Enpro Inc.

Previous wording

This quarterly report on Form 10-Q includes statements that reflect projections or expectations of the future financial condition, results of operations and business of Enpro that are subject to risk and uncertainty. We believe those statements to be “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. When used in this report, the words “may,” “hope,” “will,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “potential,” “continue,” “likely,” and other expressions generally identify forward-looking statements.

Current wording

This quarterly report on Form 10-Q includes statements that reflect projections or expectations of the future financial condition, results of operations and business of Enpro that are subject to risk and uncertainty. We believe those statements to be “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. When used in this report, the words “may,” “hope,” “will,” “should,” “expect,” “plan,”

Previous wording

Highlights. Financial highlights for the three months ended March 31, 2026 and March 31, 2025 are as follows:

Current wording

Highlights. Financial highlights for the quarters and six months ended June 30, 2026 and June 30, 2025 are as follows:

Previous wording

We measure operating performance of our reportable segments based on segment earnings before interest, income taxes, depreciation, amortization, and other selected items ("Adjusted Segment EBITDA" or "Segment AEBITDA"), which is segment revenue reduced by operating expenses and other costs identifiable with the segment, excluding acquisition expenses, restructuring costs, net of gains on restructuring-related sales of assets, amortization of the fair value adjustment to acquisition date inventory, and depreciation and amortization. Adjusted Segment EBITDA is not defined under GAAP and may not be comparable to similarly titled measures used by other companies. Corporate expenses include general corporate administrative costs. Corporate expenses also include $1.2 million of restructuring expense for the three months ended March 31, 2026. Segment non-operating expenses and income, corporate expenses, net interest expense, and income taxes are not included in the computation of Adjusted Segment EBITDA. The accounting policies of the reportable segments are the same as those for Enpro.

Current wording

We measure operating performance of our reportable segments based on segment earnings before interest, income taxes, depreciation, amortization, and other selected items ("Adjusted Segment EBITDA" or "Segment AEBITDA"), which is segment revenue reduced by operating expenses and other costs identifiable with the segment, excluding acquisition expenses, restructuring costs, net of gains on restructuring-related sales of assets, amortization of the fair value adjustment to acquisition date inventory, and depreciation and amortization. Adjusted Segment EBITDA is not defined under GAAP and may not be comparable to similarly titled measures used by other companies. Corporate expenses include general corporate administrative costs. Corporate expenses also include $1.5 million and $2.7 million of restructuring expense for the quarters and six months ended June 30, 2026, respectively. Segment non-operating expenses and income, corporate expenses, net interest expense, and income taxes are not included in the computation of Adjusted Segment EBITDA. The accounting policies of the reportable segments are the same as those for Enpro.

Previous wording

Sales of $303.0 million in the first three months of 2026 increased 10.9% from $273.2 million last year. The following table summarizes the impact of an acquisition and foreign currency on segment sales:

Current wording

Sales of $338.8 million in the second quarter of 2026 increased 17.6% from $288.1 million last year. The following table summarizes the impact of foreign currency on segment sales:

Previous wording

Corporate expenses for the first three months of 2026 of $13.7 million increased $2.4 million compared to last year primarily due to $1.2 million of restructuring costs incurred in the first quarter of 2026 and increased incentive compensation accruals.

Current wording

Corporate expenses for the second quarter of 2026 of $15.7 million increased $3.6 million compared to the same period in 2025, primarily due to $1.3 million of higher restructuring costs and increased incentive compensation accruals of $2.4 million.

Previous wording

Discussion of year-over-year operating performance for each segment for the first three months of 2026:

Current wording

Discussion of year-over-year operating performance for each segment for the first six months of 2026:

Previous wording

Sealing Technologies: Sales of $199.0 million in the first three months of 2026 increased 10.8% compared to $179.6 million in the prior-year period. Excluding favorable foreign exchange translation ($5.7 million) and contribution from acquisitions completed in the fourth quarter of 2025 ($14.4 million), sales were down 0.4%, or $0.7 million. Pricing and mix ($5.9 million), as well as strength in space, nuclear solutions, and compositional analysis applications, largely offset continued weak demand in commercial vehicle and slow general industrial markets internationally. Domestic general industrial and food and biopharmaceutical demand remained firm.

