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What changed in Vontier Corp's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Vontier 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.

+205 added−204 removedSource: 10-K (2026-02-12) vs 10-K (2025-02-13)

Top changes in Vontier Corp's 2025 10-K

205 paragraphs added · 204 removed · 161 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeCustomers in this segment choose suppliers based on several factors, including product features, performance and functionality, the supplier’s geographic coverage and the other factors described under “Competition.” Sales are generally made to independent distributors or through our direct sales personnel.
Biggest changeCustomers in this segment choose suppliers based on several factors, including product features, performance and functionality, the supplier’s geographic coverage and the other factors described under “Competition.” Sales are generally made to independent distributors or through our direct sales personnel. 4 Table of Contents Research and Development We conduct research and development activities for the purpose of developing new products, enhancing the functionality, effectiveness, ease of use and reliability of our existing products and expanding the applications for which uses of our products are appropriate.
Through brands including Gilbarco and Veeder-Root, we serve independent and company owned retail and commercial fueling operators with industry-leading environmental monitoring and leak detection systems, forecourt controllers, vapor recovery equipment and fuel dispenser systems for petroleum. Our large installed base of products provides a recurring revenue stream for aftermarket parts and service offerings.
Through brands including Gilbarco Veeder-Root and Veeder-Root, we serve independent and company owned retail and commercial fueling operators with industry-leading environmental monitoring and leak detection systems, forecourt controllers, vapor recovery equipment and fuel dispenser systems for petroleum. Our large installed base of products provides a recurring revenue stream for aftermarket parts and service offerings.
Of our United States employees, approximately 750 were hourly-rated, unionized employees. Outside the United States, we have government-mandated collective bargaining arrangements and union contracts in certain countries, particularly in Europe where certain of our employees are represented by unions and/or works councils. The Company believes that its relationship with employees is good.
Of our U.S. employees, approximately 750 were hourly-rated, unionized employees. Outside the United States, we have government-mandated collective bargaining arrangements and union contracts in certain countries, particularly in Europe where certain of our employees are represented by unions and/or works councils. The Company believes that its relationship with employees is good.
In 2024, our teams across the globe continued to support their local communities by participating in a Day of Caring event, from cleaning up parks, to providing aid to those in need, to supporting local organizations that work with children and the elderly.
In 2025, our teams across the globe continued to support their local communities by participating in a Day of Caring event, from cleaning up parks, to providing aid to those in need, to supporting local organizations that work with children and the elderly.
Department of Treasury, Office of Foreign Assets Control, which implement economic sanctions imposed against designated countries, governments and persons based on United States foreign policy and national security considerations; and • the import regulations administered by the U.S. Customs and Border Protection.
Department of Treasury, Office of Foreign Assets Control, which implement economic sanctions imposed against designated countries, governments and persons based on U.S. foreign policy and national security considerations; and • the import regulations administered by the U.S. Customs and Border Protection.
Our full-site integrated solutions span compressed natural gas (“CNG”), renewable natural gas (“RNG”), hydrogen (H2) and biogas compression and dispensing. We offer scalable, modular systems, including dispensing, compression, storage, service, and automation solutions to support global fleet decarbonization.
Our full-site integrated solutions span compressed natural gas (“CNG”), renewable natural gas (“RNG”) and biogas compression and dispensing. We offer scalable, modular systems, including dispensing, compression, storage, service, and automation solutions to support global fleet decarbonization.
For example, capital equipment sales are often stronger in the fourth calendar quarter. However, as a whole, we are not subject to material seasonality. 5 Table of Contents Working Capital We maintain an adequate level of working capital to support our business needs. There are no unusual industry practices or requirements relating to working capital items.
For example, capital equipment sales are often stronger in the fourth calendar quarter. However, as a whole, we are not subject to material seasonality. Working Capital We maintain an adequate level of working capital to support our business needs. There are no unusual industry practices or requirements relating to working capital items.
We provide an end-to-end technology platform combining embedded point-of-sale, workflow and monitoring software, customer support, digital marketing and payment facilitation services. We serve individual customer sites and have long-standing relationships with the majority of the top 20 car wash platforms in North America.
We provide an end-to-end technology platform combining embedded point-of-sale, workflow and monitoring software, customer support, digital marketing and payment facilitation services. We 3 Table of Contents serve individual customer sites and have long-standing relationships with the majority of the top 20 car wash platforms in North America.
Leveraging leading market positions, decades of domain expertise and unparalleled portfolio breadth, Vontier enables the way the world moves, delivering smart, safe and sustainable solutions to our customers and the planet.
Leveraging leading market positions, decades of domain expertise and unparalleled portfolio breadth, Vontier powers the way the world moves, delivering smart, safe and sustainable solutions to our customers and the planet.
Customers in this segment choose suppliers based on several factors, including relevant innovative features, convenience and the other factors described under “Competition.” 4 Table of Contents Environmental & Fueling Solutions Environmental & Fueling Solutions is a leading manufacturer and provider of solutions to improve safety, environmental compliance and fueling efficiency globally.
Customers in this segment choose suppliers based on several factors, including relevant innovative features, convenience and the other factors described under “Competition.” Environmental & Fueling Solutions Environmental & Fueling Solutions is a leading manufacturer and provider of solutions to improve safety, environmental compliance and fueling efficiency globally.
Some examples of key programs and initiatives that are focused to attract, motivate, develop and retain our workforce include: • Health, wellness and family resources. Our benefit offerings are designed to meet the varied and evolving needs of our workforce across businesses and geographies.
Some examples of key programs and initiatives that are focused to attract, motivate, develop and retain our workforce include: • Health, wellness and family resources. Our benefit offerings are designed to meet the varied and evolving needs of our workforce across businesses and geographies. • Talent Development and Inclusion.
Our internet site and the information contained on or connected to that site are not incorporated by reference into this Form 10-K. The SEC also maintains a website at www.sec.gov that contains reports, proxy statements and other information regarding issuers that file electronically with the SEC, including Vontier.
Our internet site and the information contained on or connected to that site are not incorporated by reference into this Form 10-K. The SEC also maintains a website at www.sec.gov that contains reports, proxy statements and other information regarding issuers that file electronically with the SEC, including Vontier. 7 Table of Contents
Our business in Russia, Ukraine and Israel was not material to our results. We did not have any sales in Russia during the year ended December 31, 2024. Sales in Ukraine and Israel accounted for approximately 60 basis points of our total sales for the year ended December 31, 2024.
Our business in Russia, Ukraine and Israel was not material to our results. We did not have any sales in Russia during the year ended December 31, 2025. Sales in Ukraine and Israel accounted for approximately 80 basis points of our total sales for the year ended December 31, 2025.
We seek to continue to attract, develop and retain world-class leaders and employees globally and to drive their engagement with our customer-centric approach. As of December 31, 2024, we employed approximately 8,000 persons, of whom approximately 3,500 were employed in the United States and approximately 4,500 were employed outside of the United States.
We seek to continue to attract, develop and retain world-class leaders and employees globally and to drive their engagement with our customer-centric approach. As of December 31, 2025, we employed approximately 7,800 persons, of whom approximately 3,300 were employed in the United States and approximately 4,500 were employed outside of the United States.
We believe our industry leading alternative energy fueling offerings strategically position us to capitalize on key market trends, including infrastructure buildout and decarbonization at scale. EVolve, made up of our Driivz and Sparkion businesses, serves charge point operators and fleet operators, globally.
We believe our industry leading alternative energy fueling offerings strategically position us to capitalize on key market trends, including infrastructure buildout and decarbonization at scale. Driivz serves charge point operators and fleet operators, globally.
Backlog as of December 31, 2024 and 2023 was $702.4 million and $626.0 million, respectively. We expect that a majority of the unfilled orders as of December 31, 2024 will be delivered to customers within the first half of 2025.
Backlog as of December 31, 2025 and 2024 was $615.7 million and $702.4 million, respectively. We expect that a majority of the unfilled orders as of December 31, 2025 will be delivered to customers within the first half of 2026.
Additionally, the Company was named to Newsweek’s Most Responsible Companies 2025 and TIME’s World’s Most Sustainable Companies 2024 lists. 6 Table of Contents • Community and Social Impact. We are committed to supporting the communities in which we live and work. One primary way we do this is through our employee connection program – Vontier Cares.
The Company was named to Newsweek’s One of America’s Greenest Companies 2026 and Most Responsible Companies 2026 as well as TIME’s World’s Most Sustainable Companies 2025 lists. • Community and Social Impact. We are committed to supporting the communities in which we live and work. One primary way we do this is through our employee connection program – Vontier Cares.
We provide a network of connected solutions including devices, software, APIs and services to improve productivity, automation, compliance and safety to help our customers deliver better consumer experiences, increase revenue yield and generate higher margins.
Invenco serves convenience retail stores, energy retailing providers and fleet operators globally. We provide a network of connected solutions including devices, software, APIs and services to improve productivity, automation, compliance and safety to help our customers deliver better consumer experiences, increase revenue yield and generate higher margins.
This geographic diversity allows us to draw on the skills of a worldwide workforce, provides greater stability to our operations, allows us to drive economies of scale, provides revenue streams that may help offset economic trends that are specific to individual economies and offers us an opportunity to access new markets for products. 7 Table of Contents The manner in which our products and services are sold outside the United States differs by business and by region.
This geographic diversity allows us to draw on the skills of a worldwide workforce, provides greater stability to our operations, allows us to drive economies of scale, provides revenue streams that may help offset economic trends that are specific to individual economies and offers us an opportunity to access new markets for products.
We are headquartered in Raleigh, North Carolina and serve end markets across the mobility ecosystem, including convenience retail and fueling, fleets and auto repair, marketing our products and services to retail and commercial fueling operators, convenience store operators, car wash operators, commercial vehicle repair businesses, fleet owners/operators and electric vehicle charging network operators on a global basis.
We are headquartered in Raleigh, North Carolina and serve three end markets, convenience retail, fleet solutions and auto repair, marketing our products and services to retail and commercial fueling operators, convenience store operators, car wash operators, electric vehicle charging network operators, fleet owners/operators and commercial vehicle repair businesses.
Offerings include convenience retail operating platform, point-of-sale and payment solutions, remote diagnostics and site-management tools, workflow automation solutions, data analytics, operating software platform for electric vehicle charging networks, integrated solutions for alternative fuel dispensing and IoT-based fleet telematics.
Offerings include convenience retail operating platform, point-of-sale and payment solutions, remote diagnostics and site-management tools, workflow automation solutions, data analytics, operating software platform for electric vehicle charging networks, integrated solutions for alternative fuel dispensing and IoT-based fleet telematics. Mobility Technologies serves major end markets with tailored solutions for customers based on their unique needs.
Risk Factors.” Environmental Laws and Regulations Our operations and properties are subject to laws and regulations relating to environmental protection, including those governing air emissions, water discharges and waste management, and workplace health and safety.
For a description of the risks related to the regulations that our businesses are subject to, please refer to “Item 1A. Risk Factors.” Environmental Laws and Regulations Our operations and properties are subject to laws and regulations relating to environmental protection, including those governing air emissions, water discharges and waste management, and workplace health and safety.
