Financial Data and Key Metrics Changes - In Q1 2025, total sales reached $273.2 million, reflecting a 6% increase year-over-year, driven by strong performance in Sealing Technologies and Advanced Surface Technologies (AST) [11] - Adjusted EBITDA for the first quarter was $67.8 million, up over 16% compared to the prior year, with an adjusted EBITDA margin of 24.8%, expanding by 210 basis points year-over-year [12][19] - Adjusted diluted earnings per share increased by 21% to $1.9, supported by the factors driving adjusted EBITDA growth [13] Business Line Data and Key Metrics Changes - Sealing Technologies segment sales increased by 4.7% to $179.6 million, with adjusted segment EBITDA rising nearly 11% and a margin of 32.7% [13][14] - Advanced Surface Technologies saw a 9.1% increase in sales to nearly $94 million, with adjusted segment EBITDA up 18.5% and a margin of 21.9% [15][16] Market Data and Key Metrics Changes - The aerospace, general industrial, and food and pharma markets contributed to the growth in Sealing Technologies, while commercial vehicle OEM demand remained weak [6][14] - In the AST segment, double-digit growth was noted in Precision Cleaning Solutions and Optical Coatings and Filters, despite ongoing volatility in semiconductor capital equipment spending [8][15] Company Strategy and Development Direction - The company is focused on organic growth opportunities and capability expansions through acquisitions that meet strategic and financial criteria [7] - EnPro is positioned to leverage technological innovation and applied engineering expertise to gain market share, particularly in aerospace markets [7][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate economic uncertainties and emphasized the importance of agility and leadership development [5][10] - The guidance for 2025 remains unchanged, with expectations for sales growth in the low to mid-single-digit range and adjusted EBITDA between $262 million to $277 million [19][20] Other Important Information - The company amended its credit agreement to provide a revolving credit facility of up to $800 million, enhancing financial flexibility for strategic growth initiatives [17] - Free cash flow for Q1 was $11.6 million, with capital expenditures expected to be around $50 million for the year [18] Q&A Session Summary Question: Can you provide numbers regarding the minimal and manageable impact of tariffs? - Management indicated that most products are produced regionally, with minimal exposure to tariffs, particularly from imports [28][30] Question: Are there any end markets that are performing better or worse compared to 90 days ago? - Management feels equally positive about all markets, with commercial vehicle demand as expected and strong performance in aerospace and food and pharma [32][33] Question: What is the outlook for margin expansion in Sealing Technologies? - Margin expansion was primarily driven by favorable mix and strategic pricing initiatives, with strong demand in aftermarket and aerospace markets [56][58] Question: Any updates on the Arizona facility? - The facility is on track, with early revenue from testing and qualification expected to ramp up throughout the year [44][45] Question: Is M&A activity slowing down due to the current environment? - While M&A activity has slowed, the company remains focused on high-quality assets and is patient in its approach to acquisitions [50][51]

Core Viewpoint - Enpro (NPO) reported quarterly earnings of $1.90 per share, exceeding the Zacks Consensus Estimate of $1.57 per share, marking a 21.02% earnings surprise [1]. Financial Performance - The company achieved revenues of $273.2 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 5.16% and showing an increase from $257.5 million year-over-year [2]. - Over the last four quarters, Enpro has exceeded consensus EPS estimates three times and has topped consensus revenue estimates three times as well [2]. Stock Performance and Outlook - Enpro shares have declined approximately 9.7% since the beginning of the year, compared to a 3.9% decline in the S&P 500 [3]. - The company's earnings outlook will be crucial for future stock performance, with current consensus EPS estimates at $2.18 for the coming quarter and $7.38 for the current fiscal year [7]. Industry Context - The Technology Services industry, to which Enpro belongs, is currently ranked in the top 24% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8].

