Enpro Inc. Q1 FY2025 earnings call

• Recognized colleagues' efforts in providing critical products and solutions. - Emphasized dual bottom line philosophy. - Sealing Technologies had organic sales growth, strong performance in certain markets, and continued to invest in organic growth and acquisitions. - Advanced Surface Technologies saw sales growth driven by precision cleaning solutions and optical coatings and filters, with operating leverage improving adjusted segment EBITDA. - Total company adjusted EBITDA increased over 16% on 6% sales growth with margins expanding. - Mentioned minimal direct tariff exposure and strong supply chain. - Corporate expenses decreased with lower restructuring costs and professional fees. - Balance sheet remains strong with ample financial flexibility.

Sealing Technologies: Sales increased 4.7% to $179.6 million. Adjusted segment EBITDA increased nearly 11%, with adjusted segment EBITDA margin this quarter at 32.7% remaining above 30% for the fifth consecutive quarter. Advanced Surface Technologies: Sales increased more than 9% year-over-year. Adjusted segment EBITDA increased 18.5% versus the prior year period, with adjusted segment EBITDA margin expanding 180 basis points to 21.9%.

• Maintain total 2025 guidance: total Enpro sales growth in low to mid-single-digit range, adjusted EBITDA between $262 million to $277 million, adjusted diluted earnings per share range from $7 to $7.70. - Sealing Technologies: shorter-cycle order patterns solid into second quarter, positive order momentum in certain product lines, and expected strong performance moving forward with profitability towards high end of target range. - Advanced Surface Technologies: expect revenue growth in mid to high single-digit range for 2025 and adjusted segment EBITDA margin above 20% for the year.

• Potential secondary impacts from tariffs on broader macroeconomic environment. - Macroeconomic and geopolitical uncertainty.

Q: Jeff Hammond asked about the minimal and manageable tariffs and pricing actions.

A: Eric Vaillancourt said most products are region for region, import very little, supply chain is agile, and North American exposure is minimal with Canada and Mexico exempted by tariffs.

Q: Steve Ferazani asked about distributor destocking and AST Arizona facility.

A: Eric Vaillancourt said no examples of destocking, and AST Arizona facility is on track with qualification and early revenue starting.

Q: Ian Zaffino asked about margin expansion in Sealing and pricing outlook.

A: Joe Bruderek said margin expansion was mix driven, Eric Vaillancourt said traditional 2% or so general price increase, and Joe Bruderek mentioned good demand in key end markets driving favorable mix.