Through educational and collaborative initiatives, we aim to inspire personal growth and sustainable wellbeing for all our team. • Talent Development and Inclusion. At Vontier, we are dedicated to cultivating a dynamic learning and growth culture, representing Skills-Based Talent Development and Inclusion, that fosters growth throughout our organization.
At Vontier, we are dedicated to cultivating a dynamic learning and growth culture, representing Skills-Based Talent Development and Inclusion, that fosters growth throughout our organization.
For a discussion of risks related to government contracting requirements, please refer to “Item 1A. Risk Factors.” Regulatory Matters We face extensive government regulation both within and outside the United States relating to the development, manufacture, marketing, sale and distribution of our products, software and services. The following sections describe certain significant regulations that we are subject to.
Risk Factors.” 6 Table of Contents Regulatory Matters We face extensive government regulation both within and outside the United States relating to the development, manufacture, marketing, sale and distribution of our products, software and services. The following sections describe certain significant regulations that we are subject to. These are not the only regulations that our businesses must comply with.
We utilize a number of techniques to address potential disruption in and other risks relating to our supply chain, including in certain cases the use of safety stock, alternative materials and qualification of multiple supply sources.
We utilize a number of techniques to address potential disruption in and other risks relating to our supply chain, including in certain cases the use of safety stock, alternative materials and qualification of multiple supply sources. In 2025, the U.S. government announced the imposition of various tariffs including additional country-specific tariffs on all imports into the United States.
Through our VBS-led execution of our Connected Mobility strategy, we are accelerating the transformation to a connected, smart mobility ecosystem by creating enhanced and interconnected platforms throughout our segments. Segments The Company operates through three reportable segments comprised of three operating segments.
Leveraging VBS, we are accelerating our Connected Mobility strategy, advancing a smart, interconnected mobility ecosystem across our segments. Segments The Company operates through three reportable segments comprised of three operating segments.
Our three operating segments, and businesses within, are as follows: • Mobility Technologies: Invenco by GVR, DRB, Teletrac Navman, ANGI and EVolve. • Repair Solutions: Matco Tools. • Environmental & Fueling Solutions: Gilbarco Veeder-Root.
Our three operating segments, and businesses within, are as follows: • Mobility Technologies: Invenco, DRB, Teletrac Navman, ANGI and Driivz. • Repair Solutions: Matco Tools. • Environmental & Fueling Solutions: Gilbarco Veeder-Root. Mobility Technologies Mobility Technologies provides digitally enabled equipment and operating software solutions to drive automation, productivity and compliance across the mobility ecosystem.
We actively support nine Employee Resource Groups (ERGs), including our newly established LIFE ERG, which champion communities within our workforce. These ERGs emphasize development, community, growth, and wellness, and in 2024, they have been instrumental in fostering a culture of belonging by providing multicultural learning opportunities that enrich our collective experience.
Our dedication to development and inclusion is further exemplified by the approximately 3,000 attendees at our monthly learning events. We actively support nine Employee Resource Groups (ERGs). These ERGs emphasize community and wellness, and in 2025, they have been instrumental in fostering a culture of belonging by providing multicultural learning opportunities that enrich our collective experience.
Given the relatively short delivery periods that are characteristic of most of our products, we believe that our backlog is indicative of short-term sales performance but not necessarily a reliable indicator of medium or long-term sales performance.
Given the relatively short delivery periods that are characteristic of most of our products, we believe that our backlog is indicative of short-term sales performance but not necessarily a reliable indicator of medium or long-term sales performance. 5 Table of Contents Human Capital Resources The Company’s key human capital management objectives are to attract, motivate, retain and develop the highest quality talent, united by VBS and a common culture in pursuit of continuous improvement.
Our research and development, manufacturing, sales, distribution, service and administration operations are located in approximately 25 countries primarily across North America, Asia Pacific, Europe and Latin America.
Our research and development, manufacturing, sales, distribution, service and administration operations are located in approximately 25 countries primarily across North America, Asia Pacific, Europe and Latin America. Guided by our shared purpose to mobilize the future and create a better world, we embrace a culture of continuous improvement and innovation through the Vontier Business System (“VBS”).
Government Contracts Although the substantial majority of our revenue in 2024 was from customers other than governmental entities, we have agreements relating to the sale of products to government entities. As a result, we are subject to various statutes and regulations that apply to companies doing business with governments and government-owned entities.
As a result, we are subject to various statutes and regulations that apply to companies doing business with governments and government-owned entities. For a discussion of risks related to government contracting requirements, please refer to “Item 1A.
Our Vontier Cares volunteers have made a significant impact in their communities throughout the year and around the globe. • Safety. The Company has received ongoing recognition for its exceptional safety programs, notably being awarded the British Safety Council’s ‘International Safety Award 2024’ with Distinction. Our comprehensive safety initiatives emphasize the health and wellbeing of employees in all workplace settings.
Our Vontier Cares volunteers have made a significant impact in their communities throughout the year and around the globe. • Safety. The Company is proud to be recognized as best in class within our industry sector for safety excellence, earning the British Safety Council’s International Safety Award 2025 with Distinction.
During 2024, the normalizing of supply chain conditions we experienced during 2023 continued, with costs and lead times generally returning to historical levels during the year. For a further discussion of risks related to the materials and components required for our operations, please refer to “Item 1A.
In response, certain countries announced reciprocal tariffs on imports from the U.S. We have actively managed our tariff exposure by optimizing our supply chain, including reducing our exposure to certain high tariff countries. For a further discussion of risks related to the materials and components required for our operations, please refer to “Item 1A.
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We are guided by our shared purpose to mobilize the future to create a better world and are united by a culture of continuous improvement and bias for actions that embody the Vontier Business System (“VBS”).
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By rigorously applying our proprietary growth, lean, and leadership tools, we consistently enhance performance across innovation, product development, supply chain, sales, marketing and leadership. Our commitment to VBS drives long-term shareholder value by fueling customer satisfaction, profitability and strategic growth through innovation and disciplined acquisitions.
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Through rigorous application of our proprietary VBS set of growth, lean, and leadership tools and processes, we continuously improve business performance in the critical areas of innovation, product development and commercialization, global supply chain, sales and marketing and leadership development.
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To continue enhancing our workplace culture, in 2025, we launched an enterprise-wide mentorship initiative aimed at building employee capability, expanding talent networks and driving a culture of learning, with over 400 employees engaging in the program.
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Our commitment to VBS and goal of creating long-term shareholder value has enabled us to drive customer satisfaction and profitability through innovation, growth and disciplined acquisitions to execute our strategy and expand our portfolio into new and attractive markets.
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Furthermore, we launched two new foundational leadership programs, available to people leaders at all levels within Vontier to drive leadership capability and equip leaders to drive a culture of development and inclusion. Additionally, our Executive Sponsorship Program continued to provide guidance and support to emerging leaders, helping them navigate their career paths and achieve their professional aspirations.
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The Company’s Global Traffic Technologies and Coats businesses, which were divested during April 2023 and January 2024, respectively, are presented in Other for periods prior to the divestitures. Mobility Technologies Mobility Technologies provides digitally enabled equipment and operating software solutions to drive automation, productivity and compliance across the mobility ecosystem.
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This accolade reflects our unwavering commitment to creating a workplace where health and wellbeing are prioritized at every level. Our comprehensive safety programs go beyond compliance, fostering a proactive culture through proven risk control practices, active employee engagement, and continuous improvement. We conduct regular evaluations to ensure effectiveness and adaptability, supported by ISO 45001 certified management systems.
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Mobility Technologies serves major end markets with tailored solutions for customers based on their unique needs. 3 Table of Contents Invenco by GVR serves convenience retail stores and energy retailing providers globally.
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In addition, we track progress using performance indicators focused on prevention and resilience, enabling us to maintain world class safety standards across all operations. Government Contracts Although the substantial majority of our revenue in 2025 was from customers other than governmental entities, we have agreements relating to the sale of products to government entities.
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Research and Development We conduct research and development activities for the purpose of developing new products, enhancing the functionality, effectiveness, ease of use and reliability of our existing products and expanding the applications for which uses of our products are appropriate.
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The manner in which our products and services are sold outside the United States differs by business and by region.
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Human Capital Resources The Company’s key human capital management objectives are to attract, motivate, retain and develop the highest quality talent, united by VBS and a common culture in pursuit of continuous improvement.
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In 2024, we launched a new employee resource group called LIFE (Lifestyle Improvements for Everyone) that focuses on empowering employees and providing resources to achieve wellness by fostering a balanced approach to physical, mental, social, and financial wellbeing.
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This commitment is exemplified by the approximately 4,500 learners who have completed training in our newly launched peer-to-peer learning program, promoting a growth mindset that flows throughout our enterprise. To enhance our workplace culture, we have launched a Leadership Program aimed at building trust, driving business results, and inspiring careers.
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This program equips leaders with the tools to empower their teams, creating an environment where everyone can thrive. Additionally, our Executive Sponsorship Program provides guidance and support to emerging leaders, helping them navigate their career paths and achieve their professional aspirations.
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Furthermore, high-potential leaders completed an intensive six-week “Communicating with Impact” training, significantly enhancing their communication skills and enabling them to make a greater impact. Our dedication to inclusion is further exemplified by the approximately 2,000 attendees at our monthly learning events.
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To elevate our leadership capabilities, we have successfully implemented a comprehensive program with the goal of empowering over 200 learners to develop their leadership voice and influence within the organization in order to create positive impact. We also introduced seven new learning opportunities. Our CEO took two pledges: the CEO Action for Diversity and Inclusion and The Valuable 500.
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We implement established best practices for risk control, combined with active employee participation, to foster a culture that goes beyond mere compliance, with regular evaluations in place.
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We utilize systematic management systems that are either certified to, or in the process of obtaining the internationally recognized ISO 45001 management system certification, along with performance indicators that are focused on proactive measures to assess our progress.
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These are not the only regulations that our businesses must comply with. For a description of the risks related to the regulations that our businesses are subject to, please refer to “Item 1A.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe rely on information technology systems, some of which are managed by third parties and some of which are managed on a decentralized, independent basis by our operating companies, to process, transmit and store electronic information (including sensitive data such as confidential business information and personally identifiable data relating to employees, customers, customer’s employees and end users and other business partners), and to manage or support a variety of critical business processes and activities (such as receiving and fulfilling orders, billing, collecting and making payments, shipping products, providing services and support to customers and fulfilling contractual obligations).
Biggest changeWe rely on information technology systems, some of which are managed by third parties or on an independent basis by our operating companies, to process, transmit and store electronic information, including personal data, and to manage or support a variety of critical business processes and activities.
