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Enpro Inc.

Enpro Inc.NPOEarnings & Financial Report

NYSE · Materials · Gaskets, Packg & Sealg Devices & Rubber & Plastics Hose

Enpro is a US-based industrial technology company that designs and manufactures products and materials for technology-intensive sectors. The company serves industries such as semiconductors, aerospace, power generation, heavy-duty trucking, agricultural machinery, chemical processing, pulp and paper, and life sciences from 61 primary manufacturing facilities located in 12 countries, worldwide. It is organized under three segments: Sealing Technologies, Advanced Surface Technologies, and Engin...

What changed in Enpro Inc.'s 10-K — 2023 vs 2024

Top changes in Enpro Inc.'s 2024 10-K

263 paragraphs added · 268 removed · 192 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

50 edited+13 added−20 removed33 unchanged
Raw Materials and Components. Our Advanced Surface Technologies segment uses ultra-high purity chemicals, fluoropolymers, elastomeric compounds, technical ceramics, rare earth materials, specialty substrates, common and exotic metals. We believe that these raw materials and components are generally available from various suppliers, with occasional, isolated and short-term constraints.
Our Advanced Surface Technologies segment uses ultra-high purity chemicals, fluoropolymers, elastomeric compounds, technical ceramics, rare earth materials, specialty substrates, common and exotic metals. We believe that these raw materials and components are generally available from various suppliers, with occasional, isolated and short-term constraints.
AST’s products and solutions include: (i) cleaning, coating, testing, refurbishment and verification for critical components and assemblies used in state-of-the-art advanced node semiconductor manufacturing equipment, (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.
AST’s products and solutions include: (i) cleaning, coating, testing, refurbishment and verification for critical components and assemblies used in state-of-the-art advanced node semiconductor manufacturing equipment, (ii) designing, manufacturing and selling specialized optical filters and proprietary thin-film coatings for the most challenging applications in the industrial technology, life sciences, communications 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.
These capabilities are also leveraged for high reliability in critical applications for space, aerospace and defense markets. LeanTeq provides cleaning, coating, testing, refurbishment and verification solutions for critical components and assemblies used in state-of-the-art advanced node semiconductor manufacturing equipment. LeanTeq offers highly differentiated, proprietary, technology-enabled processes, market-leading process tool expertise, and broad materials proficiency.
These capabilities are also leveraged for high reliability in critical applications for space, aerospace and defense markets. 4 LeanTeq provides cleaning, coating, testing, refurbishment and verification solutions for critical components and assemblies used in state-of-the-art advanced node semiconductor manufacturing equipment. LeanTeq offers highly differentiated, proprietary, technology-enabled processes, market-leading process tool expertise, and broad materials proficiency.
Except for proprietary formulations and know-how in our Advanced Surface Technologies segment, we do not consider our business as a whole to be 6 materially dependent on any particular patent, patent right, trademark, trade secret or license granted or group of related patents, patent rights, trademarks, trade secrets or licenses granted.
Except for proprietary formulations and know-how in our Advanced Surface Technologies segment, we do not consider our business as a whole to be materially dependent on any particular patent, patent right, trademark, trade secret or license granted or group of related patents, patent rights, trademarks, trade secrets or licenses granted.
These rotary seals are used for many markets, including for demanding applications in the steel, machine building, and mining and pulp and paper processing industries, under the well-known brand names Klozure® and PS Seal. Compression packing is used to provide sealing in pressurized, static and dynamic applications such as pumps and valves.
These rotary seals are used for many markets, including for demanding applications in the steel, machine building, and mining and pulp and paper processing industries, under the well-known brand names Klozure® and PS Seal. 3 Compression packing is used to provide sealing in pressurized, static and dynamic applications such as pumps and valves.
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. Aftermarket or recurring revenue approximates two-thirds of our Sealing Technologies segment’s total revenue. Garlock consists of two companies: Garlock Sealing Technologies (GST) and Garlock Hygienic Technologies (GHT).
Sealing Technologies offers customers widely recognized applied engineering, innovation, process know-how and reliability, driving a enduring aftermarket for many of our products and solutions. Aftermarket or recurring revenue approximates two-thirds of our Sealing Technologies segment’s total revenue. Garlock consists of two companies: Garlock Sealing Technologies (GST) and Garlock Hygienic Technologies (GHT).
In 2023, we received $28.9 million, net of transaction fees and cash sold, resulting in a pretax gain of $14.6 million recognized in the first quarter of 2023. 2 The sale of GGB closed on November 4, 2022 to The Timken Company.
In 2023, we received $28.9 million, net of transaction fees and cash sold, resulting in a pretax gain of $14.6 million recognized in the first quarter of 2023. The sale of GGB to The Timken Company closed on November 4, 2022.
We believe that our significant competitive advantages include our technological knowledge, proprietary processes, manufacturing and analytical 5 capabilities and record of performance, which enable us to satisfy the substantial upfront qualification processes required by many of our customers.
We believe that our significant competitive advantages include our technological knowledge, proprietary processes, manufacturing and analytical capabilities and record of performance, which enable us to satisfy the substantial upfront qualification processes required by many of our customers.
We received $298.2 million, net of transaction fees and cash sold, including $3.1 million of payments made in Q1 of 2023. We recorded a pre-tax gain of $189.1 million as part of our discontinued operations in the fourth quarter of 2022.
We received $298.2 million, net of transaction fees and cash sold, including $3.1 million of payments made in the first quarter of 2023. We recorded a pre-tax gain of $189.1 million as part of our discontinued operations in the fourth quarter of 2022.
In a market with volatile turnover, our aggregate retention rates are at or above market level, in part due to our culture and due to our progressive approach to employee development and focus on employee well-being. Focus on the Communities and our New Employee Assistance Fund.
In a market with volatile turnover, our aggregate retention rates are at or above market level, in part due to our culture and due to our progressive approach to employee development and focus on employee well-being. Focus on our Communities and Employee Assistance Fund .
We routinely employ in-process inspection by using testing equipment as a process aid during all stages of development, design and production to ensure product quality and reliability. These include state-of-the-art CAD/CAM equipment, statistical process control systems, laser tracking devices, failure mode and effect analysis, and coordinate measuring machines.
We routinely employ in-process inspection by using testing equipment as a process aid during all stages of development, design and production to ensure product quality and reliability. These include but not limited to, state-of-the-art CAD/CAM equipment, statistical process control systems, laser tracking devices, failure mode and effect analysis, and coordinate measuring machines.
Approximately 5% of the December 31, 2023 backlog is expected to be filled beyond 2024. Backlog represents orders on hand that we believe to be firm. However, there is no certainty the backlog orders will result in actual sales at the times or in the amounts ordered.
Approximately 4% of the December 31, 2024 backlog is expected to be filled beyond 2025. Backlog represents orders on hand 5 that we believe to be firm. However, there is no certainty the backlog orders will result in actual sales at the times or in the amounts ordered.
AMI offers a portfolio of oxygen, hydrogen sulfide and moisture analyzers and proprietary sensing capabilities that detect contaminants in a variety of processes, including natural gas and biogas streams, which enable operators to avoid flaring and, thereby, reduce CO 2 emissions.
The company offers a portfolio of oxygen, hydrogen, sulfide and moisture analyzers and proprietary sensing capabilities that detect contaminants in a variety of processes, including natural gas and biogas streams, which enable operators to avoid flaring and, thereby, reduce CO 2 emissions.
Advanced Surface Technologies’ products and solutions are offered to global customers, with approximately 34% of sales delivered to customers outside the United States in 2023. Representative customers include leading global manufacturers of semiconductor manufacturing equipment, such as Applied Materials and ASML, as well as manufacturers of equipment used in the life sciences and industrial technology industries and government defense contractors.
Advanced Surface Technologies’ products and solutions are offered to global customers, with approximately 45% of sales delivered to customers outside the United States in 2024. Representative customers include leading global manufacturers of semiconductor manufacturing equipment, such as Applied Materials and ASML, as well as manufacturers of equipment used in the life sciences and industrial technology industries and government defense contractors.
In the United States, this includes a company-wide minimum wage of $15 per hour, a 401k plan with an above-market company match, an award-winning health and wellbeing program, flexible vacation, and time off policies, enhanced employee assistance programs, paid family leave, and comprehensive healthcare benefits, as well as company-paid long-term disability, critical illness, and accident coverage.
In the United States, this includes a company-wide minimum wage of $17 per hour, a 401k plan with an above-market company match, an award-winning health and well-being program, flexible vacation, and time off policies, enhanced employee assistance programs, paid family leave, and comprehensive healthcare benefits, as well as company-paid long-term disability, critical illness, and accident insurance coverage.
These capabilities extend the life cycles of parts and shorten the time for cleaning of chamber components. Alluxa manufactures specialized optical filters and thin-film coatings for challenging applications in the industrial technology, life sciences, and semiconductor markets. Its products are developed through a proprietary coating process using state-of-the-art, advanced equipment.
These capabilities extend the life cycles of parts and shorten the time for cleaning of chamber components. Alluxa manufactures specialized optical filters and thin-film coatings for challenging applications in the industrial technology, life sciences, communications, and semiconductor markets. Its products are developed through proprietary coating processes using state-of-the-art, advanced equipment engineered in-house.
In 2020, we launched the Enpro Foundation to support charitable organizations in the communities where our colleagues live and work. Enpro has contributed $1.75 million to the Enpro Foundation since its formation in 2020 and our Foundation has made $690,000 in donations, with a special focus on charitable organizations nominated by our colleagues.
In 2020, we launched the Enpro Foundation to support charitable organizations in the communities where our colleagues live and work. Enpro has contributed $2.25 million to the Enpro Foundation since its formation in 2020 and our Foundation has made $1.1 million in donations, with a special focus on charitable organizations nominated by our colleagues.
If this were to occur, our business, financial condition, results of operations and cash flows could be adversely affected. Human Capital As of December 31, 2023, we had approximately 3,500 employees, of which approximately 66% are in North America, 12% in Europe, and 22% in Asia Pacific.
If this were to occur, our business, financial condition, results of operations and cash flows could be adversely affected. Human Capital As of December 31, 2024, we had approximately 3,500 employees, of which approximately 65% are in North America, 23% in Asia Pacific, and 12% in Europe.
Through our Foundation, we have created and funded an employee 7 assistance fund, administered by a third-party that specializes in this type of fund, where we can confidentially assist employees that are facing difficult challenges, including family sickness or impact from natural disasters or other tragedies, in a way that is objective and respectful.
Through our Foundation, we have created and financially supported an employee assistance fund, administered by a third-party that specializes in this type of fund, where we assist employees that are facing difficult challenges, including family sickness, impact from natural disasters, or other tragedies, in a way that is objective, respectful, and confidential.
As a result of our practices, we are able to significantly improve the quality of the services we provide and the parts we manufacture, avoid and reduce defects, and improve efficiency and reliability. As of December 31, 2023, 31 of our manufacturing and service facilities were ISO 9000 certified. Three of our facilities are ISO 14001 certified.
As a result of our practices, we are able to significantly improve the quality of the services we provide and the parts we manufacture, avoid and reduce defects, and improve efficiency and reliability. As of December 31, 2024, 26 of our manufacturing and service facilities were ISO 9001 certified. Four of our facilities are ISO 14001 certified.
Background We were incorporated under the laws of the State of North Carolina on January 11, 2002, as a wholly owned subsidiary of Goodrich Corporation (“Goodrich”). The incorporation was in anticipation of Goodrich’s announced spin-off of its Engineered Industrial Products segment by a distribution of the Company's common stock to existing Goodrich shareholders.
Background Enpro was incorporated under the laws of the State of North Carolina on January 11, 2002, as a wholly owned subsidiary of Goodrich Corporation (“Goodrich”). The incorporation was organized in anticipation of Goodrich’s intended spin-off of its Engineered Industrial Products segment, named Enpro Industries, Inc., by a distribution of the Company's common stock to existing Goodrich shareholders.
In the semiconductor cleaning space, our competitors include a limited number of other providers of cleaning solutions, primarily in Taiwan, Japan, South Korea and the United States, with no provider having a dominant global market position. The optical coatings market is highly fragmented, with numerous small competitors to Alluxa. Competitors of Technetics Semi include Mirapro, FMI/NGK, KSM and Senior Flexonics.
In the semiconductor cleaning space, our competitors include a limited number of other providers of cleaning solutions, primarily in Taiwan, Japan, South Korea and the United States, with no provider having a dominant global market position. The optical coatings market is highly fragmented, with numerous small competitors to Alluxa. Raw Materials and Components.
Many of our products and solutions are used in highly demanding applications, often in incredibly harsh environments; for example, where extreme temperatures, extreme pressures, corrosive environments, strict tolerances, or worn equipment create challenges for product performance.
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 incredibly harsh environments; for example, where extreme temperatures, extreme pressures, corrosive environments, strict tolerances, or worn equipment create challenges for product performance.
In the first quarter of 2024, we acquired all of these equity interests and became the sole owner of Alluxa. In September 2019, Lunar Investment LLC ("Lunar"), a subsidiary of Enpro, acquired all of the equity securities of LeanTeq Co, LTD. and its affiliate LeanTeq LLC (collectively referred to as "LeanTeq").
Enpro is now the sole owner of Alluxa. In September 2019, Lunar Investment LLC ("Lunar"), a subsidiary of Enpro, acquired all of the equity securities of LeanTeq Co, LTD. and its affiliate LeanTeq LLC (collectively referred to as "LeanTeq").
Our Sealing Technologies segment, composed of three operating divisions, Garlock, Technetics and STEMCO, designs, 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. 3 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, medical, filtration and semiconductor fabrication.
Our Sealing Technologies segment, composed of three operating divisions, Garlock, Technetics and STEMCO, designs, 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.
Dispositions During the third quarter of 2022, we entered into an agreement to sell our GGB business and announced our intention to sell Garlock Pipeline Technologies, Inc. ("GPT"), which was sold in January 2023. These businesses, along with Compressor Products International ("CPI"), which was divested on December 21, 2021, comprised our entire Engineered Materials segment ("Engineered Materials").
Dispositions During the third quarter of 2022, we entered into an agreement to sell our GGB business and announced our intention to sell Garlock Pipeline Technologies, Inc. ("GPT"), which was sold in January 2023. These businesses comprised our remaining Engineered Materials segment ("Engineered Materials").
These initiatives, described in “Acquisitions” and “Dispositions” below, have increased our ability to provide solutions to the semiconductor, life sciences, and other technology industries. As of December 31, 2023, our continuing operations had 13 primary manufacturing and service facilities (approximately 50,000 square feet or larger) located in 6 countries, including the United States.
These initiatives, which include those described in “Acquisitions” and “Dispositions” below, have widened our capabilities to provide solutions to the semiconductor, life sciences, and other leading-edge industries. As of December 31, 2024, our continuing operations had 15 primary manufacturing and service facilities (approximately 50,000 square feet or larger) located in 8 countries, including the United States.
Our businesses differentiate themselves from competitors with product performance and reliability, as well as customer service, application expertise, technical support, delivery terms, breadth of product offering, reputation for quality, and the availability of product. Our leading brand names, including Garlock®, Technetics®, and STEMCO®, have been built 4 upon long-standing reputations for reliability and durability.
Our businesses are differentiated from competitors with technology, applied engineering advantage and reliability, as well as customer service, application expertise, technical support, on-time delivery, breadth of product offering, reputation for quality, and product availability. Our leading brand names, including Garlock®, Technetics®, and STEMCO®, have been built upon long-standing reputations for reliability, engineering expertise, safety and durability.
Our Sealing Technologies segment uses PTFE resins, aramid fibers, specialty elastomers, elastomeric compounds, graphite and carbon, common and exotic metals, cold-rolled steel, leather, aluminum die castings, nitrile rubber, powdered metal components, and various fibers and resins. We believe that these raw materials and components are generally available from various suppliers, though sources for certain raw materials and components are limited.
Raw Materials and Components. Our Sealing Technologies segment uses PTFE resins, aramid fibers, specialty elastomers, elastomeric compounds, graphite and carbon, common and exotic metals, cold-rolled steel, leather, aluminum die castings, nitrile rubber, powdered metal components, and various fibers and resins.
Our core value of safety includes physical safety on our factory floors and the wellness and psychological safety of colleagues. We have worked for many years to develop a world-class safety program and culture, where the intention is that each colleague goes home each day as healthy as they arrived.
We have worked for many years to develop a world-class safety program and culture, where the intention is that all of our colleagues go home each day as healthy as they arrived.
LeanTeq is included as part of our Advanced Surface Technologies segment. During the fourth quarter of 2022, Enpro acquired all of the equity interests of Lunar owned by the LeanTeq Executives and became the sole owner of LeanTeq.
During the fourth quarter of 2022, Enpro acquired all of the equity interests of Lunar owned by the LeanTeq Executives and became the sole owner of LeanTeq.
