npo-20260331

SEC Form 10-Q filed by Enpro Inc.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________________________

FORM 10-Q

_________________________________________

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-31225

_________________________________________

ENPRO INC.

(Exact name of registrant, as specified in its charter)

_____________________________________


North Carolina						01-0573945
(State or other jurisdiction of incorporation)						(I.R.S. Employer Identification No.)
5605 Carnegie Boulevard
Suite 500
Charlotte
North Carolina						28209
(Address of principal executive offices)						(Zip Code)

(704) 731-1500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

__________________________________________


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.01 par value	NPO	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ý

As of April 24, 2026, there were 21,126,664 shares of common stock of the registrant outstanding, which does not include 173,724 shares of common stock held by a subsidiary of the registrant and accordingly are not entitled to be voted. There is only one class of common stock.

PART I

FINANCIAL INFORMATION

Item 1. Financial Statements

ENPRO INC.

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(in millions, except per share amounts)


	Three Months Ended March 31,
		2026		2025
Net sales		$	303.0	$	273.2
Cost of sales		173.0		155.0
Gross profit		130.0		118.2
Operating expenses:
Selling, general and administrative		85.3		75.8

Other		1.2		0.6
Total operating expenses		86.5		76.4
Operating income		43.5		41.8
Interest expense		(9.4)		(9.2)
Interest income		0.6		1.2
Other expense		(0.8)		(1.5)
Income before income taxes		33.9		32.3
Income tax expense		(6.5)		(7.8)


Net income		$	27.4	$	24.5


Comprehensive income		$	29.7	$	38.0







Basic earnings per share		$	1.30	$	1.16



Diluted earnings per share		$	1.29	$	1.15

See notes to consolidated financial statements (unaudited).

ENPRO INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

Three Months Ended March 31, 2026 and 2025

(in millions)


	2026		2025
OPERATING ACTIVITIES
Net income	$	27.4	$	24.5
Adjustments to reconcile net income to net cash provided by operating activities:


Depreciation	6.7		6.0
Amortization	20.8		19.2


Deferred income taxes	(0.6)		(0.6)
Stock-based compensation	4.1		3.3
Other non-cash adjustments	2.3		2.4
Change in assets and liabilities, net of effects of acquisition:
Accounts receivable, net	(30.0)		(27.1)
Inventories	(5.5)		3.3
Accounts payable	13.7		(3.3)

Other current assets and liabilities	1.2		(11.7)
Other non-current assets and liabilities	(0.5)		5.0
Net cash provided by operating activities	39.6		21.0
INVESTING ACTIVITIES
Purchases of property, plant and equipment	(12.2)		(8.0)
Payments for capitalized internal-use software	(0.9)		(1.4)


Redemption of short-term investments	3.4		—


Proceeds from sale of property, plant, and equipment	0.1		—
Other	1.0		—
Net cash used in investing activities	(8.6)		(9.4)
FINANCING ACTIVITIES

Repayments of debt	(50.1)		(4.0)



Dividends paid	(6.9)		(6.6)
Incentive plan activity	(9.2)		(2.7)

Net cash used in financing activities	(66.2)		(13.3)




Effect of exchange rate changes on cash and cash equivalents	(0.3)		5.7
Net increase (decrease) in cash and cash equivalents	(35.5)		4.0
Cash and cash equivalents at beginning of period	114.7		236.3
Cash and cash equivalents at end of period	$	79.2	$	240.3

Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	$	2.9	$	4.3
Income taxes, net of refunds	$	0.9	$	6.6
Non-cash investing and financing activities:
Non-cash acquisitions of property, plant, and equipment	$	6.9	$	1.8
Non-cash acquisitions of capitalized internal-use software	$	1.2	$	0.9

See notes to consolidated financial statements (unaudited).

