What changed in Zurn Elkay Water Solutions Corp's 10-K — 2024 vs 2025
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Paragraph-level year-over-year comparison of Zurn Elkay Water Solutions Corp'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.
+204 added−229 removedSource: 10-K (2026-02-09) vs 10-K (2025-02-10)
Top changes in Zurn Elkay Water Solutions Corp's 2025 10-K
204 paragraphs added · 229 removed · 171 edited across 8 sections
- Item 7. Management's Discussion & Analysis+87 / −92 · 71 edited
- Item 1A. Risk Factors+48 / −64 · 37 edited
- Item 1. Business+41 / −46 · 36 edited
- Item 1C. Cybersecurity+9 / −9 · 9 edited
- Item 5. Market for Registrant's Common Equity+9 / −8 · 8 edited
Item 1. Business
Business — how the company describes what it does
36 edited+5 added−10 removed61 unchanged
Item 1. Business
Business — how the company describes what it does
36 edited+5 added−10 removed61 unchanged
2024 filing
2025 filing
Biggest changeAs previously disclosed, on February 12, 2022, Zurn Water Solutions Corporation ("Zurn") entered into a definitive agreement to combine with Elkay Manufacturing Company (“Elkay”), pursuant to an Agreement and Plan of Merger (the “Merger Agreement”) by and among Zurn, Elkay, Zebra Merger Sub, Inc., a wholly owned subsidiary of Zurn (“Merger Sub”), and Elkay Interior Systems International, Inc., as representative of the stockholders of Elkay, providing for the merger of Elkay with and into Merger Sub, with Elkay surviving as a wholly owned subsidiary of Zurn (the “Merger”).
Biggest changeOur physical footprint encompasses 21 principal manufacturing and warehouse facilities located primarily in North America. As previously disclosed, on February 12, 2022, Zurn Water Solutions Corporation entered into a definitive agreement to combine with Elkay Manufacturing Company (the “Merger" or "Elkay Merger”).
Our product portfolio includes professional grade water safety and control products, flow systems products, hygienic and environmental products, and filtered drinking water products for public and private spaces that deliver superior value to building owners, positively impact the environment and human hygiene and reduce product installation time.
Our product portfolio includes professional grade water safety and control products, flow systems products, hygienic and environmental products, and filtered drinking water products for public and private spaces that deliver superior value to building owners, positively impact the environment and human hygiene and reduce product installation time.
Specification drainage products within flow systems include point drains (such as roof drains and floor drains), hydrants, fixture carrier systems, and chemical drainage systems that are used to control storm water, and process water and potable water in various institutional, commercial, industrial, civil and irrigation applications.
Specification drainage products within flow systems include point drains (such as roof drains and floor drains), hydrants, fixture carrier systems, and chemical drainage systems that are used to control storm water, process water and potable water in various institutional, commercial, industrial, civil and irrigation applications.
Acquisitions Mergers and acquisitions are a critical part of the Zurn Elkay growth strategy. Our strategy is to grow strategically by acquiring leading companies in attractive markets with businesses that we believe will benefit from ZEBS to increase customer satisfaction, revenue growth and operating margins.
Acquisitions Mergers and acquisitions are a critical part of the Zurn Elkay growth strategy. Our mergers and acquisitions strategy is to grow strategically by acquiring leading companies in attractive markets with businesses that we believe will benefit from ZEBS to increase customer satisfaction, revenue growth and operating margins.
These stringent testing and regulatory approval processes are completed principally through the Foundation for Cross-Connection Control and Hydraulic Research at the University of Southern California, the International Association of Plumbing and Mechanical Officials ("IAPMO"), the National Sanitation Foundation ("NSF"), the American National Standards Institute ("ANSI"), ASTM International ("ASTM"), the Plumbing and Drainage Institute ("PDI"), Underwriters Laboratories ("UL"), Factory Mutual ("FM") and the American Waterworks Association ("AWWA") typically prior to the commercialization of our products.
These stringent testing and regulatory approval processes are completed principally through the Foundation for Cross-Connection Control and Hydraulic Research at the University of Southern California ("USC"), the International Association of Plumbing and Mechanical Officials ("IAPMO"), the National Sanitation Foundation ("NSF"), the American National Standards Institute ("ANSI"), ASTM International ("ASTM"), the Plumbing and Drainage Institute ("PDI"), Underwriters Laboratories ("UL"), Factory Mutual ("FM") and the American Waterworks Association ("AWWA") typically prior to the commercialization of our products.
Interceptors are used to separate and capture fats, oils, and greases from wastewater before it is discharged into the municipal wastewater collection system. Our proprietary designs are primarily fabricated from fiberglass reinforced polyester, which we believe is gaining market share from traditional concrete products due to its reliability, service life, ease of service, and lowest cost of ownership.
Interceptors are used to separate and capture fats, oils, and greases from wastewater before it is discharged into the municipal wastewater collection system. Our 7 proprietary designs are primarily fabricated from fiberglass reinforced polyester, which we believe is gaining market share from traditional concrete products due to its reliability, service life, ease of service, and lowest cost of ownership.
We will also post on our website any amendments to these documents, and information about any waivers granted to directors or executive officers with respect to our Code of Ethics. Our website and the information contained on or connected to that site are not incorporated by reference into this Form 10-K. 11
We will also post on our website any amendments to these documents, and information about any waivers granted to directors or executive officers with respect to our Code of Ethics. Our website and the information contained on or connected to that site are not incorporated by reference into this Form 10-K. 10
We believe the areas in which we compete are primarily tied to growth in institutional and commercial construction, as well as, to a lesser extent, waterworks and residential. We believe these areas have significant long-term growth fundamentals. Historically, the institutional, commercial, and waterworks construction sectors have been more stable and less vulnerable to down-cycles than the residential construction industry.
We believe the areas in which we compete are primarily tied to growth in institutional and commercial construction, as well as, to a lesser extent, waterworks and residential. We believe these areas have significant long-term growth fundamentals. 6 Historically, the institutional, commercial, and waterworks construction sectors have been more stable and less vulnerable to down-cycles than the residential construction industry.
Designed to meet the stringent requirements of independent test labs, such as the IAPMO, NSF, UL and FM, they are sold into institutional, commercial, and residential new construction and retrofit applications as well as the fire protection, municipal water and wastewater and irrigation end markets.
Designed to meet the stringent requirements of independent test labs, such as the IAPMO, NSF, UL, FM and USC, they are sold into institutional, commercial, and residential new construction and retrofit applications as well as the fire protection, municipal water and wastewater and irrigation end markets.
We serve a broad and diverse array of institutional and commercial end markets, and to a lesser extent waterworks and residential 6 end markets, with solid fundamental long-term growth characteristics. We believe there continues to be long-term growth potential in our markets.
We serve a broad and diverse array of institutional and commercial end markets, and to a lesser extent waterworks and residential end markets, with solid fundamental long-term growth characteristics. We believe there continues to be long-term growth potential in our markets.
We also strive to provide competitive compensation and benefits for our associates. Health and Safety: The safety of our associates is a top priority. To be our best and maintain integrity in everything we do, we strive to provide associates with the right tools and resources.
We also strive to provide competitive compensation and benefits for our associates. 9 Health and Safety: The safety of our associates is a top priority. To be our best and maintain integrity in everything we do, we strive to provide associates with the right tools and resources.
Our secure online portal, plumbSMART™, allows for real-time insights from our Connected Products including wireless monitoring of usage trends, water consumption, possible issues and alerts through digitally connected product solutions that can be retrofitted to the installed base of our products.
Our secure online portal, plumbSMART™, allows for real-time insights from our Connected Products including wireless monitoring of usage trends, filter status, water consumption, possible issues and alerts through digitally connected product solutions that can be retrofitted to the installed base of our products.
Product Development The majority of our new product development begins with our extensive "Voice of the Customer" operating philosophy. We have a team of approximately 160 engineers and technical employees who are organized by product line. Each of our product lines has technical staff responsible for product development and application support.
Product Development The majority of our new product development begins with our extensive "Voice of the Customer" operating philosophy. We have a team of approximately 180 engineers and technical employees who are organized by product line. Each of our product lines has technical staff responsible for product development and application support.
The combination of Elkay's wide array of sinks recognized for their design, durability and aesthetics, World Dryer’s eco-friendly hand dryers, Just Manufacturing's stainless steel product portfolio, Hadrian’s partition systems and Zurn Elkay's water-efficient hygienic and environmental products allows us to deliver a bundle of products to our customers, what we believe is the most comprehensive hygienic and environmental content to new and existing buildings.
The combination of Elkay's wide array of sinks recognized for their design, durability and aesthetics, World Dryer’s eco-friendly hand dryers, Just Manufacturing's stainless steel product portfolio, Hadrian’s partition systems and Zurn's water-efficient fixtures allows us to deliver a bundle of products to our customers, what we believe is the most comprehensive hygienic and environmental content to new and existing buildings.
Through continual training and engaging associates and visitors in addressing safety issues, we have reduced our Total Recordable Incident Rate ("TRIR") by 46% when compared to the combined Zurn Elkay rate for calendar year 2022, at the time of the Merger, an d also reduced our Lost Time Incident Rate ("LTIR") by 70% over the same period.
Through continual training and engaging associates and visitors in addressing safety issues, we have reduced our Total Recordable Incident Rate ("TRIR") by 43% when compared to the combined Zurn Elkay rate for calendar year 2022, at the time of the Merger, an d also reduced our Lost Time Incident Rate ("LTIR") by 43% over the same period.
Zurn Elkay has approximately 230 active patents in the United States and approximately 90 foreign active patents as of December 31, 2024. Product innovation is crucial in the institutional and commercial plumbing products markets because new products must continually be developed to meet specifications and regulatory demands as well as customer needs.
Zurn Elkay has approximately 240 active patents in the United States and approximately 90 foreign active patents as of December 31, 2025. Product innovation is crucial in the institutional and commercial plumbing products markets because new products must continually be developed to meet specifications and regulatory demands as well as customer needs.
At 0.65 TRIR and 0.11 LTIR per 100 associates, we are better than best-in-class benchmarks. We are also committed to improving the holistic health and well-being of our associates and have various programs in place to provide information, activities and support for assisting healthy choices.
At 0.69 TRIR and 0.21 LTIR per 100 associates, we are better than best-in-class benchmarks. We are also committed to improving the holistic health and well-being of our associates and have various programs in place to provide information, activities and support for assisting healthy choices.
We use approximately 1,100 independent sales representatives, along with a network of regional distribution centers and third-party warehouses, to provide our customers with same-day service and quick response times. Zurn®, Elkay®, JUST®, Hadrian®, and Wilkins® benefit from strong brand recognition, which is enhanced by a strong propensity to replace "like-for-like" products.
We use approximately 1,000 independent sales representatives within North America, along with a network of regional distribution centers and third-party warehouses, to provide our customers with same-day service and quick response times. Zurn®, Elkay®, JUST®, Hadrian®, and Wilkins® benefit from strong brand recognition, which is enhanced by a strong propensity to replace "like-for-like" products.
The Company’s largest customer accounted for 19%, 20% and 22% of consolidated net sales for the years ended December 31, 2024, 2023, and 2022, respectively. No other customers account for more than 10% of consolidated net sales for the years ended December 31, 2024, 2023, or 2022.
The Company’s largest customer accounted for 18%, 19% and 20% of consolidated net sales for the years ended December 31, 2025, 2024, and 2023, respectively. No other customers account for more than 10% of consolidated net sales for the years ended December 31, 2025, 2024, or 2023.
Human Capital Management As of December 31, 2024, we had approximately 2,500 employees, of whom approximately 1,900 were employed in the United States. Approximately 160 of our United States employees are represented by labor unions. We are currently party to four collective bargaining agreements in the United States with expiration dates in November 2026, October 2027, and January 2028.
Human Capital Management As of December 31, 2025, we had approximately 2,600 employees, of whom approximately 2,000 were employed in the United States. Approximately 160 of our United States employees are represented by labor unions. We are currently party to four collective bargaining agreements in the United States with expiration dates in November 2026, October 2027, and January 2028.
The operating results and financial position of the Process & Motion Control platform are reported as discontinued operations within our consolidated financial statements and we operate as a single Water Management platform. 5 ZEBS ZEBS creates a scalable, process-based framework that focuses on driving superior customer satisfaction and financial results by targeting world-class operating performance throughout all aspects of our business.
The operating results and financial position of the Process & Motion Control business are reported as discontinued operations within our consolidated financial statements. ZEBS ZEBS creates a scalable, process-based framework that focuses on driving superior customer satisfaction and financial results by targeting world-class operating performance throughout all aspects of our business.
Our drinking water products are sold under the Elkay® and Halsey Taylor® brand names and filtered units include water filters certified by NSF and ANSI to reduce the level of contaminants in water, including lead, microplastics, and certain per- and polyfluoroalkyl substances ("PFAS") chemicals.
Our drinking water products are sold under the Elkay® and Halsey Taylor® brand names and filtered units include water filters certified by NSF and ANSI to reduce the level of contaminants in water, including lead, microplastics, and total polyfluoroalkyl substances ("PFAS") chemicals (as defined by NSF/ANSI 53), also known as forever chemicals.
Among our leading brands are Zurn®, Elkay®, and Wilkins®. Drinking Water Products Our drinking water product line includes an extensive collection of filtered drinking water delivery products oriented around providing the cleanest, superior tasting water while improving overall water hygiene, accessibility and sustainability.