The distribution took place on May 31, 2002. Today, we are a leading-edge industrial technology company focused on critical applications across a diverse group of growing end markets such as semiconductor, photonics, industrial process, aerospace, food, biopharmaceuticals and life sciences.
The distribution took place on May 31, 2002. Today, Enpro Inc. is a leading-edge industrial technology company focused on critical applications across a diverse group of growing end markets including semiconductor, industrial process, commercial vehicle, sustainable power generation, aerospace, food and pharmaceuticals, photonics and life sciences.
As a result of this sale, we recorded a $0.4 million loss in the fourth quarter of 2022 in other expense in our consolidated statement of operations.
As a result of this sale, we recorded a $0.4 million loss in the fourth quarter of 2022 in other expense in our consolidated statement of operations. Operations We manage our business as two segments: a Sealing Technologies segment and an Advanced Surface Technologies segment.
In addition, the breadth, performance and quality of our product offerings allow us to achieve premium pricing and have made us a preferred supplier among our agents and distributors. We believe that our Sealing Segment’s record of product performance in the major markets it serves is a significant competitive advantage. Major competitors include A.W.
The breadth, performance and quality of our product offerings allow us to achieve premium pricing and have made us a preferred supplier, with specified positions in a variety of critical applications, that we can leverage through our distribution channels. We believe that our Sealing Segment’s record of product performance in the major markets it serves is a significant competitive advantage.
Backlog At December 31, 2023, we had a backlog of orders valued at $225.4 million, of which $110.4 million related to Sealing Technologies and $115.0 million related to Advanced Surface Technologies compared with $310.7 million at December 31, 2022, of which $123.9 million related to Sealing Technologies and $186.8 million related to Advanced Surface Technologies.
Backlog At December 31, 2024, we had order backlog valued at $240.6 million, of which $122.7 million is related to Sealing Technologies and $117.9 million related to Advanced Surface Technologies, compared with $225.4 million at December 31, 2023, of which $110.4 million related to Sealing Technologies and $115.0 million related to Advanced Surface Technologies.
AMI's financial results will be included as part of our Sealing Technologies segment beginning January 29, 2024. 1 Based in Costa Mesa, California, AMI serves customers in the midstream natural gas, biogas, industrial processing, cryogenics, food processing, laboratory, wastewater and aerospace markets.
AMI is included within the Sealing Technologies segment. 1 Based in Costa Mesa, California, AMI serves customers in the midstream natural gas, biogas, industrial processing, cryogenics, food processing, laboratory wastewater and aerospace markets.
For financial information with respect to our business segments, see Item 7 , “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations,” and Note 18 to our Consolidated Financial Statements.
Our reportable segments are managed separately based on differences in their respective products and solutions, and end-customers. For financial information with respect to our business segments, see Item 7 , “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Results of Operations,” and Note 18 to our Consolidated Financial Statements.
Enpro 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.
Enpro is a leader in applied engineering and designs, develops, manufactures, and markets proprietary, value-added products and solutions that generally have a specified position on a critical application, contributing key functionality with the purpose of safeguarding a variety of critical environments.
(“AMI”), for $210 million in cash, subject to customary purchase price adjustments related to the final acquisition date net working capital determination. AMI is a leading provider of highly-engineered, application-specific analyzers and sensing technologies that monitor critical parameters to maintain infrastructure integrity, enable process efficiency, enhance safety, and facilitate the clean energy transition.
AMI is a leading provider of highly-engineered, application-specific analyzers and sensing technologies that monitor critical parameters to maintain infrastructure integrity, enable process efficiency, enhance safety, and facilitate the clean energy transition.
We continue to focus on the mental wellbeing of our colleagues through company-wide resource groups that focus on mental health and inclusion, as well as through our employee assistance programs. Focus on Diversity and Respect. A diverse workforce and a commitment to diverse, innovative thinking are critical to our long-term growth and success.
We continue to focus on the mental well-being of our colleagues through company-wide resource groups that focus on mental health, as well as through our employee assistance programs and a mental health support community group. Focus on Workforce and Respect .
Safety, excellence, and respect are our enduring core values and are the standard by which we measure all our actions, including how we treat our colleagues, physically and psychologically. In 2023, we introduced a new performance management and development process, placing emphasis on both manager engagement and employee ownership.
Safety, excellence, and respect are our enduring core values and are the standard by which we measure all our actions, including how we treat our colleagues, physically and psychologically.
Sales by market for the year ended December 31, 2023 were as follows: Year Ended December 31, 2023 (in millions) Total % of Total Aerospace $ 58.3 5.5% Chemical and material processing 84.6 8.0% Food and pharmaceutical 65.4 6.2% General industrial 171.4 16.2% Commercial vehicle 198.4 18.7% Oil and gas 27.8 2.6% Power generation 68.3 6.5% Semiconductors 363.5 34.3% Other 21.6 2.0% Total third-party sales $ 1,059.3 100.0% Sealing Technologies Segment Overview .
Item 7 contains information about sales and profits for each segment, and Note 18 contains information about each segment’s sales by major end market, capital expenditures, depreciation and amortization, and assets. 2 Sales by market for the year ended December 31, 2024 were as follows: Year Ended December 31, 2024 (in millions) Total % of Total Aerospace $ 71.8 6.8% Chemical and material processing 85.1 8.1% Commercial vehicle 174.0 16.6% Food and pharmaceutical 67.7 6.4% General industrial 195.7 18.7% Oil and gas 57.7 5.5% Power generation 72.0 6.9% Semiconductors 324.7 31.0% Total third-party sales $ 1,048.7 100.0% Sealing Technologies Segment Overview .
As part of the transaction, two of the equity owners of LeanTeq, who were executives of the acquired entity (the "LeanTeq Executives"), acquired approximately a 10% ownership share of Lunar in the form of rollover equity. Founded in 2011 and headquartered in Taoyuan City, Taiwan, LeanTeq has two locations in Taiwan and one in the United States (Silicon Valley).
As part of the transaction, two of the equity owners of LeanTeq, who were executives of the acquired entity (the "LeanTeq Executives"), acquired approximately a 10% ownership share of Lunar in the form of rollover equity. LeanTeq is included as part of our Advanced Surface Technologies segment.
The segment’s products and solutions are used in demanding environments requiring performance, precision and repeatability, with a low tolerance for failure.
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.
We regularly conduct employee engagement and satisfaction surveys, including one completed in early 2023. Results from these surveys and engagement activities help senior management drive advances in our workplace and culture as we continuously focus on ways to improve our way of working. Focus on Safety and Wellbeing of our Employees.
Results from these surveys and engagement activities help senior management drive advances in our workplace and culture as we continuously focus on ways to improve our work environment. Focus on Safety and Well-being of our Employees . Our core value of safety includes physical safety on our factory floors and the wellness and psychological safety of colleagues.
Our sales from continuing operations by geographic region in 2023, 2022 and 2021 were as follows: 2023 2022 2021 (in millions) United States $ 640.3 $ 687.4 $ 445.7 Europe 149.6 139.7 132.7 Other 269.4 272.1 262.0 Total $ 1,059.3 $ 1,099.2 $ 840.4 We maintain an Internet website at www.enpro.com.
Our sales from continuing operations by geography in 2024, 2023 and 2022: 2024 2023 2022 (in millions) United States $ 601.7 $ 640.3 $ 687.4 Europe 152.4 149.6 139.7 Asia Pacific and Rest of World 294.6 269.4 272.1 Total $ 1,048.7 $ 1,059.3 $ 1,099.2 All filings can be found on our website at www.enpro.com.
Our gender and ethnic/racial diversity including senior management and through two levels down is 47% diverse, a testament to our focus on creating a diverse and inclusive environment, and one with opportunity for growth and development. The positive impact of our care, compassion, and flexible programs is demonstrated by our employee retention rates.
We prioritize the promotion of an inclusive environment with opportunities for growth and development for all. The positive impact of our care, compassion, and flexible programs is demonstrated by our employee retention rates.
Solutions are offered to a broad range of global customers, with approximately 43% of sales delivered to customers outside the United States in 2023.
Our Sealing Technologies segment sells products and solutions through distribution, original equipment manufacturers (“OEMs”), engineering and construction firms and end users worldwide. Solutions are offered to a broad range of global customers, with approximately 42% of 2024 sales delivered to customers outside the United States. Competition.
Information included on or linked to our website is not incorporated by reference into this annual report. Acquisitions On December 28, 2023, our direct, wholly owned subsidiary, EnPro Holdings, Inc. ("EnPro Holdings"), entered into an agreement to acquire Advanced Micro Instruments, Inc.
Information included on or linked to our website is not incorporated by reference into this annual report. Acquisitions On January 29, 2024, Enpro acquired all of the equity securities of Advanced Micro Instruments, Inc. ("AMI"), a privately held company, for $209.4 million, net of cash acquired.
Advanced Surface Technologies Segment Overview . Our Advanced Surface Technologies (AST) segment is composed of four operating businesses, NxEdge, Technetics Semi, LeanTeq, and Alluxa. 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.
We believe that these raw materials and components are generally available from various suppliers, though sources for certain raw materials and components are limited. Advanced Surface Technologies Segment Overview . Our Advanced Surface Technologies ("AST") segment is composed of four operating businesses, NxEdge, Technetics Semi, LeanTeq, and Alluxa.
Removed
Since the acquisition closed on January 29, 2024, the assets and operating results of AMI are not included in our 2023 consolidated financial statements. (see Note 21 to our Consolidated Financial Statements in this Form 10-K for information on this subsequent event).
Added
In connection with the acquisition of AMI, there were $3.9 million of acquisition-related costs incurred during the year ended December 31, 2024 that are included in selling, general, and administrative expense in the accompanying Consolidated Statements of Operations.
Removed
On December 17, 2021, EnPro Holdings, completed the acquisition of all issued and outstanding membership interests of TCFII NxEdge LLC (“NxEdge”). NxEdge is headquartered in Boise, Idaho and operates six main facilities located in California and Idaho. NxEdge is an advanced manufacturing, cleaning, coating, and refurbishment business serving the semiconductor industry.
Added
Acquisitions of non-controlling interests of Enpro subsidiaries In connection with our acquisition of Alluxa in October 2020, three Alluxa executives (the "Alluxa Executives") received rollover equity interests in the form of approximately 7% of the total equity interest of an entity we formed for the purpose of acquiring Alluxa (the "Alluxa Acquisition Subsidiary").
Removed
NxEdge engineers, manufactures and services leading-edge systems and components critical in the production of semiconductors, offers technically-advanced coatings and surface treatments along with refurbishment services and spare parts. NxEdge is included as part of our Advanced Surface Technologies segment. We paid $853.9 million, net of cash acquired, for the business.
Added
Pursuant to the limited liability operating agreement (the "Alluxa LLC Agreement") that was entered into with the completion of the transaction, each Alluxa Executive had the right to sell to us, and we had the right to purchase from each Alluxa Executive (collectively, the "Put and Call Rights"), one-third of the Alluxa Executive equity interests in the Alluxa Acquisition Subsidiary during each of three exercise periods in 2024, 2025 and 2026, with any amount not sold or purchased in a prior exercise period being carried forward to the subsequent exercise periods.
Removed
On October 26, 2020, a subsidiary of Enpro formed for this purpose (the "Alluxa Acquisition Subsidiary") acquired all of the equity securities of Alluxa, Inc. ("Alluxa"), a privately held, California-based company.
Added
In January 2024, we agreed with the Alluxa Executives to change the terms of the Put and Call Rights so that all outstanding equity interests could be acquired in 2024. In February of 2024, we acquired all outstanding equity interests in the Alluxa Acquisition Subsidiary for $17.9 million, which was the minimum fixed price set in the Alluxa LLC Agreement.
Removed
Alluxa is an industrial technology company that provides specialized optical filters and thin-film coatings for the most challenging applications in the industrial technology, life sciences, semiconductor, defense, and communications markets. Alluxa's products are developed through a proprietary coating process using state-of-the-art advanced equipment. Alluxa is included as part of the Advanced Surface Technologies segment.
Added
As these transactions were for the acquisition of all remaining shares of a consolidated subsidiary with no change in control, the portion of the consideration paid that was related to the redeemable non-controlling interest as of the date the options were exercised was recorded within shareholder's equity and as a financing cash flow in the Consolidated Statement of Cash Flows in the respective periods.
Removed
Alluxa works in collaboration with customers across major end markets to provide customized, complex precision coating solutions through its specialized technology platform and proprietary processes. Alluxa has long-standing customer relationships across its diversified customer base, serving customers across the Americas, Europe, and Asia. Founded in 2007, Alluxa has two locations in California and is headquartered in Santa Rosa, California.
Added
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, medical, filtration and semiconductor fabrication.
Removed
In connection with the completion of the transaction, we entered into a limited liability operating agreement with respect to the Alluxa Acquisition Subsidiary in connection with the rollover transaction, with three equity owners of Alluxa, who were also executives of Alluxa, receiving approximately 7% of the equity interests of the Alluxa Acquisition Subsidiary in return for their contribution of the rollover shares of Alluxa.
Added
STEMCO designs, engineers and manufactures innovative wheel-end and suspension products and solutions for the medium and heavy-duty commercial vehicle and trailer markets. STEMCO’s products protect our roadways and make them safer. The critical nature of the STEMCO product offering reduces the possibility of catastrophic failure on the roadways.
Removed
LeanTeq primarily provides refurbishment solutions for critical components and assemblies used in state-of-the-art semiconductor manufacturing equipment. This equipment is used to produce technologically advanced microchips for smartphones, autonomous vehicles, high-speed wireless connectivity, artificial intelligence, and other leading-edge applications.
Added
Approximately two-thirds of the business is tied to the regular replacement of wheel-end systems through distribution, with a focus on securing specified positions with large transportation fleets, largely in North America, driving a sustainable aftermarket. New product innovation, best in class product performance and customer intimacy contribute to STEMCO’s competitive advantages. Customers.
Removed
LeanTeq partners closely with original equipment manufacturers throughout the development and production lifecycle to achieve Process of Record qualifications, enabling long-term, recurring aftermarket revenue. Aftermarket refurbishment solutions have historically represented approximately 65% of LeanTeq's total sales. LeanTeq’s suite of solutions includes cleaning, coating, analytical testing, inspection and verification, kit assembly, failure analysis, and other value-added solutions.
Added
In 2024, we continued to enhance our performance management and development processes, placing emphasis on both manager engagement and employee ownership, including a number of training sessions throughout the enterprise on delivering objective, constructive feedback. We regularly conduct employee engagement and satisfaction surveys, including one completed in early 2024.
Removed
On October 12, 2021, we entered into an Equity and Asset Purchase Agreement (the “Purchase Agreement”) providing for the sale of specified equity interests and assets of our CPI business, which had been included in our Engineered Materials segment.
Added
In 2024, our major manufacturing locations took steps to align with ISO 45001: Occupational Health and Safety Management System, with three locations receiving third-party certification. This system provides a framework for identifying and assessing occupational health and safety risks and promotes a culture of continuous improvement in health and safety management.
Removed
The sale closed on December 21, 2021 and we recorded a pretax gain of $117.6 million in the fourth quarter of 2021 as a result of this transaction. On September 2, 2021, we sold certain assets and liabilities of our polymer components business unit, which was principally located in Houston, Texas and had been included in our Sealing Technologies segment.
Added
In 2025, we plan to further align with ISO 45001, while also applying an artificial intelligence ("AI") tool to analyze work tasks and identify 6 improvement ideas and solutions. This tool is focused on reducing ergonomic injuries, which is one of our top risks. These activities will drive our continual improvement efforts within safety.
Removed
As a result of the sale, we recorded a pre-tax gain of $19.5 million in other income (expense) on our Consolidated Statements of Operations. Operations We manage our business as two segments: a Sealing Technologies segment and an Advanced Surface Technologies segment. Our reportable segments are managed separately based on differences in their respective products and solutions, and end-customers.
Added
Having a workforce comprised of diverse backgrounds, perspectives, experiences and skills and that shares a commitment to innovative thinking is critical to our long-term growth and success. We utilize inclusive practices within our talent acquisition processes, always with the goal of hiring the best person for the role, wholistically, and bringing in our next set of leaders.
Removed
Item 7 contains information about sales and profits for each segment, and Note 19 contains information about each segment’s sales by major end market, capital expenditures, depreciation and amortization, and assets.
Added
We have implemented tools and structures as a part of our interview and selection process consist with our goal to select talented and creative individuals with varied perspectives and backgrounds. We focus on creating decision-making environments where the best ideas win and high-quality inputs are welcome regardless of hierarchy or level of experience.
Removed
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.
Removed
STEMCO designs, manufactures and sells commercial vehicle components and systems including: preadjusted hub systems; seals; hubcaps; mileage tracking products; bearings; locking fasteners; suspension components, such as steering knuckle king-pins and bushings, spring pins and bushings; and other polymer bushing components. Its products primarily serve the medium and heavy-duty commercial vehicle market.