Slower global economic growth, actual or anticipated default on sovereign debt, changes in global trade policies, volatility in the currency and credit markets, high levels of unemployment or underemployment, inflation or deflation, supply interruptions, reduced levels of capital expenditures, changes in government fiscal and monetary policies, government deficit reduction and budget negotiation dynamics, sequestration, other austerity measures, political and social instability, natural disasters, terrorist attacks, and other challenges that affect the global economy adversely affect us and our distributors, customers and suppliers, including having the effect of: • reducing demand for our products, software and services, limiting the financing available to our customers and suppliers, increasing order cancellations and resulting in longer sales cycles and slower adoption of new technologies; • increasing the difficulty in collecting accounts receivable and the risk of excess and obsolete inventories; • increasing price competition in our served markets; • supply interruptions, which could disrupt our ability to produce our products; • increasing the risk of impairment of goodwill and other long-lived assets, and the risk that we may not be able to fully recover the value of other assets such as real estate and tax assets; • increasing the risk that counterparties to our contractual arrangements will become insolvent or otherwise unable to fulfill their contractual obligations which, in addition to increasing the risks identified above, could result in preference actions against us; and • increasing the risk of credit defaults under the extensions of credit that we provide in our Repair Solutions segment.
Slower global economic growth, actual or anticipated default on sovereign debt, changes in global trade policies, volatility in the currency and credit markets, high levels of unemployment or underemployment, inflation or deflation, supply interruptions, reduced levels of capital expenditures, changes in government fiscal and monetary policies, government deficit reduction and budget negotiation dynamics, sequestration, other austerity measures, political and social instability, natural disasters, terrorist attacks, and other challenges that affect the global economy adversely affect us and our distributors, customers and suppliers, including having the effect of: 11 Table of Contents • reducing demand for our products, software and services, limiting the financing available to our customers and suppliers, increasing order cancellations and resulting in longer sales cycles and slower adoption of new technologies; • increasing the difficulty in collecting accounts receivable and the risk of excess and obsolete inventories; • increasing price competition in our served markets; • supply interruptions, which could disrupt our ability to produce our products; • increasing the risk of impairment of goodwill and other long-lived assets, and the risk that we may not be able to fully recover the value of other assets such as real estate and tax assets; • increasing the risk that counterparties to our contractual arrangements will become insolvent or otherwise unable to fulfill their contractual obligations which, in addition to increasing the risks identified above, could result in preference actions against us; and • increasing the risk of credit defaults under the extensions of credit that we provide in our Repair Solutions segment.
These acquisitions, investments, joint ventures and strategic relationships involve a number of financial, accounting, managerial, operational, legal, compliance and other risks and challenges, including the following, any of which could adversely affect our business and our financial statements: • any business, technology, service or product that we acquire or invest in could under-perform relative to our expectations and the price that we paid for it, or not perform in accordance with our anticipated timetable, or we could fail to operate any such business profitably; • we may incur or assume significant debt in connection with our acquisitions, investments, joint ventures or strategic relationships, which could also cause a deterioration of our credit ratings, result in increased borrowing costs and interest expense and diminish our future access to the capital markets; • acquisitions, investments, joint ventures or strategic relationships could cause our financial results to differ from our own or the investment community’s expectations in any given period, or over the long-term; • pre-closing and post-closing earnings charges could adversely impact operating results in any given period, and the impact may be substantially different from period to period; • acquisitions, investments, joint ventures or strategic relationships could create demands on our management, operational resources and financial and internal control systems that we are unable to effectively address; • we may be unable to achieve cost savings or other synergies anticipated in connection with an acquisition, investment, joint venture or strategic relationship; • we may assume unknown liabilities, known contingent liabilities that become realized, known liabilities that prove greater than anticipated, internal control deficiencies or exposure to regulatory sanctions resulting from the acquired company’s or investee’s activities.
These acquisitions, investments, joint ventures and strategic 10 Table of Contents relationships involve a number of financial, accounting, managerial, operational, legal, compliance and other risks and challenges, including the following, any of which could adversely affect our business and our financial statements: • any business, technology, service or product that we acquire or invest in could under-perform relative to our expectations and the price that we paid for it, or not perform in accordance with our anticipated timetable, or we could fail to operate any such business profitably; • we may incur or assume significant debt in connection with our acquisitions, investments, joint ventures or strategic relationships, which could also cause a deterioration of our credit ratings, result in increased borrowing costs and interest expense and diminish our future access to the capital markets; • acquisitions, investments, joint ventures or strategic relationships could cause our financial results to differ from our own or the investment community’s expectations in any given period, or over the long-term; • pre-closing and post-closing earnings charges could adversely impact operating results in any given period, and the impact may be substantially different from period to period; • acquisitions, investments, joint ventures or strategic relationships could create demands on our management, operational resources and financial and internal control systems that we are unable to effectively address; • we may be unable to achieve cost savings or other synergies anticipated in connection with an acquisition, investment, joint venture or strategic relationship; • we may assume unknown liabilities, known contingent liabilities that become realized, known liabilities that prove greater than anticipated, internal control deficiencies or exposure to regulatory sanctions resulting from the acquired company’s or investee’s activities.
Our global business (and particularly our business in high-growth markets) is subject to risks that are customarily encountered in non-U.S. operations, including: • interruption in the transportation of materials to us and finished goods to our customers; • differences in terms of sale, including payment terms; • local product preferences and product requirements; • changes in a country’s or region’s political or economic conditions, including changes in a country’s relationship with the U.S.; • trade protection measures, embargoes and import or export restrictions and requirements; • unexpected changes in laws or regulatory requirements, including changes in tax laws; • capital controls and limitations on ownership and on repatriation of earnings and cash; • epidemics, pandemics or other public health crises, that adversely impact travel, production or demand; • the potential for nationalization of enterprises; • limitations on legal rights and our ability to enforce such rights; • difficulty in staffing and managing widespread operations; • differing labor regulations; • difficulties in implementing restructuring actions on a timely or comprehensive basis; 15 Table of Contents • differing protection of intellectual property; and • greater uncertainty, risk, expense and delay in commercializing products in certain foreign jurisdictions, including with respect to product and other regulatory approvals.
Our global business (and particularly our business in high-growth markets) is subject to risks that are customarily encountered in non-U.S. operations, including: • interruption in the transportation of materials to us and finished goods to our customers; • differences in terms of sale, including payment terms; • local product preferences and product requirements; • changes in a country’s or region’s political or economic conditions, including changes in a country’s relationship with the U.S.; • trade protection measures (including tariffs), embargoes and import or export restrictions and requirements; • unexpected changes in laws or regulatory requirements, including changes in tax laws; • capital controls and limitations on ownership and on repatriation of earnings and cash; • epidemics, pandemics or other public health crises, that adversely impact travel, production or demand; • the potential for nationalization of enterprises; • limitations on legal rights and our ability to enforce such rights; • difficulty in staffing and managing widespread operations; • differing labor regulations; • difficulties in implementing restructuring actions on a timely or comprehensive basis; • differing protection of intellectual property; and • greater uncertainty, risk, expense and delay in commercializing products in certain foreign jurisdictions, including with respect to product and other regulatory approvals.
If regulatory authorities or courts determine that our franchisees are not independent contractors, we may be required to withhold and pay certain taxes in respect of such franchisees, may be liable for unpaid past taxes, unpaid wages and potential penalties, and may be subject to wage and hour laws and requirements (such as those pertaining to minimum wage and overtime), claims for employee benefits, social security contributions, and workers’ compensation and unemployment insurance, which could have an adverse effect on our business and financial position.
If regulatory authorities or courts determine that our franchisees are not independent contractors, we may be required to withhold and pay certain taxes in respect of such franchisees, may be liable for unpaid past taxes, unpaid wages and potential penalties, and may be subject to wage and hour laws and requirements (such as those pertaining to minimum wage and overtime), claims for employee benefits, social 16 Table of Contents security contributions, and workers’ compensation and unemployment insurance, which could have an adverse effect on our business and financial position.
Our income has in the past and could in the future be adversely impacted if we are unable to adjust our manufacturing capacity, purchases required for our manufacturing activities and supply chain management to reflect any supply chain disruptions or changes in customer demand and market fluctuations, including those caused by a pandemic, natural disaster or other catastrophe, increases in demand outpacing supply chain capabilities, labor shortages, seasonality or cyclicality.
Our income has in the past and could in the future be adversely impacted if we are unable to adjust our manufacturing capacity, purchases required for our manufacturing activities and supply chain management to reflect any supply chain disruptions or changes in customer demand and market fluctuations, including those caused by a pandemic, natural disaster or other catastrophe, increases in demand outpacing supply chain capabilities, labor shortages, changes in governmental regulations and policies, seasonality or cyclicality.
Risks Related to Our Accounting and Tax Matters We may be required to recognize impairment charges for our goodwill and other intangible assets. As of December 31, 2024, the net carrying value of our goodwill and other intangible assets totaled approximately $2.2 billion.
Risks Related to Our Accounting and Tax Matters We may be required to recognize impairment charges for our goodwill and other intangible assets. As of December 31, 2025, the net carrying value of our goodwill and other intangible assets totaled approximately $2.2 billion.
Even if we successfully defend against claims of infringement or misappropriation, we may incur significant costs and diversion of management attention and resources, which could adversely affect our business and financial statements. 14 Table of Contents If we suffer a loss to our facilities, supply chains, distribution systems or information technology systems due to catastrophe or other events, our operations could be seriously harmed.
Even if we successfully defend against claims of infringement or misappropriation, we may incur significant costs and diversion of management attention and resources, which could adversely affect our business and financial statements. If we suffer a loss to our facilities, supply chains, distribution systems or information technology systems due to catastrophe or other events, our operations could be seriously harmed.
In addition, compliance with the varying data privacy regulations across the United States and around the world, including the EU Data Act and artificial intelligence regulations in the United States and Europe, has required significant expenditures and may require additional expenditures, and may require further changes in our products or business models that increase competition or reduce revenue. 18 Table of Contents Our operations, products and services expose us to the risk of environmental, health and safety liabilities, costs and violations that could adversely affect our business, reputation and financial statements.
In addition, compliance with the varying data privacy regulations across the United States and around the world and artificial intelligence (“AI”) regulations in the United States and Europe, has required significant expenditures and may require additional expenditures, and may require further changes in our products or business models that increase competition or reduce revenue. 18 Table of Contents Our operations, products and services expose us to the risk of environmental, health and safety liabilities, costs and violations that could adversely affect our business, reputation and financial statements.
Our failure to compete effectively and/or pricing pressures resulting from competition may adversely impact our financial statements, and our expansion into new markets may result in greater-than-expected risks, liabilities and expenses. 13 Table of Contents Our reputation, ability to do business and financial statements may be impaired by improper conduct by any of our employees, agents or business partners.
Our failure to compete effectively and/or pricing pressures resulting from competition may adversely impact our financial statements, and our expansion into new markets may result in greater-than-expected risks, liabilities and expenses. Our reputation, ability to do business and financial statements may be impaired by improper conduct by any of our employees, agents or business partners.
Compliance with the various import laws that apply to our businesses can restrict our access to, and increase the cost of obtaining, certain products and at times can interrupt our supply of imported inventory; 16 Table of Contents • We also have agreements to sell products and services to government entities and are subject to various statutes and regulations that apply to companies doing business with government entities.
