Enpro Inc.: Q3 FY2026 earnings call

What management said about Q3 FY2026, from the documents filed with the SEC on 3 November 2026: press release. Guidance figures: 3 raised, 2 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Sales rose 22.4% to $350.8 million: Excluding foreign exchange translation and the AlpHa and Overlook acquisitions, sales rose 16.9% in the quarter. Source
• Net income and EPS both rose: Net income was $40.3 million; GAAP diluted EPS was $1.88 and adjusted diluted EPS was $2.66, against $1.99 a year earlier. Source
• AST sales rose 25.8% organically: Leading-edge precision cleaning and semiconductor capital equipment and coatings demand led AST growth, to $136.5 million. Source
• Sealing sales rose 20.5%: Sealing Technologies sales were $214.7 million; excluding 0.4% from currency and 8.5% from acquisitions, sales rose 11.6%. Source
• Aerospace and compositional analysis grew: Strength in aerospace, domestic general industrial, compositional analysis and pricing offset slow European general industrial and food and biopharma demand. Source
• Operating margin up 370 basis points: Operating income was $63.3 million against $40.9 million; selling, general and administrative expense was $89.4 million against $78.9 million. Source
• Nine-month free cash flow reached $129.2 million: Free cash flow is net of $43.6 million of capital expenditure, against $104.9 million a year earlier; higher net income and lower cash taxes drove the rise. Source

“Our strong third quarter performance reflects our disciplined execution and success of Enpro 3.0 as we continue to accelerate profitable growth across the organization,”

Eric Vaillancourt, President and Chief Executive Officer

Guidance

What changed from last quarter

• Guidance raised: Full-year 2026 revenue, adjusted EBITDA and adjusted diluted EPS ranges were raised from the second-quarter release. Source
• New: Board approved a replacement $50 million share repurchase authorization in October 2026, after the prior one expired. Source

Results and growth drivers

• Sales rose 22.4% to $350.8 million: Excluding foreign exchange translation and the AlpHa and Overlook acquisitions, sales rose 16.9% in the quarter. Source
• Net income and EPS both rose: Net income was $40.3 million; GAAP diluted EPS was $1.88 and adjusted diluted EPS was $2.66, against $1.99 a year earlier. Source
• Adjusted EBITDA rose 31.7%: Higher sales were the main driver of adjusted EBITDA, partly offset by higher operating expenses supporting growth. Source
• Operating leverage partly offset by spending: Sales growth produced operating leverage, partly offset by expenses supporting growth initiatives across both segments. Source

Segment results

• AST sales rose 25.8% organically: Leading-edge precision cleaning and semiconductor capital equipment and coatings demand led AST growth, to $136.5 million. Source
• AST margin up 500 basis points: AST adjusted segment EBITDA rose 57.3% to $34.3 million, with margin at 25.1% against 20.1%, as sales growth outran growth investments. Source
• Sealing sales rose 20.5%: Sealing Technologies sales were $214.7 million; excluding 0.4% from currency and 8.5% from acquisitions, sales rose 11.6%. Source
• Sealing margin steady near 32.6%: Sealing adjusted segment EBITDA rose 21.8% to $69.9 million; excluding currency and acquisitions, it rose 13.2%. Source

“We are raising our outlook for the balance of the year to reflect robust demand across the portfolio and our strong momentum as we head into 2027.”

Eric Vaillancourt, President and Chief Executive Officer

End markets and customers

• Semiconductor demand drove AST growth: Management attributed AST sales growth to semiconductor demand; Sealing Technologies organic growth was about 12%. Source
• Aerospace and compositional analysis grew: Strength in aerospace, domestic general industrial, compositional analysis and pricing offset slow European general industrial and food and biopharma demand. Source
• Nuclear and commercial vehicle OEM improved: Nuclear and commercial vehicle OEM revenue improved year over year; Sealing commercial vehicle demand also improved. Source