ENPRO INC.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in millions, except share amounts)


	March 31, 2026		December 31, 2025
ASSETS
Current assets
Cash and cash equivalents	$	79.2	$	114.7
Accounts receivable, net	163.8		134.1
Inventories	158.7		153.8

Prepaid expenses and other current assets	31.5		35.1


Total current assets	433.2		437.7
Property, plant and equipment, net	221.3		221.5
Goodwill	1,066.9		1,064.8
Other intangible assets, net	803.2		823.5

Other assets	110.9		115.5

Total assets	$	2,635.5	$	2,663.0
LIABILITIES AND EQUITY
Current liabilities
Current maturities of long-term debt	$	0.2	$	0.2

Accounts payable	80.2		71.6
Accrued expenses	116.1		116.9


Total current liabilities	196.5		188.7
Long-term debt	605.2		655.1
Deferred taxes	144.2		143.4
Other liabilities	126.9		131.9

Total liabilities	1,072.8		1,119.1
Commitments and contingent liabilities

Shareholders’ equity
Common stock – $.01 par value; 100,000,000 shares authorized; issued 21,300,176 shares in 2026 and 21,240,597 shares in 2025	0.2		0.2
Additional paid-in capital	329.2		333.3
Retained earnings	1,210.3		1,189.7
Accumulated other comprehensive income	24.2		21.9
Common stock held in treasury, at cost – 174,014 shares in 2026 and 174,546 shares in 2025	(1.2)		(1.2)
Total shareholders’ equity	1,562.7		1,543.9
Total liabilities and equity	$	2,635.5	$	2,663.0

See notes to consolidated financial statements (unaudited).

ENPRO INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Overview and Basis of Presentation

Overview

Enpro Inc. (“we,” “us,” “our,” “Enpro,” or the “Company”) is a leading-edge industrial technology company focused on critical applications across a diverse group of growing end markets such as semiconductor, industrial process, commercial vehicle, sustainable power generation, aerospace (including commercial space), food and biopharmaceutical, photonics and life sciences. The Company is a leader in applied engineering and designs, develops, manufactures, and markets proprietary, value-added products and solutions that contribute key functionality or safeguard a variety of critical environments.

Over the past several years, we have executed several strategic initiatives to focus the portfolio of businesses where we offer proprietary, industrial technology-related products and solutions with high barriers to entry, compelling margins, strong cash flow, and perpetual recurring/aftermarket revenue streams in markets with favorable secular tailwinds.

Basis of Presentation

The accompanying interim consolidated financial statements are unaudited, and certain related information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been omitted in accordance with Rule 10-01 of Regulation S-X. They were prepared following the same policies and procedures used in the preparation of our annual financial statements. The accompanying interim consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of results for the periods presented. The Consolidated Balance Sheet as of December 31, 2025 was derived from the audited financial statements included in our annual report on Form 10-K for the year ended December 31, 2025. The results of operations for the interim periods are not necessarily indicative of the results for the fiscal year. These consolidated financial statements should be read in conjunction with our annual consolidated financial statements for the year ended December 31, 2025 included within our annual report on Form 10-K.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amount of assets and liabilities and the disclosures regarding contingent assets and liabilities at period end and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

All intercompany accounts and transactions between our consolidated operations have been eliminated.

Recently Issued Accounting Guidance

In November 2024, new accounting guidance was issued that will require additional disclosures and disaggregation of certain costs and expenses presented on the face of the income statement. The amendments are effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. We are currently evaluating this new guidance.

In September 2025, new accounting guidance was issued which modernizes the accounting guidance for internal-use software development costs. The amendments are effective for annual periods beginning after December 15, 2027, with early adoption permitted. We are currently evaluating this new guidance.

Pension

In the second quarter of 2024, Enpro initiated a plan to terminate and settle its remaining defined benefit pension plan in the United States. The termination and settlement process for this frozen plan, which preserves retirement benefits due to participants but changes the ultimate payor of such benefits, was substantially completed in the fourth quarter of 2025.

As a result of the plan termination, Enpro recorded a pretax, noncash settlement loss of $67.2 million in other nonoperating expense in our consolidated statement of operations in the fourth quarter of 2025. The loss was driven primarily by the recognition of actuarial losses previously deferred in accumulated other comprehensive income (loss) on our consolidated balance sheet.

2. Acquisitions

Acquisition of business

On October 8, 2025, Enpro acquired all of the equity of Overlook Industries, Inc. ("Overlook"). Overlook, which is located in Easthampton, Massachusetts, specializes in the design and fabrication of single-use technologies and other critical componentry for biopharmaceutical production processes.

