on Form 10-K for a detailed discussion of business risk factors[182](index=182&type=chunk) - A material change in risk factors includes increased costs for raw materials and potential supply chain disruptions, which could adversely affect the business, despite efforts to pass on higher costs[183](index=183&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.](index=40&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) Enpro made no share repurchases under its authorization in Q2 2025, but transferred 594 shares to a rabbi trust for the Deferred Compensation Plan Share Purchases in Q2 2025 | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :-------------------------- | :----------------------------- | :--------------------------- | | April 1 - April 30, 2025 | — | — | | May 1 - May 31, 2025 | — | — | | June 1 - June 30, 2025 | 594 | $191.00 | | Total | 594 | $191.00 | - No shares were purchased under the **$50.0 million** share repurchase authorization during Q2 2025[185](index=185&type=chunk) - **594 shares** were transferred to a rabbi trust for the Deferred Compensation Plan for Non-Employee Directors in June 2025, valued at a weighted average price of **$191.00 per share**[186](index=186&type=chunk) [Item 5. Other Information.](index=41&type=section&id=Item%205.%20Other%20Information.) No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q2 2025 - No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q2 2025[187](index=187&type=chunk) [Item 6. Exhibits.](index=41&type=section&id=Item%206.%20Exhibits.) This section lists the exhibits filed with the Form 10-Q report, including key agreements, equity plans, and certifications - The exhibit index includes the Indenture dated May 29, 2025, the Second Amendment to Third Amended and Restated Credit Agreement dated April 9, 2025, and the Enpro Inc. Amended and Restated 2020 Equity Compensation Plan[190](index=190&type=chunk) - Certifications from the Chief Executive Officer and Chief Financial Officer, along with InlineXBRL taxonomy extension documents, are also filed as exhibits[190](index=190&type=chunk)

Financial Data and Key Metrics Changes - EnPro reported second quarter sales of $288.1 million, a 6% increase year-over-year, with adjusted EBITDA of $71.1 million, down 3.9% from the previous year [12][19] - Adjusted diluted earnings per share decreased to $2.3 from $2.8 last year, primarily due to factors affecting adjusted EBITDA performance [13] Business Line Data and Key Metrics Changes - Sealing Technologies sales increased by 1.9% to $187.5 million, driven by strength in aerospace and food and pharma markets, while adjusted segment EBITDA margin was 33.8%, down from 35.5% last year [14] - Advanced Surface Technologies (AST) saw a 14.5% increase in sales to $100.9 million, with adjusted segment EBITDA margin at 19.6%, down from 21.7% last year [15][16] Market Data and Key Metrics Changes - The company experienced strong performance in aerospace and food and pharma markets, while commercial vehicle OEM demand remained weak [6][19] - The overall semiconductor capital equipment spending was described as choppy, but there was growth in leading-edge precision cleaning solutions and optical coatings [15] Company Strategy and Development Direction - EnPro is focused on capturing opportunities in key markets such as aerospace, sustainable power generation, food and pharma, and compositional analysis, aiming for long-term profitable growth [7][10] - The company is implementing a multi-year strategy called EnPro 3.0, which emphasizes personal and profitable growth for employees [10][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the underlying demand for their products, particularly in aerospace and food and pharma markets, while acknowledging challenges in commercial vehicle OEM demand [19][40] - The company raised its full-year 2025 guidance, expecting sales growth between 5-7% and adjusted EBITDA in the range of $270 million to $280 million [19] Other Important Information - The balance sheet remains strong, with net debt of $364 million and a net leverage ratio of 1.4 times trailing twelve-month adjusted EBITDA [17] - Free cash flow for the first half of 2025 was $52.8 million, up from $35.5 million last year, driven by strong operating performance and working capital management [18] Q&A Session Summary Question: What was the impact of FX transaction headwinds in Sealing? - Management indicated that the impact was $1.9 million due to the weakening of the U.S. dollar, affecting expenses in non-functional currency denominations [30][31] Question: What is the outlook for AST's incremental margins in the second half? - Management expects that the FX headwinds experienced in Q2 will not continue at the same magnitude, and AST should leverage well going forward as revenue from growth investments materializes [36] Question: What is driving the improved growth rate in Sealing for the second half? - Management highlighted new programs and customer wins, particularly in the OEM commercial truck sector, and a strong backlog as factors contributing to the improved outlook [39][40] Question: How is the M&A market looking? - Management remains active in the M&A space, focusing on growth nodes in key markets and evaluating opportunities that meet their strategic and financial criteria [54][55]

