I'm Steve Ferazani, an analyst at Sidoti. As the room looks like it's almost filled in at this point, I do want to remind everyone before we start the next chat, if you do have questions, you press that Q and A button at the bottom of your screen, type them in, and throughout the conversation, we'll get to as many questions as we can over the next 30 minutes, and I know we're nearing the end of the conference, but we saved one of our favorites for last, Enpro, the ticker is NPO, and we're so happy to be joined by Chief Financial Officer Joe Bruderek, Director of Accounting Mike Barron, and Investor Relations James Gentile. Thank you all for being here. Why don't we get before we get into some of the Q and A, Joe? Why don't we let you give a brief overview for folks who might be a little bit newer to Enpro? Sure, happy to do that. Thank you, Steve, and hello everyone. Thanks for being with us today. I'll talk a little bit about Enpro's recent history, kind of where we are today and where we're going as a company. So we just went through a pretty substantial portfolio transformation over the last three to five years or so. We divested about $1 billion worth of businesses that just didn't quite fit our criteria, a little bit more asset intense, a little more cyclicality, lower margin, lower cash generative. Fantastic businesses just didn't fit with where we were going as a company. And through that period, took those proceeds and invested them back to mostly create what is today our Advanced Surface Technologies business, which was around a foundation of Technetics Semi, which was carved out of Garlock and some of our other businesses, and really built up our AST segment, which again has a decent semiconductor exposure. So that transformation was quite successful. We're very happy with where we are. Our EBITDA margins have increased about 1,000 basis points through that process, our growth profile significantly more enhanced, more cash generative businesses, much better cash return on invested capital. So we're very happy with the portfolio we have today, which today we sit with our sealing segment, which about 60%, two-thirds of our Enpro consists of Stemco, Garlock, and Technetics businesses, and really centered around a thesis here of companies that create application that have critical application engineering component with a strong specification position. They have a small percentage of overall customer spend, but absolutely critical to the end customer solution, provide a very critical safety function that has a high consequence of failure, and a high percentage of aftermarket or recurring revenue. The business is quite well operationally. We think we're pretty best in class when it comes to the operational nature of our sealing business. We're sustainably now around 30% EBITDA margins and very happy with the overall profile of sealing, the success of our margin expansion efforts, and sort of where we sit with that portfolio today. I mentioned the other segment is Advanced Surface Technologies, which predominantly about 90% is a semiconductor facing business. That business we created recently, like I mentioned, through the portfolio transformation work, and we're really focused there on in-chamber tools for making semiconductor integrated circuits. We now have a portfolio across the entire life cycle of some of those critical in-chamber tools where we can design, prototype, manufacture, engineer the heart and lungs really of the in-chamber environment, and then have an aftermarket cycle around replacement, cleaning, coating, refurbishment, so we can provide a set of solutions across the entire life cycle of those critical in-chamber tools. That's our Technetics Semi business. That's NxEdge, Alluxa, and LeanTeq. Alluxa is more of the critical optical filter component of that. At the same time, where we sit today, 2024 has been a little bit of a tepid environment overall demand-wise, right? More than 50% of our markets are in some sort of down cycle, whether it be the capital equipment spending side of Semi or our commercial vehicle OEM side of our business in Stemco. But we've still performed quite well. We've got 30% EBITDA margins in sealing. And even at the bottom of the semiconductor equipment cycle, our AST business is still delivering 20% EBITDA margins, and we feel very good about that. And that business still is not optimized. We've been really successful from an operational excellence standpoint and margin expansion standpoint in sealing. And now we're focusing on applying some of those same principles to our AST business. And even though it's not fully optimized, still delivering 20% EBITDA margins. So a little bit about where we're going now. We talked in our last earnings call about our focus around our long-term sustainable growth algorithm. We believe our sealing business has a mid-single-digit plus ability to grow over time with the new portfolio and our AST business in the upper single-digit range. And so we believe Enpro now has the portfolio to grow in the blended mid-single-digit range organically, and then with a strong, very strong balance sheet and a good liquidity position and quite a bit of flexibility to continue to invest in strong inorganic opportunities to supplement that growth algorithm and sustainably grow in the mid- to upper-single-digit range. That's a little bit of market, 2%-3% market. That's a couple of points of strategic pricing every year, and then all the growth programs that we're investing heavily in behind that, and then supplementing with our inorganic M&A pipeline. So we feel really good about where we are, coming off a very strong performance in 2024, even though our markets are some tepid and in some