Our leading brands include Zurn®, Elkay®, and Wilkins®. Drinking Water Products Our drinking water product line includes an extensive collection of filtered drinking water delivery products oriented around providing cleaner and safer drinking water while improving overall water hygiene, accessibility and sustainability.
The number of shares issued in connection with the merger represented approximately 29% of outstanding shares immediately following the Merger. 8 Customers Our water safety and control, flow systems, hygienic and environmental, and drinking water products are sold for new construction, remodeling and retrofit applications to customers in institutional, commercial, waterworks and residential end markets and are distributed through independent sales representatives, plumbing wholesalers and industry-specific distributors in the waterworks, foodservice, industrial, janitorial, sanitation and siteworks industries.
Customers Our water safety and control, flow systems, hygienic and environmental, and filtered drinking water products are sold for new construction, remodeling and retrofit applications to customers in institutional, commercial, waterworks and residential end markets and are distributed through independent sales representatives, plumbing wholesalers and industry-specific distributors in the waterworks, foodservice, industrial, janitorial, sanitation and siteworks industries.
Our business also depends upon general economic conditions and other market factors beyond our control, and we serve customers in cyclical industries. As a result, our operating results have been, and in the future likely will be, negatively affected during economic downturns. See Item 1A Risk Factors of this report for information on the risks associated with general economic conditions.
As a result, our operating results have been, and in the future likely will be, negatively affected during economic downturns. See Item 1A, Risk Factors of this report for information on the risks associated with general economic conditions.
We are led by an experienced, high-caliber management team that employs ZEBS as a proven operating philosophy to drive excellence and world-class performance in all aspects of our business, which includes our "Voice of the Customer" process to promote superior customer satisfaction. Our physical footprint encompasses 27 principal manufacturing and warehouse facilities located primarily in North America.
We are led by an experienced, high-caliber management team that employs ZEBS as a proven operating philosophy to drive excellence and world-class performance in all aspects of our business, which includes our "Voice of the Customer" process to promote superior customer satisfaction and striving for continuous improvement across the business.
Our innovation is focused on introducing products that provide incremental value to our end customer and help enable our customers to achieve their sustainability goals by focusing innovation on products that save water, use less energy, provide clean drinking water, reduce installation time, lower maintenance costs, and other sustainable attributes.
Our innovation is focused on introducing products that provide incremental value to our end customer and help enable our customers to achieve their sustainability goals by focusing innovation on products that save water, use less energy, provide clean drinking water, reduce installation time, lower maintenance costs, and other sustainable attributes. 8 Our digital strategy for a customer productivity platform is based on the integration of technology with Zurn Elkay's leading portfolio of products.
Our Business Zurn Elkay is a growth-oriented, pure-play water management business that designs, procures, manufactures, and markets what we believe to be the broadest sustainable product portfolio of specification-driven water management solutions to improve health, hydration, human safety and the environment.
As we continue to apply ZEBS, we have experienced improvements in growth, productivity, cost reduction and asset efficiency and believe there are ongoing opportunities to improve our performance. 5 Our Business Zurn Elkay is a growth-oriented, pure-play water management business that designs, procures, manufactures, and markets what we believe to be the broadest sustainable product portfolio of specification-driven water management solutions to improve health, hydration, human safety and the environment.
These highly specified and engineered flow control devices protect and control the potable water supply and emergency water supply within a building or site.
Key valve products include backflow preventers, fire system valves, pressure reducing valves and thermostatic mixing valves. These highly specified and engineered flow control devices protect and control the potable water supply and emergency water supply within a building or site.
See Item 1A Risk Factors of this report for more information on the risks associated with backlog. 9 Seasonality Demand for our products is primarily driven by institutional and commercial building activity, remodeling and retrofit opportunities, and to a lesser extent, new home starts as well as waterworks expansion.
Seasonality Demand for our products is primarily driven by institutional and commercial building activity, remodeling and retrofit opportunities, and to a lesser extent, new home starts as well as waterworks expansion. Accordingly, weather has an impact on the seasonality of certain end markets.
We utilize an extensive sales and marketing network spanning approximately 30 countries, which consists of approximately 1,100 independent sales representatives across 180 sales agencies. Specifically, it has been our experience that, once an architect, engineer, contractor, or owner has specified our product with satisfactory results, that person will generally continue to use our products in future projects.
Specifically, it has been our experience that, once an architect, engineer, contractor, or owner has specified our product with satisfactory results, that person will generally continue to use our products in future projects.
Also, as previously disclosed, on October 4, 2021, we completed a Reverse Morris Trust tax-free spin-off transaction (the “Spin-Off Transaction”) in which (i) substantially all the assets and liabilities of our Process & Motion Control business were transferred to a newly created subsidiary, Land Newco, Inc.
Also, as previously disclosed, on October 4, 2021, we completed a Reverse Morris Trust tax-free spin-off transaction (the “Spin-Off Transaction”) in which our former Process & Motion Control business was divested to Regal Rexnord Corporation (formerly known as Regal Beloit Corporation). Following the transaction, we operate as a pure-play water management business.
On occasion we are involved in such investigations and/or cleanup, and we have been named as a PRP in environmental matters and could be named in future matters. 10 We do not currently anticipate any significant additional expenditures related to maintaining compliance; however, due to the evolving nature of laws and regulations and changes thereto, there can be no assurance that current expenditures will be adequate or that violations will not occur.
We do not currently anticipate any significant additional expenses related to maintaining compliance; however, due to the evolving nature of laws and regulations and changes thereto, there can be no assurance that current expenses will be adequate or that violations will not occur. Additional Information The address of our principal executive office is 511 West Freshwater Way, Milwaukee, Wisconsin 53204.
Spring and summer months in the United States and Canada represent the main construction season with increased construction in the institutional, commercial, and waterworks markets, as well as new housing starts. As a result, sales generally decrease slightly in the first and fourth quarters as compared to the second and third quarters of the calendar year.
With the exception of our remodeling and retrofit opportunities, weather is an important variable as it significantly impacts construction. Spring and summer months in the United States and Canada represent the main construction season with increased construction in the institutional, commercial, and waterworks markets, as well as new housing starts.
Additional Information The address of our principal executive office is 511 West Freshwater Way, Milwaukee, Wisconsin 53204. Our phone number is (855) 480-5050. Our website address is www.zurnelkay.com.
Our phone number is (855) 480-5050. Our website address is www.zurnelkay.com.
Water Safety and Control Products Our water safety and control products are sold under the Zurn® and Wilkins® brand names and encompass a wide range of valve and water distribution control products. Key valve products include backflow preventers, fire system valves, pressure reducing valves and thermostatic mixing valves.
These units can be equipped with a range of filters certified to NSF/ANSI 42, 53, and 401 requirements to reduce PFAS, lead, microplastics, asbestos and other contaminants. Water Safety and Control Products Our water safety and control products are sold under the Zurn® and Wilkins® brand names and encompass a wide range of valve and water distribution control products.
Removed
(“Land”), (ii) the shares of Land were distributed to our stockholders pro rata, and (iii) Land was merged with a subsidiary of Regal Rexnord Corporation (formerly known as Regal Beloit Corporation), in which the stock of Land was converted into shares of Regal Rexnord Corporation.
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We utilize an extensive sales and marketing network with a strong focus on the North American market. This market consists of approximately 1,000 independent sales representatives across 120 sales agencies in North America.
Removed
As we have applied ZEBS over the past several years, we have experienced improvements in growth, productivity, cost reduction and asset efficiency and believe there are opportunities to continue to improve our performance as we continue to apply ZEBS.
Added
In 2025, Elkay launched Pro Filtration TM , the latest evolution of our trusted ezH2O® Bottle Filling Station line, advancing both water quality and sustainability with up to 10,000 gallon filtration capacity. Pro Filtration features a new top-mounted filter housing that allows anyone to replace filters in under 30 seconds, reducing downtime and improving operational efficiency.
Removed
Water control solutions that protect human health and gravity drainage products that protect the environment are sold under the Zurn® brand and are typically required in the early stages of a construction or retrofit project, when potable water and 7 non-potable water control and drainage systems are installed. Water control products include PEX piping, valves, fittings and installation tools.
Added
We continue to evaluate opportunities focused on expanding our product portfolio in the industry's specification-driven end markets.
Removed
PEX tubing is manufactured from cross-linked polyethylene and is designed for high temperature and pressure fluid distribution piping applications for both potable water and radiant heating systems in the residential and nonresidential construction industries. These systems are engineered to meet stringent NSF and ASTM standards helping water professionals provide safe and efficient building and site water management solutions.
Added
As a result, sales generally decrease slightly in the first and fourth quarters as compared to the second and third quarters of the calendar year. Our business also depends upon general economic conditions and other market factors beyond our control, and we serve customers in cyclical industries.
Removed
In 2022, we completed the Elkay Merger, which expanded our product portfolio and presence in the end markets we serve; that transaction is further described below.
Added
On occasion we are involved in such investigations and/or cleanup, and we have been named as a PRP in environmental matters and could be named in future matters.
Removed
The purchase price for this transaction is stated net of cash acquired and excludes transaction costs. • July 1, 2022 - We completed the merger with Elkay, a market leader of drinking water solutions and commercial sinks which complements the offerings of our existing product portfolio. The final purchase price (after final purchase price adjustments) was $1,457.8 million.
Removed
The purchase price included 51,378,504 shares of Zurn's common stock ($1,411.9 million based on Zurn's closing stock price of $27.48 per share on July 1, 2022), and $45.9 million of net cash payments for the repayment of Elkay's existing term loan and Elkay's transaction related costs outstanding that were in excess of Elkay's cash and cash equivalents balance at the time of closing.
Removed
Our digital strategy for a customer productivity platform is based on the integration of innovative Industrial Internet of Things (IIoT) and e-commerce technologies with Zurn Elkay's leading portfolio of products.
Removed
Backlog Our backlog of unshipped orders was approximately $49 million and $51 million as of December 31, 2024 and December 31, 2023, respectively. As of December 31, 2024, our backlog is all expected to ship during the year ending December 31, 2025.
Removed
Accordingly, weather has an impact on the seasonality of certain end markets. With the exception of our remodeling and retrofit opportunities, weather is an important variable as it significantly impacts construction.
Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
37 edited+11 added−27 removed104 unchanged
Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
37 edited+11 added−27 removed104 unchanged
2024 filing
2025 filing
Biggest changeEven if we ultimately succeed in recovering any amounts for which we were initially held liable, we may be temporarily required to bear these losses ourselves. 13 The loss or financial instability of any significant customer or customers accounting for our backlog could adversely affect our business, financial condition, results of operations or cash flows.
Biggest changeThe loss or financial instability of any significant customer or customers accounting for our backlog could adversely affect our business, financial condition, results of operations or cash flows. A substantial part of our business is concentrated with a few customers, and we have certain customers that are significant to our business.
The restrictions contained in the credit agreement could: • limit our ability to plan for or react to market conditions or meet capital needs or otherwise restrict our activities or business plans; • restrict our ability to repurchase shares of our common stock and/or adversely impact our ability to implement capital allocation strategy; 17 • adversely affect our ability to finance our operations, to enter into strategic acquisitions, to fund investments or other capital needs or to engage in other business activities that would be in our interest; and • limit our access to the cash generated by our subsidiaries.
The restrictions contained in the credit agreement could: • limit our ability to plan for or react to market conditions or meet capital needs or otherwise restrict our activities or business plans; • restrict our ability to repurchase shares of our common stock and/or adversely impact our ability to implement capital allocation strategy; • adversely affect our ability to finance our operations, to enter into strategic acquisitions, to fund investments or other capital needs or to engage in other business activities that would be in our interest; and • limit our access to the cash generated by our subsidiaries.
The discovery of additional contamination, including at acquired facilities, the imposition of more stringent environmental, health and safety laws and regulations, including cleanup requirements, disputes with our insurers or the 19 insolvency of other responsible parties could require us to incur significant capital expenditures or operating costs materially in excess of our accruals.
The discovery of additional contamination, including at acquired facilities, the imposition of more stringent environmental, health and safety laws and regulations, including cleanup requirements, disputes with our insurers or the insolvency of other responsible parties could require us to incur significant capital expenditures or operating costs materially in excess of our accruals.
We are also subject to an increasing number of evolving data privacy and security laws and regulations that impose requirements on us. We collect, store, access and otherwise process various types of confidential or sensitive data, including proprietary business information, personal data and other information that is subject to privacy and security laws, regulations and/or customer-imposed controls.
We are also subject to an increasing number of evolving data privacy and security laws and regulations that impose requirements on us. We collect, store, access and otherwise process various types of confidential or sensitive data, including proprietary business information, personal data and other information that is subject to privacy and security laws, regulations 14 and/or customer-imposed controls.
We cannot ensure that we can adequately protect our own technological developments to produce a sustainable competitive advantage. Furthermore, we may be subject to business continuity risk in the event of an unexpected loss of a material facility or operation. We cannot ensure adequate insurance protection against such a loss.
We cannot ensure that we can adequately protect our own technological developments to produce a sustainable competitive advantage. Furthermore, we may be subject to business continuity risk in the event of an unexpected loss at a material facility or operation. We cannot ensure adequate insurance protection against such a loss.
