Core Insights - Bayberry Capital Partners has fully exited its position in Atmus Filtration Technologies, selling 282,500 shares valued at $12.74 million during the fourth quarter of 2025 [1][2][10] Company Overview - Atmus Filtration Technologies is a leading designer and manufacturer of filtration products, leveraging its Fleetguard brand to meet the filtration needs of commercial and industrial vehicle operators globally [6][9] - The company reported a total revenue of $1.76 billion for the trailing twelve months (TTM), with a net income of $207.40 million and a dividend yield of 0.4% [4][11] Financial Performance - In 2025, Atmus achieved full-year sales of $1.76 billion, an increase from $1.67 billion in 2024, while net income rose to $207 million [11] - The adjusted EBITDA for the year was $354 million, reflecting margins around 20%, and the company generated $158 million in adjusted free cash flow [11] Market Position - Atmus serves various sectors including transportation, agriculture, construction, mining, and power generation, providing a range of filtration products such as fuel filters, lube filters, and hydraulic filters [9][12] - The company benefits from a diversified customer base and established relationships with original equipment manufacturers (OEMs), which provide a competitive advantage in the industrial filtration market [6][12] Stock Performance - As of the latest data, shares of Atmus Filtration Technologies were priced at $56.72, representing a 51% increase over the past year, significantly outperforming the S&P 500's gain of approximately 21% during the same period [8][11][13]

Company Overview - Atmus Filtration Technologies is a leading provider of advanced filtration products and solutions, operating globally with a diversified customer base [5] - The company focuses on OEM relationships and aftermarket distribution, which supports stable recurring revenue and positions it for continued growth in the industrial filtration market [5] - As of March 9, 2026, Atmus reported a revenue of $1.76 billion and a net income of $207.40 million, with a dividend yield of 0.36% [4] Recent Developments - Port Capital LLC increased its stake in Atmus Filtration Technologies by 446,260 shares, with an estimated transaction value of $21.60 million [1] - The value of Port Capital's position in Atmus rose by $26.10 million at quarter-end, reflecting both share purchases and price changes [1] - Following this transaction, Port Capital's position in Atmus now represents 1.96% of its reported assets under management (AUM) [2] Stock Performance - As of March 9, 2026, shares of Atmus Filtration Technologies were priced at $58.21, reflecting a 55.7% increase over the past year [3] - The company's one-year alpha versus the S&P 500 was 36 percentage points, indicating strong performance relative to the market [3] Strategic Moves - Atmus Filtration Technologies recently completed a $450 million acquisition of Koch Filter, which may have contributed to increased investor interest [9] - The company provides a range of filtration products, including fuel, lube, air, hydraulic filters, and crankcase ventilation systems, primarily under the Fleetguard brand [8]

Core Insights - Atmus Filtration Technologies achieved a 5.7% full-year revenue growth by leveraging strong market outperformance and favorable pricing to offset soft global demand conditions [5] - The company established a new Industrial Solutions segment through the acquisition of Cook Filter, marking a strategic pivot into industrial air filtration markets [5] - A new NanoNet N3 media technology was launched, securing industry recognition and driving growth in first-fit market share with global OEMs [5] Financial Performance - Projected total revenue for 2026 is between $1,945 million and $2,015 million, representing a 10% to 14% increase largely driven by the Cook Filter integration [5] - Recorded a one-time $8 million asset impairment charge in Q4 related to specific manufacturing equipment idling [5] - Incurred $16 million in one-time separation costs during 2025 following the spin-off from its former parent company [5] Strategic Initiatives - Completed the transition to a direct global distribution network, enhancing control over customer experience and optimizing aftermarket availability [5] - Expanded aftermarket presence by adding new distributors in independent and retail channels to broaden the reach of Fleetguard and Cook Filter brands [5] - Management plans to prioritize the integration of Cook Filter before pursuing further bolt-on M&A in liquid or water filtration [5] Market Outlook - Anticipating a recovery in Power Solutions in the second half of 2026, supported by an expected pre-buy ahead of 2027 EPA NOx emission standards [5] - Expects Industrial Solutions revenue of $155 million to $165 million, with high-teens growth projected in the data center vertical [5][7] - Guidance assumes a 1% revenue tailwind from a weakening U.S. dollar and approximately 1% growth from core base pricing actions [5]

