Atmus Filtration Technologies reported record sales and stronger earnings for the second quarter of 2026 as the Nashville-based filtration company continued integrating its $450 million acquisition of Koch Filter and expanding beyond its traditional vehicle-filtration business.
Net sales reached a record $528 million for the quarter ended June 30, up 16.4 percent from $454 million during the same period last year. The increase was driven by the addition of Koch Filter, higher pricing, increased sales volumes and favorable currency movements.
Atmus reported net income of $64 million, compared with $60 million a year earlier. Diluted earnings increased to 78 cents per share from 72 cents. On an adjusted basis, earnings reached 82 cents per share, beating the 75 cents expected by analysts.
The company also produced $109 million in adjusted EBITDA, up from $95 million a year earlier. Its adjusted EBITDA margin was 20.7 percent, slightly below the 21 percent reported during the second quarter of 2025. Gross margin improved to 29.2 percent of sales from 28.9 percent.
Cash generation improved sharply. Atmus generated $78 million from operating activities during the quarter, compared with $44 million a year earlier. Adjusted free cash flow rose to $67 million from $36 million, an increase of about 86 percent.
The company’s core Power Solutions division remained its largest business, generating $486 million in quarterly sales, an increase of about 7 percent from the previous year. Management said approximately three percentage points of that growth came from higher prices, two points from increased volume and another two points from favorable foreign exchange rates.
Power Solutions includes Atmus’ Fleetguard filtration products for trucks, buses, agricultural equipment, construction machinery, mining equipment and other on- and off-highway applications.
The newer Industrial Solutions division generated $42 million in second-quarter sales. That business was created following Atmus’ acquisition of Koch Filter, which was completed in January for approximately $450 million in cash. Koch Filter gives Atmus access to commercial and industrial heating, ventilation and air-conditioning markets as well as rapidly growing applications involving data centers and power-generation facilities.
Koch Filter’s integration appears to be moving ahead of the most difficult part of the transition. Chief Executive Officer Steph Disher said during the earnings call that Atmus had already exited more than 95 percent of the Transition Service Agreement associated with the acquisition. Management expects the remaining integration work to be completed during the third quarter.
Completing that transition should allow Atmus to focus more heavily on expanding Koch Filter’s products and distribution. Management said it sees opportunities for new products and for using the broader Atmus distribution network to increase the reach of the industrial filtration business.
The acquisition represents the fourth part of Atmus’ broader growth strategy. The company has organized that strategy around four main priorities.
The first is increasing its share of the original-equipment market by building relationships with major global and regional manufacturers. Atmus is using newer filtration technologies, including its NanoNet N3 filtration media, along with testing facilities around the world to compete for additional original-equipment business.
The second pillar focuses on expanding the aftermarket business. Atmus sells replacement filtration products through thousands of customers and distributors around the world. Management said dedicated sales teams are attempting to bring both Fleetguard and Koch Filter products to existing customers while also developing new accounts.
Although management sees some indications that freight-market conditions are improving, it has not yet seen a major recovery in the aftermarket. The company therefore continues to expect the overall aftermarket market to remain relatively flat during 2026.
The third part of the strategy involves improving manufacturing and distribution efficiency. Atmus has introduced a production system called “Lean the Atmus Way,” which uses standardized management systems and lean manufacturing practices to improve productivity and margins. A facility in Mexico became the first Atmus operation to receive certification under the program.
Management also said delivery performance and product availability through the company’s controlled distribution network have reached record levels. Improving availability is particularly important in the replacement-filter business, where customers frequently need parts immediately to keep equipment operating.
The fourth growth pillar is the company’s expansion into industrial filtration. Koch Filter currently gives Atmus a significant position in industrial air filtration, but management has indicated that it does not intend to stop there.
The company is also evaluating opportunities involving water and liquid filtration. Management said its immediate focus remains industrial air, but Atmus could pursue an acquisition that would serve as an anchor for a broader water or liquid filtration platform.
That strategy could eventually make Atmus significantly less dependent on transportation markets by giving the company greater exposure to buildings, industrial facilities, data centers, power generation and other infrastructure markets.
Atmus is also continuing to balance acquisitions and investment with debt reduction and shareholder returns. During the second quarter, the company spent $13 million on capital projects and returned approximately $18 million to shareholders. That included $13 million of stock repurchases and approximately $5 million in dividends.
Atmus expects to repurchase between $20 million and $40 million of its shares during 2026. The company had $49 million remaining under its existing share-repurchase authorization at the end of June. Management said surplus cash beyond its investment requirements will increasingly be directed toward reducing debt.
Debt increased substantially following the Koch Filter purchase. Atmus had approximately $992 million in long-term debt as of June 30, compared with $540 million at the end of 2025. The company nevertheless ended the quarter with $259 million in cash and estimated its net-debt-to-adjusted-EBITDA ratio at about 1.9 times.
Management became more optimistic about full-year sales following the strong first half. Atmus now expects 2026 revenue of between $1.975 billion and $2.03 billion. Power Solutions is expected to generate between $1.82 billion and $1.865 billion, while Industrial Solutions is projected to contribute between $155 million and $165 million.
The company also expects adjusted earnings of between $2.85 and $3 per share for the full year. Its adjusted EBITDA margin is projected to finish between 19.75 percent and 20.25 percent. The bottom end of the earnings forecast was increased from the company’s previous guidance of $2.75 per share.
There are still challenges heading into the second half of the year. Atmus expects the benefit from pricing increases to moderate, while higher commodity expenses could continue putting pressure on costs. Management also warned that the Middle East conflict has affected some markets and contributed to weaker performance from the company’s joint venture operations in India.
Despite those concerns, management expects continued market-share gains in both original equipment and aftermarket filtration. The company estimates that share gains are contributing roughly one to two percentage points of growth.
Investors initially reacted cautiously to the earnings report. Atmus shares closed Friday, August 7, at $51.17, down $3.26, or roughly 6 percent, despite the earnings beat and record quarterly sales.
The quarterly results nevertheless show a company undergoing a significant change. Atmus remains heavily tied to transportation filtration through Fleetguard, but the Koch Filter acquisition has created a second business centered on industrial air filtration. If management follows through on its plans for data centers, power generation and potentially water and liquid filtration, the company could develop into a considerably broader filtration business than it was only a few years ago.
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