Company Performance - Enpro (NPO) reported quarterly earnings of $2.03 per share, missing the Zacks Consensus Estimate of $2.08 per share, and down from $2.08 per share a year ago, representing an earnings surprise of -2.40% [1] - The company posted revenues of $288.1 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.86%, and up from $271.9 million year-over-year [2] - Over the last four quarters, Enpro has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Stock Performance - Enpro shares have increased approximately 24.6% since the beginning of the year, compared to the S&P 500's gain of 7.6% [3] - The current consensus EPS estimate for the upcoming quarter is $1.80 on revenues of $268.6 million, and for the current fiscal year, it is $7.34 on revenues of $1.09 billion [7] Industry Outlook - The Technology Services industry, to which Enpro belongs, is currently in the top 41% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [5]

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]

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) Enpro reported strong Q2 2025 sales, raising full-year guidance for revenue, adjusted EBITDA, and EPS, driven by AST and Sealing Technologies, and enhanced financial flexibility [Second Quarter 2025 Highlights](index=1&type=section&id=Second%20Quarter%202025%20Highlights) Enpro reported strong Q2 2025 sales, raising full-year guidance for revenue, adjusted EBITDA, and EPS, despite operating leverage impacts Second Quarter 2025 Highlights | Metric | 2025 Q2 | Change YoY | | :-------------------------------- | :------ | :--------- | | Sales | $288.1M | +6.0% | | Organic Sales | - | +5.6% | | AST Sales | - | +14.5% | | Sealing Technologies Sales | - | +1.9% | | Operating Income | $45.7M | -4.8% | | Adjusted EBITDA* | $71.1M | -3.9% | | GAAP Diluted EPS | $1.25 | -1.6% | | Adjusted Diluted EPS* | $2.03 | -2.4% | - Increased full-year 2025 guidance: Revenue growth of **5%-7%**, adjusted EBITDA* in the range of **$270 million to $280 million**, and adjusted diluted earnings per share* in the range of **$7.60 to $8.10 per share**[4](index=4&type=chunk) - Debt refinancing and strong free cash flow generation provide ample financial flexibility to execute on Enpro 3.0 growth strategy[4](index=4&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO highlighted strong Q2 sales growth in AST and Sealing Technologies, noting investment and FX impacts, but affirmed a positive H2 2025 outlook and enhanced financial flexibility - Enpro delivered strong Q2 sales growth, driven by **double-digit revenue increase in AST** and continued momentum in Sealing Technologies[2](index=2&type=chunk) - Investments in high-return growth initiatives and foreign exchange headwinds impacted operating leverage, particularly in AST[2](index=2&type=chunk) - Full-year guidance increased due to strength in aerospace, general industrial, food and pharma orders, and a positive sales outlook for AST in H2 2025[2](index=2&type=chunk) [Financial Performance - Second Quarter 2025](index=3&type=section&id=Financial%20Performance%20-%20Second%20Quarter%202025) Enpro's Q2 2025 saw consolidated sales growth, but profitability declined due to increased operating expenses and foreign exchange impacts across segments [Consolidated Results](index=3&type=section&id=Second%20Quarter%202025%20Consolidated%20Results) Enpro's consolidated sales grew 6.0% organically, but net income and adjusted EBITDA declined due to increased operating expenses and FX headwinds Second Quarter 2025 Consolidated Financial Highlights (Millions) | Metric | Q2 2025 | Q2 2024 | Change | | :-------------------------- | :------ | :------ | :----- | | Net sales | $288.1M | $271.9M | 6.0% | | Net income | $26.4M | $26.7M | (1.1)% | | Diluted earnings per share | $1.25 | $1.27 | (1.6)% | | Adjusted net income* | $43.1M | $43.9M | (1.8)% | | Adjusted diluted EPS* | $2.03 | $2.08 | (2.4)% | | Adjusted EBITDA* | $71.1M | $74.0M | (3.9)% | | Adjusted EBITDA margin* | 24.7% | 27.2% | -2.5 pp | - Sales growth of **6.0% (5.6% organic)** was driven by aerospace, food and pharma, precision cleaning, optical coatings, and general industrial demand, partially offset by soft commercial vehicle OEM demand and nuclear order timing[7](index=7&type=chunk) - Corporate