Removed
STEMCO’s product brands include STEMCO®, STEMCO Kaiser®, Discover®, QWICKTIE®, GritGuard®, Guardian HP®, Voyager®, Discover®, Auto-Torq®, Pro-Torq®, Zip-Torq®, Sentinel®, Defender™, DataTrac®, and QwikKit®. Customers. Our Sealing Technologies segment sells products and solutions to industrial agents and distributors, original equipment manufacturers (“OEMs”), engineering and construction firms and end users worldwide.
Removed
Representative customers include Sanofi, Motion Industries, Applied Industrial Technologies, Electricite de France, AREVA S.A., Bayer AG, BASF SE, Chevron Corporation, General Electric Company, Georgia-Pacific Corporation, Eastman Chemical Company, Exxon Mobil Corporation, Minara Resources, Queensland Alumina, AK Steel Corporation, Volvo Corporation, Wabash Trailer, Great Dane Trailer, Mack Volvo Corporation, Daimler Corporation, PACCAR, Carlisle Interconnect Technologies, Schlumberger, and Flextronics. Competition.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

29 edited+15 added−3 removed76 unchanged
Our failure to offer to 13 purchase all outstanding notes or to purchase all validly tendered notes would be an event of default under the indenture governing our senior notes. Such an event of default may cause the acceleration of our other debt. We may incur increased interest expense as a result of our variable rate debt.
Our failure to offer to purchase all outstanding notes or to purchase all validly tendered notes would be an event of default under the indenture governing our senior notes. Such an event of default may cause the acceleration of our other debt. 13 We may incur increased interest expense as a result of our variable rate debt.
In particular, our articles of incorporation and bylaws, among other things: • require a supermajority shareholder vote to approve any business combination transaction with an owner of 5% or more of our shares unless the transaction is recommended by disinterested directors; • limit the right of shareholders to remove directors and fill vacancies; • regulate how shareholders may present proposals or nominate directors for election at shareholders’ meetings; and • authorize our board of directors to issue preferred stock in one or more series, without shareholder approval.
In particular, our articles of incorporation and bylaws, among other things: • require a supermajority shareholder vote to approve any business combination transaction with an owner of 5% or more of our shares unless the transaction is recommended by disinterested directors; • limit the right of shareholders to remove directors and fill vacancies; 14 • regulate how shareholders may present proposals or nominate directors for election at shareholders’ meetings; and • authorize our board of directors to issue preferred stock in one or more series, without shareholder approval.
Consolidation among our customers, or a decision by any one or more of our customers to no longer outsource the type of solutions provided by our Advanced Surface Technologies segment, may further concentrate our business 8 in a limited number of customers and expose us to increased risks relating to dependence on an even smaller number of customers.
Consolidation among our customers, or a decision by any one or more of our customers to no longer outsource the type of solutions provided by our Advanced Surface Technologies segment, may further concentrate our business in a limited number of customers and expose us to increased risks relating to dependence on an even smaller number of customers.
Additionally, disputes with insurance carriers over coverage may affect the timing of cash flows and, if litigation with the carrier becomes necessary, an outcome unfavorable to us may have a material adverse effect on our results of operations. Our business may be adversely affected by information technology disruptions .
Additionally, disputes with insurance carriers over coverage may affect the timing of cash flows and, if litigation with the carrier becomes necessary, an outcome unfavorable to us may have a material adverse effect on our results of operations. 9 Our business may be adversely affected by information technology disruptions .
In addition, internal controls over financial reporting of acquired companies may not be up to required U.S. public company standards. Our integration activities may place substantial demands on our management, operational 11 resources and financial and internal control systems.
In addition, internal controls over financial reporting of acquired companies may not be up to required U.S. public company standards. Our integration activities may place substantial demands on our management, operational resources and financial and internal control systems.
The impacts of climate change and legal or regulatory initiatives to address climate change could have a long-term adverse impact on our business and results of operations.
The impacts of climate change and legal or regulatory initiatives to address climate change could 10 have a long-term adverse impact on our business and results of operations.
The anti-takeover provisions of our articles of incorporation and bylaws and provisions of North Carolina law could delay or prevent a change of control or may impede the ability of the holders of our common stock to change our management.
Various provisions and laws could delay or prevent a change of control. The anti-takeover provisions of our articles of incorporation and bylaws and provisions of North Carolina law could delay or prevent a change of control or may impede the ability of the holders of our common stock to change our management.
Other factors that could significantly affect quarterly operating results include, but are not limited to: • demand for our products and services; • the timing and execution of customer contracts; • the timing of sales of our products and services; • contractual penalties for late delivery of long-lead-time products; • increases in costs due to equipment or labor issues; • changes in foreign currency exchange rates; • changes in applicable tax rates; • an impairment of goodwill or other intangibles at one of our reporting units; • unanticipated delays or problems in introducing new products; • announcements by competitors of new products, services or technological innovations; • changes in our pricing policies or the pricing policies of our competitors; • increased expenses, whether related to sales and marketing, raw materials or supplies, product development or administration; • major changes in the level of economic activity in major regions of the world in which we do business; • costs related to possible future acquisitions or divestitures of technologies or businesses; • an increase in the number or magnitude of product liability or environmental claims; • our ability to expand our operations and the amount and timing of expenditures related to expansion of our operations, particularly outside the U.S.; and • economic assumptions and market factors used to determine postretirement benefits and pension liabilities. 14 Various provisions and laws could delay or prevent a change of control.
Other factors that could significantly affect quarterly operating results include, but are not limited to: • demand for our products and services; • the timing and execution of customer contracts; • the timing of sales of our products and services; • contractual penalties for late delivery of long-lead-time products; • increases in costs or operating disruptions due to equipment or labor issues; • changes in foreign currency exchange rates; • changes in applicable tax rates; • an impairment of goodwill or other intangibles at one of our reporting units; • unanticipated delays or problems in introducing new products; • announcements by competitors of new products, services or technological innovations; • changes in our pricing policies or the pricing policies of our competitors; • increased expenses, whether related to sales and marketing, raw materials or supplies, product development or administration; • major changes in the level of economic activity in major regions of the world in which we do business; • costs related to possible future acquisitions or divestitures of technologies or businesses; • an increase in the number or magnitude of product liability or environmental claims; • our ability to expand our operations and the amount and timing of expenditures related to expansion of our operations, particularly outside the U.S.; and • economic assumptions and market factors used to determine postretirement benefits and pension liabilities.
Because we sell our products and provide services in a number of foreign countries, we are subject to risks associated with doing business internationally. In 2023, we derived approximately 40% of our net sales from sales of our products and solutions outside of the U.S.
Because we sell our products and provide services in a number of foreign countries, we are subject to risks associated with doing business internationally. In 2024, we derived approximately 43% of our net sales from sales of our products and solutions outside of the U.S.
Our sales and operating activities outside of the U.S. are, and will continue to be, subject to a number of risks, including: • unfavorable fluctuations in foreign currency exchange rates, including long-term contracts denominated in foreign currencies; • adverse changes in foreign tax, legal and regulatory requirements; • political and economic instability, including any conflict or threat of conflict that may affect Taiwan; • difficulty in protecting intellectual property; • government embargoes, tariffs and trade protection measures, such as “anti-dumping” duties applicable to classes of products, and import or export licensing requirements, as well as the imposition of trade sanctions against a class of products imported from or sold and exported to, or the loss of “normal trade relations” status with, countries in which we conduct business, could significantly increase our cost of products or otherwise reduce our sales and harm our business; • cultural norms and expectations that may sometimes be inconsistent with our Code of Conduct and our requirements about the manner in which our employees, agents and distributors conduct business; • differing labor regulations; and 12 • acts of hostility, terror or war.
Our sales and operating activities outside of the U.S. are, and will continue to be, subject to a number of risks, including: • unfavorable fluctuations in foreign currency exchange rates, including long-term contracts denominated in foreign currencies; • adverse changes in foreign tax, legal and regulatory requirements; • political and economic instability, including any conflict, threat of conflict or other external destabilizing activities that may affect Taiwan; • difficulty in protecting intellectual property; • government embargoes, tariffs and trade protection measures, such as “anti-dumping” duties applicable to classes of products, and import or export licensing requirements, as well as the imposition of trade sanctions against a class of products imported from or sold and exported to, or the loss of “normal trade relations” status with, countries in which we conduct business, could significantly increase our cost of products or otherwise reduce our sales and harm our business; • cultural norms and expectations that may sometimes be inconsistent with our Code of Conduct and our requirements about the manner in which our employees, agents and distributors conduct business; • differing labor regulations; and • acts of hostility, terror or war. 12 Any of these factors, individually or together, could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Outside the U.S., we operate 6 primary manufacturing and service facilities (approximately 50,000 square feet or larger) located in 5 countries.
Outside the U.S., we operate 8 primary manufacturing and service facilities (approximately 50,000 square feet or larger) located in 7 countries.
We have experienced cybersecurity attacks and, while we believe that we have adopted appropriate measures and procedures to mitigate potential risks to our systems from information technology-related disruptions, it is possible that a cybersecurity attack could be successful in breaching the measures and procedures designed to protect our systems.
We have experienced cybersecurity attacks and, while we believe that we have adopted appropriate measures and procedures to mitigate potential risks to our systems from information technology-related disruptions, it is possible that a cybersecurity attack could be successful in breaching the measures and procedures designed to protect our systems, including due to the development, through the application of artificial intelligence, of more advanced cybersecurity attacks.
In addition, if we or one of our divisions were charged with wrongdoing with respect to a U.S. government contract, the U.S. government could suspend us from bidding on or receiving awards of new government contracts pending the completion of legal proceedings, and if we are found liable, we could subject us to fines, penalties, repayments and treble and other damages, and/or debarment from bidding on or receiving new awards of U.S. government contracts. 10 Climate change and legal or regulatory responses thereto may have an adverse impact on our business and results of operations.
In addition, if we or one of our divisions were charged with wrongdoing with respect to a U.S. government contract, the U.S. government could suspend us from bidding on or receiving awards of new government contracts pending the completion of legal proceedings, and if we are found liable, we could subject us to fines, penalties, repayments and treble and other damages, and/or debarment from bidding on or receiving new awards of U.S. government contracts.
Changes in the replacement cycle of certain of our products and solutions, including because of improved product and service quality or improved maintenance, may affect aftermarket demand for such products and solutions.
This commoditization may be accelerated by low-cost foreign competition. Changes in the replacement cycle of certain of our products and solutions, including because of improved product and service quality or improved maintenance, may affect aftermarket demand for such products and solutions.
If we were unable to attract and retain sufficient numbers of qualified individuals or our costs to do so were to increase significantly, our operations and results of operations could be materially adversely affected. Our business with the U.S. government is subject to government contracting risks.
If we were unable to attract and retain sufficient numbers of qualified individuals or our costs to do so were to increase significantly, our operations and results of operations could be materially adversely affected.
Risks Related to Our Prior Ownership of Disposed Businesses We have exposure to some contingent liabilities relating to previously owned businesses, which could have a material adverse effect on our financial condition, results of operations, and cash flows in any fiscal period.
Customer dissatisfaction or performance problems with an acquired business, technology, service or product could also have a material adverse effect on our reputation and business. 11 Risks Related to Our Prior Ownership of Disposed Businesses We have exposure to some contingent liabilities relating to previously owned businesses, which could have a material adverse effect on our financial condition, results of operations, and cash flows in any fiscal period.
A loss of a significant number of these agents or distributors, or of a particular agent or distributor in a key market or with key customer relationships, could significantly inhibit our ability to effectively market our products, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
A loss of a significant number of these agents or distributors, or of a particular agent or distributor in a key market or with key customer relationships, could significantly inhibit our ability to effectively market our products, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. 8 Increased costs for raw materials, the termination of existing supply arrangements or other disruptions of our supply chain has had, and could continue in the future to have, a material adverse effect on our business.
Our business with government agencies, including sales to prime contractors that supply these agencies, is subject to government contracting risks. U.S. government contracts are subject to termination by the government, either for the convenience of the government or for default as a result of our failure to perform under the applicable contract.
U.S. government contracts are subject to termination by the government, either for the convenience of the government or for default as a result of our failure to perform under the applicable contract.
As a result, the segment is dependent on certain key relationships with customers in that industry, including a customer that accounted for approximately 26% of our 2023 consolidated net sales, and the loss of the segment’s relationship with that customer or other key customers or other adverse changes in the segment’s relationships with those customers could have a material adverse effect on our business, financial condition, results of operations and cash flows.
These sales were made by our Advanced Surface Technologies segment and the loss of the segment’s relationship with that customer or other key customers or other adverse changes in the segment’s relationships with those customers could have a material adverse effect on our business, financial condition, results of operations and cash flows.
The failure to do so could result in a significant competitive disadvantage that could materially adversely affect our results of operations. The loss of key personnel and an inability to attract and retain qualified employees could have a material adverse effect on our operations. We are dependent on the continued services of our leadership team.
The loss of key personnel and an inability to attract and retain qualified employees could have a material adverse effect on our operations. We are dependent on the continued services of our leadership team and other key employees. The loss of these personnel without adequate replacement could have a material adverse effect on our operations.
From time to time, there may be a shortage of skilled labor, which may make it more difficult and expensive for us to attract and retain qualified employees.
Additionally, we need qualified managers and skilled employees with technical and industry experience in many locations in order to operate our business successfully. From time to time, there may be a shortage of skilled labor, which may make it more difficult and expensive for us to attract and retain qualified employees.
Any of these factors, individually or together, could have a material adverse effect on our business, financial condition, results of operations and cash flows. For example, tapered roller bearings manufactured at our facilities in China that are imported into the United States before re-sale to customers are currently subject to “anti-dumping” duties imposed by the U.S.
For example, tapered roller bearings manufactured at our facilities in China that are imported into the United States before re-sale to customers are currently subject to “anti-dumping” duties imposed by the U.S.
The prices of some of our raw materials may continue to increase due to supply chain limitations or the imposition (or announcement of the intended imposition) of new or increased tariffs or changes in trade laws.
The prices of some of our raw materials may continue to increase due to supply chain limitations or the imposition (or announcement of the intended imposition) of new or increased tariffs or changes in trade laws, including tariffs imposed in response to the tariffs announced by the U.S. government in January 2025 with respect to goods sources in China, Mexico, and Canada.
Accordingly, product and service failures can have significant consequences and could result in significant product liability, warranty and other claims against us, regardless of whether our products and services caused the incident that is the subject of the claim, and we may have obligations to participate in the recall of products in which our products are components, if any of the components or services we supply prove to be defective. 9 We endeavor to identify and obtain in established markets insurance agreements to cover certain significant risks and liabilities, though insurance against some of the risks inherent in our operations (such as insurance covering down-stream customer product recalls) is either unavailable or available only at rates or on terms that we consider excessive.
Accordingly, product and service failures can have significant consequences and could result in significant product liability, warranty and other claims against us, regardless of whether our products and services caused the incident that is the subject of the claim, and we may have obligations to participate in the recall of products in which our products are components, if any of the components or services we supply prove to be defective.
We may not have sufficient resources to continue to make such investments or maintain our competitive position. Additionally, some of our competitors are larger than we are and have substantially greater financial resources than we do. As a result, they may be better able to withstand the effects of periodic economic downturns.
Additionally, some of our competitors are larger than we are and have substantially greater financial resources than we do. As a result, they may be better able to withstand the effects of periodic economic downturns. Certain of our products and solutions may also experience transformation from unique branded products to undifferentiated price sensitive products and solutions.
Customers for many of our products and solutions are attempting to reduce the number of vendors from which they purchase. To remain competitive, we need to invest continuously in manufacturing, marketing, customer service and support and our distribution networks. We also need to develop new products and solutions to continue to meet the needs and desires of our customers.
To remain competitive, we need to invest continuously in manufacturing, marketing, customer service and support and our distribution networks. We also need to develop new products and solutions to continue to meet the needs and desires of our customers. We may not have sufficient resources to continue to make such investments or maintain our competitive position.
A prolonged and severe downward cycle in our markets, particularly in our semiconductor markets, could have a material adverse effect on our business, financial condition, results of operations and cash flows. We face intense competition that could have a material adverse effect on our business. We encounter intense competition in almost all areas of our businesses.
A prolonged and severe downward cycle in our markets, particularly in our semiconductor markets, could have a material adverse effect on our 7 business, financial condition, results of operations and cash flows. In addition, in the past, we have experienced downturns in end-market demand due to uncertainty regarding the impact of tariffs or threatened tariffs and related trade tensions.
Due to consolidation in the semiconductor manufacturing equipment industry, a small number of companies control a significant majority of the global production of semiconductor manufacturing equipment.
Due to consolidation in the semiconductor manufacturing equipment industry, a small number of companies control a significant majority of the global production of semiconductor manufacturing equipment. As a result, the segment is dependent on certain key relationships with customers in that industry, including a customer that accounted for approximately 21% of our 2024 consolidated net sales.