Costs, margins and pricing

• Corporate expense rose to $13.5 million: Higher incentive compensation accruals and restructuring costs drove the increase from $10.2 million a year earlier. Source
• Operating margin up 370 basis points: Operating income was $63.3 million against $40.9 million; selling, general and administrative expense was $89.4 million against $78.9 million. Source
• Gross profit rose to $153.2 million: Cost of sales was $197.6 million against $166.4 million, so gross profit grew faster than cost of sales. Source
• Nine-month adjusted EBITDA margin 25.6%: The quarter's adjusted EBITDA margin was 26.0% against 24.2%; the nine-month figure compares with 24.6% a year earlier. Source

“Strong cash generation and a healthy balance sheet provide us with significant flexibility to invest in areas of the portfolio with higher growth rates and superior profitability”

Eric Vaillancourt, President and Chief Executive Officer

Guidance basis and exclusions

• Guidance excludes later share changes: Full-year guidance excludes share count changes, future acquisitions and dispositions, restructuring costs and currency moves after September 30, 2026. Source
• Tariff effects excluded after Nov 3: Guidance also excludes incremental effects of tariffs or trade tensions announced after November 3, 2026. Source
• Adjusted guidance on consistent basis: Full-year adjusted EBITDA and adjusted EPS guidance follow the historical presentation; no GAAP reconciliation is given for these forward-looking figures. Source

Cash flow and balance sheet

• Nine-month free cash flow reached $129.2 million: Free cash flow is net of $43.6 million of capital expenditure, against $104.9 million a year earlier; higher net income and lower cash taxes drove the rise. Source
• Operating cash flow increased: Nine-month operating cash flow compares with $138.5 million a year earlier; working capital investment supported demand. Source
• Total debt $520.7 million at quarter end: Cash and cash equivalents were $83.4 million; revolving debt was reduced by $55.0 million in the quarter and $135.0 million year-to-date. Source
• Net leverage fell to 1.4 times: Measured on trailing twelve-month adjusted EBITDA; the prior release gave 1.6 times at June 30, 2026. Source

Capital returns and reinvestment

• Dividends paid totalled $20.6 million: Dividend payments for the nine months were up from $19.7 million a year earlier; the regular quarterly rate was unchanged. Source
• No shares bought under prior program: The earlier $50 million repurchase authorization expired without any purchases; the replacement matches it in size and terms. Source
• Buybacks may use 10b5-1 plans: Repurchases may be made in open market or privately negotiated deals, with timing set by management based on market conditions. Source
• Reinvesting in organic growth: Management is reinvesting in organic growth across both segments to meet Enpro 3.0 targets. Source
• Acquisitions pursued within financial criteria: Management said it will pursue acquisitions that expand capabilities and meet its disciplined financial criteria. Source

One-time and non-GAAP items

• LeanTeq tax liability partly released: A tax liability from the 2019 LeanTeq acquisition was released as the statute of limitations expired on some uncertain tax positions. Source
• Indemnification receivable reversed as expense: The related receivable was reversed as an expense in other non-operating income or expense; the nine-month amount was $0.9 million. Source
• Pension settlement gain offsets 2025 loss: Pension plan termination was completed in 2026; the nine-month gain on settlement was $1.2 million. Source
• Environmental reserve adjustments excluded: Nine-month environmental reserve adjustments of $16.1 million were excluded from adjusted measures. Source
• Adjusted tax uses normalized rate: Adjusted income tax expense applies a normalized company-wide effective tax rate of 25.0%, excluding discrete items. Source

Coming up, as management said on 3 November 2026

• Dividend payment date set: The quarterly dividend is scheduled to be paid December 16, 2026, to holders of record on December 2, 2026. Source
• Repurchase authority runs to October 2028: The replacement repurchase authorization is set to expire in October 2028. Source

Risks management discussed

• Demand: Management named slow European general industrial and food and biopharmaceutical demand as a headwind in the quarter. Source
• Operational: Expenses to support growth initiatives in both segments partly offset the operating leverage from higher sales. Source

Earlier plans management reported on

• Not stated: Management said reinvestment is aimed at delivering the Enpro 3.0 growth targets; no status was given. Source
• Not stated: The raised ranges are compared with the guidance given in the prior release; no delivery status is stated. Source

Other quarters

• Q2 FY2026 earnings call
• Q1 FY2026 earnings call
• Q4 FY2025 earnings call
• Q3 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.