Financial Data and Key Metrics Changes - Sales for Q4 2025 were $447 million, a 9.8% increase from $407 million in Q4 2024, driven by pricing, higher volumes, and favorable foreign exchange [10][16] - Full year sales reached $1.764 billion, up 5.7% from $1.67 billion in 2024, supported by higher volumes and pricing actions [11][18] - Adjusted EBITDA for Q4 was $85 million (19.1% margin), compared to $78 million (19.1% margin) in the prior year [10][18] - Full year adjusted EBITDA was $354 million (20% margin), up from $330 million (19.7% margin) in 2024 [11][20] - Adjusted earnings per share for Q4 was $0.66, compared to $0.58 in the previous year [10][18] - Full year adjusted EPS was $2.73, an increase from $2.50 in 2024 [11][20] Business Line Data and Key Metrics Changes - The company will report on two segments in 2026: Power Solutions and Industrial Solutions, following the acquisition of Koch Filter [4] - The Power Solutions segment is expected to generate revenue between $1.79 billion and $1.85 billion, reflecting a 3% increase at the midpoint from the previous year [14] - The Industrial Solutions segment is projected to generate revenue between $155 million and $165 million, including one week of sales from Koch Filter [14][25] Market Data and Key Metrics Changes - The heavy-duty market is expected to be flat to up 10% compared to 2025, while the Industrial Solutions segment is anticipated to contribute 1%-4% to growth in 2026 [12][14] - Overall pricing is expected to provide approximately 1% of revenue growth, with a weaker U.S. dollar contributing an additional 1% revenue tailwind [13][14] Company Strategy and Development Direction - The company is focused on a four-pillar growth strategy: growing share in first fit, accelerating profitable growth in the aftermarket, transforming the supply chain, and expanding into industrial filtration markets [7][9] - The acquisition of Koch Filter is expected to enhance the company's industrial air filtration platform and provide opportunities for organic and inorganic growth [4][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate challenging global markets and achieve strong performance through disciplined execution [3][22] - The outlook for 2026 includes expectations for continued strong operational performance and investment for growth, with total company revenue projected to increase by 10%-14% [14][22] Other Important Information - The company returned $78 million to shareholders in 2025, consisting of $61 million in share buybacks and $17 million in dividends [5] - The company has $69 million remaining on its share repurchase authorization and expects to repurchase $20-$40 million in 2026 [5] Q&A Session Summary Question: Update on Koch Filter acquisition and data center growth - Management indicated that 8% of revenue is tied to data centers, with growth in that market expected to be in the high-teens rate [24][27] Question: Impact of tariffs on pricing - Management clarified that the 1% pricing expectation is core pricing, not directly related to tariffs, and adjustments will be made if tariff costs change [28][29] Question: Opportunities for insourcing filtration media at Koch - Management highlighted that synergies from the acquisition will primarily come from procurement and innovation workshops to enhance product offerings [33][36] Question: Outlook for off-highway markets - Management expects the off-highway markets to remain flat year-over-year, with more impact seen in the aftermarket business [37][38] Question: Adjusted EBITDA guidance and self-help levers - Management noted that the flat year-over-year adjusted EBITDA reflects strong incremental growth and ongoing evaluations for cost reductions [48][50]

Financial Data and Key Metrics Changes - In Q4 2025, sales increased to $447 million, up 9.8% from $407 million in Q4 2024, driven by a 5% increase in pricing, 4% higher volumes, and 1% favorable foreign exchange [10][16] - For the full year 2025, sales reached $1.764 billion, a 5.7% increase from $1.67 billion in 2024, with adjusted EBITDA of $354 million, up from $330 million, resulting in an adjusted EBITDA margin of 20% [11][20] - Adjusted earnings per share for Q4 2025 was $0.66, compared to $0.58 in Q4 2024, while full-year adjusted EPS was $2.73, up from $2.50 in 2024 [11][20] Business Line Data and Key Metrics Changes - The company will report on two business segments in 2026: Power Solutions and Industrial Solutions, following the acquisition of Koch Filter [4] - The Power Solutions segment is expected to generate revenue between $1.79 billion and $1.85 billion in 2026, while Industrial Solutions is projected to contribute between $155 million and $165 million [14] Market Data and Key Metrics Changes - The heavy-duty market is expected to be flat to up 10% in 2026, while the Industrial Solutions segment anticipates a growth contribution of 1%-4% [12][14] - The company expects overall pricing to provide approximately 1% of revenue growth in 2026, with a weaker U.S. dollar expected to offer a 1% revenue tailwind [13] Company Strategy and Development