Compliance with the various import laws that apply to our businesses can restrict our access to, and increase the cost of obtaining, certain products and at times can interrupt our supply of imported inventory; • We also have agreements to sell products and services to government entities and are subject to various statutes and regulations that apply to companies doing business with government entities.
Furthermore, as our customer base as a whole progresses or completes the implementation of such regulations or standards, the incremental demand generated by the initial adoption thereof will abate and our revenue will decline incrementally as demand drops, which may have an adverse impact on our financial results.
Furthermore, as our customer base as a 15 Table of Contents whole progresses or completes the implementation of such regulations or standards, the incremental demand generated by the initial adoption thereof will abate and our revenue will decline incrementally as demand drops, which may have an adverse impact on our financial results.
For additional information regarding these risks, please refer to the section entitled “Business—Regulatory Matters.” 17 Table of Contents We are party to asbestos-related product litigation that could adversely affect our financial condition, results of operations and cash flows.
For additional information regarding these risks, please refer to the section entitled “Business—Regulatory Matters.” We are party to asbestos-related product litigation that could adversely affect our financial condition, results of operations and cash flows.
Our success also depends on our ability to attract, develop and retain a talented employee base. Work stoppages, union and works council campaigns and other labor disputes could adversely impact our productivity and results of operations . Certain of our U.S. and non-U.S. employees are subject to collective labor arrangements.
Our success also depends on our ability to attract, develop and retain a talented employee base. Work stoppages, union and works council campaigns and other labor disputes could adversely impact our productivity and financial statements . Certain of our U.S. and non-U.S. employees are subject to collective labor arrangements.
We continually assess the strategic fit of our existing businesses and may divest, spin-off, split-off or otherwise dispose of businesses that are deemed not to fit with our strategic plan or are not achieving the desired return on investment. For example, during the year ended December 31, 2024, we divested our Coats business in an all-cash transaction.
We continually assess the strategic fit of our existing businesses and may divest, spin-off, split-off or otherwise dispose of businesses that are deemed not to fit with our strategic plan or are not achieving the desired return on investment. For example, during January 2024, we divested our Coats business in an all-cash transaction.
Third parties may claim that we are infringing or misappropriating their intellectual property rights and we could suffer significant litigation expenses, losses or licensing expenses or be prevented from selling products or services . From time to time, we receive notices from third parties alleging intellectual property infringement or misappropriation.
Third parties have in the past, and may in the future, claim that we are infringing or misappropriating their intellectual property rights and we could suffer significant litigation expenses, losses or licensing expenses or be prevented from selling products or services . From time to time, we receive notices from third parties alleging intellectual property infringement or misappropriation.
Failure to comply with the requirements of EU General Data Protection Regulation that became effective in May 2018 (“GDPR”) and the applicable national data protection laws of the EU member states may result in fines of up to €20 million or up to 4% of the total worldwide annual turnover of the preceding financial year, whichever is higher, and other administrative penalties.
For example, failure to comply with the requirements of EU General Data Protection Regulation (“GDPR”) and the applicable national data protection laws of the EU member states may result in fines of up to €20 million or up to 4% of the total worldwide annual turnover of the preceding financial year, whichever is higher, and other administrative penalties.
See the section entitled “Liquidity and Capital Resources.” This debt could have important, adverse consequences to us and our investors, including: • requiring a substantial portion of our cash flow from operations be used to make interest payments; • making it more difficult to satisfy other obligations; • increasing the risk of a future credit ratings downgrade of our debt, which could increase future debt costs and limit the future availability of debt financing; • increasing our vulnerability to general adverse economic and industry conditions; • reducing the cash flow available to fund capital expenditures and other corporate purposes and to grow our businesses; • limiting our flexibility in planning for, or reacting to, changes in our businesses and industries; and • limiting our ability to borrow additional funds as needed or take advantage of business opportunities as they arise, pay cash dividends or repurchase shares of our common stock.
See the section entitled “Liquidity and Capital Resources.” This debt could have important, adverse consequences to us and our investors, including: • requiring a substantial portion of our cash flow from operations be used to make interest payments; • making it more difficult to satisfy other obligations; • increasing the risk of a future credit ratings downgrade of our debt, which could increase future debt costs and limit the future availability of debt financing; • increasing our vulnerability to general adverse economic and industry conditions; • reducing the cash flow available to fund capital expenditures and other corporate purposes and to grow our businesses; • limiting our flexibility in planning for, or reacting to, changes in our businesses and industries; and • limiting our ability to borrow additional funds as needed or take advantage of business opportunities as they arise, pay cash dividends or repurchase shares of our common stock. 9 Table of Contents The instruments governing the debt financing contain restrictive covenants that will limit our ability to engage in activities that may be in our long-term interest.
This indebtedness could adversely affect our businesses and our ability to meet our obligations and pay dividends. As of December 31, 2024, we have outstanding indebtedness of approximately $2.2 billion, and have the ability to incur an additional $750.0 million of indebtedness under the Revolving Credit Facility.
As of December 31, 2025, we have outstanding indebtedness of approximately $2.1 billion and the ability to incur an additional $750.0 million of indebtedness under the Revolving Credit Facility and in the future we may incur additional indebtedness. This indebtedness could adversely affect our businesses and our ability to meet our obligations and pay dividends.
Since our growth strategy depends in part on our ability to further penetrate markets outside the U.S. and increase the localization of our products and services, we expect to continue to increase our sales and presence outside the U.S., particularly in high-growth markets.
Since our growth strategy depends in part on our ability to further penetrate markets outside the U.S. and increase the localization of our products and services, we expect to continue to increase our 14 Table of Contents sales and presence outside the U.S.
In 2024, approximately 32% of our sales were derived from customers outside the U.S. In addition, many of our manufacturing operations, suppliers and employees are located outside the U.S.
In 2025, approximately 31% of our sales were derived from customers outside the U.S. In addition, many of our manufacturing operations, suppliers and employees are located outside the U.S.
While to date none of these incidents have been material to our operations, any of the attacks, breaches or other disruptions or damage described above could interrupt our operations, delay production and shipments, result in theft of our and our customers’ intellectual property and trade secrets, damage customer and business partner relationships and our reputation or result in defective products or services, legal claims and proceedings, liability and penalties under privacy laws and increased costs for security and remediation, each of which could adversely affect our business and financial statements.
The attacks, breaches or other disruptions or damage described above could interrupt our operations, delay production and shipments, result in theft of our and our customers’ intellectual property and trade secrets, damage customer and business partner relationships and our reputation or result in defective products or services, legal claims and proceedings, liability and penalties under privacy laws and increased costs for security and remediation, each of which could adversely affect our business and financial statements.
Ongoing or new trade wars or other governmental action related to tariffs or international trade agreements or policies could reduce demand for our products and services, increase our costs, reduce our profitability, adversely impact our supply chain or otherwise have a material adverse effect on our business and results of operations.
Ongoing or new trade wars or other governmental action related to tariffs or international trade agreements or policies or our ability to effectively mitigate the financial impact of tariffs could reduce demand for our products and services, increase our costs, reduce our profitability, adversely impact our supply chain or otherwise have a material adverse effect on our business and financial statements.
However, because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and may be difficult to detect, we may be unable to anticipate these techniques or implement adequate preventive measures.
While we have implemented security measures, the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and may be difficult to detect, and we may be unable to anticipate these techniques or implement adequate preventive measures.
For example, during the fiscal year ended December 31, 2024, the closing price of our common stock ranged from $31.95 to $45.36 per share. Furthermore, stock markets have experienced price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies.
For example, during the fiscal year ended December 31, 2025, the closing price of our common stock ranged from $28.04 to $43.71 per share. Furthermore, stock markets have experienced price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies.
In addition, the consolidation of distributors and customers in certain of our served industries could adversely impact our profitability. Our financial results are subject to fluctuations in the cost and availability of commodities that we use in our operations.
In addition, the consolidation of distributors and customers in certain of our served industries could adversely affect our financial statements. 12 Table of Contents Our financial results are subject to fluctuations in the cost and availability of commodities that we use in our operations.
Depending on the nature of the information compromised, we may also have obligations to notify consumers and/or employees as well as regulatory agencies about the incident, and we may need to provide some form of remedy, such as a subscription to a credit monitoring service, for the individuals affected by the incident.
Depending on the nature of the information compromised, we may have obligations to notify consumers and/or employees as well as regulatory agencies about the incident, and we may need to provide some form of remedy, such as credit monitoring services.
If we are not able to realize the value of these assets, we may be required to incur impairment charges; and • we may have interests that diverge from those of our joint venture partners or other strategic partners and we may not be able to direct the management and operations of the joint venture or other strategic relationship in the manner we believe is most appropriate, exposing us to additional risk. 11 Table of Contents Divestitures or other dispositions could negatively impact our business, and contingent liabilities from businesses that we or our predecessors have sold could adversely affect our financial statements.
If we are not able to realize the value of these assets, we may be required to incur impairment charges; and • we may have interests that diverge from those of our joint venture partners or other strategic partners and we may not be able to direct the management and operations of the joint venture or other strategic relationship in the manner we believe is most appropriate, exposing us to additional risk.
In addition, delays in implementing planned restructuring activities or other productivity improvements, unexpected costs or failure to meet targeted improvements may diminish the operational or financial benefits we realize from such actions.
In addition, delays in implementing planned restructuring activities or other productivity improvements, unexpected costs or failure to meet targeted improvements may diminish the operational or financial benefits we realize from such actions. Any of the circumstances described above could adversely impact our business and financial statements.
These systems, products and services (including those we acquire through business acquisitions) may be damaged, disrupted or shut down due to attacks by computer hackers, nation states, cyber-criminals, computer viruses, employee error or malfeasance, power outages, hardware failures, telecommunication or utility failures, catastrophes or other unforeseen events, and in any such circumstances our system redundancy and other disaster recovery planning may be ineffective or inadequate.
These systems, products and services may be damaged, disrupted or shut down due to cybersecurity incidents and data breaches, including attacks by computer hackers, nation states, cyber-criminals, computer viruses, employee error or malfeasance, denial-of-service attacks, ransomware attacks, business email compromises, computer malware, malicious codes, viruses, breakdown, wrongful intrusions, social engineering (including phishing attacks), power outages, hardware failures, telecommunication or utility failures, catastrophes or other unforeseen events, and in any such circumstances our system redundancy and other disaster recovery planning may be ineffective or inadequate.
We derive a significant portion of our revenues from international sales, which makes us especially vulnerable to increased tariffs. Changes in U.S. trade policy have created ongoing turmoil in international trade relations, and it is unclear what future actions governments will or will not take with respect to tariffs or other international trade agreements and policies.
Changes in U.S. trade policy have created ongoing turmoil in international trade relations, and it is unclear what future actions governments will or will not take with respect to tariffs or other international trade agreements and policies.
Any or all of these problems have in the past and could in the future result in the loss of customers, provide an opportunity for competing products to gain market acceptance and otherwise adversely affect our profitability. 8 Table of Contents Our growth depends in part on the timely development and commercialization, and customer acceptance, of new and enhanced products and services based on technological innovation.