On November 14, 2025, we acquired all of the equity interests in AlpHa Measurement Holdings, LLC (“AlpHa”). AlpHa, together with its wholly-owned direct and indirect subsidiaries (i) VL Acquisition Co., a Delaware corporation, (ii) AlpHa Measurement Solutions, LLC, a Texas limited liability company, (iii) Aurora Scientific Instruments (Shanghai) Co., Ltd., a company organized under the Laws of the PRC, and (iv) VATCO, LLC, a Texas limited liability company, is a Houston, Texas-based leading provider of liquid analytical sensing technologies and instrumentation for the measurement of key parameters for liquid processes. AlpHa and its subsidiaries serve customers across a diverse set of end-markets, including industrial process control, water and wastewater, laboratory, and environmental monitoring.

In 2025, we paid $273.9 million, net of cash acquired, for the two acquisitions completed in the fourth quarter. The purchase prices of Overlook and AlpHa were allocated to the assets acquired and liabilities assumed based on their estimated fair values as of the acquisition date. The excess of the purchase price over the estimated fair value of the identifiable assets acquired less the liabilities assumed is reflected as goodwill, which is attributable primarily to the value of the workforce and the ongoing operations of the business. Goodwill recorded as part of the purchases was $160.2 million, of which we expect approximately 32% is tax deductible given the structure of the transactions. Inventory acquired included an adjustment to fair value of $5.4 million, of which $3.2 million was amortized to cost of goods sold in the first quarter of 2026.

We will continue to evaluate the purchase price allocation of these acquisitions, including the value of intangible assets and income tax assets and liabilities and adjust this allocation as appropriate. The allocation of purchase price was revised during the first quarter of 2026 primarily to increase deferred income tax liabilities and decrease acquired net working capital by $2.0 million in total, with an offsetting $2.0 million increase to goodwill. The following table represents the preliminary allocation of purchase price as of March 31, 2026:


	(in millions)
Accounts receivable	$	7.7
Inventories	16.9
Property, plant, and equipment	3.8
Goodwill	160.2
Other intangible assets	107.8
Other assets	10.8
Deferred income taxes	(16.9)
Other liabilities	(17.2)
	$	273.1

The following unaudited pro forma condensed consolidated financial results of operations for the three months ended March 31, 2025 are presented as if the acquisitions had been completed prior to 2025:


	Three Months Ended March 31,
		2025
		(in millions)
Pro forma net sales		$	286.0
Pro forma net income		$	24.0

These amounts have been calculated after applying our accounting policies and adjusting the results of the two acquired businesses to reflect the additional depreciation and amortization that would have been charged assuming the fair value adjustments to intangible assets had been applied as of January 1, 2025. The pro forma financial results have been prepared for

comparative purposes only and do not reflect the effect of any potential synergies as a result of the integration of businesses acquired in 2025. The pro forma information does not purport to be indicative of the results of operations that actually would have resulted had the acquisition of these businesses occurred prior to 2025, or of future results of Enpro Inc.

3. Income Taxes

Our income tax expense and resulting effective tax rate are based upon the estimated annual effective tax rates applicable for the respective periods adjusted for the effect of items required to be treated as discrete in the interim periods. This estimated annual effective tax rate is affected by the relative proportions of revenue and income before taxes in the jurisdictions in which we operate. Based on the geographical mix of earnings, our annual effective tax rate fluctuates based on the portion of our profits earned in each jurisdiction.

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.

The Organization for Economic Co-operation and Development (the “OECD”) introduced a framework to implement a global minimum corporate tax of 15%, referred to as Pillar Two, effective for tax years beginning in 2024. While it is uncertain whether the United States will enact legislation to adopt Pillar Two, certain countries in which we operate have enacted legislation to adopt Pillar Two. The adoption of Pillar Two had no impact on our income tax expense for the three months ended March 31, 2026 or the three months ended March 31, 2025 and we expect there to be minimal impact, if any, in future periods. Any impact would be accounted for as a period cost in the period in which it is incurred.