Direction - The company is focused on a four-pillar growth strategy: growing share in first fit, accelerating profitable growth in the aftermarket, transforming the supply chain, and expanding into industrial filtration markets [7][9] - The acquisition of Koch Filter is seen as a strategic move to enhance the industrial air filtration platform and drive growth [4] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenging global market conditions but expressed confidence in the company's ability to unlock growth potential through disciplined execution and cultural strength [3][7] - The outlook for 2026 includes expectations for total company revenue to be in the range of $1.945 billion to $2.015 billion, reflecting a 10%-14% increase compared to 2025 [14] Other Important Information - The company returned $78 million to shareholders in 2025, consisting of $61 million in share buybacks and $17 million in dividends, with $69 million remaining on the share repurchase authorization [5] - The company has a strong liquidity position with an estimated $701 million available after financing the Koch Filter acquisition [21] Q&A Session Summary Question: Update on Koch Filter acquisition and data center revenue - Management indicated that 8% of revenue is tied to data centers, growing at a high-teens rate, with a focus on commercial and industrial HVAC markets [24][27] Question: Impact of tariffs on pricing - Management clarified that the 1% pricing guidance is core pricing, not directly related to tariffs, and they aim to remain price-cost neutral [28][30] Question: Opportunities for insourcing filtration media at Koch - Management highlighted that synergies from the acquisition include procurement synergies and innovation workshops to enhance product development [33][36] Question: Outlook for off-highway markets - Management expects off-highway markets to remain flat year-over-year, with more significant impacts seen in the aftermarket [37] Question: Sales guidance for Industrial Solutions - Management provided a conservative sales guidance for Industrial Solutions, emphasizing transparency and the potential for growth based on market conditions [40][42] Question: Customer response to emissions regulation changes - Management noted that while recent regulatory changes may impact the market, they expect NOx standards to hold for the 2027 engine launch [44][46] Question: Adjusted EBITDA guidance - Management indicated that the flat year-over-year adjusted EBITDA reflects strong incrementals and ongoing investments to fuel top-line growth [48][50]

Financial Data and Key Metrics Changes - In Q4 2025, sales increased to $447 million, up 9.8% from $407 million in Q4 2024, driven by pricing, higher volumes, and favorable foreign exchange [10][16] - For the full year 2025, sales reached $1.764 billion, a 5.7% increase from $1.67 billion in 2024, supported by higher volumes and pricing actions [11][18] - Adjusted EBITDA for Q4 was $85 million, maintaining a margin of 19.1%, compared to $78 million in Q4 2024 [10][18] - Full year adjusted EBITDA was $354 million, up from $330 million in 2024, resulting in a margin of 20% [11][20] - Adjusted earnings per share for Q4 was $0.66, compared to $0.58 in the prior year [10][18] - Adjusted free cash flow for the full year was $158 million, an increase from $115 million in 2024 [11][20] Business Line Data and Key Metrics Changes - The company will report on two business segments in 2026: Power Solutions and Industrial Solutions, following the acquisition of Koch Filter [4] - The Power Solutions segment is expected to generate total revenue between $1.79 billion and $1.85 billion, reflecting a 3% increase year-over-year [12][14] - The Industrial Solutions segment is projected to contribute revenue between $155 million and $165 million, including one week of sales from Koch Filter [12][14] Market Data and Key Metrics Changes - The heavy-duty market is expected to be flat to up 10% compared to 2025, while the Industrial Solutions segment anticipates growth of 1%-4% in 2026 [12][14] - Overall pricing is expected to contribute approximately 1% to revenue growth, with the U.S. dollar anticipated to weaken, providing a 1% revenue tailwind [13][14] Company Strategy and Development Direction - The company is focused on a four-pillar growth strategy: growing share in first fit, accelerating profitable growth in the aftermarket, transforming the supply chain, and expanding into industrial filtration markets [6][9] - The acquisition of Koch Filter is expected to enhance the company's industrial air filtration platform and provide opportunities for organic and inorganic growth [4][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate challenging global markets and achieve growth through disciplined execution [3][5] - The outlook for 2026 includes expectations of strong operational performance and continued investment for growth, with total company revenue projected to be between $1.945 billion and $2.015 billion [14][15] Other Important Information - The company returned $78 million