Any or all of these problems have in the past, and could in the future, result in the loss of customers, provide an opportunity for competing products to gain market acceptance and otherwise adversely affect our profitability.
In the event that we do not receive distributions from our subsidiaries, we may be unable to make required principal and interest payments on our indebtedness. 10 Table of Contents Our inability to generate sufficient cash flows to satisfy our debt obligations, or to refinance our indebtedness on commercially reasonable terms or at all, may materially adversely affect our business, financial condition and results of operations and our ability to satisfy our obligations under our indebtedness or pay dividends on our common stock.
Our inability to generate sufficient cash flows to satisfy our debt obligations, or to refinance our indebtedness on commercially reasonable terms or at all, may materially adversely affect our business, financial condition and results of operations and our ability to satisfy our obligations under our indebtedness or pay dividends on our common stock.
Furthermore, if we fail to accurately predict future customer needs and preferences or fail to produce viable technologies, we may invest heavily in research and development of products and services that do not lead to significant sales, which would adversely affect our profitability.
In addition, technological advances in alternative power systems may reduce the frequency of required maintenance for vehicles, resulting in lower demand for our vehicle repair tools. 8 Table of Contents Furthermore, if we fail to accurately predict future customer needs and preferences or fail to produce viable technologies, we may invest heavily in research and development of products and services that do not lead to significant sales, which would adversely affect our profitability.
If growth in the global economy or in any of the markets we serve slows for a significant period, if there is significant deterioration in the global economy or such markets, if there is instability in global capital and credit markets, or if improvements in the global economy do not benefit the markets we serve, our business and financial statements could be adversely affected. 12 Table of Contents Changes in U.S. trade policy, including changes to existing trade agreements and any resulting changes in international trade relations, may have a material adverse effect on us.
If growth in the global economy or in any of the markets we serve slows for a significant period, if there is significant deterioration in the global economy or such markets, if there is instability in global capital and credit markets, or if improvements in the global economy do not benefit the markets we serve, our business and financial statements could be adversely affected.
In some circumstances, enforcement may not be available to us because an infringer has a dominant intellectual property position or for other business reasons, or countries may require compulsory licensing of our intellectual property. We also rely on nondisclosure and noncompetition agreements with employees, consultants and other parties to protect, in part, trade secrets and other proprietary rights.
In some circumstances, enforcement may not be available to us because an infringer has a dominant intellectual property position or for other business reasons, or countries may require compulsory licensing of our intellectual property.
The U.S. may continue to alter its approach to international trade, which may impact existing bilateral or multi-lateral trade agreements and treaties with foreign countries. The U.S. has imposed tariffs on certain foreign goods and may increase tariffs or impose new ones, and certain foreign governments have retaliated and may continue to do so.
The U.S. may continue to alter its approach to international trade, which may impact existing bilateral or multi-lateral trade agreements and treaties with foreign countries.
We generally sell our products and services in an industry that is characterized by rapid technological changes, frequent new product introductions and changing industry standards. If we do not develop innovative new and enhanced products and services on a timely basis, our offerings will become obsolete over time and our competitive position and financial statements will suffer.
If we do not develop innovative new and enhanced products and services on a timely basis, our offerings will become obsolete over time and our competitive position and financial statements will suffer.
Several other countries such as China and Russia have passed, and other countries are considering passing, laws that require personal data relating to their citizens to be maintained on local servers and impose additional data transfer restrictions.
In addition, certain other countries such as China and Russia have passed, and other countries are considering passing, laws that impose additional data transfer restrictions with respect to the personal data of their citizens.
Any of the circumstances described above could adversely impact our business and financial statements. 9 Table of Contents As of December 31, 2024, we have outstanding indebtedness of approximately $2.2 billion and the ability to incur an additional $750.0 million of indebtedness under the Revolving Credit Facility and in the future we may incur additional indebtedness.
As of December 31, 2025, we have outstanding indebtedness of approximately $2.1 billion, and have the ability to incur an additional $750.0 million of indebtedness under the Revolving Credit Facility.
In addition, security breaches of our systems (or the systems of our customers, suppliers or other business partners) could result in the misappropriation, destruction or unauthorized disclosure of confidential information or personal data belonging to us or to our employees, partners, customers or suppliers.
In addition, cybersecurity incidents and data breaches (including cybersecurity incidents or data breaches that impact the systems of our customers, suppliers or other business partners) could result in the misappropriation, destruction or unauthorized disclosure of confidential information or personal data belonging to us or to our employees, partners, customers or suppliers. 17 Table of Contents Like many multinational corporations, our information technology systems and infrastructure, and the information technology systems and infrastructure of our third party vendors, have been subject to threats and cybersecurity incidents.
Removed
In addition, technological advances in alternative power systems may reduce the frequency of required maintenance for vehicles, resulting in lower demand for our vehicle repair tools.
Added
Our growth depends in part on the timely development and commercialization, and customer acceptance, of new and enhanced products and services based on technological innovation. We generally sell our products and services in an industry that is characterized by rapid technological changes, frequent new product introductions and changing industry standards.
Removed
The instruments governing the debt financing contain restrictive covenants that will limit our ability to engage in activities that may be in our long-term interest.
Added
In the event that we do not receive distributions from our subsidiaries, we may be unable to make required principal and interest payments on our indebtedness.
Removed
During his campaign, President Trump expressed various intentions to impose tariffs on imports. It is unclear what action the new presidential administration or Congress will take with respect to these proposals.
Added
Divestitures or other dispositions could negatively impact our business, and contingent liabilities from businesses that we or our predecessors have sold could adversely affect our financial statements.
Removed
Like many multinational corporations, our information technology systems have been subject to computer viruses, malicious codes, unauthorized access and other cyber-attacks and we expect to be subject to similar incidents in the future as such attacks become more sophisticated and frequent.
Added
Changes in U.S. trade policy, including changes to existing trade agreements and any resulting changes in international trade relations, may have a material adverse effect on us. In 2025, the U.S. government announced the imposition of various tariffs including additional country-specific tariffs on all imports into the U.S. In response, certain countries announced reciprocal tariffs on imports from the U.S.
Removed
We have programs in place that are intended to detect, contain, and respond to data security incidents and that provide at least annual employee awareness training regarding phishing, malware, and other cyber risks.
Added
While the U.S. has reached trade agreements with certain countries, tariffs on imports from other countries and other reciprocal tariffs either remain in effect or have been temporarily paused, and as such, significant uncertainty around future tariff policies remains.
Removed
If our security measures are breached or fail, unauthorized persons may be able to obtain access to or acquire personal or other confidential data.
Added
We have actively managed our tariff exposure and continue to diversify our supply chain to reduce our exposure to tariffs on imports into the United States, particularly from high-tariff countries.
Removed
If we are unable to maintain reliable information technology systems and appropriate controls with respect to global data privacy and security requirements and prevent data breaches, we may suffer adverse regulatory consequences, business consequences and litigation.
Added
We also rely on nondisclosure and 13 Table of Contents noncompetition agreements with employees, consultants and other parties to protect, in part, trade secrets and other proprietary rights.
Removed
The California Consumer Privacy Act, which came into effect in January 2020, has some of the same features as the GDPR, and has prompted several other states to follow with similar laws.
Added
If we experienced an actual or perceived cybersecurity incident or data breach, we may suffer adverse regulatory consequences, business consequences and be subject to litigation.
Added
Our contracts may not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability will be sufficient to protect us from liabilities, damages, or claims related to our privacy and data security obligations.
Added
Further, although we maintain cyber liability insurance, this insurance may not provide adequate coverage against potential liabilities related to any experienced cybersecurity incident or data breach. If we experience a cybersecurity incident or data breach, unauthorized persons may be able to obtain access to or acquire personal or other confidential data.
Added
We are subject to governmental regulation and other legal obligations, particularly related to privacy, data protection and information security, and our actual or perceived failure to comply with such obligations could harm our business. Compliance with such laws could also impair our efforts to maintain and expand our customer base and business lines, and thereby decrease our revenue.
Added
We may be required to modify our policies, procedures, and data processing measures in order to address requirements under these or other privacy, data protection, or cyber security regimes, and may face claims, litigation, investigations, or other proceedings regarding them and may incur related liabilities, expenses, costs, and operational losses.
Added
In the U.S. numerous states have passed comprehensive privacy and data security laws, such as the California Consumer Privacy Act, which impose similar (but not identical) obligations on covered businesses, as those created under the GDPR. Furthermore, the U.S. federal government and some U.S. states have passed privacy and cybersecurity laws governing specific sectors, technologies, or categories of personal data.
Added
Through executive and legislative action, the U.S. federal government has also taken steps to restrict data transactions involving persons affiliated with countries of concern such as China and Russia. For example, Executive Order 14117 on "Preventing Access to Americans' Bulk Sensitive Personal Data and U.S.
Added
Government-Related Data by Countries of Concern" as implemented by Department of Justice regulations issued in December 2024, prohibits data brokerage transactions involving certain sensitive personal data categories to countries of concern. The regulations also restrict certain investment agreements, employment agreements and vendor agreements involving such data and countries of concern, absent specified cybersecurity controls.
Added
Actual or alleged violations of these regulations may be punishable by criminal and/or civil sanctions. The evolving complexity of privacy and data security legislation in the U.S. may complicate our compliance efforts and further increase our risk of regulatory enforcement, penalties and litigation.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

1 edited+0 added−0 removed14 unchanged
Biggest changeThe ERM program is driven by Vontier’s Executive Risk Committee, which is led by the SVP, Chief Administrative Officer and comprised of business and functional leaders. Our Audit Committee oversees the ERM program and the Board of Directors have regular updates on topics that are identified through the RAP and overall risk management process.
Biggest changeThe ERM program is driven by Vontier’s Executive Risk Committee, which is led by the EVP, Chief Transformation and Operations Officer and comprised of business and functional leaders. Our Audit Committee oversees the ERM program and the Board of Directors have regular updates on topics that are identified through the RAP and overall risk management process.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed3 unchanged
Biggest changeITEM 2. PROPERTIES Our corporate headquarters are located in Raleigh, North Carolina in a facility that we lease. As of December 31, 2024, our facilities included approximately 25 significant facilities, which are used for manufacturing, distribution, warehousing, research and development, general administrative and/or sales functions.
Biggest changeITEM 2. PROPERTIES Our corporate headquarters are located in Raleigh, North Carolina in a facility that we lease. As of December 31, 2025, our facilities included approximately 25 significant facilities, which are used for manufacturing, distribution, warehousing, research and development, general administrative and/or sales functions.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

8 edited+1 added−0 removed3 unchanged
Biggest changeAga was the Executive Vice President and Chief Financial Officer of Cubic Corporation. He joined Cubic Corporation in July 2017 as Executive Vice President and assumed the role of CFO in October 2017. Prior to joining Cubic Corporation, Mr.
