Enpro Inc.

Greetings. Welcome to NPRO's second quarter 2023 earnings conference call. At this time, all participants are in listen-only mode. The question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero from your telephone keypad. Please note this conference is being recorded. It is now my pleasure to turn the conference over to James Gentile, Vice President of Investor Relations. Mr. Gentile, you may begin.

Thanks, Rob, and good morning, everyone. Welcome to EnPro's second quarter 2023 earnings conference call. I'll remind you that our call is being webcast at enproindustries.com, where you can find the presentation that accompanies this call. With me today is Eric Valancourt, our President and Chief Executive Officer, and Milt Childress, Executive Vice President and Chief Financial Officer. During today's call, we will reference a number of non-GAAP financial measures. Tables reconciling the historical non-GAAP measures to the comparable GAAP measures are included in the appendix, to the presentation materials. Also, a friendly reminder that we will be making statements on this call that are not historical facts and that are considered forward-looking in nature. These statements involve a number of risks and uncertainties, including those described in our filings with the SEC, including our most recent Form 10-K. Also note during this call, we will be discussing our full-year 2023 guidance which includes unforeseen impacts from these risks and uncertainties, as well as changes in the number of shares outstanding, impacts from future acquisitions, dispositions, and related transaction costs, restructuring costs, incremental impacts of inflation subsequent to the end of the second quarter, the impact of foreign exchange rate changes subsequent to the end of the second quarter, and interest rate increases differing from the assumptions outlined in guidance. We do not undertake any obligation to update these forward-looking statements. It is now my pleasure to turn the call over to Eric Valencourt, President and Chief Executive Officer. Eric?

Thanks, James, and good morning, everyone. We are pleased to have delivered another solid quarter with total adjusted segment EBITDA margins of 29%. Our optimized portfolio is showing balance as strong performance and ceiling technologies roughly offset weakness expected in AST that was driven by ongoing headwinds in semiconductor markets. Consistent with our strategic priorities, we will continue to invest in multiple growth and productivity opportunities that will build upon our strong foundation as we position Enbro for long-term growth and value creation. In the second quarter, sales were essentially flat year-over-year, with organic sales up slightly. We saw steady demand in several of our ceiling technologies markets, with strong profitability in Q2 and year-to-date. In AST, based on recent customer feedback and overall market forecast, we now anticipate the expected recovery in our semiconductor markets to begin in 2024. We continue to invest in various growth sectors or vectors at AST as the semiconductor industry is expected to roughly double to $1 trillion by 2030. And our positioning on the leading edge will continue to serve us well as the industry recovers. In the meantime, We continue to successfully execute an AST as evidenced by the year-to-date adjusted segment EBITDA margins exceeding 25%. In ceiling technologies, we delivered fantastic results with strong operating leverage and price realization in each of the businesses. And in particular, we saw incremental strength in our aerospace and nuclear energy markets, as well as strong volume and profit performance in our commercial vehicle markets. The performance improvement in recent years through the ceiling segment is nothing short of remarkable, as year-to-date ceiling segment margins exceeded 30%. Our results demonstrate the balance of ENTRO's optimized growth portfolio. We are well-positioned to outperform across a variety of macroeconomic and industry backdrops over the long term, a credit to our focus on innovation and continuous improvement, as well as technology and applied engineering advantages. The resilience of our portfolio of businesses is enduring, and our well-capitalized balance sheet and strong free cash flow generation enable continued opportunities to invest in growth and build upon our strong foundation. Now I'll hand the call over to Milt to discuss our financial results in more detail.