Financial Data and Key Metrics Changes - In Q1 2025, total sales reached $273.2 million, reflecting a 6% year-over-year increase driven by strong performance in Sealing Technologies and a 9.1% increase in Advanced Surface Technologies (AST) [10][11] - Adjusted EBITDA for the first quarter was $67.8 million, up over 16% compared to the prior year, with an adjusted EBITDA margin of 24.8%, expanding by 210 basis points year-over-year [10][11] - Adjusted diluted earnings per share increased by 21% to $1.9, supported by the factors driving adjusted EBITDA growth [11] Business Line Data and Key Metrics Changes - Sealing Technologies segment sales increased by 4.7% to $179.6 million, with adjusted segment EBITDA rising nearly 11% and a margin of 32.7% [11][13] - Advanced Surface Technologies saw sales increase by over 9% to nearly $94 million, with adjusted segment EBITDA up 18.5% and a margin of 21.9% [14][15] Market Data and Key Metrics Changes - The aerospace, general industrial, and food and pharma markets contributed to the growth in Sealing Technologies, while commercial vehicle OEM demand remained weak [5][11] - In the AST segment, double-digit growth was noted in Precision Cleaning Solutions and Optical Coatings and Filters, despite ongoing volatility in semiconductor capital equipment spending [14][15] Company Strategy and Development Direction - The company is focused on organic growth opportunities where it has technological differentiation and is pursuing acquisitions that meet its strategic and financial criteria [6][8] - The "EnPro 3.0" strategy aims to accelerate profitable growth and enhance market share, particularly in aerospace and adjacent markets [4][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate economic uncertainties and maintain strong performance, emphasizing agility and operational excellence [4][8] - The guidance for 2025 remains unchanged, with expectations for low to mid-single-digit sales growth and adjusted EBITDA between $262 million to $277 million [18][19] Other Important Information - The company amended its credit agreement to provide a revolving credit facility of up to $800 million, enhancing financial flexibility for growth initiatives [16][17] - Free cash flow for Q1 was $11.6 million, with capital expenditures expected to be around $50 million for the year [17] Q&A Session Summary Question: Can you provide numbers regarding the minimal impact of tariffs? - Management indicated that most products are produced regionally, with minimal exposure to tariffs, particularly in North America, where Canada and Mexico are exempt [25][27] Question: Are there any end markets showing significant changes compared to 90 days ago? - Management feels equally positive about all markets, with commercial vehicle demand as expected and strong performance in aerospace, food, and pharma [29][31] Question: Any updates on the Arizona facility? - The facility is on track, with early revenue from testing and qualification expected to ramp up throughout the year [41][42] Question: Is there any indication of distributor destocking? - Management has not observed any significant inventory build or destocking, maintaining a balanced supply chain [40] Question: What is the outlook for margin expansion in Sealing Technologies? - Margin expansion is primarily driven by favorable mix and strategic pricing initiatives, with strong demand in aftermarket and aerospace markets [51][53]

Forward-Looking Statements Statements in this presentation that express a belief, expectation or intention, including the 2025 guidance and other statements that are not historical fact, are forward-looking statements under the Private Securities Litigation Reform Act of 1995. They involve a number of risks and uncertainties that may cause actual events and results to differ materially from such forward-looking statements. These risks and uncertainties include, but are not limited to: economic conditions in ...

Financial Performance - Sales for Q1 2025 were $273.2 million, an increase of 6.1% year-over-year, with organic sales growth of 6.0%[3] - GAAP net income rose to $24.5 million, a 96.0% increase from $12.5 million in the prior year, with diluted earnings per share at $1.15 compared to $0.59[4] - Adjusted EBITDA increased by 16.1% to $67.8 million, with an adjusted EBITDA margin of 24.8%, up 210 basis points from the previous year[3] - Adjusted net income for Q1 2025 was $40.3 million, a 21.8% increase year-over-year, with adjusted diluted earnings per share at $1.90, up 21.0%[7] - Net sales for Q1 2025 increased to $273.2 million, up 6.6% from $257.5 million in Q1 2024[26] - Gross profit rose to $118.2 million, representing a 11.9% increase compared to $106.2 million in the previous year[26] - Operating income improved significantly to $41.8 million, up 49.3% from $28.0 million in Q1 2024[26] - Basic earnings per share increased to $1.16, compared to $0.60 in the same quarter last year[26] - Adjusted EBITDA for Q1 2025 reached $67.8 million, up from $58.4 million in Q1 2024, indicating a 16.8% growth[38] - The company reported an adjusted diluted earnings per share of $1.90 for Q1 2025, compared to $1.57 in Q1 2024, marking a 20.9% increase[34] Segment Performance - The Sealing Technologies segment reported sales of $179.6 million, a 4.7% increase, while the Advanced Surface Technologies segment saw sales rise by 9.1% to $93.8 million[8][9] - Adjusted Segment EBITDA for Sealing Technologies was $58.7 million, up from $53.0 million, with a margin of 32.7%[30] - Advanced Surface Technologies reported Adjusted Segment EBITDA of $20.5 million, an increase from $17.3 million, with a margin of 21.9%[30] Cash Flow and Debt - Free cash flow for Q1 2025 was $11.6 million, a significant improvement from $(2.0) million in the prior year, driven by strong operating results[10] - Total debt at the end of Q1 2025 was $636.4 million, with cash and cash equivalents of $240.3 million[11] - Cash and cash equivalents at the end of Q1 2025 were $240.3 million, up from $236.3 million at the end of Q4 2024[28] - The company reported a net cash provided by operating activities of $21.0 million, significantly higher than $6.3 million in Q1 2024[27] Guidance and Future Outlook - The company maintains its full-year 2025 guidance, projecting revenue growth in the low to mid-single-digit range and adjusted EBITDA between $262 million and $277 million[14] - Order rates remain positive entering Q2 2025, with minimal expected impact from recently announced tariffs[2] Other Financial Metrics - The effective tax rate used for adjusted income tax expense was normalized at 25.0%[35] - Acquisition expenses decreased to $0.2 million in Q1 2025 from $3.3 million in Q1 2024[38] - Restructuring expenses were $0.6 million in Q1 2025, slightly down from $0.8 million in Q1 2024[38] - The company recorded foreign exchange losses of $0.4 million related to a divestiture in Q1 2025, compared to $0.5 million in Q1 2024[38] - Approximately 47% of the adjusted EBITDA in Q1 2025 was attributable to subsidiaries that do not guarantee the company's 5.75% Senior Notes due 2026[38]