Biggest changeAga served as Senior Vice President and Chief Financial Officer of Harsco Corporation from August 2021 through August 2022. Prior to serving at Harsco Corporation, Mr. Aga was the Executive Vice President and Chief Financial Officer of Cubic Corporation. He joined Cubic Corporation in July 2017 as Executive Vice President and assumed the role of CFO in October 2017.
Rowen served as Vice President, Corporate Social Responsibility, Employment and Litigation of Fortive Corporation from January 2020 to August 2020, as Vice President, Labor & Employment and Litigation from January 2018 to January 2020, and as Vice President, Labor and Employment from January 2017 to January 2018 of Fortive Corporation. Prior to joining Fortive Corporation, Ms.
Prior to that, Ms. Rowen served as Vice President, Corporate Social Responsibility, Employment and Litigation of Fortive Corporation from January 2020 to August 2020, as Vice President, Labor & Employment and Litigation from January 2018 to January 2020, and as Vice President, Labor and Employment from January 2017 to January 2018 of Fortive Corporation. Prior to joining Fortive Corporation, Ms.
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 23 Table of Contents EXECUTIVE OFFICERS OF THE REGISTRANT Set forth below are the names, ages, positions and experience of our executive officers as of February 13, 2025. All of our executive officers hold office at the pleasure of our Board. Name Age Position Officer Since Mark D.
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 23 Table of Contents EXECUTIVE OFFICERS OF THE REGISTRANT Set forth below are the names, ages, positions and experience of our executive officers as of February 12, 2026. All of our executive officers hold office at the pleasure of our Board. Name Age Position Officer Since Mark D.
Aga served at AECOM, from June 2015 to July 2017, where he was Senior Vice President and Chief Financial Officer of their multi-billion-dollar Design and Consulting Services business in the Americas.
Prior to joining Cubic Corporation, Mr. Aga served at AECOM, from June 2015 to July 2017, where he was Senior Vice President and Chief Financial Officer of their multi-billion-dollar Design and Consulting Services business in the Americas.
Army officer and helicopter pilot, serving as a company commander of a helicopter unit. Anshooman Aga has served as our Senior Vice President, Chief Financial Officer since August 2022. Mr. Aga previously served as Senior Vice President and Chief Financial Officer of Harsco Corporation from August 2021 through August 2022. Prior to serving at Harsco Corporation, Mr.
Army officer and helicopter pilot, serving as a company commander of a helicopter unit. Anshooman Aga has served as our Executive Vice President, Chief Financial Officer since December 2025. Mr. Aga previously served as our Senior Vice President, Chief Financial Officer from August 2022 through December 2025. Prior to that, Mr.
He also held a series of financial leadership positions at Siemens, from July 2006 to May 2015, including Chief Financial Officer of the Energy Automation business based in Nuremburg, Germany, in addition to similar financial roles for Siemen’s Rail Electrification and TurboCare business units. Kathryn K. Rowen has served as our Senior Vice President, Chief Administrative Officer since January 2024.
He also held a series of financial leadership positions at Siemens, from July 2006 to May 2015, including Chief Financial Officer of the Energy Automation business based in Nuremburg, Germany, in addition to similar financial roles for Siemen’s Rail Electrification and TurboCare business units. Kathryn K.
She served as our Senior Vice President, Chief Legal and Sustainability Officer from June 2023 through January 2024, as our Senior Vice President, Chief Legal and Administrative Officer from January 2022 through June 2023 and as our Senior Vice President and General Counsel from September 2020 through January 2022. Prior to that, Ms.
Rowen previously served as our Senior Vice President, Chief Administrative Officer from January 2024 through December 2025, as our Senior Vice President, Chief Legal and Sustainability Officer from June 2023 through January 2024, as our Senior Vice President, Chief Legal and Administrative Officer from January 2022 through June 2023 and as our Senior Vice President and General Counsel from September 2020 through January 2022.
Morelli 61 President and Chief Executive Officer 2020 Anshooman Aga 49 Senior Vice President, Chief Financial Officer 2022 Kathryn K. Rowen 46 Senior Vice President, Chief Administrative Officer 2020 Mark D. Morelli has served as our President and Chief Executive Officer since January 2020. Mr.
Morelli 62 President and Chief Executive Officer 2020 Anshooman Aga 50 Executive Vice President, Chief Financial Officer 2022 Kathryn K. Rowen 47 Executive Vice President, Chief Transformation and Operations Officer 2020 Mark D. Morelli has served as our President and Chief Executive Officer since January 2020. Mr.
Added
Rowen has served as our Executive Vice President, Chief Transformation and Operations Officer since December 2025. Ms.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+0 added−3 removed2 unchanged
Biggest changeThe following table sets forth our share repurchase activity for the three months ended December 31, 2024: Period Total Number of Shares Purchased (in millions) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (in millions) Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs ($ in millions) September 28, 2024 to October 25, 2024 0.6 $ 34.12 0.6 $ 169.6 October 26, 2024 to November 22, 2024 (a) 0.9 38.66 0.9 135.7 November 23, 2024 to December 31, 2024 0.2 38.86 0.2 129.6 Total 1.7 1.7 (a) The average price paid per share under the share repurchase agreement included in the table above was determined using the volume-weighted average price of the Company’s common stock over the term of the agreed-upon trading period, less a discount.
Biggest changeThe following table sets forth our share repurchase activity for the three months ended December 31, 2025: Period Total Number of Shares Purchased (in millions) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (in millions) Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs ($ in millions) September 27, 2025 to October 24, 2025 0.5 $ 41.05 0.5 $ 374.0 October 25, 2025 to November 21, 2025 2.4 36.74 2.4 286.0 November 22, 2025 to December 31, 2025 0.5 35.75 0.5 267.4 Total 3.4 3.4 Recent Issuances of Unregistered Securities None. 25 Table of Contents Company Stock Performance The following graph shows a comparison from December 31, 2020 through December 31, 2025 of the cumulative return of our common stock, the S&P 500 Index and the S&P Industrials Index.
Under the share repurchase program, the Company may purchase shares of common stock from time to time in open market transactions, privately negotiated transactions, accelerated share repurchase programs, or by combinations of such methods, any of which may use pre-arranged trading plans that are designed to meet the requirements of Rule 10b5-1(c) of the Securities Exchange Act of 1934.
Under the share repurchase program, the Company may purchase shares of common stock from time to time in open market transactions, privately negotiated transactions, accelerated share repurchase programs, or by combinations of such methods, any of which may use prearranged trading plans that are designed to meet the requirements of Rule 10b5-1(c) of the Securities Exchange Act of 1934.
Issuer Purchases of Equity Securities On May 24, 2022, the Company’s Board of Directors approved a replenishment of the Company’s previously approved share repurchase program announced in May 2021, bringing the total amount authorized for future share repurchases to $500.0 million.
Issuer Purchases of Equity Securities On April 30, 2025, the Company’s Board of Directors approved a replenishment of the Company’s previously approved share repurchase program announced in May 2021 and replenished in May 2022, bringing the total amount authorized for future share repurchases to $500.0 million.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock trades on the New York Stock Exchange under the symbol VNT. As of February 10, 2025, there were 773 holders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock trades on the New York Stock Exchange under the symbol VNT. As of February 9, 2026, there were 714 holders of record of our common stock.
Removed
During the three months ended December 31, 2024, the Company entered into a share repurchase agreement with a third-party institution, whereupon the Company made a payment of $25.0 million.
Removed
At the end of an agreed-upon trading period during the three months ended December 31, 2024, the Company received 0.6 million of the Company’s shares at an average price per share of $39.57 under the share repurchase agreement.
Removed
Recent Issuances of Unregistered Securities None. 25 Table of Contents Company Stock Performance The following graph shows a comparison from October 8, 2020 (the date trading commenced on our common stock on the New York Stock Exchange) through December 31, 2024 of the cumulative return of our common stock, the S&P 500 Index and the S&P Industrials Index.

Item 7. Management's Discussion & Analysis

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

73 edited+21 added−17 removed57 unchanged
Biggest changeThe increase in segment operating profit margin was due to a 170 basis points increase from the net impact of our productivity initiatives that have reduced manufacturing, procurement and other costs and unfavorable product mix as compared to the prior year, offset by increased costs from inflationary pressures. 30 Table of Contents Corporate & Other Unallocated Costs Corporate & other unallocated costs consists of the following for the periods indicated: Year Ended December 31, ($ in millions) 2024 2023 Amortization of acquisition-related intangible assets $ (79.7) $ (81.2) Stock-based compensation expense (31.6) (31.5) Restructuring and other related charges (13.5) (25.2) Other unallocated expense (0.9) (1.2) Corporate costs (109.0) (109.9) Repair Solutions Capital Charge 43.9 41.7 Total corporate & other unallocated costs $ (190.8) $ (207.3) Corporate & other unallocated costs decreased $16.5 million, or 8.0%, during the year ended December 31, 2024, as compared to the prior year, due to an $11.7 million decrease in costs associated with restructuring activities.
Biggest changeThe increase in segment operating profit margin was due to an increase in volume, as further discussed above, and focus and prioritization process initiatives. 30 Table of Contents Corporate & Other Unallocated Costs Corporate & other unallocated costs consists of the following for the periods indicated: Year Ended December 31, ($ in millions) 2025 2024 Amortization of acquisition-related intangible assets $ (74.1) $ (79.7) Stock-based compensation expense (30.1) (31.6) Restructuring and other related charges (10.4) (13.5) Other unallocated expense (13.3) (0.9) Corporate costs (110.3) (109.0) Repair Solutions Capital Charge 43.2 43.9 Total corporate & other unallocated costs $ (195.0) $ (190.8) Corporate & other unallocated costs increased $4.2 million, or 2.2%, during the year ended December 31, 2025, as compared to the prior year, due to a $12.4 million increase in other unallocated expense from $7.0 million of asset impairments recognized during the year ended December 31, 2025, partially offset by a $5.6 million decrease in amortization of acquisition-related intangible assets from certain intangible assets becoming fully amortized between periods and a $3.1 million decrease in restructuring and other related charges.
We are routinely examined by various domestic and international taxing authorities. The amount of income taxes we pay is subject to audit by federal, state and foreign tax authorities, which may result in proposed assessments. The Company is subject to examination in the United States, various states and foreign jurisdictions. We review our global tax positions on a quarterly basis.
We are routinely examined by various domestic and international taxing authorities. The amount of income taxes we pay is subject to audit by federal, state and foreign tax authorities, which may result in proposed assessments. We are subject to examination in the United States, various states and foreign jurisdictions. We review our global tax positions on a quarterly basis.
OVERVIEW General Vontier is a global industrial technology company uniting productivity, automation and multi-energy technologies to meet the needs of a rapidly evolving, more connected mobility ecosystem. Leveraging leading market positions, decades of domain expertise and unparalleled portfolio breadth, Vontier enables the way the world moves, delivering smart, safe and sustainable solutions to our customers and the planet.
OVERVIEW General Vontier is a global industrial technology company uniting productivity, automation and multi-energy technologies to meet the needs of a rapidly evolving, more connected mobility ecosystem. Leveraging leading market positions, decades of domain expertise and unparalleled portfolio breadth, Vontier powers the way the world moves, delivering smart, safe and sustainable solutions to our customers and the planet.
