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What changed in WATTS WATER TECHNOLOGIES INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of WATTS WATER TECHNOLOGIES INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+346 added−314 removedSource: 10-K (2026-02-23) vs 10-K (2025-02-18)

Top changes in WATTS WATER TECHNOLOGIES INC's 2025 10-K

346 paragraphs added · 314 removed · 255 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

84 edited+16 added−18 removed80 unchanged
Biggest changeTo support this mission, we have incorporated this culture into the Watts strategic pillars, cultural behaviors, global performance management and talent review frameworks, as well as the Global Leadership Team’s goals. ​ We also established a regular cadence for pay equity review and added benefits including additional paid parental leave and family planning in the U.S. and mental health resources globally through our Employee Assistance Program. ​ In addition, we monitor employee perception on our culture through employee feedback, and we create awareness with our employees through the company intranet, in employee meetings, and through a calendar of events designed to increase allyship and engagement.
Biggest changeIn addition, we have strengthened our benefits portfolio to offer more targeted support for employees with specific health needs including paid parental leave and family planning and expanded preventive medicine options. ​ We also remain committed to supporting employees’ mental well-being through an enhanced, globally accessible Employee Assistance Program and ongoing communication initiatives that promote awareness and education of available resources. ​ 10 Table of Contents In addition, we monitor employee perception of our culture through employee feedback, and we create awareness with our employees through the company intranet, in employee meetings, and through a calendar of events designed to increase allyship and engagement.
In recent years, we have announced global restructuring plans which reduced our manufacturing and distribution footprint in order to reduce our costs and to realize incremental operating efficiencies. ​ Additionally, a majority of our manufacturing facilities are ISO 9001 certified by an accredited third party certification body to the ISO standards. ​ The majority of our sales are for products that have been approved under regulatory standards incorporated into state and municipal plumbing, heating, building and fire protection codes in the Americas, Europe and certain countries within APMEA.
In recent years, we have announced global restructuring plans which reduced our manufacturing and distribution footprint in order to reduce our costs and to realize incremental operating efficiencies. ​ Additionally, a majority of our manufacturing facilities are ISO 9001 certified by an accredited third party certification body to ISO standards. ​ The majority of our sales are for products that have been approved under regulatory standards incorporated into state and municipal plumbing, heating, building and fire protection codes in the Americas, Europe and certain countries within APMEA.
Watts is also a member of the Canadian Institute of Plumbing and Heating (CIPH), which provides a similar function and benefit as ASA by monitoring and advocating on behalf of its members on various legislative and regulatory issues. ​ New Product Development and Engineering ​ We retain our own product development staff, design teams, and testing laboratories in the Americas, Europe and APMEA that work to enhance our existing products and develop new products and solutions with a focus on sustainable, customer-centric technological innovation and smart and connected solutions.
Watts is also a member of the Canadian Institute of Plumbing and Heating (CIPH), which provides a similar function and benefit as ASA by monitoring and advocating on behalf of its members on various legislative and regulatory issues in the Canadian market. ​ New Product Development and Engineering ​ We retain our own product development staff, design teams, and testing laboratories in the Americas, Europe and APMEA that work to enhance our existing products and develop new products and solutions with a focus on sustainable, customer-centric technological innovation and smart and connected solutions.
Watts Water Technologies, Inc. was incorporated in Delaware in 1985 and is the parent company of Watts Regulator Co. ​ Our strategy is to be the preferred supplier of differentiated solutions, systems and products that manage and conserve the flow of fluids and energy into, through and out of buildings in the commercial and residential markets of the Americas, Europe, and Asia-Pacific, Middle East and Africa (“APMEA”), our three geographic segments.
Watts Water Technologies, Inc. was incorporated in Delaware in 1985 and is the parent company of Watts Regulator Co. ​ Our strategy is to be the preferred supplier of differentiated products and solutions that manage and conserve the flow of fluids and energy into, through and out of buildings in the commercial and residential markets of the Americas, Europe, and Asia-Pacific, Middle East and Africa (“APMEA”), our three geographic segments.
Other than an investor’s own internet access charges, we make available free of charge through our website our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and amendments to these reports, as soon as reasonably practicable after we have electronically filed such material with, or furnished such material to, the Securities and Exchange Commission (“SEC”). ​ 12 Table of Contents Information about Our Executive Officers and Directors ​ Set forth below are the names of our executive officers and directors, their respective ages and positions with our Company, and a brief summary of their business experience for at least the past five years: ​ ​ ​ ​ ​ ​ Executive Officers ​ Age ​ Position Robert J.
Other than an investor’s own internet access charges, we make available free of charge through our website our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, and amendments to these reports, as soon as reasonably practicable after we have electronically filed such material with, or furnished such material to, the Securities and Exchange Commission (“SEC”). ​ 13 Table of Contents Information about Our Executive Officers and Directors ​ Set forth below are the names of our executive officers and directors, their respective ages and positions with our Company, and a brief summary of their business experience for at least the past five years: ​ ​ ​ ​ ​ ​ Executive Officers ​ Age ​ Position Robert J.
These categories are: ​ ● Residential & commercial flow control and protection—includes products and solutions typically sold into plumbing and hot water applications such as backflow preventers, water pressure regulators, temperature and pressure relief valves, thermostatic mixing valves, leak detection and protection products, commercial washroom solutions and emergency safety products and equipment.
These categories are: ​ ● Residential and commercial flow control and protection—includes products and solutions typically sold into plumbing and hot water applications such as backflow preventers, water pressure regulators, temperature and pressure relief valves, thermostatic mixing valves, leak detection and protection products, commercial washroom solutions, hydration solutions and emergency safety products and equipment.
In the Americas, our typical OEM customers are water heater manufacturers and equipment and water systems manufacturers needing flow control devices and other products. Our sales to OEMs in Europe are primarily to boiler manufacturers and radiant system manufacturers. Our sales to OEMs in APMEA are primarily to water heater, air conditioning, and appliance manufacturers. ​ Specialty.
In the Americas, our typical OEM customers are water heater manufacturers and equipment and water systems manufacturers needing flow control devices and other products. Our sales to OEMs in Europe are primarily to boiler manufacturers and radiant system manufacturers. Our sales to OEMs in APMEA are primarily to water heaters, air conditioning, and appliance manufacturers. ​ Specialty.
Employee safety is one of our highest priorities and we strive for zero hazards and zero injuries by educating and training employees on safety best practices through awareness campaigns and related engagement initiatives. ​ Access & Culture ​ An integral part of our mission to build a high performance, value-driven culture is creating a culture that welcomes employees of all identities, backgrounds and cultures.
Employee safety is one of our highest priorities and we strive for zero hazards and zero injuries by educating and training employees on safety best practices through awareness campaigns and related engagement initiatives. ​ Culture & Employee Experience ​ An integral part of our mission to build a high-performance, value-driven culture is creating a culture that welcomes employees of all identities, backgrounds and cultures.
Approximately 19%, 19% and 21% of our net sales in 2024, 2023 and 2022, respectively, were through our specialty channel. The specialty channel primarily includes sales related to high-efficiency boilers and water heaters, water filtration and conditioning products and solutions, specialty floor and tile products, food service products and leak detection products. ​ DIY Chains.
Approximately 21%, 19% and 19% of our net sales in 2025, 2024 and 2023, respectively, were through our specialty channel. The specialty channel primarily includes sales related to high-efficiency boilers and water heaters, water filtration and conditioning products and solutions, specialty floor and tile products, food service products and leak detection products. ​ DIY Chains.
In 2024, Watts was recognized, by our employees, as a best-in-class place for employment in two regions. 80% of our employees in our North Andover, MA, US, Headquarters participated in the Massachusetts Top Places to Work survey, resulting in being named by the Boston Globe as one of the Top Places to Work in Massachusetts.
In 2025, Watts was recognized by our employees as a best-in-class place for employment in two regions. 80% of our employees in our North Andover, MA, US, Headquarters participated in the Massachusetts Top Places to Work survey, resulting in being named by the Boston Globe as one of the Top Places to Work in Massachusetts.
“Risk Factors” and Note 16 of the Notes to the Consolidated Financial Statements, both of which are incorporated herein by reference. ​ Asbestos Litigation ​ We are defending lawsuits in different jurisdictions, alleging injury or death as a result of exposure to asbestos.
“Risk Factors” and Note 17 of the Notes to the Consolidated Financial Statements, both of which are incorporated herein by reference. ​ Asbestos Litigation ​ We are defending lawsuits in different jurisdictions, alleging injury or death as a result of exposure to asbestos.
During 2024, we supported those in need through donations of money and products to several non-profit charitable organizations and through the volunteer efforts of our employees. One example was our ongoing partnership with the Planet Water Foundation.
During 2025, we supported those in need through donations of money and products to several non-profit charitable organizations and through the volunteer efforts of our employees. One example was our ongoing partnership with the Planet Water Foundation.
We accrue estimated environmental liabilities based on assumptions, which are subject to a number of factors and uncertainties. Circumstances that can affect the reliability and precision of these estimates include identification of additional sites, environmental regulations, level of clean-up required, technologies available, number and financial condition of other contributors to remediation and the time period over which remediation may occur.
We accrue estimated environmental liabilities based on assumptions, which are subject to a number of factors and uncertainties. Circumstances that can affect the reliability and precision of these estimates include identification of additional sites, environmental regulations, level of cleanup required, technologies available, number and financial condition of other contributors to remediation and the time period over which remediation may occur.
Alternative sources for raw materials may not be timely available or available at reasonable cost. ​ Refer to Item 1A. “Risk Factors” for risks related to the impact of supply chain and logistic disruptions and Item 7.
Alternative sources for raw materials may not be readily available or available at reasonable cost. ​ Refer to Item 1A. “Risk Factors” for risks related to the impact of supply chain and logistic disruptions and Item 7.
Concern around water conservation has led to increased interest in products that are designed to reduce water consumption, such as our Nexa intelligent water management system, ACV Assure monitoring system, Intelliflow water shut off device, ZeroWaste reverse osmosis filters, OneFlow anti-scale system, Hygienic Pro drains, and our Trident™ and Leak Defense leak detection and water shutoff systems.
Concerns around water conservation has led to increased interest in products that are designed to reduce water consumption, such as our Nexa intelligent water management system, ACV Assure monitoring system, Intelliflow water shut off device, ZeroWaste reverse osmosis filters, OneFlow anti-scale system, Hygienic Pro drains, and our Leak Defense leak detection and water shutoff systems.
Melhem spent eleven years with ITT Industries in China where he held several management positions, including serving as President of ITT’s Residential and Commercial Water Group in China and President of ITT’s Water Technology Group in Asia. ​ 14 Table of Contents Rebecca J. Boll has served as a director of the Company since February 2024. Ms.
Melhem spent eleven years with ITT Industries in China where he held several management positions, including serving as President of ITT’s Residential and Commercial Water Group in China and President of ITT’s Water Technology Group in Asia. ​ Rebecca J. Boll has served as a director of the Company since February 2024. Ms.
Boll held management positions at Northrop Grumman, Allied Domecq and Leo Burnett Advertising, and she served as an electronic combat officer, AWACS, in the United States Air Force. ​ Michael J. Dubose has served as a director of the Company since December 2020. Mr.
Boll held management positions at Northrop Grumman, Allied Domecq and Leo Burnett Advertising, and she served as an electronic combat officer, AWACS, in the United States Air Force. ​ 15 Table of Contents Michael J. Dubose has served as a director of the Company since December 2020. Mr.
Noonan served as Senior Director of Wayfair International from June 2011 to November 2012, Director of Category Management and Merchandising from February 2009 to June 2011 and Manager of Wayfair’s Business-to-Business Division from April 2008 to February 2009. Wayfair is an online retailer of home furnishings, décor and home improvement products. Prior to joining Wayfair, Mr.
Noonan served as Senior Director of Wayfair International from June 2011 to November 2012, Director of Category Management and Merchandising from February 2009 to June 2011 and Manager of Wayfair’s Business-to-Business Division from April 2008 to February 2009. Wayfair is an online retailer of home furnishings, decor and home improvement products. Prior to joining Wayfair, Mr.
Goeser previously served as a member of the boards of directors of Talen Energy from June 2015 to December 2016, PPL Corporation from March 2003 to June 2015, and Witco Corporation from 1997 to 1999. ​ 15 Table of Contents Kenneth Napolitano has served as a director of the Company since March 2024. Mr.
Goeser previously served as a member of the boards of directors of Talen Energy from June 2015 to December 2016, PPL Corporation from March 2003 to June 2015, and Witco Corporation from 1997 to 1999. ​ Kenneth Napolitano has served as a director of the Company since March 2024. Mr.
The occurrence of natural disasters, public health crises such as pandemics or epidemics, political crises such as war, terrorism or political instability, or other events that result in widespread business or supply chain disruptions in China or the imposition of tariffs that make it more costly or cost prohibitive to source raw materials from China could have a material adverse effect on our ability to obtain necessary components and raw materials, and our business and operating results could suffer.
The occurrence of natural disasters, public health crises such as pandemics or epidemics, political crises such as war, terrorism or political instability, or other events that result in widespread business or supply chain disruptions or the imposition of tariffs that make it more costly or cost prohibitive to source raw materials from countries in Asia could have a material adverse effect on our ability to obtain necessary components and raw materials at times, and our business and operating results could suffer.
Residential & commercial flow control and protection products accounted for approximately 60%, 56% and 52% of our total net sales in 2024, 2023 and 2022, respectively. ​ ● Heating, ventilation and air conditioning (“HVAC”) & gas—includes commercial high-efficiency boilers, water heaters and custom heat and hot water solutions, hydronic and electric heating systems for under-floor radiant applications, hydronic pump groups for boiler manufacturers and alternative energy control packages, and flexible stainless steel connectors for natural and liquid propane gas in commercial food service and residential applications.
Residential & commercial flow control and protection products accounted for approximately 61%, 60% and 56% of our total net sales in 2025, 2024 and 2023, respectively. ​ ● Heating, ventilation and air conditioning (“HVAC”) and gas—includes commercial , institutional and industrial high-efficiency boilers, water heaters and heating solutions, hydronic and electric heating systems for under-floor radiant applications, custom heat and hot water solutions, hydronic pump groups for boiler manufacturers and alternative energy control packages, and flexible stainless steel connectors for natural and liquid propane gas in commercial food service and residential applications.
To that end, we have developed, and continue to enhance and refine, a robust and comprehensive talent management strategy which spans from talent attraction to performance management, career development and retention of our top talent, to succession planning across our organization.
To that end, we have developed, and continue to enhance and refine, a robust and comprehensive talent management strategy, which includes talent attraction, performance management, career development and retention of our top talent, and succession planning across our organization.
If component costs or commodity costs increase in the future and we are not able to reduce or eliminate the effect of the cost increases by reducing production costs or implementing price increases, our profit margins could decrease. If component costs or commodity costs were to decline, we may experience pressure from customers to reduce our selling prices.
If component costs or commodity costs increase in the future and we cannot reduce or eliminate the effect of the cost increases by reducing production costs or implementing price increases, our profit margins could decrease. If component costs or commodity costs were to decline, we may experience pressure from customers to reduce our selling prices.
In 2024, we continued to invest in our systems, our manufacturing facilities and our commercial and operational excellence initiatives. ​ 6 Table of Contents Capital expenditures and depreciation for each of the last three years were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ 2024 2023 2022 ​ ​ (in millions) Capital expenditures ​ $ 35.3 ​ $ 29.7 ​ $ 28.1 Depreciation ​ $ 34.6 ​ $ 30.1 ​ $ 27.6 ​ Purchased Raw Materials and Components ​ Our products are made using various purchased components and raw materials, including primarily bronze, brass, cast iron, stainless steel, steel, and plastic.
In 2025, we continued to invest in our systems, our manufacturing facilities and our commercial and operational excellence initiatives. ​ 6 Table of Contents Capital expenditures and depreciation for each of the last three years were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years Ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 ​ ​ (in millions) Capital expenditures ​ $ 45.7 ​ $ 35.3 ​ $ 29.7 Depreciation ​ $ 36.2 ​ $ 34.6 ​ $ 30.1 ​ Purchased Raw Materials and Components ​ Our products are made using various purchased components and raw materials, including primarily bronze, brass, cast iron, stainless steel, steel, and plastic.
Our General Counsel and Chief Sustainability Officer also chairs our global Sustainability Steering Committee, which is made up of senior company leaders and is responsible for formulating our sustainability strategy and overseeing the execution of our environmental, social and governance initiatives. ​ 10 Table of Contents Climate Change Impact ​ The increasing focus on sustainability and climate change has furthered demand for energy efficient products such as our high-efficiency boilers and water heaters, our Aegis heat pumps, under floor heating systems, smart thermostats, and our Microflex insulated pipes.
Our General Counsel and Chief Sustainability Officer also chairs our global Sustainability Steering Committee, which is made up of senior company leaders and is responsible for formulating our sustainability strategy and overseeing the execution of our environmental, social and governance initiatives. ​ Climate Change Impact ​ The focus on sustainability and climate change from some sectors has furthered demand for energy efficient products such as our high-efficiency boilers and water heaters, our Aegis heat pumps, under floor heating systems, smart thermostats, and our Microflex insulated pipes.
Approximately 4% of our net sales in each of 2024, 2023 and 2022 were to DIY chains. The DIY channel primarily includes sales related to valves and a portion of our water quality products. ​ In 2024, 2023 and 2022, no customer accounted for more than 10% of our total net sales.
Approximately 3%, 4%, and 4% of our net sales in each of 2025, 2024 and 2023, respectively, were to DIY chains. The DIY channel primarily includes sales related to valves and a portion of our water quality products. ​ In 2025, 2024 and 2023, no customer accounted for more than 10% of our total net sales.
In the last two years, we completed four strategic and complementary acquisitions that expanded our addressable market and are intended to enable value creation through greater scale and growth opportunities. ​ We are committed to reducing our manufacturing and operating costs using Lean methodologies to drive improvement across all key processes.
In the last three years, we have completed eight strategic and complementary acquisitions that expanded our addressable market and are intended to enable value creation through greater scale and growth opportunities. ​ We are committed to reducing our manufacturing and operating costs using Lean methodologies to drive improvement across all key processes.
“Risk Factors” and Note 16 of the Notes to the Consolidated Financial Statements, both of which are incorporated herein by reference. ​ Environmental Remediation ​ We have been named as a potentially responsible party with respect to a limited number of identified contaminated sites.
“Risk Factors” and Note 17 of the Notes to the Consolidated Financial Statements, both of which are incorporated herein by reference. ​ 12 Table of Contents Environmental Remediation ​ We have been named as a potentially responsible party with respect to a limited number of identified contaminated sites.
Because we internationally source a significant amount of raw materials and components, several months of raw materials and work in process are moving through our supply chain at any point in time. We are not able to predict whether component costs or commodity costs, including copper and stainless steel, will significantly increase or decrease in the future.
Because we internationally source a significant number of raw materials and components, several months of raw materials and work in process are moving through our supply chain at any point in time. We cannot predict whether component costs or commodity costs, including copper and stainless steel, will significantly increase or decrease in the future.
Noonan worked as a venture capitalist at Polaris Partners and as an investment banker at Cowen & Company. ​ Merilee Raines has served as a director of the Company since February 2011. Ms. Raines served as Chief Financial Officer of IDEXX Laboratories, Inc. from October 2003 until her retirement in May 2013. Prior to becoming Chief Financial Officer, Ms.
Noonan worked as a venture capitalist at Polaris Partners and as an investment banker at Cowen & Company. 16 Table of Contents ​ Merilee Raines has served as a director of the Company since February 2011. Ms. Raines served as Chief Financial Officer of IDEXX Laboratories, Inc. from October 2003 until her retirement in May 2013.
We have completed 14 acquisitions since 2015. Our acquisition strategy focuses on businesses that manufacture preferred brand name products that address our themes of safety and regulation, energy efficiency and water conservation.
We have completed 17 acquisitions since 2016. Our acquisition strategy focuses on businesses that manufacture preferred brand name products that address our themes of safety and regulation, energy efficiency and water conservation.
Many of the codes and standards are incorporated into state and municipal plumbing and heating, building and fire protection codes. ​ National regulatory standards in Europe vary by country. The major standards and/or guidelines that our products must meet are AFNOR (France), DVGW (Germany), UNI/ICIM (Italy), SVGW (Switzerland), SITAC (Sweden), WRAS (United Kingdom) and CEN (Denmark).
These various industry generated codes and standards are typically incorporated into state and municipal plumbing and heating, building, and fire protection codes. ​ National regulatory standards in Europe vary by country. The major standards and/or guidelines that our products must meet are AFNOR (France), DVGW (Germany), UNI/ICIM (Italy), SVGW (Switzerland), SITAC (Sweden), WRAS (United Kingdom) and CEN (Denmark).
Prior to his tenure at Pentair, Mr. Dunbar held a number of senior positions at Emerson Electric Co., including President of each of the following: Emerson Process Management Europe; Machinery Health Management; and Emerson Climate Technologies Refrigeration. ​ Louise K. Goeser has served as a director of the Company since March 2018. Ms.
Dunbar held a number of senior positions at Emerson Electric Co., including President of each of the following: Emerson Process Management Europe; Machinery Health Management; and Emerson Climate Technologies Refrigeration. ​ Louise K. Goeser has served as a director of the Company since March 2018. Ms.
Raines held several management positions with IDEXX Laboratories, including Corporate Vice President of Finance, Vice President of Finance and Treasurer, Director of Finance, and Controller. IDEXX Laboratories develops, manufactures and distributes products and provides services primarily for the companion animal veterinary, livestock and poultry, dairy and water testing industries. Ms.
Prior to becoming Chief Financial Officer, Ms. Raines held several management positions with IDEXX Laboratories, including Corporate Vice President of Finance, Vice President of Finance and Treasurer, Director of Finance, and Controller. IDEXX Laboratories develops, manufactures and distributes products and provides services primarily for the companion animal veterinary, livestock and poultry, dairy and water testing industries. Ms.
Codes and standards in the Americas are established by industry and government organizations such as the American Society of Mechanical Engineers (ASME), the Canadian Standards Association (CSA), the American Society of Sanitary Engineering (ASSE), NSF International (NSF), Underwriters Laboratories (UL), the Environmental Protection Agency (EPA), the Californian Energy Commission (CEC), the International Code Council (ICC) and the International Association of Plumbing and Mechanical Officials (IAPMO).
Codes and standards in the Americas are developed and maintained by industry and government organizations such as the American Society of Mechanical Engineers (ASME), Canadian Standards Association (CSA), American Society of Sanitary Engineering (ASSE), NSF International (NSF), Underwriters Laboratories (UL), United States Environmental Protection Agency (EPA), California Energy Commission (CEC), International Code Council (ICC) and the International Association of Plumbing and Mechanical Officials (IAPMO).
HVAC & gas products and solutions accounted for approximately 24%, 29% and 31% of our total net sales in 2024, 2023 and 2022, respectively. ​ ● Drainage & water re-use—includes drainage products and engineered rain water harvesting solutions for commercial, industrial, marine and residential applications, including connected roof drain systems.
HVAC & gas products and solutions accounted for approximately 23%, 24% and 29% of our total net sales in 2025, 2024 and 2023, respectively. ​ ● Drainage and water re-use—includes drainage products and engineered rainwater harvesting solutions for commercial, industrial, marine and residential applications, including connected roof drain systems.
In addition, our goal is to embed sustainability throughout the lifecycle of our products to create safe, efficient, long-lasting products made with high-recycling-value materials wherever possible. ​ Social Responsibility ​ We are focused on creating both economic and social value and strive to have a positive impact on our global community.