cases quite depressed. So feel really good about our growth algorithm as we pivot to the future. And with that, Steve, if there's any questions, happy to take them on, James and I and Mike. Thanks so much for that overview, Joe. I do want to ask about, I mean, to me, the most impressive piece this year, and you touched on it, if we break out general industrials to its end markets, commercial truck really is your biggest single end market when we think about sealing, as I view it. That market's been soft, yet you're generating record margins in that segment when your biggest end market is soft. And really, over three years, when we think about what that margin has done on not huge top-line growth, can you walk us through how you were able to do that over that three-year process? Because the numbers don't, that revenue growth does not support that type of margin improvement, right? It just. Yeah, it's a great question, Steve. And we're very pleased with the work that our team has done there. And it really isn't just one thing. It's a number of different things that we kind of put into the buckets of operational excellence or continuous improvement. Our team has done a fantastic job in value and strategic pricing. So capturing our share of the profit pools, according to the strategic thesis I talked about, all the what makes up the DNA of our business is now having an ability to command a much stronger price point and providing that critical component to our customer solution and being a small percentage of their spend, but absolutely critical to their end solution, right, from a safety and protection standpoint. And I think in the past, we just maybe underestimated how powerful some of those positions were. And through our portfolio transformation, we're able to really kind of uncover that and build up a strong pricing component to what we've done. So the value pricing piece is one. I think we've done a really nice job of kind of 80/20 portfolio optimization, of kind of cleaving off a few pieces when you look at our underlying portfolio, whether it be product, customer, or a combination of the two, and really focusing on the businesses where we have a really strong position. Were you willing, when I think about that, when I talk to folks who are very heavily involved with 80/20, they talk about trying to price something so it generates a margin they want, and if they can't get there, they're willing to lose that business. Is that how you went into it thinking? Yeah, that's the mechanism for how to execute it. But the reality is it starts with all the strategic work leading up to that to identify where those are, where those positions are, and then you figure out what the best execution mechanism. But fundamentally, yes. It's what is our right margin in that place, and what is our floor margin going to be that either that's the point at which it makes sense to kind of continue to remain in that position. And the mechanism for testing that may be through pricing. And then you just look at the rest of your question, just operational excellence. Our team is very good at cost control and managing to dynamic volume environments and taking advantage of down cycles or other positions to kind of right size and get more efficient and optimize, and then build from there in a sequence of continuous improvement kind of steps, so that's what we've been. That's been the biggest part of the success story there in sealing and why we feel confident that we have a sustainable market position around those 30% EBITDA margins, plus or minus 200-250 basis points on either side based on volume and mix, etc. You mentioned our commercial vehicle being in a down market. That's really the OEM piece. If you look at our overall commercial vehicle exposure in the 18%-20% range, about two-thirds of our business historically has been aftermarket, and a third has been the OEM piece. And the OEM piece, that's down substantially in the 25%-30% range. And our team has done a really nice job kind of mixing up and moving more and more business and more capacity to the aftermarket. Now, it's critical that we provide a function in our key partners on the OEM because it kind of seeds the future there for the aftermarket component. But the team has done a really nice job of maximizing the ability to mix up and drive more aftermarket business. And that is leading to a little bit of the favorable mix component that we're seeing right now. That's why we feel, hey, we may be a little bit above the 30% range in Sealing right now, but we do have a little bit of a favorable mix component there, and we can feel comfortable that we're sustainably in the 30% range. Can I get your take on, before we move over to AST, get your take on what end markets are looking like now for you and any change? It's sort of similar to what we've talked about the last couple of quarters. I mean, the semiconductor market clearly is the semiconductor capital equipment investment side of things tied to WFE is still in a prolonged downturn. I think there was some optimism going into this year broadly that we'd see a second-half recovery that hasn't come to fruition in a marked way. We've seen the bottom occurring earlier this year and just kind of very choppy demand since then kind of bouncing around at a depressed level. Slight sequential improvement, but no major step forward. The indication is that those conditions are going to remain for some time, whether it lasts through the middle of next year and next year. I think there's really a lot of uncertainty in that. But current conditions are probably going to persist for some period of time. Like the commercial vehicle side I just talked about, there is some improvement