Increased costs for raw materials, the termination of existing supply arrangements or other disruptions of our supply chain has had, and could continue in the future to have, a material adverse effect on our business. We have seen organic changes related to price increases of raw materials over the past several years.
We have seen organic changes related to price increases of raw materials over the past several years.
Removed
Certain of our products and solutions may also experience transformation from unique branded products to undifferentiated price sensitive products and solutions. This commoditization may be accelerated by low-cost foreign competition.
Added
The United States and other countries have imposed and may continue to impose new trade restrictions and export regulations, have levied tariffs and taxes on certain goods, and could significantly increase tariffs on a broad array of goods.
Removed
The loss of these personnel without adequate replacement could have a material adverse effect on our operations. Additionally, we need qualified managers and skilled employees with technical and industry experience in many locations in order to operate our business successfully.
Added
These actions, or the threat of these actions in the United States or other jurisdictions material to our operations and end markets, could depress demand for our products or increase the cost to manufacture our products, which may affect the competitiveness of our products relative to manufacturers not affected by such actions, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
Removed
Customer dissatisfaction or performance problems with an acquired business, technology, service or product could also have a material adverse effect on our reputation and business.
Added
We face intense competition that could have a material adverse effect on our business. We encounter intense competition in almost all areas of our businesses. Customers for many of our products and solutions are attempting to reduce the number of vendors from which they purchase.
Added
We endeavor to identify and obtain in established markets insurance agreements to cover certain significant risks and liabilities, though insurance against some of the risks inherent in our operations (such as insurance covering down-stream customer product recalls) is either unavailable or available only at rates or on terms that we consider excessive.
Added
The failure to do so could result in a significant competitive disadvantage that could materially adversely affect our results of operations. Debt incurred in the future to refinance existing indebtedness, to fund strategic acquisitions or for other needs may be at interest rates greater than the rates applicable to the Company’s current indebtedness.
Added
Our outstanding senior notes, which bear interest at 5.75% per annum, mature on October 15, 2026 and we may be required to obtain financing in order to fund the refinancing of the senior notes and other outstanding debt, as well as certain strategic acquisitions, if they arise.
Added
We are also exposed to risks from tightening credit markets, through the interest payable on any variable-rate debt, including the interest cost on future borrowings under our senior credit facilities. The credit environment could impact our ability to borrow money in the future.
Added
Additional financing or refinancing might not be available and, if available, may not be at economically favorable terms, including at interest rates in excess of the rates applicable to the Company’s outstanding indebtedness. Further, an increase in leverage could lead to deterioration in our credit ratings.
Added
A reduction in our credit ratings, regardless of the cause, could also limit our ability to obtain additional financing and/or increase our cost of obtaining financing. There is no guarantee we will be able to access the capital markets at financially economical interest rates, which could negatively affect our business and results of operations.
Added
Our business with the U.S. government is subject to government contracting risks. Our business with government agencies, including sales to prime contractors that supply these agencies, is subject to government contracting risks.
Added
Climate change and legal or regulatory responses thereto may have an adverse impact on our business and results of operations.
Added
In addition, under recently implemented governmental requirements, we will incur incremental annual costs in complying with climate-related reporting mandates. Beginning in 2026, the European Union’s Corporate Sustainability Reporting Directive (CSRD) will require that we, and other companies with operations the European Union that exceed requisite financial thresholds report extensive climate-related information for the 2025 financial year.
Added
Under laws enacted in California, we, and other companies doing business in California that exceed requisite financial thresholds, will be subject to extensive climate-related reporting on a similar time frame.
Added
The reporting requirements of CSRD and the California laws and related regulations, along with other corporate sustainability reporting standards with which we may be required to comply, will result in increased compliance costs and could result in regulatory reporting risks as each standard may have its own required disclosures.
Added
Failure to comply with laws and regulations can have serious consequences, including civil, administrative, and criminal penalties as well as a negative impact on the Company’s reputation, business, results of operations and cash flows.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

6 edited+0 added−0 removed13 unchanged
Please see Item 1A . Risk Factors in this Form 10-K for more information regarding cybersecurity-related risks that could materially affect our business strategy, results of operations, or financial condition, including under the heading “Our business may be adversely affected by information technology disruptions”.
Please see 1A. Risk Factors in this Form 10-K for more information regarding cybersecurity-related risks that could materially affect our business strategy, results of operations, or financial condition, including under the heading “Our business may be adversely affected by information technology disruptions”.
Should a cybersecurity incident occur, the CISO would reference an incident response plan and supporting playbooks to support the incident response process. We regularly test our incident response process by leveraging a combination of internal resources and trusted third-party consultants to test our response readiness and the completeness of our incident response plan, including through the use of tabletop exercises.
Should a cybersecurity incident occur, the CISO would reference an incident response plan and supporting playbooks to support the incident response process. We regularly test our incident response process by leveraging a combination of internal resources and trusted third-party consultants to test our response readiness and the completeness of our incident response plan through the use of tabletop exercises.
In addition to above, we have implemented and maintained the following cybersecurity measures as part of our efforts to assess, identify, and manage material risks from cybersecurity threats, and to protect against, detect and respond to cybersecurity incidents (as defined in Item 106(a) of Regulation S-K): • Security Operations Program - a security operations program to bolster real-time cybersecurity incident detection and response capabilities; • Security Control Framework - a security control framework that aligns with industry accepted best practices and prioritizes implementation of critical cybersecurity controls; • Incident Response Plan - a cybersecurity Incident Response Plan, designed to effectively address cybersecurity incidents while promoting cross-functional coordination across the organization; 15 • Tabletop Exercises - periodic internal and vendor-led tabletop exercises to assess the effectiveness, relevance, and completeness of the Incident Response Plan; • Assessments - annual cybersecurity assessments, which focus on identifying and remediating vulnerabilities that present the most significant organizational risks; • Training - security awareness training for all salaried personnel that highlights critical organizational risks through quarterly phishing simulation campaigns, “lunch and learns”, monthly communication updates, and regular cybersecurity learning modules; • Insurance - cybersecurity insurance policies and periodic reviews of our policies and coverage levels; and • Monitoring Legal/Regulatory Developments – review of emerging data protection, data privacy, and other relevant cybersecurity laws and regulations to determine appropriate changes to cybersecurity controls and processes.
In addition to above, we have implemented and maintained the following cybersecurity measures as part of our efforts to assess, identify, and manage material risks from cybersecurity threats, and to protect against, detect and respond to cybersecurity incidents (as defined in Item 106(a) of Regulation S-K): • Security Operations Program - a security operations program to bolster real-time cybersecurity incident detection and response capabilities; • Security Control Framework - a security control framework that aligns with industry accepted best practices and prioritizes implementation of critical cybersecurity controls; • Incident Response Plan - a cybersecurity Incident Response Plan, designed to effectively address cybersecurity incidents while promoting cross-functional coordination across the organization; • Tabletop Exercises - periodic internal and vendor-led tabletop exercises to assess the effectiveness, relevance, and completeness of the Incident Response Plan and Business Resilience Plans; • Assessments - annual cybersecurity assessments, which focus on identifying and remediating vulnerabilities that present the most significant organizational risks; • Training - security awareness training for all salaried personnel during onboarding and periodically throughout the year that highlights critical organizational risks through quarterly phishing simulation campaigns, “lunch and learns”, monthly communication updates, and relevant cybersecurity learning modules; • Insurance - cybersecurity insurance policies and periodic reviews of our policies and coverage levels; and 15 • Monitoring Legal/Regulatory Developments – review of emerging data protection, data privacy, and other relevant cybersecurity laws and regulations to determine appropriate changes to cybersecurity controls and processes.
Our CISO and CIO regularly advise the Audit Committee on cybersecurity risks and the company’s cybersecurity program, including quarterly updates and comprehensive briefings to the Audit Committee at least annually.
Our CISO and CIO regularly advise the Audit Committee on cybersecurity risks and the company’s cybersecurity program, including quarterly updates and comprehensive briefings to the Audit Committee annually.
Accordingly, the Audit Committee oversees our approach to cybersecurity risk management and plays a critical role in the governance of our cybersecurity risk management program. From a management perspective, our Chief Information Security Officer (“CISO”) and Chief Information Officer (“CIO”) lead our cybersecurity efforts.
Accordingly, the Audit Committee oversees our approach to cybersecurity risk management and plays a critical role in the governance of our cybersecurity risk management program. From a management perspective, our Chief Information Security Officer (“CISO”) and Senior Vice President and Chief Information Officer (“CIO”) lead our cybersecurity efforts.
Board and Management Oversight Our Board of Directors has delegated to its Audit and Risk Management Committee (the “Audit Committee”), which consists of all of our non-management directors, the authority and responsibility to oversee our company’s compliance program, including our cybersecurity program.
Board and Management Oversigh t Our Board of Directors has delegated to its Audit and Risk Management Committee (the “Audit Committee”), which consists of all of our non-management directors, the authority and responsibility to oversee our company’s compliance program, including our cybersecurity program.

Item 2. Properties

Properties — owned and leased real estate

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ITEM 2. PROPERTIES We are headquartered in Charlotte, North Carolina and have 13 primary manufacturing and service facilities located in 6 countries, including the U.S. The following table outlines the location, business segment and size of our primary facilities, along with whether we own or lease each facility: Location Segment Owned/ Leased Size (Square Feet) U.S.
ITEM 2. PROPERTIES We are headquartered in Charlotte, North Carolina and have 15 primary manufacturing and service facilities located in 8 countries, including the U.S. The following table outlines the location, business segment and size of our primary facilities, along with whether we own or lease each facility: Location Segment Owned/ Leased Size (Square Feet) U.S.
Palmyra, New York Sealing Technologies Owned 690,000 Longview, Texas Sealing Technologies Owned 219,000 Morgan Hill, California Advanced Surface Technologies Leased 156,000 Boise, Idaho Advanced Surface Technologies Owned 92,000 Tempe, Arizona Advanced Surface Technologies Owned 75,000 Houston, Texas Sealing Technologies Leased 66,000 Deland, Florida Sealing Technologies Owned 50,000 Foreign Mexico City, Mexico Sealing Technologies Owned 128,000 Saint Etienne, France Sealing Technologies Owned 108,000 Taoyuan City, Taiwan Advanced Surface Technologies Leased 103,000 Neuss, Germany Sealing Technologies Leased 97,000 Sherbrooke, Canada Sealing Technologies Owned 86,000 Montbrison, France Sealing Technologies Owned 79,000 Our manufacturing capabilities are flexible and allow us to tailor the manufacturing process to increase performance and value for our customers and meet particular specifications.
Palmyra, New York Sealing Technologies Owned 690,000 Longview, Texas Sealing Technologies Owned 219,000 Morgan Hill, California Advanced Surface Technologies Leased 156,000 Boise, Idaho Advanced Surface Technologies Owned 94,000 Tempe, Arizona Advanced Surface Technologies Owned 75,000 Houston, Texas Sealing Technologies Leased 66,000 Deland, Florida Sealing Technologies Owned 50,000 Foreign Mexico City, Mexico Sealing Technologies Owned 128,000 Saint Etienne, France Sealing Technologies Owned 108,000 Taoyuan City, Taiwan Advanced Surface Technologies Leased 104,000 Neuss, Germany Sealing Technologies Leased 97,000 Sherbrooke, Canada Sealing Technologies Owned 86,000 Montbrison, France Sealing Technologies Owned 79,000 Singapore, Singapore Advanced Surface Technologies Leased 70,000 Suzhou, China Sealing Technologies Leased 55,000 Our manufacturing capabilities are flexible and allow us to tailor the manufacturing process to increase performance and value for our customers and meet particular specifications.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Prior to joining Enpro, Mr. McLean was a partner at the Charlotte, North Carolina law firm of Robinson Bradshaw & Hinson P.A., which he joined in 1995, and where he chaired the firm’s corporate practice group. Prior to joining Robinson Bradshaw & Hinson, Mr.
McLean was a partner at the Charlotte, North Carolina law firm of Robinson Bradshaw & Hinson P.A., which he joined in 1995, and where he chaired the firm’s corporate practice group. Prior to joining Robinson Bradshaw & Hinson, Mr.
Bower held finance and accounting roles with the SGL Group from 1996 through 2014, and Collins & Aikman Corporation from 1989 through 1996. Mr. Bower was with Price Waterhouse LLP from July 1983 through November 1989, where he departed as an Audit Manager. Mr. Bower is both a Certified Public Accountant and a Certified Management Accountant. Meredith L.
Bower held finance and accounting roles with the SGL Group from 1996 through 2014, and Collins & Aikman Corporation from 1989 through 1996. Mr. Bower was with Price Waterhouse LLP from July 1983 through November 1989, where he departed as an Audit Manager. Mr. Bower is both a Certified Public Accountant and a Certified Management Accountant. Larisa R.
McLean is currently Executive Vice President, a position he has held since July 2017, as well as Chief Administrative Officer, a position he has held since January 2016, and General Counsel and Secretary of Enpro, positions he has held since May 2012. Mr. McLean served as Vice President, Legal and Assistant Secretary from April 2010 to May 2012.
McLean is currently Executive Vice President, a position he has held since July 2017, as well as Chief Administrative Officer, a position he has held since January 2016, and General Counsel, a position he has held since May 2012. Mr. McLean served as Vice President, Legal and Assistant Secretary from April 2010 to May 2012. Prior to joining Enpro, Mr.
ITEM 4. MINE SAFETY DISCLOSURES Not Applicable 17 EXECUTIVE OFFICERS OF THE REGISTRANT Information concerning our executive officers is set forth below: Name Age Position Eric A. Vaillancourt 60 President, Chief Executive Officer and Director J. Milton Childress II 66 Executive Vice President and Chief Financial Officer Robert S.
ITEM 4. MINE SAFETY DISCLOSURES Not Applicable 17 EXECUTIVE OFFICERS OF THE REGISTRANT Information concerning our executive officers is set forth below: Name Age Position Eric A. Vaillancourt 61 President, Chief Executive Officer and Director Joseph F. Bruderek 46 Executive Vice President and Chief Financial Officer Robert S.
Vaillancourt held positions of increasing responsibility with Bluelinx Corporation, culminating in his position as Regional Vice President North-Sales and Distribution. J. Milton Childress II is currently Executive Vice President and Chief Financial Officer and has held this position since July 2017. Mr.
Vaillancourt held positions of increasing responsibility with Bluelinx Corporation, culminating in his position as Regional Vice President North-Sales and Distribution. Joseph F. Bruderek is currently Executive Vice President and Chief Financial Officer and has held these positions since January, 2024 and April, 2024, respectively. Mr.
McLean 59 Executive Vice President, Chief Administrative Officer, General Counsel and Secretary Steven R. Bower 65 Senior Vice President, Controller and Chief Accounting Officer Meredith L. Manz 43 Senior Vice President and Chief Human Resources Officer Ronald R. Angelillo 53 Vice President, Tax __________________ Eric A.
McLean 60 Executive Vice President, Chief Administrative Officer and General Counsel Steven R. Bower 66 Senior Vice President, Controller and Chief Accounting Officer Larisa R. Joiner 51 Senior Vice President, Chief Information Officer __________________ Eric A.
Removed
Childress previously served as Senior Vice President and Chief Financial Officer since March 2015, after having previously served as Vice President, Strategic Planning and Business Development since February 2006. Mr. Childress joined the Enpro corporate staff in December 2005. He was a co-founder of and served from October 2001 through December 2005 as Managing Director of Charlotte-based McGuireWoods Capital Group.
Added
Bruderek previously served from April 2022 to June 2023 as Vice President, Commodities and Corporate Strategy of Momentive Performance Materials, Inc., a global provider of silicones and specialty materials that formerly was a division of General Electric Company. During Mr.
Removed
Prior to that, Mr. Childress was Senior Vice President, Planning and Development of United Dominion Industries, Inc. from December 1999 until May 2001, having previously served as Vice President. Mr. Childress held a number of positions with Ernst & Young LLP’s corporate finance consulting group prior to joining United Dominion in 1992. Robert S.
Added
Bruderek’s career at Momentive Performance Materials, he also served as Vice President, Corporate Development from June 2018 until April 2022, as Vice President and General Manager, Sealants from March 2014 to June 2018, as Director of Finance, Formulated Products Division from July 2012 to March 2014, as Chief Financial Officer, Americas from March 2009 to June 2012 and as Operations Finance Leader, Americas from January 2009 to March 2009.
Removed
Manz is currently Chief Human Resources Officer and Senior Vice President of Human Resources and has held that position since July 31, 2023. Prior to joining Enpro, Ms. Manz served as Managing Director with Manz Coaching & Consulting, LLC from September 2021 through July 2023 and Senior Change Management Advisor with Switch Consulting Group from August 2022 through December 2022.