In addition, if we are unable to continue to purchase our required quantities of raw materials on commercially reasonable terms, or at all, or if we are unable to maintain or 14 enter into new purchase contracts for our larger commodities, our business operations could be disrupted and our profitability could be adversely impacted.
In addition, if we are unable to continue to purchase our required quantities of raw materials on commercially reasonable terms, or at all, or if we are unable to maintain or enter into new purchase contracts for our larger commodities, our business operations could be disrupted and our profitability could be adversely impacted.
Equally unpredictable are the responses of national and local governments and health authorities in affected regions to reduce community spread and protect employees, which may include mandatory shutdowns or limitations on all or certain types of business operations.
Equally unpredictable are the responses of national and local governments and health authorities in affected regions to reduce community spread and protect employees, which may include 15 mandatory shutdowns or limitations on all or certain types of business operations.
Such liability can be imposed without regard to fault and, under certain circumstances, may be joint and several, resulting in one PRP being held responsible for the entire obligation. Liability may also include damages to natural resources.
Such liability can be imposed without regard to fault and, under certain circumstances, 18 may be joint and several, resulting in one PRP being held responsible for the entire obligation. Liability may also include damages to natural resources.
Failure to comply with certain covenants in these agreements could result in a default. For more information, see Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources.
Failure to comply with certain covenants in 16 these agreements could result in a default. For more information, see Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources.
Defaults by any of the customers that have placed significant orders with us, whether because of bankruptcy, illiquidity, operational problems or otherwise, could have a significant adverse effect on our net sales, profitability and cash flow. As of December 31, 2024, all of our backlog was scheduled to ship during the year ending December 31, 2025.
Defaults by any of the customers that have placed significant orders with us, whether because of bankruptcy, illiquidity, operational problems or otherwise, could have a significant adverse effect on our net sales, profitability and cash flow. As of December 31, 2025, all of our backlog was scheduled to ship during the year ending December 31, 2026.
Therefore, an unsuccessful litigation matter or product liability defense could have a material adverse effect on our business, financial condition, results of operations or cash flows. See Item 8, Note 17, Commitments and Contingencies for additional details. Our inability to achieve our sustainability strategy goals and targets could adversely impact our business, financial condition, results of operations or cash flows.
Therefore, an unsuccessful litigation matter or product liability defense could have a material adverse effect on our business, financial condition, results of operations or cash flows. See Item 8, Note 16, Commitments and Contingencies for additional details. Our inability to achieve our sustainability strategy goals and targets could adversely impact our business, financial condition, results of operations or cash flows.
Also, in spite of the limitations in our credit agreement, we may still incur significantly more debt, which could intensify the risks described above on our business, results and financial condition. For more information about our indebtedness, see Item 8, Note 11, Long-Term Debt.
Also, in spite of the limitations in our credit agreement, we may still incur significantly more debt, which could intensify the risks described above on our business, results and financial condition. For more information about our indebtedness, see Item 8, Note 10, Long-Term Debt.
These expectations, policies and standards may be more restrictive than current laws and regulations as well as our own pre-existing policies; they may be customer-driven, established by the industry sectors in which we operate or 18 imposed by third-party organizations or other constituencies.
These expectations, policies and standards may be more restrictive than current laws and regulations as 17 well as our own pre-existing policies; they may be customer-driven, established by the industry sectors in which we operate or imposed by third-party organizations or other constituencies.
See Item 8, Note 17, Commitments and Contingencies for additional information. Certain subsidiaries are subject to litigation, including product liability and other claims, which could adversely affect our business, reputation, financial condition, results of operations or cash flows.
See Item 8, Note 16, Commitments and Contingencies for additional information. Certain subsidiaries are subject to litigation, including product liability and other claims, which could adversely affect our business, reputation, financial condition, results of operations or cash flows.
We cannot provide assurance that we will be able to maintain or increase the current market share of our products successfully in the future. If we are unable to effectively manage risks associated with changing technology, product innovation and new product development, manufacturing techniques, distribution channels and business continuity, we may be at a competitive disadvantage.
We cannot provide assurance that we will be able to maintain or increase the current market share of our products successfully in the future. If we are unable to effectively manage risks associated with changing technology, including artificial intelligence, product innovation and new product development, manufacturing techniques, distribution channels and business continuity, we may be at a competitive disadvantage.
If we fail to meet these requirements, our business and ability to compete effectively could suffer. We believe our customers rigorously evaluate their suppliers on a number of factors, including product quality, price competitiveness, technical and manufacturing expertise, development and product design capability, new product innovation, reliability and timeliness of delivery, operational flexibility, customer service and overall management.
If we fail to meet these requirements, our business and ability to compete effectively could suffer. We believe our customers rigorously evaluate their suppliers on numerous factors, including product quality, price competitiveness, technical and manufacturing expertise, development and product design capability, new product innovation, reliability and timeliness of delivery, operational flexibility, customer service and overall management.
To operate more efficiently, control costs and refine our business focus, we periodically undertake restructuring plans, which can include facility consolidations, product rationalizations, workforce reductions and other cost reduction initiatives. We also periodically choose to divest operations or product lines that we no longer believe are additive or complementary to our business or strategic direction.
To operate more efficiently, control costs and refine our business focus, we periodically undertake restructuring plans, which can include facility consolidations, product rationalizations, workforce reductions, manufacturing and supply chain repositioning and other cost reduction initiatives. We also periodically choose to divest operations or product lines that we no longer believe are additive or complementary to our business or strategic direction.
An inability to effectively integrate acquisitions, mergers or other business combinations could adversely affect our business, financial condition, results of operations or cash flows. Additionally, dispositions or liabilities retained in connection with dispositions could negatively affect us. Acquisitions, mergers and other business combinations are part of our growth strategy, and we have completed several in the last few years.
An inability to effectively integrate acquisitions, mergers or other business combinations could adversely affect our business, financial condition, results of operations or cash flows. Additionally, dispositions or liabilities retained in connection with dispositions could negatively affect us. Acquisitions, mergers and other business combinations are part of our growth strategy, and we have completed several in recent years.
Furthermore, continued geopolitical turmoil, including the Russia-Ukraine conflict, has heightened the risk of cyberattacks. As discussed further below, the rapid evolution and increased adoption of artificial intelligence and machine learning technologies may intensify our cybersecurity risks.
Furthermore, continued geopolitical turmoil has heightened the risk of cyberattacks. As discussed further below, the rapid evolution and increased adoption of artificial intelligence and machine learning technologies may intensify our cybersecurity risks.
The unpredictable ebbing and flowing of new infectious diseases worldwide may continue to adversely impact our business, operations, suppliers and customers for the foreseeable future.
The unpredictable nature of new infectious diseases worldwide may continue to adversely impact our business, operations, suppliers and customers for the foreseeable future.
Financial Risks Our debt levels could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry, inhibit us from making beneficial acquisitions, adversely impact our ability to 16 implement our capital allocation strategy and prevent us from making debt service payments.
Financial Risks Macroeconomic conditions and our credit agreement could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry, inhibit us from making beneficial acquisitions, adversely impact our ability to implement our capital allocation strategy and prevent us from making debt service payments.
Our required cash contributions to our pension plans may increase further and we could experience a material change in the funded status of our defined benefit pension plans and the amount recorded in our consolidated balance sheets related to those plans. Additionally, our pension costs could increase in future years.
Our required cash contributions or plan settlement expense related to our pension plans may increase and we could experience a change in the funded status of our defined benefit pension plans and the amount recorded in our consolidated balance sheets related to those plans. Additionally, pension costs could increase in future years.
Any such increases could have a material and adverse effect on our business, financial condition, results of operations or cash flows. The need to make contributions, which may be substantial, to such plans may reduce the cash available to meet our other obligations, including our obligations under our borrowing arrangements or to meet the needs of our business.
Any such increases could have an adverse effect on our business, financial condition, results of operations or cash flows. The need to make contributions to such plans may reduce the cash available to meet our other obligations, including our obligations under our borrowing arrangements or to meet the needs of our business.
As of December 31, 2024, our goodwill and intangible assets totaled $794.2 million and $891.6 million, respectively, and represent a substantial portion of our assets. These assets result from our acquisitions, representing the excess of cost over the fair value of the tangible net assets we have acquired.
As of December 31, 2025, our goodwill and intangible assets totaled $795.0 million and $835.0 million, respectively, and represent a substantial portion of our assets. These assets result from our acquisitions, representing the excess of cost over the fair value of the tangible net assets we have acquired.
Based upon the current OECD rules and administrative guidance, as well as the related legislation of those countries which has been enacted to date, the Company does not anticipate being subject to material Top-Up Taxes.
Based upon the current OECD rules and administrative guidance, as well as the related legislation of those countries in which we do business, the Company does not anticipate being subject to material Top-Up Taxes.
For example, an unusually severe or prolonged winter can lead to reduced or delayed construction activity which could magnify the seasonal decline in our net sales and earnings during the winter months and hamper the typical seasonal increase in net sales and earnings during the spring months. 15 The long-term effect of climate change could decrease demand for certain of our products.
For example, an unusually severe or prolonged winter can lead to reduced or delayed construction activity which could magnify the seasonal decline in our net sales and earnings during the winter months and hamper the typical seasonal increase in net sales and earnings during the spring months.
We depend on 1,100 independent sales representatives and approximately 65 third-party warehouses to distribute our products. In fiscal 2024, our three largest independent distributors generated approximately 33% of our consolidated net sales with the largest accounting for 19% of consolidated net sales.
We depend on approximately 1,000 independent sales representatives within North America, and approximately 65 third-party warehouses to distribute our products. In fiscal 2025, our three largest independent distributors generated approximately 32% of our consolidated net sales with the largest accounting for 18% of consolidated net sales.
Any determination requiring the impairment of goodwill or intangible assets would negatively affect our results of operations, particularly in the period in which we record any related charges, and financial condition. Refer to Risks Related to the Merger with Elkay section below for additional considerations.
Any determination requiring the impairment of goodwill or intangible assets would negatively affect our results of operations, particularly in the period in which we record any related charges, and financial condition.
Refer to Risks Related to the Merger with Elkay section below for additional considerations. If dispositions are not completed in a timely manner, there may be a negative effect on our cash flows and/or our ability to execute our strategy. In addition, we may not realize some or all of the anticipated benefits of our dispositions.
If dispositions are not completed in a timely manner, there may be a negative effect on our cash flows and/or our ability to execute our strategy. In addition, we may not realize some or all of the anticipated benefits of our dispositions. From time to time, we have sold or divested businesses, products and technologies.
Our ongoing success depends on our ability to continue to meet our customers' changing specifications with respect to these criteria. We cannot ensure that we will be able to address technological advances or introduce new products that may be necessary to remain competitive within our businesses. Further, such new 12 products and technologies may create additional exposure or risk.
Our ongoing success depends on our ability to continue to meet our customers' changing specifications with respect to these criteria. 11 We cannot ensure that we will be able to introduce new products that may be necessary to remain competitive within our businesses or to effectively adopt technological advances, including use of artificial intelligence, related to our products or operational processes.
An adverse ruling or other unfavorable outcome in any such litigation could have a material adverse effect on our business, reputation, financial condition, results of operations or cash flows.
An adverse ruling or other unfavorable outcome in any such litigation could have a material adverse effect on our business, reputation, financial condition, results of operations or cash flows. 13 Operational Risks Increases in the cost, and/or the availability, of raw materials, including as a result of tariffs or other trade protection measures, could adversely affect our business, financial condition, results of operations or cash flows.
Even without ongoing contractual indemnification obligations, we could be exposed to liabilities arising out of the businesses for certain activities prior to the divestitures. In addition, certain of the counterparties to those divestitures and/or the divested businesses have agreed to indemnify us or assume certain liabilities relating to those divestitures.
In addition, certain of the counterparties to those divestitures and/or the divested businesses have agreed to indemnify us or assume certain liabilities relating to those divestitures.
From time to time, we have sold or divested businesses, products and technologies. With respect to some of these former businesses, we may contractually agree to indemnify the counterparties against, or otherwise retain, certain liabilities, including, certain lawsuits, tax liabilities, product liability claims, and environmental matters.
With respect to some of these former businesses, we may contractually agree to indemnify the counterparties against, or otherwise retain, certain liabilities, including, certain lawsuits, tax liabilities, product liability claims, and environmental matters. Even without ongoing contractual indemnification obligations, we could be exposed to liabilities arising out of the businesses for certain activities prior to the 12 divestitures.
Third parties also could seek to hold us responsible for any of the liabilities that a counterparty or divested business agreed to assume.
Third parties also could seek to hold us responsible for any of the liabilities that a counterparty or divested business agreed to assume. Even if we ultimately succeed in recovering any amounts for which we were initially held liable, we may be temporarily required to bear these losses.
A substantial part of our business is concentrated with a few customers, and we have certain customers that are significant to our business. During the year ended December 31, 2024, our top five customers accounted for approximately 39% of our consolidated net sales, with one customer accounting for 19% of consolidated net sales.
During the year ended December 31, 2025, our top five customers accounted for approximately 38% of our consolidated net sales, with one customer accounting for 18% of consolidated net sales.
The Company is continuing to monitor the potential impact of the Pillar 2 proposals and developments on our consolidated financial statements and related disclosures, including eligibility for any transitional safe harbor rules. We may incur significant costs for environmental compliance and/or to address liabilities under environmental laws and regulations, and our reputation may be adversely affected.