In addition, our goal is to embed sustainability throughout the lifecycle of our products to create safe, efficient, long-lasting products made with high-recycling-value materials wherever possible. ​ 11 Table of Contents Social Responsibility ​ While we are focused on creating economic value, we also strive to have a positive impact on our local and global community.
Approximately 66%, 62% and 60% of our net sales in 2024, 2023 and 2022, respectively, were to wholesale distributors for commercial and residential applications. ​ OEMs. Approximately 11%, 15% and 15% of our net sales in 2024, 2023 and 2022, respectively, were to OEMs.
Approximately 66%, 66% and 62% of our net sales in 2025, 2024 and 2023, respectively, were to wholesale distributors for commercial and residential applications. ​ OEMs. Approximately 10%, 11% and 15% of our net sales in 2025, 2024 and 2023, respectively, were to OEMs.
We continually strive to cultivate and support a highly engaged and productive workforce with employees from all backgrounds. ​ Talent Acquisition ​ ● Recruitment efforts follow a defined Talent Acquisition process to attract and hire top talent. ● We provide a robust college internship program to identify and cultivate an early-in-career pipeline of talent. ● We are actively engaging with colleges and universities and professional organizations to help attract and recruit the best talent. ● We engage with external professional recruiting firms to supplement our internal recruiting efforts as needed. ● We employ varying sourcing strategies and technology platforms to increase our outreach to candidate pools of all different backgrounds. ● We have a global employee referral bonus program to attract qualified candidates and reward employees. ​ Professional Development ​ ● Team Building.
We continually strive to cultivate and support a highly engaged and productive workforce with employees from all backgrounds. ​ Talent Acquisition ​ ● Recruitment efforts follow a defined talent acquisition process to attract and hire top talent aligned to our talent strategy and employee value proposition. ● We provide a robust college internship program to identify and cultivate an early-in-career pipeline of talent. ● We are actively engaging with colleges and universities and professional organizations to help attract and recruit the best talent. ● We maintain an internal experienced talent acquisition team to source best-in-class talent pipeline. ● We engage with external professional recruiting firms to supplement our internal recruiting efforts as needed. ● We employ varying sourcing strategies and technology platforms to increase our outreach to candidate pools of all different backgrounds. ● We utilize a formal apprenticeship program to develop hard-to-fill skills trades. ● We have a global employee referral bonus program to attract qualified candidates and reward employees. ​ Professional Development ​ ● Team Building.
As of December 31, 2024, we had approximately 4,800 employees globally, including 2,500 in the Americas, 1,900 in Europe and 400 in APMEA. At Watts, we strive to attract, develop, retain and engage high performing talent and we reward employee performance. By developing and promoting our talented people, we are creating value for our customers and shareholders.
As of December 31, 2025, we had approximately 5,700 employees globally, including 3,100 in the Americas, 1,900 in Europe and 700 in APMEA. At Watts, we strive to attract, develop, retain and engage high performing talent and we reward employee performance. By developing and promoting our talented people, we are creating value for our customers and shareholders.
Together with their managers, employees start the process by setting goals; year-end activities begin with employee self-assessments and conclude with a conversation led by the manager on goal accomplishment and defined cultural behaviors. ● Safety.
We maintain a robust annual performance management process across the organization. Together with their managers, employees start the process by setting goals; year-end activities begin with employee self-assessments and conclude with a conversation led by the manager on goal accomplishment and defined cultural behaviors. ● Safety.
If a supplier is unable to meet our demands, we believe that in most cases our inventory of components and raw materials will allow for sufficient time to identify and obtain the necessary commodities and other raw materials from an alternate source.
If a supplier is unable to meet our demands, we believe that in most cases our inventory positions of components and raw materials will allow for sufficient time to identify and obtain the necessary commodities and other raw materials from alternative pre-qualified secondary sources.
Drainage & water re-use products and solutions accounted for approximately 11%, 10% and 10% of our total net sales in 2024, 2023 and 2022, respectively. ​ ● Water quality—includes point-of-use and point-of-entry water filtration, monitoring, conditioning and scale prevention systems for commercial, marine and residential applications.
Drainage & water re-use products and solutions accounted for approximately 11%, 11% and 10% of our total net sales in 2025, 2024 and 2023, respectively. ​ ● Water quality—includes point-of-use, point-of-entry, closed loop, cooling tower, and other water applications used for water filtration, monitoring, conditioning and scale prevention systems for commercial, marine, light industrial and residential applications.
Our Watts China location was certified as a Great Place to Work, with 88% of employees participating in the Great Place to Work Trust Index survey which gathers insight on workplace environment factors and various management behaviors related to trust from the employees’ perspective. ● Performance Management Framework. We maintain a robust annual performance management process across the organization.
Our Watts China location was certified as a Great Place to Work for Women, with 75% of employees participating in the Great Place to Work Trust Index survey which gathers insight on workplace environment factors and various management behaviors related to trust from the employees’ perspective. ● Performance Management Framework.
Our top ten customers accounted for $512.0 million, or 22.7%, of our total net sales in 2024; $440.4 million, or 21.4%, of our total net sales in 2023; and $431.7 million, or 21.8%, of our total net sales in 2022.
Our top ten customers accounted for $570.3 million, or 23.4%, of our total net sales in 2025; $512.0 million, or 22.7%, of our total net sales in 2024; and $440.4 million, or 21.4%, of our total net sales in 2023.
We are also focused on adhering to responsible business practices, prioritizing employee safety and providing our employees with opportunities for personal and professional growth, including through programs and initiatives that support access, teamwork and reinforce our focus on building a high-performance, values-driven culture that welcomes employees of all identities, backgrounds and cultures.
We are also focused on adhering to responsible business practices, prioritizing employee safety and providing our employees with opportunities for personal and professional growth, including through programs and initiatives that support access, teamwork and reinforce our focus on building a high-performance, value-driven culture that welcomes employees of all identities, backgrounds and cultures. ​ Recognition ​ In 2025, we were recognized for the seventh year in a row as one of America’s Most Responsible Companies by Newsweek Magazine.
Dubose previously served as President of the Fisher Healthcare Division of Thermo Fisher Scientific Inc. from March 2019 to August 2023. Thermo Fisher Scientific engages in the provision of analytical instruments, equipment, reagents and consumables, software and services for research, analysis, discovery, and diagnostics. Mr.
Thermo Fisher Scientific engages in the provision of analytical instruments, equipment, reagents and consumables, software and services for research, analysis, discovery, and diagnostics. Mr. Dubose previously served as Vice President of National Accounts and Cross Border Business Globally for W.W. Grainger, Inc. from 2010 to March 2019. W.W.
We will continue to focus on and invest in our global new product development program to leverage new technologies, inhouse expertise and our electronics capabilities to expand our smart and connected strategy. ​ Competition ​ The domestic and international markets for energy efficient products, water conservation devices, and products that address the safety and regulation for the flow of fluids, are intensely competitive and require us to compete against some companies possessing greater financial, marketing and other resources than ours.
We remain committed to investing in our global new product development program, leveraging advanced technologies, in-house expertise, and electronics capabilities to accelerate the expansion of our smart and connected portfolio with Nexa at its core. ​ Competition ​ The domestic and international markets for energy efficient products, water conservation devices, and products that address the safety and regulation for the flow of fluids, are intensely competitive and require us to compete against some companies possessing greater financial, marketing and other resources than ours.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” for additional disclosure. ​ Code Compliance ​ Products representing a majority of our sales are subject to regulatory standards and code enforcement, which typically require that these products meet stringent performance criteria.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” for additional disclosure. ​ Code Compliance ​ Products representing a majority of our sales are subject to stringent performance criteria required by regulatory building codes and standards, including certification and installation enforcement.
Lennox International is a leading global provider of climate control solutions and it designs, manufactures and markets a broad range of products for the heating, ventilation, air conditioning and refrigeration markets. Before joining Lennox International, Mr. Reitmeier held financial leadership roles at Cummins Inc. and PolyOne Corporation. ​ 16 Table of Contents
Lennox International is a leading global provider of climate control solutions and it designs, manufactures and markets a broad range of products for the heating, ventilation, air conditioning and refrigeration markets. Before joining Lennox International, Mr.
The Water Council is a non-profit organization focused on water research, education and economic development to solve critical water challenges by driving innovation in freshwater technology and advancing water stewardship. ​ 13 Table of Contents Shashank Patel has served as Chief Financial Officer of the Company since July 2018 and our interim Chief Information Officer since January 2025. Mr.
The Water Council is a non-profit organization focused on water research, education and economic development to solve critical water challenges by driving innovation in freshwater technology and advancing water stewardship. ​ D iane McClintock has served as Chief Financial Officer of the Company since November 2025. Ms.
Water quality products and solutions accounted for approximately 5%, 5% and 7% of our total net sales in 2024, 2023 and 2022, respectively. ​ Commercial and Operational Excellence ​ We strive to invest in product innovation that meets the wants and needs of our customers.
Water quality products and solutions accounted for approximately 5% of our total net sales in 2025, 2024 and 2023. ​ Commercial and Operational Excellence ​ We strive to invest in product innovation that meets the wants and needs of our customers. Our focus is on differentiated products and solutions that will provide greater opportunities to distinguish ourselves in the marketplace.
Boll served as Senior Vice President and Chief Product Officer at Fluence Energy, Inc. from 2020 until January 2025. Fluence is a leading provider of energy storage products and services and cloud-based software for the renewable energy and energy storage markets, and its service offerings include delivery services and recurring operational services, as well as financing structuring services. Ms.
Fluence is a leading provider of energy storage products and services and cloud-based software for the renewable energy and energy storage markets, and its service offerings include delivery services and recurring operational services, as well as financing structuring services. Ms.
Our strategy is anchored by a commitment to connect our customers to smart systems, control those systems for optimal performance, and conserve critical water and other resources by increasing operability, efficiency, and safety.
These actions reflect our commitment to advancing product sustainability and delivering credible, third-party verified environmental information to our customers worldwide. ​ Our strategy is anchored by a commitment to connect our customers to smart systems, control those systems for optimal performance, and conserve critical water and other resources by increasing operability, efficiency, and safety.
Substantially all of the raw materials we require to manufacture our products are purchased from outside sources. The commodity markets have experienced tremendous volatility over the past several years, particularly with respect to copper and stainless steel, and we have experienced high inflationary pressures in these markets.
Substantially all these materials are sourced from external suppliers. The commodity markets have experienced tremendous volatility over the past several years, particularly with respect to copper and stainless steel, and we have experienced high inflationary pressures in these markets. Tariffs impact the total cost of our products and the components and raw materials that go into manufacturing them.
Survey results are also reviewed with our Board and used to develop and refine other aspects of our talent strategies.
Survey results are also reviewed with our Board and used to develop and refine other aspects of our talent strategies. In 2025, our global engagement survey achieved an 85% participation rate. ● Employee Engagement - Recognition .
We believe that the nature of the components and raw materials used in our business are such that multiple sources are generally available in the market. However, our current and alternative suppliers are largely concentrated in China.
We believe that the nature of the components and raw materials used in our business are such that multiple sources are generally available in the global market. Our current supply chain continues to leverage countries in Asia.
We launched an advanced technology strainer used in commercial and residential plumbing systems that allows for communication to a cellphone or BMS when the flow rate is reduced due to debris or blockages, improving process efficiency and is able to reduce total cost of maintenance for customers. We also launched three new AERCO boilers this year, with two being electric.
We offer an advanced technology strainer used in commercial and residential plumbing systems that allows for communication to a cellphone or BMS when the flow rate is reduced due to debris or blockages, improving process efficiency and is able to reduce total cost of maintenance for customers. ​ In 2025, we also advanced our Triple Play strategy (safety and regulation, water conservation, and energy efficiency) with Nexa at the core of our smart and connected initiatives.
Dunbar previously served as President of the valves and controls global business unit of Pentair Ltd. from October 2009 to December 2013. The unit was initially owned by Tyco Flow Control and Tyco Flow Control and Pentair merged in 2012. Pentair is a global provider of products and services relating to energy, water, thermal management and equipment protection.
The unit was initially owned by Tyco Flow Control and Tyco Flow Control and Pentair merged in 2012. Pentair is a global provider of products and services relating to energy, water, thermal management and equipment protection. Prior to his tenure at Pentair, Mr.
At the management level, our General Counsel and Chief Sustainability Officer, who reports directly to our Chief Executive Officer, has general oversight responsibility for all sustainability matters.
The Governance and Sustainability Committee regularly reviews the Company’s ESG performance and strategic plans and receives additional updates from the Company’s Chief Sustainability Officer as needed. At the management level, our General Counsel and Chief Sustainability Officer, who reports directly to our Chief Executive Officer, has general oversight responsibility for all sustainability matters.
Goeser(2)(3) ​ 71 ​ Director Kenneth Napolitano(1)(3) ​ 63 ​ Director Joseph T. Noonan ​ 43 ​ Director Merilee Raines(1)(3) ​ 69 ​ Director Joseph W. Reitmeier(1)(3) ​ 60 ​ Director ​ (1) Member of the Audit Committee ​ (2) Member of the Compensation Committee ​ (3) Member of the Governance and Sustainability Committee ​ Robert J.
Noonan ​ 44 ​ Director Merilee Raines(1)(3) ​ 70 ​ Director Joseph W. Reitmeier(1)(3) ​ 61 ​ Director Suzanne Stefany(2)(3) ​ 62 ​ Director ​ (1) Member of the Audit Committee ​ (2) Member of the Compensation Committee ​ (3) Member of the Governance and Sustainability Committee ​ Robert J.
We were also named one of America’s Climate Leaders by USA Today for the second consecutive year. ​ 11 Table of Contents More information about our sustainability efforts is included in our latest Sustainability Report, available at https://investors.wattswater.com/sustainability.
In addition, we were named one of America’s Climate Leaders by USA Today for the third consecutive year, one of America’s Top GreenTech Companies by Time Magazine, one of Barron’s 100 Most Sustainable Companies and one of the Boston Globe’s Top Places to Work in Massachusetts. ​ More information about our sustainability efforts is included in our latest Sustainability Report, available at https://investors.wattswater.com/sustainability.
Lepage ​ 54 ​ General Counsel, Chief Compliance Officer, Chief Sustainability Officer & Secretary Elie A. Melhem ​ 61 ​ President, Asia-Pacific, the Middle East & Africa Non-Employee Directors ​ ​ ​ ​ Rebecca J. Boll(1)(3) ​ 53 ​ Director Michael J. Dubose(2)(3) ​ 69 ​ Director David A. Dunbar(2)(3) ​ 63 ​ Lead Independent Director Louise K.
Melhem ​ 62 ​ President, Asia-Pacific, the Middle East & Africa Non-Employee Directors ​ ​ ​ ​ Rebecca J. Boll(1)(3) ​ 54 ​ Director Michael J. Dubose(2)(3) ​ 70 ​ Director David A. Dunbar(2)(3) ​ 64 ​ Lead Independent Director Louise K. Goeser(2)(3) ​ 72 ​ Director Kenneth Napolitano(1)(3) ​ 63 ​ Director Joseph T.
Dubose previously served as Vice President of National Accounts and Cross Border Business Globally for W.W. Grainger, Inc. from 2010 to March 2019. W.W. Grainger is a leading broad line supplier of maintenance, repair and operating (MRO) products. Prior to this position, he served as a Regional Vice President of Staples, Inc. from 2008 to 2010. Prior to 2008, Mr.
Grainger is a leading broad line supplier of maintenance, repair and operating (MRO) products. Prior to this position, he served as a Regional Vice President of Staples, Inc. from 2008 to 2010. Prior to 2008, Mr. Dubose held senior management positions with Corporate Express Inc., Alliant Foodservice Inc. and Baxter International Inc. ​ David A.
We formed employee resource groups, which are voluntary, employee-led groups that provide a space for all interested employees to gain professional development support, engage with our leadership teams, and drive initiatives to improve Watts. ​ ESG and Sustainability ​ Focus on Sustainability ​ We have demonstrated our focus on environmental sustainability by reducing our impact on the environment in multiple areas of our global business and by providing innovative products and solutions that can help customers to reduce their impact on the environment. ​ The Governance and Sustainability Committee of our Board of Directors has primary responsibility for the oversight of our environmental, social and governance (“ESG”) efforts and strategy.
We also refreshed our ERG branding globally with updated logos, further evaluating the visibility and impact of our employee communities. ​ ESG and Sustainability ​ Focus on Sustainability ​ We have demonstrated our focus on environmental sustainability by reducing our impact on the environment in multiple areas of our global business and by providing innovative products and solutions that can help customers to reduce their impact on the environment. ​ The Governance and Sustainability Committee of our Board of Directors has primary responsibility for the oversight of our environmental, social and governance (“ESG”) efforts and strategy.
We believe our relationships with our key suppliers are strong and an interruption in supply from any one supplier would not materially affect our ability to meet our immediate demands while another supplier is qualified. We regularly review our suppliers to evaluate their capabilities.
Although we believe that our strategic partnerships with key suppliers are strong, an interruption in supply from any one supplier could potentially affect our short-term ability to meet immediate demands while alternate sources of supply continue to be qualified. We regularly review our suppliers to evaluate their capabilities and to ensure that they continue to align with our needs.
We refer to this customer-facing mindset as commercial excellence, and we are continually looking for strategic opportunities to invest or divest, where necessary, in order to meet those objectives. In conjunction with this customer-centric focus, we continually review our operations to ensure we can efficiently and effectively produce and deliver products to customers.
Our goal is to be a solutions provider, not merely a components supplier. We refer to this customer-facing mindset as commercial excellence, and we are continually looking for strategic opportunities to invest or divest, where necessary, in order to meet those objectives.
Pagano, Jr. ​ 62 ​ Chief Executive Officer, President, Chairperson of the Board and Director Shashank Patel ​ 64 ​ Chief Financial Officer & Interim Chief Information Officer Monica Barry ​ 54 ​ Chief Human Resources Officer Andre Dhawan ​ 61 ​ Chief Operating Officer Kenneth R.
Pagano, Jr. ​ 63 ​ Chief Executive Officer, President, Chairperson of the Board and Director Diane McClintock ​ 58 ​ Chief Financial Officer Monica Barry ​ 55 ​ Chief Human Resources Officer Andre Dhawan ​ 62 ​ Chief Operating Officer Kenneth R. Lepage ​ 55 ​ General Counsel, Chief Compliance Officer, Chief Sustainability Officer & Secretary Elie A.
Dubose has served as Operating Partner for Commercial Excellence of GenNx360 Capital Partners and Chief Executive Officer of B2B Industrial Packaging since December 2024. GenNx360 Capital Partners is a private equity firm focused on acquiring middle market industrial and business service companies. B2B Industrial Packaging is a distributor of packaging equipment and supplies owned by GenNx360. Mr.
Dubose has served as the Operating Partner for Commercial Excellence of GenNx360 Capital Partners since June 2024. GenNx360 Capital Partners is a private equity firm focused on acquiring middle market industrial and business service companies. Mr. Dubose previously served as President of the Fisher Healthcare Division of Thermo Fisher Scientific Inc. from March 2019 to August 2023.
Dunbar has served as President and Chief Executive Officer and a member of the Board of Directors of Standex International Corporation since January 2014, and as Chairman since October 2016. Standex is a global, multi-industry manufacturer comprised of five broad business segments: Electronics, Engraving, Scientific, Engineering Technologies and Specialty Solutions. Mr.
Standex is a global, multi-industry manufacturer comprised of five broad business segments: Electronics, Engraving, Scientific, Engineering Technologies and Specialty Solutions. Mr. Dunbar previously served as President of the valves and controls global business unit of Pentair Ltd. from October 2009 to December 2013.
Additionally, we leverage our distribution channels through the introduction of new products and solutions, as well as the integration of products of our acquired companies. ​ The Internet of Things (“IoT”) has allowed companies to transform components and products into smart and connected solutions.
Additionally, we leverage our distribution channels through the introduction of new products and solutions, as well as the integration of products of our acquired companies. ​ Advances in smart, connected, and software-enabled technologies have enabled companies to enhance products with sensing, connectivity, and data-driven insights.
We are also striving to simplify our administrative operations to drive further efficiencies. We call this aspect of our business operational excellence. In 2024, we embarked on a multi-year SAP Enterprise Resource Planning (“ERP”) system implementation for our Americas and APMEA regions to consolidate our business systems, drive productivity and support our smart and connected strategy.
In 2024, we initiated a multi-year implementation of the SAP Enterprise Resource Planning (“ERP”) system across our Americas and APMEA regions to consolidate business systems, enhance productivity, and support our smart and connected strategy. The new ERP platform is designed to enable commercial and operational excellence by providing a modern, standardized, and connected experience for our teams.
The new, substantial tariff increases on imports to the United States from Canada and Mexico (in addition to China) announced on February 1, 2025, should they be implemented and sustained for an extended period of time, could adversely impact the gross margin we earn on our products.
The tariffs imposed in 2025 on foreign imports to the United States, particularly from Canada, China and Mexico, have increased the costs of our products and could adversely impact the gross margin we earn on our products.
As a leading global water technology company, we address some of the world’s most important sustainability priorities: the conservation, control and safe use of water.
As a leading global water technology company, we address some of the world’s most important sustainability priorities: the conservation, control and safe use of water. In 2024, we completed Life Cycle Assessments (“LCAs”) for all products manufactured at our largest production facility and foundry in Franklin, New Hampshire, covering many of our most impactful product lines.
Dubose held senior management positions with Corporate Express Inc., Alliant Foodservice Inc. and Baxter International Inc. ​ David A. Dunbar has served as a director of the Company since February 2017 and as Lead Independent Director of our Board of Directors since July 2023. Mr.
Dunbar has served as a director of the Company since February 2017 and as Lead Independent Director of our Board of Directors since July 2023. Mr. Dunbar has served as President and Chief Executive Officer and a member of the Board of Directors of Standex International Corporation since January 2014, and as Chairman since October 2016.
The new ERP is designed to enable commercial and operational excellence by empowering our resources through a modern, standardized and connected experience. ​ 5 Table of Contents Customers and Markets ​ We sell our products and solutions to plumbing, heating and mechanical wholesale distributors and dealers, original equipment manufacturers (“OEMs”), specialty product distributors, and major do-it-yourself (“DIY”) and retail chains. ​ Wholesalers.
This achievement sets the foundation for a strategic rollout roadmap in 2026 and beyond, focused on scaling implementations across key facilities to drive efficiency, improve data visibility, and strengthen operational performance globally. ​ 5 Table of Contents Customers and Markets ​ We sell our products and solutions to plumbing, heating and mechanical wholesale distributors and dealers, original equipment manufacturers (“OEMs”), specialty product distributors, and major do-it-yourself (“DIY”) and retail chains. ​ Wholesalers.
We provide global coaching opportunities through external partnerships targeted to the individual’s coaching and development needs. ​ Engagement and Performance Management ​ ● Senior Leader Communication and Transparency. We actively seek opportunities for regular engagement and communication by our CEO and other senior executive leaders with our broader employee population.
In 2025, we optimized our succession planning process and the identification of critical roles to ensure a robust and future-ready leadership pipeline. ​ 9 Table of Contents Engagement and Performance Management ​ ● Senior Leader Communication and Transparency. We actively seek opportunities for regular engagement and communication by our CEO and other senior executive leaders with our broader employee population.
This new solution provides insight into water systems and unlocks significant value in onsite operations and water risk management, while supporting customers’ sustainability targets. ​ We continue to focus on sustainability by taking steps to reduce the negative impact our operations have on the environment while generating economic value, and we manufacture and sell solutions, products and technologies that enable our customers to reduce their negative impact to the environment.