Added
Mr. Bruderek joined Momentive Performance Materials in connection with General Electric’s sale of the division to Momentive Performance Materials in December 2006, after having served in various positions of increasing responsibility at General Electric from 2000. Robert S.
Removed
Prior to that, Ms. Manz served as Head, Employee Engagement NA & Global Leadership Program, AP with BASF, having previously served as Vice President, Global Human Resources from August 2018 through September 2021. Prior to that, Ms.
Added
Joiner is currently Senior Vice President and Chief Information Officer and has held these positions since January, 2025 and March, 2017, respectively. Ms. Joiner joined Enpro in 2013 and has held various positions in Information Technology, including Director, Global Project Management Office from 2014 to 2017. Prior to Enpro, Ms.
Removed
Manz served as Head of Global HR Pre-Merger Planning with Bayer 18 Crop Science, having previously served as Vice President, Global Human Resources from October 2011 through August 2018. Prior to that, Ms.
Added
Joiner led an application development team at BlueLinx Corporation, a distributor of building products. Earlier in her career, Ms. Joiner held multiple system analyst and project management roles at Georgia Pacific, LLC, a consumer products company. 18 PART II
Removed
Manz held positions of increasing responsibility with Nortel Networks, culminating in her position as HR Business Partner, Latin American Operations, Supply Chain & Manufacturing from September 2006 through November 2008. Ronald R. Angelillo joined Enpro in October 2019 and has served as Vice President, Tax, since December 2019. Immediately prior to joining the Company, Mr.
Removed
Angelillo served as Senior Director Global Tax Operations with XPO Logistics, from November 2018 through October 2019. Mr. Angelillo also served as Senior Vice President, Accounting for Income Tax Operations with Bank of America from June 2016 through September 2018 and as Director, Global Tax Reporting with Stanley Black & Decker from July 2011 through June 2016. Mr.
Removed
Angelillo also served as Tax Senior Manager with Deloitte from October 2006 through July 2011. Prior to that Mr. Angelillo held tax roles with increasing levels of responsibility from June 1996 through October 2006 with PricewaterhouseCoopers, United Technologies Corporation and Aetna Inc. 19 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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We do not consider the transfer of shares from EnPro Holdings in this context to be pursuant to a publicly announced plan or program. 20 CUMULATIVE TOTAL RETURN PERFORMANCE GRAPH Set forth below is a line graph showing the annual change in the cumulative total shareholder return for our common stock as compared to similar returns for the Russell 2000® Stock Index and the S&P 600 Capital Goods Index.
We do not consider the transfer of shares from EnPro Holdings in this context to be pursuant to a publicly announced plan or program. 19 CUMULATIVE TOTAL RETURN PERFORMANCE GRAPH Set forth below is a line graph showing the annual change in the cumulative total shareholder return for our common stock as compared to similar returns for the Russell 2000® Stock Index and the S&P 600 Capital Goods Index.
The following table sets forth all purchases made by us or on our behalf or any “affiliated purchaser,” as defined in Rule 10b-18(a)(3) under the Exchange Act, of shares of our common stock during each month in the fourth quarter of 2023.
The following table sets forth all purchases made by us or on our behalf or any “affiliated purchaser,” as defined in Rule 10b-18(a)(3) under the Exchange Act, of shares of our common stock during each month in the fourth quarter of 2024.
We have not made any repurchases under this authorization. (2) In December 2023, a total of 208 shares were transferred to a rabbi trust that we established in connection with our Deferred Compensation Plan for Non-Employee Directors, pursuant to which non-employee directors may elect to defer directors’ fees into common stock units.
We have not made any repurchases under this authorization. (2) In December 2024, a total of 346 shares were transferred to a rabbi trust that we established in connection with our Deferred Compensation Plan for Non-Employee Directors, pursuant to which non-employee directors may elect to defer directors’ fees into common stock units.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is publicly traded on the New York Stock Exchange (“NYSE”) under the symbol “NPO.” As of December 31, 2023, there were 1,982 holders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is publicly traded on the New York Stock Exchange (“NYSE”) under the symbol “NPO.” As of December 31, 2024 , there were 1,885 holders of record of our common stock.
Returns have been calculated assuming the investment of $100 in each of the securities or indices on December 31, 2018, and reinvestment of dividends into additional shares of the respective equity securities when paid. The graph plots the respective values beginning on December 31, 2018, and continuing through December 31, 2023.
Returns have been calculated assuming the investment of $100 in each of the securities or indices on December 31, 2019, and reinvestment of dividends into additional shares of the respective equity securities when paid. The graph plots the respective values beginning on December 31, 2019, and continuing through December 31, 2024.
Period Total Number of Shares (or Units) Purchased Average Price Paid per Share (or Unit) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs October 1 – October 31, 2023 — — — $50,000,000 (1) November 1 – November 30, 2023 — — — $50,000,000 (1) December 1 – December 31, 2023 208 (2) $ 151.74 (2) — $50,000,000 (1) Total 208 (2) $ 151.74 (2) — $50,000,000 (1) (1) In October of 2022, our board of directors authorized the expenditure program of up to $50.0 million for the repurchase of our outstanding common shares through October 2024.
Period Total Number of Shares (or Units) Purchased Average Price Paid per Share (or Unit) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs October 1 – October 31, 2024 — — — $50,000,000 (1) November 1 – November 30, 2024 — — — $50,000,000 (1) December 1 – December 31, 2024 346 (2) $ 173.00 (2) — $50,000,000 (1) Total 346 (2) $ 173.00 (2) — $50,000,000 (1) (1) In October of 2024, our board of directors authorized the expenditure program of up to $50.0 million for the repurchase of our outstanding common shares through October 2026.
Accordingly, the total 208 shares were valued at a weighted average price of $151.74.
Accordingly, the total 346 shares were valued at a weighted average price of $173.00.
Of these shares, 64 shares were valued at a price of $140.49 per share, the closing trading price of our common stock on December 13, 2023, and 144 of these shares were valued at a price of $56.74 per share, the closing trading price of our common stock on December 31, 2023.
Of these shares, 56 shares were valued at a price of $175.86 per share, the closing trading price of our common stock on December 18, 2024, and 290 of these shares were valued at a price of $172.45 per share, the closing trading price of our common stock on December 31, 2024.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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The Amended Credit Agreement contains affirmative and negative covenants (subject, in each case, to customary exceptions and qualifications), including covenants that limit our ability to, among other things: 30 • grant liens on our assets; • incur additional indebtedness (including guarantees and other contingent obligations); • make certain investments (including loans and advances); • merge or make other fundamental changes; • sell or otherwise dispose of property or assets; • pay dividends and other distributions and prepay certain indebtedness; • make changes in the nature of our business; • enter into transactions with our affiliates; • enter into burdensome contracts; and • modify or terminate documents related to certain indebtedness.
The Amended Credit Agreement contains affirmative and negative covenants (subject, in each case, to customary exceptions and qualifications), including covenants that limit our ability to, among other things: • grant liens on our assets; • incur additional indebtedness (including guarantees and other contingent obligations); • make certain investments (including loans and advances); • merge or make other fundamental changes; • sell or otherwise dispose of property or assets; • pay dividends and other distributions and prepay certain indebtedness; • make changes in the nature of our business; • enter into transactions with our affiliates; • enter into burdensome contracts; and • modify or terminate documents related to certain indebtedness.
A court might do so if it is found that when such Guarantor Subsidiary entered into its 36 guarantee of the Senior Notes, or in some states when payments became due under the Senior Notes, such Guarantor Subsidiary received less than reasonably equivalent value or fair consideration and either: • was insolvent or rendered insolvent by reason of such incurrence; • was left with unreasonably small or otherwise inadequate capital to conduct our business; or • believed or reasonably should have believed that it would incur debts beyond its ability to pay.
A court might do so if it is found that when such Guarantor Subsidiary entered into its guarantee of the Senior Notes, or in some states when payments became due under the Senior Notes, such Guarantor Subsidiary received less than reasonably equivalent value or fair consideration and either: • was insolvent or rendered insolvent by reason of such incurrence; • was left with unreasonably small or otherwise inadequate capital to conduct our business; or • believed or reasonably should have believed that it would incur debts beyond its ability to pay.
The measures of insolvency for purposes of these fraudulent transfer or conveyance laws will vary depending upon the law applied in any proceeding to determine whether a fraudulent transfer or conveyance has occurred, such that we cannot predict what standards a court would use to determine whether or not a Guarantor Subsidiary was solvent at the relevant time or, regardless of the standard that a court uses, that the guarantee of a Guarantor Subsidiary would not be subordinated to such Guarantor Subsidiary’s other debt.
The 35 measures of insolvency for purposes of these fraudulent transfer or conveyance laws will vary depending upon the law applied in any proceeding to determine whether a fraudulent transfer or conveyance has occurred, such that we cannot predict what standards a court would use to determine whether or not a Guarantor Subsidiary was solvent at the relevant time or, regardless of the standard that a court uses, that the guarantee of a Guarantor Subsidiary would not be subordinated to such Guarantor Subsidiary’s other debt.
The 364-Day Facility did not amortize and was repaid in full in the quarter ended September 30, 2022. The Facilities are subject to prepayment with the net cash proceeds of certain asset sales not reinvested in acquisitions within a specified period, casualty or condemnation events, and non-permitted debt issuances.
The 364-Day Facility did not amortize and was repaid in full in the quarter ended September 30, 2022. The Facilities are subject to prepayment with the net cash proceeds of 28 certain asset sales not reinvested in acquisitions within a specified period, casualty or condemnation events, and non-permitted debt issuances.
The key assumptions used for the discounted cash flow approach include projected revenues and profit margins, projected capital expenditures, changes in working capital, and the discount and tax rates. For the market approach, we select a group of peer companies that we believe are best representative of each reporting unit.
The key assumptions used for the discounted cash flow approach include projected revenues and profit margins, 31 projected capital expenditures, changes in working capital, and the discount and tax rates. For the market approach, we select a group of peer companies that we believe are best representative of each reporting unit.
Financing activities of continuing operations used $170.9 million in cash in 2023, primarily attributable to payments on our Term Loan Facilities, including the complete repayment of our Term Loan A-1 Facility, as defined and discussed below, ($144.9 million) and by dividend payments ($24.3 million).
Financing activities of continuing operations used $170.9 million in 2023 primarily attributable to payments on our Term Loan Facilities, including the complete repayment of our Term Loan A-1 Facility, as defined and discussed below ($144.9 million), and by dividend payments ($24.3 million).
Our future results may include favorable or unfavorable adjustments to our estimated tax liabilities due to closure of income tax examinations, statute expirations, new regulatory or judicial pronouncements, changes in tax laws, changes in projected levels of taxable income, future tax planning strategies, or other relevant events.
Our future results may include favorable or unfavorable 33 adjustments to our estimated tax liabilities due to closure of income tax examinations, statute expirations, new regulatory or judicial pronouncements, changes in tax laws, changes in projected levels of taxable income, future tax planning strategies, or other relevant events.
Of the restructuring and impairment costs incurred in 2023 and 2022, we incurred $4.3 million and $1.8 million, respectively, of restructuring costs related to the reorganization of sites and functions, primarily in the United States and $0.7 million and $1.2 million, respectively, of non-cash impairment charges of long-lived assets.
Of the restructuring and impairment costs incurred in 2024, 2023 and 2022, we incurred $2.8 million, $4.3 million and $1.8 million, respectively, of restructuring costs related to the reorganization of sites and functions, primarily in the United States and $3.4 million, $0.7 million, and $1.2 million, respectively, of non-cash impairment charges of long-lived assets.
We determined the carrying value of our Alluxa reporting unit to exceed its fair value and, as a result, we impaired the remaining $60.8 million of goodwill related to Alluxa. Our Consolidated Balance Sheet at December 31, 2023 reflects no goodwill related to Alluxa.
We determined the carrying value of our Alluxa reporting unit to exceed its fair value and, as a result, we impaired the remaining $60.8 million of goodwill related to Alluxa. Our Consolidated Balance Sheet at December 31, 2024 and 2023 reflects no goodwill related to Alluxa.
The Amended Credit Agreement became effective on December 17, 2021. 29 Borrowings under the 364-Day Facility bore interest at an annual rate of LIBOR plus 1.50% or base rate plus 0.50%.
The Amended Credit Agreement became effective on December 17, 2021. Borrowings under the 364-Day Facility bore interest at an annual rate of LIBOR plus 1.50% or base rate plus 0.50%.
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 in markets with favorable secular tailwinds. 22 We manage our business as two segments: a Sealing Technologies segment and an Advanced Surface Technologies segment.
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 in markets with favorable secular tailwinds. 21 We manage our business as two segments: a Sealing Technologies segment and an Advanced Surface Technologies segment.
If the recognition threshold for the tax position is met, only the portion of the tax benefit that 34 we believe is greater than 50 percent likely to be realized is recorded.
If the recognition threshold for the tax position is met, only the portion of the tax benefit that we believe is greater than 50 percent likely to be realized is recorded.
Note 1 , “Overview, Basis of Presentation, Significant Accounting Policies and Recently Issued Accounting Guidance,” to the Consolidated Financial Statements describes 32 the significant accounting policies used to prepare the Consolidated Financial Statements and recently issued accounting guidance.
Note 1 , “Overview, Basis of Presentation, Significant Accounting Policies and Recently Issued Accounting Guidance,” to the Consolidated Financial Statements describes the significant accounting policies used to prepare the Consolidated Financial Statements and recently issued accounting guidance.
We determined the statute of limitations expired on some of the uncertain tax positions in 2021 and 2022 and, accordingly, removed a portion of the liability and receivable.
We determined the statute of limitations expired on some of the uncertain tax positions in 2022 and, accordingly, removed a portion of the liability and receivable.
We will perform our next annual goodwill impairment tests as of November 1, 2024; or earlier, if adverse changes in circumstances result in our assessment that a triggering event has occurred at any of our reporting units and an interim test is required.
We will perform our next annual goodwill impairment tests as of November 1, 2025; or earlier, if adverse changes in circumstances result in our assessment that a triggering event has occurred at any of our reporting units and an interim test is required.
Environmental Although we believe past operations were in substantial compliance with the then applicable regulations, we or one or more of our subsidiaries are involved with various remediation activities or an investigation to determine responsibility for environmental conditions at 19 sites.
Environmental Although we believe past operations were in substantial compliance with the then applicable regulations, we or one or more of our subsidiaries are involved with various remediation activities or an investigation to determine responsibility for environmental conditions at 21 sites.
The adjusted income tax expense presented above is calculated using a normalized company-wide effective tax rate excluding discrete items of 25.0% for 2023, 27.0% for 2022, and 30.0% for 2021. Per share amounts were calculated by dividing by the weighted-average shares of diluted common stock outstanding during the periods.
The adjusted income tax expense presented above is calculated using a normalized company-wide effective tax rate excluding discrete items of 25.0% for 2024 and 2023, and 27.0% for 2022. Per share amounts were calculated by dividing by the weighted-average shares of diluted common stock outstanding during the periods.
Reconciliation of Income from Continuing Operations Attributable to Enpro Inc. to Total Adjusted Segment EBITDA The reconciliation of income from continuing operations attributable to Enpro Inc. to total adjusted segment EBITDA for the years ended December 31, 2023, 2022 and 2021 is included in “— Results of Operations ."
Reconciliation of Income from Continuing Operations Attributable to Enpro Inc. to Total Adjusted Segment EBITDA The reconciliation of income from continuing operations attributable to Enpro Inc. to total adjusted segment EBITDA for the years ended December 31, 2024, 2023, and 2022 is included in “— Results of Operations ."
The Guarantor Subsidiaries at December 31, 2023 comprise all of our consolidated domestic subsidiaries at that date. Our subsidiaries organized outside of the United States, (collectively, the “Non-Guarantor Subsidiaries”) do not guarantee the Senior Notes.
The Guarantor Subsidiaries at December 31, 2024 comprise all of our consolidated domestic subsidiaries at that date. Our subsidiaries organized outside of the United States, (collectively, the “Non-Guarantor Subsidiaries”) do not guarantee the Senior Notes.
The release of the related liability was recorded as part of our tax expense for the year ended December 31, 2021 and December 31, 2022 and the reversal of the related receivable was recorded as an expense in other non-operating income (expense) on our consolidated statement of operations. 3 In connection with the sale of GGB, accounted for as a discontinued operation, in the fourth quarter of 2022, we issued an intercompany note between a domestic and foreign entity that was denominated in a foreign currency.
The release of the related liability was recorded as part of our tax expense for the year ended December 31, 2022 and the reversal of the related receivable was recorded as an expense in other non-operating income (expense) on our consolidated statement of operations. 2 In connection with the sale of GGB, accounted for as a discontinued operation, in the fourth quarter of 2022, we issued an intercompany note between a domestic and foreign entity that is denominated in a foreign currency.