The Company is continuing to monitor the potential impact of the Pillar 2 proposals and developments on our consolidated financial statements and related disclosures, including eligibility for any transitional safe harbor rules. On July 4, 2025, the U.S. government enacted the One Big Beautiful Bill Act (“OBBBA”).
Operational Risks Increases in the cost, and/or the availability, of raw materials, including as a result of tariffs or other trade protection measures, could adversely affect our business, financial condition, results of operations or cash flows. Our manufacturing processes depend on third parties for raw materials, in particular bronze, iron, brass, stainless steel, carbon steel, zinc, and engineered plastics.
Our manufacturing processes depend on third parties for raw materials, in particular bronze, iron, brass, stainless steel, carbon steel, zinc, and engineered plastics.
Removed
We amended our credit facilities to switch from eurodollar loans based on LIBOR to term Secured Overnight Financing Rate (“SOFR”) loans. SOFR is a relatively new reference rate, and its composition and characteristics are not the same as LIBOR. It is not possible to predict what effect the change to SOFR may have on our interest rates.
Added
If our competitors successfully leverage artificial intelligence, including generative artificial intelligence and machine learning to enhance efficiency, improve customer experience, or accelerate innovation more quickly or more successfully than us, this could affect our competitive position, profitability and results of operations. Further, such new products and technologies may create additional exposure or risk.
Removed
As indicated above, SOFR is a relatively new reference rate. Any failure of SOFR to gain market acceptance could cause it to be modified or discontinued. Our current credit facilities provide a mechanism for determining an alternative rate of interest upon the occurrence of certain events related to the discontinuance of SOFR.
Added
In addition, there is potential for the misuse of artificial intelligence and machine-learning technology by our personnel while carrying out their responsibilities. The deployment of generative artificial intelligence tools also creates opportunities for the misuse or loss of data, the inadvertent dissemination of our confidential or proprietary information or the inadvertent use of third parties' intellectual property.
Removed
The change to SOFR or transition to other alternative rates, whether in connection with borrowings under the current credit facilities, or borrowings under replacement facilities or lines of credit, could expose our future borrowings to less favorable rates.
Added
In 2025, the U.S. government announced additional tariffs on goods imported from various countries into the U.S., and in response, certain of those countries countered with reciprocal tariffs and other actions. The U.S. government continues to negotiate with countries regarding tariffs and other trade actions.
Removed
If the change to SOFR, or other alternative rates, results in increased alternative interest rates or if our lenders have increased costs due to such phase out or changes, then our debt that uses benchmark rates could be affected and, in turn, our cash flows and interest expense could be adversely impacted.
Added
The long-term effect of climate change could decrease demand for certain of our products.
Removed
In addition, the PBGC may terminate our U.S. defined benefit pension plans under limited circumstances, including in the event the PBGC concludes that the risk may increase unreasonably if such plans continue.
Added
In 2025, the Company terminated its U.S. defined benefit pension plan (the "Pension Plan"). The plan termination is subject to regulatory review and requirements, which may result in additional funding. See Item 8, Note 14, Retirement Benefits for additional details. In addition, the Company still maintains other domestic and international (statutory) defined benefit plans.
Removed
In the event one of our U.S. defined benefit pension plans is terminated for any reason while it is underfunded, we could be required to make an immediate payment to the PBGC of all or a substantial portion of such plan's underfunding, as calculated by the PBGC based on its own assumptions (which might result in a larger obligation than that based on the assumptions we have used to fund such plan), and the PBGC could place a lien on material amounts of our assets.
Added
In October 2021, the Organization for Economic Co-operation and Development (“OECD”) issued rules for a new global minimum tax (“Pillar 2”), which included the introduction of a 15% global minimum tax (“Top-Up Tax”) that applies to tax years beginning in 2024. To date, approximately 140 countries have signed a framework agreeing to implement Pillar 2.
Removed
Moreover, in recent years, the Organization for Economic Co-operation and Development (“OECD”) and member countries have been focused on taxation issues relating to multi-national companies.
Added
OBBBA extended several provisions of the Tax Cuts and Jobs Act (“TCJA”) of 2017 that were set to expire on December 31, 2025, including immediate expensing of domestic research and development expenses, 100% bonus depreciation, qualified production property 100% depreciation, and reinstatement of utilizing EBITDA for the interest deduction limitation.
Removed
In October 2021, more than 130 countries agreed to implement Pillar 2, a plan introduced by the OECD providing for a global minimum tax rate of 15% (calculated on a country-by-country basis) for those companies having consolidated revenue of at least €750 million; with any shortfall of the 15% minimum tax resulting in a related tax assessment ("Top-Up Tax").
Added
The OBBBA incorporates additional changes to the U.S tax code that will be effective after January 1, 2026, including charitable contribution limitations, deductible meal limitations, and changes to the U.S. system for taxing international corporate income. We expect to continue to see future regulatory, administrative or legislative guidance.
Removed
The implementation of the Pillar 2 global minimum tax rules has begun to apply for tax years beginning in 2024. The main purpose of such rules is to minimize tax base erosion and profit shifting from higher tax jurisdictions to lower tax jurisdictions by multi-national companies.
Added
The full extent of the impact remains uncertain at this time, and our current interpretations of, and assumptions regarding, OBBBA are subject to additional regulatory or administrative developments, including any regulations or other guidance promulgated by the U.S. Internal Revenue Service (“IRS”).
Removed
On February 2, 2023, the OECD issued various administrative guidance including transitional safe harbor rules available in conjunction with the implementation of the Pillar 2 global minimum tax.
Added
We may incur significant costs for environmental compliance and/or to address liabilities under environmental laws and regulations, and our reputation may be adversely affected.
Removed
Additionally, if our sustainability strategy and initiatives are misaligned with evolving stakeholder expectations, it could negatively impact our reputation. Risks Related to the Spin-Off Transaction If the Spin-Off Transaction does not qualify as a tax-free reorganization and distribution for purposes of U.S. federal income taxes, we may be subject to substantial additional taxes.
Added
Additionally, if our sustainability strategy and initiatives are misaligned with evolving stakeholder expectations, it could negatively impact our reputation. ITEM 1B. UNRESOLVED STAFF COMMENTS. None.
Removed
In connection with the Spin-Off Transaction, we obtained a tax opinion and a private letter ruling from the IRS (“IRS Ruling”) as to certain aspects relevant to treatment of the various steps of the transaction as tax-free to us and our shareholders for U.S. federal income tax purposes.
Removed
The tax opinion and IRS Ruling are based on certain factual representations and assumptions and covenants of the parties to the transaction. If any of the factual representations and assumptions are materially false or incorrect, or one or more of the relevant covenants are breached, the validity of the tax opinion and IRS Ruling could be impaired.
Removed
Furthermore, a tax opinion only represents counsel’s best legal judgment, and is not binding on the IRS or the courts, which may disagree with the opinion.
Removed
If the IRS determines that some or all of the transactions comprising the Spin-Off Transaction are taxable to us, we and our shareholders at the time of the transaction could be subject to significant additional U.S federal and state income taxes.
Removed
In certain circumstances, we would be entitled to indemnity from Regal Rexnord Corporation for all or a portion of such additional tax, but there is no assurance that Regal Rexnord Corporation would have the ability to satisfy any such indemnity obligation.
Removed
Risks Related to the Merger with Elkay We recorded substantial goodwill and other intangible assets as a result of the Merger that could become impaired and result in material non-cash charges to our results of operations in the future. We account for the Merger as an acquisition of a business in accordance with GAAP.
Removed
Under the acquisition method of accounting, the assets and liabilities of Elkay and its subsidiaries have been recorded, as of the completion of the Merger, at their respective fair values.
Removed
Our reported financial condition and results of operations for periods after completion of the Merger reflect Elkay’s balances and results but have not been restated retroactively to reflect the historical financial position or results of operations of Elkay and its subsidiaries for periods prior to the Merger.
Removed
Under the acquisition method of accounting, the total purchase price was allocated to Elkay’s tangible assets and liabilities and identifiable intangible assets based on their fair values as of the date of completion of the Merger. The excess of the purchase price over those fair values was recorded as goodwill.
Removed
To 20 the extent the value of goodwill or intangibles becomes impaired in the future, we may be required to incur material non-cash charges relating to such impairment. Our operating results may be significantly impacted from both the impairment and the underlying trends in the business that triggered the impairment.
Removed
Our results may suffer if we do not effectively manage our expanded operations following the Merger. Following the Merger, the size of our business has increased significantly.
Removed
Our future success will depend, in part, on our ability to continue to manage this expanded business, resulting in risks and uncertainties, including the need to efficiently and timely integrate the operations and business of Elkay, to combine systems and management controls, and to integrate relationships with customers, vendors and business partners.
Removed
Sales of substantial amounts of the Zurn Elkay Common Stock in the open market by the former Elkay stockholders could depress the trading price of our common stock. The former Elkay stockholders may wish to dispose of some or all of the Zurn Elkay Common Stock that they received in the Merger.
Removed
These sales may adversely affect the trading price of our Common Stock. Certain former stockholders of Elkay have registration rights, the exercise of which could adversely affect the market price of our Common Stock.
Removed
In connection with the Merger, the Company and certain stockholders of Elkay entered into a Registration Rights Agreement, pursuant to which such stockholders have a right to demand registration of one public offering within the first three years after the closing of the Merger, subject to certain minimum and maximum thresholds and other customary conditions.
Removed
The existence and potential or actual exercise of such rights could adversely impact the market price of our Common Stock. ITEM 1B. UNRESOLVED STAFF COMMENTS. None.
Item 1C. Cybersecurity
Cybersecurity — threats and controls disclosure
9 edited+0 added−0 removed12 unchanged
Item 1C. Cybersecurity
Cybersecurity — threats and controls disclosure
9 edited+0 added−0 removed12 unchanged
2024 filing
2025 filing
Biggest changeOur Board has extensive cybersecurity experience, including two members of the Audit Committee who have received a certificate in cybersecurity oversight from the Carnegie Mellon University Software Engineering Institute. Cybersecurity risk also is monitored, assessed and managed as part of the Company’s integrated Enterprise Risk Management program.
Biggest changeOur Board has extensive cybersecurity experience, including two members of the Audit Committee who have received a certificate in cybersecurity oversight from the Carnegie Mellon University Software Engineering Institute and one member of the Audit Committee who received a certificate in Effective AI Oversight from the Heinz College of Information Systems and Public Policy of Carnegie Mellon University.
The CIO provides key results and findings from these assessments to the cybersecurity governance council and Audit 21 Committee. The Company has a robust incident response plan intended to help provide timely remediation to cybersecurity incidents and also to help provide notice of any material incidents to the appropriate internal and external entities.
The CIO provides key results and findings from these assessments to the cybersecurity governance council and Audit Committee. The Company has a robust incident response plan intended to help provide timely remediation to cybersecurity incidents and also to help provide notice of any material incidents to the appropriate internal and external entities.
Third-party service providers are assessed initially based on security questionnaires and the access of third-party service providers is audited annually and/or with any change in circumstances. Third-party service providers are also monitored through a combination of security information and event management technology and managed detection response services.
Third-party service providers are assessed initially based on security questionnaires and the access of third-party service providers is audited annually and/or with any change in circumstances. Third-party service provider access is also monitored through a combination of security information and event management technology and managed detection response services.
ITEM 1C. CYBERSECURITY. Zurn Elkay’s management and Board recognize the importance of robust oversight of cybersecurity risk, information security, and technology risk in maintaining the trust and confidence of our customers, partners, employees, and stockholders. The Audit Committee, on behalf of the Board, oversees the Company’s material financial and other risk exposures, including risks related to cybersecurity.
ITEM 1C. CYBERSECURITY. Zurn Elkay’s management and Board recognize the importance of robust oversight of cybersecurity risk, information security, and technology risk in maintaining the trust and confidence of our customers, partners, employees, and stockholders. The Audit Committee, on behalf of the Board, oversees the Company’s material financial and other risk exposures, including risks related to cybersecurity and artificial intelligence.
The CIO has more than 36 years of information technology experience, including approximately 18 years serving as a CIO. To assess, identify and manage material risks from cybersecurity threats and to prevent, detect and respond to cybersecurity threats, including threats associated with the use of third-party service providers, the Company has a robust cybersecurity program.
The CIO has more than 37 years of information technology experience, including approximately 19 years serving as a CIO. 19 To assess, identify and manage material risks from cybersecurity threats and to prevent, detect and respond to cybersecurity threats, including threats associated with the use of third-party service providers, the Company has a robust cybersecurity program.
Failure to comply with such laws and regulations could result in the imposition of fines, penalties and other costs. 22
Failure to comply with such laws and regulations could result in the imposition of fines, penalties and other costs. 20
A cybersecurity governance council, comprised of executive leaders, including the two members of the Audit Committee with cybersecurity experience, meets at least quarterly to review the Company’s cybersecurity program and its effectiveness.
Cybersecurity risk also is monitored, assessed and managed as part of the Company’s integrated Enterprise Risk Management program. A cybersecurity governance council, comprised of executive leaders, including the two members of the Audit Committee with cybersecurity experience, meets at least quarterly to review the Company’s cybersecurity program and its effectiveness.
Annually, the program is assessed both internally and externally, including a thorough industry benchmarking, maturity assessments, best practice reviews, and risk assessments, with control validation occurring monthly internally (focused on core critical controls), quarterly (focused on vulnerabilities/cyber-incident simulations) and annually (focused on a review of best practices) via third-party vendors and partners, and annually via external third parties, including the conduct of internal/external penetration tests and tabletop exercises.