Financial Data and Key Metrics Changes - EnPro reported second quarter sales of $288.1 million, a 6% increase year-over-year, with adjusted EBITDA of $71.1 million, down 3.9% from the previous year [11][12] - Adjusted diluted earnings per share decreased to $2.3 from $2.8 last year, primarily due to factors affecting adjusted EBITDA performance [12] - Total company adjusted EBITDA margin was 24.7%, reflecting increased operating expenses and transactional foreign exchange headwinds [12] Business Line Data and Key Metrics Changes - Sealing Technologies sales increased by 1.9% to $187.5 million, driven by strength in aerospace and food and pharma markets, while facing challenges in commercial vehicle OEM demand [13] - Advanced Surface Technologies (AST) saw a 14.5% increase in sales to $100.9 million, with growth in precision cleaning solutions and optical coatings [14] - Adjusted segment EBITDA margin for Sealing Technologies was 33.8%, down from 35.5% last year, while AST's margin was 19.6%, down from 21.7% [13][15] Market Data and Key Metrics Changes - The company expects mid single-digit growth in Sealing Technologies for the year, with strong performance anticipated in aerospace and food and biopharma markets [19] - AST is projected to achieve high single to low double-digit sales growth year-over-year, driven by improved demand for semiconductor tools and precision cleaning solutions [20] Company Strategy and Development Direction - EnPro is focused on its "EnPro 3.0" strategy, which emphasizes personal and profitable growth, empowering employees to pursue individual development plans [9][22] - The company is investing in capacity expansions and strategic marketing to enhance its market reach and drive long-term profitable growth [6][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business and the ability to navigate macroeconomic challenges, with a strong outlook for the second half of 2025 [4][19] - The company raised its full-year 2025 guidance, expecting sales growth between 5% to 7%, adjusted EBITDA in the range of $270 million to $280 million, and adjusted diluted earnings per share of $7.6 to $8.1 [19] Other Important Information - The balance sheet remains strong, with net debt of $364 million and a net leverage ratio of 1.4 times trailing twelve-month adjusted EBITDA [17] - Free cash flow for the first half of 2025 was $52.8 million, up from $35.5 million last year, driven by strong operating performance and working capital management [18] Q&A Session Summary Question: Impact of FX transaction headwind in Sealing and nuclear timing - Management indicated that the nuclear performance was affected by timing issues between quarters, with strong underlying demand [27][28] - Transactional FX impacts were noted, particularly in AST, with significant effects from local expenses in non-functional currencies [29][30] Question: Incremental margins in AST and FX headwinds - Management expects FX headwinds to be less significant moving forward, with AST positioned to leverage growth investments for improved margins [35][36] Question: Drivers of improved growth rate in Sealing - New programs and customer wins, particularly in the OEM commercial truck sector, are contributing to the improved growth outlook [37][39] Question: AST growth expectations for the second half - Management highlighted ongoing investments and a healthy business environment, with expectations for continued growth in AST [42][44] Question: Success of compositional analysis post-acquisition - The compositional analysis business has exceeded growth expectations, with strong leadership and plans for capacity expansion [47][48] Question: M&A activity outlook - The company remains active in pursuing M&A opportunities, focusing on growth nodes in key markets [51][52]

Enpro, which belongs to the Zacks Technology Services industry, posted revenues of $288.1 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.86%. This compares to year-ago revenues of $271.9 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the e ...

Financial Performance - Sales increased by 6% year-over-year, driving an increase in gross profit[11] - Organic sales increased 5.6% year-over-year[13] - Adjusted EBITDA decreased 3.9% to $71.1 million, primarily due to increased operating expenses and transactional foreign exchange headwinds[11, 13] - Adjusted EBITDA margin was 24.7%[13] - Adjusted diluted earnings per share (EPS) decreased slightly to $2.03 due to factors impacting adjusted EBITDA[12] Segment Performance - Sealing Technologies sales increased 1.9% year-over-year[15] - Sealing Technologies adjusted EBITDA decreased 3.2% to $63.3 million, with a margin of 33.8%, a contraction of 170 bps[19] - Advanced Surface Technologies sales increased 14.5% year-over-year[21] - Advanced Surface Technologies adjusted EBITDA increased 3.7%[22] Capital Structure and Cash Flow - Upsized senior notes to $450 million (2033) and doubled revolving credit facility to $800 million (2030)[24] - Free cash flow for the six months ended June 30, 2025, was $52.8 million, up from $35.5 million in the prior year[24] 2025 Guidance - Revenue growth is projected to be 5% to 7%[26] - Adjusted EBITDA is projected to be $270 million to $280 million[26] - Adjusted diluted EPS is projected to be $7.60 to $8.10[26]