In 3 Table of Contents 2025, we expanded the range of our equipment portfolio that is integrated into Nexa, strengthening its unique value proposition of combining industry leading equipment solutions, with a cloud-based SaaS platform to provide actionable visibility into building water systems, supporting improved operational oversight, water risk management, and customer sustainability objectives. ​ We continue to focus on sustainability by taking steps to reduce the negative impact our operations have on the environment while generating economic value, and we manufacture and sell solutions, products and technologies that enable our customers to reduce their negative impact on the environment.
We partner with external vendors to offer leadership and professional development opportunities such as coaching for improved performance, time management and new manager skills. ● Performance Management Training. We offer a targeted training series addressing the components of performance management to help all employees accomplish their individual goals and strategic objectives of the organization.
Learning collections on relevant topics are provided which employees can access on-demand. ● Performance Management Training. We offer a targeted training series addressing the components of performance management to help all employees accomplish their individual goals and strategic objectives of the organization.
During 2024, we worked with Planet Water to fund the construction of eight AquaTowers and AquaSan systems during their World Water Day and Global Handwashing Day campaigns in order to provide clean, safe drinking water for people in Cambodia, Mexico, the Philippines and Vietnam and the construction of an additional emergency Aqua Tower in Vietnam in the wake of Typhoon Yagi.
During 2025, we worked with Planet Water to fund the construction of six AquaTowers and AquaSan systems during their World Water Day and Global Handwashing Day campaigns in order to provide clean, safe drinking water for people in Mexico, India and the Philippines and funded four emergency disaster response projects in Myanmar, the Philippines, Jamica and Indonesia. ​ Governance, Business Ethics, and Compliance ​ We believe that good corporate governance and an environment of high ethical standards are important for us to achieve business success and to create value for our stockholders.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn addition, acquisitions may involve a number of risks, including, but not limited to: ​ ● difficulties in integrating operations, business processes, systems and company culture; ● challenges in conforming standards, controls, procedures and accounting and other policies, business cultures and compensation structures; ● adverse effects on existing business relationships with suppliers or customers; ● inadequate internal control over financial reporting and our ability to bring such controls into compliance with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 in a timely manner; ● adverse short-term effects on our reported operating results, as a result of incurring acquisition-related debt, pre-acquisition potential tax liabilities, acquisition expenses, and the amortization of acquisition-acquired assets; ● inability to effectively transfer liabilities, contracts, facilities and employees to the purchaser, identify and separate the intellectual property to be divested from the intellectual property that we wish to keep and reduce fixed costs previously associated with the divested assets or business; we may still retain liabilities associated with the divested businesses and other indemnification obligations; ● diversion of management’s attention; ● investigations of, or challenges to, acquisitions by competition authorities; ● loss of key personnel at acquired companies; ● unanticipated management or operational problems or legal liabilities; and ● potential goodwill, indefinite-lived intangible asset, or long-lived asset impairment charges. ​ We are subject to risks related to product defects, which could result in product recalls and could subject us to warranty claims in excess of our warranty provisions or which are greater than anticipated due to the unenforceability of liability limitations. ​ We cannot be certain that our quality controls and procedures, including the testing of raw materials and safety testing of selected finished products, will reveal latent defects in our products or the materials from which they are made, which may not become apparent until after the products have been sold into the market.
Biggest changeIn addition, acquisitions may involve a number of risks, including, but not limited to: ​ 24 Table of Contents ● difficulties in integrating operations, business processes, systems and company culture; ● challenges in conforming standards, controls, procedures and accounting and other policies, business cultures and compensation structures; ● adverse effects on existing business relationships with suppliers or customers; ● inadequate internal control over financial reporting and our ability to bring such controls into compliance with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 in a timely manner; ● adverse short-term effects on our reported operating results, as a result of incurring acquisition-related debt, pre-acquisition potential tax liabilities, acquisition expenses, and the amortization of acquisition-acquired assets; ● inability to effectively transfer liabilities, contracts, facilities and employees to the purchaser, identify and separate the intellectual property to be divested from the intellectual property that we wish to keep and reduce fixed costs previously associated with the divested assets or business; we may still retain liabilities associated with the divested businesses and other indemnification obligations; ● diversion of management’s attention; ● investigations of, or challenges to, acquisitions by competition authorities; ● loss of key personnel at acquired companies; ● unanticipated management or operational problems or legal liabilities; and ● potential goodwill, indefinite-lived intangible asset, or long-lived asset impairment charges.
If economic conditions worsen in the future, our revenues and profits could decrease or trigger goodwill, indefinite-lived intangible assets, or long-lived asset impairments and could have a material adverse effect on our financial condition and results of operations. ​ Changes in the costs of raw materials and purchased components, including imposition of or changes in tariff rates, as well as supply chain and logistics disruptions, could reduce our profit margins and adversely affect our ability to meet our customer delivery commitments. ​ Our products are made using various purchased components and raw materials, including primarily bronze, brass, cast iron, stainless steel, steel and plastic.
If economic conditions worsen in the future, our revenues and profits could decrease or trigger goodwill, indefinite-lived intangible assets, or long-lived asset impairments and could have a material adverse effect on our financial condition and results of operations. ​ Changes in the costs of raw materials and purchased components, including imposition of tariffs or changes in tariff rates, as well as supply chain and logistics disruptions, could reduce our profit margins and adversely affect our ability to meet our customer delivery commitments. ​ Our products are made using various purchased components and raw materials, including primarily bronze, brass, cast iron, stainless steel, steel and plastic.
If it became necessary for us to resort to litigation to protect our intellectual property rights, any proceedings could be burdensome and costly, and we may not prevail. Further, adequate remedies may not be available in the event of an unauthorized use or disclosure of our trade secrets and manufacturing expertise.
If it became necessary for us to resort to litigation to protect our intellectual property rights, any proceedings could be burdensome and costly, and we may not prevail. Further, adequate remedies may not be available in the event of unauthorized use or disclosure of our trade secrets and manufacturing expertise.
In addition, our current primary ERP system will continue to be used over the course of the phased implementation and we may experience system interruptions or deficiencies as described in the paragraph above. Furthermore, the implementation of our ERP system will mandate new procedures and many new controls over financial reporting.
In addition, our current primary ERP system will continue to be used over the course of the phased implementation and we may experience system interruptions or deficiencies as described above. Furthermore, the implementation of our ERP system will mandate new procedures and many new controls over financial reporting.
Any disruptions, delays or deficiencies related to our primary ERP system could lead to substantial business interruption, including our ability to perform routine business transactions, which could have a material adverse effect on our financial results. ​ Given the unpredictability of the timing, nature and scope of such disruptions, we could potentially be subject to production downtimes, operational delays, other detrimental impacts on our operations or ability to provide products to our customers, the compromising of confidential information, misappropriation, destruction or corruption of data, security incidents, other manipulation or improper use of our IT Systems, networks or our products, financial losses from remedial actions, loss of business or potential liability, and/or damage to our reputation, any of which could have a material adverse effect on our competitive position, results of operations, cash flows or financial condition. ​ 20 Table of Contents We are in the process of replacing our current primary ERP system with a new ERP system, and this system implementation is expected to occur in phases over the next several years.
Any disruptions, delays or deficiencies related to our primary ERP system could lead to substantial business interruption, including our ability to perform routine business transactions, which could have a material adverse effect on our financial results. ​ Given the unpredictability of the timing, nature and scope of such disruptions, we could potentially be subject to production downtimes, operational delays, other detrimental impacts on our operations or ability to provide products to our customers, the compromising of confidential information, misappropriation, destruction or corruption of data, security incidents, other manipulation or improper use of our IT Systems, networks or our products, financial losses from remedial actions, loss of business or potential liability, and/or damage to our reputation, any of which could have a material adverse effect on our competitive position, results of operations, cash flows or financial condition. ​ We are in the process of replacing our current primary ERP system with a new ERP system, and this system implementation is expected to occur in phases over the next several years.
As ESG best practices, reporting standards, and disclosure requirements continue to develop, we may incur increasing costs related to ESG monitoring and reporting. In addition, new, conflicting ESG rules and regulations have been adopted and may continue to be introduced in various states and other jurisdictions.
As ESG best practices, reporting standards, and disclosure requirements continue to develop, we may incur increasing costs related to ESG monitoring and reporting. In addition, conflicting ESG rules and regulations have been adopted and may continue to be introduced in various states and other jurisdictions.
Our effective tax rate and cash tax payments could increase in future years as a result of these changes. ​ The U.S. enacted the Inflation Reduction Act of 2022 (“IRA”) in August 2022, which, among other provisions, created a new corporate alternative minimum tax (CAMT) of at least 15% for certain large corporations that have at least an average of $1 billion in adjusted financial statement income over a consecutive three-year period, and became effective in tax years beginning after December 31, 2022.
Our effective tax rate and cash tax payments could increase in future years as a result of these changes. ​ The U.S. enacted the Inflation Reduction Act of 2022 (“IRA”) in August 2022, which, among other provisions, created a new corporate alternative minimum tax (“CAMT”) of at least 15% for certain large corporations that have at least an average of $1 billion in adjusted financial statement income over a consecutive three-year period, and became effective in tax years beginning after December 31, 2022.
“Business—Product Liability, Environmental and Other Litigation Matters” and Note 16 of the Notes to the Consolidated Financial Statements, both of which are incorporated herein by reference. ​ Climate change, and legislation or regulations addressing climate change, may have an adverse impact on our business and results of operations . ​ The impacts of climate change vary depending on geographical location, but could include changing temperatures, droughts, water shortages, wildfires, changes in weather and rainfall patterns, changes in sea levels, and changing storm patterns and intensities.
“Business—Product Liability, Environmental and Other Litigation Matters” and Note 17 of the Notes to the Consolidated Financial Statements, both of which are incorporated herein by reference. ​ Climate change, and legislation or regulations addressing climate change, may have an adverse impact on our business and results of operations . ​ The impacts of climate change vary depending on geographical location, but could include changing temperatures, droughts, water shortages, wildfires, changes in weather and rainfall patterns, changes in sea levels, and changing storm patterns and intensities.
In 2024 and 2023 none of our long-lived assets were impaired. ​ There can be no assurances that future goodwill, indefinite-lived intangible assets or other long-lived asset impairments will not occur.
In 2025, 2024 and 2023, none of our long-lived assets were impaired. ​ There can be no assurances that future goodwill, indefinite-lived intangible assets or other long-lived asset impairments will not occur.
We perform our annual test for indications of goodwill and indefinite-lived intangible assets impairment in the fourth quarter of our fiscal year or sooner if indicators of impairment exist. ​ The loss or financial instability of major customers could have an adverse effect on our results of operations. ​ In 2024, our top ten customers accounted for approximately 23% of our total net sales with no one customer accounting for more than 10% of our total net sales.
We perform our annual test for indications of goodwill and indefinite-lived intangible assets impairment in the fourth quarter of our fiscal year or sooner if indicators of impairment exist. ​ The loss or financial instability of major customers could have an adverse effect on our results of operations. ​ In 2025, our top ten customers accounted for approximately 23% of our total net sales with no one customer accounting for more than 10% of our total net sales.
Such ESG matters may also impact our suppliers, customers, and business partners, which may augment or cause additional impacts on our business, financial condition or results of operations. ​ 25 Table of Contents Our ability to achieve savings through our restructuring and business transformation activities may be adversely affected by management’s ability to fully execute such plans as a result of local regulations, geo-political risk or other factors within or beyond the control of management. ​ We have implemented a number of restructuring and business transformation activities, which include steps that we believe are necessary to enhance the value and performance of the Company, including reducing operating costs and increasing efficiencies throughout our manufacturing, sales and distribution footprint.
Such ESG matters may also impact our suppliers, customers, and business partners, which may augment or cause additional impacts on our business, financial condition or results of operations. ​ 28 Table of Contents Our ability to achieve savings through our restructuring and business transformation activities may be adversely affected by management’s inability to fully execute such plans as a result of local regulations, geo-political risk or other factors within or beyond the control of management. ​ We have implemented a number of restructuring and business transformation activities, which include steps that we believe are necessary to enhance the value and performance of the Company, including reducing operating costs and increasing efficiencies throughout our manufacturing, sales and distribution footprint.
Our future taxes could be affected by numerous factors, including changes in the mix of our profitability from country to country, the results of examinations and audits of our tax filings, adjustments to our uncertain tax positions, changes in accounting for income taxes and changes in tax laws. ​ 27 Table of Contents In the ordinary course of our business, there are many transactions and calculations where the ultimate tax determination is uncertain.
Our future taxes could be affected by numerous factors, including changes in the mix of our profitability from country to country, the results of examinations and audits of our tax filings, adjustments to our uncertain tax positions, changes in accounting for income taxes and changes in tax laws. ​ 30 Table of Contents In the ordinary course of our business, there are many transactions and calculations where the ultimate tax determination is uncertain.
Should we require additional debt financing above our existing credit limit, we cannot be assured such financing would be available to us or available to us on reasonable economic terms. ​ 26 Table of Contents Our inability to attract and retain key personnel may adversely affect our business. ​ Our success depends on our ability to recruit, retain and develop highly-skilled management and key personnel.
Should we require additional debt financing above our existing credit limit, we cannot be assured such financing would be available to us or available to us on reasonable economic terms. ​ 29 Table of Contents Our inability to attract and retain key personnel may adversely affect our business. ​ Our success depends on our ability to recruit, retain and develop highly-skilled management and key personnel.
PRP designation typically requires the funding of site investigations and subsequent remedial activities. Such liability can be imposed without regard to fault and, under certain circumstances, may be joint and several, which may result in one PRP being held responsible for the entire obligation. Liability may also include damages to natural resources.
PRP designation typically requires the funding of site investigations and subsequent remedial activities. Such liability can be imposed without regard to fault and, under certain circumstances, may be joint and several, which may result in one PRP being held responsible for the entire obligation. Liability may also include damage to natural resources.
If any of these events were to occur, our business, results of operations, and financial condition could be materially adversely affected. ​ 21 Table of Contents Implementation of our strategic initiatives, including acquisitions and dispositions, and integration of acquired businesses may not be successful, which could affect our ability to increase our revenues or our profitability. ​ One of our strategies is to increase our revenues and profitability and expand our business through acquisitions that will provide us with complementary products and solutions and enhance our existing product offerings.
If any of these events were to occur, our business, results of operations, and financial condition could be materially adversely affected. ​ Implementation of our strategic initiatives, including acquisitions and dispositions, and integration of acquired businesses may not be successful, which could affect our ability to increase our revenues or our profitability. ​ One of our strategies is to increase our revenues and profitability and expand our business through acquisitions that will provide us with complementary products and solutions and enhance our existing product offerings.
We have invested, and continue to invest, human and technology resources in our efforts to comply with such requirements that may be time-intensive and costly. ​ The application and interpretation of such requirements are constantly evolving and are subject to change, creating a complex compliance environment.
We have invested, and continue to invest, human and technological resources in our efforts to comply with such requirements that may be time-intensive and costly. ​ The application and interpretation of such requirements are constantly evolving and are subject to change, creating a complex compliance environment.
In lieu of amortization, we are required to perform an annual impairment review of both goodwill and indefinite-lived intangible assets. In 2024, 2023 and 2022, none of our goodwill reporting units or our indefinite lived tradenames were impaired. We are also required to perform an impairment review of our long-lived assets if indicators of impairment exist.
In lieu of amortization, we are required to perform an annual impairment review of both goodwill and indefinite-lived intangible assets. In 2025, 2024 and 2023, none of our goodwill reporting units or our indefinite lived tradenames were impaired. We are also required to perform an impairment review of our long-lived assets if indicators of impairment exist.
While we have taken steps designed to reduce interruptions by implementing internal controls, a cybersecurity risk management program, network and data center resiliency, and redundancy and recovery processes, these measures may be inadequate. ​ 19 Table of Contents Cybersecurity attacks, in particular, are evolving and are expected to accelerate on a global basis in frequency and magnitude as threat actors become increasingly sophisticated in using techniques and tools (including artificial intelligence) to circumvent security controls, evade detection and remove forensic evidence.
While we have taken steps designed to reduce interruptions by implementing internal controls, a cybersecurity risk management program, network and data center resiliency, and redundancy and recovery processes, these measures may be inadequate. ​ Cybersecurity attacks, in particular, are evolving and are expected to accelerate on a global basis in frequency and magnitude as threat actors become increasingly sophisticated in using techniques and tools (including artificial intelligence) to circumvent security controls, evade detection and remove forensic evidence.
During fiscal year 2024, our results of operations were impacted by the softening of economic conditions in Europe. The continuation of economic weakness in Europe or in other regions could adversely impact our financial performance in such regions, as well as our consolidated financial performance.
During fiscal year 2025, our results of operations were impacted by the softening of economic conditions in Europe. The continuation of economic weakness in Europe or in other regions could adversely impact our financial performance in such regions, as well as our consolidated financial performance.
“Business—Product Liability, Environmental and Other Litigation Matters” and Note 16 of the Notes to the Consolidated Financial Statements, both of which are incorporated herein by reference. 23 Table of Contents We are subject to environmental, health and safety laws and regulations, which could result in costs, liabilities and impacts to our business operations. ​ Our operations and facilities in all jurisdictions in which we operate are subject to federal, state, local and foreign laws and regulations related to pollution and the protection of the environment and health and safety, including, but not limited to those governing air emissions, discharges to water, water usage, the generation, handling, storage, treatment and disposal of hazardous wastes and other materials, and the remediation of contaminated sites.
“Business—Product Liability, Environmental and Other Litigation Matters” and Note 17 of the Notes to the Consolidated Financial Statements, both of which are incorporated herein by reference. ​ 26 Table of Contents We are subject to and impacted by environmental, health and safety laws and regulations, which could result in costs, liabilities and impacts to our business operations. ​ Our operations and facilities in all jurisdictions in which we operate are subject to federal, state, local and foreign laws and regulations related to pollution and the protection of the environment and health and safety, including, but not limited to those governing air emissions, discharges to water, water usage, the generation, handling, storage, treatment and disposal of hazardous wastes and other materials, and the remediation of contaminated sites.
We may incur additional operating expenses if our warranty provision does not reflect the actual cost of resolving issues related to defects in our products. If these additional expenses are significant, it could adversely affect our business, financial condition and results of operations. ​ We use important intellectual property in our business.
We may incur additional operating expenses if our warranty provision does not reflect the actual cost of resolving issues related to defects in our products. If these additional expenses are significant, it could adversely affect our business, financial condition and results of operations. ​ 25 Table of Contents We use important intellectual property in our business.
This may result in the delay or cancellation of orders from our customers or potential customers and may adversely affect our revenues and our ability to manage inventory levels, collect customer receivables and maintain profitability.
This may result in a delay or cancellation of orders from our customers or potential customers and may adversely affect our revenues and our ability to manage inventory levels, collect customer receivables and maintain profitability.
Our Class B common stock entitles its holders to ten votes for each share, and our Class A common stock entitles its holders to one vote per share. As of December 31, 2024, Timothy P.
Our Class B common stock entitles its holders to ten votes for each share, and our Class A common stock entitles its holders to one vote per share. As of December 31, 2025, Timothy P.
Our insurance policies may not cover the costs of a product recall. ​ 22 Table of Contents Our standard warranties contain limits on damages and exclusions of liability for consequential damages and for misuse, improper installation, alteration, accident or mishandling while in the possession of someone other than us.
Our insurance policies may not cover the costs of a product recall. ​ Our standard warranties contain limits on damages and exclusions of liability for consequential damages and for misuse, improper installation, alteration, accident or mishandling while in the possession of someone other than us.
Any significant disruption or deficiency in the design and implementation of our software IT Systems, including our new ERP, could adversely affect our ability to process orders, ship product, send invoices and track payments, fulfill contractual obligations or otherwise operate our business.
Any significant disruption or deficiency in the design and implementation of our software IT Systems, including our new ERP system, could adversely affect our ability to process orders, ship products, send invoices and track payments, fulfill contractual obligations or otherwise operate our business.
If we fail to retain and recruit the necessary personnel or arrange for successors to key personnel, our business could materially suffer. ​ Investment Risk Factors ​ One of our stockholders can exercise substantial influence over our Company. ​ As of December 31, 2024, Timothy P. Horne beneficially owned 5,933,290 shares of Class B common stock.
If we fail to retain and recruit the necessary personnel or arrange for successors to key personnel, our business could materially suffer. ​ Investment Risk Factors ​ One of our stockholders can exercise substantial influence over our Company. ​ As of December 31, 2025, Timothy P. Horne beneficially owned 5,896,290 shares of Class B common stock.
Our business and future operating results could be harmed by a variety of factors, including: ​ ● unexpected geo-political events in foreign countries in which we operate, which could adversely affect manufacturing and our ability to fulfill customer orders; and threats or outbreaks of war, terrorism, governmental instability, or international tensions and conflicts, which could cause supply chain disruptions impacting our ability to manufacture products, service our customers or negatively impact our profit margins ; 18 Table of Contents ● our failure to comply with anti-corruption laws and regulations of the U.S. government and various international jurisdictions, such as the U.S.
Our business and future operating results could be harmed by a variety of factors, including: ​ ● unexpected geopolitical events in foreign countries in which we operate, which could adversely affect manufacturing and our ability to fulfill customer orders; and threats or outbreaks of war, terrorism, governmental instability, or international tensions and conflicts, which could cause supply chain disruptions impacting our ability to manufacture products, service our customers or negatively impact our profit margins ; ● our failure to comply with anti-corruption laws and regulations of the U.S. government and various international jurisdictions, such as the U.S.
Horne beneficially owned approximately 17.8% of our outstanding shares of Class A common stock (assuming conversion of all shares of Class B common stock beneficially owned by Mr. Horne into Class A common stock) and approximately 99.7% of our outstanding shares of Class B common stock, which represents approximately 68.3% of the total outstanding voting power. As long as Mr.
Horne beneficially owned approximately 17.7% of our outstanding shares of Class A common stock (assuming conversion of all shares of Class B common stock beneficially owned by Mr. Horne into Class A common stock) and approximately 99.7% of our outstanding shares of Class B common stock, which represents approximately 68.1% of the total outstanding voting power. As long as Mr.
The availability of components and finished goods from international sources could be adversely impacted by a range of factors, such as a public health crisis, extreme weather events, suppliers’ allocations to other purchasers, threats of wars and global geo-political instability, and new laws, tariffs or regulations that might cause short-term / long-term supply chain disruptions. ​ 17 Table of Contents As a global manufacturer and distributor, we are facing additional risks related to ongoing disruptions and increased costs in our supply chain and logistics.
The availability of components and finished goods from international sources could be adversely impacted by a range of factors, such as public health crises, extreme weather events, suppliers’ allocations to other purchasers, threats of wars and global geopolitical instability, and new laws, tariffs or regulations that might cause short or long-term supply chain disruptions. ​ 18 Table of Contents As a global manufacturer and distributor, we are facing additional risks related to ongoing disruptions and increased costs in our supply chain and logistics.
We cannot ensure that we adequately protect against such loss. ​ Economic and other risks associated with international sales and operations could adversely affect our business and future operating results. ​ Since we sell and manufacture our products worldwide, our business is subject to risks associated with doing business internationally.
We cannot ensure that we adequately protect against such loss. ​ 20 Table of Contents Economic and other risks associated with international sales and operations could adversely affect our business and future operating results. ​ Since we sell and manufacture our products worldwide, our business is subject to risks associated with doing business internationally.