The release of the related liability was recorded as part of our tax expense for the year ended December 31, 2021 and the reversal of the related receivable was recorded as an expense in other non-operating income (expense) on our consolidated statement of operations. 3 In connection with the sale of GGB, accounted for as a discontinued operation, in the fourth quarter of 2022, we issued an intercompany note between a domestic and foreign entity that was denominated in a foreign currency.
The release of the related liability was recorded as part of our tax expense for the year ended December 31, 2022 and the reversal of the related receivable was recorded as an expense in other non-operating income (expense) on our consolidated statement of operations. 2 In connection with the sale of GGB, accounted for as a discontinued operation, in the fourth quarter of 2022, we issued an intercompany note between a domestic and foreign entity that is denominated in a foreign currency.
After taking into account the repayment of borrowings under the Term Loan A-1 Facility noted above, forecasted capital expenditures, and other applicable expenditures, we expect to meet all reinvestment requirements under the indenture related to the excess net cash proceeds from the sales of GGB and GPT.
After taking into account the repayment of borrowings under the Term Loan A-1 Facility noted above, forecasted capital expenditures, and other applicable expenditures, we met all reinvestment requirements under the indenture related to the excess net cash proceeds from the sales of GGB and GPT.
All annual and interim impairment tests of goodwill for the Semiconductor reporting unit performed during the 3-years ended December 31, 2023 indicated there was no impairment of goodwill for the Semiconductor reporting unit.
All annual and interim impairment tests of goodwill for the Semiconductor reporting unit performed during the 3-years ended December 31, 2024 indicated there was no impairment of goodwill for the Semiconductor reporting unit.
We determined the statute of limitations expired on some of the uncertain tax positions in 2021 and, accordingly, removed a portion of the liability and receivable.
We determined the statute of limitations expired on some of the uncertain tax positions in 2022 and, accordingly, removed a portion of the liability and receivable.
We have 13 primary manufacturing and service facilities located in 6 countries, including the United States. Enpro is a leader in applied engineering and designs, develops, manufactures, and markets proprietary, value-added products and solutions that safeguard a variety of critical environments.
We have 15 primary manufacturing and service facilities located in 8 countries, including the United States. Enpro is a leader in applied engineering and designs, develops, manufactures, and markets proprietary, value-added products and solutions that safeguard a variety of critical environments.
A guarantee of the Senior Notes by a Guarantor Subsidiary is subject to release in the following circumstances: (i) the sale, disposition, exchange or other transfer (including through merger, consolidation, amalgamation or otherwise) of the capital stock of the subsidiary made in a manner not in violation of the Indenture; (ii) the designation of the subsidiary as an “Unrestricted Subsidiary” under the Indenture; (iii) the legal defeasance or covenant defeasance of the Senior Notes in accordance with the terms of the Indenture; or (iv) the subsidiary ceasing to be our subsidiary as a result of any foreclosure of any pledge or security interest securing our Revolving Credit Facility or other exercise of remedies in respect thereof. 35 The following tables present summarized financial information for Enpro Inc.
A guarantee of the Senior Notes by a Guarantor Subsidiary is subject to release in the following circumstances: (i) the sale, disposition, exchange or other transfer (including through merger, consolidation, amalgamation or otherwise) of the capital stock of the subsidiary made in a manner not in violation of the Indenture; (ii) the designation of the subsidiary as an “Unrestricted Subsidiary” under the Indenture; (iii) the legal defeasance or covenant defeasance of the Senior Notes in accordance with the terms of the Indenture; or (iv) the subsidiary ceasing to be our subsidiary as a result of any foreclosure of any pledge or security interest securing our Revolving Credit Facility or other exercise of remedies in respect thereof.
In our Consolidated Balance Sheet, these amounts are shown net of a debt discount of $3.3 million.
In our Consolidated Balance Sheet, these amounts are shown net of a debt discount of $2.2 million.
We believe that it would be helpful to the readers of the financial statements to understand the impact of certain selected items on our reported income from continuing operations attributable to Enpro Inc. and diluted earnings per share attributable to Enpro Inc. continuing operations, including items that may recur from time to time.
Reconciliations of Non-GAAP Financial Measures to the Comparable GAAP Measures We believe that it would be helpful to the readers of the financial statements to understand the impact of certain selected items on our reported income from continuing operations attributable to Enpro Inc. and diluted earnings per share attributable to Enpro Inc. continuing operations, including items that may recur from time to time.
The fair value of our semiconductor reporting unit, included in the Advanced Surface Technologies segment, exceeded carrying value by approximately 20% as of November 1, 2023. The carrying value of the Semiconductor reporting unit as of December 31, 2023 includes $532.2 million of goodwill.
The fair value of our semiconductor reporting unit, included in the Advanced Surface Technologies segment, exceeded carrying value by approximately 17% as of November 1, 2024. The carrying value of the Semiconductor reporting unit as of December 31, 2024 includes $532.2 million of goodwill.
Additionally, undistributed earnings are estimated to be $179.5 million as of December 31, 2023. Whether through the application of the 100-percent dividends received deduction, or distribution of these previously-taxed earnings, we do not intend to distribute foreign earnings that will be subject to any significant incremental U.S. or foreign tax.
Additionally, undistributed earnings are estimated to be $239.4 million as of December 31, 2024. Whether through the application of the 100 percent dividends received deduction, or distribution of these previously-taxed earnings, we do not intend to distribute foreign earnings that will be subject to any significant incremental U.S. or foreign tax.
As a result of classifying the GGB and GPT businesses as held for sale in the third quarter of 2022, we determined Engineered Materials to be a discontinued operation. On January 30, 2023 we completed the sale of GPT.
These businesses comprised our remaining Engineered Materials segment ("Engineered Materials"). As a result of classifying the GGB and GPT businesses as held for sale in the third quarter of 2022, we determined Engineered Materials to be a discontinued operation. On January 30, 2023 we completed the sale of GPT.
Restructuring and Other Costs We incurred $5.0 million, $3.0 million and $2.5 million of restructuring and impairment costs during the years ended December 31, 2023, 2022 and 2021, respectively. Additionally, in 2023 and 2022, we incurred goodwill impairment charges of $60.8 million and $65.2 million, respectively, related to the Alluxa reporting unit. No goodwill impairment expense was incurred in 2021.
Restructuring and Other Costs We incurred $6.2 million, $5.0 million and $3.0 million of restructuring and impairment costs during the years ended December 31, 2024, 2023 and 2022, respectively. Additionally, in 2023 and 2022, we incurred goodwill impairment charges of $60.8 million and $65.2 million, respectively, related to the Alluxa reporting unit.
OECD/G20 Base Erosion and Profit Shifting Project - Pillar 2 The Organization for Economic Co-operation and Development (the “OECD”) has introduced a framework to implement a global minimum corporate tax of 15%, referred to as Pillar Two.
OECD/G20 Base Erosion and Profit Shifting Project - Pillar 2 The Organization for Economic Co-operation and Development (the “OECD”) has introduced a framework to implement a global minimum corporate tax of 15%, referred to as Pillar Two, that is effective for tax years beginning in 2024.
Income from continuing operations attributable to Enpro Inc. was $10.8 million, or $0.52 per share, in 2023 compared to income from continuing operations attributable to Enpro Inc. of $6.7 million, or $0.32 per share, in 2022. 2022 Compared to 2021 For a comparison of our results of operations for the years ended December 31, 2022 to December 31, 2021, see "Part II, Item 7.
Income from continuing operations attributable to Enpro Inc. was $72.9 million, or $3.48 per share, in 2024 compared to income from continuing operations attributable to Enpro Inc. of $10.8 million, or $0.52 per share, in 2023. 2023 Compared to 2022 For a comparison of our results of operations for the years ended December 31, 2023 to December 31, 2022, see "Part II, Item 7.
In 2021, our board declared a dividend of $0.27 per share in each quarter, in 2022, our board declared a dividend of $0.28 per share in each quarter, and in 2023 our board declared a dividend of $0.29 per share in each quarter.
In 2022, our board declared a dividend of $0.28 per share in each quarter, in 2023, our board declared a dividend of $0.29 per share in each quarter, and in 2024 our board declared a dividend of $0.30 per share in each quarter.
As a result of this purchase transaction, $35.0 million of our Redeemable Non-Controlling Interests was reclassified as a liability. We paid $41.9 million in December 2022, which was the minimum purchase price for these equity securities, of which $7.8 million eliminated our outstanding deferred compensation liability and $34.1 million reduced the liability attributable to the redeemable non-controlling interest acquisition.
We paid $41.9 million in December 2022, which was the minimum purchase price for these equity securities, of which $7.8 million eliminated our outstanding deferred compensation liability and $34.1 million reduced the liability attributable to the redeemable non-controlling interest acquisition.
Workforce reductions associated with our restructuring activities totaled 36 administrative and manufacturing positions. Please see the " Overview " section of Management's Discussion and Analysis of Financial Condition and Results of Operations and Note 3 to our consolidated financial statements for further information.
Workforce reductions associated with our restructuring activities in 2024, 2023, and 2022 totaled 77, 72, and 25 administrative and manufacturing positions, respectively. Please see the " Overview " section of Management's Discussion and Analysis of Financial Condition and Results of Operations and Note 3 to our consolidated financial statements for further information.
Second, with a 1% increase in the discount rate as of November 1, 2023 we estimate our fair value of the Semiconductor reporting unit would exceed its carrying value by approximately 9%.
Second, with a 1% increase in the discount rate as of November 1, 2024 we estimate our fair value of the Semiconductor reporting unit would exceed its carrying value by less than 2%.
Management acknowledges that there are many items that impact a company’s reported results and the adjustments reflected in these non-GAAP financial measures are not intended to present all items that may have impacted these results.
Management acknowledges that there are many items that impact a company’s reported results and the adjustments reflected in these non-GAAP financial measures are not intended to present all items that may have impacted these results. In addition, these non-GAAP measures are not necessarily comparable to similarly titled measures used by other companies.
We were in compliance with all covenants of the Amended Credit Agreement as of December 31, 2023. The borrowing availability under our Revolving Credit Facility at December 31, 2023 was $390 million after giving consideration to $10.0 million of outstanding letters of credit. The balance of our outstanding Term Loan A-2 Facility at December 31, 2023 was $299.3 million.
We were in compliance with all covenants of the Amended Credit Agreement as of December 31, 2024. The borrowing availability under our Revolving Credit Facility at December 31, 2024 was $390 million after giving consideration to $10.0 29 million of outstanding letters of credit.
To estimate the fair value of our five reporting units, we use both a discounted cash flow and a market valuation approach. The discounted cash flow approach uses cash flow projections and a discount rate to calculate the fair value of each reporting unit while the market approach relies on market multiples of similar companies.
The discounted cash flow approach uses cash flow projections and a discount rate to calculate the fair value of each reporting unit while the market approach relies on market multiples of similar companies.
Should we need additional capital, we have resources available, which are discussed in this section under the heading “Capital Resources.” As of December 31, 2023, we held $214.1 million of cash and cash equivalents in the United States and $155.7 million of cash outside of the United States.
Should we need additional capital, we have resources available, which are discussed in this section under the heading “Capital Resources.” As of December 31, 2024, we held $49.3 million of cash and cash equivalents in the United States and $187.0 million of cash outside of the United States.
Additional discussion regarding these liabilities is included earlier in this Management’s Discussion and Analysis of Financial Condition and Results of Operations in “Contingencies – Environmental" and "Contingencies – Crucible Steel Corporation a/k/a Crucible, Inc.,” and in Note 19 , "Commitments and Contingencies," to the consolidated financial statements.
Additional discussion regarding these liabilities is included earlier in this Management’s Discussion and Analysis of Financial Condition and Results of Operations in “Contingencies – Environmental" and "Contingencies – Crucible Steel Corporation a/k/a Crucible, Inc.,” and in Note 19 , "Commitments and Contingencies," to the consolidated financial statements. 30 The table does not include obligations under our pension plans, which is included in Note 14 , "Pension," to the consolidated financial statements.
Management's Discussion and Analysis of Financial Condition and Results of Operations" of the Company's Annu al Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on March 1, 2023.
Management's Discussion and Analysis of Financial Condition and Results of Operations" of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 27, 2024.
On February 15, 2024 we announced that our board of directors had increased the quarterly dividend to $0.30 per share, commencing with the dividend to be paid on March 20, 2024 to all shareholders of record as of March 6, 2024.
On February 13, 2025 we announced that our board of directors had increased the quarterly dividend to $0.31 per share, commencing with the dividend to be paid on March 19, 2025 to all shareholders of record as of March 5, 2025.
During 2023, we repatriated $72.6 million of earnings from our foreign subsidiaries, resulting in only $0.4 million of withholding taxes net of refunds to be received. 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.
During 2024, we repatriated $61.3 million of earnings from our foreign subsidiaries, resulting in only $0.3 million of withholding taxes. 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.
For additional information, see “ Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview ” as well as Notes 1 and 8 to the Consolidated Financial Statements.
For additional information regarding the acquisition of AMI, see “ Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview as well as Note 2 to the Consolidated Financial Statements.
The fair value of the three reporting units of our Sealing Technologies segment all exceeded their respective carrying values by more than 75% as of November 1, 2023.
The fair value of the three reporting units of our Sealing Technologies segment all exceeded their respective carrying values by more than 75% as of November 1, 2024. Our annual impairment test of the goodwill for the three reporting units of our Sealing Technologies segment as of November 1, 2023 and 2022 indicated no impairment.
Our annual impairment test of the goodwill for the three reporting units of our Sealing Technologies segment as of November 1, 2022 and 2021 indicated no impairment. 33 Annual assessments are conducted in the context of information that was reasonably available to us as of the date of the assessment including our best estimates of future sales volumes and prices; material and labor cost and availability; operational efficiency including the impact of projected capital asset additions, and the discount rates and tax rates.
Annual assessments are conducted in the context of information that was reasonably available to us as of the date of the assessment including our best estimates of future sales volumes and prices; material and labor cost and availability; operational efficiency including the impact of projected capital asset additions, and the discount rates and tax rates.
The testing completed as of November 1, 2023, 2022 and 2021, indicated no impairment. Interim tests may be required if an event occurs or circumstances change that would more likely than not reduce the fair value below the carrying value or change the useful life of the asset.
Interim tests may be required if an event occurs or circumstances change that would more likely than not reduce the fair value below the carrying value or change the useful life of the asset.
The increase in Segment AEBITDA was driven primarily by pricing gains ($41.2 million) and favorable sales mix ($2.2 million), partially offset by increase in labor and overhead costs ($5.3 million), decreased sales volume ($4.0 million), foreign exchange transaction related costs ($0.3 million), and higher segment selling, general, and administrative costs ($0.3 million). Advanced Surface Technologies .
The increase in Segment AEBITDA was driven primarily by pricing gains ($20.0 million), favorable sales mix ($5.7 million), decreased labor and overhead costs ($3.9 million), and lower selling, general, and administrative costs ($1.5 million), partially offset by decreased sales volume ($15.5 million). Advanced Surface Technologies .
Reconciliation of Income from Continuing Operations Attributable to Enpro Inc. to Adjusted EBITDA Years Ended December 31, 2023 2022 2021 Income from continuing operations attributable to Enpro Inc. $ 10.8 $ 6.7 $ 56.9 Net income (loss) attributable to redeemable non-controlling interests (3.9) (2.8) 0.4 Income from continuing operations 6.9 3.9 57.3 Adjustments to arrive at earnings before interest, income taxes, depreciation, amortization, and other selected items (" Adjusted EBITDA"): Interest expense, net 30.1 33.9 13.7 Income tax expense 30.8 24.4 8.7 Depreciation and amortization expense 94.5 103.1 63.8 Restructuring and impairment expense 5.0 2.9 2.5 Environmental reserve adjustments 2.9 5.1 8.3 Costs associated with previously disposed businesses 1.7 0.3 0.4 Net loss (gain) on sale of businesses — 0.6 (17.5) Acquisition and divestiture expense 1.1 1.2 15.6 Pension expense (income) (non-service cost) 1.5 (3.6) (8.4) Non-controlling interest compensation allocations 1 (0.3) (0.6) 5.3 Asbestos receivable adjustment — 2.8 — Amortization of the fair value adjustment to acquisition date inventory — 13.3 9.9 Tax indemnification asset 2 — 0.9 3.0 Goodwill impairment 60.8 65.2 — Foreign exchange losses related to the divestiture of a discontinued operation 3 2.2 3.8 — Other 0.8 0.2 (0.2) Adjusted EBITDA $ 238.0 $ 257.4 $ 162.4 1 Non-controlling interest compensation allocation represents compensation expense associated with a portion of the rollover equity from the acquisitions of LeanTeq and Alluxa that was subject to reduction for certain types of employment terminations of the LeanTeq Executives and the Alluxa Executives and is directly related to the terms of the respective acquisition.