Sales and Revenue - Total third-party sales for the year ended December 31, 2024, were $1,048.7 million, with the semiconductor market contributing 31.0% of total sales at $324.7 million[30]. - The Sealing Technologies segment generated approximately two-thirds of its total revenue from aftermarket or recurring revenue[33]. - The order backlog as of December 31, 2024, was valued at $240.6 million, an increase from $225.4 million at December 31, 2023, with $122.7 million related to Sealing Technologies and $117.9 million to Advanced Surface Technologies[54]. - Approximately 42% of Sealing Technologies segment sales in 2024 were delivered to customers outside the United States[41]. - Advanced Surface Technologies segment sales included approximately 45% delivered to customers outside the United States in 2024[49]. - The Sealing Technologies segment serves a variety of markets, including aerospace, oil and gas, and food and pharmaceutical, with general industrial being the largest at 18.7% of total sales[30]. - The Advanced Surface Technologies segment includes four operating businesses focused on high-growth markets, such as semiconductor manufacturing and life sciences[44]. Quality and Certification - As of December 31, 2024, 26 manufacturing and service facilities were ISO 9001 certified, ensuring high-quality standards[57]. - The company achieved third-party certification for three major manufacturing locations under ISO 45001, promoting continuous improvement in health and safety management[63]. Employee and Culture - The company employs approximately 3,500 employees, with 65% located in North America[60]. - In 2024, the company enhanced performance management processes, focusing on manager engagement and employee ownership, with training sessions conducted enterprise-wide[62]. - The company maintains a company-wide minimum wage of $17 per hour and offers a comprehensive benefits program, including a 401k plan with above-market company match[65]. - Employee retention rates are at or above market level, attributed to the company’s culture and focus on employee well-being[68]. Research and Development - Research and development efforts are focused on creating breakthrough products and solutions for demanding environments, particularly in semiconductor manufacturing[52]. Financial Obligations and Risk Management - As of December 31, 2024, the company had $291.4 million outstanding on the Amended Credit Agreement with a variable interest rate, affecting interest expense and cash flows[252]. - The company entered into a forward contract to hedge a €95 million exposure related to intercompany loans, expected to be resolved in 2025[253]. - The company’s fixed-rate debt obligations totaled $350.9 million as of December 31, 2024, with an average interest rate of 5.8%[251]. - The notional amount of foreign exchange contracts hedging foreign currency transactions was $103.7 million as of December 31, 2024[253]. Community Engagement - The company has contributed $2.25 million to the Enpro Foundation since 2020, with $1.1 million in donations to charitable organizations nominated by employees[69]. Health and Safety Initiatives - The company plans to apply an AI tool in 2025 to analyze work tasks and reduce ergonomic injuries, which are a top risk[64].

Investor Overview February-March 2025 February-March 2025 Investor Presentation 2 Enpro Inc. (NYSE: NPO) | Attractive Portfolio of High-Margin Businesses Company Overview Headquarters Charlotte, NC Principal Manufacturing Facilities 15 Global Employees ~3,500 Financial Overview Market-Cap1 $4.0B LTM Revenue3 $1.0B LTM Adj. EBITDA (Margin)2,3 $255M (24.3%) 2024 YTD Aftermarket Rev. % 54% Dividend Yield1 0.6% 2024 Revenue Contribution Sales by Segment Sales by Channel Sales by Geography Sales by Market Highly ...