in the food and pharma side of things after going through a massive destocking cycle post-COVID and the correction from a major supply chain investment. That seems to have stabilized, and now we're seeing some decent growth there. The rest of our markets are either general industrial that are going to be in a low single digit percent growth kind of range or other areas where we have good positions with smaller positions, whether they be aerospace, nuclear, etc., where we just see good overall market conditions, so similar to what we've seen. Really, that's helped a lot, right? Because besides the fact that you were able to shift to aftermarket, you also found, and you had pointed this out, nuclear, aerospace, which are high-margin, we know for you, helping to offset some of the weakness in that core commercial truck. That's right. Is that correct? Okay. That's right. Just the general industrial side, North America demand feels firm, and we did see kind of a pickup in Europe that we announced in the third quarter when we reported last month, but Asia remains soft. Okay, so as we switch over to AST, and you talked about we're probably off the bottom, but we're kind of bouncing around here. We're not getting that dramatic recovery yet. There's obviously a lot more optimism around that. We can look at your stock price and other stock prices and recognize there's some optimism out there. Generally, in a recovery, because some of these businesses, NxEdge and LeanTeq, are a little bit newer to you, we haven't seen, we haven't watched those businesses go through a recovery. Will it lag the market? Will it be in step with the market? How do you think about the recovery in those businesses timing-wise versus the more capital equipment, the Technetics, more capital equipment type? Yeah. And just to clarify a little bit, Steve, when I was commenting before on kind of our exposure to the capital equipment side, that's really specifically our NxEdge and Technetics Semi position where we're producing and manufacturing and designing in-chamber tools in the supply cycle that goes into new capital equipment install. Our LeanTeq business is more of an aftermarket service where we have a very strong position in precision cleaning for advanced node tools. And that business, because of the movement to more and more advanced nodes and our strong position there and really good formulation capabilities from a cleaning perspective, it's grown through the entire cycle. So as the install base has moved to more advanced nodes, even though it is a small percentage of the overall market, our penetration has increased more and more there. And so even though the equipment side has gone through a pretty staunch downturn, the cleaning side has grown through that entire cycle as we've continued to win in those more advanced node positions. So I just wanted to clarify that a little bit because we all have all exposure to the equipment side. And as you rightly said, right, these businesses are somewhat new into the Enpro portfolio. And this is the first major down cycle that we've experienced with this newer portfolio. And like I said before, we're quite pleased that we've been able to still demonstrate 20% EBITDA margins at the bottom of the cycle. Now, we also haven't experienced an up cycle yet from start to finish with these in our portfolio. But the previous history has shown that they track fairly well to general capital equipment spending. Now, it could change depending on our OEM customers and their specific position in the market and how they're winning with the fabs. But the history in the past is that we've tended to track pretty well to the overall cycle. James, I don't know if you have any additional comment to add to that. I mean, obviously, this has been prolonged in decades. The semi capital equipment market has demonstrated brief cyclicality with big movements upward, but there's no question that the market remains in cyclical growth mode. All through this down cycle, we've probably held a bit more fixed costs given expectations that have changed and moved to the right a little bit, which we made clear throughout this entire year, but also invest in opportunities for incremental growth, whether that be our facility in the Southwest, which is a phased opportunity to expand our cleaning capabilities where we're strongest in the advanced nodes, and also new platforms that could kind of use more than one of our capabilities that we offer in the portfolio. So, over the long term, we've been positioning the segment for that high single-digit growth that Joe mentioned, but also continuing to invest through this downturn to make sure that we're very well positioned when the market recovers. Yeah. And you mentioned, James, the addition of the Southwest, the Arizona facility. And the question I get from investors, if it's not question one, it's question 1B, and I'm sure you do as well, is we keep seeing the data that says, and we know this, and a lot of the investments, a lot of the payments by the Biden administration were finalized as he's going out the door to a lot of these chip manufacturers. Data saying tripling of U.S. fab capacity over a decade. You guys bought NxEdge, which already had significant U.S. exposure. You've now added the Arizona facility. How well positioned and what can that mean to Enpro if we see all this fab capacity coming to the U.S. over seven, eight, nine years? Yeah. I I mean, we feel good about how we're positioned there, right? We've made our, as James mentioned, our first position investment in Arizona. It's only phase one of the building, which LeanTeq is the lead there in our precision cleaning capability. We've had a very successful outfit of