Also, a friendly reminder that we will be making statements on this call, including our current perspectives for full year 2026 guidance, that are not historical facts and that are considered forward-looking in nature. We have clear line of sight in areas of the business where we can accelerate the growth and profit performance, and are excited to work on these value-creating levers again in 2026. Our growth priorities underpinning the Enpro 3.0 strategy remain unchanged and will guide our performance through 2030. Over the long term, we are positioned to generate mid- to high single-digit organic top line growth at strong profitability and return levels.
Strength in aerospace, food and biopharma, firm domestic general industrial performance, as well as improving performance in semiconductor markets, were the primary drivers of the 7.6% increase in organic sales. Complementing our strong organic results were the powerful quarter contributions from the acquisitions of Alpha Measurement Solutions and Overlook Industries, completed in the fourth quarter of 2025. We continue to be pleased with this best-in-class performance for our Sealing Technologies segment. As well, I'm encouraged by AST's steady performance during the choppiness we experienced in semiconductor capital equipment spending over the last two years.
In Sealing Technologies, disciplined execution and efficient operations drove an Adjusted segment EBITDA margin of over 32% for the second year in a row. At AST, revenue increased nearly 14%, with strength in solutions serving leading-edge applications and pockets of recovery in semiconductor capital equipment demand. We continue to proactively invest capital and operating resources throughout 2025 in preparation for new platforms in anticipation of a recovery in semiconductor capital equipment spending. We remain well positioned to participate in a stronger semiconductor market in coming periods, while also seeking 80/20 improvements and cost realignment opportunities to drive incremental improvement in segment profitability over time.
| Metric | Period | Current guidance |
|---|---|---|
| Total sales growth | FY2026 | 8%-12% (incl. ~$60M from AlpHa/Overlook) (new) |
| Adjusted EBITDA | FY2026 | $305M-$320M (incl. $16M-$17M from acquisitions) (new) |
| Adjusted diluted EPS | FY2026 | $8.50-$9.20 (new) |
| Capital expenditures | FY2026 | ~$50M (~4% of sales) (new) |
| Sealing Technologies revenue growth | FY2026 | approach 15% (mid-single-digit organic) (new) |
| AST sales growth | FY2026 | high single digits, second half stronger (new) |
| Normalized tax rate | FY2026 | 25% (new) |
| Diluted shares outstanding | FY2026 | ~21.3 million (new) |
| Metric | YoY | Note |
|---|---|---|
| Q4 total sales | +14.3% to $295.4M | Aerospace and food/biopharma strength, strategic pricing, and partial-quarter AlpHa/Overlook contributions offsetting weak commercial vehicle OEM and international industrial |
| Q4 Adjusted EBITDA | +19.2% to $69.4M | Sealing Technologies performance and acquisition contributions, partly offset by higher AST growth-program operating expenses |
| Q4 Adjusted diluted EPS | +~27% to $1.99 | Higher Adjusted EBITDA and lower interest expense from reduced net borrowings |
| Sealing Technologies Q4 sales | +~15% to $187.1M | Aerospace, food/biopharma, pricing, and acquisitions offsetting commercial vehicle and international weakness |
| Sealing Technologies Q4 Adjusted segment EBITDA margin | +180 bps to 32.8% | Strategic pricing, improved volume, acquisition additions, and firm aftermarket demand |
| AST Q4 sales | +13.4% to $108.4M | Strength in precision cleaning solutions for leading-edge applications and pockets of strength in precision components and optical coatings |
| FY2025 sales | +9% to $1.14B | 7.6% organic growth plus acquisition contributions |
| FY2025 free cash flow | +18% to >$150M | Strong working capital management and portfolio performance |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Semiconductor capital equipment recovery | Choppiness over the last two years | Signs of robust recovery with second half of 2026 stronger than first half, supported by accelerating order patterns | Improving |
| M&A pipeline | Robust pipeline noted | Active pipeline with capacity to deploy $250M-$300M+; looking at assets once or twice a week and getting early looks before assets go to market | Stable |
| AST growth-program investment | Investing ahead of revenue | At ~$2M/quarter run rate of operating expenses ahead of demand; revenue expected to leverage against these costs through 2026 | Stable |
| Commercial vehicle OEM demand | Persistent weakness through 2025 | Expected flat to slightly down in 2026; aftermarket drivers remain firm | Stable |
| Enpro 3.0 strategy | Launched last year | Unchanged long-term targets guiding performance through 2030, with both segments capable of 30% Adjusted segment EBITDA margins | Stable |