A portion of our net sales and certain portions of our costs, assets and liabilities are denominated in currencies other than U.S. dollars. Approximately 31%, 36% and 34% of our net sales in 2024, 2023 and 2022, respectively, were from sales outside of the U.S.
A portion of our net sales and certain portions of our costs, assets and liabilities are denominated in currencies other than U.S. dollars. Approximately 29%, 31% and 36% of our net sales in 2025, 2024 and 2023, respectively, were from sales outside of the U.S.
Company Risk Factors ​ Our business, reputation and financial performance may be adversely affected if we or our third-party providers fail to protect confidential information and/or experience by cybersecurity attacks, information technology failures and other business disruptions. ​ We depend heavily on the confidentiality, integrity and availability of our and third-party information technology, networks infrastructure and systems (collectively, “IT Systems”), including third-party data centers and third-party cloud services, to manage our business objectives and operations, support our customers’ requirements and protect proprietary and other sensitive information, including personal information. ​ Any damage to, or failure of, our IT Systems or a third-party hosting facility or other service or IT System that we use, could severely impact our ability to conduct our business operations, attract new customers, maintain existing customers, or result in a material weakness in our internal control over financial reporting, any of which could materially adversely affect our future operating results.
Measures to contain a public health crisis may intensify other risks described in these Risk Factors. 21 Table of Contents Company Risk Factors ​ Our business, reputation and financial performance may be adversely affected if we or our third-party providers fail to protect confidential information and/or experience cybersecurity attacks, information technology failures and other business disruptions. ​ We depend heavily on the confidentiality, integrity and availability of our information technology, networks infrastructure and systems (collectively, “IT Systems”) and third-party IT Systems, including third-party data centers and third-party cloud services, to manage our business objectives and operations, support our customers’ requirements and protect proprietary and other sensitive information, including personal information. ​ Any damage to, or failure of, our IT Systems or a third-party hosting facility or other service or IT System that we use could severely impact our ability to conduct our business operations, attract new customers, maintain existing customers, or result in a material weakness in our internal control over financial reporting, any of which could materially adversely affect our future operating results.
Concern over climate change has and may continue to result in new or increased legal and regulatory requirements to respond to or mitigate the effects of climate change, including limitations on greenhouse gas emissions, which could increase our costs or require additional investments in our facilities and equipment, or to disclose efforts and progress regarding such matters, which could require us to make significant new disclosures regarding the climate-related impacts of our business.
Concern over climate change, in addition to political debates over the need for additional regulation, has and may continue to result in new or amended legal and regulatory requirements to respond to or mitigate the effects of climate change, including limitations on greenhouse gas emissions, which could increase our costs or require additional investments in our facilities and equipment, or to disclose efforts and progress regarding such matters, which could require us to make significant new disclosures regarding the climate-related impacts of our business.
With this increased focus, public reporting regarding ESG practices is becoming more broadly expected by some stakeholders, which could lead to increased scrutiny of our ESG practices or lack thereof.
Public reporting regarding ESG practices is becoming more expected by some stakeholders, which could lead to increased scrutiny of our ESG practices or lack thereof.
Horne will be able to unilaterally determine the outcome of most stockholder votes, and other stockholders will not be able to affect the outcome of any such votes. ​ Conversion and subsequent sale of a significant number of shares of our Class B common stock could adversely affect the market price of our Class A common stock. ​ As of December 31, 2024, there were 27,366,685 shares of our Class A common stock outstanding and 5,953,290 shares of our Class B common stock outstanding.
Horne will be able to unilaterally determine the outcome of most stockholder votes, and other stockholders will not be able to affect the outcome of any such votes. ​ Conversion and subsequent sale of a significant number of shares of our Class B common stock could adversely affect the market price of our Class A common stock. ​ As of December 31, 2025, there were 27,426,533 shares of our Class A common stock outstanding and 5,916,290 shares of our Class B common stock outstanding.
Cybersecurity may also be breached through diverse attack vectors, such as social engineering/phishing, malware (including ransomware), human error, malfeasance by insiders, system errors or vulnerabilities, including vulnerabilities of our customers, distributors, vendors, suppliers, and their products.
Cybersecurity may also be breached through diverse attack vectors, such as social engineering/phishing or other impersonation attacks, including those enhanced by artificial intelligence, malware (including ransomware), human error, malfeasance by insiders, system errors or vulnerabilities, including vulnerabilities of our customers, distributors, vendors, suppliers, and their products.
In addition, our restructuring and transformation activities may place substantial demands on our management, which could lead to diversion of management’s attention from other business priorities and result in a reduced customer focus. ​ The requirements to evaluate goodwill, indefinite-lived intangible assets and long-lived assets for impairment may result in a write-off of all or a portion of our recorded amounts, which would negatively affect our operating results and financial condition. ​ As of December 31, 2024, our balance sheet included goodwill, indefinite-lived intangible assets, amortizable intangible assets and property, plant and equipment of $715.0 million, $70.4 million, $164.6 million and $254.8 million, respectively.
In addition, our restructuring and transformation activities may place substantial demands on our management, which could lead to diversion of management’s attention from other business priorities and result in a reduced customer focus. ​ The requirements to evaluate goodwill, indefinite-lived intangible assets and long-lived assets for impairment may result in a write-off of all or a portion of our recorded amounts, which would negatively affect our operating results and financial condition. ​ As of December 31, 2025, our balance sheet included goodwill, indefinite-lived intangible assets, amortizable intangible assets and property, plant and equipment of $859.0 million, $79.4 million, $215.2 million and $297.1 million, respectively.
Congress could advance other tax legislation proposals in the future that could have a material impact on our financial statements. ​ Item 1B. UNRESOLVED STAFF COMMENTS. ​ None. ​
In addition, it is possible that the U.S. Congress could advance other tax legislation proposals in the future that could have a material impact on our financial statements. ​ Item 1B. UNRESOLVED STAFF COMMENTS. ​ None. ​
Substantially all of the raw materials we require to manufacture our products are purchased from outside sources. The costs and availability of raw materials and components may be subject to change due to, among other things, interruptions in production by suppliers, changes in worldwide prices, demand levels, exchange rates and imposition of or changes in tariff rates.
Substantially all of these materials are sourced from external suppliers. The costs and availability of raw materials and components may be subject to change due to, among other things, interruptions in production by suppliers, changes in worldwide prices, demand levels, exchange rates, imposition of tariffs or changes in tariff rates.
If we are unable to be agile and responsive to disruption in the development of new products, services and technologies, including technologies such as artificial intelligence and machine learning, our business, financial condition, results of operations and cash flows could be adversely affected.
If we are unable to be agile and responsive to disruption in the development of new products, services and technologies, including artificial intelligence, machine learning and other advanced digital technologies that are increasingly central to product development, manufacturing efficiency, and customer engagement, our business, financial condition, results of operations and cash flows could be adversely affected.
Moreover, we may be subject to the International Sustainability Standards Board’s climate and sustainability disclosure requirements, as such may be or have been adopted into law by countries including the United Kingdom, Canada, Australia, China, Hong Kong, and Singapore. ​ While we may at times engage in voluntary initiatives (such as voluntary disclosures or goals), such initiatives may be costly and may not have the desired effect.
Moreover, we may be subject to the International Sustainability Standards Board’s climate and sustainability disclosure requirements, as such may be or have been adopted into law by jurisdictions including the United Kingdom, Canada, Australia, China, Hong Kong, and Singapore.
To date, approximately 140 countries have tentatively signed a framework agreeing in principle to this initiative. A number of countries in which we do business have implemented Pillar Two proposals into local tax legislation. Details around the proposals are still uncertain as the OECD and local jurisdictions continue to issue the technical guidance.
To date, approximately 140 countries have tentatively signed a framework agreeing in principle to this initiative. A number of countries in which we do business have implemented Pillar Two proposals into local tax legislation.
If we are unable to adequately maintain procedures and controls relating to our ERP system, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired and impact our assessment of the effectiveness of our internal controls over financial reporting. ​ Any actual or perceived failure to comply with new or existing laws, regulations and other requirements relating to the privacy, security and processing of personal information could adversely affect our business, results of operations, or financial condition. ​ In connection with running our business, we receive, store, use and otherwise process information that relates to individuals and/or constitutes “personal data,” “personal information,” “personally identifiable information,” or similar terms under applicable data privacy laws, including from and about actual and prospective customers, as well as our employees and business contacts.
These issues could increase the risk of cybersecurity incidents, processing errors, or operational disruption during and after implementation. ​ 23 Table of Contents Any actual or perceived failure to comply with new or existing laws, regulations and other requirements relating to the privacy, security and processing of personal information could adversely affect our business, results of operations, or financial condition. ​ In connection with running our business, we receive, store, use and otherwise process information that relates to individuals and/or constitutes “personal data,” “personal information,” “personally identifiable information,” or similar terms under applicable data privacy laws, including from and about actual and prospective customers, as well as our employees and business contacts.
New legislation and regulatory requirements may also impact our customers and suppliers, which could affect demand for our products or our ability to source key materials. In addition, our customers and suppliers may impose their own requirements with respect to climate change and greenhouse gas emissions that may require us to incur additional costs to comply with such requirements.
In addition, our customers and suppliers may impose their own requirements with respect to climate change and greenhouse gas emissions that may require us to incur additional costs to comply with such requirements.
Also, companies acquired recently and in the future may not achieve anticipated revenues, cost synergies, profitability or cash flows that justify our investment, or divestitures may not realize the expected benefits or synergies of such transactions.
This competition, and the resulting purchase price increases, may limit the number of acquisition opportunities available to us, possibly leading to a decrease in the rate of growth of our revenues and profitability. ​ Companies acquired recently and in the future may not achieve anticipated revenues, cost synergies, profitability or cash flows that justify our investment, or divestitures may not realize the expected benefits or synergies of such transactions.
We face numerous cybersecurity risks that threaten the confidentiality, integrity and availability of our IT Systems and information, including from diverse threat actors, such as state-sponsored organizations, opportunistic hackers and hacktivists, and as a result of malicious software, misconfigurations, bugs, attempts to gain unauthorized access to data (including through social engineering/phishing or the use of malware/ransomware), other electronic security breaches that could lead to disruptions in systems, unauthorized release of confidential or otherwise protected information and corruption of data, and other vulnerabilities in commercial software that is integrated into our (or our suppliers’ or service providers’) IT Systems, products or services.
We face numerous cybersecurity risks that threaten the confidentiality, integrity and availability of our IT Systems and information, including from diverse threat actors, such as state-sponsored organizations, opportunistic hackers and hacktivists, and as a result of sophisticated cyberattacks, system vulnerabilities, third-party failures and other vulnerabilities in commercial software that is integrated into our (or our suppliers’ or service providers’) IT Systems, products or services.
Any failure to achieve our own goals, or any perception of a failure to act responsibly with respect to the environment or to effectively respond to regulatory requirements concerning climate change, or failure to accurately report on our progress toward achieving our goal or in environmental and sustainability programs can lead to adverse publicity or litigation, resulting in an adverse effect on our business or damage to our reputation. ​ Increased scrutiny of, and evolving and conflicting expectations regarding, sustainability and ESG matters could increase our costs, harm our reputation and adversely impact our financial results. ​ Companies are facing increasing, evolving and conflicting scrutiny related to ESG practices and disclosures from certain investors, government entities, customers, employees, and other stakeholders or third parties.
Any failure to achieve our own goals, or any perception of a failure to act responsibly with respect to the environment or to effectively respond to regulatory requirements concerning climate change, or failure to accurately report on our progress toward achieving our goal or in environmental and sustainability programs can lead to adverse publicity or litigation, resulting in an adverse effect on our business or damage to our reputation.
Any failure to comply with those requirements may also affect demand for our products or our ability to source key materials. We also establish our own goals with respect to reducing 24 Table of Contents our impact on the environment.
Any failure to comply with those requirements, or adapt to rollbacks in regulatory 27 Table of Contents requirements, may also affect demand for our products or our ability to source key materials.
Certain market participants, including major institutional investors, use third-party benchmarks, ratings, or scores to measure our ESG practices in making investment and voting decisions.
Certain market participants, including major institutional investors, use third-party benchmarks, ratings, or scores to measure our ESG practices in making investment and voting decisions. Unfavorable ratings or scores of us or our industry may lead to negative investor sentiment and reduced investment, which could have a negative impact on our stock price and our access to and cost of capital.
These vulnerabilities and security defects could expose us or our customers to a risk of loss, disclosure, or misuse of data; adversely affect our operating results; result in litigation (including class actions), liability, or regulatory action (including under laws related to privacy, data protection, data security, network security, and consumer protection); deter customers or sellers from using our products, services and solutions; result in significant incident response, system restoration or remediation costs; and otherwise harm our business and reputation.
These vulnerabilities and security defects could expose us or our customers to a risk of loss, disclosure, or misuse of data; adversely affect our operating results; result in litigation (including class actions), liability, or regulatory action (including under laws related to privacy, data protection, data security, network security, and consumer protection); deter customers or sellers from using our products, services and solutions; result in significant incident response, system restoration or remediation costs; and otherwise harm our business and reputation. ​ We maintain a cybersecurity risk management program and have adopted measures and incurred costs with the intention of mitigating potential risks associated with information technology disruptions and cybersecurity threats; however, there is no assurance that these measures will be fully implemented, complied with or effective at preventing or detecting cyberattacks or security breaches, or other vulnerabilities, which may allow such risks to persist in the environment over long periods of time.
The conflicts in Europe and the Middle East have negatively impacted, and may continue to negatively impact, the availability and prices for raw materials, and components. ​ We face intense competition and, if we are not able to respond to competition in our markets, our revenues and profits may decrease. ​ Competitive pressures in our markets could adversely affect our competitive position, leading to a possible loss of market share or a decrease in prices, either of which could result in decreased revenues and profits.
Any of these events could increase the cost of our products, create disruptions to our supply chain and impair our ability to effectively operate and compete in the countries where we do business. ​ 19 Table of Contents We face intense competition and, if we are not able to respond to competition in our markets, our revenues and profits may decrease. ​ Competitive pressures in our markets could adversely affect our competitive position, leading to a possible loss of market share or a decrease in prices, either of which could result in decreased revenues and profits.
We have been impacted by certain cybersecurity attacks, either directly or indirectly via our supply chain or third-party vendors, and may continue to experience them going forward, potentially with more frequency. While to date no attacks have had a material impact on our operations or financial results, we cannot guarantee that material attacks will not occur in the future.
While to date no attacks have had a material impact on our operations or financial results, we cannot guarantee that material attacks will not occur in the future.
If we fail to successfully enforce our intellectual property rights, our competitive position could suffer, which could harm our business, financial condition, results of operations and cash flows. ​ In addition, our competitors may develop technologies that are similar or superior to our proprietary technologies or design around the patents we own or license.
If we fail to successfully enforce our intellectual property rights, our competitive position could suffer, which could harm our business, financial condition, results of operations and cash flows. Continued use of AI in the development of our products and services could also adversely impact our intellectual property protections.
For example, the new U.S. presidential administration announced plans to significantly increase tariffs on foreign imports into the United States, particularly from Canada, China and Mexico. We typically do not enter into long-term supply agreements.
Tariffs imposed on foreign imports into the United States, particularly from Canada, China and Mexico, have increased the cost of our products and could adversely impact the gross margin we earn on our products. We typically do not enter into long term supply agreements.
We are still evaluating our response to these rules given the subsequent litigation challenging these rules (as well as the SEC’s stay on its climate rules) and the new Trump Administration’s climate policy. Additionally, we may be subject to the State of California’s disclosure laws regarding greenhouse gas emissions and climate-related financial risks.
Additionally, we may be subject to the State of California’s disclosure laws regarding greenhouse gas emissions and climate-related financial risks. On November 18, 2025, the U.S.
The IRA also includes a 1% excise tax on new corporate stock repurchases that became effective in 2023. We do not expect to meet the CAMT threshold in the near term nor expect the IRA to have a material impact on our financial statements. However, it is possible that the U.S.
The IRA also includes a 1% excise tax on new corporate stock repurchases that became effective in 2023.
Consequently, these products, services and solutions also may be subjected to harmful or illegal content or attacks that develop vulnerabilities or critical security issues that cannot be disclosed without compromising security. ​ If we need to address multiple vulnerabilities simultaneously, we may also need to make prioritization decisions in determining which vulnerabilities or security defects to fix first, and the timing of these fixes, which could result in compromised security.
Consequently, these products, services and solutions also may be subjected to harmful or illegal content or attacks that develop vulnerabilities or critical security issues that cannot be disclosed without compromising security. ​ Our growth strategy includes acquisitions, and we may acquire businesses that operate on different and potentially outdated information technology and operational technology environments.
Removed
Additionally, we continue to purchase components and finished goods from international sources. In limited cases, these components or finished goods are single-sourced.
Added
We also source certain components and finished goods internationally, including some that are single-sourced. We also sell products internationally.
Removed
Measures to contain a public health crisis may intensify other risks described in these Risk Factors.
Added
The conflicts in Europe and the Middle East have negatively impacted, and may continue to negatively impact, the availability and prices for raw materials and components. ​ Changes in U.S. or foreign trade policies and other factors beyond our control may adversely impact our business and operating results. ​ Geopolitical tensions and trade disputes can disrupt supply chains and increase the cost of our products.
Removed
We maintain a cybersecurity risk management program and have adopted measures and incurred costs with the intention of mitigating potential risks associated with information technology disruptions and cybersecurity threats; however, there is no assurance that these measures will be fully implemented, complied with or effective at preventing or detecting cyber-attacks or security breaches, or other vulnerabilities, which may allow them to persist in the environment over long periods of time.
Added
This could cause our products to be more expensive for customers, which could reduce the demand for, or attractiveness of, such products. In addition, a geopolitical conflict in a region where we operate could disrupt our ability to conduct business operations in that region.
Removed
This competition, and the resulting purchase price increases, may limit the number of acquisition opportunities available to us, possibly leading to a decrease in the rate of growth of our revenues and profitability.
Added
Countries also could adopt restrictive trade measures, such as tariffs, laws and regulations concerning investments and limitations on foreign ownership of businesses, taxation, foreign exchange controls, capital controls, employment regulations and the repatriation of earnings and controls on imports or exports of goods, technology, or data, any of which could adversely affect our operations and supply chain and limit our ability to offer our products and services as intended.
Removed
For instance, in January 2025, President Trump signed an executive order directing the U.S. Attorney General and all federal agencies to identify and discourage diversity, equity and inclusion initiatives in the private sector. On the other hand, in March 2024, the SEC finalized climate-related disclosure rules that require reporting on issues including greenhouse gas emissions and certain climate-related risks.
Added
Changes in laws or policies governing the terms of foreign trade, and in particular increased trade restrictions, tariffs or taxes on imports from countries where we manufacture products or from which we import products or raw materials (either directly or through our suppliers) could have an impact on our competitive position, business operations and financial results.
Removed
Other US states have proposed laws similar to California’s to which we may be subject if they take effect.
Added
For example, the U.S., China and other countries continue to implement restrictive trade actions, including tariffs, export controls, sanctions, legislation favoring domestic investment and other actions impacting the import and export of goods, foreign investment and foreign operations in jurisdictions in which we operate.
Removed
We expect to be subject to the European Union’s Corporate Sustainability Reporting Directive (“CSRD”) for the first time for fiscal year 2025, with our first report due to be published in 2026, Corporate Sustainability Due Diligence Directive (“CSDDD”), and related EU Taxonomy Regulation, along with implementing regulations, to be consolidated into an “omnibus simplification package” expected for introduction as early as February 2025 .
Added
The U.S. has also previously proposed significant tariffs on products imported from European countries, which if implemented could have similar impacts on our operations and adversely affect our financial results. ​ The United States has announced tariffs and reciprocal tariffs on a wide range of products manufactured or produced worldwide, including Canada, China, the European Union, and Mexico, among others.
Removed
Unfavorable ratings or scores of us or our industry may lead to negative investor sentiment and the diversion of investment to other companies or industries, which could have a negative impact on our stock price and our access to and cost of capital.
Added
Several countries have similarly announced reciprocal or other tariffs impacting products manufactured or produced in the United States.
Removed
In 2022, we recognized a pre-tax non-cash impairment charge of $1.3 million related to a technology intangible asset. This impairment was due to market value expectations indicating the carrying amounts of these assets were in excess of the fair value.
Added
The United States has paused, reimposed or increased tariffs, and may do so again in the future, and countries subject to such tariffs have imposed and, in the future, may impose reciprocal tariffs or other restrictive trade measures in response to the imposition of tariffs by the United States.
Added
We maintain operations worldwide, including jurisdictions impacted by enacted and contemplated tariffs. If the actual and potential tariffs and reciprocal tariffs are implemented, we expect that such actions could negatively impact our revenue growth and margins in future periods through increased costs, decreased demand and other adverse economic impacts.
Added
The net effect of these actions will depend on our ability to successfully mitigate and offset their impact, which may not be effective. On February 20, 2026, the U.S. Supreme Court rendered a decision invalidating tariffs imposed under the International Emergency Economic Powers Act.
Added
This decision introduces uncertainty regarding future trade policy actions and could affect our cost structure and supply chain planning.
Added
We will continue to monitor developments around the Supreme Court’s decision and evaluate its potential impact on our future financial results and business. ​ Trade restrictions could be adopted with little to no advance notice, and we may not be able to effectively mitigate the adverse impacts from such measures.
Added
Political uncertainty surrounding trade or other international disputes also could have a negative impact on customer confidence and willingness to invest capital, which could impair our future growth. Geopolitical volatility and trade uncertainty may also affect our long-term strategic planning and investment decisions, including capital allocation, manufacturing footprint, and supply chain design.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur VP of Information Security has over 25 years of experience in leading cybersecurity functions across strategy, architecture, engineering, and operations. ​ The CIO and VP of Information Security supervise efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include, but are not limited to, risk assessments, including with the support of external advisors, briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in the IT environment. ​ Our Cybersecurity Council, comprised of cross-functional senior leaders from operations, finance, internal audit, product management, and information technology teams, also reviews and assesses security risks and issues from a business and technology perspective across all organizations within Watts on a quarterly basis, with the guidance and input of the CIO and VP of Information Security.
Biggest changeFor a full discussion of cybersecurity risks, please see our Risk Factors in Item 1A. ​ Management Oversight of Cybersecurity ​ Our Chief Information Officer (“CIO”) and the Vice President (“VP”) of Information Security have primary responsibility for our cybersecurity risk management capability, including establishing cybersecurity strategy, overseeing risk mitigation priorities, and supervising both internal cybersecurity personnel and retained external cybersecurity consultants. ​ Our CIO and VP of Information Security collectively have over 30 years of experience in leading information technology and security functions across strategy, architecture, engineering, and operations. ​ The CIO and VP of Information Security take steps to stay informed and monitor efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include, but are not limited to, risk assessments, including with the support of external advisors, briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in our IT environment. ​ Management and relevant stakeholders periodically participate in cybersecurity incident response exercises designed to test preparedness, decision-making, and escalation procedures. ​ Our Cybersecurity Council, comprised of cross-functional senior leaders from operations, finance, internal audit, product management, and information technology teams, also reviews and assesses security risks and issues from a business and technology perspective across all organizations within the Company on a quarterly basis, with the guidance and input of the CIO and VP of Information Security. ​ 32 Table of Contents The Cybersecurity Council provides oversight to help support alignment between cybersecurity risk management activities and business priorities, including operational continuity, financial impact, and product considerations.