Financial Data and Key Metrics Changes - EnPro Industries, Inc. reported approximately $255 million in adjusted EBITDA for 2024, up 7% year over year, with adjusted EBITDA margins of 24.3%, an increase of 180 basis points from the prior year [15][32] - Fourth-quarter sales reached $258.4 million, a 3.7% increase, with organic sales rising 1.2% [23] - Adjusted diluted earnings per share increased 32% to $1.57 compared to the prior year period [25] Business Line Data and Key Metrics Changes - Sealing Technologies segment sales were $163 million in Q4, an 11% increase from the prior year, with adjusted segment EBITDA margin expanding almost 500 basis points to 31% [25][26] - Advanced Surface Technologies (AST) sales decreased 6.4% year over year to $95.6 million, with adjusted segment EBITDA margin of 22.1%, flat year over year [27][28] Market Data and Key Metrics Changes - AST revenue ended the year down roughly 10% due to weakness in semiconductor capital equipment spending, although there was strength in solutions for leading-edge applications [14] - The company expects continued weakness in semiconductor capital equipment spending throughout 2025, impacting overall market growth [38] Company Strategy and Development Direction - EnPro 3.0% is the next phase of the company's value creation journey, focusing on profitable growth and operational improvements [16][19] - The company aims for mid to high single-digit top-line growth over the long term, with specific targets of mid-single-digit growth in sealing and high single-digit growth in AST [20][36] Management's Comments on Operating Environment and Future Outlook - Management noted that the operating environment remains challenging, particularly in semiconductor capital equipment, but expressed confidence in the company's ability to navigate these challenges [10][48] - The company anticipates a choppy market in 2025 but expects to achieve growth through strategic investments and operational improvements [38][86] Other Important Information - The company generated $130 million in free cash flow in 2024 and maintained a strong balance sheet with a net leverage ratio of 1.6 times [32][34] - EnPro Industries, Inc. has committed to returning capital to shareholders, increasing the quarterly dividend to $0.31 per share [34] Q&A Session Summary Question: Semiconductor growth expectations - Management indicated that growth in AST is primarily driven by outgrowth and leading-edge applications, with expectations for a choppy market in 2025 [48][50] Question: AST sequential performance - Management expects some choppiness in the first half of 2025 but anticipates a stronger second half for AST [52][54] Question: Tariff risks and pricing actions - Management stated that most sourcing is done regionally, with minimal exposure to tariffs, and plans to implement pricing actions to mitigate any impacts [56][58] Question: AST margins and certification process - Management noted that despite higher costs associated with certification, favorable mix and strong volume contributed to improved margins in AST [66][70] Question: CapEx expectations - Management confirmed that higher CapEx in 2025 is due to projects being pushed from 2024, with confidence in executing these investments [73][76]

