Atmus Filtration Technologies — Third Quarter 2026 Earnings Summary

Financial Performance:

• Net sales reached $510 million, a 13.9% increase from $447.7 million in the third quarter of 2025.
• Net income was $61 million ($0.74 diluted EPS), compared to $55 million ($0.66 diluted EPS) in the prior year period.
• Adjusted earnings per share were $0.77, up from $0.69 in the third quarter of 2025.
• Adjusted EBITDA was $104 million with a margin of 20.4%, matching the 20.4% margin recorded in the third quarter of 2025.
• Gross margin was $154 million (30.3% of net sales), compared to $129 million (28.9%) in the third quarter of 2025.
• Cash provided by operating activities was $98 million, up from $82 million in the third quarter of 2025.
• Adjusted free cash flow was $88 million, an increase from $72 million in the third quarter of 2025.
• The effective tax rate was 22.8% for the third quarter of 2026, compared to 23.6% in the same period last year.
• Long-term debt increased to $948.3 million as of September 30, 2026, from $540.0 million as of December 31, 2025.

Guidance and Future Outlook:

• The company raised full-year 2026 net sales guidance to a range of $2,010 million to $2,035 million.
• Power Solutions segment full-year net sales guidance is $1,850 million to $1,870 million.
• Industrial Solutions segment full-year net sales guidance is $160 million to $165 million.
• Full-year 2026 Adjusted EBITDA margin guidance is 19.75% to 20.25%.
• Full-year 2026 Adjusted earnings per share guidance is $2.90 to $3.05.

Business Segments and Product Lines:

• Power Solutions segment net sales were $468 million with an Adjusted EBITDA margin of 20.5%.
• Industrial Solutions segment net sales were $42 million with an Adjusted EBITDA margin of 19.6%.
• Sales growth was driven by the acquisition of Koch Filter Corporation, favorable volumes, currency benefits, and pricing increases, partially offset by tariff refunds payable to customers.
• Gross margin improvements were attributed to incremental margin from the Koch Filter acquisition, favorable volume, pricing, manufacturing costs, currency impacts, lower one-time separation costs, and lower warranty costs, partially offset by higher material and freight costs.

Market and Competitive Landscape:

• Atmus operates through two segments: Power Solutions (serving global on- and off-highway equipment markets via the Fleetguard® brand) and Industrial Solutions (serving commercial/industrial HVAC, data centers, and power generation via the Koch Filter® brand).
• The company employs nearly 5,000 people worldwide.

Risks and Challenges:

• Sales were partially offset by tariff refunds payable to customers.
• Material and freight costs increased.
• Forward-looking statements involve risks and uncertainties, including those related to the accuracy of underlying assumptions, market conditions, and integration of the Koch Filter acquisition.

Management Commentary and Tone:

• CEO Steph Disher expressed pride in the team's dedication, noting strong financial results and the protection of customer interests through Fleetguard® and Koch Filter® branded products.
• Management highlighted strong cash generation and outlook as the basis for expanding the share repurchase program.
• Capital allocation strategy focuses on investing for growth and returning cash to shareholders to create value.

Other Key Points:

• Atmus repurchased $20 million of common stock during the third quarter under the $150 million program authorized in July 2024.
• On November 4, 2026, the Board authorized a new $300 million share repurchase program, replacing the prior authorization.
• A quarterly cash dividend of $0.06 per share was paid, representing a 9% increase from the prior quarter.
• The acquisition of Koch Filter Corporation significantly impacted the balance sheet, increasing Goodwill from $84.7 million to $302.6 million and Intangible assets from $0 to $206.4 million between December 31, 2025, and September 30, 2026.
• Cash and cash equivalents increased to $273.3 million as of September 30, 2026, from $236.4 million at the end of 2025.
• One-time capital expenditures of $1 million associated with the Koch Filter acquisition were excluded from the third quarter 2026 Adjusted free cash flow calculation.
• One-time separation costs of $3.7 million were excluded from the third quarter 2025 Adjusted EBITDA calculation.