Control validations occur monthly internally (focused on core critical controls), quarterly (focused on vulnerabilities/cyber-incident simulations) and annually (focused on a review of best practices) via third-party vendors and partners, and annually via external third parties, including the conduct of internal/external penetration tests and tabletop exercises.
The program uses a combination of standards and best practices from the National Institute of Standards and Technology, Center of Internet Security, third-party vendor partners, and other industry forums.
The program uses a combination of standards and best practices from the National Institute of Standards and Technology, Center of Internet Security, third-party vendor partners, and other industry forums. The program is assessed both internally and externally, including a thorough industry benchmarking and best practice review annually, with maturity assessments and risk assessments occurring alternating years biennially.
Item 2. Properties
Properties — owned and leased real estate
2 edited+0 added−0 removed0 unchanged
Item 2. Properties
Properties — owned and leased real estate
2 edited+0 added−0 removed0 unchanged
2024 filing
2025 filing
Biggest changeAs of December 31, 2024, we had 27 principal manufacturing and warehouse facilities as set forth below: Total Square Feet Location Number of Facilities Owned Leased USA Arizona 1 — 46,100 California 2 157,500 186,100 Georgia 1 — 262,600 Illinois 4 590,500 286,800 North Carolina 5 392,200 415,500 Ohio 1 42,500 — Pennsylvania 4 119,000 216,000 Texas 3 175,000 284,200 International Canada 4 72,600 195,600 Mexico 1 106,100 — United Arab Emirates 1 — 6,000 We believe our principal manufacturing and warehouse facilities are suitable for our operations and provide sufficient capacity for our current and future anticipated needs.
Biggest changeAs of December 31, 2025, we had 21 principal manufacturing and warehouse facilities as set forth below: Total Square Feet Location Number of Facilities Owned Leased USA Arizona 1 — 46,100 California 2 157,500 186,100 Georgia 1 — 262,600 Illinois 3 465,500 499,200 North Carolina 4 392,200 387,300 Pennsylvania 2 — 234,600 Texas 3 175,000 284,200 International Canada 4 72,600 195,600 Mexico 1 106,100 — We believe our principal manufacturing and warehouse facilities are suitable for our operations and provide sufficient capacity for our current and future anticipated needs.
ITEM 3. LEGAL PROCEEDINGS. Information with respect to our legal proceedings is contained in Item 8, Note 17, Commitments and Contingencies.
ITEM 3. LEGAL PROCEEDINGS. Information with respect to our legal proceedings is contained in Item 8, Note 16, Commitments and Contingencies.
Item 4. Mine Safety Disclosures
Mine Safety Disclosures — required of mining issuers
7 edited+0 added−0 removed4 unchanged
Item 4. Mine Safety Disclosures
Mine Safety Disclosures — required of mining issuers
7 edited+0 added−0 removed4 unchanged
2024 filing
2025 filing
Biggest changeSudhanshu Chhabra became Vice President, Zurn Elkay Business Systems in 2018. Mr. Chhabra was a sector President and Regional Executive - India from 2016 to 2018 after having joined Zurn Elkay in 2014 as President & Regional Executive for India and the Middle East. Prior to joining Zurn Elkay, Mr.
Biggest changeSudhanshu Chhabra became Executive Vice President, Zurn Elkay Business Systems in 2025. Prior to that, he was Vice President, Zurn Elkay Business Systems since 2018. Mr. Chhabra was a sector President and Regional Executive - India from 2016 to 2018 after having joined Zurn Elkay in 2014 as President & Regional Executive for India and the Middle East.
Chhabra served in various positions with Danaher Corporation, a diversified manufacturer, most recently as President – Asia, Gilbarco Veeder-Root Inc. and as Managing Director – India, Gilbarco Veeder-Root Inc. Jeffrey J. LaValle became our Vice President, General Counsel and Secretary in 2022. Mr. LaValle previously served as our Assistant General Counsel since 2013. Prior to joining Zurn Elkay, Mr.
Prior to joining Zurn Elkay, Mr. Chhabra served in various positions with Danaher Corporation, a diversified manufacturer, most recently as President – Asia, Gilbarco Veeder-Root Inc. and as Managing Director – India, Gilbarco Veeder-Root Inc. Jeffrey J. LaValle became our Vice President, General Counsel and Secretary in 2022. Mr. LaValle previously served as our Assistant General Counsel since 2013.
Troutman became Zurn Elkay's Chief Information Officer at Zurn Elkay in 2007 and an executive officer in 2017. Before joining Zurn Elkay, he was with AT&T, Lucent, and Agere Systems in various senior information technology positions implementing global industry leading solutions and processes. 24 PART II
Troutman became Zurn Elkay's Chief Information Officer at Zurn Elkay in 2007 and an executive officer in 2017. Before joining Zurn Elkay, he was with AT&T, Lucent, and Agere Systems in various senior information technology positions implementing global industry leading solutions and processes. 22 PART II
Troutman 58 Chief Information Officer 2007 Information about the business experience of our executive officers during at least the past five fiscal years is as follows: Todd A. Adams became our Chairman of the Board in 2020 and Chief Executive Officer in 2009. Mr.
Troutman 59 Chief Information Officer 2007 Information about the business experience of our executive officers during at least the past five fiscal years is as follows: Todd A. Adams became our Chairman of the Board in 2020 and Chief Executive Officer in 2009. Mr.
ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. * * * 23 Information about our Executive Officers The following table sets forth information concerning our executive officers as of the date of this report: Name Age Position(s) In Current Position(s) since Todd A. Adams 54 Chairman of the Board and Chief Executive Officer 2020 David J.
ITEM 4. MINE SAFETY DISCLOSURES. Not applicable. * * * 21 Information about our Executive Officers The following table sets forth information concerning our executive officers as of the date of this report: Name Age Position(s) In Current Position(s) since Todd A. Adams 55 Chairman of the Board and Chief Executive Officer 2020 David J.
LaValle was a partner at Quarles & Brady LLP, a national full-service law firm. Mark W. Peterson became our Chief Administrative Officer in 2024. Mr.
Prior to joining Zurn Elkay, Mr. LaValle was a partner at Quarles & Brady LLP, a national full-service law firm. Mark W. Peterson became our Chief Administrative Officer in 2024. Mr.
Pauli 42 Chief Financial Officer 2024 Sudhanshu Chhabra 58 Vice President, Zurn Elkay Business Systems 2018 Jeffrey J. LaValle 46 Vice President, General Counsel and Corporate Secretary 2022 Mark W. Peterson 53 Chief Administrative Officer 2024 Jeffrey A. Schoon 43 President 2024 Michael D.
Pauli 43 Chief Financial Officer 2024 Sudhanshu Chhabra 59 Executive Vice President, Zurn Elkay Business Systems 2025 Jeffrey J. LaValle 47 Vice President, General Counsel and Corporate Secretary 2022 Mark W. Peterson 54 Chief Administrative Officer 2024 Jeffrey A. Schoon 44 President 2024 Michael D.
Item 5. Market for Registrant's Common Equity
Market for Common Equity — stock, dividends, buybacks
8 edited+1 added−0 removed3 unchanged
Item 5. Market for Registrant's Common Equity
Market for Common Equity — stock, dividends, buybacks
8 edited+1 added−0 removed3 unchanged
2024 filing
2025 filing
Biggest changeISSUER PURCHASES OF EQUITY SECURITIES Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Maximum Approximate Dollar Value that may yet be Purchased Under the Plans or Programs (1) Period October 1 - October 31, 2024 227,728 $ 36.49 227,728 $ 252,236,711 November 1 - November 30, 2024 144,698 $ 39.25 144,698 $ 246,554,377 December 1 - December 31, 2024 161,142 $ 39.26 161,142 $ 240,224,683 Total/Average 533,568 $ 38.08 533,568 (1) See explanation of the Repurchase Program above. 25 Performance Graph Set forth below is a line graph comparing the cumulative total shareholder return of our common stock with the Standard & Poor's (the "S&P") 500 Index and the S&P 1500 Industrials Index for the years ended December 31, 2024, December 31, 2023, December 31, 2022, December 31, 2021, and our preceding nine-month transition period ended December 31, 2020.
Biggest changeISSUER PURCHASES OF EQUITY SECURITIES Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1) Maximum Approximate Dollar Value that may yet be Purchased Under the Plans or Programs (1) Period October 1 - October 31, 2025 186,923 $ 46.70 186,923 $ 498,412,103 November 1 - November 30, 2025 167,319 $ 46.86 167,319 $ 490,568,071 December 1 - December 31, 2025 177,770 $ 47.42 177,770 $ 482,134,951 Total/Average 532,012 $ 46.99 532,012 (1) See explanation of the Repurchase Program above. 23 Performance Graph Set forth below is a line graph comparing the cumulative total shareholder return of our common stock with the Standard & Poor's (the "S&P") 500 Index and the S&P 1500 Industrials Index for the years ended December 31, 2025, December 31, 2024, December 31, 2023, December 31, 2022, and December 31, 2021.
Issuer Purchases of Equity Securities In fiscal 2015, our Board of Directors approved a stock repurchase program (the "Repurchase Program") authorizing the repurchase of up to $200.0 million of our common stock from time to time on the open market or in privately negotiated transactions.
Issuer Purchases of Equity Securities During fiscal 2015, our Board of Directors approved a stock repurchase program (the "Repurchase Program") authorizing the repurchase of up to $200.0 million of our common stock from time to time on the open market or in privately negotiated transactions.
The graph assumes the value of the investment in our common stock and each index was $100 on March 31, 2020, and that all dividends were reinvested.
The graph assumes the value of the investment in our common stock and each index was $100 on December 31, 2020, and that all dividends were reinvested.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Shares of our common stock trade on the New York Stock Exchange under the ticker symbol “ZWS”. As of February 5, 2025, there were 24 holders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Shares of our common stock trade on the New York Stock Exchange under the ticker symbol “ZWS”. As of February 4, 2026, there were 17 holders of record of our common stock.
A substantially greater number of holders of Zurn Elkay common stock are beneficial holders, whose shares of record are held by banks, brokers, and other financial institutions. Dividend Policy On February 1, 2024, May 2, 2024, and July 25, 2024 our Board of Directors declared a quarterly cash dividend on our common stock of $0.08 per share.
A substantially greater number of holders of Zurn Elkay common stock are beneficial holders, whose shares of record are held by banks, brokers, and other financial institutions. Dividend Policy On January 30, 2025, May 1, 2025, and July 24, 2025 our Board of Directors declared a quarterly cash dividend on our common stock of $0.09 per share.
On October 23, 2024 and January 30, 2025 our Board of Directors declared a quarterly cash dividend on our common stock of $0.09 per share.
On October 28, 2025 and January 29, 2026 our Board of Directors declared a quarterly cash dividend on our common stock of $0.11 per share.
During the three and twelve months ended December 31, 2024, we repurchased approximately $20.3 million and $150.2 million, respectively, of our common stock. The remaining repurchase authority under the Repurchase Program at December 31, 2024 was $240.2 million.
During the three and twelve months ended December 31, 2025, we repurchased approximately $25.0 million and $159.9 million, respectively, of our common stock. The remaining repurchase authority under the Repurchase Program at December 31, 2025 was $482.1 million.
The shareholder return shown on the graph below is not necessarily indicative of future performance and the indices included do not necessarily reflect management's opinion that such indices are an appropriate measure of the relative performance of Zurn Elkay's stock. 3/31/2020 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 Zurn Elkay Water Solutions Corporation (1) $ 100 $ 174 $ 327 $ 190 $ 264 $ 335 S&P 500 Index $ 100 $ 145 $ 184 $ 149 $ 185 $ 228 S&P 1500 Industrials Index $ 100 $ 152 $ 184 $ 169 $ 200 $ 231 (1) Zurn Elkay Water Solutions Corporation historical prices were adjusted to reflect the impact of the Spin-Off Transaction that was completed on October 4, 2021.
The shareholder return shown on the graph below is not necessarily indicative of future performance and the indices included do not necessarily reflect management's opinion that such indices are an appropriate measure of the relative performance of Zurn Elkay's stock. 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 12/31/25 Zurn Elkay Water Solutions Corporation (1) $ 100 $ 193 $ 113 $ 158 $ 203 $ 255 S&P 500 Index $ 100 $ 129 $ 105 $ 133 $ 166 $ 196 S&P 1500 Industrials Index $ 100 $ 122 $ 114 $ 138 $ 161 $ 190 (1) Zurn Elkay Water Solutions Corporation historical prices were adjusted to reflect the impact of the Spin-Off Transaction that was completed on October 4, 2021.
Added
On October 28, 2025, our Board of Directors approved increasing the remaining share repurchase authority under the Repurchase Program to $500.0 million.
Item 7. Management's Discussion & Analysis
Management's Discussion & Analysis (MD&A) — revenue / margin commentary
71 edited+16 added−21 removed65 unchanged
Item 7. Management's Discussion & Analysis
Management's Discussion & Analysis (MD&A) — revenue / margin commentary
71 edited+16 added−21 removed65 unchanged
2024 filing
2025 filing
Biggest changeCash used for investing activities was $20.2 million in the year ended December 31, 2024 compared to $4.6 million in the year ended December 31, 2023. Investing activities in the year ended December 31, 2024, included $21.8 million of capital expenditures, which were partially offset by the receipt of $1.6 million from the sale of certain long-lived assets.
