Greetings, and welcome to the NPRO First Quarter 2026 Earnings Conference 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. Please note this conference is being recorded. I will now turn the conference over to James Gentile, Vice President, Investor Relations. Thank you. You may begin.

Thanks, Jesse, and good morning, everyone. Thank you for joining us today as we review NPRO's first quarter 2026 earnings results and discuss our improved outlook for 2026. I'll remind you that this call is being webcast at NPRO.com, where you can find the presentation that accompanies the call. With me today is Eric Valancourt, our President and Chief Executive Officer, and Joe Broderick, Executive Vice President and Chief Financial Officer. During this morning'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, including our current perspectives for full year 2026 guidance 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. 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, our President and

Chief Executive Officer. Eric? Thanks, James, and good morning, everyone. Thank you for your interest in end growth as we discuss our first quarter results, provide an update on strategic initiatives, and share our current views for the balance of 2020. Before we discuss our results for the first quarter, I would like to recognize our 4,000 colleagues across the company who are accelerating their personal and professional growth while contributing to Enpro's strategic and financial successes. Momentum and excitement is showing up throughout the organization, and we are off to a strong start in the second year of Enpro 3.0. We are energized to continue providing critical products and solutions to our customers while driving significant enterprise value creation by unlocking compounding strengths of our portfolio. Our leading market positions, committed colleagues, and strong balance sheet support the continued execution of our multi-year value creation strategy. After my update, I will turn the call over to Joe for a more detailed discussion of our results and drivers of our increased guidance for 2026. Now on to the highlights for the first quarter. We started 2026 off on the front foot with reported sales up nearly 11 percent year over year. Improving demand in semiconductor markets drove sales in the advanced surface technology segment up over 11 percent. Additionally, the contributions from the two businesses that we acquired in the fourth quarter, Alpha Measurement Solutions and Overlook Industries, drove ceiling technology sales up 10.8 percent. Total a company adjusted EBITDA increased nearly 13% to over $76 million and a margin over 25% further. We are pleased with these results, especially as we continue to invest in growth opportunities across the company at high margin return thresholds while accelerating investments in the development and growth of our organization. Teams are excited to drive our early progress shows the benefits we expect to unlock as we move into this phase of our strategy. We are confident that our proven excellent execution will allow us to continue to succeed. In AST, positive trends across the segment's portfolio of products and solutions, the slope of the demand curve has steepened with order patterns accelerating during the first quarter ahead of our expectations at the start of the year. For us, execution is top of mind, and we began building inventory during the first quarter to ensure that we can effectively deliver for our customers and proactively manage potential capacity, supply chain, and labor constraints. We are already seeing the investments we made in AST during the downturn beginning to bear fruit in the early stages of the recovery cycle. We expect these investments will position us well to capture opportunities from the acceleration of semiconductor capital equipment spending for the balance of the year and beyond. We also believe that our vertical integration model is a key differentiator for Enpro in the next phase of the semiconductor industry growth. As many of our new business wins are using more of our solutions to drive value for our customers, enhancing our specified position and critical in-chamber tools, including gas dispersion. In addition, process of record designations solidifies our position and leading its precision is certainly strong and accelerating. Our capacity expansions in Taiwan, California, and Arizona, both executed and ongoing, position us to participate in the rapid expansion. In ceiling technologies, segment revenue of 10.8% was primarily driven by the first full quarter contribution from the acquisitions of Alpha and Overlook, completed in the fourth quarter of 2025, recovering nuclear solution sales and currency tailwinds. Commercial vehicle sales were down year-over-year below our expectations, as demand remained slow, although we're cautiously optimistic that were nearing the bottom in commercial vehicle markets. Aerospace sales and ceiling were flat year-over-year, reflecting a difficult year-over-year comparison in commercial aerospace, which was partially offset by continued acceleration in demand for products supporting space applications. Total ceiling segment orders were up double digits during the first quarter. Ceiling technology's segment profitability remained strong at 32.5%, with disciplined execution helping to offset continued growth investments, softness in commercial vehicle sales, and tepid general industrial demand internationally. Aftermarket sales represented 60% of ceiling segment revenue in the quarter. Integration is going well at Alpha and Overlook, and we are making the appropriate investments to fully integrate these businesses into NPRO, and our colleagues are already finding ways to leverage the NPRO network, including our sourcing expertise, while delivering strong top-line growth. Additionally, AMI, which we acquired in January 2024, continues to perform above-planned. We expect the ceiling technology segment to continue to deliver continued best-in-class performance. Growth priorities under pretending the NPRO 3.0 strategy remain unchanged and will guard our performance. Long-term, we are positioned to generate mid-to-high single-digit organic top-line growth with strong profitability and returns, complemented by capability-expanding acquisitions and meet our rigorous strategic and financial criteria. We are targeting mid-single-digit organic growth in ceiling technologies, while at AST, we are targeting at least high single-digit organic growth, with both segments capable of generating 30% adjusted segment EBITDA margin. Our cash flows allow us to maintain our strong balance sheet, with a net leverage ratio currently at 1.9 times, after taking into account the fourth quarter acquisitions of Alpha. Our first capital allocation priority is to reinvest in the business and our people while pursuing select strategic acquisitions that expand our leading-edge capabilities and meet our stringent criteria without the use of excess leverage to drive growth in line or above Enpro 3.1 goals. We are excited to live on our promises and continue to execute our strategic plan. Life is good at Enpro and the future is bright.