On July 4, 2025, the U.S. enacted into law H.R. 1, “An Act to provide for reconciliation pursuant to title II of H. Con. Res. 14” (“The Act”), commonly referred to as “The One Big Beautiful Bill Act.” The Act contains several key tax provisions impacting businesses, including the permanent reinstatement of 100 percent bonus depreciation for qualified property and the restoration of immediate expensing of domestic research and experimental expenditures. The Act also modifies the business interest deduction limitation, as well as several core international tax provisions. Provisions of H.R. 1 effective in 2026 had a favorable impact on the Company’s effective tax rate and Federal cash tax payments for the three months ended March 31, 2026.

4. Earnings Per Share


	Three Months Ended March 31,
		2026		2025
		(in millions, except per share amounts)
Numerator (basic and diluted):
Net income		$	27.4	$	24.5
Denominator:
Weighted-average shares – basic		21.1		21.0
Share-based awards		0.2		0.2

Weighted-average shares – diluted		21.3		21.2
Earnings per share:
Basic		$	1.30	$	1.16
Diluted		$	1.29	$	1.15

5. Inventories


	March 31, 2026		December 31, 2025
	(in millions)
Finished products	$	51.3	$	53.2
Work in process	40.4		37.2
Raw materials	67.0		63.4





Total inventories	$	158.7	$	153.8

6. Goodwill and Other Intangible Assets

The changes in the net carrying value of goodwill by reportable segment for the three months ended March 31, 2026 are as follows:


	Sealing Technologies		Advanced Surface Technologies		Total
	(in millions)
Goodwill as of December 31, 2025	$	532.6	$	532.2	$	1,064.8



Measurement period adjustment to goodwill	2.0		—		2.0
Foreign currency translation	0.1		—		0.1

Goodwill as of March 31, 2026	$	534.7	$	532.2	$	1,066.9

The goodwill balances reflected above at March 31, 2026 are net of accumulated impairment losses of $27.8 million for the Sealing Technologies segment and $126.0 million for the Advanced Surface Technologies segment.

Identifiable intangible assets are as follows:


	March 31, 2026				December 31, 2025
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
	(in millions)
Definite-Lived:
Customer relationships	$	568.8	$	248.3	$	568.7	$	241.0
Existing technology	597.0		198.4		596.8		186.9
Trademarks	80.4		43.4		80.5		41.9
Other	17.2		15.0		18.3		15.9
	1,263.4		505.1		1,264.3		485.7
Indefinite-Lived:
In-process research and development	14.0		—		14.0		—
Trademarks	30.9		—		30.9		—
Total	$	1,308.3	$	505.1	$	1,309.2	$	485.7

Amortization for the three months ended March 31, 2026 and 2025 was $20.6 million and $19.0 million, respectively.

7. Accrued Expenses


	March 31, 2026		December 31, 2025
	(in millions)
Salaries, wages and employee benefits	$	43.9	$	52.4
Interest	9.7		3.1
Environmental	7.3		7.9

Income taxes	12.0		8.5
Taxes other than income taxes	7.4		5.8
Operating lease liabilities	12.4		12.7

Other	23.4		26.5
	$	116.1	$	116.9

8. Long-Term Debt

Senior Secured Credit Facilities

On April 9, 2025, we entered into a Second Amendment to Third Amended and Restated Credit Agreement dated as of April 9, 2025 (the “Amended Credit Facility Agreement”) among the Company and our subsidiary, EnPro Holdings, Inc. ("EnPro Holdings"), as borrowers, certain foreign subsidiaries of the Company from time to time party thereto, as designated borrowers, the guarantors party thereto, the lenders party thereto and Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer.

The Amended Credit Facility Agreement amended the agreement then governing our senior secured credit facilities and provides for a senior secured revolving credit facility of up to $800.0 million (the “Revolving Credit Facility”), which will mature on April 9, 2030. On April 9, 2025, in connection with our entry into the Amended Credit Facility Agreement, we repaid the remaining outstanding principal amount of term loan borrowings outstanding under the agreement governing our senior secured credit facilities prior to such amendment, funded by borrowings under the Revolving Credit Facility and $59.8 million of available cash.