The full Board also receives annual briefings from the CIO and the VP of Information Security on cybersecurity, or from external experts on cybersecurity as part of the Board’s continuing education on topics that impact public companies. 29 Table of Contents
The full Board also receives annual briefings from the CIO and the VP of Information Security on cybersecurity, or from external experts on cybersecurity as part of the Board’s continuing education on topics that impact public companies. ​ ​
Our executive management team is responsible for assessing our material, or reasonably likely to be material, risks from cybersecurity threats with the advice and input of the CIO and VP of Information Security, including based on the above and from external advisors as necessary. ​ Board Oversight of Cybersecurity ​ Our Board considers cybersecurity risks as part of its risk oversight function and has delegated to the Audit Committee oversight of cybersecurity and other information technology risks. ​ The Audit Committee oversees management’s implementation of our cybersecurity risk management program and receives updates on the cybersecurity risk management program from the CIO and the VP of Information Security at least twice yearly.
Our executive management team is responsible for assessing our material, or reasonably likely to be material, risks from cybersecurity threats with the advice and input of the CIO and VP of Information Security, including based on the above and from external advisors as necessary. ​ Board Oversight of Cybersecurity ​ Our Board considers cybersecurity risks as part of its risk oversight function and has delegated to the Audit Committee oversight of cybersecurity. ​ The Audit Committee oversees management’s implementation of our cybersecurity risk management program and receives updates on our cybersecurity risk management program from the CIO and the VP of Information Security at least twice yearly; however, only one update was provided in 2025 due to our transition to a new CIO.
In addition, management updates the Audit Committee regarding any material or significant cybersecurity incidents, as well as incidents with lesser impact potential as necessary. ​ The Audit Committee reports to the full Board annually regarding cybersecurity.
In addition, management updates the Audit Committee regarding any material or significant cybersecurity incidents, as well as incidents with lesser impact potential or other significant emerging risks, as appropriate. ​ The Audit Committee reports to the full Board at least annually regarding cybersecurity matters.
We use the NIST CSF as a guide to help us identify, assess, and manage cybersecurity risks relevant to our business. ​ Our cybersecurity risk management program is integrated into our overall enterprise risk management program and shares common methodologies, reporting channels, and governance processes that apply across the enterprise risk management program to other legal, compliance, strategic, operational, and financial risk areas. ​ Our cybersecurity risk management program includes the following: ​ ● risk assessments designed to help identify material cybersecurity risks to our critical IT Systems, information, products, services, and our broader enterprise IT environment; ​ ● a security team principally responsible for managing our (1) cybersecurity risk assessment processes, (2) security controls, and (3) response to cybersecurity incidents; ​ ● the use of external service providers, where appropriate, to assess, test, or otherwise assist with aspects of our security controls; ​ ● risk review of certain third-party service providers, including software vendors , third-party cloud services, and third-party hosting services , with ongoing risk monitoring for critical vendors through an external cybersecurity intelligence service; ​ 28 Table of Contents ● cybersecurity awareness training of our employees, incident response personnel, and senior management; and ​ ● a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents. ​ There can be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, will be fully implemented, complied with or effective in protecting our systems and information. ​ Ongoing Risks ​ We have not experienced any material cybersecurity incidents.
This does not imply that we meet any particular technical standards, specifications, or requirements, only that we use NIST CSF to inform how we identify, assess, prioritize, and manage cybersecurity risks relevant to our business, including decisions related to controls, investments, and maturity progression. ​ Our cybersecurity risk management processes are integrated into our overall risk management program and share common methodologies, reporting channels, and governance processes that apply across the risk management program to other legal, compliance, strategic, operational, and financial risk areas. ​ Our cybersecurity risk management program includes the following, among other elements: ​ ● risk assessments designed to help identify material cybersecurity threats to our critical IT Systems and information; ​ 31 Table of Contents ● a security team principally responsible for managing our (1) cybersecurity risk assessment processes, (2) security controls, and (3) response to cybersecurity incidents; ​ ● the use of external service providers, where appropriate, to assess, test, or otherwise assist with aspects of our security processes; ​ ● risk review of certain third-party service providers, including software vendors , third-party cloud services, and third-party hosting services , with ongoing risk monitoring for critical vendors through an external cybersecurity intelligence service; ​ ● cybersecurity awareness training of our employees, including incident response personnel, and senior management; ​ ● a cybersecurity incident response plan that includes procedures for responding to cybersecurity incidents including escalation, communication, and recovery protocols , and ​ ● periodic evaluation of our cybersecurity capabilities to identify opportunities for improvement and to prioritize enhancements based on risk, threat intelligence, and business needs.
We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected us, including our operations, business strategy, results of operations, or financial condition.
We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected us, including our operations, business strategy, results of operations, or financial condition. ​ We monitor the evolving cybersecurity threat landscape, including risks associated with ransomware, supply-chain and third-party dependencies, and emerging technologies. ​ However, we face risks from cybersecurity threats that, if realized, are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition.
Item 1C. CYBERSECURITY ​ Cybersecurity Risk Management and Strategy ​ We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical IT Systems and information. ​ We design and assess our program based on the National Institute of Standards and Technology Cybersecurity Framework (“NIST CSF”).
CYBERSECURITY ​ Cybersecurity Risk Management and Strategy ​ We maintain a cybersecurity risk management capability designed to protect the confidentiality, integrity, and availability of our critical IT Systems, digital assets, and operational technologies, and to support business continuity, customer trust, and enterprise resilience. ​ We design and assess our cybersecurity risk management capability using the National Institute of Standards and Technology Cybersecurity Framework (“NIST CSF”) as a structured, risk-based reference.
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This does not imply that we meet any particular technical standards, specifications, or requirements.
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Ongoing Risks ​ We have not experienced any material cybersecurity incidents.
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We face risks from cybersecurity threats that, if realized, are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition.
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For a full discussion of cybersecurity risks, please see our Risk Factors in Item 1A. ​ Management Oversight of Cybersecurity ​ Our Chief Information Officer (“CIO”) and the Vice President (“VP”) of Information Security have primary responsibility for our overall cybersecurity risk management program and supervise both our internal cybersecurity personnel and our retained external cybersecurity consultants. ​ Our former CIO left the Company in January 2025.
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Currently Shashank Patel, our Chief Financial Officer, is serving as Interim CIO as we proceed with an executive search to appoint a permanent CIO. Mr. Patel has been overseeing the Company’s Information Technology function since he joined the Company in July 2018. References to the CIO and the CIO’s duties refer to our CIO’s historical role, Mr.
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Patel’s interim CIO role, and our future CIO’s role. ​ Mr. Patel has over 10 years of experience overseeing an Information Technology function.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeNeots, United Kingdom ​ Distribution ​ Leased ​ Asia-Pacific, Middle East, and Africa: ​ ​ ​ ​ ​ ​ Location ​ Principal Use ​ Owned/Leased Ningbo, Beilun, China ​ Manufacturing ​ Owned Shanghai, China ​ APMEA Headquarters ​ Leased Ningbo, Beilun District, China ​ Distribution Center ​ Leased Auckland, New Zealand ​ Manufacturing/Distribution ​ Leased Dubai, United Arab Emirates ​ Sales Office/Distribution ​ Leased Caringbah, New South Wales, Australia ​ Manufacturing/Distribution ​ Leased Kewdale, Western Australia, Australia ​ Distribution ​ Leased Campbellfield, Victoria, Australia ​ Distribution ​ Leased ​ We believe our properties, including machinery, tools and equipment, are in good condition, well maintained and adequate and suitable for their intended uses. 30 Table of Contents ​
Biggest changeNeots, United Kingdom ​ Distribution ​ Leased ​ Asia-Pacific, Middle East, and Africa: ​ ​ ​ ​ ​ Location ​ Principal Use ​ Owned/Leased Ningbo, Beilun District, China ​ Manufacturing ​ Owned Riyadh, Kingdom of Saudi Arabia ​ Manufacturing ​ Owned Shanghai, China ​ APMEA Headquarters ​ Leased Ningbo, Beilun District, China ​ Distribution Center ​ Leased Auckland, New Zealand ​ Manufacturing/Distribution ​ Leased Dubai, United Arab Emirates ​ Sales Office/Distribution ​ Leased Caringbah, New South Wales, Australia ​ Manufacturing/Distribution ​ Leased Epping, Victoria, Australia ​ Distribution ​ Leased Kewdale, Western Australia, Australia ​ Distribution ​ Leased Luscombe, Queensland, Australia ​ Distribution ​ Leased Riyadh, Kingdom of Saudi Arabia ​ Manufacturing ​ Leased ​ We believe our properties, including machinery, tools and equipment, are in good condition, well-maintained and adequate and suitable for their intended uses. ​
The principal properties in each of our three geographic segments and their location, principal use and ownership status are set forth below: ​ Americas: ​ ​ ​ ​ ​ ​ Location ​ Principal Use ​ Owned/Leased North Andover, MA ​ Corporate Headquarters ​ Owned Burlington, ON, Canada ​ Distribution Center ​ Owned Export, PA ​ Manufacturing ​ Owned Franklin, NH ​ Manufacturing/Distribution ​ Owned St.
The principal properties in each of our three geographic segments and their location, principal use and ownership status are set forth below: ​ Americas: ​ ​ ​ ​ ​ Location ​ Principal Use ​ Owned/Leased North Andover, MA ​ Corporate Headquarters ​ Owned Burlington, ON, Canada ​ Distribution Center ​ Owned Export, PA ​ Manufacturing/Distribution ​ Owned Franklin, NH ​ Manufacturing/Distribution ​ Owned St.
Item 2. PROPERTIES. ​ We maintain 36 principal manufacturing, warehouse and distribution centers worldwide, including our corporate headquarters located in North Andover, Massachusetts. Additionally, we maintain numerous sales offices and other smaller manufacturing facilities and warehouses.
Item 2. PROPERTIES. ​ We maintain 41 principal manufacturing, warehouse and distribution facilities worldwide, including our corporate headquarters located in North Andover, Massachusetts. Additionally, we maintain numerous sales offices and other smaller manufacturing facilities and warehouses.
Pauls, NC ​ Manufacturing ​ Owned Menomonee Falls, WI ​ Manufacturing/Distribution ​ Owned Germantown, WI ​ Manufacturing/Distribution ​ Owned Michigan City, IN ​ Manufacturing/Distribution ​ Owned Spindale, NC ​ Distribution Center ​ Owned Fort Worth, TX ​ Manufacturing/Distribution ​ Leased Fort Myers, FL ​ Manufacturing/Distribution ​ Leased Oviedo, FL ​ Manufacturing/Distribution ​ Leased Blauvelt, NY ​ Manufacturing/Distribution ​ Leased Sparks, NV ​ Distribution Center ​ Leased Vernon, BC, Canada ​ Manufacturing/Distribution ​ Leased Woodland, CA ​ Manufacturing ​ Leased Groveport, OH ​ Distribution Center ​ Leased ​ Europe: ​ ​ ​ ​ ​ ​ Location ​ Principal Use ​ Owned/Leased Biassono, Italy ​ Manufacturing/Distribution ​ Owned Hautvillers, France ​ Manufacturing ​ Owned Landau, Germany ​ Manufacturing/Distribution ​ Owned Plovdiv, Bulgaria ​ Manufacturing ​ Owned Sorgues, France ​ Distribution Center ​ Owned Vildbjerg, Denmark ​ Manufacturing/Distribution ​ Owned Virey-le-Grand, France ​ Manufacturing/Distribution ​ Owned Rosières, France ​ Manufacturing/Distribution ​ Owned Gardolo, Italy ​ Manufacturing ​ Owned Monastir, Tunisia ​ Manufacturing ​ Leased St.
Pauls, NC ​ Manufacturing/Distribution ​ Owned Menomonee Falls, WI ​ Manufacturing/Distribution ​ Owned Germantown, WI ​ Manufacturing/Distribution ​ Owned Michigan City, IN ​ Manufacturing/Distribution ​ Owned Itu, São Paolo, Brazil ​ Manufacturing/Distribution ​ Owned Spindale, NC ​ Manufacturing/Distribution ​ Owned Fort Worth, TX ​ Manufacturing/Distribution ​ Leased Fort Myers, FL ​ Manufacturing/Distribution ​ Leased Oviedo, FL ​ Manufacturing/Distribution ​ Leased Blauvelt, NY ​ Manufacturing/Distribution ​ Leased Sparks, NV ​ Distribution Center ​ Leased Sparks, NV ​ Manufacturing/Distribution ​ Leased Vernon, BC, Canada ​ Manufacturing/Distribution ​ Leased Woodland, CA ​ Manufacturing/Distribution ​ Leased Groveport, OH ​ Distribution Center ​ Leased Hutchinson, KS ​ Manufacturing/Distribution ​ Leased ​ 33 Table of Contents Europe: ​ ​ ​ ​ ​ Location ​ Principal Use ​ Owned/Leased Biassono, Italy ​ Manufacturing/Distribution ​ Owned Landau, Germany ​ Manufacturing/Distribution ​ Owned Plovdiv, Bulgaria ​ Manufacturing ​ Owned Sorgues, France ​ Distribution Center ​ Owned Vildbjerg, Denmark ​ Manufacturing/Distribution ​ Owned Virey-le-Grand, France ​ Manufacturing ​ Owned Rosières, France ​ Manufacturing/Distribution ​ Owned Gardolo, Italy ​ Manufacturing ​ Owned Monastir, Tunisia ​ Manufacturing ​ Leased St.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. LEGAL PROCEEDINGS. ​ We are from time to time involved in various legal and administrative proceedings. See Item 1. “Business—Product Liability, Environmental and Other Litigation Matters,” and Note 16 of the Notes to Consolidated Financial Statements, both of which are incorporated herein by reference. ​ Item 4. MINE SAFETY DISCLOSURES. ​ Not applicable. PART II ​
Biggest changeItem 3. LEGAL PROCEEDINGS. ​ We are from time to time involved in various legal and administrative proceedings. See Item 1. “Business—Product Liability, Environmental and Other Litigation Matters,” and Note 17 of the Notes to Consolidated Financial Statements, both of which are incorporated herein by reference. ​ Item 4.
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MINE SAFETY DISCLOSURES. ​ Not applicable. 34 Table of Contents PART II ​

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeWe did not have any such repurchases in the three-month period ended December 31, 2024. ​ The following table includes information with respect to repurchases of our Class A common stock during the three-month period ended December 31, 2024 under our stock repurchase programs. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Issuer Purchases of Equity Securities (1) ​ ​ ​ ​ ​ (d) Maximum Number (or ​ ​ (a) Total ​ ​ ​ ​ (c) Total Number of ​ Approximate Dollar ​ ​ Number of ​ (b) Average ​ Shares (or Units) ​ Value) of Shares (or ​ ​ Shares (or ​ Price Paid ​ Purchased as Part of ​ Units) that May Yet Be ​ ​ Units) ​ per Share ​ Publicly Announced ​ Purchased Under the Period ​ Purchased(1) ​ (or Unit) ​ Plans or Programs ​ Plans or Programs September 30, 2024 – October 27, 2024 6,070 ​ $ 205.36 6,070 ​ $ 147,747,960 October 28, 2024 – November 24, 2024 6,113 ​ $ 204.55 6,113 ​ $ 146,497,693 November 25, 2024 – December 31, 2024 ​ 7,355 ​ $ 212.85 ​ 7,355 ​ $ 144,932,380 Total 19,538 ​ $ 207.90 19,538 ​ ​ ​ (1) On February 6, 2019, we announced that our Board of Directors had authorized a repurchase program of up to $150 million of our Class A common stock, to be purchased from time to time on the open market or in privately negotiated transactions.
Biggest changeWhile we presently intend to continue to pay comparable cash dividends, the payment of future cash dividends depends upon the Board of Directors’ assessment of our earnings, financial condition, capital requirements and other factors. ​ The following table includes information with respect to repurchases of our Class A common stock during the three-month period ended December 31, 2025 under our stock repurchase programs. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Issuer Purchases of Equity Securities (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (d) Maximum Number (or ​ ​ (a) Total ​ ​ ​ ​ (c) Total Number of ​ Approximate Dollar ​ ​ Number of ​ (b) Average ​ Shares (or Units) ​ Value) of Shares (or ​ ​ Shares (or ​ Price Paid ​ Purchased as Part of ​ Units) that May Yet Be ​ ​ Units) ​ per Share ​ Publicly Announced ​ Purchased Under the Period ​ Purchased(1) ​ (or Unit) ​ Plans or Programs ​ Plans or Programs September 29, 2025 – October 26, 2025 4,680 ​ $ 277.95 4,680 ​ $ 131,817,886 October 27, 2025 – November 23, 2025 4,547 ​ $ 273.00 4,547 ​ $ 130,576,667 November 24, 2025 – December 31, 2025 ​ 5,929 ​ $ 277.34 ​ 5,929 ​ $ 128,932,475 Total 15,156 ​ $ 276.20 15,156 ​ ​ ​ (1) On July 31, 2023, the Board of Directors authorized a stock repurchase program of up to $150 million of our Class A common stock to be purchased from time to time on the open market or in privately negotiated transactions, which has no expiration date.
We chose the Russell 2000 Index because it represents companies with a market capitalization similar to that of Watts Water. The graph assumes that the value of the investment in our Class A common stock and each index was $100 at December 31, 2019 and that all dividends were reinvested.
We chose the Russell 2000 Index because it represents companies with a market capitalization similar to that of Watts Water. The graph assumes that the value of the investment in our Class A common stock and each index was $100 at December 31, 2020 and that all dividends were reinvested.
The timing and number of shares repurchased will be determined by the Company’s management based on its evaluation of market conditions and other factors. ​ Performance Graph ​ Set forth below is a line graph comparing the cumulative total shareholder return on our Class A common stock for the last five years with the cumulative return of companies on the Standard & Poor’s 500 Stock Index and the Russell 2000 Index.
The timing and number of shares repurchased will be determined by the Company’s management based on its evaluation of market conditions and other factors. ​ 35 Table of Contents Performance Graph ​ Set forth below is a line graph comparing the cumulative total shareholder return on our Class A common stock for the last five years with the cumulative return of companies on the Standard & Poor’s 500 Stock Index and the Russell 2000 Index.
Each share of our Class B common stock (10 votes per share) is convertible into one share of Class A common stock (1 vote per share). ​ The number of record holders of our Class A common stock as of January 26, 2025 was 57.
Each share of our Class B common stock (10 votes per share) is convertible into one share of Class A common stock (1 vote per share). ​ The number of record holders of our Class A common stock as of January 25, 2026 was 54.
The number of record holders of our Class B common stock as of January 26, 2025 was 9. ​ Aggregate common stock dividend payments in 2024 were $55.5 million, which consisted of $45.7 million and $9.8 million for Class A shares and Class B shares, respectively.
The number of record holders of our Class B common stock as of January 25, 2026 was 9. ​ Aggregate common stock dividend payments in 2025 were $66.9 million, which consisted of $55.1 million and $11.8 million for Class A common stock and Class B common stock, respectively.
Aggregate common stock dividend payments in 2023 were $46.5 million, which consisted of $38.3 million and $8.2 million for Class A shares and Class B shares, respectively.
Aggregate common stock dividend payments in 2024 were $55.5 million, which consisted of $45.7 million and $9.8 million for Class A common stock and Class B common stock, respectively.
Cumulative Total Return ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 Watts Water Technologies, Inc. 100.00 ​ 123.16 ​ 197.84 ​ 150.22 ​ 215.68 ​ 212.18 S & P 500 100.00 ​ 118.40 ​ 152.39 ​ 124.79 ​ 157.59 ​ 197.02 Russell 2000 100.00 ​ 119.96 ​ 137.74 ​ 109.59 ​ 128.14 ​ 142.93 ​ The above Performance Graph and related information shall not be deemed “soliciting material” or to be “filed” with the Securities and Exchange Commission, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or Securities Exchange Act of 1934, each as amended, except to the extent that we specifically incorporate it by reference into such filing. ​ 32 Table of Contents Item 6. [Reserved] ​
Cumulative Total Return ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 12/31/20 ​ ​ ​ 12/31/21 ​ ​ ​ 12/31/22 ​ ​ ​ 12/31/23 ​ ​ ​ 12/31/24 ​ ​ ​ 12/31/25 Watts Water Technologies, Inc. 100.00 ​ 160.64 ​ 121.97 ​ 175.13 ​ 172.28 ​ 235.76 S & P 500 100.00 ​ 128.71 ​ 105.40 ​ 133.10 ​ 166.40 ​ 196.16 Russell 2000 100.00 ​ 114.82 ​ 91.35 ​ 106.82 ​ 119.14 ​ 134.40 ​ The above Performance Graph and related information shall not be deemed “soliciting material” or to be “filed” with the Securities and Exchange Commission, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or Securities Exchange Act of 1934, each as amended, except to the extent that we specifically incorporate it by reference into such filing. ​ Item 6. [Reserved] 36 Table of Contents ​
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While we presently intend to continue to pay comparable cash dividends, the payment of future cash dividends depends upon the Board of Directors’ assessment of our earnings, financial condition, capital requirements and other factors. ​ We satisfy the minimum withholding tax obligation due upon the vesting of shares of restricted stock by repurchasing a number of shares with an aggregate fair market value on the date of such vesting that would satisfy the withholding amount due.
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This repurchase program was completed in 2024 after the Company expended the remainder of the $150 million authorized under the repurchase program.
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On July 31, 2023, the Board of Directors authorized an additional stock repurchase program of up to $150 million of our Class A common stock to be purchased from time to time on the open market or in privately negotiated transactions, which also 31 Table of Contents has no expiration date.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeItem 6. ​ [RESERVED] 33 Item 7. ​ MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 33 Item 7A. ​ QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 48 Item 8. ​ FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 48 Item 9. ​ CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 48 Item 9A. ​ CONTROLS AND PROCEDURES 49 Item 9B. ​ OTHER INFORMATION 50
Biggest changeItem 6. ​ [RESERVED] 36 Item 7. ​ MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 37 Item 7A. ​ QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 53 Item 8. ​ FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 53

Item 7. Management's Discussion & Analysis

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

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Biggest changeOperating income, which is made up of segment earnings, Corporate operating loss and special items, for 2024 and 2023 was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ % Change to ​ Year Ended ​ ​ Consolidated ​ December 31, ​ December 31, ​ ​ Operating ​ ​ ​ 2024 2023 Change Income ​ ​ (dollars in millions) ​ ​ ​ Americas ​ $ 376.0 $ 328.5 $ 47.5 13.6 % Europe ​ 53.2 ​ 72.4 ​ (19.2) (5.5) ​ APMEA ​ 24.5 ​ 19.3 ​ 5.2 1.5 ​ Total segment earnings ​ $ 453.7 ​ $ 420.2 ​ ​ 33.5 9.6 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Corporate operating loss - excluding special items ​ (54.1) ​ (55.0) ​ 0.9 0.2 ​ Corporate special items ​ (1.7) ​ (5.8) ​ 4.1 1.2 ​ Corporate operating loss - as reported ​ $ (55.8) ​ $ (60.8) ​ 5.0 1.4 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Segment special items ​ (7.5) ​ (8.5) ​ 1.0 0.3 ​ Total operating income ​ $ 390.4 ​ $ 350.9 ​ $ 39.5 11.3 % ​ The increase (decrease) in total segment earnings is attributable to the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change As a % of ​ Change As a % of ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Segment Earnings ​ Segment Earnings ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Americas ​ Europe ​ APMEA ​ Total ​ Americas ​ Europe ​ APMEA ​ Total ​ Americas ​ Europe ​ APMEA ​ ​ ​ (dollars in millions) Organic ​ $ 23.0 ​ $ (19.5) ​ $ 4.3 ​ $ 7.8 ​ 5.5 % (4.6) % 1.0 % 1.9 % 7.0 % (26.9) % 22.3 % Foreign exchange ​ ​ (0.3) ​ ​ 0.3 ​ ​ 0.2 ​ ​ 0.2 ​ (0.1) ​ 0.1 ​ — ​ — ​ (0.1) ​ 0.4 ​ 1.0 ​ Acquired ​ ​ 24.8 ​ ​ — ​ ​ 0.7 ​ ​ 25.5 ​ 5.9 ​ — ​ 0.2 ​ 6.1 ​ 7.5 ​ — ​ 3.6 ​ Total ​ $ 47.5 ​ $ (19.2) ​ $ 5.2 ​ $ 33.5 11.3 % (4.5) % 1.2 % 8.0 % 14.4 % (26.5) % 26.9 % ​ Operating income increased $39.5 million, or 11.3%, in 2024 compared to 2023.