Reconciliation of Income from Continuing Operations Attributable to Enpro Inc. to Adjusted EBITDA Years Ended December 31, (In Millions) 2024 2023 2022 Income from continuing operations attributable to Enpro Inc. $ 72.9 $ 10.8 $ 6.7 Net loss attributable to redeemable non-controlling interests — (3.9) (2.8) Income from continuing operations 72.9 6.9 3.9 Adjustments to arrive at earnings before interest, income taxes, depreciation, amortization, and other selected items (" Adjusted EBITDA"): Interest expense, net 34.5 30.1 33.9 Income tax expense 21.5 30.8 24.4 Depreciation and amortization expense 100.3 94.5 103.1 Restructuring and impairment expense 6.2 5.0 2.9 Environmental reserve adjustments 5.7 2.9 5.1 Costs associated with previously disposed businesses 1.4 1.7 0.3 Net loss on sale of businesses — — 0.6 Acquisition and divestiture expense 4.3 1.1 1.2 Pension expense (income) (non-service cost) 0.1 1.5 (3.6) Non-controlling interest compensation allocations — (0.3) (0.6) Asbestos receivable adjustment (0.6) — 2.8 Amortization of the fair value adjustment to acquisition date inventory 1.7 — 13.3 Tax indemnification asset 1 — — 0.9 Goodwill impairment — 60.8 65.2 Foreign exchange losses related to the divestiture of a discontinued operation 2 1.8 2.2 3.8 Long-term promissory note reserve 3 4.5 — — Other 0.5 0.8 0.2 Adjusted EBITDA $ 254.8 $ 238.0 $ 257.4 1 In connection with the acquisition of Aseptic in 2019, we recognized a liability for uncertain tax positions and a related indemnification asset for the portion of that liability recoverable from the seller.
This expense was recorded in selling, general, and administrative expenses on our Consolidated Statements of Operations and is directly related to the terms of the acquisitions.
This expense was recorded in selling, general, and administrative expenses on our Consolidated Statements of Operations and is directly related to the terms of the acquisitions. We acquired all of the LeanTeq non-controlling interests in the fourth quarter of 2022 and all of the Alluxa non-controlling interests in the first quarter of 2024.
In addition, these non-GAAP measures are not necessarily comparable to similarly titled measures used by other companies. 37 A reconciliation of (i) income from continuing operations attributable to Enpro Inc. to adjusted income from continuing operations attributable to Enpro Inc., including on a per share basis, and (ii) income from continuing operations attributable to Enpro Inc. to adjusted EBITDA for the years ended December 31, 2023, 2022 and 2021 are as follows: Years Ended December 31, 2023 2022 (In Millions Except Per Share Amounts) $ Average common shares outstanding, diluted Per Share $ Average common shares outstanding, diluted Per Share Income from continuing operations attributable to Enpro Inc. $ 10.8 21.0 $ 0.51 $ 6.7 20.9 $ 0.32 Net loss attributable to redeemable non-controlling interests (3.9) (2.8) Income tax expense 30.8 24.4 Income from continuing operations before income taxes 37.7 28.3 Adjustments from selling, general, and administrative: Acquisition and divestiture expenses 1.1 1.2 Non-controlling interest compensation allocation 1 (0.3) (0.7) Amortization of acquisition-related intangible assets 68.4 74.8 Adjustments from other operating expense and cost of sales: Amortization of the fair value adjustment to acquisition inventory — 13.1 Restructuring and impairment costs 5.0 2.9 Adjustments from other non-operating expense Asbestos receivable adjustment — 2.8 Environmental reserve adjustments 2.9 5.1 Costs associated with previously disposed businesses 1.7 0.3 Net loss on sale of businesses — 0.6 Pension expense (income) (non-service cost) 1.5 (3.6) Tax indemnification asset 2 — 0.9 Goodwill impairment 56.5 60.6 Foreign exchange losses related to the divestiture of a discontinued operation 3 2.2 3.8 Other adjustments 4 Other 0.8 0.2 Adjusted income from continuing operations before income taxes 177.5 190.3 Adjusted tax expense (44.4) (51.3) Income from redeemable non-controlling interest, net of taxes 3.9 2.8 Adjusted income from continuing operations attributable to Enpro Inc. $ 137.0 21.0 $ 6.54 5 $ 141.8 20.9 $ 6.79 5 38 Year Ended December 31, 2021 (In Millions Except Per Share Amounts) $ Average common shares outstanding, diluted Per Share Income from continuing operations attributable to Enpro Inc. $ 56.9 20.8 $ 2.74 Net income attributable to redeemable non-controlling interests 0.4 Income tax expense 8.7 Income from continuing operations before income taxes 66.0 Adjustments from selling, general, and administrative: Acquisition and divestiture expenses 15.6 Non-controlling interest compensation allocation 1 4.9 Amortization of acquisition-related intangible assets 42.1 Adjustments from other operating expense and cost of sales: Restructuring and impairment costs 2.5 Amortization of the fair value adjustment to acquisition inventory 9.4 Adjustments from other non-operating expense Environmental reserve adjustments 8.3 Costs associated with previously disposed businesses 0.4 Net gain on sale of businesses (17.5) Pension income (non-service cost) (8.4) Tax indemnification asset 2 3.0 Other adjustments 4 Other (0.2) Adjusted income from continuing operations before income taxes 126.1 Adjusted tax expense (37.8) Income from redeemable non-controlling interest, net of taxes (0.4) Adjusted income from continuing operations attributable to Enpro Inc. $ 87.9 20.8 4.23 5 Adjustments in the tables above only reflect amounts attributable to Enpro Inc. 1 Non-controlling interest compensation allocation represents compensation expense associated with a portion of the rollover equity from the acquisitions of LeanTeq and Alluxa that was subject to reduction for certain types of employment terminations of the LeanTeq and Alluxa sellers and is directly related to the terms of the respective acquisition.
Years Ended December 31, 2024 2023 (In Millions Except Per Share Amounts) $ Average common shares outstanding, diluted Per Share $ Average common shares outstanding, diluted Per Share Income from continuing operations attributable to Enpro Inc. $ 72.9 21.1 $ 3.45 $ 10.8 21.0 $ 0.51 Net loss attributable to redeemable non-controlling interests — (3.9) Income tax expense 21.5 30.8 Income from continuing operations before income taxes 94.4 37.7 Adjustments from selling, general, and administrative: Acquisition and divestiture expenses 4.3 1.1 Non-controlling interest compensation allocation — (0.3) Amortization of acquisition-related intangible assets 75.9 68.4 Adjustments from other operating expense and cost of sales: Amortization of the fair value adjustment to acquisition inventory 1.7 — Restructuring and impairment costs 6.2 5.0 Adjustments from other non-operating expense Asbestos receivable adjustment (0.6) — Environmental reserve adjustments 5.7 2.9 Costs associated with previously disposed businesses 1.4 1.7 Pension expense (non-service cost) 0.1 1.5 Goodwill impairment — 56.5 Foreign exchange losses related to the divestiture of a discontinued operation 2 1.8 2.2 Long-term promissory note reserve 3 4.5 — Other adjustments Other 0.5 0.8 Adjusted income from continuing operations before income taxes 195.9 177.5 Adjusted tax expense (49.0) (44.4) Income from redeemable non-controlling interest, net of taxes — 3.9 Adjusted income from continuing operations attributable to Enpro Inc. $ 146.9 21.1 $ 6.96 4 $ 137.0 21.0 $ 6.54 4 37 Year Ended December 31, 2022 (In Millions Except Per Share Amounts) $ Average common shares outstanding, diluted Per Share Income from continuing operations attributable to Enpro Inc. $ 6.7 20.9 $ 0.32 Net income attributable to redeemable non-controlling interests (2.8) Income tax expense 24.4 Income from continuing operations before income taxes 28.3 Adjustments from selling, general, and administrative: Acquisition and divestiture expenses 1.2 Non-controlling interest compensation allocation (0.7) Amortization of acquisition-related intangible assets 74.8 Adjustments from other operating expense and cost of sales: Amortization of the fair value adjustment to acquisition inventory 13.1 Restructuring and impairment costs 2.9 Adjustments from other non-operating expense Asbestos receivable adjustment 2.8 Environmental reserve adjustments 5.1 Costs associated with previously disposed businesses 0.3 Net loss on sale of businesses 0.6 Pension income (non-service cost) (3.6) Tax indemnification asset 1 0.9 Goodwill impairment 60.6 Foreign exchange losses related to the divestiture of a discontinued operation 2 3.8 Other adjustments Other 0.2 Adjusted income from continuing operations before income taxes 190.3 Adjusted tax expense (51.3) Income from redeemable non-controlling interest, net of taxes 2.8 Adjusted income from continuing operations attributable to Enpro Inc. $ 141.8 20.9 6.79 4 Adjustments in the tables above only reflect amounts attributable to Enpro Inc. 1 In connection with the acquisition of Aseptic in 2019, we recognized a liability for uncertain tax positions and a related indemnification asset for the portion of that liability recoverable from the seller.
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.
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. Segment non-operating expenses and income, corporate expenses, net interest expense, goodwill impairment, and income taxes are not included in the computation of Adjusted Segment EBITDA.
In the first quarter of 2024, we acquired all of these equity interests in the Alluxa Acquisition Subsidiary for $17.9 million and became the sole owner of Alluxa. In September 2019, Lunar Investment LLC ("Lunar"), a subsidiary of Enpro, acquired all of the equity securities of LeanTeq Co, LTD. and its affiliate LeanTeq LLC (collectively referred to as "LeanTeq").
In September 2019, Lunar Investment LLC ("Lunar"), a subsidiary of Enpro, acquired all of the equity securities of LeanTeq Co, LTD. and its affiliate LeanTeq LLC (collectively referred to as "LeanTeq").
Financing activities of continuing operations provided $368.0 million in 2022 primarily attributable to a net payment our Revolving Credit Facility, as defined below, and Term Loan Facilities ($337.0 million) and by dividend payments ($23.4 million).
Financing activities used $402.1 million in 2022, primarily attributable to a net payment our Revolving Credit Facility, as defined below, and Term Loan Facilities ($337.0 million), the acquisition of the equity interests in LeanTeq held by the LeanTeq Executives ($34.1 million) and dividend payments ($23.4 million) Capital Resources Senior Secured Credit Facility .
We cannot assure you, however, as to what standard a court would apply in making these determinations or that a court would agree with our conclusions in this regard. Reconciliations of Non-GAAP Financial Measures to the Comparable GAAP Measures Reconciliation of Adjusted Income from Continuing Operations Attributable to Enpro Inc .
We cannot assure you, however, as to what standard a court would apply in making these determinations or that a court would agree with our conclusions in this regard.
The decrease in Adjusted Segment EBITDA was driven primarily by lower volumes ($37.4 million), higher labor costs ($5.2 million), and a higher level of start-up expenses for LeanTeq's new production site in Arizona. Corporate expenses for 2023 increased $2.5 million as compared to 2022.
The $18.7 million decrease in Adjusted Segment EBITDA was driven primarily by lower volumes ($25.5 million), higher labor costs ($1.3 million), increased selling, general, and administrative costs ($2.3 million) and a higher level of start-up expenses for LeanTeq's new production site in Arizona, partially offset by favorable sales mix ($14.7 million).
First, with a 5% reduction in forecasted sales used in our valuation model, we estimate the fair value of the Semiconductor reporting unit would exceed its carrying value by approximately 12%.
We considered the sensitivity of the valuation of our Semiconductor reporting unit to adverse changes in our projected cash flows under two separate alternative scenarios. First, with a 5% reduction in forecasted sales used in our valuation model, we estimate the fair value of the Semiconductor reporting unit would exceed its carrying value by less than 4%.
(“AMI”), for $210 million in cash, subject to customary purchase price adjustments related to the final acquisition date net working capital determination. AMI is a leading provider of highly-engineered, application-specific analyzers and sensing technologies that monitor critical parameters to maintain infrastructure integrity, enable process efficiency, enhance safety, and facilitate the clean energy transition.
AMI is a leading provider of highly-engineered, application-specific analyzers and sensing technologies that monitor critical parameters to maintain infrastructure integrity, enable process efficiency, enhance safety, and facilitate the clean energy transition. AMI is included within the Sealing Technologies segment.
If the funds held outside the United States were needed for our operations in the U.S., we have several methods to repatriate such funds without significant adverse 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. 28 Because of the transition tax, GILTI, and Subpart F provisions, undistributed earnings of our foreign subsidiaries totaling $251.0 million at December 31, 2022 have 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") provided in the Tax Cuts and Jobs Act.
Because of the transition tax, GILTI, and Subpart F provisions, undistributed earnings of our foreign subsidiaries totaling $187.1 million at December 31, 2023 have 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") provided in the Tax Cuts and Jobs Act.
LeanTeq is included as part of our Advanced Surface Technologies segment. During the fourth quarter of 2022, Enpro acquired all the equity securities of Lunar owned by the LeanTeq Executives for an anticipated $42.8 million and became the sole owner of LeanTeq.
During the fourth quarter of 2022, Enpro acquired all the equity securities of Lunar owned by the LeanTeq Executives for an anticipated $42.8 million and became the sole owner of LeanTeq. As a result of this purchase transaction, $35.0 million of our Redeemable Non-Controlling Interests was reclassified as a liability.
Cash Flows Operating activities of continuing operations provided cash in the amount of $208.4 million, $106.1 million and $124.1 million in 2023, 2022 and 2021, respectively. The increase in operating cash flows in 2023 versus 2022 was primarily attributable to less income tax payments, net of refunds ($63.6 million) and improvements in net working capital.
The increase in operating cash flows in 2023 versus 2022 was primarily 27 attributable to less income tax payments, net of refunds ($63.6 million) and improvements in net working capital. Higher tax payments in 2022 were the result of high proceeds from our divestiture of discontinued operations.
As a result of this sale, we recorded a $0.4 million loss in the fourth quarter of 2022 in other expense in our consolidated statement of operations. On October 12, 2021, we entered into an Equity and Asset Purchase Agreement providing for the sale of specified equity interests and assets of CPI.
As a result of this sale, we recorded a $0.4 million loss in the fourth quarter of 2022 in other expense in our consolidated statement of operations.
As part of the transaction, two of the equity owners of LeanTeq, who were executives of the acquired entity (the "LeanTeq Executives"), acquired approximately a 10% ownership share of Lunar in the form of rollover equity. Founded in 2011 and headquartered in Taoyuan City, Taiwan, LeanTeq has two locations in Taiwan and one in the United States (Silicon Valley).
As part of the transaction, two of the equity owners of LeanTeq, who were executives of the acquired entity (the "LeanTeq Executives"), acquired approximately a 10% ownership share of Lunar in the form of rollover equity. LeanTeq is included as part of our Advanced Surface Technologies segment.
The summarized balance sheet information at December 31, 2023 was as follows: (In Millions) Parent and Guarantor Subsidiaries ASSETS Current assets $ 407.8 Non-current assets 1,403.1 Total assets $ 1,810.9 LIABILITIES AND EQUITY Current liabilities $ 144.3 Non-current liabilities 921.5 Total liabilities 1,065.8 Redeemable non-controlling interest 17.9 Shareholders’ equity 727.2 Total liabilities and equity $ 1,810.9 The table above reflects $9.6 million of current intercompany receivables due to the Guarantor Subsidiaries from the Non-Guarantor Subsidiaries and $8.6 million of current intercompany payables due to the Non-Guarantor Subsidiaries from the Guarantor Subsidiaries within current assets and liabilities held and used.
(the "Parent") and the Guarantor Subsidiaries on a combined basis after intercompany eliminations. 34 The summarized results of operations information for the year ended December 31, 2024 was as follows: (In Millions) Parent and Guarantor Subsidiaries Net sales $ 738.2 Gross profit $ 270.5 Net loss $ (8.9) The summarized balance sheet information at December 31, 2024 was as follows: (In Millions) Parent and Guarantor Subsidiaries ASSETS Current assets $ 249.4 Non-current assets 1,568.8 Total assets $ 1,818.2 LIABILITIES AND EQUITY Current liabilities $ 145.4 Non-current liabilities 915.2 Total liabilities 1,060.6 Shareholders’ equity 757.6 Total liabilities and equity $ 1,818.2 The table above reflects $14.1 million of current intercompany receivables due to the Guarantor Subsidiaries from the Non-Guarantor Subsidiaries and $8.1 million of current intercompany payables due to the Non-Guarantor Subsidiaries from the Guarantor Subsidiaries within current assets and liabilities held and used.
In many instances, AST capabilities drive products and solutions that enable the performance of our customers’ high-value processes through an entire life cycle.. Acquisitions On December 28, 2023, our direct, wholly owned subsidiary, EnPro Holdings, Inc. ("EnPro Holdings"), entered into an agreement to acquire Advanced Micro Instruments, Inc.