expense increased to **$12.1 million** from **$10.5 million**, mainly due to higher incentive compensation accruals and increased health insurance costs[8](index=8&type=chunk) [Segment Performance](index=3&type=section&id=Second%20Quarter%202025%20Segment%20Highlights) Enpro's segments showed mixed Q2 2025 performance: Sealing Technologies had modest sales growth but declining EBITDA, while AST achieved strong sales growth with slight EBITDA increase [Sealing Technologies](index=3&type=section&id=Sealing%20Technologies) Sealing Technologies reported modest sales growth, but adjusted EBITDA and margin declined due to FX headwinds and strong prior-year comparisons Sealing Technologies Q2 2025 Performance (Millions) | Metric | Q2 2025 | Q2 2024 | Change | | :-------------------------- | :------ | :------ | :----- | | Sales | $187.5M | $184.0M | 1.9% | | Adjusted segment EBITDA | $63.3M | $65.4M | (3.2)% | | Adjusted segment EBITDA margin | 33.8% | 35.5% | -1.7 pp | - Sales increased **1.9% (1.5% excluding FX)** driven by aerospace, food and pharma demand, general industrial performance, and strategic pricing, partially offset by softness in commercial vehicle OEM and timing of nuclear deliveries[11](index=11&type=chunk) - Adjusted segment EBITDA decreased **3.2% (3.4% excluding FX)**, with margin narrowing to **33.8%**, primarily due to transactional foreign exchange headwinds and timing of deliveries, against a strong prior-year comparison[12](index=12&type=chunk)[13](index=13&type=chunk) [Advanced Surface Technologies](index=5&type=section&id=Advanced%20Surface%20Technologies) Advanced Surface Technologies achieved strong sales growth from precision cleaning and optical coatings, with slight EBITDA increase, though margin narrowed due to growth investments and FX Advanced Surface Technologies Q2 2025 Performance (Millions) | Metric | Q2 2025 | Q2 2024 | Change | | :-------------------------- | :------ | :------ | :----- | | Sales | $100.9M | $88.1M | 14.5% | | Adjusted segment EBITDA | $19.8M | $19.1M | 3.7% | | Adjusted segment EBITDA margin | 19.6% | 21.7% | -2.1 pp | - Sales increased **14.5%**, driven by growth in leading-edge precision cleaning solutions, optical coatings, and improved demand for certain in-chamber semiconductor tools and assemblies[22](index=22&type=chunk) - Adjusted segment EBITDA increased **3.7%**, but operating leverage on sales growth was offset by transactional foreign currency headwinds and increased operating expenses supporting growth initiatives[22](index=22&type=chunk) [Financial Position & Capital Allocation](index=5&type=section&id=Financial%20Position%20%26%20Capital%20Allocation) Enpro significantly improved H1 2025 cash flow, maintaining a healthy balance sheet and low net leverage after successful debt refinancing [Balance Sheet and Cash Flow](index=5&type=section&id=Balance%20Sheet%20and%20Cash%20Flow) Enpro improved H1 2025 operating cash flow by 47.9%, driven by higher net income and effective working capital management Six Months Ended June 30, 2025 Cash Flow Summary (Millions) | Metric | 2025 (6 months) | 2024 (6 months) | Change | | :-------------------------------- | :-------------- | :-------------- | :----- | | Cash flow from operating activities | $73.2M | $49.5M | +47.9% | | Capital expenditures | $20.4M | $14.0M | +45.7% | | Free cash flow | $52.8M | $35.5M | +48.7% | - Higher net income and working capital management were the primary drivers of the year-over-year improvement in cash flow[14](index=14&type=chunk) [Debt Refinancing and Capital Structure](index=5&type=section&id=Debt%20Refinancing%20and%20Capital%20Structure) Enpro refinanced debt with a new $800 million revolving credit facility and $450 million senior notes, achieving a 1.4x net leverage ratio and enhanced financial flexibility - Amended existing credit agreement with a new **$800 million revolving credit facility** maturing in 2030; revolver capacity was **$770 million** at June 30, 2025[16](index=16&type=chunk) - Completed an offering of **$450 million of 6.125% senior notes** due 2033, using proceeds to redeem **$350 million of 5.75% senior notes** due 2026[17](index=17&type=chunk) - Ended Q2 with total debt of **$465.1 million** and cash of **$107.1 million**, resulting in a net leverage