Enpro Inc.

Greetings and welcome to the MPRO Q4 and full year 2024 earnings conference call and webcast. At this time, all participants are in listen-only mode. If anyone requires operator assistance, please press star zero on your telephone keypad. A question and answer session will follow the formal presentation. You may be placed into question queue at any time by pressing star one on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to turn welcome over to James Gentile, Vice President, Investor Relations. Please go ahead, James.

Thanks, Kevin, and good morning, everyone. Welcome to Enpro's fourth quarter and full year 2024 earnings conference call. I will remind you that our call is being webcast at Enpro.com, where you can find the presentation that accompanies this call. With me today is Eric Valencourt, our President and Chief Executive Officer, and Joe Bruderick, 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 that during this call, we will be providing full year 2025 guidance, which excludes unforeseen impacts from these risks and uncertainties. We do not undertake any obligation to update these forward-looking statements. It is now my pleasure to turn the call over to Eric Vallencourt, our President and Chief Executive Officer. Eric?

Thanks, James, and good morning, everyone. Thank you for joining us today as we review our results for the fourth quarter and full year 2024. and provide a business update that introduces our outlook for 2025. Before we get started, I would like to thank our colleagues across the company for delivering another great year of results. I very much appreciate all of your hard work and the remarkable contributions that you make each day to enable our company's success. I look forward to continuing our work together as we empower technology with purpose and create opportunities for each of us to flourish and thrive. Now on to our results. Enpro performed well in 2024, executing effectively despite persistent weakness in semiconductor capital equipment demand and a sharp decline in commercial vehicle OEM sales. Excellent performance across ceiling technology segment offset an overall soft demand environment in AST, driving improved bottom line results year over year. Thanks to the inherent balance and quality of the Enpro portfolio and the resilience of our business model, we generated strong free cash flow in 2024 and ended the year with a net leverage ratio of 1.6 times, well within our desired range. In ceiling technologies, our excellent performance and efficient operations drove an adjusted segment EBITDA margin of over 32% for the year. We are very pleased with the strength of the segment and how our teams are positioning the businesses to drive above-market growth by leveraging our applied engineering capabilities and specification positions to deliver important solutions to our customers in areas where we have clear technology and process advantages. Our efforts to improve and evolve ceiling technologies to position the segment for world-class performance have unlocked significant value. In 2019, when we embarked on our portfolio optimization strategy, the ceiling adjusted segment EBITDA margin approximated 17%. Through this purposeful and structural transformation, we have created a group of businesses that can deliver adjusted segment EBITDA margins around 30% consistently. Now that this portion of our evolution is complete, we are leaning into our strengths and our best growth opportunities, identifying adjacent markets for our products to drive long-term organic growth while considering selective acquisitions that would expand the segment's capabilities. At AST, revenue ended the year down roughly 10%. as weakness in semiconductor capital equipment spending continued, partially offset by the strength of our solutions serving leading edge applications. The low point of AST's revenue in 2024 came in the first quarter, and then sales modestly improved sequentially each quarter as the year progressed. Adjusted segment even margins finished the year above 21%, reflecting our resilient performance in a choppy demand environment. In total, NPRO reported approximately $255 million in adjusted EBITDA for 2024, up 7% year-over-year. Considering weak demand in areas of semiconductor capital equipment spending and the sharp decline in commercial vehicle OEM demand, we are pleased with NPRO's adjusted EBITDA margins of 24.3% that are up 180 basis points from prior year. Next, I would like to take a couple minutes to share some recent highlights from our January Leadership Conference, where 85 leaders from across the company gathered to launch EnPro 3.0, the next phase of our purposeful value creation journey. Our teams aligned on our long-term strategic goals and focused on areas where we can accelerate profitable business growth and meaningful personal and professional advancement. But first, what is EnPro 3.0? We think of our company's elevation in three phases. Following our spinoff from Goodrich Corporation in 2002, the company's first phase was about permanently resolving significant legacy liabilities while establishing the beginning of our dual bottom line culture. The second phase on Pro 2.0 was about portfolio transformation. We began this phase in 2019, divesting a number of businesses and product lines that did not meet our growth, profit, and return criteria while reallocating proceeds from these divestments into growth markets where we added strong technological and applied engineering capabilities. During this phase, we optimized the Enpro portfolio and widened and adjusted EBITDA margins by 1,000 basis points, creating significant shareholder value, returning nearly 27% annually since 2019, upon a much more efficient and profitable revenue base. These moves optimized our go-forward portfolio and set the stage for Enpro 3.0, a period where we expect higher revenue growth coupled with best-in-class profitability and strong returns on invested capital. Successful execution of this next phase of EnPro will accelerate our value-creating strategy and continue our excellent track record of delivering double-digit shareholder returns. At the Leadership Conference, we had several discussions and exercises that focused on driving top-line profitable growth, while encouraging a growth mindset to embrace challenges, refine our processes, and actively implement our continuous improvement playbooks to reimagine areas where both commercial market expansion and efficiency opportunities exist. I was struck by the genuine excitement that our leaders have for our businesses and their motivation to achieve profitable growth to unlock additional opportunities for our colleagues and value for our stakeholders. With our optimized portfolio in place, Enpro is positioned to generate mid to high single digit top line growth over the long term at strong profitability and return levels. Over the next five years, we are targeting mid-single-digit growth in ceiling, while at AST we are targeting at least high single-digit growth, with both segments capable of generating 30% adjusted segment EBITDA margins, plus or minus 250 basis points. The entire team is excited to deliver the next phase of growth in MPRO 3.0. Before I turn the call over to Joe to discuss our fourth quarter results in more detail and provide 2025 guidance, I would like to comment on safety, which is our most important core value. In 2024, our safety results for total recordable case rate and lost time case rate continue to be much better than industry averages. While proactive measures such as employee engagement, safety opportunities corrected, training completion arose by double digits, we are building on NPRO's approach to safety culture by aligning with ISO 45001. Occupational health and safety management systems to ensure repeatable processes and drive continuous improvement. This year, three EnPro locations received third-party certifications for ISO 4001. Joe?