Biggest changeInvesting activities for the year ended December 31, 2024, included $21.8 million of capital expenditures, which were partially offset by the receipt of $1.6 million from the sale of certain long-lived assets. Cash used for financing activities was $217.3 million in the year ended December 31, 2025 compared to $207.5 million in the year ended December 31, 2024.
(4) Last-in first-out (LIFO) inventory adjustments are excluded in calculating Adjusted EBITDA as defined in our credit agreement. (5) Other, net consists of gains and losses on the disposition of long-lived assets in accordance with the terms of our credit agreement.
(4) Last-In, First-Out ("LIFO") adjustments are excluded in calculating Adjusted EBITDA as defined in our credit agreement. (5) Other, net consists of gains and losses on the disposition of long-lived assets in accordance with the terms of our credit agreement.
(2) Other expense, net consists primarily of gains and losses from foreign currency transactions, the non-service cost components of net periodic benefit costs associated with our defined benefit plans and other non-operational gains and losses as defined in our credit agreement.
(2) Other (income) expense, net consists primarily of gains and losses from foreign currency transactions, the non-service cost components of net periodic benefit costs associated with our defined benefit plans and other non-operational gains and losses as defined in our credit agreement.
In particular, our definition of Adjusted EBITDA allows us to add back certain non-cash, non-operating or non-recurring charges that are deducted in calculating net income, even though these are expenses that may recur, vary greatly and are difficult to predict and can represent the effect of long-term strategies as opposed to short-term results. 34 In addition, certain of these expenses added back in calculating Adjusted EBITDA can represent the reduction of cash that could be used for other corporate purposes.
In particular, our definition of Adjusted EBITDA allows us to add back certain non-cash, non-operating or non-recurring charges that are deducted in calculating net income, even though these are expenses that may recur, vary greatly and are difficult to predict and can represent the effect of long-term strategies as opposed to short-term results. 32 In addition, certain of these expenses added back in calculating Adjusted EBITDA can represent the reduction of cash that could be used for other corporate purposes.
This section discusses our exposure to potential losses arising from adverse changes in interest rates and foreign exchange rates. 27 Company Overview We are a growth-oriented, pure-play water management business that designs, procures, manufactures, and markets what we believe to be the broadest sustainable product portfolio of specification-driven water management solutions to improve health, hydration, human safety and the environment.
This section discusses our exposure to potential losses arising from adverse changes in interest rates and foreign exchange rates. 25 Company Overview We are a growth-oriented, pure-play water management business that designs, procures, manufactures, and markets what we believe to be the broadest sustainable product portfolio of specification-driven water management solutions to improve health, hydration, human safety and the environment.
Management's Discussion and Analysis of Financial Condition and Results of Operations" of our 2023 Form 10-K . Non-GAAP Financial Measures . This section provides an explanation of certain financial measures we use that are not in accordance with U.S. generally accepted accounting principles ("GAAP"). Covenant Compliance . This section provides a discussion of certain restrictive covenants in our credit agreement.
Management's Discussion and Analysis of Financial Condition and Results of Operations" of our 2024 Form 10-K . Non-GAAP Financial Measures . This section provides an explanation of certain financial measures we use that are not in accordance with U.S. generally accepted accounting principles ("GAAP"). Covenant Compliance . This section provides a discussion of certain restrictive covenants in our credit agreement.
Off-Balance Sheet Arrangements We do not have any off-balance sheet or non-consolidated special-purpose entities. 37 Contractual Obligations Our primary material cash requirements include the payment of interest and principal on our outstanding term loans and finance lease obligations, purchase commitments, operating lease obligations, and pension and other post-retirement plans.
Off-Balance Sheet Arrangements We do not have any off-balance sheet or non-consolidated special-purpose entities. 35 Contractual Obligations Our primary material cash requirements include the payment of interest and principal on our outstanding term loans and finance lease obligations, purchase commitments, operating lease obligations, and pension and other post-retirement plans.
As a result, the following discussion of results of operations and financial condition is centered on the Zurn Elkay Water Solutions business excluding PMC. The consolidated statements of cash flows for the years ended December 31, 2024, 2023, and 2022 have not been adjusted to separately disclose cash flows related to the discontinued operations.
As a result, the following discussion of results of operations and financial condition is centered on the Zurn Elkay Water Solutions business excluding PMC. The consolidated statements of cash flows for the years ended December 31, 2025, 2024, and 2023 have not been adjusted to separately disclose cash flows related to the discontinued operations.
Provision for income taxes The income tax provision for the year ended December 31, 2024 was $48.1 million, or an effective tax rate of 23.2%.
The income tax provision for the year ended December 31, 2024 was $48.1 million, or an effective tax rate of 23.2%.
The timing of principal payments associated with our term loan and finance lease obligations are disclosed in Item 8, Note 11, Long-Term Debt. We pay interest monthly based on prevailing interest rates at the time and the balance outstanding on our term loans and finance lease obligations. Our operating lease obligations are primarily for real estate leases and automobile leases.
The timing of principal payments associated with our term loan and finance lease obligations are disclosed in Item 8, Note 10, Long-Term Debt. We pay interest monthly based on prevailing interest rates at the time and the balance outstanding on our term loans and finance lease obligations. Our operating lease obligations are primarily for real estate leases and automobile leases.
The year-over-year change in net income is primarily the result of the factors described above. 33 Non-GAAP Financial Measures Non-GAAP financial measures are intended to supplement and not replace financial measures prepared in accordance with GAAP. The following non-GAAP financial measures are utilized by management in comparing our operating performance on a consistent basis.
The year-over-year change in net income is primarily the result of the factors described above. 31 Non-GAAP Financial Measures Non-GAAP financial measures are intended to supplement and not replace financial measures prepared in accordance with GAAP. The following non-GAAP financial measures are utilized by management in comparing our operating performance on a consistent basis.
A discussion of cash flows for the year ended December 31, 2023 compared to December 31, 2022 can be found within "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" of our 2023 Form 10-K . Contractual Obligations . This section provides a discussion of our commitments as of December 31, 2024.
A discussion of cash flows for the year ended December 31, 2024 compared to December 31, 2023 can be found within "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" of our 2024 Form 10-K . Contractual Obligations . This section provides a discussion of our commitments as of December 31, 2025.
The calculation of Adjusted EBITDA under our credit agreement as of December 31, 2024, is presented in the table in the Covenant Compliance section below. However, the results of such calculation could differ in the future based on the different types of adjustments that may be included in such respective calculations at the time.
The calculation of Adjusted EBITDA under our credit agreement as of December 31, 2025, is presented in the table in the Covenant Compliance section below. However, the results of such calculation could differ in the future based on the different types of adjustments that may be included in such respective calculations at the time.
See Item 8, Note 15, Retirement Benefits for additional information. The obligation for other postretirement benefits other than pension also is actuarially determined and is affected by assumptions including the discount rate and expected future increase in per capita costs of covered other postretirement health care benefits.
See Item 8, Note 14, Retirement Benefits for additional information. The obligation for other postretirement benefits other than pension also is actuarially determined and is affected by assumptions including the discount rate and expected future increase in per capita costs of covered other postretirement health care benefits.
During the fourth quarter of the year ended December 31, 2024, we completed our annual goodwill and intangible asset impairment tests and elected to perform a qualitative assessment. No goodwill impairment charges were recorded during the years ended December 31, 2024, 2023, or 2022.
During the fourth quarter of the year ended December 31, 2025, we completed our annual goodwill and intangible asset impairment tests and elected to perform a qualitative assessment. No goodwill impairment charges were recorded during the years ended December 31, 2025, 2024, or 2023.
Upon the conclusion of the measurement period or final determination of the values of the assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in our consolidated statements of operations. 28 Impairment of intangible assets and tangible fixed assets.
Upon the conclusion of the measurement period or final determination of the values of the assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in our consolidated statements of operations. 26 Impairment of intangible assets and tangible fixed assets.
During the year ended December 31, 2024, we recorded a $0.6 million impairment charge related to an indefinite-lived tradename no longer used. No intangible asset impairment charges were recorded during the years ended December 31, 2023 or 2022. Retirement benefits. We have significant pension and post-retirement benefit income and expense and assets/liabilities that are developed from actuarial valuations.
During the year ended December 31, 2024, we recorded a $0.6 million impairment charge related to an indefinite-lived tradename no longer used. No intangible asset impairment charges were recorded during the years ended December 31, 2025 or 2023. Retirement benefits. We have pension and post-retirement benefit income and expense and assets/liabilities that are developed from actuarial valuations.
As a result of this review, we established a full valuation allowance against U.S. federal and state capital loss carryforwards, as well as certain foreign NOL carryforwards and related deferred tax assets, and continues to maintain a partial valuation allowance against certain U.S. state NOL and tax credit carryforwards.
As a result of this review, we established a full valuation allowance against U.S. federal and state capital loss carryforwards, as well as certain foreign NOL carryforwards and related deferred tax assets, and continue to maintain a partial valuation allowance against certain U.S. state NOL and tax credit carryforwards.
(3) In accordance with the terms in our credit agreement, restructuring and other similar charges is comprised of costs associated with workforce reductions, lease termination costs, and other facility rationalization costs. See Item 8, Note 5, Restructuring and Other Similar Charges for more information.
(3) In accordance with the terms in our credit agreement, restructuring and other similar charges is comprised of costs associated with workforce reductions, lease termination costs, and other facility rationalization costs. See Item 8, Note 4, Restructuring and Other Similar Charges for more information.
In providing analysis of the results of our operations, we have provided a comparison of our year ended December 31, 2024 to the year ended December 31, 2023. A discussion of the financial performance for the year ended December 31, 2023 compared to December 31, 2022 can be found within "Item 7.
In providing analysis of the results of our operations, we have provided a comparison of our year ended December 31, 2025 to the year ended December 31, 2024. A discussion of the financial performance for the year ended December 31, 2024 compared to December 31, 2023 can be found within "Item 7.
Liquidity and Capital Resources . This section provides an analysis of our cash flows and year-to-year comparisons for our years ended December 31, 2024 and 2023, as well as a discussion of our indebtedness and its potential effects on our liquidity.
Liquidity and Capital Resources . This section provides an analysis of our cash flows and year-to-year comparisons for our years ended December 31, 2025 and 2024, as well as a discussion of our indebtedness and its potential effects on our liquidity.
Therefore, a 100 basis point increase in Term SOFR above where it closed as of December 31, 2024 would increase the annual interest expense under our term loan facility by approximately $4.9 million.
Therefore, a 100 basis point increase in Term SOFR above where it closed as of December 31, 2025 would increase the annual interest expense under our term loan facility by approximately $4.9 million.
The required accruals may change in the future due to new developments in each matter, the ultimate resolution of each matter or changes in approach, such as change in strategy. See Item 8, Note 17, Commitments and Contingencies for additional information. Recent Accounting Pronouncements See Item 8, Note 2, Significant Accounting Policies regarding recent accounting pronouncements.
The required accruals may change in the future due to new developments in each matter, the ultimate resolution of each matter or changes in approach, such as change in strategy. See Item 8, Note 16, Commitments and Contingencies for additional information. 28 Recent Accounting Pronouncements See Item 8, Note 2, Significant Accounting Policies regarding recent accounting pronouncements.
During the years ended December 31, 2024, 2023, and 2022, we recognized a non-cash actuarial gain from continuing operations of $1.4 million, $2.0 million, and $1.9 million, respectively, in connection with re-measurements of our plans. Net periodic benefit costs recorded on a quarterly basis are primarily comprised of service and interest cost and the expected return on plan assets.
During the years ended December 31, 2025, 2024, and 2023, we recognized a non-cash actuarial gain from continuing operations of $0.5 million, $1.4 million, and $2.0 million, respectively, in connection with re-measurements of our plans. Net periodic benefit costs recorded on a quarterly basis are primarily comprised of service and interest cost and the expected return on plan assets.
Financing activities in the year ended December 31, 2024 included $56.6 million of cash for the payment of dividends on our common stock, $150.2 million of cash for repurchases of our common stock, $0.8 million of net cash payments on outstanding debt, and $8.6 million of cash used for the payment of withholding taxes on employees' share-based payment awards, which were partially offset by $8.7 million of net cash proceeds associated with stock option exercises and Employee Stock Purchase Plan ("ESPP") contributions.
Financing activities in the year ended December 31, 2024 included $56.6 million of cash for the payment of dividends on our common stock, $150.2 million of cash for repurchases of our common stock, $0.8 million of net cash payments on outstanding debt, and $8.6 million of cash used for the payment of withholding taxes on employees' share-based payment awards, which were offset by $8.7 million of net cash proceeds associated with stock option exercises and ESPP contributions.
The major components of the Income from discontinued operations, net of tax presented in the consolidated statements of operations during the years ended December 31, 2024, 2023, and 2022 are included in the table below (in millions): Year Ended (1) (1) (2) December 31, 2024 December 31, 2023 December 31, 2022 Selling, general and administrative income (0.7) (8.4) (2.9) Income from discontinued operations before income tax 0.7 8.4 2.9 Income tax benefit 0.6 0.1 1.8 Income from discontinued operations, net of tax $ 1.3 $ 8.5 $ 4.7 ____________________ (1) Selling, general and administrative income for the years ended December 31, 2024 and 2023 include the release of certain accruals as a result of costs the Company will no longer incur related to the Spin-Off Transaction.