ratio of **1.4x** to trailing twelve-month adjusted EBITDA[18](index=18&type=chunk) [Quarterly Dividend](index=5&type=section&id=Quarterly%20Dividend) Enpro declared a regular quarterly dividend of $0.31 per share, payable September 17, 2025, with $13.2 million paid in H1 2025 - Declared a regular quarterly dividend of **$0.31 per share** on July 31, 2025[19](index=19&type=chunk) - Dividend is payable on September 17, 2025, to shareholders of record as of September 3, 2025[19](index=19&type=chunk) - Total dividend payments for the six months ended June 30, 2025, amounted to **$13.2 million**[15](index=15&type=chunk) [Full-Year 2025 Guidance](index=5&type=section&id=Full-Year%202025%20Guidance) Enpro increased full-year 2025 guidance for revenue growth, adjusted EBITDA, and adjusted diluted EPS, reflecting confidence in market performance [Updated Guidance](index=5&type=section&id=Raising%202025%20Guidance) Enpro increased full-year 2025 guidance for revenue growth, adjusted EBITDA, and adjusted diluted EPS, reflecting improved market outlook and strong Q2 Updated Full-Year 2025 Guidance | Metric | Updated Guidance | | :-------------------------- | :--------------- | | Revenue growth | 5%-7% | | Adjusted EBITDA* | $270M - $280M | | Adjusted diluted EPS* | $7.60 - $8.10 | [Previous Guidance](index=6&type=section&id=Previously%2C%20Enpro%20expected%20revenue%20growth%20in%20the%20low%20to%20mid-single-digit%20range%2C%20adjusted%20EBITDA*%20in%20the%20range%20of%20%24262%20million%20to%20%24277%20million%20and%20adjusted%20diluted%20earnings%20per%20share*%20in%20the%20range%20of%20%247.00%20to%20%247.70%20per%20share.) Previous full-year 2025 guidance was lower across all key metrics, indicating a more conservative outlook before strong Q2 performance Previous Full-Year 2025 Guidance | Metric | Previous Guidance | | :-------------------------- | :-------------------- | | Revenue growth | Low to mid-single-digit range | | Adjusted EBITDA* | $262M - $277M | | Adjusted diluted EPS* | $7.00 - $7.70 | [Additional Information](index=6&type=section&id=Additional%20Information) This section details the conference call, non-GAAP financial measures, forward-looking statements, and an overview of Enpro Inc. [Conference Call and Webcast](index=6&type=section&id=Conference%20Call%2C%20Webcast%20Information%2C%20and%20Presentations) Enpro held a conference call and webcast on August 5, 2025, to discuss Q2 financial results, providing investors access to detailed information - Conference call held on **August 5, 2025**, at **8:30 a.m. Eastern Time**[24](index=24&type=chunk) - Live audio webcast and accompanying slide presentation accessible from the company's website, https://www.enpro.com[24](index=24&type=chunk) [Non-GAAP Financial Measures](index=6&type=section&id=Non-GAAP%20Financial%20Information) This section details Enpro's non-GAAP financial measures, including adjusted income, EPS, EBITDA, and free cash flow, used by management to assess performance - Non-GAAP measures include adjusted income from continuing operations, adjusted diluted EPS, adjusted EBITDA, adjusted EBITDA margin, total adjusted segment EBITDA, and free cash flow[26](index=26&type=chunk) - Management uses these non-GAAP metrics to evaluate operating performance and believes they are useful for investors, acknowledging they are not comparable to all similarly titled measures by other companies[27](index=27&type=chunk) - Reconciliations of historical non-GAAP measures to GAAP are provided, but forward-looking non-GAAP guidance measures are not reconciled due to their nature[26](index=26&type=chunk) [Forward-Looking Statements and Risks](index=6&type=section&id=Forward-Looking%20Statements%20and%20Guidance) This section outlines Enpro's forward-looking statements and 2025 guidance, emphasizing inherent risks from economic conditions, geopolitical events, market growth, and foreign currency fluctuations - Forward-looking statements involve risks and uncertainties that may cause actual events and results to differ materially[28](index=28&type=chunk) - Key risks include economic conditions, geopolitical activity (Ukraine, Middle East, Taiwan), tariffs, raw material prices, growth in semiconductor/life sciences markets, foreign currency fluctuations, and