that. We're in qualification right now with our leading OEM partner. We talked on our last earnings call that we're actually a little ahead of that process. We've pulled some of the qualification work that was originally set in 2025 into 2024. But there's phase two and phase three of that investment that's still to come. Like you said, we have precision cleaning now in Arizona. We previously invested in Milpitas, California to create the exact Copy Exact record that we had in Taiwan and replicated that successfully into the US already. And we've demonstrated that capability into California. Now we're just repeating the same thing in Arizona, so that gives us pretty much our entire footprint now in the U.S. So for AST, so we have the ability to pretty much operate through that entire life cycle that I talked about in chamber tools at the beginning of my opener. We have that capability in the U.S., and we're one of the only few who have that footprint in the U.S. and kind of provide the vertically integrated supply chain, chain of command, chain of custody capabilities with our key partners, and we believe that uniquely positions us for the incoming capacity install in the U.S. Can you touch on that a little bit more? Because it's obviously a very niche sector. Maybe explain a little bit about the qualification process, which I'm sure a lot of people aren't aware of because you've been doing this for similar customers, why you'd have to go through it. Again, how complex it is, how sticky relationships are, and what the competitive landscape is like? Yeah. And the leading fabs, the foundries and IDMs, they have a pretty well-entrenched supply base that have been their key trusted partners for a long period of time over multiple cycles, right? They've moved from more legacy node production and then get more advanced over time. And they typically rely on those key supplying partners that have demonstrated the ability to meet those critical environment requirements. And to your point, right, we've had that position from a cleaning perspective in Taiwan for a long period of time with our key partners there. And we've successfully demonstrated the ability to provide cleaning services to the strict requirements that exist on leading-edge node manufacturing inside the chamber in Taiwan. We've successfully demonstrated that capability once in California, and now we're doing it in Arizona. We're talking about a very harsh environment within the chamber for significant gas and metal vapor deposition processes that get very caustic and very nasty inside the chamber. They require a really sophisticated capability to be able to clean, refurbish, recoat, and rehabilitate some of those parts so that they can have multiple life cycles and meet very harsh requirements and demonstrate the same performance, whether it be yield, etc., for the next phase of chip manufacturing over multiple cycles in there. That's not an easy requirement. You have to demonstrate that you can copy exact that capability for the original install on the OEM piece of equipment that you can through a replacement cycle. That's where we've been successful over time and have demonstrated that capability. And you have to prove that you can do it at each step and each fab and inside each chamber as you go through an initial qualification. So it is a very involved qualification, but we have a unique position. We've demonstrated success there. Excellent. High barriers to entry, it sounds like, if I could sum it up too simply. You talk about how you've been able to maintain 20% EBITDA margins in AST. At the peak, you were doing at least one quarter, you were over 30%. You've also talked about migrating some of these continuous improvement efforts, which were extremely successful in sealing. So we think about we're in the early stages of a semi-recovery affecting a business that had 1,000 basis points higher margins, throw in the continuous improvements. What can AST eventually look like? Yeah. And we talked about this on our last. We believe that we have now two segments that sustainably can be 30% EBITDA segments, plus or minus a few hundred basis points at different points in the cycle, but sustainably at that level. And that's really going to be driven by a couple of things. One is just market improvement, like you said. And when we've demonstrated it before, it was the absolute peak of the market. And I think it was maybe one quarter or two quarters that we demonstrated that, right? So we're talking about an absolute peak of the cycle. But through a normal part of the cycle, we believe we can sustainably be in that 30% range. A good portion of that is going to come from some market recovery and the volume leverage that comes with that, with a little bit of that cost base that we've been carrying through the down cycle that James mentioned earlier. Some of it is going to come from the continuous improvement efforts that I mentioned before, right? We have asset optimization, footprint optimization work, good operational excellence, continuous improvement, 80/20. All of that will contribute to additional margin expansion in AST. And then the additional growth that we're driving on some of the leading-edge cleaning side of the business, which is one of our premier businesses, which will provide us with an even stronger exposure to advanced nodes and an even stronger margin position on the upside. So that's why we feel confident we have a path. We can say that sustainably, that's a 30% margin business in a normalized part of the cycle as well. Fantastic. Do you want to turn to some of the questions that we're getting in? There is a question about in terms of your appetite for further M&A. I do want to