Approximately 55% of our cash was held outside of the United States. We have made an assertion regarding the amount of earnings that we do not intend to repatriate due to local working capital needs, local law restrictions, high foreign remittance costs, previous investments in physical assets and acquisitions, or future growth needs.
Approximately 49% of our cash was held outside of the United States. We have made an assertion regarding the amount of earnings that we do not intend to repatriate due to local working capital needs, local law restrictions, high foreign remittance costs, previous investments in physical assets and acquisitions, or future growth needs.
As of December 31, 2024, we had $750.0 million of borrowing capacity under our revolving credit facility. We also may from time to time access the capital markets, including to take advantage of favorable interest rate environments or other market conditions. As of December 31, 2024, we believe that we have sufficient liquidity to satisfy our cash needs.
As of December 31, 2025, we had $750.0 million of borrowing capacity under our revolving credit facility. We also may from time to time access the capital markets, including to take advantage of favorable interest rate environments or other market conditions. As of December 31, 2025, we believe that we have sufficient liquidity to satisfy our cash needs.
Our MD&A should be read in conjunction with our Consolidated Financial Statements and the accompanying Notes to the Consolidated Financial Statements included elsewhere in this Annual Report. Discussion and analysis of our financial condition and results of operations as of and for the year ended December 31, 2023 compared to December 31, 2022 is included under the heading “Item 7.
Our MD&A should be read in conjunction with our Consolidated Financial Statements and the accompanying Notes to the Consolidated Financial Statements included elsewhere in this Annual Report. Discussion and analysis of our financial condition and results of operations as of and for the year ended December 31, 2024 compared to December 31, 2023 is included under the heading “Item 7.
The registered notes and the guarantees thereof are the Company’s and the Guarantor Subsidiaries’ senior unsecured obligations and: • rank without preference or priority among themselves and equally in right of payment with our existing and any future unsecured and unsubordinated indebtedness, including, without limitation, indebtedness under our credit agreement; • are senior in right of payment to any of our existing and future indebtedness that is subordinated to the notes; • are effectively subordinated to any of our existing and future secured indebtedness to the extent of the assets securing such indebtedness; and 35 Table of Contents • are structurally subordinated to all existing and any future indebtedness and any other liabilities of our Non-Guarantor Subsidiaries.
The registered notes and the guarantees thereof are the Company’s and the Guarantor Subsidiaries’ senior unsecured obligations and: • rank without preference or priority among themselves and equally in right of payment with our existing and any future unsecured and unsubordinated indebtedness, including, without limitation, indebtedness under our credit agreement; • are senior in right of payment to any of our existing and future indebtedness that is subordinated to the notes; • are effectively subordinated to any of our existing and future secured indebtedness to the extent of the assets securing such indebtedness; and • are structurally subordinated to all existing and any future indebtedness and any other liabilities of our Non-Guarantor Subsidiaries.
If actual results are not consistent with management’s estimates and assumptions, goodwill and other intangible assets may be overstated, and a charge would need to be taken against net earnings which would adversely affect our financial statements. No goodwill or other intangible assets impairment charges were recorded during the years ended December 31, 2024, 2023 and 2022.
If actual results are not consistent with management’s estimates and assumptions, goodwill and other intangible assets may be overstated, and a charge would need to be taken against net earnings which would adversely affect our financial statements. No goodwill impairment charges were recorded during the years ended December 31, 2025, 2024 and 2023.
If the reserves established with respect to these contingent liabilities are inadequate, we would be required to incur an expense equal to the amount of the loss incurred in excess of the reserves, which would adversely affect our financial statements. 38 Table of Contents Revenue Recognition We derive revenues from the sale of products and services.
If the reserves established with respect to these contingent liabilities are inadequate, we would be required to incur an expense equal to the amount of the loss incurred in excess of the reserves, which would adversely affect our financial statements. Revenue Recognition We derive revenues from the sale of products and services.
For revenue related to a product or service to qualify for recognition, we must have an enforceable contract with a customer that defines the goods or services to be transferred and the payment terms related to those goods or services.
To qualify for revenue recognition, we must have an enforceable contract with a customer that defines the goods or services to be transferred and the payment terms related to those goods or services.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is designed to provide a reader of our financial statements with a narrative from the perspective of management and is intended to help the reader understand the results and operations and financial condition of the Company.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is designed to provide a reader of our financial statements with a narrative from the perspective of management and is intended to help the reader understand our results of operations and financial condition.
Risk Factors.” CRITICAL ACCOUNTING ESTIMATES Management’s discussion and analysis of our financial condition and results of operations is based upon our Consolidated Financial Statements, which have been prepared in accordance with GAAP.
Risk Factors.” 37 Table of Contents CRITICAL ACCOUNTING ESTIMATES Management’s discussion and analysis of our financial condition and results of operations is based upon our Consolidated Financial Statements, which have been prepared in accordance with GAAP.
A hypothetical 100 basis points increase in market interest rates as of December 31, 2024 on our variable-rate debt obligations as of December 31, 2024 would increase our annual interest expense by approximately $5.5 million.
A hypothetical 100 basis points increase in market interest rates as of December 31, 2025 on our variable-rate debt obligations as of December 31, 2025 would increase our annual interest expense by approximately $5.0 million.
Environmental & Fueling Solutions The components of sales growth for our Environmental & Fueling Solutions segment were as follows for the periods indicated: 2024 vs 2023 Total sales growth (GAAP) 2.7 % Core sales (Non-GAAP) 5.9 % Acquisitions and divestitures (Non-GAAP) (2.3) % Currency exchange rates (Non-GAAP) (0.9) % Total sales within our Environmental & Fueling Solutions segment increased 2.7% during the year ended December 31, 2024, as compared to the prior year, driven by a 5.9% increase in core sales, partially offset by a 2.3% decrease due to the impact of recently exited businesses and product lines and a 0.9% decrease due to the impact of currency translation.
Environmental & Fueling Solutions The components of sales growth for our Environmental & Fueling Solutions segment were as follows for the periods indicated: 2025 vs 2024 Total sales growth (GAAP) 5.7 % Core sales (Non-GAAP) 6.4 % Acquisitions and divestitures (Non-GAAP) (1.0) % Currency exchange rates (Non-GAAP) 0.3 % Total sales within our Environmental & Fueling Solutions segment increased 5.7% during the year ended December 31, 2025, as compared to the prior year, driven by a 6.4% increase in core sales, partially offset by a 1.0% decrease due to the impact of recently exited businesses and product lines and a 0.3% increase due to the impact of currency translation.
Our outlook is subject to various assumptions and risks, including but not limited to the resilience and durability of the economies of the United States and other critical regions, the condition of global supply chains, including the availability of electronic components, the impact of international conflicts, including Russia-Ukraine and conflicts in the Middle East, market conditions in key end product segments, no significant changes in governmental policies or regulations and the impact of energy disruption in Europe.
Our outlook is subject to various assumptions and risks, including but not limited to the impact of changes in United States and international trade policies, other changes in governmental policies or regulations, the resilience and durability of the economies of the United States and other critical regions, the condition of global supply chains, including the availability of electronic components, the impact of international conflicts, including Russia-Ukraine and conflicts in the Middle East and market conditions in key end product segments.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K filed for the fiscal year ended December 31, 2023 with the Securities and Exchange Commission on February 15, 2024.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K filed for the fiscal year ended December 31, 2024 with the Securities and Exchange Commission on February 13, 2025.
Capital Stock and Earnings per Share to the Consolidated Financial Statements for a description of the Company’s share repurchase program. Dividends We paid regular quarterly cash dividends of $0.025 per share during the year ended December 31, 2024.
Capital Stock and Earnings per Share to the Consolidated Financial Statements for a description of our share repurchase program. Dividends We paid regular quarterly cash dividends of $0.025 per share during the year ended December 31, 2025.
Judgment is required in evaluating tax positions and determining income tax provisions. We re-evaluate the technical merits of our tax positions and may recognize an uncertain tax benefit in certain circumstances, including when: (i) a tax audit is completed; (ii) applicable tax laws change, including a tax case ruling or legislative guidance; or (iii) the applicable statute of limitations expires.
We re-evaluate the technical merits of our tax positions and may recognize an uncertain tax benefit in certain circumstances, including when: (i) a tax audit is completed; (ii) applicable tax laws change, including a tax case ruling or legislative guidance; or (iii) the applicable statute of limitations expires.
Supplemental Guarantor Financial Information As of December 31, 2024, we had $1.6 billion in aggregate principal amount of registered notes and $550.0 million in aggregate principal amount outstanding of term loans.
Supplemental Guarantor Financial Information As of December 31, 2025, we had $1.6 billion in aggregate principal amount of registered notes and $500.0 million in aggregate principal amount outstanding of term loans.
As a result, originations of certain financing receivables are non-cash transactions. • The aggregate of other operating assets and liabilities used $30.7 million of cash during the year ended December 31, 2024 compared to generating $6.8 million in the prior year. This difference is due primarily to working capital needs and the timing of accruals and payments and tax-related amounts.
As a result, originations of certain financing receivables are non-cash transactions. • The aggregate of other operating assets and liabilities used $66.9 million of cash during the year ended December 31, 2025 compared to using $30.7 million in the prior year. This difference is due primarily to working capital needs and the timing of accruals and payments and tax-related amounts.
Corporate & other unallocated costs as a percentage of total sales decreased 30 basis points during the year ended December 31, 2024, as compared to the prior year.
Corporate & other unallocated costs as a percentage of total sales decreased 10 basis points during the year ended December 31, 2025, as compared to the prior year.
The year-over-year change in operating cash flows was primarily attributable to the following factors: • The aggregate of accounts receivable and long-term financing receivables used $56.0 million of operating cash flows during the year ended December 31, 2024 as compared to using $6.9 million in the prior year.
The year-over-year change in operating cash flows was primarily attributable to the following factors: • The aggregate of accounts receivable and long-term financing receivables generated $10.4 million of operating cash flows during the year ended December 31, 2025 as compared to using $56.0 million in the prior year.
Financing to the Consolidated Financial Statements. 31 Table of Contents INCOME TAXES General Income tax expense and deferred tax assets and liabilities reflect management’s assessment of current and future taxes expected to be paid on items reflected in our financial statements.
For a discussion of our outstanding indebtedness, refer to Note 10. Financing to the Consolidated Financial Statements. 31 Table of Contents INCOME TAXES General Income tax expense and deferred tax assets and liabilities reflect management’s assessment of current and future taxes expected to be paid on items reflected in our financial statements.
Financing Activities Net cash used in financing activities was $392.3 million during the year ended December 31, 2024, driven by the voluntary repayment of $150.0 million of the Three-Year Term Loans due 2024 and Three-Year Term Loans due 2025 and repurchases of the Company’s common stock of $224.7 million.
Net cash used in financing activities was $392.3 million during the year ended December 31, 2024, driven by repurchases of our common stock of $224.7 million and the voluntary repayment of $150.0 million of the Three-Year Term Loans due 2024 and Three-Year Term Loans due 2025. Share Repurchase Program Refer to Note 19.