Biggest changeOperating income, which is made up of segment earnings, Corporate operating loss and special items, for 2025 and 2024 was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ % Change to ​ ​ ​ ​ Year Ended ​ ​ ​ ​ ​ ​ ​ ​ Consolidated ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ ​ ​ ​ ​ ​ Change ​ ​ ​ ​ ​ ​ ​ ​ Income ​ ​ (dollars in millions) ​ ​ ​ Americas ​ $ 452.2 ​ ​ ​ ​ ​ ​ ​ ​ $ 376.0 ​ ​ ​ ​ ​ ​ ​ ​ $ 76.2 ​ ​ ​ ​ ​ ​ ​ ​ 19.5 % Europe ​ 59.8 ​ 53.2 ​ 6.6 1.7 ​ APMEA ​ 25.7 ​ 24.5 ​ 1.2 0.3 ​ Total segment earnings ​ $ 537.7 ​ $ 453.7 ​ ​ 84.0 21.5 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Corporate operating loss - excluding special items ​ (60.5) ​ (54.1) ​ (6.4) (1.6) ​ Corporate special items ​ (1.6) ​ (1.7) ​ 0.1 — ​ Corporate operating loss - as reported ​ $ (62.1) ​ $ (55.8) ​ (6.3) (1.6) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Segment special items ​ (27.5) ​ (7.5) ​ (20.0) (5.1) ​ Total operating income ​ $ 448.1 ​ $ 390.4 ​ $ 57.7 14.8 % ​ The increase (decrease) in total segment earnings is attributable to the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change As a % of ​ Change As a % of ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Segment Earnings ​ Segment Earnings ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Americas ​ Europe ​ APMEA ​ Total ​ Americas ​ Europe ​ APMEA ​ Total ​ Americas ​ Europe ​ APMEA ​ ​ ​ (dollars in millions) Organic ​ $ 71.6 ​ $ 4.2 ​ $ 0.5 ​ $ 76.3 ​ 15.8 % 0.9 % 0.1 % 16.8 % 19.0 % 7.9 % 2.0 % Foreign exchange ​ ​ (0.4) ​ ​ 2.4 ​ ​ 0.1 ​ ​ 2.1 ​ (0.1) ​ 0.5 ​ — ​ 0.4 ​ (0.1) ​ 4.5 ​ 0.4 ​ Acquired ​ ​ 5.0 ​ ​ — ​ ​ 0.6 ​ ​ 5.6 ​ 1.1 ​ — ​ 0.1 ​ 1.2 ​ 1.3 ​ — ​ 2.4 ​ Total ​ $ 76.2 ​ $ 6.6 ​ $ 1.2 ​ $ 84.0 16.8 % 1.4 % 0.2 % 18.4 % 20.2 % 12.4 % 4.8 % ​ Operating income increased $57.7 million, or 14.8%, in 2025 compared to 2024.
We regularly review our estimates of variable consideration on the transaction price and recognize changes in estimates on a cumulative catch-up basis as if the most current estimate of the transaction price adjusted for variable consideration had been known as of the inception of the contract. ​ Our revenue for product sales is recognized on a point in time model, at the point control transfers to the customer, which is generally when products are shipped from the Company’s manufacturing or distribution facilities or when delivered to the customer’s named location.
We regularly review our estimates of variable consideration on the transaction price and recognize changes in estimates on a cumulative catch-up basis as if the most current estimate of the transaction price adjusted for variable consideration had been known as of the inception of the contract. ​ Our revenue for product sales is primarily recognized on a point in time model, at the point control transfers to the customer, which is generally when products are shipped from the Company’s manufacturing or distribution facilities or when delivered to the customer’s named location.
Changes in macroeconomic, industry or market conditions, or our inability to achieve projected results that were used to complete the qualitative analyses could result in the reporting unit fair value not exceeding the carrying amounts and could lead to impairment. ​ Intangible assets such as trademarks and trade names are generally recorded in connection with a business acquisition and we have recorded certain trademarks and trade names as indefinite-lived intangible assets.
Changes in macroeconomic, industry or market conditions, or our inability to achieve projected results that were used to complete the qualitative and quantitative analyses could result in the reporting unit fair value not exceeding the carrying amounts and could lead to impairment. ​ Intangible assets such as trademarks and trade names are generally recorded in connection with a business acquisition and we have recorded certain trademarks and trade names as indefinite-lived intangible assets.
Many of our flow control and protection products are now smart and connected enabled, warning of leaks, floods, freezing temperatures and other hazards with alerts to Building Management Systems (“BMS”) and/or personal devices giving our customers greater insight into their water management and the ability to shut off the water supply to avoid waste and mitigate damage. ​ · Heating, ventilation and air conditioning (“HVAC”) & gas—includes commercial high-efficiency boilers, water heaters and heating solutions, hydronic and electric heating systems for under-floor radiant applications, custom heat and hot water solutions, hydronic pump groups for boiler manufacturers and alternative energy control packages, and flexible stainless steel connectors for natural and liquid propane gas in commercial food service and residential applications.
Many of our flow control and protection products are now smart and connected enabled, warning of leaks, floods, freezing temperatures and other hazards with alerts to Building Management Systems (“BMS”) and/or personal devices giving our customers greater insight into their water management and the ability to shut off the water supply to avoid waste and mitigate damage. ​ · Heating, ventilation and air conditioning (“HVAC”) and gas—includes commercial, institutional and industrial high-efficiency boilers, water heaters and heating solutions, hydronic and electric heating systems for under floor radiant applications, custom heat and hot water solutions, hydronic pump groups for boiler manufacturers and alternative energy control packages, and flexible stainless steel connectors for natural and liquid propane gas in commercial food service and residential applications.
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. ​ Overview ​ We are a leading supplier of solutions, systems and products that manage and conserve the flow of fluids and energy into, through and out of buildings in the commercial, industrial and residential markets in the Americas, Europe and Asia-Pacific, Middle East and Africa (“APMEA”).
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. ​ Overview ​ We are a leading supplier of products and solutions that manage and conserve the flow of fluids and energy into, through and out of buildings in the commercial, industrial and residential markets in the Americas, Europe and Asia-Pacific, Middle East and Africa (“APMEA”).
Our principal product and solution categories include: ​ · Residential & commercial flow control and protection—includes products and solutions typically sold into plumbing and hot water applications such as backflow preventers, water pressure regulators, temperature and pressure relief valves, thermostatic mixing valves, leak detection and protection products, commercial washroom solutions and emergency safety products and equipment.
Our principal product and solution categories include: ​ · Residential and commercial flow control and protection—includes products and solutions typically sold into plumbing and hot water applications such as backflow preventers, water pressure regulators, temperature and pressure relief valves, thermostatic mixing valves, leak detection and protection products, commercial washroom solutions, hydration solutions and emergency safety products and equipment.
The timing and number of shares repurchased will be determined based on our evaluation of market conditions and other factors, see Note 13 of Notes to Consolidated Financial Statements in this Annual Report on Form 10-K. ​ While we presently intend to continue to pay comparable quarterly cash dividends on both Class A and B common stock, the payment of future cash dividends depends upon our Board of Directors’ assessment of our earnings, financial condition, capital requirements and other factors. ​ We maintain letters of credit that guarantee our performance or payment to third parties in accordance with specified terms and conditions.
The timing and number of shares repurchased will be determined based on our evaluation of market conditions and other factors, see Note 14 of Notes to Consolidated Financial Statements in this Annual Report on Form 10-K. ​ While we presently intend to continue to pay comparable quarterly cash dividends on both Class A and B common stock, the payment of future cash dividends depends upon our Board of Directors’ assessment of our earnings, financial condition, capital requirements and other factors. ​ We maintain letters of credit that guarantee our performance or payment to third parties in accordance with specified terms and conditions.
For 150 years, we have designed and produced valve systems that safeguard and regulate water systems, energy efficient heating and hydronic systems, drainage systems and water filtration technology that helps purify and conserve water. We earn revenue and income almost exclusively from the sale of our products.
For over 150 years, we have designed and produced valve systems that safeguard and regulate water systems, energy efficient heating and hydronic systems, drainage systems and water filtration technology that helps purify and conserve water. We earn revenue and income almost exclusively from the sale of our products.
These non-GAAP financial measures may not be the same as similar measures used by other companies due to possible differences in method and in the items or events being adjusted. ​ We refer to non-GAAP organic changes in financial measures, including organic net sales, organic net sales growth, organic SG&A expenses and organic segment earnings which are non-GAAP measures that exclude the impacts of acquisitions, divestitures and foreign exchange from year-over-year comparisons.
These non-GAAP financial measures may not be the same as similar measures used by other companies due to possible differences in method and in the items or events being adjusted. ​ We refer to non-GAAP organic changes in financial measures, including organic net sales, organic net sales growth, organic SG&A expenses and organic segment earnings, which exclude the impacts of acquisitions, divestitures and foreign exchange from year-over-year comparisons.
Changes in macroeconomic, industry or market conditions, or our inability to achieve projected results that were used to complete the qualitative and quantitative analyses could result in the trademark’s or trade name’s fair value not exceeding its carrying amount and could lead to impairment. ​ Product liability ​ Because of retention requirements associated with our insurance policies, we are generally self-insured for potential product liability claims.
Changes in macroeconomics, industry or market conditions, or our inability to achieve projected results that were used to complete the qualitative and quantitative analyses could result in the trademark’s or trade name’s fair value not exceeding its carrying amount and could lead to impairment. ​ Product liability ​ Because of retention requirements associated with our insurance policies, we are generally self-insured for potential product liability claims.
“Business—Product Liability, Environmental and Other Litigation Matters” and Note 16 of Notes to Consolidated Financial Statements in this Annual Report on Form 10-K. As required by GAAP, we determine whether an estimated loss from a loss contingency should be accrued by assessing whether a loss is deemed probable and the loss amount can be reasonably estimated.
“Business—Product Liability, Environmental and Other Litigation Matters” and Note 17 of Notes to Consolidated Financial Statements in this Annual Report on Form 10-K. As required by GAAP, we determine whether an estimated loss from a loss contingency should be accrued by assessing whether a loss is deemed probable and the loss amount can be reasonably estimated.
A reconciliation to the most closely related U.S. GAAP measure, net sales, net sales growth, SG&A and segment earnings, have been included in our discussion within “Results of Operations” above. Non-GAAP measures should be considered in addition to, and not as a replacement for or as a superior measure to U.S. GAAP measures.
Reconciliations to the most closely related U.S. GAAP measure, net sales, net sales growth, SG&A and segment earnings, have been included in our discussion within “Results of Operations” above. Non-GAAP measures should be considered in addition to, and not as a replacement for or as a superior measure to, U.S. GAAP measures.
Management believes reporting these non-GAAP measures provide useful information to investors, potential investors and others, by facilitating easier comparisons of our performance with prior and future periods. ​ Adjusted operating income, adjusted operating margins, adjusted net income, and adjusted diluted earnings per share are non-GAAP measures that exclude the impact of special items which are defined as non-recurring, and unusual expenses incurred or benefits recognized in the periods presented that relate primarily to our global restructuring programs, acquisition-related costs, contingent consideration adjustment, gain or loss on sale of assets, pension settlements, other investment gains and the related income tax impacts on these items and other tax adjustments.
Management believes reporting these non-GAAP measures provide useful information to investors, potential investors and others, by facilitating easier comparisons of our performance with prior and future periods. ​ Adjusted operating income, adjusted operating margins, adjusted net income, and adjusted diluted earnings per share are non-GAAP measures that exclude the impact of special items which are defined as non-recurring and unusual expenses incurred or benefits recognized in the periods presented that relate primarily to our global restructuring programs, acquisition-related costs, gain on sale of assets, pension settlements, other investment gains and the related income tax impacts on these items and other tax adjustments.
The CODM uses segment earnings for insight into underlying trends comparing past financial performance with current performance by reporting segment on a consistent basis. ​ 34 Table of Contents In addition, we refer to non-GAAP organic changes in financial measures, including organic net sales, organic net sales growth, organic selling, general and administrative expenses, and organic segment earnings, that exclude the impacts of acquisitions, divestitures and foreign exchange.
The CODM uses segment earnings for insight into underlying trends comparing past financial performance with current performance by reporting segment on a consistent basis. ​ In addition, we refer to non-GAAP organic changes in financial measures, including organic net sales, organic net sales growth, organic selling, general and administrative expenses, and organic segment earnings, that exclude the impacts of acquisitions, divestitures and foreign exchange.
Management believes reporting these financial measures provides useful information to investors, potential investors and others, by facilitating easier comparisons of our performance with prior and future periods. ​ 42 Table of Contents A reconciliation of U.S.
Management believes reporting these financial measures provides useful information to investors, potential investors and others by facilitating easier comparisons of our performance with prior and future periods. ​ 46 Table of Contents A reconciliation of U.S.
The product liability accrual represents the estimated ultimate losses for all reported and 46 Table of Contents incurred but not reported claims. For the remainder of our product liability accrual, where we do not utilize third-party actuarial valuations, we maintain insurance and calculate potential product liability accruals which includes legal costs associated with the accrued claims on a case-by-case basis.
The product liability accrual represents the estimated ultimate losses for all reported and incurred but not reported claims. For the remainder of our product liability accrual, where we do not utilize third-party actuarial valuations, we maintain insurance and calculate potential product liability accruals which includes legal costs associated with the accrued claims on a case-by-case basis.
As of the assessment, the majority of the trademarks and tradenames were expected to have annual sales growth in 2024, with a few expected to potentially have minimal sales decline in 2024 but sales growth in 2025 or future years.
As of the assessment, the majority of the trademarks and tradenames were expected to have annual sales growth in 2025, with a few expected to potentially have minimal sales decline in 2025 but sales growth in 2026 or future years.
The Credit Agreement provides for a maximum consolidated leverage ratio of 3.50 to 1.00 (or 4.00 to 1.00 during temporary step-ups following certain permitted acquisitions) and the minimum consolidated interest ratio of 3.50 to 1.00. ​ The Revolving Credit Facility also includes sublimits of $100 million for letters of credit and $15 million for swing line loans.
The Credit Agreement provides for a maximum consolidated leverage ratio of 3.50 to 1.00 (or 4.00 to 1.00 during temporary step-ups following certain permitted acquisitions) and the minimum consolidated interest ratio of 3.50 to 1.00. ​ The Revolving Credit Facility also includes sub-limits of $100 million for letters of credit and $15 million for swing line loans.
Management believes the following critical accounting policies reflect our more significant estimates and assumptions. ​ 44 Table of Contents Revenue recognition ​ We recognize revenue under the core principle to recognize revenue in a manner that depicts the transfer of control to our customers in an amount reflecting the consideration to which we expect to be entitled.
Management believes the following critical accounting policies reflect our more significant estimates and assumptions. ​ Revenue recognition ​ We recognize revenue under the core principle to recognize revenue in a manner that depicts the transfer of control to our customers in an amount reflecting the consideration to which we expect to be entitled.
Any material change in the aforementioned factors could have an adverse impact on our operating results for any particular period depending, in part, upon the operating results for such period. ​ Legal contingencies ​ We are a defendant in numerous legal matters including legal matters involving environmental issues and product liability as discussed in more detail in Part I, Item 1.
Any material change in the aforementioned factors could have an adverse impact on our operating results for any particular period depending, in part, upon the operating results for such period. ​ 51 Table of Contents Legal contingencies ​ We are a defendant in numerous legal matters including legal matters involving environmental issues and product liability as discussed in more detail in Part I, Item 1.
Borrowings outstanding under the Revolving Credit Facility bear interest at a fluctuating rate per annum equal to an applicable percentage defined as (i) in the case of Term Benchmark loans, the Term Benchmark rate plus an applicable percentage, ranging from 1.075% to 1.325%, or (ii) in the case of alternate base rate loans and swing line loans, interest (which at all times will not be less than 1.00%) at the greatest of (a) the Prime Rate in effect on such day, (b) the FRBNY Rate in effect on such day plus 0.50% and (c) the Term Benchmark rate plus 1.00% for a one month interest period, in each case, determined by reference to our consolidated leverage ratio.
Borrowings outstanding bear interest at a fluctuating rate per annum equal to an applicable percentage defined as (i) in the case of Term Benchmark loans, the Term Benchmark rate plus an applicable percentage, ranging from 1.075% to 1.325%, or (ii) in the case of alternate base rate loans and swing line loans, interest (which at all times will not be less than 1.00%) at the greatest of (a) the Prime Rate in effect on such day, (b) the FRBNY Rate in 43 Table of Contents effect on such day plus 0.50% and (c) the Term Benchmark rate plus 1.00% for a one-month interest period, in each case, determined by reference to our consolidated leverage ratio.
In addition to paying interest under the Credit Agreement, we are also required to pay certain fees in connection with the 39 Table of Contents Revolving Credit Facility, including, but not limited to, an unused facility fee and letter of credit fees.
In addition to paying interest under the Credit Agreement, we are also required to pay certain fees in connection with the Revolving Credit Facility, including, but not limited to, an unused facility fee and letter of credit fees.
Consolidated funded debt, as defined in the Credit Agreement, includes all long and short-term debt, finance lease obligations and any trade letters of credit that are outstanding, less cash and cash equivalents on the balance sheet. ​ As of December 31, 2024, our actual financial ratios calculated in accordance with the Credit Agreement compared to the required levels under the Credit Agreement were as follows: ​ ​ ​ ​ ​ ​ ​ Actual Ratio Required Level ​ ​ ​ Minimum level Interest Charge Coverage Ratio 32.3 to 1.00 3.50 to 1.00 ​ ​ ​ Maximum level Leverage Ratio 0.00 to 1.00 3.50 to 1.00 (or 4.00 to 1.00 during temporary step-ups following certain acquisitions) ​ As of December 31, 2024, we were in compliance with all covenants related to the Credit Agreement. ​ In addition to financial ratios, the Credit Agreement contains affirmative and negative covenants that include limitations on disposition or sale of assets, prohibitions on assuming or incurring any liens on assets with limited exceptions and limitations on making investments other than those permitted by the agreement. ​ Working capital (defined as current assets less current liabilities) as of December 31, 2024 was $665.6 million compared to $655.2 million as of December 31, 2023.
Consolidated funded debt, as defined in the Credit Agreement, includes all long and short-term debt, finance lease obligations and any trade letters of credit that are outstanding, less cash and cash equivalents on the balance sheet. ​ As of December 31, 2025, our actual financial ratios calculated in accordance with the Credit Agreement compared to the required levels under the Credit Agreement were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Actual Ratio ​ ​ ​ Required Level ​ ​ ​ Minimum level Interest Charge Coverage Ratio 49.4 to 1.00 3.50 to 1.00 ​ ​ ​ Maximum level Leverage Ratio 0.00 to 1.00 3.50 to 1.00 (or 4.00 to 1.00 during temporary step-ups following certain acquisitions) ​ 44 Table of Contents As of December 31, 2025, we were in compliance with all financial covenants related to the Credit Agreement. ​ In addition to financial ratios, the Credit Agreement contains affirmative and negative covenants that include limitations on disposition or sale of assets, prohibitions on assuming or incurring any liens on assets with limited exceptions and limitations on making investments other than those permitted by the agreement. ​ Working capital (defined as current assets less current liabilities) as of December 31, 2025 was $773.7 million compared to $665.6 million as of December 31, 2024.
We also anticipate investing approximately $20 million to $25 million during 2025 related to our multi-year cloud-based SAP ERP system implementation for our Americas and APMEA regions. The SAP ERP system implementation will be a phased rollout approach over a number of years.
We also anticipate investing approximately $25 million to $30 million during 2026 related to our multi-year cloud-based SAP ERP system implementation for our Americas and APMEA regions. The SAP ERP system implementation will be a phased rollout approach over a number of years.
See Note 12 of Notes to the Consolidated Financial Statements in this Annual Report for further disclosures. ​ 41 Table of Contents (b) Relates to the lease liabilities recognized for right-of-use assets of operating leases with a lease term longer than twelve months.
See Note 13 of Notes to the Consolidated Financial Statements in this Annual Report for further disclosures. ​ 45 Table of Contents (b) Relates to the lease liabilities recognized for right-of-use assets of operating leases with a lease term longer than twelve months.
Amounts outstanding were approximately $12.9 million as of December 31, 2024 and $12.5 million as of December 31, 2023. Our letters of credit are primarily associated with insurance coverage and, to a lesser extent, foreign purchases and generally expire within one year of issuance.
Amounts outstanding were approximately $12.2 million as of December 31, 2025 and $12.9 million as of December 31, 2024. Our letters of credit are primarily associated with insurance coverage and, to a lesser extent, foreign purchases and generally expire within one year of issuance.
Most of our HVAC products and solutions feature advanced controls enabling customers to easily connect to the BMS for better monitoring, control and operation. ​ ● Drainage & water re-use—includes drainage products and engineered rainwater harvesting solutions for commercial, industrial, marine and residential applications, including connected roof drain systems. ​ ● Water quality— includes point of use and point of entry water filtration, monitoring, conditioning and scale prevention systems for commercial, marine and residential applications. ​ Our business is reported in three geographic segments: Americas, Europe, and APMEA.
Most of our HVAC products and solutions feature advanced controls enabling customers to easily connect to the BMS for better monitoring, control and operation. ​ ● Drainage and water re use—includes drainage products and engineered rainwater harvesting solutions for commercial, industrial, marine and residential applications, including connected roof drain systems. ​ ● Water quality—includes point-of-use, point-of-entry, closed loop, cooling tower, and other water applications used for water filtration, monitoring, conditioning and scale prevention systems for commercial, marine, light industrial and residential applications. ​ Our business is reported in three geographic segments: Americas, Europe, and APMEA.
In the event we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made. ​ As of December 31, 2024, we decreased our valuation allowance on foreign tax credits by $4.0 million due to the reduction in related foreign tax credits.
In the event we change our determination as to the amount of deferred tax assets that can be realized, we will adjust our valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made. ​ As of December 31, 2025, we decreased our valuation allowance on foreign tax credits by $8.2 million due to the reduction in related foreign tax credits.
Segment earnings exclude the impacts of special items which are defined as non-recurring, and unusual expenses or benefits such as restructuring costs, acquisition-related costs, gain or loss on sale of assets, pension settlements and contingent consideration adjustments.
Segment earnings exclude the impacts of special items which are defined as non-recurring, and unusual expenses or benefits, such as restructuring costs, acquisition-related costs, gain on sale of assets and pension settlements.
During 2024, 2023, and 2022, no impairment was recognized on our indefinite-lived intangible assets.
During 2025, 2024, and 2023, no impairment was recognized on our indefinite-lived intangible assets.