Thank you, Eric, and good morning, everyone. Enpro started 2026 with strong results and consistent execution, despite a dynamic macroeconomic environment. For the first quarter, sales of $303 million increased nearly 11%, supported by strong year-on-year revenue growth at AST of over 11%, the contributions from the recent acquisitions, and steady overall performance in the ceiling technology segment. First quarter adjusted EBITDA of $76.4 million increased nearly 13% compared to the prior year period. Total company adjusted EBITDA margin of 25.2% expanded by 40 basis points year over year, driven by consistent performance in the ceiling technology segment and a nearly 20% increase in AST segment EBITDA, which includes expenses tied to growth investments, both executed and ongoing. Expert expenses of $13.7 million in the first quarter of 2026 increased from $11.3 million a year ago, primarily driven by higher incentive compensation accruals and $1.2 million in restructuring costs. Adjusted diluted earnings per share of $2.14 increased 13%, largely driven by the factors behind adjusted EBITDA growth year over year. Moving to a discussion of segment performance, ceiling technology sales increased 10.8% to $199 million. Growth was driven by the contributions from the Alphen Overlook acquisitions, recovery in nuclear solution sales from the choppiness experienced last year, strength in compositional analysis applications, as well as strategic pricing actions. These gains more than offset soft commercial vehicle demand and slower general industrial sales internationally. Foreign currency translation was also a tailwind. North American general industrial, aerospace, and food and biopharma sales were firm throughout the quarter. For the first quarter, adjusted segment EBITDA increased over 10%, driven by favorable mix, strategic pricing initiatives, contributions from Alpha and Overlook, and foreign exchange tailwinds, partially offset by lower commercial vehicle volumes and investment in growth initiatives. Adjusted segment EBITDA margin was 32.5% and remained above 30% for the 9th consecutive course. Turning now to advanced surface technologies. Sales for the first quarter were up over 11%, and orders during the quarter hit a clear inflection point. Demand for precision cleaning solutions tied to advanced node chip production is accelerating. In addition, our outlook for semiconductor capital equipment spending has improved, and we built inventory of key products during the first quarter to prepare for the expected increase. For the first quarter, adjusted segment EBITDA increased 18.5% versus the prior year period. Adjusted segment EBITDA margin expanded 140 basis points to 23.3%. Operating leverage on higher sales growth and higher production volumes, as well as favorable mix, were offset in part by $2 million of increased expenses tied to growth initiatives. Our number one priority is to serve our customers and remain agile as we enter this period of unprecedented demand for our semiconductor products and solutions. Moving to the balance sheet and cash flow. Our balance sheet remains strong, and we have ample financial flexibility to execute on our long-term organic growth initiatives and consider select acquisitions that align with our strategic priorities and deliver attractive returns. We generated strong free cash flow in the first quarter, more than doubling from last year to $26.5 million, while capital expenditures increased nearly 40% to $13.1 million, largely supporting growth and efficiency projects. During the first quarter, we repaid $50 million in revolving debt, bringing our leverage ratio to 1.9 times trailing 12-month adjusted EBITDA. We expect to continue generating strong free cash flow in 2026, with an unchanged capital expenditure budget of around $50 million this year, as we continue to invest in the company at solid margin and return thresholds. Finally, our strong balance sheet and cash generation provide us with ample liquidity to make these investments, while continuing to return capital to shareholders. In the first quarter, we paid a $0.32 per share quarterly dividend, totaling $6.9 million. We also have an outstanding $50 million share repurchase authorization. Moving now to our increased guidance. We are raising our total year 2026 guidance issued in mid-February and now expect total and pro sales to increase in the 10% to 14% range, up from 8% to 12%. Adjusted EBITDA in the range of $315 million to $330 million, up from $305 million to $320 million previously. And adjusted diluted earnings per share to range from $8.85 to $9.50, up from $8.50 to $9.20. The normalized tax rate used to calculate adjusted diluted earnings per share remains at 25%, and fully diluted shares outstanding are $21.3 million. In ceiling technologies, shorter cycle order patterns remain solid as we enter our seasonally strong second quarter. As Eric mentioned, we are seeing double-digit order growth year on year, despite a slightly softer commercial vehicle outlook than previously expected, and we expect mid-single-digit revenue growth, excluding the contributions from ALF and Overlook in the ceiling technology segment for the year. We are encouraged by positive order momentum in domestic general industrial, aerospace, food and biopharma, and compositional analysis, as well as smaller but improving pockets of earned growth in areas such as communications and data center infrastructure. We expect these elements to support improved sequential sales performance and ceiling technologies into the second quarter, while not factoring in any recovery in commercial vehicle markets in our improved guidance ranges. Finally, we expect ceiling segment profitability to remain towards the high end of our long-term target range of 30% plus or minus 250 basis points for the year. In the advanced service technology segment, we are seeing significant order momentum, with strong acceleration in precision cleaning solutions and critical in-chamber tools. New platforms and capacity expansions that we have invested in will begin to generate revenue in the second half of 2026, with ramp schedules dependent on underlying volume into 2027 and beyond. At this time, we expect AST revenue growth in the mid-teens range year-over-year, with segment profitability improving to a run rate close to 25% by the end of 2026 as capacity and supply chains align to meet elevated demand levels. Thank you for your time today. I will now turn the call back to Eric for closing comments.