to shareholders in 2025 through share buybacks and dividends, with $69 million remaining on its share repurchase authorization [5] - The company has entered into a $1 billion term loan and a $500 million revolving credit facility to support the acquisition of Koch Filter [21] Q&A Session Summary Question: Update on Koch Filter acquisition and data center market growth - Management indicated that 8% of revenue is tied to data centers, which are growing at a high-teens rate, with a focus on product development to support this market [25][28] Question: Impact of tariffs on pricing - Management clarified that the 1% pricing expectation is core pricing, not directly related to tariffs, and they aim to be price-cost neutral [29][30] Question: Opportunities for insourcing filtration media at Koch - Management highlighted the focus on integration and identified procurement synergies, with plans for innovation workshops to leverage combined expertise [33][36] Question: Sales guidance for industrial solutions - Management provided a conservative sales guidance for industrial solutions, emphasizing transparency and the potential for growth based on market conditions [40][42] Question: Customer response to emissions regulation changes - Management noted that while recent regulatory changes may impact the market, they expect NOx standards to hold for the 2027 engine launch, with no immediate changes to product development [44][46] Question: Adjusted EBITDA guidance and self-help levers - Management acknowledged that the adjusted EBITDA guidance is flat year-over-year, reflecting strong incrementals and ongoing cost reduction strategies [48][50]

Summary of Atmus Filtration Technologies Conference Call Company Overview - **Company**: Atmus Filtration Technologies (NYSE: ATMU) - **Event**: 2025 Conference Call - **Date**: December 04, 2025 Key Points Operational Separation from Cummins - The full operational separation from Cummins was completed in Q3 2025, requiring more effort and resources than initially expected [3][4] - The organization is now focused on reallocating resources for growth, enhancing customer experience, and improving internal operations [5] Growth Strategy and Market Opportunities - Atmus has two strategic pillars for growth: winning new business in core markets and expanding into new customer segments [6][7] - The company is in the early stages of establishing connections with new customers and is more advanced in the aftermarket segment [8] - New distribution channels have been established, including over 100 new outlets in Latin America and a partnership with Traction in Canada [9][10] Recent Acquisition - Atmus announced the acquisition of Koch Filter for $450 million, representing a 13.9 times trailing multiple pre-synergy [13][14] - The acquisition aims to expand into industrial markets, particularly in industrial air, water, and liquid filtration [18] - Expected synergies from the acquisition include $4 million in supply chain and cost synergies [19] Financial Metrics and Capital Allocation - The acquisition is expected to enhance EBITDA margins, EPS, and return on invested capital [15][16] - The transaction will be financed through existing cash and a potential upsizing of the credit facility, targeting a net debt to EBITDA ratio of around two times [23][24] - Atmus plans to continue returning cash to shareholders through dividends and share repurchases [28][29] Market Outlook - The company expects a 20%-25% decline in the US heavy-duty and medium-duty markets in 2025, with demand remaining tepid due to regulatory uncertainties [30] - The aftermarket is also expected to remain flat, with ongoing challenges in freight activity impacting filtration demand [31][32] Pricing Strategy - Atmus has guided a 3% price increase for 2025, with 1.2% attributed to tariffs and 1.7% to base pricing [33][34] Operational Efficiency and Margin Expansion - The company has achieved over 400 basis points of margin expansion in recent years, driven by supply chain transformation and cost management initiatives [37][38] - Future initiatives will focus on targeted cost reductions and efficiency gains [39] Regulatory Environment and Global Market Trends - Emissions regulations are viewed as opportunities for growth, with the company looking to leverage advanced filtration technologies [40] - Demand trends in India and China show mixed signals, with India experiencing a slowdown in infrastructure spending and China seeing growth in zero-emissions vehicles [42][43] Aftermarket Sales and Vehicle Lifespan - The company emphasizes the significance of aftermarket sales, with vehicle lifespans of 15-20 years providing a recurring revenue stream [48] Conclusion Atmus Filtration Technologies is strategically positioned for growth following its separation from Cummins, with a focus on expanding its market presence through acquisitions and enhancing operational efficiencies. However, the company faces challenges in the current market environment, particularly regarding regulatory uncertainties and demand fluctuations.