The Amended Credit Facility Agreement provides that we may seek incremental term loans and/or additional revolving credit commitments in an amount equal to the greater of $275.0 million and 100% of consolidated EBITDA for the most recently ended four-quarter period for which we have reported financial results, plus additional amounts based on a consolidated senior secured leverage ratio. Any incremental term loans will be subject to prepayment with the net cash proceeds of non-permitted debt issuances and with the net cash proceeds of certain asset sales and casualty or condemnation events not reinvested in our business or applied to prepay such term loans within a specified period.

Borrowings under the Revolving Credit Facility, at our option, bear interest at either (1) an alternate base rate (the highest of (a) the federal funds effective rate plus 0.50%, (b) the prime rate of Bank of America, N.A., and (c) the one-month Term Secured Overnight Financing Rate ("SOFR") plus 1.00%) or (2) the Term SOFR rate for the applicable interest period plus, in each case, an applicable margin percentage, which initially is 1.375% for Term SOFR borrowings and 0.375% for alternate base rate borrowings and is subject to incremental increase or decrease based on a consolidated total net leverage ratio. In addition, a commitment fee accrues with respect to the unused amount of the Revolving Credit Facility at an annual rate of 0.175% initially, which rate is also subject to incremental increase or decrease based on a consolidated total net leverage ratio.

Enpro Inc. and EnPro Holdings are the permitted borrowers under the Amended Credit Facility Agreement. We have the ability to add wholly owned foreign subsidiaries as borrowers under the Revolving Credit Facility. Each of our domestic, consolidated subsidiaries (subject to certain exclusions) is required to guarantee the obligations of the borrowers under the Amended Credit Facility Agreement and, subject to the permitted exceptions, each of the Company’s existing domestic subsidiaries has entered into the Amended Credit Facility Agreement to provide such a guarantee.

Borrowings under the Amended Credit Facility Agreement are secured by a first-priority pledge of certain assets. The Amended Credit Facility Agreement contains certain financial covenants and required financial ratios including a maximum consolidated total net leverage ratio and a minimum consolidated interest coverage ratio as defined in the Amended Credit Facility Agreement. We were in compliance with all covenants of the Amended Credit Facility Agreement as of March 31, 2026.

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.

Senior Notes

On May 29, 2025, we completed the offering of $450 million in aggregate principal amount of our 6.125% Senior Notes due 2033 (the “Senior Notes”). The Senior Notes were issued to investors at 100% of the principal amount thereof. The Senior Notes are unsecured, unsubordinated obligations of Enpro Inc. and mature on June 1, 2033. Interest on the Senior Notes accrues at a rate of 6.125% per annum and is payable semi-annually in cash in arrears on June 1 and December 1 of each year, commencing December 1, 2025. The Senior Notes are required to be guaranteed on a senior unsecured basis by each of Enpro’s existing and future direct and indirect domestic subsidiaries that is a borrower under, or guarantees, our indebtedness under the Revolving Credit Facility or guarantees any other Capital Markets Indebtedness (as defined in the indenture governing the Senior Notes) of Enpro or any of the guarantors above a specified threshold. We may, on any one or more occasions, redeem all or a part of the Senior Notes at specified redemption prices plus accrued and unpaid interest.

The indenture governing the Senior Notes includes covenants that restrict our ability, subject to specified exceptions and qualifications set forth in the indenture, to incur liens on assets, engage in certain asset sales, including sale and leaseback transactions, and merge, consolidate, transfer or dispose of all or substantially all assets. The indenture further requires us to offer to repurchase the Senior Notes at a price equal to 100% of the principal amount thereof plus accrued and unpaid interest, in the event that the net cash proceeds of certain asset sales are not reinvested in acquisitions, capital expenditures, or used to repay or otherwise reduce specified indebtedness within a specified period, to the extent the remaining net proceeds exceed a specified amount.

Each holder of the Senior Notes may require us to repurchase some or all of the Senior Notes held by such holder for cash upon the occurrence of a defined “change of control” event. Our ability to redeem the Senior Notes prior to maturity is subject to certain conditions, including in certain cases the payment of make-whole amounts.

We applied a portion of the net proceeds from the sale of the Senior Notes to fund the redemption on June 12, 2025 of all of our outstanding 5.75% Senior Notes due 2026 (having an aggregate principal amount of $350 million) at a redemption price equal to 100% of the aggregate principal amount thereof, plus accrued but unpaid interest to, but not including, the redemption date.