Thank you, Joe. We are excited to demonstrate our strength and agility as we continue to accelerate our personal and profitable growth in the second year. Thank you all for your interest in intro. We'll now welcome your question.

Thank you. we will now be conducting the question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. The confirmation tone will indicate that your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your hands up before pressing the star keys. Our first question is coming from the line of Jeff Hammond with KeyBank Capital Markets. Please proceed with your question.

Hey, everyone. Good morning. This is Mitch Moran for Jeff.

Morning, Mitch.

Good morning. Obviously, just really nice margin progression sequentially for AST. Could you help us just unpack a little bit how that inventory investment helped margins in AST? And then separately, just could you help us understand the margin trajectory kind of through the balance of the year? Is it kind of a linear progression to that 25% you talked about? Thanks.

Yeah, thanks, Mitch. As you noted, we did see progression from the low 20s to 23 and change for the first quarter. The inventory build, which is really important as we head into significant demand in the second quarter and more specifically for the back half of the year, contributed about 150 basis points to the margin increase in the first quarter. We also saw, you know, precision cleaning continue to be very strong, tied to advanced node precision cleaning work, both in Taiwan and the U.S., which helped margins, and we're also seeing a little bit of leverage on the revenue growth. You know, we expect to continue to build inventory a little bit in the second quarter. It might be a little bit less than we had in the first quarter. and then, you know, revenue increasing to offset, you know, any lower inventory build potentially in the second quarter. So margins relatively similar in the second quarter, and then, you know, seeing incrementally throughout the second half pointing towards that roughly 25% run rate that we expect to exit the year at.

That's helpful. And then maybe just a ceiling. I think orders were up double digits in the quarter. Could you just expand on the order activity you saw there, where you're seeing it, if it's concentrated or more broad-based? And then if you could just talk a little bit about your confidence in the ceiling kind of picking up through the remainder of the year with a little bit slower start here.

Very confident ceiling picking up throughout the year. Our order rate is very strong, actually, in the first quarter and building throughout the quarter. So very positive on the year. don't have any concerns. They're very strong in North America, space, aerospace in general. General industrial in the U.S. is still pretty strong. The only area of weakness really is general industrial and a little bit in Europe, a little bit in Asia, but it still doesn't have any meaningful impact to our overall results. Okay, great. Thanks for taking my questions.

Thank you. Our next question is coming from the line of Steve Ferrazani with Sidoti and Company. Please proceed with your question.

Morning, everyone. Appreciate the detail on the presentation. Eric, you know, I understand commercial vehicles still being weak. Obviously, we've seen three or four months of much stronger Class A truck orders, obviously coming off of a significant trough. When would you start seeing that? And is that built in at all, that CV comes back at all in the second half?

It's not built into our projections at all, as we said in the script, although I am cautiously optimistic that it does start to pick up at the second half of the year. Keep in mind, the reason for the acceleration in truck orders is really to avoid the extra cost of pollution enhancements in the trucks. And so right now, people are prioritizing trucks versus trailers, but that demand will normalize over time to roughly, you know, if you look over a 20-year cycle, it's about 250,000 units a year, and we're somewhere about 170 or 180 now. So I expect, you know, at the end of this year, beginning of next year, somewhere in that time frame, you'll start to see some momentum. I mean, the ratio between trucks and trailers really doesn't change much. You'd expect to have about 1.1 trailers per truck. So you would expect that to come back. And the aftermarket business remains very strong. Got it.