The major components of the Income from discontinued operations, net of tax presented in the consolidated statements of operations during the years ended December 31, 2025, 2024, and 2023 are included in the table below (in millions): Year Ended December 31, 2025 December 31, 2024 December 31, 2023 Selling, general and administrative income (1) (4.7) (0.7) (8.4) Income from discontinued operations before income tax 4.7 0.7 8.4 Income tax benefit 0.9 0.6 0.1 Income from discontinued operations, net of tax $ 5.6 $ 1.3 $ 8.5 _________________ (1) Selling, general and administrative income for the years ended December 31, 2025, 2024, and 2023 includes the release of certain accruals as a result of costs the Company will no longer incur related to the Spin-Off Transaction.
Failure to comply with these covenants could limit our long-term growth prospects by hindering our ability to borrow under the revolver, to obtain future debt and/or to make acquisitions. 35 Set forth below is a reconciliation of net income to Adjusted EBITDA for the year ended December 31, 2024.
Failure to comply with these covenants could limit our long-term growth prospects by hindering our ability to borrow under the revolver, to obtain future debt and/or to make acquisitions. 33 Set forth below is a reconciliation of net income to Adjusted EBITDA for the year ended December 31, 2025.
Approximately 11% of our sales originated outside of the United States in the year ended December 31, 2024. Revenues and expenses denominated in foreign currencies are translated into USD at the end of the fiscal period using the average exchange rates in effect during the period. Fluctuations in currency exchange rates also impact the USD amount of our stockholders' equity.
Approximately 10% of our sales originated outside of the United States in the year ended December 31, 2025. Revenues and expenses denominated in foreign currencies are translated into USD at the end of the fiscal period using the average exchange rates in effect during the period. Fluctuations in currency exchange rates also impact the USD amount of our stockholders' equity.
See Item 8, Note 13, Leases for future minimum lease payments associated with our lease portfolio. We have long-term obligations related to our deferred compensation, pension and other post-retirement plans that are summarized in Item 8, Note 15, Retirement Benefits .
See Item 8, Note 12, Leases for future minimum lease payments associated with our lease portfolio. We have long-term obligations related to our deferred compensation, pension and other post-retirement plans that are summarized in Item 8, Note 14, Retirement Benefits .
The largest component of our cost of sales is cost of materials, which represented approximately 33% of net sales in the year ended December 31, 2024. We purchase a broad range of materials and components throughout the world in connection with our manufacturing activities.
The largest component of our cost of sales is cost of materials, which represented approximately 30% of net sales in the year ended December 31, 2025. We purchase a broad range of materials and components throughout the world in connection with our manufacturing activities.
During the year ended December 31, 2024, the weighted-average interest rate was 7.28%. Our net income is affected by changes in market interest rates on our variable-rate obligations. As discussed above, our term loan facilities bear interest at Term SOFR (subject to a 0.5% floor), plus a Term SOFR adjustment plus an applicable margin.
During the year ended December 31, 2025, the weighted-average interest rate was 6.36%. Our net income is affected by changes in market interest rates on our variable-rate obligations. As discussed above, our term loan facilities bear interest at Term SOFR (subject to a 0.5% floor), plus a Term SOFR adjustment plus an applicable margin.
See Item 8, Note 4, Discontinued Operations for additional information on cash flows associated with the discontinued operations. This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in the "Risk Factors" in Item 1A of this report. Actual results may differ materially from those contained in any forward-looking statements.
See Item 8, Note 3, Discontinued Operations for additional information on discontinued operations. This discussion contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those described in the "Risk Factors" in Item 1A of this report. Actual results may differ materially from those contained in any forward-looking statements.
As of December 31, 2024 and 2023, valuation allowances of $9.0 million and $12.0 million, respectively, were recorded against our deferred tax assets. See Item 8, Note 16, Income Taxes for additional information. Commitments and Contingencies. We are subject to proceedings, lawsuits and other claims related to environmental, labor, product and other matters.
As of December 31, 2025 and 2024, valuation allowances of $4.8 million and $9.0 million, respectively, were recorded against our deferred tax assets. See Item 8, Note 15, Income Taxes for additional information. Commitments and Contingencies. We are subject to proceedings, lawsuits and other claims related to environmental, labor, product and other matters.
We completed the spin-off of our Process & Motion Control platform ("PMC") on October 4, 2021 in the Spin-Off Transaction, and, accordingly, the results of operations and financial condition associated with PMC have been reclassified to discontinued operations for all periods presented.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. We completed the spin-off of our Process & Motion Control platform ("PMC") on October 4, 2021 in the Spin-Off Transaction, and, accordingly, the results of operations and financial condition associated with PMC have been reclassified to discontinued operations for all periods presented.
See Item 8, Note 11, Long-Term Debt for a description of our outstanding indebtedness.
See Item 8, Note 10, Long-Term Debt for a description of our outstanding indebtedness.
Actuar ial gain on pension and other postretirement benefit obligations Actuarial gain on pension and other postretirement benefit obligations for the year ended December 31, 2024, was $1.4 million compared to a gain of $2.0 million for the year ended December 31, 2023.
Actuar ial gain on pension and other postretirement benefit obligations Actuarial gain on pension and other postretirement benefit obligations for the year ended December 31, 2025, was $0.5 million compared to a gain of $1.4 million for the year ended December 31, 2024.
(6) Our credit agreement defines our consolidated indebtedness as the sum of all indebtedness (other than letters of credit or bank guarantees, to the extent undrawn) consisting of indebtedness for borrowed money and capitalized lease obligations, less unrestricted cash, which was $159.2 million (as defined by the credit agreement) at December 31, 2024.
(6) Our credit agreement defines our consolidated indebtedness as the sum of all indebtedness (other than letters of credit or bank guarantees, to the extent undrawn) consisting of indebtedness for borrowed money and capitalized lease obligations, less unrestricted cash, which was $260.4 million (as defined by the credit agreement) at December 31, 2025.
As of December 31, 2024 and 2023, our liability for unrecognized tax benefits was $1.8 million and $5.6 million, respectively. We recognize deferred tax assets and liabilities based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities, net operating losses (“NOL’s”), tax credit and other carryforwards.
As of December 31, 2025 and 2024, our liability for unrecognized tax benefits was $0.6 million and $1.8 million, respectively. We recognize deferred tax assets and liabilities based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities, net operating losses (“NOLs”), tax credit and other carryforwards.
As of December 31, 2024, our outstanding borrowings under the term loan facility were $475.0 million (net of $5.4 million unamortized debt issuance costs) and bore a weighted-average effective interest rate of 6.42%, determined as Term SOFR (subject to a 0.5% floor), plus a Term SOFR adjustment of 0.115%, plus an applicable margin of 2.00%.
As of December 31, 2025, our outstanding borrowings under the term loan facility were $476.4 million (net of $4.0 million unamortized debt issuance costs) and bore a weighted-average effective interest rate of 5.80%, determined as Term SOFR (subject to a 0.5% floor), plus a Term SOFR adjustment of 0.115%, plus an applicable margin of 2.00%.
Cash Flows The consolidated statements of cash flows for the year ended December 31, 2024, December 31, 2023, and December 31, 2022 have not been adjusted to separately disclose cash flows related to the discontinued operations.
The consolidated statements of cash flows for the years ended December 31, 2025, 2024, and 2023 have not been adjusted to separately disclose cash flows related to the discontinued operations.
The assets and liabilities of our non-U.S. subsidiaries are translated into USD at the exchange rates in effect at the end of the fiscal periods. As of December 31, 2024, stockholders' equity decreased by $10.0 million from December 31, 2023 as a result of foreign currency translation adjustments.
The assets and liabilities of our non-U.S. subsidiaries are translated into USD at the exchange rates in effect at the end of the fiscal periods. As of December 31, 2025, stockholders' equity increased by $4.9 million from December 31, 2024 as a result of foreign currency translation adjustments.
If the USD strengthened by 10% as of December 31, 2024, the result would have decreased stockholders' equity by approximately $11.5 million. As of December 31, 2024, we had not entered into foreign currency forward contracts.
If the USD strengthened by 10% as of December 31, 2025, the result would have decreased stockholders' equity by approximately $13.1 million. As of December 31, 2025, we had not entered into foreign currency forward contracts.
Net income from continuing operations Our net income from continuing operations for the year ended December 31, 2024, was $158.9 million, compared to net income from continuing operations of $104.2 million for the year ended December 31, 2023, as a result of the factors described above.
Net income from continuing operations Our net income from continuing operations for the year ended December 31, 2025, was $192.4 million, compared to net income from continuing operations of $158.9 million for the year ended December 31, 2024, as a result of the factors described above.
Diluted net income per share was $0.92 per share for the year ended December 31, 2024, compared to $0.64 per share for the year ended December 31, 2023. Income from discontinued operations, net of tax, was $1.3 million for the year ended December 31, 2024 compared to $8.5 million for the year ended December 31, 2023.
Diluted net income per share was $1.15 per share for the year ended December 31, 2025, compared to $0.92 per share for the year ended December 31, 2024. Income from discontinued operations, net of tax, was $5.6 million for the year ended December 31, 2025 compared to $1.3 million for the year ended December 31, 2024.
Indebtedness As of December 31, 2024 we had $495.6 million of total indebtedness outstanding as follows (in millions): Total Debt at December 31, 2024 Current Maturities of Long-Term Debt Long-term Portion Term loan (1) $ 475.0 $ — $ 475.0 Finance leases 20.6 0.8 19.8 Total $ 495.6 $ 0.8 $ 494.8 ____________________ (1) Includes unamortized original issue discount and debt issuance costs of $5.4 million at December 31, 2024.
Indebtedness As of December 31, 2025 we had $496.5 million of total indebtedness outstanding as follows (in millions): Total Debt at December 31, 2025 Current Maturities of Long-Term Debt Long-term Portion Term loan (1) $ 476.4 $ — $ 476.4 Finance leases 20.1 0.9 19.2 Total $ 496.5 $ 0.9 $ 495.6 ____________________ (1) Includes unamortized original issue discount and debt issuance costs of $4.0 million at December 31, 2025.
Discontinued Operations During the year ended December 31, 2021, we completed the spin-off of our PMC platform. The operating results of PMC are reported as discontinued operations in our consolidated statements of operations for all periods presented, as the Spin-Off Transaction represented a strategic shift that had a major impact on our operations and financial results.
The operating results of PMC are reported as discontinued operations in our consolidated statements of operations for all periods presented, as the Spin-Off Transaction represented a strategic shift that had a major impact on our operations and financial results.
As of December 31, 2024, our Net First Lien Leverage Ratio was 0.86 to 1.0.
As of December 31, 2025, our Net First Lien Leverage Ratio was 0.53 to 1.0.
The effective income tax rate for the year ended December 31, 2023 was above the U.S. federal statutory rate of 21% primarily due to the accrual of additional income taxes associated with compensation deduction limitations under Section 162(m) of the Internal Revenue Code, the accrual of various state income taxes, the nondeductible loss on divestiture of asbestos liabilities and certain assets and the accrual of foreign income taxes, which are generally above the U.S. federal statutory rate, partially offset by the recognition of income tax benefits associated with share-based payments.
The effective income tax rate for the year ended December 31, 2025 was above the U.S. federal statutory rate of 21% primarily due to the accrual of additional income taxes associated with compensation deduction limitations under Section 162(m) of the Internal Revenue Code, the accrual of various state income taxes and the accrual of foreign income taxes, which are generally 30 above the U.S. federal statutory rate, partially offset by the recognition of income tax benefits associated with share-based payments and the recognition of certain previously unrecognized tax benefits due to the lapse of the applicable statutes of limitations.
We reported net income in the year ended December 31, 2024, of $160.2 million and Adjusted EBITDA for the same period of $390.4 million. See "Covenant Compliance" for a reconciliation of Adjusted EBITDA to GAAP net income.
We reported net income in the year ended December 31, 2025, of $198.0 million and Adjusted EBITDA for the same period of $442.2 million. See "Covenant Compliance" for a reconciliation of Adjusted EBITDA to GAAP net income.
Based upon the current OECD rules and administrative guidance, as well as the related legislation of those countries which has been enacted to date, the Company does not anticipate being subject to material Top-Up Taxes.
Based upon the current OECD rules and administrative guidance, as well as the related legislation 27 of those countries in which we do business, the Company does not anticipate being subject to material Top-Up Taxes.
Diluted net income per share from continuing operations was $0.91 per share for the year ended December 31, 2024, as compared to $0.59 per share for the year ended December 31, 2023. Net income Net income for the year ended December 31, 2024, was $160.2 million compared to $112.7 million for the year ended December 31, 2023.
Diluted net income per share from continuing operations was $1.12 per share for the year ended December 31, 2025, as compared to $0.91 per share for the year ended December 31, 2024. Net income Net income for the year ended December 31, 2025, was $198.0 million compared to $160.2 million for the year ended December 31, 2024.