We were in compliance with all of the covenants under the indenture governing the Senior Notes as of March 31, 2026.

9. Shareholders' Equity

The quarterly changes in shareholders' equity during the three months ended March 31, 2026 are as follows:


	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income		Treasury Stock		Total Shareholders' Equity
(in millions, except per share data)	Shares	Amount
Balance, December 31, 2025	21.1	$	0.2	$	333.3	$	1,189.7	$	21.9	$	(1.2)	$	1,543.9

Net income	—	—		—		27.4		—		—		27.4
Other comprehensive income	—	—		—		—		2.3		—		2.3
Dividends ($0.32 per share)	—	—		—		(6.8)		—		—		(6.8)

Incentive plan activity	—	—		(4.1)		—		—		—		(4.1)


Balance, March 31, 2026	21.1	$	0.2	$	329.2	$	1,210.3	$	24.2	$	(1.2)	$	1,562.7

The quarterly changes in shareholders' equity during the three months ended March 31, 2025 are as follows:


	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Total Shareholders' Equity
(in millions, except per share data)	Shares	Amount
Balance, December 31, 2024	21.0	$	0.2	$	319.4	$	1,175.6	$	(65.4)	$	(1.2)	$	1,428.6

Net income	—	—		—		24.5		—		—		24.5
Other comprehensive income	—	—		—		—		13.5		—		13.5
Dividends ($0.31 per share)	—	—		—		(6.6)		—		—		(6.6)

Incentive plan activity	—	—		1.8		—		—		—		1.8


Balance, March 31, 2025	21.0	$	0.2	$	321.2	$	1,193.5	$	(51.9)	$	(1.2)	$	1,461.8

We intend to declare regular quarterly cash dividends on our common stock, as determined by our board of directors, after taking into account our current and projected cash flows, earnings, financial position, debt covenants and other relevant factors. Total dividend payments of $6.9 million were made during the three months ended March 31, 2026.

In April of 2026, our board of directors declared a dividend of $0.32 per share, payable on June 17, 2026, to shareholders of record as of June 3, 2026.

Enpro’s board of directors approved a two-year share repurchase authorization in October 2024, replacing the previous $50.0 million authorization that expired in October 2024. No shares have been purchased under the prior or current repurchase authorization. Under the replacement authorization, which, other than the expiration date, is identical to the prior authorization, the Company may repurchase up to $50.0 million of shares in both open market and privately negotiated transactions. The Company’s management is authorized to determine the timing and amount of any such repurchases based on its evaluation of market conditions, capital alternatives, and other factors. Repurchases may also be made under Rule 10b5-1 plans, which could result in the repurchase of shares during periods when the Company otherwise would be precluded from doing so under insider trading laws.

In February 2026, we issued stock options to certain key executives for approximately 30,000 common shares with an exercise price of $275.37 per share. The options vest pro-rata on the first, second and third anniversaries of the grant date, subject to continued employment. All options have a term of 10 years.

We determine the fair value of stock options using the Black-Scholes option pricing formula as of the grant date. Key inputs into this formula include expected term, expected volatility, expected dividend yield, and the risk-free interest rate. This fair value is amortized on a straight-line basis over the vesting period and recorded in selling, general and administrative costs on our Consolidated Statement of Operations.

The expected term represents the period that our stock options are expected to be outstanding and is determined based on historical experience of similar awards, given the contractual terms of the awards, vesting schedules, and expectations of future employee behavior. The fair value of stock options reflects a volatility factor calculated using historical market data for Enpro's common stock. The time frame used was approximated as a six-year period from the grant date for the awards. The dividend assumption is based on our expectations as of the grant date. We base the risk-free interest rate on the yield to maturity at the time of the stock option grant on zero-coupon U.S. government bonds having a remaining life equal to the option's expected life.

