Enpro Inc.

Greetings and welcome to the NPRO third quarter 2025 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I'd now like to turn the conference over to your host, James Gentile, Vice President, Investor Relations. Thank you. You may begin.

Thanks, Melissa, and good morning, everyone. Welcome to NPRO's third quarter 2025 earnings conference call. I remind you that our call is being webcast at NPRO.com, where you can find the presentation that accompanies this call. With me today is Eric Valancourt, our President and Chief Executive Officer, and Joe Bruderich, Executive Vice President and Chief Financial Officer. During this morning's call, we will reference a number of non-GAAP financial measures. Tables reconciling historical non-GAP measures to comparable GAP measures are included in the appendix to the presentation materials. Also, a friendly reminder that we will be making statements on this call, including our perspectives for full year 2025 guidance, that are not historical facts and considered forward-looking in nature. These statements involve a number of risks and uncertainties, including those described in our filings with the SEC. We do not undertake any obligation to update these forward-looking statements. It is now my pleasure to turn the call over to Eric Valancourt, our President and Chief Executive Officer. Eric?

Thanks, James, and good morning, everyone. Thank you for joining us today as we review our third quarter financial results and provide an update on our strategic progress. We greatly appreciate your support. It certainly is an exciting time to use Power Club Enpro. After a brief discussion of our quarterly performance and acknowledgement of the hard work ongoing across organizations, I will turn the call over to Joe for more detailed discussion of our third quarter results and current guidance perspectives for the balance of the year. Now on to our third quarter performance. Enpro reported organic sales growth of nearly 10% during the third quarter, with mid-single-digit revenue growth year-over-year in ceiling technologies and more than 17% top-line growth at AST. The strength of our business model was demonstrated again during the quarter with total Enpro adjusted EBITDA margin above 24%. which included increased operating expenses supporting both growth initiatives in both segments. Complementing this strong quarterly performance, we continue to advance ENPRO 3.0 strategy with Overlook Industries' acquisition in our agreement to acquire Alpha Measurement Solutions, which we announced on October 13th. Both of these acquisitions will expand our capabilities in critical growth areas of the portfolio without the use of excess leverage. We closed our acquisition of Overlook on October 8 and expect the acquisition of Alpha to close during the fourth quarter of 2025. Once required regulatory approvals are received and other customary closing conditions are satisfied. Alpha and Overlook are great examples of our ability to identify businesses that fit our strategic growth characteristics while meeting our stringent financial criteria. Both businesses have significant technical competence, customer intimacy, and competitive differentiation, while bringing strong business leadership, all characteristics reflective of an EnPro business. Alpha's portfolio of liquid sensing capabilities complements our existing gas stream solutions acquired with AMI, broadening our portfolio of sensing technologies and instrumentation for compositional analysis into key end markets, such as industrial process control, water and wastewater, laboratory, and environmental monitoring. The sensing and measurement parameters brought together to further our compositional analysis strategy enable us to detect unwanted, oftentimes trace compounds in a variety of processes, which in turn enable us to solve our customers' critical problems. Overlook specializes in engineering, design, and fabrication of single-use technologies and other critical componentry that expands our position in biopharmaceutical manufacturing. Oralix capabilities expand in liquid-dose biologics, a secular growth area that continues to expand as liquid. Single-use medicines are increasingly replacing those taken worldly. These medicines target a number of evolving areas in oncology, immunology, and dermatology, amongst many others, as the market is poised to accelerate over the next decade. Within our Garlag Hygienic Technologies business, Overlook furthers our technology expertise and customer intimacy by answering the industry's accelerating need for tailored, single-use consumables as more stringent, receptive processing is essential to prevent contamination. Our business teams are continuing to identify acquisition targets that broaden our leading-edge capabilities and bring them into EnPro as we strategically expand our portfolio of critical products and solutions. I would like to thank those involved in the preparation and execution of these transactions, as we are excited to begin integrating these bright new colleagues and successful teams into our organization. Turning to our segment results for the quarter, in Sealing Technology, sales increased 5.7%, highlighted by strength in aerospace and food and biopharma demand, firm aftermarket performance in general industrial and commercial vehicle markets, and strategic pricing initiatives. Solid performance in these areas more than offset persistent weakness in commercial vehicle OEM market and soft overall industrial demand in Asia and Europe. Sealing segment profitability remained above 32%. In advanced surface technology segment, sales increased more than 17% led by growth in leading edge precision cleaning solutions and improved demand for certain semiconductor tools and assemblies. AST segment profit increased double digits over the last year though operating leverage was impacted by continued growth investments, such as preparation for advanced chip production domestically and accelerating qualification work on new platforms and next-node development. A slightly unfavorable mix was also a headwind, which Joe will discuss in greater detail in a moment. Across Enpro, we continue to pursue targeted incremental capacity expansions in areas where we are winning, preparing to solve critical problems for our customers and investing in and expanding our differentiated capabilities. Our aim is to unlock the compounding features of our business model and drive value creation into the second year of our 3.0 phase and beyond. In fueling technologies, for example, we are currently expanding capacity and investing resources to support future growth in compositional analysis, aerospace, and commercial space applications. In commercial vehicle, we are making investments to support incremental market share gains with new products and expanding partnerships with key customers. We are readying our manufacturing processes to be well positioned for the inevitable recovery of the current trough and trailer builds. Across the ceiling segment, our teams are making strides to identify new market opportunities and specify our process solutions for critical positions in higher growth markets, including life sciences, space, hydrogen, semiconductor, nuclear, energy storage, and digital infrastructure applications. Our teams are excited about these efforts as we expand our capabilities and reinvest in growth opportunities to drive long-term, profitable growth in ceiling technologies. AST is busy, and we'd like to acknowledge our colleagues for their hard work. In AST, we offer critical products and solutions, and our customers come to us to solve exacting problems that enable contamination control, efficient in-chamber environments, process and equipment protection, and economic yield optimization for semiconductor fabs. During the quarter, we experienced strong demand for our leading-edge precision solutions and some recovery in semiconductor tools and assemblies, while pursuing stringent qualifications for next-generation platforms. As we have said in recent quarters, we have been making disciplined investments in key areas of the business that will serve as growth platforms to support our long-term expectations for the segment. We continue to implement certain continuous improvement and optimization actions that can drive incremental margin expansion into a more robust overall semiconductor market recovery. As our pipeline continues to expand, we are well positioned to deliver. The ENPRO 3.0 strategy is proceeding as planned as we approach our second year, and we are excited about the many opportunities ahead. The business is positioned to drive mid-single-digit revenue and growth in the C1 technology segment. high single digit low double digit growth in ast over time our programmatic m a strategy is an additive to these organic growth perspectives over our 3.0 planning horizon we are pleased with the ceiling segment's ability to consistently generate profitability toward the high end of our targeted ranges over the past three years and expect this level of impressive performance to continue for ast the segment has demonstrated its ability to generate profitability in the high 20 low 30% range in the past and are taking steps to unlock value inherent within the segment and deliver more consistent performance at these levels. As we continue to invest in areas where we are strongest while implementing our playbooks to continuously optimize performance over time. Before I pass the call over to Joe to discuss our results in more detail, I want to thank everyone at Enpro for your valuable contributions to our company and I encourage each of you to continue investing in your personal and professional growth as we work toward to deliver the critically important solutions to our customers.