Financial Performance - Fourth quarter 2024 sales reached $258.4 million, a 3.7% increase year-over-year, while full year sales totaled $1.05 billion, down 1.0%[4][15] - GAAP net income from continuing operations for Q4 2024 was $13.9 million, compared to a loss of $4.9 million in the prior year, and full year net income increased to $72.9 million from $10.8 million[4][17] - Adjusted EBITDA for Q4 2024 was $58.2 million, a 24.1% increase from $46.9 million last year, with full year adjusted EBITDA rising 7.1% to $254.8 million[4][10][18] - Diluted earnings per share from continuing operations for Q4 2024 improved to $0.66, compared to a diluted loss per share of $0.23 in the prior year, while full year diluted earnings per share increased to $3.45 from $0.51[4][17] - Net income attributable to Enpro Inc. for 2024 was $72.9 million, up from $22.2 million in 2023, marking a 228.8% increase[33] - Basic earnings per share for continuing operations were $3.48 in 2024, compared to $0.52 in 2023, indicating a substantial increase[33] - Adjusted income from continuing operations attributable to Enpro Inc. for Q4 2024 was $33.2 million, or $1.57 per diluted share, compared to $25.0 million, or $1.19 per diluted share in Q4 2023[48] - Adjusted income from continuing operations attributable to Enpro Inc. was $146.9 million for 2024, with diluted earnings per share of $6.96, up from $137.0 million and $6.54 in 2023[49] Sales and Segment Performance - Strong performance in Sealing Technologies contributed to Q4 sales growth, with a 10.9% increase in segment sales to $163.0 million[12] - Advanced Surface Technologies segment sales decreased by 6.4% in Q4 2024, totaling $95.6 million, reflecting ongoing challenges in semiconductor capital equipment spending[14][18] - Sales for Sealing Technologies increased to $163.0 million in Q4 2024, up 10.9% from $147.0 million in Q4 2023[39] - Advanced Surface Technologies reported sales of $95.6 million in Q4 2024, a decrease of 6.4% from $102.1 million in Q4 2023[39] - Total sales for Enpro Inc. reached $258.4 million in Q4 2024, compared to $249.1 million in Q4 2023, reflecting a growth of 3.7%[39] Cash Flow and Financial Position - The company generated $162.9 million in cash flow from continuing operations in 2024, with free cash flow of $130.0 million after capital expenditures[19] - Enpro ended 2024 with cash of $236.3 million and $390 million available under its revolving credit facility, resulting in a net leverage ratio of approximately 1.6x[20] - Cash and cash equivalents decreased to $236.3 million in 2024 from $369.8 million in 2023, a decline of 36.0%[37] - The company reported a net cash provided by operating activities of $162.9 million for 2024, down from $208.4 million in 2023[35] - Enpro's total liabilities decreased to $1,062.9 million in 2024 from $1,071.9 million in 2023, a reduction of 0.8%[37] Guidance and Future Outlook - The company introduced 2025 guidance, expecting revenue growth in the low to mid-single-digit range, adjusted EBITDA between $262 million and $277 million, and adjusted diluted earnings per share of $7.00 to $7.70[4][22] - The company is focused on expanding its presence in semiconductor and life sciences markets, with ongoing investments in new technologies and facilities[29] Operational Efficiency - Gross profit for the year ended December 31, 2024, was $444.8 million, compared to $426.8 million in 2023, reflecting a 4.7% increase[33] - Operating income for the year increased significantly to $142.3 million from $76.8 million in 2023, representing an 85.5% growth[33] - Corporate expenses for the year ended December 31, 2024, totaled $46.4 million, down from $51.1 million in 2023[42] - Adjusted EBITDA for the year ended December 31, 2024, was $254.8 million, an increase from $238.0 million in 2023, indicating a growth of approximately 7.2%[54] - Free cash flow for the year ended December 31, 2024, was $130.0 million, down from $174.1 million in 2023, reflecting a decrease of about 25.4%[55] Environmental and Acquisition Expenses - The company incurred acquisition expenses of $4.3 million in 2024, compared to $1.1 million in 2023, indicating increased investment in growth initiatives[49] - Environmental reserve adjustments amounted to $5.7 million in 2024, up from $2.9 million in 2023, highlighting a focus on environmental liabilities[54] Depreciation and Tax Management - Depreciation and amortization expense increased to $100.3 million in 2024 from $94.5 million in 2023, reflecting ongoing capital investments[54] - The effective tax rate used for adjusted income tax expense was normalized at 25.0%, providing a clearer view of the company's tax obligations[52]

Company Performance - Enpro (NPO) reported quarterly earnings of $1.74 per share, missing the Zacks Consensus Estimate of $1.93 per share, but showing an increase from $1.58 per share a year ago, resulting in an earnings surprise of -9.84% [1] - The company posted revenues of $260.9 million for the quarter ended September 2024, which was 1.14% below the Zacks Consensus Estimate and an increase from $250.7 million year-over-year [2] - Over the last four quarters, Enpro has surpassed consensus EPS estimates two times and topped consensus revenue estimates just once [2] Market Context - Enpro shares have declined approximately 6.4% since the beginning of the year, contrasting with the S&P 500's gain of 19.8% [3] - The current consensus EPS estimate for the upcoming quarter is $1.82 on revenues of $265.9 million, and for the current fiscal year, it is $7.40 on revenues of $1.06 billion [7] - The Zacks Industry Rank indicates that the Technology Services sector is in the top 32% of over 250 Zacks industries, suggesting a favorable environment for stocks in this category [8] Future Outlook - The sustainability of Enpro's stock price movement will largely depend on management's commentary during the earnings call and the revisions of earnings estimates in the near future [3][4] - The estimate revisions trend for Enpro is currently mixed, resulting in a Zacks Rank 3 (Hold), indicating that the shares are expected to perform in line with the market [6]