The option awards issued in February 2026 had a fair value of $119.34 per share at their grant date. The following assumptions were used to estimate the fair value of the 2026 option awards:


Average expected term	6 years
Expected volatility	41.13	%
Risk-free interest rate	3.69	%
Expected dividend yield	0.46	%

10. Business Segment Information

We identify our two operating businesses, Sealing Technologies and Advanced Surface Technologies ("AST"), as reportable segments. Factors considered in determining our reportable segments include the economic similarity of the businesses, the nature of products sold, or solutions provided, the production processes and the types of customers. Our President and Chief Executive Officer, who we have identified as our Chief Operating Decision Maker ("CODM"), regularly evaluates the individual performance of both operating segments by reviewing segment earnings before interest, income taxes, depreciation, amortization, and other selected items ("Adjusted Segment EBITDA"), which is segment revenue reduced by operating expenses and other costs identifiable with the segment, excluding acquisition expenses, restructuring costs, 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. The CODM assesses Adjusted Segment EBITDA in comparison to prior periods, previously forecasted results and anticipated/experienced market trends in determining how to allocate operating and capital resources between the operating segments. The only significant segment expense categories reviewed by the CODM are cost of sales and selling, general, and administrative costs.

Our Sealing Technologies segment engineers and manufactures value-added products and solutions that safeguard a variety of critical environments, including: metallic, non-metallic and composite material gaskets; dynamic seals; compression packing; elastomeric components; custom-engineered mechanical seals used in diverse applications; hydraulic components; test, measurement and sensing applications; sanitary gaskets; hoses and fittings for hygienic process industries; fluid transfer products for the pharmaceutical and biopharmaceutical industries; and commercial vehicle solutions used in wheel-end and suspension components that customers rely upon to ensure safety on our roadways.

These products are used in a variety of markets, including chemical and petrochemical processing, nuclear energy, hydrogen, natural gas, food and biopharmaceutical processing, primary metal manufacturing, mining, water and waste treatment, commercial vehicle, aerospace (including commercial space), medical, filtration and semiconductor fabrication. In all these industries, the performance and durability of our proprietary products and solutions are vital for the safety and environmental protection of our customers’ processes. Many of our products and solutions are used in highly demanding applications, often in harsh environments, where the cost of failure is extremely high relative to the cost of our offerings to our customers. These environments include those where extreme temperatures, extreme pressures, corrosive agents, strict tolerances, or worn equipment create challenges for product performance. Sealing Technologies offers customers widely recognized applied engineering, innovation, process know- how and enduring reliability, driving a lasting aftermarket for many of our products and solutions.

Our AST segment applies proprietary technologies, processes, and capabilities to deliver a highly differentiated suite of products and solutions for challenging applications in high-growth markets. The segment’s products and solutions are used in demanding environments requiring performance, precision and repeatability, with a low tolerance for failure. AST’s products and solutions include: (i) cleaning, coating, testing, refurbishment and verification for critical components and assemblies used in semiconductor manufacturing equipment, with meaningful exposures to state-of-the-art advanced node chip applications; (ii) designing, manufacturing and selling specialized optical filters and proprietary thin-film coatings for the most challenging applications in the industrial technology, life sciences, and semiconductor markets; (iii) engineering and manufacturing complex front-end wafer processing sub-systems and new and refurbished electrostatic chuck pedestals for the semiconductor equipment industry; and (iv) engineering and manufacturing edge-welded metal bellows for the semiconductor equipment industry and critical applications in the space, aerospace and defense markets. In many instances, AST capabilities drive products and solutions that enable the performance of our customers’ high-value processes through an entire life cycle.

The accounting policies of the reportable segments are the same as those for Enpro.

Segment operating results and other financial data for the three months ended March 31, 2026 and 2025, were as follows:


	Three Months Ended March 31, 2026


(in millions)	Sealing Technologies		Advanced Surface Technologies		Total
Sales from external customers	$	199.0	$	104.0	$	303.0
Intersegment sales	—		0.2		0.2
	199.0		104.2		303.2
Reconciliation of sales
Elimination of intersegment sales					(0.2)
Total consolidated sales					303.0

Cost of sales	(103.3)		(70.0)
Selling, General, and Administrative	(46.5)		(26.2)

Adjusting Items:
Acquisition expenses	1.0		—

Amortization of fair value adjustment to acquisition date inventory	3.2		—

Depreciation and amortization expense	11.2		16.3
Adjusted Segment EBITDA	$	64.6	$	24.3	$	88.9

Three Months Ended March 31, 2025

(in millions)

Sealing Technologies

Advanced Surface Technologies

Sales from external customers