For our 2024 impairment assessment, which occurred as of October 27, 2024, we performed a qualitative assessment for all trademarks and tradenames where the fair value significantly exceeded the carrying value in the previous quantitative assessment performed.
For our 2025 impairment assessment, which occurred as of October 26, 2025, we performed a qualitative assessment for all trademarks and tradenames where the fair value significantly exceeded the carrying value in the previous quantitative assessment performed.
Of this amount, $161.0 million of cash and cash equivalents were held by foreign subsidiaries. Our U.S. operations typically generate sufficient cash flows to meet our domestic obligations.
Of this amount, $209.4 million of cash and cash equivalents were held by foreign subsidiaries. Our U.S. operations typically generate sufficient cash flows to meet our domestic obligations.
We may repay loans outstanding under the Credit Agreement from time to time without premium or penalty, other than customary breakage costs, if any, and subject to the terms of the Credit Agreement. ​ As of December 31, 2024, we held $386.9 million in cash and cash equivalents.
We may repay loans outstanding under the Credit Agreement from time to time without premium or penalty, other than customary breakage costs, if any, and subject to the terms of the Credit Agreement. ​ As of December 31, 2025, we held $405.5 million in cash and cash equivalents.
The change was driven by a decrease in net debt balance primarily due to decreased long-term debt and increased cash and cash equivalents and an increase in stockholders’ equity at December 31, 2024 compared to December 31, 2023 due to higher net income.
The change was driven by a decrease in net debt balance, primarily due to increased cash and cash equivalents and an increase in stockholders’ equity at December 31, 2025 compared to December 31, 2024 due to higher net income.
For the borrowings denominated in dollars, there is a fixed 10 basis point adjustment if the reference rate is Term SOFR. The weighted average interest rate on debt outstanding under the Revolving Credit Facility as of December 31, 2024 was 5.64%.
For the borrowings denominated in dollars, there is a fixed 10 basis point adjustment if the reference rate is Term SOFR. The weighted average interest rate on debt outstanding under the Revolving Credit Facility as of December 31, 2025 was 4.98%.
As of December 31, 2024, we had drawn down $200.0 million on this line of credit and had $12.9 million in letters of credit outstanding, which resulted in $587.1 million of unused and available credit under the Revolving Credit Facility as of such date.
As of December 31, 2025, we had drawn down $200.0 million on this line of credit and had $12.2 million in letters of credit outstanding, which resulted in $587.8 million of unused and available credit under the Revolving Credit Facility as of such date.
The weighted average interest rate on debt outstanding inclusive of the interest rate swap discussed in Note 17 of the Notes to Consolidated Financial Statements and interest rates under the Revolving Credit Facility as of December 31, 2024 was 4.07%.
The weighted average interest rate on debt outstanding inclusive of the interest rate swaps discussed in Note 18 of the Notes to Consolidated Financial Statements and interest rates under the Revolving Credit Facility as of December 31, 2025 was 4.07%.
We estimate the fair value of our reporting units using an income approach based on the present value of estimated future cash flows, and when appropriate, guideline public company and guideline transaction market approaches. ​ Accounting guidance allows us to assess goodwill for impairment utilizing either qualitative or quantitative analyses.
We estimate the fair value of our reporting units using a weighting of fair value derived from income approach based on the present value of estimated future cash flows and guideline public company market approaches. ​ Accounting guidance allows us to assess goodwill for impairment utilizing either qualitative or quantitative analyses.
We have completed 14 acquisitions since 2015, and in the last two years, we have completed four strategic and complementary acquisitions that expanded our addressable market and that we believe will enable value creation through greater scale and growth opportunities. ​ 33 Table of Contents Our innovation strategy is focused on differentiated products and solutions that will provide greater opportunity to distinguish ourselves in the marketplace, while at the same time creating innovative products and smart solutions to protect, control, and conserve critical resources, and help our customers with their sustainability efforts through the use of our products.
We have completed 17 acquisitions since 2016, and eight acquisitions in the last three years, all of which were strategic and complementary acquisitions that expanded our addressable market and that we believe will enable value creation through greater scale and growth opportunities. ​ 37 Table of Contents Our innovation strategy is focused on differentiated products and solutions that will provide greater opportunity to distinguish ourselves in the marketplace, while at the same time creating innovative products and smart solutions to protect, control, and conserve critical resources, and help our customers with their sustainability efforts through the use of our products.
There were no significant changes in our accounting policies or significant changes in our accounting estimates during 2024. ​ We periodically discuss the development, selection and disclosure of the estimates with our Audit Committee.
There were no significant changes in our accounting policies or significant changes in our accounting estimates during 2025. ​ 48 Table of Contents We periodically discuss the development, selection and disclosure of the estimates with our Audit Committee.
This increase was primarily driven by contribution from our acquisitions, favorable price, product mix, productivity, and cost savings from restructuring actions, partially offset by inflation, lower volume in our Europe segment and incremental investments. ​ In discussing our results of operations, segment earnings is our GAAP performance measure used by our chief operating decision-maker (“CODM”) to assess and evaluate segment results.
This increase was primarily driven by favorable price, volume growth, productivity, contributions from our acquisitions and cost savings from prior restructuring actions, partially offset by inflation, tariffs, lower volume in our Europe segment, higher restructuring costs and incremental investments. ​ In discussing our results of operations, segment earnings is the GAAP performance measure used by our chief operating decision-maker (“CODM”) to assess and evaluate segment results.
See Note 10 of Notes to the Consolidated Financial Statements in this Annual Report for further disclosures. ​ 47 Table of Contents
See Note 11 of Notes to the Consolidated Financial Statements in this Annual Report for further disclosures. ​ 52 Table of Contents
Our computation may not be comparable to other companies that may define their net debt to capitalization ratios differently. ​ A reconciliation of long-term debt (including current portion) to net debt and our net debt to capitalization ratio is provided below: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ ​ 2024 ​ 2023 ​ ​ (in millions) Current portion of long‑term debt $ — ​ $ — Plus: long-term debt, net of current portion ​ 197.0 ​ 298.3 Less: cash and cash equivalents ​ (386.9) ​ (350.1) Net debt ​ $ (189.9) ​ $ (51.8) ​ A reconciliation of capitalization is provided below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ ​ ​ 2024 ​ 2023 ​ ​ ​ (in millions) Net debt ​ $ (189.9) ​ $ (51.8) ​ Total stockholders’ equity ​ 1,707.9 ​ 1,513.3 ​ Capitalization ​ $ 1,518.0 ​ $ 1,461.5 ​ Net debt to capitalization ratio ​ (12.5) % (3.5) % ​ Application of Critical Accounting Policies and Key Estimates ​ The preparation of our consolidated financial statements in accordance with U.S.
Our computation may not be comparable to other companies that may define their net debt to capitalization ratios differently. ​ A reconciliation of long-term debt (including current portion) to net debt and our net debt to capitalization ratio is provided below: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ ​ 2025 ​ 2024 ​ ​ (in millions) Current portion of long‑term debt $ — ​ $ — Plus: long-term debt, net of current portion ​ 197.7 ​ 197.0 Less: cash and cash equivalents ​ (405.5) ​ (386.9) Net debt ​ $ (207.8) ​ $ (189.9) ​ A reconciliation of capitalization is provided below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ ​ ​ 2025 ​ 2024 ​ ​ ​ (in millions) Net debt ​ $ (207.8) ​ $ (189.9) ​ Total stockholders’ equity ​ 2,027.7 ​ 1,707.9 ​ Capitalization ​ $ 1,819.9 ​ $ 1,518.0 ​ Net debt to capitalization ratio ​ (11.4) % (12.5) % ​ Application of Critical Accounting Policies and Key Estimates ​ The preparation of our consolidated financial statements in accordance with U.S.
Sales tax, value-added tax, or other taxes collected concurrent with revenue producing activities are excluded from revenue. Freight costs billed to customers for shipping and handling activities are included in revenue with the related cost included in selling, general and administrative expenses.
Contract costs can include labor, materials, subcontractors’ costs, or other direct costs and indirect costs. Sales tax, value-added tax, or other taxes collected concurrent with revenue producing activities are excluded from revenue. Freight costs billed to customers for shipping and handling activities are included in revenue with the related cost included in selling, general and administrative expenses.
The ratio of current assets to current liabilities was 2.6 to 1 as of December 31, 2024 and December 31, 2023.
The ratio of current assets to current liabilities was 2.5 to 1.0 as of December 31, 2025 and 2.6 to 1 as of December 31, 2024.
These instruments may exist or expire without being drawn down; therefore, they do not necessarily represent future cash flow obligations. ​ Our contractual obligations as of December 31, 2024 are presented in the following table: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Next Beyond Contractual Obligations ​ Total ​ 12 Months ​ 12 Months ​ ​ (in millions) Long-term debt obligations, including current maturities(a) ​ $ 200.0 ​ $ — ​ $ 200.0 Operating lease obligations(b) ​ 57.8 ​ 12.9 ​ 44.9 Finance lease obligations(c) ​ 4.6 ​ 2.7 ​ 1.9 Pension contributions(d) ​ 9.0 ​ 0.4 ​ 8.6 Interest(e) ​ 17.1 ​ 9.9 ​ ​ 7.2 2017 Tax Act Toll Tax payable(f) ​ ​ 8.4 ​ ​ 8.4 ​ ​ — Capital expenditures(g) ​ ​ 4.4 ​ ​ 4.4 ​ ​ — Purchase obligations(h) ​ 52.0 ​ 49.8 ​ 2.2 Total ​ $ 353.3 ​ $ 88.5 ​ $ 264.8 ​ (a) Relates to drawdowns on the line of credit under the Credit Agreement as recognized in the consolidated balance sheet.
These instruments may exist or expire without being drawn down; therefore, they do not necessarily represent future cash flow obligations. ​ Our contractual obligations as of December 31, 2025 are presented in the following table: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Next ​ ​ ​ Beyond Contractual Obligations ​ Total ​ 12 Months ​ 12 Months ​ ​ (in millions) Long-term debt obligations, including current maturities(a) ​ $ 200.0 ​ $ — ​ $ 200.0 Operating lease obligations(b) ​ 123.8 ​ 17.2 ​ 106.6 Finance lease obligations(c) ​ 2.9 ​ 1.3 ​ 1.6 Pension contributions(d) ​ 8.4 ​ 0.5 ​ 7.9 Interest(e) ​ 17.1 ​ 9.9 ​ ​ 7.2 Capital expenditures(f) ​ ​ 12.6 ​ ​ 12.6 ​ ​ — Purchase obligations(g) ​ 69.4 ​ 65.7 ​ 3.7 Total ​ $ 434.2 ​ $ 107.2 ​ $ 327.0 (a) Relates to drawdowns on the line of credit under the Credit Agreement as recognized in the consolidated balance sheet.
GAAP results to these adjusted non-GAAP measures is provided below (dollars in millions, except per share amounts): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ December 31, ​ ​ 2024 ​ 2023 ​ ​ ​ ​ ​ ​ ​ Net sales ​ $ 2,252.2 ​ $ 2,056.3 ​ ​ ​ ​ ​ ​ ​ Operating income ​ ​ 390.4 ​ ​ 350.9 Operating margin % ​ ​ 17.3% ​ ​ 17.1% ​ ​ ​ ​ ​ ​ ​ Adjustments for special items: ​ ​ ​ ​ Restructuring ​ ​ 7.2 ​ ​ 5.5 Acquisition-related costs ​ ​ 14.2 ​ ​ 11.3 Contingent consideration adjustment ​ ​ — ​ ​ (2.5) Gain on sale of asset ​ ​ (4.4) ​ ​ — Pension settlement ​ ​ (7.8) ​ ​ — ​ ​ ​ ​ ​ ​ ​ Total adjustments for special items ​ $ 9.2 ​ $ 14.3 ​ ​ ​ ​ ​ ​ ​ Adjusted operating income ​ $ 399.6 ​ $ 365.2 Adjusted operating margin % ​ ​ 17.7% ​ ​ 17.8% ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 291.2 ​ $ 262.1 ​ ​ ​ ​ ​ ​ ​ Adjustments for special items - tax effected: ​ ​ ​ ​ ​ ​ Restructuring ​ ​ 5.4 ​ ​ 4.1 Acquisition-related costs ​ ​ 10.7 ​ ​ 8.3 Contingent consideration adjustment ​ ​ — ​ ​ (2.5) Gain on sale of asset ​ ​ (3.5) ​ ​ — Pension settlement ​ ​ (5.8) ​ ​ — Other investment gain ​ ​ (1.0) ​ ​ — Discrete tax items ​ ​ — ​ ​ 5.3 ​ ​ ​ ​ ​ ​ ​ Total adjustments for special items - tax effected: ​ $ 5.8 ​ $ 15.2 ​ ​ ​ ​ ​ ​ ​ Adjusted net income ​ $ 297.0 ​ $ 277.3 ​ ​ ​ ​ ​ ​ ​ Diluted earnings per share ​ $ 8.69 ​ $ 7.82 Restructuring ​ 0.16 ​ 0.12 Acquisition-related costs ​ 0.32 ​ 0.25 Contingent consideration adjustment ​ — ​ (0.08) Gain on sale of asset ​ (0.11) ​ — Pension settlement ​ (0.17) ​ — Other investment gain ​ (0.03) ​ — Discrete tax items ​ — ​ 0.16 Adjusted diluted earnings per share ​ $ 8.86 ​ $ 8.27 ​ Free cash flow is a non-GAAP measure that does not represent cash provided by operating activities in accordance with U.S.
GAAP results to these adjusted non-GAAP measures is provided below (dollars in millions, except per share amounts): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ December 31, ​ ​ 2025 ​ 2024 ​ ​ ​ ​ ​ ​ ​ Net sales ​ $ 2,438.5 ​ $ 2,252.2 ​ ​ ​ ​ ​ ​ ​ Operating income ​ ​ 448.1 ​ ​ 390.4 Operating margin % ​ ​ 18.4% ​ ​ 17.3% ​ ​ ​ ​ ​ ​ ​ Adjustments for special items: ​ ​ ​ ​ Restructuring ​ ​ 23.7 ​ ​ 7.2 Acquisition-related costs ​ ​ 5.4 ​ ​ 14.2 Gain on sale of asset ​ ​ — ​ ​ (4.4) Pension settlement ​ ​ — ​ ​ (7.8) ​ ​ ​ ​ ​ ​ ​ Total adjustments for special items ​ $ 29.1 ​ $ 9.2 ​ ​ ​ ​ ​ ​ ​ Adjusted operating income ​ $ 477.2 ​ $ 399.6 Adjusted operating margin % ​ ​ 19.6% ​ ​ 17.7% ​ ​ ​ ​ ​ ​ ​ Net income ​ $ 340.8 ​ $ 291.2 ​ ​ ​ ​ ​ ​ ​ Adjustments for special items - tax effected: ​ ​ ​ ​ ​ ​ Restructuring ​ ​ 17.8 ​ ​ 5.4 Acquisition-related costs ​ ​ 4.5 ​ ​ 10.7 Gain on sale of asset ​ ​ — ​ ​ (3.5) Pension settlement ​ ​ — ​ ​ (5.8) Other investment gain ​ ​ — ​ ​ (1.0) Tax adjustment items ​ ​ (8.3) ​ ​ — ​ ​ ​ ​ ​ ​ ​ Total adjustments for special items - tax effected: ​ $ 14.0 ​ $ 5.8 ​ ​ ​ ​ ​ ​ ​ Adjusted net income ​ $ 354.8 ​ $ 297.0 ​ ​ ​ ​ ​ ​ ​ Diluted earnings per share ​ $ 10.17 ​ $ 8.69 Restructuring ​ 0.53 ​ 0.16 Acquisition-related costs ​ 0.13 ​ 0.32 Gain on sale of asset ​ — ​ (0.11) Pension settlement ​ — ​ (0.17) Other investment gain ​ — ​ (0.03) Tax adjustment items ​ (0.25) ​ — ​ ​ ​ ​ ​ ​ ​ Adjusted diluted earnings per share ​ $ 10.58 ​ $ 8.86 ​ Free cash flow is a non-GAAP measure that does not represent cash provided by operating activities in accordance with U.S.
We have the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount.
We have the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. ​ We first identify those reporting units that we believe could pass a qualitative assessment to determine whether further impairment testing is necessary.
The organic net sales growth was primarily in the wholesale channel from increased sales across our core valve products and in the specialty channel from increased sales of our heating and hot water products. ​ Europe net sales decreased $58.8 million, or 11.5%, in 2024 compared to 2023.
The organic net sales growth was primarily in the wholesale channel from increased sales across our core valve and drain products and in the specialty channel from increased sales of our heating and hot water products. ​ Europe net sales decreased $2.6 million, or 0.6%, in 2025 compared to 2024.
However, if amounts held by foreign subsidiaries were needed to fund operations in the United States, we could be required to accrue and pay taxes to repatriate these funds. Such charges may include potential state income taxes and other tax charges.
However, if amounts held by foreign subsidiaries were needed to fund operations in the United States, we could be required to accrue and pay taxes to repatriate these funds.
Organic net sales increased $10.7 million, or 9.2%, primarily due to increased volume across all major countries in the segment. ​ The net decrease in sales due to foreign exchange was mostly due to the unfavorable impact of the appreciation of the U.S. dollar against the Chinese yuan and Canadian dollar, partially offset by the favorable impact of the depreciation of the U.S. dollar against the euro in 2024. ​ Gross Profit.
Organic net sales increased $6.4 million, or 4.8%, primarily due to increased volume across all major countries in the segment. ​ The net increase in net sales due to foreign exchange was mostly due to the favorable impact of the depreciation of the U.S. dollar against the euro, partially offset by the unfavorable impact of the appreciation of the U.S. dollar against the Australian dollar and Canadian dollar in 2025. ​ Gross Profit.
We reconcile the change in these non-GAAP financial measures to our reported results below. ​ Management’s discussion and analysis of our financial condition, results of operations and cash flows as of and for the year ended December 31, 2022 can be found in Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the year ended December 31, 2023. ​ Acquisitions ​ Effective January 1, 2024, we completed the acquisition of Josam Company following its conversion into Josam Industries, LLC (“Josam”) in a share purchase transaction funded with cash on hand.
We reconcile the change in these non-GAAP financial measures to our reported results below. ​ Management’s discussion and analysis of our financial condition, results of operations and cash flows as of and for the year ended December 31, 2023 can be found in Item 7 of Part II, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the year ended December 31, 2024. ​ Acquisitions ​ On November 29, 2025, we completed the acquisition of The Industrial Company for Castings and Sanitary Fittings (“Saudi Cast”) in a share purchase transaction funded with cash on hand.
Results for 2024 included after-tax charges of $10.7 million, or $0.32 per common share, for acquisition-related costs and $5.4 million, or $0.16 per common share, for restructuring, partially offset by after-tax benefits of $5.8 million, or $0.17 per common share, for a gain on the settlement of the Bradley pension plan, $3.5 million, or $0.11 per common share, for a gain on sale of assets and $1.0 million, or $0.03 per common share, for other investment gains. ​ Results for 2023 include after-tax charges of $8.3 million, or $0.25 per common share, for acquisition-related costs, $5.3 million, or $0.16 per common share, primarily for an income tax adjustment related to repatriation of foreign funds and $4.1 million, or $0.12 per common share, for restructuring; partially offset by an after-tax benefit of $2.5 million, or $0.08 per common share, for an adjustment to contingent consideration. ​ Liquidity and Capital Resources ​ 2024 and 2023 Cash Flows ​ We generated $361.1 million of net cash from operating activities in 2024 as compared to $310.8 million in 2023.
Results for 2025 included after-tax charges of $17.8 million, or $0.53 per share of common stock, for restructuring and $4.5 million, or $0.13 per share of common stock, for acquisition-related costs, partially offset by an after-tax benefit of $8.3 million, or $0.25 per share of common stock, for an income tax adjustment related to a lapsed statute tax year liability, as noted above in ‘Income Taxes’ . ​ Results for 2024 included after-tax charges of $10.7 million, or $0.32 per share of common stock , for acquisition-related costs and $5.4 million, or $0.16 per share of common stock , for restructuring, partially offset by after-tax benefits of $5.8 million, or $0.17 per share of common stock , for a gain on the settlement of the Bradley pension plan, $3.5 million, or $0.11 per share of common stock , for a gain on sale of assets and $1.0 million, or $0.03 per share of common stock , for other investment gains. ​ Liquidity and Capital Resources ​ 2025 and 2024 Cash Flows ​ We generated $402.0 million of net cash from operating activities in 2025 as compared to $361.1 million in 2024.
We believe free cash flow and cash flow conversion rate to be an appropriate supplemental measure of our operating performance because it provides investors with a measure of our ability to generate cash, repay debt, pay dividends, repurchase stock and fund acquisitions. 43 Table of Contents A reconciliation of net cash provided by operating activities to free cash flow and a calculation of our cash conversion rate is provided below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ December 31, ​ ​ ​ 2024 ​ 2023 ​ ​ ​ (in millions) Net cash provided by operating activities ​ $ 361.1 ​ $ 310.8 ​ Less: additions to property, plant, and equipment ​ (35.3) ​ (29.7) ​ Plus: proceeds from the sale of property, plant, and equipment ​ 5.9 ​ — ​ Free cash flow ​ $ 331.7 ​ $ 281.1 ​ Net income ​ $ 291.2 ​ $ 262.1 ​ Cash conversion rate of free cash flow to net income ​ 113.9 % 107.2 % ​ Free cash flow improved in 2024 when compared to 2023 primarily driven by higher net income including contributions from our acquisitions. ​ Our net debt to capitalization ratio, a non-GAAP financial measure used by management, at December 31, 2024 was (12.5)% for 2024 compared to (3.5)% in 2023.
We believe free cash flow and cash flow conversion rate to be an appropriate supplemental measure of our operating performance because it provides investors with a measure of our ability to generate cash, repay debt, pay dividends, repurchase stock and fund acquisitions. 47 Table of Contents A reconciliation of net cash provided by operating activities to free cash flow and a calculation of our cash conversion rate is provided below: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, ​ December 31, ​ ​ ​ 2025 ​ 2024 ​ ​ ​ (in millions) Net cash provided by operating activities ​ $ 402.0 ​ $ 361.1 ​ Less: additions to property, plant, and equipment ​ (45.7) ​ (35.3) ​ Plus: proceeds from the sale of property, plant, and equipment ​ — ​ 5.9 ​ Free cash flow ​ $ 356.3 ​ $ 331.7 ​ Net income ​ $ 340.8 ​ $ 291.2 ​ Cash conversion rate of free cash flow to net income ​ 104.5 % 113.9 % ​ Free cash flow improved in 2025 when compared to 2024 primarily driven by higher net income, partially offset by higher working capital investments related to the timing of accounts receivable collections and higher inventory primarily related to increased tariff costs. ​ Our net debt to capitalization ratio, a non GAAP financial measure used by management, at December 31, 2025 was (11.4%) compared to (12.5%) at December 31, 2024.
See Note 15 of Notes to the Consolidated Financial Statements in this Annual Report for further disclosures. ​ (e) Represents the current estimate of future interest payments due on the current and estimated future drawdown requirements on the line of credit under the Credit Agreement referenced above at (a). ​ (f) Relates to the 2017 Tax Act one time transition tax on accumulated foreign subsidiary earnings not previously subject to U.S. income tax which was payable over a number of years. ​ (g) Relates to capital expenditure obligations included in the anticipated capital expenditure investment totals of $45 million to $50 million discussed above. ​ (h) Primarily includes $45.2 million of commodity commitments and $6.2 million relates to cost obligations for our SAP ERP system implementation program. ​ Non-GAAP Financial Measures ​ In accordance with the SEC’s Regulation G and Item 10(e) of Regulation S-K, the following provides definitions of the non-GAAP financial measures used by management.