acquisition integration[28](index=28&type=chunk)[30](index=30&type=chunk) - Full-year guidance excludes changes in shares outstanding, future acquisitions/dispositions, restructuring costs, and impacts from foreign exchange rates or tariffs subsequent to June 30, 2025[31](index=31&type=chunk) [About Enpro Inc.](index=8&type=section&id=About%20Enpro%20Inc.) Enpro Inc. is a leading industrial technology company headquartered in Charlotte, NC, listed on the NYSE, specializing in critical applications across diverse end-markets - Enpro is a leading industrial technology company focused on critical applications across various end-markets[32](index=32&type=chunk) - Key end-markets include semiconductor, industrial process, commercial vehicle, sustainable power generation, aerospace, food and pharma, photonics, and life sciences[32](index=32&type=chunk) - Headquartered in Charlotte, North Carolina, and listed on the New York Stock Exchange (NYSE: NPO)[32](index=32&type=chunk) [Appendices - Financial Statements & Reconciliations](index=9&type=section&id=APPENDICES) This section provides unaudited consolidated financial statements, including statements of operations, cash flows, and balance sheets, along with non-GAAP reconciliations [Consolidated Statements of Operations](index=10&type=section&id=Consolidated%20Statements%20of%20Operations%20(Unaudited)) This section presents unaudited consolidated statements of operations for Q2 and H1 2025 and 2024, detailing net sales, gross profit, operating income, net income, and diluted EPS Consolidated Statements of Operations (Unaudited) - Q2 2025 vs Q2 2024 (Millions) | Metric | Q2 2025 | Q2 2024 | | :------------------------ | :------ | :------ | | Net sales | $288.1M | $271.9M | | Gross profit | $124.8M | $119.0M | | Operating income | $45.7M | $48.0M | | Income before income taxes | $35.5M | $36.4M | | Net income | $26.4M | $26.7M | | Diluted earnings per share | $1.25 | $1.27 | [Consolidated Statements of Cash Flows](index=11&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) This section presents unaudited consolidated statements of cash flows for H1 2025 and 2024, outlining cash flows from operating, investing, and financing activities Consolidated Statements of Cash Flows (Unaudited) - Six Months Ended June 30 (Millions) | Activity | 2025 | 2024 | | :-------------------------------- | :----- | :----- | | Net cash provided by operating activities | $73.2M | $49.5M | | Net cash used in investing activities | $(19.6)M | $(223.1)M | | Net cash used in financing activities | $(194.9)M | $(19.0)M | | Net decrease in cash and cash equivalents | $(129.2)M | $(193.9)M | | Cash and cash equivalents at end of period | $107.1M | $175.9M | [Consolidated Balance Sheets](index=12&type=section&id=Consolidated%20Balance%20Sheets%20(Unaudited)) This section provides unaudited consolidated balance sheets as of June 30, 2025, and December 31, 2024, detailing assets, liabilities, and shareholders' equity Consolidated Balance Sheets (Unaudited) - As of June 30, 2025 vs Dec 31, 2024 (Millions) | Item | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Total current assets | $424.7M | $512.3M | | Total assets | $2,375.3M | $2,491.5M | | Total current liabilities | $170.4M | $198.0M | | Long-term debt | $464.9M | $624.1M | | Total liabilities | $879.2M | $1,062.9M | | Total shareholders' equity | $1,496.1M | $1,428.6M | [Segment Information](index=14&type=section&id=Segment%20Information%20(Unaudited)) This section provides unaudited segment information for Sealing Technologies and AST, including sales, adjusted segment EBITDA, and margins for Q2 and H1 2025 and 2024 Segment Sales (Millions) - Q2 2025 vs Q2 2024 | Segment | Q2 2025 | Q2 2024 | | :-------------------------- | :------ | :------ | | Sealing Technologies | $187.5M | $184.0M | | Advanced Surface Technologies | $100.9M | $88.1M | | Total Net Sales | $288.1M | $271.9M | Adjusted Segment EBITDA (Millions) - Q2 2025 vs Q2 2024 | Segment | Q2 2025 | Q2 2024 | | :-------------------------- | :------ | :------ | | Sealing Technologies | $63.3M | $65.4M | | Advanced Surface Technologies | $19.8M | $19.1M | | Total Adjusted Segment EBITDA | $83.1M | $84.5M | Adjusted Segment EBITDA Margin - Q2 2025 vs Q2 2024 | Segment | Q2 2025 | Q2 2024 | | :-------------------------- | :------ | :------ | | Sealing Technologies | 33.8% | 35.5% | | Advanced Surface Technologies | 19.6% | 21.7% | | Total | 28.8% | 31.1% | [Reconciliation of Net Income to Adjusted Net Income and Adjusted Diluted EPS](index=18&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20Net%20Income%20and%20Adjusted%20Diluted%20Earnings%20Per%20Share%20(Unaudited)) This section details the reconciliation of GAAP net income to adjusted net income and adjusted diluted EPS for Q2 and H1 2025 and 2024, outlining adjustments for non-recurring items Reconciliation of Net Income to Adjusted Net Income and Adjusted Diluted EPS (Unaudited) - Q2 2025 vs Q2 2024 (Millions, except per share) | Metric | Q2 2025 | Q2 2024 | | :---------------------------------- | :------ | :------ | | Net income | $26.4M | $26.7M | | Income before income taxes | $35.5M | $36.4M | | Adjusted income before income taxes | $57.5M | $58.5M | | Adjusted net income | $43.1M | $43.9M | | Adjusted diluted earnings per share | $2.03 | $2.08 | - Adjustments include acquisition expenses, amortization of acquisition-related intangibles, restructuring expense (income), environmental reserve adjustments, costs from previously disposed businesses, pension expense (non-service cost), loss on extinguishment of debt, and foreign exchange losses[55](index=55&type=chunk)[57](index=57&type=chunk) [Reconciliation of Net Income to Adjusted EBITDA](index=20&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20EBITDA%20(Unaudited)) This section provides unaudited reconciliation of net income to adjusted EBITDA for Q2 and H1 2025 and 2024, detailing adjustments for interest, income taxes, depreciation, and amortization Reconciliation of Net Income to Adjusted EBITDA (Unaudited) - Q2 2025 vs Q2 2024 (Millions) | Metric | Q2 2025 | Q2 2024 | | :-------------------------------- | :------ | :------ | | Net income | $26.4M | $26.7M | | Interest expense, net | $7.5M | $9.5M | | Income tax expense | $9.1M | $9.7M | | Depreciation and amortization expense | $25.2M | $25.2M | | Adjusted EBITDA | $71.1M | $74.0M | - Adjustments to net income to arrive at Adjusted EBITDA include interest expense, income tax expense, depreciation and amortization, restructuring expense (income), environmental reserve adjustments, costs associated with previously disposed businesses, acquisition expenses, pension expense (non-service cost), and loss on extinguishment of debt[61](index=61&type=chunk) [Free Cash Flow Reconciliation](index=21&type=section&id=Free%20Cash%20Flow%20-%20Six%20Months%20Ended%20June%2030%2C%202025) This section provides the reconciliation of net cash provided by operating activities to free cash flow for H1 2025 and 2024, by deducting capital expenditures and capitalized software Free Cash Flow (Millions) - Six Months Ended June 30 | Metric | 2025 | 2024 | | :-------------------------------- | :----- | :----- | | Net cash provided by operating activities | $73.2M | $49.5M | | Purchases of property, plant, and equipment | $(17.9)M | $(13.1)M | | Payments for capitalized internal-use software | $(2.5)M | $(0.9)M | | Free cash flow | $52.8M | $35.5M |

Core Viewpoint - The article emphasizes the importance of confirming the sustainability of stock trends for successful short-term investing, highlighting the use of a specific screening strategy to identify stocks with strong fundamentals and positive price momentum. Group 1: Trend Analysis - The trend in short-term investing is crucial, and confirming its sustainability is essential for profitability [1][2] - A predefined screening strategy, "Recent Price Strength," helps identify stocks with sufficient fundamental strength to maintain their upward trend [3] Group 2: Stock Example - Enpro (NPO) - Enpro (NPO) has shown a solid price increase of 30% over the past 12 weeks, indicating strong investor interest [4] - NPO has also increased by 6.7% over the last four weeks, suggesting that the upward trend is still intact [5] - Currently, NPO is trading at 83.9% of its 52-week high-low range, indicating a potential breakout [5] Group 3: Fundamental Strength - NPO holds a Zacks Rank 2 (Buy), placing it in the top 20% 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 performance [7] Group 4: Additional Insights - The article suggests that NPO's price trend is unlikely to reverse soon, and there are other stocks that also meet the "Recent Price Strength" criteria [8] - The effectiveness of stock-picking strategies can be backtested using tools like the Zacks Research Wizard, which offers insights into successful strategies [9]