Current wording

Sealing Technologies: Sales of $415.2 million in the first half of of 2026 increased 13.1% compared to $367.1 million last year. Excluding favorable foreign exchange translation ($8.6 million) and contribution from acquisitions completed in the fourth quarter of 2025 ($30.8 million), sales were up 2.4%, or $8.7 million. Pricing and mix ($12.4M) and strength in aerospace, nuclear, domestic general industrial, and compositional analysis applications, along with strategic pricing gains were offset in part by continued weak demand in commercial vehicle OEM sales, tepid demand in European general industrial and food and biopharmaceutical markets.

Previous wording

Adjusted Segment EBITDA of $64.6 million in the first three months of 2026 increased 10.1%, or $5.9 million, from $58.7 million prior year. Adjusted Segment EBITDA margin of 32.5% in the first three months of 2026 was relatively flat compared to the prior year. Excluding the favorable foreign exchange translation ($2.0 million) and contribution from acquisitions completed in the fourth quarter of 2025 ($3.2 million), Adjusted Segment EBITDA increased 1.2%, or $0.7 million. Favorable pricing and mix offset lower sales volume.

Current wording

Adjusted Segment EBITDA of $136.3 million in the first half of 2026 increased 11.7%, or $14.3 million, from $122.0 million last year. Adjusted Segment EBITDA margin of 32.8% in the first six months of 2026 was relatively flat compared to last year. Excluding the favorable foreign exchange translation ($3.0 million) and contribution from acquisitions completed in the fourth quarter of 2025 ($8.2 million), Adjusted Segment EBITDA increased 2.5%, or $3.1 million. Favorable pricing and mix offset slightly lower sales volume and higher headcount and personnel-related costs supporting growth initiatives ($3.7 million).

Previous wording

Interest expense, net in the first three months of 2026 increased by $0.8 million compared to the first three months of 2025 primarily driven by lower interest income in 2026.

Current wording

Interest expense, net in the first six months of 2026 increased by $1.6 million compared to the first six months of 2025 primarily driven by a higher average outstanding debt balance in 2026.

Previous wording

The effective tax rates for the three months ended March 31, 2026 and 2025 were 19.2% and 24.3%, respectively. The effective tax rate for the three months ended March 31, 2026 is lower than the U.S. Federal tax rate primarily driven by additional tax benefit related to share-based payments, partially offset by higher tax rates in most foreign jurisdictions. The effective tax rate for the three months ended March 31, 2025 is higher than the U.S. Federal tax rate primarily driven by higher tax rates in most foreign jurisdictions, partially offset by additional tax benefit related to share-based payment awards.

Current wording

The effective tax rates for the six months ended June 30, 2026 and 2025 were 18.4% and 24.9%, respectively. The effective tax rate for the six months ended June 30, 2026 is lower than the U.S. Federal tax rate primarily driven by additional tax benefit related to share-based payments and adjustments to uncertain tax positions, partially offset by higher tax rates in most foreign jurisdictions. The effective tax rate for the six months ended June 30, 2025 is higher than the U.S. Federal tax rate primarily driven by higher tax rates in most foreign jurisdictions and state tax on domestic earnings partially offset by various tax credits.

Previous wording

Net income was $27.4 million, or $1.29 per share, in the first three months of 2026 compared to $24.5 million, or $1.15 per share, in the first three months of 2025. Earnings per share is expressed on a diluted basis.

Current wording

Net income was $54.5 million, or $2.55 per share, in the first six months of 2026 compared to $50.9 million, or $2.40 per share, in the first six months of 2025. Earnings per share is expressed on a diluted basis.

Previous wording

As of March 31, 2026, the aggregate amount of transaction price of remaining performance obligations, or backlog, on a consolidated basis was $357.7 million. Approximately 94% of these obligations are expected to be satisfied within one year. There is no certainty these orders will result in actual sales at the times or in the amounts ordered. In addition, for most of our business, backlog is not particularly predictive of future performance due to shorter lead times for our leading-edge aftermarket or recurring solutions across both segments and some seasonality.

Current wording

As of June 30, 2026, the aggregate amount of transaction price of remaining performance obligations, or backlog, on a consolidated basis was $432.2 million. Approximately 95% of these obligations are expected to be satisfied within one year. There is no certainty these orders will result in actual sales at the times or in the amounts ordered. In addition, for most of our business, backlog is not particularly predictive of future performance due to shorter lead times for our leading-edge aftermarket or recurring solutions across both segments and some seasonality.