In many instances, AST capabilities drive products and solutions that enable the performance of our customers’ high-value processes through an entire life cycle. Acquisitions On January 29, 2024, Enpro acquired all of the equity securities of Advanced Micro Instruments, Inc. ("AMI"), a privately held company, for $209.4 million, net of cash acquired.
Our portfolio presents technology leadership, compelling profitability, high cash flow return on investment, with favorable secular tailwinds. 25 Results of Operations Years Ended December 31, 2023 2022 2021 (in millions) Sales Sealing Technologies $ 658.4 $ 624.3 $ 599.8 Advanced Surface Technologies 401.2 476.1 247.3 1,059.6 1,100.4 847.1 Intersegment sales (0.3) (1.2) (6.7) Total sales $ 1,059.3 $ 1,099.2 $ 840.4 Income from continuing operations attributable to Enpro Inc. $ 10.8 $ 6.7 $ 56.9 Adjusted Segment EBITDA Sealing Technologies $ 192.3 $ 159.1 $ 141.9 Advanced Surface Technologies 95.5 141.5 73.2 Total Adjusted Segment EBITDA $ 287.8 $ 300.6 $ 215.1 Reconciliations of Income from continuing operations attributable to Enpro Inc. to Adjusted Segment EBITDA Income from continuing operations attributable to Enpro Inc. $ 10.8 $ 6.7 $ 56.9 Plus: net income (loss) attributable to redeemable non-controlling interests (3.9) (2.8) 0.4 Income from continuing operations 6.9 3.9 57.3 Income tax expense (30.8) (24.4) (8.7) Income from continuing operations before income taxes 37.7 28.3 66.0 Acquisition and divestiture expenses 1.1 0.5 0.4 Non-controlling interest compensation allocation (0.3) (0.6) 5.3 Amortization of the fair value adjustment to acquisition date inventory — 13.3 9.9 Restructuring and impairment costs 4.0 1.9 2.4 Depreciation and amortization expense 94.3 102.8 63.5 Corporate expenses 49.5 47.0 64.9 Interest expense, net 30.1 33.9 13.7 Goodwill impairment 60.8 65.2 — Other expense (income), net 10.6 8.3 (11.0) Adjusted Segment EBITDA $ 287.8 $ 300.6 $ 215.1 We measure segment operating performance 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 and divestiture expenses, restructuring costs, impairment charges, non-controlling interest compensation, amortization of the fair value adjustment to acquisition date inventory, and depreciation and amortization.
Unless otherwise indicated, amounts presented in Management's Discussion and Analysis of Financial Condition and Results of Operations pertain to continuing operations only (see Note 20 to our Consolidated Financial Statements in this Form 10-K for information on discontinued operations and the related disposition of those operations) Global Sales Please refer to Item 1, "Business-Background" for information with respect to our sales by geographic region in 2024, 2023 and 2022. 23 Highlights Financial highlights for the years ended December 31, 2024, 2023 and 2022 are as follows: 2024 2023 2022 (in millions, except per share data) Net sales $ 1,048.7 $ 1,059.3 $ 1,099.2 Income from continuing operations attributable to Enpro Inc. $ 72.9 $ 10.8 $ 6.7 Net income attributable to Enpro Inc. $ 72.9 $ 22.2 $ 205.1 Diluted earnings per share from continuing operations attributable to Enpro Inc. $ 3.45 $ 0.51 $ 0.32 Adjusted income from continuing operations attributable to Enpro Inc. 1 $ 146.9 $ 137.0 $ 141.8 Adjusted diluted earnings per share attributable to Enpro Inc. continuing operations 1 $ 6.96 $ 6.54 $ 6.79 Adjusted Segment EBITDA 2 $ 300.8 $ 287.8 $ 304.0 Adjusted EBITDA 1 $ 254.8 $ 238.0 $ 257.4 1 Reconciliation of these non-GAAP measures to their respective GAAP measure are located in "— Reconciliation of Non-GAAP Financial Measure to the Comparable GAAP Measure " at the end of this section. 2 Reconciliation of these non-GAAP measures to their respective GAAP measure are located in " — Results of Operations ". 24 Results of Operations Years Ended December 31, 2024 2023 2022 (in millions) Sales Sealing Technologies $ 687.2 $ 658.4 $ 624.3 Advanced Surface Technologies 362.2 401.2 476.1 1,049.4 1,059.6 1,100.4 Intersegment sales (0.7) (0.3) (1.2) Total sales $ 1,048.7 $ 1,059.3 $ 1,099.2 Income from continuing operations attributable to Enpro Inc. $ 72.9 $ 10.8 $ 6.7 Adjusted Segment EBITDA Sealing Technologies $ 224.1 $ 192.3 $ 157.8 Advanced Surface Technologies 76.7 95.5 146.2 Total Adjusted Segment EBITDA $ 300.8 $ 287.8 $ 304.0 Reconciliations of Income from continuing operations attributable to Enpro Inc. to Adjusted Segment EBITDA Income from continuing operations attributable to Enpro Inc. $ 72.9 $ 10.8 $ 6.7 Plus: net loss attributable to redeemable non-controlling interests — (3.9) (2.8) Income from continuing operations 72.9 6.9 3.9 Income tax expense (21.5) (30.8) (24.4) Income from continuing operations before income taxes 94.4 37.7 28.3 Acquisition and divestiture expenses 4.3 1.1 0.5 Non-controlling interest compensation allocation — (0.3) (0.6) Amortization of the fair value adjustment to acquisition date inventory 1.7 — 13.3 Restructuring and impairment costs 5.8 4.0 1.9 Depreciation and amortization expense 100.3 94.3 102.8 Corporate expenses 46.4 51.1 48.7 Interest expense, net 34.5 30.1 33.9 Goodwill impairment — 60.8 65.2 Other expense, net 13.4 9.0 10.0 Adjusted Segment EBITDA $ 300.8 $ 287.8 $ 304.0 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 and divestiture expenses, restructuring costs, impairment charges, non-controlling interest compensation, amortization of the fair value adjustment to acquisition date inventory, and depreciation and amortization.
The indenture governing the Senior Notes requires us to apply the net cash proceeds of certain asset sales 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, to offer to repurchase the Senior Notes at a price equal to 100% of the principal amount thereof plus accrued and unpaid interest. 31 Contractual Obligations A summary of our contractual obligations and commitments at December 31, 2023, is as follows: Payments Due by Period (in millions) Total Less than 1 Year 1-3 Years 3-5 Years More than 5 Years Long-term debt $ 650.1 $ 8.1 $ 641.8 $ 0.2 $ — Interest on debt 117.3 40.3 77.0 — — Operating leases 57.1 11.6 18.5 12.3 14.7 Environmental liabilities 39.0 8.2 10.3 9.9 10.6 Total $ 863.5 $ 68.2 $ 747.6 $ 22.4 $ 25.3 The payments for long-term debt shown in the table above reflect the contractual principal amount for the Senior Notes and term loans under our Amended Credit Agreement.
Contractual Obligations A summary of our contractual obligations and commitments at December 31, 2024 is as follows: Payments Due by Period (in millions) Total Less than 1 Year 1-3 Years 3-5 Years More than 5 Years Long-term debt $ 642.3 $ 16.0 $ 626.0 $ 0.3 $ — Interest on debt 72.9 37.2 35.7 — — Operating leases 61.8 12.0 21.3 14.4 14.1 Environmental liabilities 40.7 11.3 14.2 9.9 5.3 Total $ 817.7 $ 76.5 $ 697.2 $ 24.6 $ 19.4 The payments for long-term debt shown in the table above reflect the contractual principal amount for the Senior Notes and term loans under our Amended Credit Agreement.
While it is uncertain whether the U.S. will enact legislation to adopt Pillar 2, certain countries in which we operate have adopted legislation, and other countries are in the process of introducing legislation to implement Pillar 2, which is to be effective for tax years beginning in 2024.
While it is uncertain whether the U.S. 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 has had no impact on our income tax expense for the year ended December 31, 2024 and we expect there to be a minimal impact in subsequent years.
Other income (expense), net in 2023 increased by $2.3 million as compared to 2022, primarily due to higher non-service pension related costs ($5.1 million), decreased year-over-year foreign exchange gains ($4.8 million), and increased costs related to divested businesses ($1.4 million), partially offset by an asbestos receivable write-down in the prior-year period ($2.8 27 million), decreased foreign exchange losses related to an intercompany note denominated in Euros ($1.6 million), lower environmental-related costs ($2.2 million), prior-year warranty costs related to a disposed product line ($0.7 million), a loss on the sale of a business in the prior year-period ($0.6 million), and a decrease in charges related to the reversal of a receivable related to an amount due from the sellers of Aseptic for uncertain tax positions that have passed the statute of limitations ($0.9 million).
Other expense, net in 2024 increased by $4.4 million as compared to 2023, primarily due to the increase in the valuation reserve on a long-term promissory note received in partial consideration for the sale of a non-strategic business in 2020 ($4.5 million) and increased environmental related costs ($2.8 million) partially offset by lower non-service pension related costs ($1.4 million), income realized from the settlement of a legacy claim ($0.6 million), decreased foreign exchange losses related to an intercompany note denominated in Euros ($0.4 million) and decreased costs related to divested businesses ($0.3 million). 26 Income tax expense from continuing operations was $21.5 million in 2024 and $30.8 million in 2023.
Sales of $658.4 million in 2023 reflect a 5.5% increase compared to $624.3 million in 2022. Excluding favorable foreign exchange translation ($3.1 million) on our 2023 sales and the sales from businesses that have since been divested ($4.1 million) from 2022 results, sales were up 5.7% or $35.1 million.
Sales of $687.2 million in 2024 reflect a 4.4% increase compared to $658.4 million in 2023. Excluding the unfavorable foreign exchange translation ($1.5 million) and the sales from a recent acquisition ($32.1 million), sales were down 0.3% or $1.8 million.
AMI offers a portfolio of oxygen, hydrogen sulfide and moisture analyzers and proprietary sensing capabilities that detect contaminants in a variety of processes, including natural gas and biogas streams, which enable operators to avoid flaring and, thereby, reduce CO 2 emissions. On December 17, 2021, EnPro Holdings acquired all issued and outstanding membership interests of TCFII NxEdge LLC (“NxEdge”).
Based in Costa Mesa, California, AMI serves customers in the midstream natural gas, biogas, industrial processing, cryogenics, food processing, laboratory wastewater and aerospace markets, The company offers a portfolio of oxygen, hydrogen, sulfide and moisture analyzers and proprietary sensing capabilities that detect contaminants in a variety of processes, including natural gas and biogas streams, which enable operators to avoid flaring and, thereby, reduce CO2 emissions.
The following table summarizes the impact of acquisitions, divestitures, and foreign currency on sales by segment: Sales Percent Change 2023 vs. 2022 increase/(decrease) Divestiture Foreign Currency Organic Total Enpro Inc.
The following table summarizes the impact of acquisitions and foreign currency on sales by segment: Sales Percent Change 2024 vs. 2023 increase/(decrease) Acquisition Foreign Currency Organic Total Enpro Inc. 3.0 % (0.1) % (3.9) % (1.0) % Sealing Technologies 4.9 % (0.2) % (0.3) % 4.4 % Advanced Surface Technologies — % — % (9.7) % (9.7) % Following is a discussion of operating results for each segment during 2024 compared to 2023: Sealing Technologies .
Intangible assets with indefinite lives, which consist primarily of trade names, are subject to at least annual impairment testing, which was conducted as of November 1 in 2023, 2022 and 2021. The impairment testing compares the fair value of the intangible asset with its carrying amount using the relief from royalty method.
The impairment testing for the indefinite lived trade names compares the fair value of the intangible asset with its carrying amount using the relief from royalty method. Key assumptions used in the relief from royalty method are projected revenues and royalty, discount, tax, and terminal growth rates.
Segment AEBITDA margin increased from 25.5% in 2022 to 29.2% in 2023. Excluding the favorable foreign exchange translation ($1.6 million) from 2023 results and the Segment AEBITDA earned from businesses that have since been divested ($1.9 million) from 2022 results, Adjusted Segment EBITDA increased 21.3%, or $33.5 million.
Segment AEBITDA margin increased from 29.2% in 2023 to 32.6% in 2024. Excluding the unfavorable foreign exchange translation ($0.7 million) and the contribution from a business recently acquired of ($16.9 million), Adjusted Segment EBITDA increased 8.1%, or $15.6 million.
Expenses not directly attributable to the segments, corporate expenses, net interest expense, gains and losses related to the sale of assets, 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.
The accounting policies of the reportable segments are the same as those for Enpro. In the first quarter of 2024, we refined our definition of Adjusted Segment EBITDA and corporate expenses to include certain other income or expenses previously reported in other expense, net. These items were primarily comprised of bank fees and certain foreign exchange transaction gains and losses.
Discontinued Operations During the third quarter of 2022, we entered into an agreement to sell our GGB business and announced our intention to sell Garlock Pipeline Technologies, Inc. ("GPT"). These businesses, along with Compressor Products International ("CPI"), which was divested on December 21, 2021, comprised our entire Engineered Materials segment ("Engineered Materials").
As a result of the financial performance of LeanTeq through November 2023, we made a final $0.6 million payment to the LeanTeq Executives in 2024. Discontinued Operations During the third quarter of 2022, we entered into an agreement to sell our GGB business and announced our intention to sell Garlock Pipeline Technologies, Inc. ("GPT").
The increase was driven primarily by an increase in share-price-based long-term incentive compensation expenses ($5.5 million) as a result of our strong share price performance during 2023, partially offset by lower annual incentive compensation expense ($2.3 million) and decreased consulting related professional fees ($0.7 million).
Corporate expenses for 2024 decreased $4.7 million as compared to 2023. The decrease was driven primarily by a decrease in share-price-based long-term incentive compensation expenses ($4.9 million).

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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We strive to pass along such commodity price increases to customers to avoid profit margin erosion and utilize lean initiatives to further mitigate the impact of commodity raw material price fluctuations as we achieve improved efficiencies. We do not hedge commodity risk with any market risk sensitive instruments. 41
We strive to pass along such commodity price increases to customers to avoid profit margin erosion and utilize lean initiatives to further mitigate the impact of commodity raw material price fluctuations as we achieve improved efficiencies. We do not hedge commodity risk with any market risk sensitive instruments. 40
In December 2022, we entered into a forward contract to hedge a 95 million Euro exposure of an intercompany note agreement related to the proceeds from the GGB sale allocated to foreign subsidiaries. We expect this position to be resolved in 2024.
In December 2022, we entered into a forward contract to hedge a 95 million Euro exposure of an intercompany note agreement related to the proceeds from the GGB sale allocated to foreign subsidiaries. We expect this position to be resolved in 2025.
The notional amount of foreign exchange contracts hedging foreign currency transactions was $110.5 million and $103.3 million as of December 31, 2023 and 2022, respectively. All foreign exchange contracts outstanding at December 31, 2023 expired in January 2024. Commodity Risk We source a wide variety of materials and components from a network of global suppliers.
The notional amount of foreign exchange contracts hedging foreign currency transactions was $103.7 million and $110.5 million as of December 31, 2024 and 2023, respectively. All foreign exchange contracts outstanding at December 31, 2024 expired in January 2025. Commodity Risk We source a wide variety of materials and components from a network of global suppliers.
The table below provides information about the maturities of our fixed rate debt obligations as of December 31, 2023.
The table below provides information about the maturities of our fixed rate debt obligations as of December 31, 2024.
The table represents principal cash flows (in millions) and related weighted average interest rates by the contractual maturity dates. 2024 2025 2026 2027 2028 Total Fair Value Fixed rate debt $ 0.2 $ 0.2 $ 350.2 $ 0.2 $ 0.1 $ 350.9 $ 350.6 Average interest rate 4.1 % 4.1 % 5.8 % 4.9 % 4.8 % 5.7 % The table above excludes unamortized debt discount of $2.1 million at December 31, 2023.
The table represents principal cash flows (in millions) and related weighted average interest rates by the contractual maturity dates. 2025 2026 2027 2028 Thereafter Total Fair Value Fixed rate debt $ 0.3 $ 350.2 $ 0.2 $ 0.2 $ — $ 350.9 $ 350.3 Average interest rate 4.2 % 5.8 % 4.6 % 4.5 % N/A 5.8 % The table above excludes unamortized debt discount of $1.4 million at December 31, 2024.
Additionally, we had $299.3 million outstanding on the Amended Credit Agreement as of December 31, 2023, which has a variable interest rate that adjusts at least quarterly. A change in interest rates on variable-rate debt affects the interest expense incurred and cash flows, but does not affect the net balance sheet liability of the financial instrument.
Additionally, we had $291.4 million outstanding on the Amended Credit Agreement as of December 31, 2024, which has a variable interest rate that adjusts at least quarterly. A change in interest rates on variable-rate debt affects the interest expense incurred and cash flows, but does not affect the net balance sheet liability of the financial instrument.

Other NPO 10-K year-over-year comparisons