Company Overview - Enpro's market capitalization is $3.3 billion as of May 2, 2025[11] - The company's Last Twelve Months (LTM) revenue was $1.1 billion as of March 31, 2025[11] - LTM Adjusted EBITDA was $264 million, representing a 24.8% margin as of March 31, 2025[11] - Aftermarket revenue accounted for 54% of LTM revenue as of March 31, 2025[11] Financial Performance & Guidance - First quarter 2025 Adjusted EBITDA was $67.8 million, representing a 24.8% margin[29] - Free cash flow for the quarter ended March 31, 2025, was $11.6 million, an increase from $(2.0) million in the previous year[24, 41, 42] - The company paid $6.6 million in dividends for the three months ended March 31, 2025[24] - 2025 revenue is expected to grow at a low to mid-single-digit rate[25] - Adjusted EBITDA for 2025 is projected to be between $262 million and $277 million[25] - Adjusted Diluted EPS for 2025 is expected to be between $7.00 and $7.70[25] Debt & Capital Allocation - Net debt was $398 million as of March 31, 2025[22] - A revolving credit facility was increased to $800 million, with $230 million outstanding as of May 1, 2025[22, 24]

EnPro (NPO) FY Conference Summary Company Overview - EnPro is a company with a focus on industrial solutions, particularly in sealing technologies and advanced surface technologies, with a workforce of approximately 3,400 employees [4][5] - The company has undergone significant transformation, particularly through its mPro initiatives, aimed at value creation and margin expansion [5][6] Key Initiatives and Growth Strategies - **mPro 3.0 Introduction**: EnPro has launched mPro 3.0, focusing on accelerating profitable growth for both employees and the company [5][7] - **Historical Performance**: The previous phase, mPro 2.0, resulted in a margin expansion of about 1,000 basis points and a market cap increase of approximately 2.5 times [6][7] - **Portfolio Optimization**: The company divested lower growth and lower margin businesses to invest in higher growth sectors, particularly in the semiconductor industry [6][8] Business Segments Sealing Technologies - Sealing technologies account for about two-thirds of EnPro's revenue, with a focus on critical safety functions across various industries [7][9] - The company expects mid-single-digit organic growth in this segment, driven by strong positions in aerospace, food and pharma, and commercial vehicles [9][10] - Key brands include Garlock, Stemco, and Technetix, which have established market positions and strong cash flow profiles [8][9] Advanced Surface Technologies (AST) - AST, primarily focused on the semiconductor industry, is expected to grow at high single digits to low double digits [9][10] - EnPro has developed a vertically integrated portfolio in AST, providing critical in-chamber tools and aftermarket services [8][21] - The company is positioned to capitalize on the shift towards onshoring semiconductor manufacturing in the U.S. [21][34] Market Exposure and Economic Resilience - EnPro has minimal direct exposure to tariffs, with about 70% of its supply chain based in North America [13][14] - The company has a strong aftermarket component, with two-thirds of its sealing business and one-third of AST being aftermarket, which tends to perform well during economic downturns [15][16] Capital Allocation and M&A Strategy - EnPro has approximately $1.5 billion available for strategic acquisitions, maintaining a conservative leverage ratio of around 2 to 2.5 times [10][53] - Recent acquisitions include Advanced Micro Instruments (AMI) to enter the test and measurement space, aligning with the company's strategic themes [50][51] - The company has a disciplined approach to capital allocation, focusing on both organic growth and M&A opportunities [52][54] Growth Drivers and Market Trends - EnPro is well-positioned in sustainable power generation, particularly in the nuclear sector, which constitutes about 7% of its overall