(in millions) Year Ended December 31, 2024 Net income $ 160.2 Income from discontinued operations, net of tax (1) (1.3) Provision for income taxes 48.1 Actuarial gain on pension and other postretirement benefit obligations (1.4) Other expense, net (2) 5.9 Interest expense, net 33.1 Depreciation and amortization 88.3 EBITDA 332.9 Adjustments to EBITDA Restructuring and other similar charges (3) 13.5 Stock-based compensation expense 37.9 LIFO (4) 5.5 Other, net (5) 0.6 Subtotal of adjustments to EBITDA 57.5 Adjusted EBITDA 390.4 Consolidated indebtedness (6) $ 336.4 Net First Lien Leverage Ratio (7) 0.86 ____________________ (1) Income from discontinued operations, net of tax is not included in Adjusted EBITDA in accordance with the terms of our credit agreement.
(in millions) Year Ended December 31, 2025 Net income $ 198.0 Income from discontinued operations, net of tax (1) (5.6) Provision for income taxes 63.9 Actuarial gain on pension and other postretirement benefit obligations (0.5) Other (income) expense, net (2) (5.5) Interest expense, net 28.6 Depreciation and amortization 88.7 EBITDA 367.6 Adjustments to EBITDA Restructuring and other similar charges (3) 9.6 Stock-based compensation expense 40.6 Last-In, First-Out ("LIFO") adjustments (4) 20.4 Other, net (5) 4.0 Subtotal of adjustments to EBITDA 74.6 Adjusted EBITDA 442.2 Consolidated indebtedness (6) $ 236.1 Net First Lien Leverage Ratio (7) 0.53 ____________________ (1) Income from discontinued operations, net of tax is not included in Adjusted EBITDA in accordance with the terms of our credit agreement.
A loss on the divestiture of asbestos liabilities and certain assets of $11.4 million was recognized in the consolidated statements of operations for the twelve months ended December 31, 2023.
A loss on the divestiture of asbestos liabilities and certain assets of $11.4 million was recognized in the consolidated statements of operations for the twelve months ended December 31, 2023. Discontinued Operations During the year ended December 31, 2021, we completed the spin-off of our PMC platform.
As of December 31, 2023, we had $136.7 million of cash and cash equivalents and $189.0 million of additional borrowing capacity. As of December 31, 2023, the available borrowings under our credit facility were reduced by $11.0 million, due to outstanding letters of credit.
As of December 31, 2025, we had $300.5 million of cash and cash equivalents and $189.9 million of additional borrowing capacity under our revolving credit facility. As of December 31, 2025, the available borrowings under our credit facility were reduced by $10.1 million due to outstanding letters of credit.
Financing activities in the year ended December 31, 2023 included $50.4 million of cash for the payment of dividends on our common stock, $125.1 million of cash for repurchases of our common stock, $64.9 million of net cash payments on outstanding debt, and $3.1 million of cash used for the payment of withholding taxes on employees' share-based payment awards, which were partially offset by $4.3 million of net cash proceeds associated with stock option exercises.
Financing activities in the year ended December 31, 2025 included $63.9 million of cash for the payment of dividends on our common stock, $159.9 million of cash for repurchases of our common stock, $0.8 million of net cash payments on outstanding debt, and $0.6 million of cash used for the payment of withholding taxes on employees' share-based payment awards, which were offset by $7.9 million of net cash proceeds associated with stock option exercises and Employee Stock Purchase Plan ("ESPP") contributions.
Restructuring and Other Similar Charges During the year ended December 31, 2024, we continued to execute various restructuring actions. These initiatives were intended to drive efficiencies and reduce operating costs while also modifying our footprint to reflect changes in the markets we serve, the impact of acquisitions on our overall manufacturing capacity and the refinement of our overall product portfolio.
These initiatives were intended to drive efficiencies and reduce operating costs while also modifying our footprint to reflect changes in the markets we serve, the impact of acquisitions on our overall manufacturing capacity and the refinement of our overall product portfolio. These restructuring actions primarily resulted in workforce reductions, lease termination costs, and other facility rationalization costs.
The 29 Company is continuing to monitor the potential impact of the Pillar 2 proposals and developments on our consolidated financial statements and related disclosures, including eligibility for any transitional safe harbor rules.
The Company is continuing to monitor the potential impact of the Pillar 2 proposals and development on our consolidated financial statements and related disclosures, including eligibility for any transitional safe harbor rules. On July 4, 2025, the U.S. enacted the One Big Beautiful Bill Act (“OBBBA”).
Income from operations (Dollars in Millions) Year Ended December 31, 2024 December 31, 2023 Change % Change Income from operations $ 244.6 $ 191.4 $ 53.2 27.8 % % of net sales 15.6 % 12.5 % 3.1 % Income from operations was $244.6 million for the year ended December 31, 2024, or 15.6% of net sales, compared to income from operations of $191.4 million, or 12.5% of net sales, for the year ended December 31, 2023.
Income from operations (Dollars in Millions) Year Ended December 31, 2025 December 31, 2024 Change % Change Income from operations $ 278.9 $ 244.6 $ 34.3 14.0 % % of net sales 16.4 % 15.6 % 0.8 % Income from operations was $278.9 million for the year ended December 31, 2025, or 16.4% of net sales, compared to income from operations of $244.6 million, or 15.6% of net sales, for the year ended December 31, 2024.
Determination of the fair value requires various estimates including internal cash flow estimates generated from the asset, quoted market prices and appraisals as appropriate to determine fair value. Actual results could vary from these estimates. During the years ended December 31, 2024 and December 31, 2023, the Company recognized $7.4 million and $2.5 million of fixed asset impairment charges, respectively.
Determination of the fair value requires various estimates including internal cash flow estimates generated from the asset, quoted market prices and appraisals as appropriate to determine fair value. Actual results could vary from these estimates.
The income tax provision for the year ended December 31, 2023 was $42.6 million, or an effective tax rate of 29.0%.
Provision for income taxes The income tax provision for the year ended December 31, 2025 was $63.9 million, or an effective tax rate of 24.9%.
Our revolving credit facility is available to fund our working capital requirements, capital expenditures and other general corporate purposes. We believe this resource is adequate for expected short-term and long-term needs.
Our revolving credit facility is available to fund our working capital requirements, capital expenditures and other general corporate purposes.
The Company recognized no impairment charges during the during the year ended December 31, 2022. Goodwill, trademarks and certain tradenames have indefinite lives and are not amortized. However, the goodwill and intangible assets are tested annually for impairment, and may be tested more frequently if any triggering events occur that would reduce the recoverability of the asset.
However, the goodwill and intangible assets are tested annually for impairment, and may be tested more frequently if any triggering events occur that would reduce the recoverability of the asset.
See Item 8, Note 5, Restructuring and Other Similar Charges for more information. 31 Results of Operations Year Ended December 31, 2024 Compared with the Year Ended December 31, 2023 Net sales (Dollars in Millions) Year Ended December 31, 2024 December 31, 2023 Change % Change Net sales $ 1,566.5 $ 1,530.5 $ 36.0 2.4 % Net sales were $1,566.5 million for the year ended December 31, 2024, a 2.4% increase year over year.
Results of Operations Year Ended December 31, 2025 Compared with the Year Ended December 31, 2024 Net sales (Dollars in Millions) Year Ended December 31, 2025 December 31, 2024 Change % Change Net sales $ 1,695.9 $ 1,566.5 $ 129.4 8.3 % Net sales were $1,695.9 million for the year ended December 31, 2025, a 8.3% increase year over year.
The non-cash actuarial gain recognized for the year ended December 31, 2023, was primarily due to demographic gains experienced during 2023 that were reflected in other postretirement benefits plans. In addition, the post 65 medical provider options changed resulting in much lower premiums for the plans.
The non-cash actuarial gain recognized for the year ended December 31, 2025 was primarily due to demographic and claims gains experienced during 2025 that were reflected in certain other post-retirement benefit plans.
Other expense, net consists primarily of foreign currency transaction gains and losses, the non-service cost components associated with our defined benefit plans and other non-operational gains and losses.
Other income (expense), net consists primarily of foreign currency transaction gains and losses, the non-service cost components associated with our defined benefit plans and other non-operational gains and losses. The year-over-year change is primarily driven by the gain resulting from the settlement and termination of our U.S. defined benefit pension plan in the current year.
Those gains were partially offset by a decrease in the discount rate from the prior measurement. See Item 8, Note 15, Retirement Benefits for more information. 32 Other income (expense), net Other expense, net for the year ended December 31, 2024, was $5.9 million compared to other expense, net of $7.2 million for the year ended December 31, 2023.
See Item 8, Note 14, Retirement Benefits for more information. Other income (expense), net Other income (expense), net for the year ended December 31, 2025, was $5.5 million compared to other income (expense), net of $(5.9) million for the year ended December 31, 2024.
Cash used for financing activities was $207.5 million in the year ended December 31, 2024 compared to $239.2 million in the year ended December 31, 2023.
Cash used for investing activities was $29.9 million in the year ended December 31, 2025 compared to $20.2 million in the year ended December 31, 2024. Investing activities in the year ended December 31, 2025, included $29.9 million of capital expenditures.
Refer to Item 8, Note 4, Discontinued Operations for further information. 36 Year Ended December 31, 2024 Compared with the Year Ended December 31, 2023 Net cash provided by operating activities in the year ended December 31, 2024, was $293.5 million compared to $253.9 million in the year ended December 31, 2023 due to higher net income, lower use of cash for trade working capital as well as benefits generated from ongoing productivity actions.
Year Ended December 31, 2025 Compared with the Year Ended December 31, 2024 Net cash provided by operating activities in the year ended December 31, 2025, was $346.5 million compared to $293.5 million in the year ended December 31, 2024 due to higher net income and lower use of cash for accruals, partially offset by cash used for trade working capital.
We recorded restructuring charges of $13.5 million, $15.3 million and $15.4 million for the years ended December 31, 2024, 2023, and 2022, respectively.
As such, we expect further expenses related to workforce reductions, potential impairment of assets, lease termination costs, and other facility rationalization costs. 29 We recorded restructuring charges of $9.6 million, $13.5 million and $15.3 million for the years ended December 31, 2025, 2024, and 2023, respectively. See Item 8, Note 4, Restructuring and Other Similar Charges for more information.
See Item 8, Note 17, Commitments and Contingencies for more information. Interest expense, net Interest expense, net was $33.1 million for the year ended December 31, 2024 compared to $38.5 million for the year ended December 31, 2023.
Interest expense, net Interest expense, net was $28.6 million for the year ended December 31, 2025 compared to $33.1 million for the year ended December 31, 2024. The decrease in interest expense, net as compared to the prior year period is primarily due to lower interest rates.
These restructuring actions primarily resulted in workforce reductions, lease termination costs, and other facility rationalization costs. We expect to continue executing similar initiatives to optimize our operating margin and manufacturing footprint. As such, we expect further expenses related to workforce reductions, potential impairment of assets, lease termination costs, and other facility rationalization costs.
We expect to continue executing similar initiatives to optimize our operating margin and manufacturing footprint.
Removed
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. The following discussion of results of operations and financial condition includes periods prior to the acquisition of Elkay. Our financial performance includes the Elkay business subsequent to July 1, 2022, the date of the acquisition.
Added
During the years ended December 31, 2025, 2024, and 2023, the Company recognized $2.0 million, $7.4 million, and $2.5 million of fixed asset impairment charges, respectively. Goodwill, trademarks and certain tradenames have indefinite lives and are not amortized.
Removed
Accordingly, the discussion and analysis does not reflect any impact of the Elkay transaction prior to the closing date.
Added
As described in Note 14 to the consolidated financial statements, the Company’s Board of Directors approved a resolution to terminate the Company’s U.S. defined benefit pension plan (the “Pension Plan”) with the full freeze of benefit accruals under the Pension Plan effective March 31, 2025 and the termination of the Pension Plan effective April 1, 2025.
Removed
In October 2021, more than 130 countries agreed to implement Pillar 2, a plan introduced by the Organization for Economic Co-operation and Development (“OECD”) providing for a global minimum tax rate of 15% (calculated on a country-by-country basis) for those companies having consolidated revenue of at least €750 million.
Added
The Company remeasures the pension assets and obligations at the end of each year or more frequently upon any required remeasurement event. The amounts are measured using actuarial valuations, which are dependent, in part, on the selection of certain actuarial assumptions.
Removed
The implementation of the Pillar 2 global minimum tax rules has begun to apply for tax years beginning in 2024. The main purpose of such rules is to minimize tax base erosion and profit shifting from higher tax jurisdictions to lower tax jurisdictions by multi-national companies.
Added
Measuring the pension obligations was complex and required the involvement of specialists as a result of the complex nature of the actuarial assumptions, such as discount rates and mortality rates used in the Company’s accounting of the U.S. defined benefit pension plan termination and the related remeasurement process.
Removed
On February 1, 2023, the Financial Accounting Standards Board (“FASB”) indicated that they view the minimum tax (“Top-Up Tax”) imposed under Pillar 2 as an alternative minimum tax, and as such, it should be recognized in the period incurred versus recognizing or adjusting deferred tax assets and liabilities.
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Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Market Risk — interest-rate, FX, commodity exposure
1 edited+0 added−0 removed0 unchanged
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Market Risk — interest-rate, FX, commodity exposure
1 edited+0 added−0 removed0 unchanged
2024 filing
2025 filing
Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The information with respect to the Company's market risk is contained under the caption "Quantitative and Qualitative Disclosures About Market Risk" in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations. 38
Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. The information with respect to the Company's market risk is contained under the caption "Quantitative and Qualitative Disclosures About Market Risk" in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations. 36