See Note 16 of Notes to the Consolidated Financial Statements in this Annual Report for further disclosures. ​ (e) Represents the current estimate of future interest payments due on the current and estimated future drawdown requirements on the line of credit under the Credit Agreement referenced above at (a). ​ (f) Relates to capital expenditure obligations included in the anticipated capital expenditure investment totals of $50 million to $60 million discussed above. ​ (g) Primarily includes $56.7 million of commodity commitments and $12.6 million relates to cost obligations for our SAP ERP system implementation program. ​ Non-GAAP Financial Measures ​ In accordance with the SEC’s Regulation G and Item 10(e) of Regulation S-K, the following provides definitions of the non-GAAP financial measures used by management.
Despite these anticipated challenges and uncertainties, we continue to invest in our business, including new products, our smart and connected solutions and our growth and productivity initiatives.
We also continue to experience inflation in our material, labor and overhead costs. Despite these challenges and uncertainties, we continue to invest in our business, including new products, our smart and connected solutions and our growth and productivity initiatives.
Our net sales in each of these segments for the years ended December 31, 2024 and December 31, 2023 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ Year Ended ​ ​ ​ ​ % Change to ​ ​ December 31, 2024 ​ December 31, 2023 ​ ​ ​ ​ Consolidated ​ Net Sales % Sales Net Sales % Sales Change Net Sales ​ ​ (dollars in millions) Americas ​ $ 1,664.9 ​ 73.9 % $ 1,428.1 ​ 69.5 % $ 236.8 ​ 11.5 % Europe ​ 453.3 20.1 ​ 512.1 24.9 ​ (58.8) (2.9) ​ APMEA ​ 134.0 6.0 ​ 116.1 5.6 ​ 17.9 0.9 ​ Total ​ $ 2,252.2 100.0 % $ 2,056.3 100.0 % $ 195.9 9.5 % ​ The change in net sales was attributable to the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change As a % ​ Change As a % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ of Consolidated Net Sales ​ of Segment Net Sales ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Americas ​ Europe ​ APMEA ​ Total ​ Americas ​ Europe ​ APMEA ​ Total ​ Americas ​ Europe ​ APMEA ​ ​ (dollars in millions) Organic ​ $ 31.6 ​ $ (60.3) ​ $ 10.7 $ (18.0) 1.6 % (3.0) % 0.5 % (0.9) % 2.2 % (11.8) % 9.2 % Foreign exchange ​ (1.4) ​ 1.5 ​ (0.9) ​ (0.8) (0.1) 0.1 — — (0.1) 0.3 (0.8) ​ Acquired ​ 206.6 ​ — ​ 8.1 ​ 214.7 10.0 — 0.4 10.4 14.5 — 7.0 ​ Total ​ $ 236.8 ​ $ (58.8) ​ $ 17.9 ​ $ 195.9 11.5 % (2.9) % 0.9 % 9.5 % 16.6 % (11.5) % 15.4 % ​ Our products are sold primarily to wholesalers, OEMs, DIY chains, and through various specialty channels.
Our net sales in each of these segments for the years ended December 31, 2025 and December 31, 2024 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ Year Ended ​ ​ ​ ​ % Change to ​ ​ December 31, 2025 ​ December 31, 2024 ​ ​ ​ ​ Consolidated ​ ​ ​ ​ Net Sales ​ ​ ​ % Sales ​ ​ ​ Net Sales ​ ​ ​ % Sales ​ ​ ​ Change ​ ​ ​ Net Sales ​ ​ (dollars in millions) Americas ​ $ 1,847.4 ​ 75.8 % $ 1,664.9 ​ 73.9 % $ 182.5 ​ 8.1 % Europe ​ 450.7 18.5 ​ 453.3 20.1 ​ (2.6) (0.1) ​ APMEA ​ 140.4 5.7 ​ 134.0 6.0 ​ 6.4 0.3 ​ Total ​ $ 2,438.5 100.0 % $ 2,252.2 100.0 % $ 186.3 8.3 % ​ The change in net sales was attributable to the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change As a % ​ Change As a % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ of Consolidated Net Sales ​ of Segment Net Sales ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Americas ​ Europe ​ APMEA ​ Total ​ Americas ​ Europe ​ APMEA ​ Total ​ Americas ​ Europe ​ APMEA ​ ​ (dollars in millions) Organic ​ $ 133.7 ​ $ (21.0) ​ $ 6.4 ​ $ 119.1 5.9 % (0.9) % 0.3 % 5.3 % 8.0 % (4.6) % 4.8 % Foreign exchange ​ (1.6) ​ 18.4 ​ (2.0) ​ 14.8 — 0.8 (0.1) 0.7 — 4.0 (1.5) ​ Acquired ​ 50.4 ​ — ​ 2.0 ​ 52.4 2.2 — 0.1 2.3 3.0 — 1.5 ​ Total ​ $ 182.5 ​ $ (2.6) ​ $ 6.4 ​ $ 186.3 8.1 % (0.1) % 0.3 % 8.3 % 11.0 % (0.6) % 4.8 % ​ Our products are sold primarily to wholesalers, OEMs, DIY chains, and through various specialty channels.
In 2023, we generated $69.0 million of net cash from financing activities in 2023 primarily due to proceeds from borrowings of $240.0 million offset by long-term debt repayments on our line of credit totaling $90.0 million, tax withholding payments on vested stock awards of $15.8 million, dividend payments of $46.5 million and payments of $16.0 million to repurchase 91,622 shares of Class A common stock. ​ On July 12, 2024, we entered into the Third Amended and Restated Credit Agreement by and among the Company, certain subsidiaries of the Company, the lenders and other parties from time to time parties thereto and JPMorgan Chase Bank, N.A., as administrative agent (the “Credit Agreement”).
In 2024, we used $190.5 million of net cash for financing activities primarily due to long-term debt repayments of $100.0 million, dividend payments of $55.5 million, tax withholding payments on vested stock awards of $13.0 million and payments of $17.0 million to repurchase approximately 85,000 shares of Class A common stock. ​ On July 12, 2024, we entered into the Third Amended and Restated Credit Agreement by and among the Company, certain subsidiaries of the Company, the lenders and other parties from time to time parties thereto and JPMorgan Chase Bank, N.A., as administrative agent (the “Credit Agreement”).
The change in organic net sales by channel was attributable to the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change As a % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ of Prior Year Sales (*) ​ Wholesale OEMs DIY Specialty Total Wholesale OEMs DIY ​ Specialty ​ (dollars in millions) ​ Americas ​ $ 12.8 ​ $ (1.4) ​ $ 0.4 ​ $ 19.8 ​ $ 31.6 1.5 % (1.4) % 0.5 % 5.3 % Europe ​ (6.9) ​ (53.0) ​ (0.4) ​ ​ — ​ (60.3) (2.2) (27.8) ​ (15.4) ​ — ​ APMEA ​ 12.4 ​ (0.8) ​ — ​ ​ (0.9) ​ 10.7 14.8 (11.0) — ​ (3.6) ​ Total ​ $ 18.3 ​ $ (55.2) ​ $ — ​ $ 18.9 ​ $ (18.0) ​ 1.4 % (18.5) % — % 4.7 % ​ * Segment change as a % of segment net sales by channel and Total change as a % of consolidated net sales by channel. ​ Americas net sales increased $236.8 million, or 16.6%, in 2024 compared to 2023.
The change in organic net sales by channel was attributable to the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Change As a % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ of Prior Year Sales (*) ​ ​ ​ ​ Wholesale ​ ​ ​ OEMs ​ ​ ​ DIY ​ ​ ​ Specialty ​ ​ ​ Total ​ ​ ​ Wholesale ​ ​ ​ OEMs ​ ​ ​ DIY ​ Specialty ​ (dollars in millions) ​ Americas ​ $ 95.5 ​ $ 5.7 ​ $ (1.6) ​ $ 34.1 ​ $ 133.7 8.8 % 5.7 % (1.9) % 8.6 % Europe ​ (11.5) ​ (9.7) ​ 0.2 ​ ​ — ​ (21.0) (3.7) (7.0) ​ 9.1 ​ — ​ APMEA ​ 5.6 ​ 2.4 ​ — ​ ​ (1.6) ​ 6.4 5.9 37.5 — ​ (4.9) ​ Total ​ $ 89.6 ​ $ (1.6) ​ $ (1.4) ​ $ 32.5 ​ $ 119.1 ​ 6.0 % (0.7) % (1.7) % 7.6 % * Segment change as a % of segment net sales by channel and Total change as a % of consolidated net sales by channel. ​ 40 Table of Contents Americas net sales increased $182.5 million, or 11.0%, in 2025 compared to 2024.
The increase in working capital is primarily related to the increase in cash and cash equivalents as a result of increased cash from operating activities. ​ 40 Table of Contents Material Cash Requirements ​ We expect existing cash and cash equivalents and cash flows from operations and financing activities to be sufficient to meet our cash needs during 2025 and thereafter for the foreseeable future. ​ We anticipate investing between $45 million to $50 million in capital expenditures during 2025 to improve our manufacturing capabilities and invest in technology and other commercial and operational excellence initiatives.
The increase in working capital is primarily related to higher working capital investment related to timing of accounts receivable collections and higher inventory primarily related to strategic inventory investment and incremental tariffs, partially offset by timing of accounts payable and various accrual expense payments. ​ Material Cash Requirements ​ We expect existing cash and cash equivalents and cash flows from operations and financing activities to be sufficient to meet our cash needs during 2026 and thereafter for the foreseeable future. ​ We anticipate investing between $50 million to $60 million in capital expenditures during 2026 to improve our manufacturing capabilities and invest in technology and other commercial and operational excellence initiatives.
The decrease was primarily due to volume declines in the OEM channel which was impacted by reduced government energy incentives and the related heat pump destocking, as well as volume declines in wholesale plumbing product sales into France and Benelux, partially offset by increased sales of our drains products. ​ 36 Table of Contents APMEA net sales increased $17.9 million, or 15.4%, in 2024 compared to 2023.
The OEM channel was impacted by reduced government energy incentives and the related heat pump destocking primarily in the first half of 2025, while the wholesale channel was primarily impacted by reduced volume of plumbing product sales into France and Benelux and drains product sales. ​ APMEA net sales increased $6.4 million, or 4.8%, in 2025 compared to 2024.
In 2024, we repatriated approximately $75.4 million of previously taxed foreign earnings, using the majority of that cash to reduce our outstanding debt and to fund acquisitions. ​ We have no off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors. ​ Covenant Compliance Under the Credit Agreement, we are required to satisfy and maintain specified financial ratios and other financial condition tests as of December 31, 2024.
In 2025, OBBBA had minimal impact on our effective income tax rate, however it generated significant cash tax savings due to accelerated tax deductions. ​ We have no off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors. ​ Covenant Compliance Under the Credit Agreement, we are required to satisfy and maintain specified financial ratios and other financial condition tests as of December 31, 2025.
The increase in SG&A expenses was attributable to the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ (in millions) % Change Organic ​ $ (2.7) (0.4) % Foreign exchange ​ (0.3) (0.1) ​ Acquired ​ 73.9 12.2 ​ Special items ​ ​ (11.0) ​ (1.8) ​ Total ​ $ 59.9 9.9 % ​ The organic decrease in SG&A expenses was primarily due to $10.3 million from productivity initiatives, a net decrease in short-term and long-term compensation accruals of $6.7 million, $3.3 million of restructuring saving, and decreases of $4.0 million in professional fees, $2.9 million in engineering project spend, $2.0 million in donations, $1.4 million in depreciation and amortization, $1.1 million in travel and marketing spend, and $1.1 million in insurance and product liability claim costs.
The increase in SG&A expenses was attributable to the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (in millions) ​ ​ ​ % Change Organic ​ $ 37.5 5.6 % Foreign exchange ​ 3.6 0.6 ​ Acquired ​ 20.4 3.1 ​ Special items ​ ​ 8.3 ​ 1.2 ​ Total ​ $ 69.8 10.5 % ​ The increase in organic SG&A expenses was primarily due to an increase in strategic investments of $18.0 million, increased costs due to general inflation of $16.2 million, a net increase in short-term and long-term compensation accruals of $11.1 million, increased variable costs of $9.8 million due to higher net sales, $4.9 million increase in donations, increased product liability and insurance claim costs of $3.7 million and $1.4 million in higher travel and marketing spend, partially offset by $11.6 million from productivity initiatives, $6.7 million of restructuring savings, $3.4 million net benefit from the release of a previously reserved contingency matter and lower professional fees of $2.9 million compared to 2024.
The change in net sales was positively impacted by $206.6 million, or 14.5%, of acquired sales related to the Bradley and Josam acquisitions completed in the fourth quarter of 2023 and first quarter of 2024, respectively. The change in net sales was negatively impacted by $1.4 million, or 0.1%, of foreign currency translation.
The change in net sales was positively impacted by $2.0 million, or 1.5%, of acquired sales related to the Saudi Cast acquisition completed in the fourth quarter of 2025. The change in net sales was negatively impacted by $2.0 million, or 1.5%, of foreign currency translation.
If, after assessing the totality of events and circumstances, we determine it is more likely than not the fair value of a reporting unit is greater than its carrying amount, then performing the quantitative impairment test is unnecessary. ​ 45 Table of Contents We first identify those reporting units that we believe could pass a qualitative assessment to determine whether further impairment testing is necessary.
If, after assessing the totality of events and circumstances, we determine it is more likely than not the fair value of a reporting unit is greater than its carrying amount, then performing the quantitative impairment test is unnecessary. ​ If the qualitative assessment is not conclusive, or at our election, we quantitatively assess the fair value of a reporting unit to test goodwill for impairment.
The organic sales decrease was primarily driven by lower volumes in our Europe segment, partially offset by incremental price across all of our operating segments. Operating income of $390.4 million increased by $39.5 million, or 11.3%, in 2024 compared to 2023.
The organic sales increase was primarily driven by incremental price across all of our operating segments, higher volumes in our Americas and APMEA segments, partially offset by lower volumes in our Europe segment. Operating income of $448.1 million increased by $57.7 million, or 14.8%, in 2025 compared to 2024.
Refer to Note 12 of Notes to Consolidated Financial Statements in this Annual Report on Form 10-K for further details. ​ Other (Income) expense, Net. Other (income) expense, net, was an income balance of $1.4 million in 2024 primarily due to an immaterial investment gain.
Refer to Note 13 Financing Arrangement of Notes to Consolidated Financial Statements in this Annual Report on Form 10-K for further details. ​ Other Expense (Income), Net.
As a result of our qualitative analyses, we determined that the fair values of the seven reporting units noted above were more likely than not greater than the carrying amounts. In 2024, we did not need to proceed beyond the qualitative analysis, and no goodwill impairments were recorded.
As a result of our qualitative analyses, we determined that the fair values of the seven reporting units noted above were more likely than not greater than the carrying amounts. As a result of the quantitative analysis, we determined that the fair value of the Fluid Solutions - Europe reporting unit exceeded the carrying value.
Multi-family housing, office, retail and recreation verticals are expected to be down, but light industrial, including data centers, is growing and institutional verticals remain steady. The European economy remains weak and geo-political uncertainties continue. Elevated interest rates may impact new construction.
Multi-family and single-family housing, office, retail and recreation verticals are expected to be down, but light industrial, including data centers, is growing and institutional verticals remain steady.
In 2023, other (income) expense, net was an expense balance primarily due to unfavorable foreign currency translation . Refer to Note 17 Financial Instruments of Notes to Consolidated Financial Statements in this Annual Report on Form 10-K for further details. ​ Income Taxes. Our effective income tax rate decreased to 24.6% in 2024 from 24.9% in 2023.
Refer to Note 18 Financial Instruments of Notes to Consolidated Financial Statements in this Annual Report on Form 10-K for further details. ​ 42 Table of Contents Income Taxes. Our effective income tax rate decreased to 23.5% in 2025 from 24.6% in 2024.
For further information regarding the impact on the Company, see Item 1A. “Risk Factors.” ​ Financial Overview Net sales for 2024 increased 9.5%, or $195.9 million, on a reported basis and decreased 0.9%, or $18.0 million, on an organic basis, compared to 2023.
Management cannot predict the full impact of the uncertainties discussed above. For further information regarding the impact on the Company, see Item 1A. “Risk Factors.” ​ 38 Table of Contents Financial Overview Net sales for 2025 increased 8.3%, or $186.3 million, on a reported basis and 5.3%, or $119.1 million, on an organic basis, compared to 2024.
We expect the new ERP investment will result in more efficient and scalable operational processes, provide enhanced analytics to drive improved business performance, and offer an improved customer experience. ​ We completed the acquisition of I-CON in a share purchase transaction funded with cash on hand on January 2, 2025.
We expect the new ERP investment will result in more efficient and scalable operational processes, provide enhanced analytics to drive improved business performance, and offer an improved customer experience. ​ We intend to continue to repurchase shares of Class A common stock consistent with prior years.
We spent $217.1 million less cash for acquisitions and $0.3 million less cash for net capital expenditures in 2024 compared to 2023. ​ We used $190.5 million of net cash for financing activities during 2024 primarily due to long-term debt repayments of $100.0 million, dividend payments of $55.5 million, tax withholding payments on vested stock awards of $13.0 million and payments of $17.0 million to repurchase 85,435 shares of Class A common stock.
We spent $160.8 million more cash for acquisitions and $16.3 million more cash for net capital expenditures in 2025 compared to 2024. ​ We used $96.9 million of net cash for financing activities during 2025 primarily due to dividend payments of $66.9 million, tax withholding payments on vested stock awards of $11.4 million and payments of $16.0 million to repurchase approximately 67,000 shares of Class A common stock.
The change in net sales was positively impacted by $1.5 million, or 0.3%, of foreign currency translation. Organic net sales decreased $60.3 million, or 11.8%, primarily due to lower volumes, partially offset by favorable price realization.
The change in net sales was positively impacted by $18.4 million, or 4.0%, of foreign currency translation. Organic net sales decreased $21.0 million, or 4.6%, primarily due to volume declines from market weakness in the OEM and wholesale channels, partially offset by favorable price realization.
Gross profit and gross profit as a percent of net sales (gross margin) for 2024 and 2023 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, 2024 ​ December 31, 2023 ​ ​ ​ (dollars in millions) Gross profit ​ $ 1,062.0 ​ $ 960.9 ​ Gross margin ​ 47.2 % 46.7 % ​ Gross profit increased primarily due to contribution from our acquisitions, higher price realization and productivity, partially offset by inflation, lower volume in our Europe segment, and the amortization of the fair value step-up adjustments for inventory purchased as part of the Bradley and Josam acquisitions.
Gross profit and gross profit as a percent of net sales (gross margin) for 2025 and 2024 were as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ December 31, 2025 ​ December 31, 2024 ​ ​ ​ (dollars in millions) Gross profit ​ $ 1,206.0 ​ $ 1,062.0 ​ Gross margin ​ 49.5 % 47.2 % ​ Gross profit and gross margin increased primarily from higher price realization, productivity and contributions from our acquisitions including lower inventory related acquisition adjustments, partially offset by inflation and tariffs. ​ Selling, General and Administrative Expenses.
The increase in organic segment earnings of $7.8 million, or 2.2%, was due to higher price, favorable product mix, productivity, and savings from restructuring actions, partially offset by inflation, lower volume in Europe and incremental investments.
The increase in organic operating income of $76.3 million, or 16.8%, was primarily due to higher price realization, higher volume in the Americas and APMEA, and productivity and savings from prior restructuring actions, partially offset by volume deleverage in Europe, inflation, tariffs and investments. ​ Interest Income.
The decrease in special items SG&A costs was primarily due to a $7.8 million gain on the settlement of Bradley’s frozen pension plan and $4.4 million gain on sale of buildings. Total SG&A expenses, as a percentage of net sales, were 29.5% in 2024 compared to 29.4% in 2023. ​ Restructuring.
The increase in special items SG&A expenses was primarily due to a $7.8 million gain on the settlement of Bradley’s frozen pension plan and $4.4 million gain on sale of buildings in 2024 that did not repeat in 2025, partially offset by decreased acquisition-related costs of $3.9 million compared to 2024.
In 2024, we recorded a net restructuring charge of $7.2 million, which related to immaterial actions in all regions including severance, exit costs and other cost reductions. In 2023, we recorded a net restructuring charge of $5.5 million, which related to immaterial cost reduction actions in all regions primarily related to severance and other exit costs.
In 2024, we recorded a net restructuring charge of $7.2 million, which related to immaterial actions in all regions including severance, exit costs and other cost reductions. For a more detailed description of our restructuring plans, see Note 3 of Notes to Consolidated Financial Statements in this Annual Report Form 10-K. ​ Operating Income.
The aggregate net purchase price was approximately $70.6 million, net of cash acquired of $2.5 million, and is subject to a final post-closing working capital adjustment. I-CON is headquartered in Oviedo, Florida, and is a leading designer and manufacturer of intelligent plumbing controls, addressing the unique challenges of water management in correctional facilities.
I-CON is headquartered in Oviedo, Florida, and is a designer and manufacturer of intelligent plumbing controls, addressing the unique challenges of water management in correctional facilities.
Selling, general and administrative, or SG&A, expenses increased $59.9 million, or 9.9%, in 2024 compared to 2023.
Selling, general and administrative (“SG&A”) expenses increased $69.8 million, or 10.5%, in 2025 compared to 2024.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeOnce the third-party transaction associated with the hedged forecasted transaction occurs, the effective portion of any related gain or loss on the designated foreign currency hedge is reclassified into cost of goods sold within earnings. The fair value of our designated foreign hedge contracts outstanding as of December 31, 2024 was an asset of $0.5 million.
Biggest changeOnce the third-party transaction associated with the hedged forecasted transaction occurs, the effective portion of any related gain or loss on the designated foreign currency hedge is reclassified into cost of goods sold within earnings. The fair value of our designated foreign hedge contracts outstanding as of December 31, 2025 was a liability of less than $0.1 million.
Such transactions are principally purchases or sales of materials and are denominated in European currencies, the Chinese yuan or the U.S. or Canadian dollar.
Such transactions are principally purchases or sales of materials and are denominated in European currencies, the Chinese yuan or the U.S., Canadian or Australian dollar.
Information about our long-term debt facility and related interest rates appears in Note 17 of the Consolidated Financial Statements. ​ We purchase significant amounts of bronze ingot, brass rod, cast iron, stainless steel and plastic, which are utilized in manufacturing our many product lines.
Information about our long-term debt facility and related interest rates appears in Note 18 of the Consolidated Financial Statements. ​ We purchase significant amounts of bronze ingot, brass rod, cast iron, stainless steel and plastic, which are utilized in manufacturing our many product lines.
We use foreign currency forward exchange contracts from time to time to manage the risk related to intercompany loans, intercompany purchases and intercompany sales that occur during the course of a year, and certain open foreign currency denominated commitments to sell products to third parties.
We use foreign currency forward exchange contracts from time to time to manage the risks related to intercompany loans, intercompany purchases and intercompany sales that occur during the course of a year, and certain open foreign currency denominated commitments to sell products to third parties.
See Note 17 of Notes to the Consolidated Financial Statements for further details. ​ Our consolidated earnings, which are reported in United States dollars, are subject to translation risks due to changes in foreign currency exchange rates.
See Note 18 of Notes to the Consolidated Financial Statements for further details. ​ Our consolidated earnings, which are reported in United States dollars, are subject to translation risks due to changes in foreign currency exchange rates.

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