How are you feeling about the two acquisitions now with a quarter under your belt? I know that with Overlook, they had made some pretty significant capacity additions prior to the acquisition. In terms of those two businesses, do they require significant investments to grow moving forward, or how do you feel about them?

Very, very strong. Very excited about them going forward. They don't require significant investments. overlooked and made a pretty significant investment and moved into a new building or did move into a new building in the first quarter. But that was already ongoing before we closed down the business. So really it was just a move at this point. And so most of the stuff, anyhow, that was already done. And their backlog and their performance is really impressive. Alpha continues to go well, and so we're still excited about those businesses going forward.

Yeah, I'll just add, Eric, that the integrations are going well. I think the teams are joining our functional support, and we're helping where we can there. We're already seeing some supply chain opportunities. In addition, you know, we're making some smaller investments, but investments in their commercial organizations to help, you know, expand growth opportunities and enter a few new markets and new customers. So we expect that's an area that we can add value and help them grow over time.

And I think you mentioned in the script that AMI, since the acquisition was 2024, I believe, continues to outperform. In general, how are you thinking about that compositional analysis market?

We love the space. We just would like to do more. And we continue to have a very active pipeline and continue to look for the right opportunities to meet all of our criteria that are exciting. And there's several opportunities on a pipeline exciting. And more and more opportunities seem like they're coming to market now.

And overall, if you take into consideration the compositional analysis growth perspective, we're looking for a kind of minimum high single-digit organic top-line growth moving forward with incremental investments to expand end market positions and commercial expertise. Got it. That's helpful.

So just if I get one more in in terms of where you are with the various qualifying processes to meet advanced node production, is there a lot more to go there?

I don't think it ever stopped. So let me start by saying that. So, no, Arizona is getting fully qualified now. I don't know how much longer. It shouldn't be long at all. But at the same time, there's new investments in Taiwan that are just starting. There's new customers that are starting as well. So I don't think it ever ends, you know, where two nanometers is going to start to ramp at some point the next little bit, and then you're already trying to qualify one. But that stops. I think that is continued investment.

Thanks, everyone. Thanks, Steve.

Thank you. As a reminder, ladies and gentlemen, if you would like to ask a question at this time, please press star 1 on your telephone keypad. Our next question is coming from the line of Ian Zafino with Oppenheimer & Company. Please proceed with your question.

Hey, good morning. This is Isaac Salazar on for Ian. Thanks for taking the questions. Just on the updated guidance, if you could unpack a little bit more on what has changed with regards to the outlook for the AST business. Maybe if you could parse out the demand drivers between cleaning, coating, and the semi-cap side. It sounds like visibility is a bit better in capital equipment.

Yeah, good morning, Isaac. Yeah, we're clearly seeing increased order momentum and longer lead times, and, you know, demand is inflecting significantly sooner and higher than we expected coming into the year from an AST's perspective. And it's coming from both. It's coming from precision cleaning and semiconductor capital equipment in really all geographies. So our increased guidance is pretty much all driven by AST. Our teams are rallying around meeting the higher demand, working with our customers and the entire supply chain and all of our partners to kind of meet the overall industry demand. You know, the outlook is really bright for the rest of the year. The second half is firming up where, you know, when we had the call in February, we talked about we saw orders for the second half and really starting in the end of the second quarter. Well, the second quarter is filling in nicely. we're seeing some of that demand, you know, come a little sooner into the second quarter, and the second half is clearly going to be significantly increased over the first half in the magnitude of, you know, double digits increase second half versus the first half. You know, and the industry is all talking about, you know, rallying to meet this higher demand and out through the end of 26 and really into 27. So there's tremendous optimism, and we expect to participate and even outperform what the market expects.

And then just as a follow-up, you know, on the margin outlook for both businesses, obviously it sounds like you guys are managing any kind of inflationary pressures just fine, but is there anything to call out maybe on the cost side with regards to whether it's fuel or equipment? But, yeah, that would be helpful.

No, there really isn't anything that's going to be meaningful from the supply side or cost side. Life is good. We do a very good job of managing that in general. Okay, great.

Thank you. Thank you. We have no further questions at this time, so I would like to turn the floor back over to James Gentile for closing comments.

Thank you, everyone. We're seeing strong momentum across MPRO and look forward to updating all of you when we report second quarter results in early August. Have a great rest of your day.

Thank you. Ladies and gentlemen, this does conclude today's teleconference. We thank you for your participation, and you may disconnect your lines at this time.