Atmus Filtration Technologies Inc. Q1 FY2026 earnings call

Todd introduced the call. Steph provided an update on first quarter results, completion of Cook Filter acquisition, capital allocation (returned $12 million to shareholders, share repurchase authorization details), culture and leadership development, and four-pillar growth strategy (grow share in first bid, accelerate profitable growth in aftermarket, transform supply chain, expand into industrial filtration). Jack then spoke to financial results, balance sheet, and operational flexibility.

Power Solutions: First quarter sales were $439 million compared to $417 million in the prior year, an increase of 5.4%. The increase was primarily due to favorable foreign exchange of 4% and higher pricing of 2%, with volume going down slightly year over year. Adjusted EBITDA for Power Solutions was $86 million or 19.6% compared to $82 million or 19.6% last year. Industrial Solutions: Sales were $38 million resulting from the acquisition of Cook Filter. Adjusted EBITDA for Industrial Solutions was $8 million or 21.9%.

Total company revenue expected to be in range of $1.945 to $2.015 billion, increase of 10 to 14% compared to 2025. Power Solutions total revenue expected in range of $1.79 billion to $1.85 billion. Industrial Solutions revenue expected in range of $155 million to $165 million. Maintaining full year adjusted EBITDA guidance of 19.5% to 20.5%. US dollar expected to weaken year over year providing approx 1% revenue tailwind. Middle East conflict introduces uncertainties regarding input costs, sales in Middle East, and broader macroeconomic impact, but not incorporated into guidance yet.

Middle East conflict introduces uncertainties to outlook including impact on input costs, ability to sell products in Middle East, and broader macroeconomic impact. Commodity prices throughout supply chain, notably in petroleum-based components such as plastics, may be put under pressure with potential timing lag for recovery of inflationary costs.

Q: Question about pricing, confirming full year expectation of 1% and unpacking given input costs moving up.

A: Overall pricing expectations for full year remain 1%, due to evolution of tariff dynamics, holistic including base pricing actions and tariff pricing, and vigilant eye on input costs with potential to recover through supply chain or pricing but timing may exist.

Q: Question on share gains, estimate on quarter contribution and update to 150 basis points guidance.

A: Overall pleased with quarter performance, Power Solutions 5.4% growth, Industrial Solutions 6% growth, share was about 1.3% level, positive inflection in first bit markets gives confidence to maintain guidance.

Q: Question on Middle East uncertainty from revenue and cost consideration perspective.

A: Middle East impact on cost pressures, sales in Middle East ($38 million in 2025, $4 million impact in first quarter, not expecting to continue), and broader business confidence impact on global demand, but at stage flat outlook on aftermarket markets year over year holds.

Q: Question on Cook filter and aftermarket opportunity.

A: Pleased with start of Cook Filter acquisition, 6% revenue growth in quarter, progressing well with integration, team focused on share gain in market and leveraging distribution channel synergies.

Q: Question on volume comments for Power Solutions, expectation of volume turning positive later in year.

A: Expect volume to continue to grow quarter over quarter, second quarter stronger, first fit dynamics in third and fourth quarter, share 1% to 2% balance, aftermarket expected to be flat year over year.

Q: Question on Cook filter cross-sell and growth opportunities, cost or manufacturing opportunities.

A: Opportunity to expand into new markets, support Cook filter business to expand share, focus on products, customer and channels to higher growth markets, integration progress made, margin accretion demonstrated, and outlook on tariff recoveries still uncertain.

Q: Question on potential impact from higher diesel prices.

A: Monitoring input costs, in monitor phase, will react to pricing or supply chain maneuvering to offset.

Q: Question on aftermarket performance this quarter.

A: First quarter always a little challenging with stocking dynamics between fourth and first quarter, second quarter strongest for aftermarket, see improved volume performance throughout year