Previous wording

As of March 31, 2026, we held $9.2 million of cash and cash equivalents in the United States and $70.0 million of cash outside of the United States. If the funds held outside the United States were needed for our operations in the U.S., we have several methods to repatriate without significant tax effects, including repayment of intercompany loans, distributions subject to a 100 percent dividends-received deduction for income tax purposes, or distributions of previously-taxed earnings. In the first quarter of 2026, we transferred $50.0 million from our foreign subsidiaries to their U.S. parent entity via an intercompany loan, and the funds were used to partially pay down the outstanding balance on our revolving credit facility.

Current wording

As of June 30, 2026, we held $10.0 million of cash and cash equivalents in the United States and $67.0 million of cash outside of the United States. If the funds held outside the United States were needed for our operations in the U.S., we have several methods to repatriate without significant tax effects, including repayment of intercompany loans, distributions subject to a 100 percent dividends-received deduction for income tax purposes, or distributions of previously-taxed earnings. In the first six months of 2026, we transferred $60.0 million from our foreign subsidiaries to their U.S. parent entity via an intercompany loan, and the funds were used to partially pay down the outstanding balance on our revolving credit facility.

Previous wording

Because of the transition tax, GILTI, and Subpart F provisions, undistributed earnings of our foreign subsidiaries have already been subjected to U.S. income tax or are eligible for the 100 percent dividends-received deduction under Section 245A of the Internal Revenue Code (“IRC”). We do not intend to distribute foreign earnings that will be subject to any significant incremental U.S. or foreign tax. During the first three months of 2026, there were no earnings repatriated from our foreign subsidiaries, therefore no foreign withholding taxes were incurred. We have determined that estimating any tax liability on our investment in foreign subsidiaries is not practical. Therefore, we have not recorded any deferred tax liability on undistributed earnings of foreign subsidiaries.

Current wording

Because of the transition tax, GILTI, and Subpart F provisions, undistributed earnings of our foreign subsidiaries have already been subjected to U.S. income tax or are eligible for the 100 percent dividends-received deduction under Section 245A of the Internal Revenue Code (“IRC”). We do not intend to distribute foreign earnings that will be subject to any significant incremental U.S. or foreign tax. During the first six months of 2026, we repatriated $21.1 million of foreign earnings. We have determined that estimating any tax liability on our investment in foreign subsidiaries is not practicable. Therefore, we have not recorded any deferred tax liability on undistributed earnings of foreign subsidiaries.

Previous wording

Operating activities provided $39.6 million of cash in the first three months of 2026 and $21.0 million of cash in the first three months of 2025. The year-over-year increase was primarily driven by lower income tax payments (net of refunds), efficient working capital management, and higher net income.

Current wording

Operating activities provided $90.9 million of cash in the first six months of 2026 and $73.2 million of cash in the first six months of 2025. The year-over-year increase was primarily driven by higher adjusted net income and lower cash tax payments in 2026 than in the prior year.

Previous wording

Investing activities used $8.6 million of cash in the first three months of 2026 compared to $9.4 million of cash used in investing activities in the first three months of last year as the redemption of a short-term investment offset higher cash capital expenditures in the first three months of 2026.

Current wording

Investing activities used $26.0 million of cash in the first six months of 2026 compared to $19.6 million of cash used in investing activities in the first six months of last year driven primarily by higher cash capital expenditures in the first six months of 2026, partially offset by the redemption of short term investments in 2026.

Previous wording

Availability and Compliance. The borrowing availability under our Revolving Credit Facility at March 31, 2026 was $630.6 million after giving consideration to $9.4 million of outstanding letters of credit and $160.0 million of outstanding borrowings. We were in compliance with all covenants of the Amended Credit Facility Agreement as of March 31, 2026.

Current wording

Availability and Compliance. The borrowing availability under our Revolving Credit Facility at June 30, 2026 was $660.2 million after giving consideration to $9.8 million of outstanding letters of credit and $130.0 million of outstanding borrowings. We were in compliance with all covenants of the Amended Credit Facility Agreement as of June 30, 2026.

Previous wording

A reconciliation of (i) net income to adjusted net income, including on a per share basis, and (ii) net income to adjusted EBITDA for the three months ended March 31, 2026 and 2025 as set forth below.

Current wording

A reconciliation of (i) net income to adjusted net income, including on a per share basis, and (ii) net income to adjusted EBITDA for the quarters and six months ended June 30, 2026 and 2025 as set forth below.