Financial Data and Key Metrics Changes - Sales for Q4 2024 were $407 million, an increase of 1.8% compared to $400 million in Q4 2023 [19][29] - Adjusted EBITDA for Q4 2024 was $78 million, representing a margin of 19.1%, up from $71 million and 17.9% in the prior year [21][33] - For the full year 2024, sales reached $1.67 billion, a 2.5% increase from $1.63 billion in 2023 [22][35] - Adjusted EBITDA for the full year was $330 million, up from $302 million, with an adjusted EBITDA margin of 19.7%, an increase of 110 basis points from the previous year [22][38] Business Line Data and Key Metrics Changes - The company outperformed the aftermarket market by approximately two percentage points in 2024, indicating strong growth in this segment despite overall market softness [13] - The company launched a new product, NanoNet N3, enhancing its fuel filtration technology, which is expected to drive growth in both first fit and aftermarket segments [11][12] Market Data and Key Metrics Changes - The U.S. heavy-duty market is expected to be flat to down 10% in 2025, while medium-duty production is anticipated to decline by 5% to 15% [26] - In China, weak market conditions are expected to persist, with low visibility into recovery [27][126] - Overall, total company revenue for 2025 is projected to be flat to up 4%, with global sales expected between $1.67 billion and $1.735 billion [28] Company Strategy and Development Direction - The company is focused on a four-pillar growth strategy, which includes growing share in first fit, accelerating aftermarket growth, transforming the supply chain, and expanding into industrial filtration markets [10][17] - The company has initiated a capital allocation program, balancing share repurchases with dividends, having repurchased $20 million of stock since July 2024 [8] Management's Comments on Operating Environment and Future Outlook - Management anticipates a recovery in freight activity throughout 2025, but the timing remains uncertain due to fluid global economic conditions [24] - The company expects continued strength in the U.S. dollar, which will create a revenue headwind of approximately 2% [25] - Management expressed confidence in achieving a 2% growth in aftermarket revenue driven by ongoing execution of their growth strategy [24][57] Other Important Information - The company incurred one-time restructuring costs of $4 million in Q4 2024, which are excluded from adjusted results [20][30] - The effective tax rate for 2024 was 21%, down from 24.3% in 2023, due to a change in the mix of earnings among tax jurisdictions [39] Q&A Session Summary Question: Can you provide insight on EBITDA margin and its future outlook? - Management noted that the 19.7% EBITDA margin in 2024 was above guidance, with expectations of headwinds from foreign exchange and input costs impacting future margins [46][50] Question: What is the outlook for aftermarket and first fit growth? - Management indicated that the guidance for aftermarket growth is 0% to 3%, while first fit is expected to decline by 0% to 10% [82] Question: How are you managing tariff exposure in manufacturing? - The company has modeled various scenarios regarding tariffs and has implemented pricing actions to mitigate impacts, particularly from China tariffs [96][100] Question: What is the status of your industrial filtration expansion? - The company is primarily pursuing inorganic growth through acquisitions for industrial filtration, with initial product launches in infancy and not expected to contribute significantly in 2025 [108][110] Question: Can you discuss the first fit market assumptions, particularly in China? - Management expects continued weak conditions in China, with a range of flat to down 5% for the year, but is prepared to scale operations if demand improves [126]