portfolio [44][45] - The commercial aerospace segment has seen a 20% year-over-year growth, driven by strong demand for seals in fuel injection systems and temperature control [46][48] - The company is actively participating in the space exploration market, with content on every satellite launch in the U.S. [48] Conclusion - EnPro is focused on delivering strong returns through its mPro initiatives, maintaining a robust balance sheet, and capitalizing on growth opportunities in both sealing technologies and advanced surface technologies [57][58] - The company emphasizes the development of agile leaders to navigate various market conditions and ensure continued success [56][57]

Financial Performance - Net sales for the first three months of 2025 were $273.2 million, a 6.1% increase from $257.5 million in the same period of 2024[123]. - Net income for Q1 2025 was $24.5 million, compared to $12.5 million in Q1 2024, representing a 96% increase[123]. - Adjusted diluted earnings per share rose to $1.90 in Q1 2025 from $1.57 in Q1 2024, an increase of 21%[123]. - Adjusted EBITDA for Q1 2025 was $67.8 million, up from $58.4 million in Q1 2024, reflecting a 16% growth[179]. - For the three months ended March 31, 2025, net sales for Enpro Inc. and its Guarantor Subsidiaries were $190.4 million, with a gross profit of $71.9 million and a net income of $3.2 million[166]. - For the year ended December 31, 2024, net sales were $738.2 million, with a gross profit of $270.5 million and a net loss of $8.9 million[167]. Segment Performance - Sealing Technologies segment sales increased by 4.7% to $179.6 million in Q1 2025, driven by demand in aerospace and food and pharmaceuticals[128]. - Advanced Surface Technologies segment sales grew by 9.1% to $93.8 million in Q1 2025, supported by increased demand for optical coatings and aerospace applications[130]. - Adjusted Segment EBITDA for Sealing Technologies was $58.7 million in Q1 2025, a 10.8% increase from $53.0 million in Q1 2024[129]. - Adjusted Segment EBITDA for Advanced Surface Technologies increased by 18.5% to $20.5 million in Q1 2025, with a margin expansion to 21.9%[131]. Cash Flow and Investments - Operating activities generated $21.0 million in cash in Q1 2025, up from $6.3 million in Q1 2024, driven by increased revenue and improved profit margins[139]. - Investing activities used $9.4 million in cash in Q1 2025, significantly lower than $217.0 million in Q1 2024, primarily due to the prior year's acquisition of AMI[139]. - Financing activities used $13.3 million in cash in Q1 2025, including $6.6 million for dividends and $4.0 million for debt repayments[140]. Balance Sheet - As of March 31, 2025, total assets amounted to $1,854.8 million, with current assets of $307.5 million and non-current assets of $1,547.3 million[166]. - Total liabilities as of March 31, 2025, were $926.0 million, with current liabilities of $127.9 million and non-current liabilities of $798.1 million[166]. - Shareholders' equity at March 31, 2025, was $928.8 million, reflecting a significant increase from $757.6 million at December 31, 2024[168]. Tax and Foreign Operations - The effective tax rate for Q1 2025 was 24.3%, up from 12.6% in Q1 2024, primarily due to higher tax rates in foreign jurisdictions[134]. - The company repatriated $60.0 million during the first three months of 2025 from foreign subsidiaries[138]. Corporate Developments - Enpro acquired Advanced Micro Instruments, Inc. on January 29, 2024, enhancing its capabilities in application-specific analyzers and sensing technologies[122]. - A new share repurchase authorization of up to $50.0 million was approved in October 2024, replacing the previous authorization that had expired[159]. Risk Management - The company entered into cross-currency swap agreements with an aggregate notional amount of $100.0 million to manage foreign currency risk[183]. - The company has a weighted average interest rate of 3.5% on Euro-denominated debt related to the cross-currency swap agreements[183]. - The company does not hedge commodity risk with any market risk sensitive instruments[185]. - The company aims to pass along commodity price increases to customers to avoid profit margin erosion[185].

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]