ask because a lot of your acquisitions this decade were tied to building out AST, which was a newly created segment when you resegmented. The most recent one, AMI, was in sealing. That was a little bit different for you from the path you had been on previously, although you might not view it internally as different. Can you just give us some sense of how you're thinking about M&A now and your room for it? Because as you noted, you generate a ton of cash. Yeah. As you said, Steve, we built out the AST portfolio over the last three to five years. It's now about a third of our overall portfolio. That's probably in and around the range that we'd like to keep from a portfolio balancing standpoint and market exposure. We have the portfolio that we like, and like I said, we now assemble a set of businesses that can operate through that entire life cycle, so I don't believe that we're going to be doing any additional M&A in the near future on AST. I mean, we look at things all the time there. If the right thing came along that absolutely cemented an additional position that we really, really liked, we'd probably take advantage of that opportunity, but the predominant amount of pipeline work that we do is on the sealing side. The AST growth, like we talked about in that algorithm, is probably going to outpace our sealing business a little bit through a multi-year period. So from a portfolio optimization standpoint and a strategic opportunity standpoint, most of our work is focusing on additional adjacencies and connections in sealing. So as you said, we looked at the compositional analysis space quite heavily for a year plus as we identified that as a particular space that we like because it has the same strategic thesis that I talked about before of what makes up our sealing businesses. And then within that, we identified proactively targets that we wanted to look at for opportunistically when they came to market. And AMI was one of those. It fit all of our strategic criteria, financial criteria, cultural criteria. And that's a space we like. So we're looking at additional things there, food and pharma, nuclear, anything that would be tangential to some of the things that we're doing in our existing spaces and that have the right financial criteria, right strategic imperatives that meet what we're doing in other places. So most of our pipeline work is there. Any changes to your capital allocation philosophy? I mean, you stepped in from a very long-term CFO who had been in that role until fairly recently. Do you want to change the way that the capital allocation policy is set up? No. It's more of the same. I think, as I mentioned, coming out of the portfolio optimization phase of Enpro's history, now it's about growth and investing behind our organic opportunities and inorganic opportunities. We have the balance sheet to be able to do that and put capital to work. We have plenty of opportunities organically. And we want to supplement that with additional M&A that meets all the criteria I talked about. So that's going to be the focus of our capital allocation. We're generating good cash flow. Our balance sheet has ample capacity. There's no gun to our cash flow. Any exchanges on that? Not from an emergency standpoint, but we're going to be prudent and disciplined around how we allocate that capital. But there's plenty of organic and inorganic opportunities there for us. Any new CapEx expectations? I mean, you made the Arizona investment. You still generated a ton of cash on that. And any big CapEx to come or? Nothing that's going to significantly move the needle in the near term. We're going to continue to build out additional phases over time of our Arizona investment. We have behind additional growth programs, but we can still operate within that 3%-4% of sales range from a total CapEx standpoint within that and still execute those programs. We may flex a little bit above that, and we'll be transparent about it. But for the most part, that's our sweet spot there. Perfect. Very, very fast half hour. We weren't quite able to get to everything. So I mean, let me group this in with this because we've asked everybody this and this question comes up. New administration, potential tariffs, how does that fit in? And just your general final, combine that with sort of your final thoughts before we wrap this up? Yeah. We don't know. Obviously, we don't know exactly what form that will take, but we don't believe it'll have a big impact for Enpro. Definitely not from a direct standpoint. Our supply chain is fairly optimized to operate in region for region. We don't have a significant raw material base coming from China or any other region and import into the US. We're pretty much in region for region on our supply chain. Indirect, it's TBD on the indirect impact on inflation overall. I will say, though, that Enpro fared quite well in the last round of the tariff cycle in 2018 timeframe. And we were able to keep pace, if not slightly outpace the general tariff impact on inflation with strategic pricing. So we're seeing it as fairly neutral with some pro-business capabilities from a domestic standpoint and maybe with a little bit of opportunistic upside there. Fantastic. With that, any closing comments before we wrap it up? No. Really happy to be with you here, Steve, and talk to everybody as part of the conference, and very happy to be here at Enpro and really excited about what we're doing. Absolutely. Thought it was a very informative half hour. Hope everyone else agreed. Appreciate so much Joe Bruderek, James Gentile, and Mike Barron from Enpro for joining us today and hope everyone enjoys the remainder of the conference. Thanks so much, guys. Appreciate it. Thank you.