Guarantees As of December 31, 2024, the Company had guarantees consisting primarily of outstanding standby letters of credit, bank guarantees, and performance and bid bonds of $81.4 million. These guarantees have been provided in connection with certain arrangements with vendors, customers, financing counterparties, and governmental entities to secure the Company’s obligations and/or performance requirements related to specific transactions.
Guarantees As of December 31, 2025, we had guarantees consisting primarily of outstanding standby letters of credit, bank guarantees, and performance and bid bonds of $77.1 million. These guarantees have been provided in connection with certain arrangements with vendors, customers, financing counterparties, and governmental entities to secure our obligations and/or performance requirements related to specific transactions.
We continue to monitor the macroeconomic and geopolitical conditions which may impact our business, including monetary and fiscal policies, changes in the banking system, international trade and relations between the U.S., China and other nations, and investment and taxation policy initiatives being considered in the United States and by the Organization for Economic Co-operation and Development (the “OECD”).
We continue to monitor the macroeconomic and geopolitical conditions which may impact our business, including monetary and fiscal policies, changes in the banking system and investment and taxation policy initiatives being considered in the United States and by the Organization for Economic Co-operation and Development.
Environmental & Fueling Solutions Segment operating profit for our Environmental & Fueling Solutions segment increased $25.4 million, or 6.9%, during the year ended December 31, 2024, as compared to the prior year, and segment operating profit margin increased 110 basis points during the same period.
Environmental & Fueling Solutions Segment operating profit for our Environmental & Fueling Solutions segment increased $27.1 million, or 6.9%, during the year ended December 31, 2025, as compared to the prior year, and segment operating profit margin increased 40 basis points during the same period.
Amortization of acquisition-related intangible assets decreased $1.5 million, or 1.8%, during the year ended December 31, 2024, as compared to the prior year and as a percentage of sales, increased 10 basis points during the same period. 29 Table of Contents Operating Profit Operating profit decreased $6.4 million, or 1.2%, during the year ended December 31, 2024, as compared to the prior year, and operating profit margin increased 40 basis points during the same period.
Amortization of acquisition-related intangible assets as a percentage of sales decreased 30 basis points during the same period. 29 Table of Contents Operating Profit Operating profit increased $24.6 million, or 4.6%, during the year ended December 31, 2025, as compared to the prior year, and operating profit margin increased 30 basis points during the same period.
Refer to further discussion of Corporate & other unallocated costs below. Mobility Technologies Segment operating profit for our Mobility Technologies segment decreased $7.3 million, or 3.7%, during the year ended December 31, 2024, as compared to the prior year, and segment operating profit margin decreased 90 basis points during the same period.
Refer to further discussion of Corporate & other unallocated costs below. Mobility Technologies Segment operating profit for our Mobility Technologies segment increased $18.9 million, or 9.8%, during the year ended December 31, 2025, as compared to the prior year, and segment operating profit margin decreased 20 basis points during the same period.
Overview of Cash Flows and Liquidity Following is an overview of our cash flows and liquidity: Year Ended December 31, ($ in millions) 2024 2023 Net cash provided by operating activities $ 427.5 $ 455.0 Proceeds from sale of business, net of cash provided $ 68.4 $ 107.5 Payments for additions to property, plant and equipment (82.7) (60.1) Proceeds from sale of property, plant and equipment 5.6 4.5 Cash paid for equity investments (2.9) (3.0) Proceeds from sale of equity securities 0.2 20.4 Net cash (used in) provided by investing activities $ (11.4) $ 69.3 Repayment of long-term debt (150.0) (300.0) Net (repayments of) proceeds from short-term borrowings (4.5) 1.9 Payments of common stock cash dividend (15.2) (15.5) Purchases of treasury stock (224.7) (74.7) Proceeds from stock option exercises 17.0 10.4 Other financing activities (14.9) (9.9) Net cash used in financing activities $ (392.3) $ (387.8) 34 Table of Contents Operating Activities Cash flows from operating activities can fluctuate significantly from period to period as working capital needs and the timing of payments for income taxes, restructuring activities and other items impact reported cash flows.
Capital Stock and Earnings per Share to the Consolidated Financial Statements for more information related to our share repurchases. 34 Table of Contents Overview of Cash Flows and Liquidity Following is an overview of our cash flows and liquidity: Year Ended December 31, ($ in millions) 2025 2024 Net cash provided by operating activities $ 511.0 $ 427.5 Proceeds from sale of businesses, net of cash provided $ 50.4 $ 68.4 Cash paid for acquisitions (10.9) — Payments for additions to property, plant and equipment (69.9) (82.7) Proceeds from sale of property, plant and equipment 0.4 5.6 Cash paid for equity investments (1.8) (2.9) Proceeds from sale of equity investments 11.1 0.2 Net cash used in investing activities $ (20.7) $ (11.4) Proceeds from issuance of long-term debt $ 83.3 $ — Repayment of long-term debt (133.3) (150.0) Net proceeds from (repayments of) short-term borrowings 0.2 (4.5) Payments for debt issuance costs (2.3) — Payments of common stock cash dividend (14.7) (15.2) Purchases of treasury stock (300.2) (224.7) Proceeds from stock option exercises 10.0 17.0 Other financing activities (14.3) (14.9) Net cash used in financing activities $ (371.3) $ (392.3) Operating Activities Cash flows from operating activities can fluctuate significantly from period to period as working capital needs and the timing of payments for income taxes, restructuring activities and other items impact reported cash flows.
Segment operating profit, operating profit and related margins were as follows for the periods indicated: Year Ended December 31, ($ in millions) 2024 Margin 2023 Margin Mobility Technologies $ 192.6 19.0 % $ 199.9 19.9 % Repair Solutions 140.7 22.2 170.0 26.1 Environmental & Fueling Solutions 394.9 29.0 369.5 27.9 Other (0.4) (30.8) 11.3 9.5 Corporate & other unallocated costs (a) (190.8) (6.4) (207.3) (6.7) Total operating profit $ 537.0 18.0 % $ 543.4 17.6 % (a) Margin for corporate & other unallocated costs is presented as a percentage of total sales.
Segment operating profit, operating profit and related margins were as follows for the periods indicated: Year Ended December 31, ($ in millions) 2025 Margin 2024 Margin Mobility Technologies $ 211.5 18.8 % $ 192.6 19.0 % Repair Solutions 123.1 20.9 140.7 22.2 Environmental & Fueling Solutions 422.0 29.4 394.9 29.0 Other — — (0.4) (30.8) Corporate & other unallocated costs (a) (195.0) (6.3) (190.8) (6.4) Total operating profit $ 561.6 18.3 % $ 537.0 18.0 % (a) Margin for corporate & other unallocated costs is presented as a percentage of total sales.
Commodity Price Risk For a discussion of risks relating to commodity prices, refer to “Item 1A. Risk Factors.” 33 Table of Contents LIQUIDITY AND CAPITAL RESOURCES We assess our liquidity in terms of our ability to generate cash to fund our operating, investing and financing activities.
No customer accounted for more than 10% of sales during all periods presented. 33 Table of Contents Commodity Price Risk For a discussion of risks relating to commodity prices, refer to “Item 1A. Risk Factors.” LIQUIDITY AND CAPITAL RESOURCES We assess our liquidity in terms of our ability to generate cash to fund our operating, investing and financing activities.
Investing Activities Net cash used in investing activities was $11.4 million during the year ended December 31, 2024, driven by payments for additions to property, plant and equipment, partially offset by proceeds from the sale of our Coats business.
Net cash used in investing activities was $11.4 million during the year ended December 31, 2024, driven by payments for additions to property, plant and equipment, partially offset by proceeds from the sale of our Coats business. We made capital expenditures of $69.9 million and $82.7 million during the years ended December 31, 2025 and 2024, respectively.
If the exchange rates in effect as of December 31, 2024 were to prevail throughout the year ended December 31, 2025, currency exchange rates would negatively impact estimated sales for the year ended December 31, 2025 by approximately 1.2% compared to the year ended December 31, 2024.
If the exchange rates in effect as of December 31, 2025 were to prevail throughout the year ended December 31, 2026, currency exchange rates would positively impact estimated sales for the year ended December 31, 2026 by approximately 0.5% compared to the year ended December 31, 2025.
Based on these reviews, the results of discussions and resolutions of matters with certain tax authorities, tax rulings and court decisions and the expiration of statutes of limitations reserves for contingent tax liabilities are accrued or adjusted as necessary. The IRS concluded examination procedures on the Company’s initial U.S. federal income tax return for the post-Separation period of 2020.
Based on these reviews, the results of discussions and resolutions of matters with certain tax authorities, tax rulings and court decisions and the expiration of statutes of limitations, reserves for contingent tax liabilities are accrued or adjusted as necessary. The IRS started an examination of our U.S. federal income tax return for 2023.
Refer to Note 10. Financing to the Consolidated Financial Statements for more information related to our long-term indebtedness and Note 19. Capital Stock and Earnings per Share to the Consolidated Financial Statements for more information related to our share repurchases.
Refer to Note 10. Financing to the Consolidated Financial Statements for more information related to our long-term indebtedness and Note 19.
The decrease in our effective tax rate during the year ended December 31, 2024, as compared to the prior year, was primarily due to favorable impacts related to business reorganizations and divestitures and a decrease to uncertain tax positions.
The increase in our effective tax rate during the year ended December 31, 2025, as compared to the prior year, was primarily due to favorable impacts of business reorganizations and divestitures during the year ended December 31, 2024.
As of December 31, 2024, we had $550.0 million outstanding of debt that was subject to variable interest rates. As a result, increases in interest rates could increase the cost of servicing our debt and could materially reduce our profitability and cash flows. We seek to manage exposure to adverse interest rate changes through our normal operating and financing activities.
As a result, increases in interest rates could increase the cost of servicing our debt and could materially reduce our profitability and cash flows. We seek to manage exposure to adverse interest rate changes through our normal operating and financing activities.
Holding other estimates constant, a hypothetical 100 basis points increase in the expected loss rate on the financing receivables portfolio would have resulted in an increase in the allowance for credit losses of approximately $5.0 million as of December 31, 2024. No customer accounted for more than 10% of sales during all periods presented.
Holding other estimates constant, a hypothetical 100 basis points increase in the expected loss rate on the financing receivables portfolio would have resulted in an increase in the allowance for credit losses of approximately $5.0 million as of December 31, 2025.
Allocating the transaction price to each performance obligation may require judgment. If our judgments regarding revenue recognition prove incorrect, our reported revenues in particular periods may be adversely affected. Historically, our estimates of revenue have been materially correct.
If our judgments regarding revenue recognition prove incorrect, our reported revenues in particular periods may be adversely affected. Historically, our estimates of revenue have been materially correct.
As of December 31, 2024, we had purchase obligations of $241.9 million, with $235.6 million payable in the next 12 months. 36 Table of Contents With respect to our cash requirements, we generally intend to use available cash and internally generated funds to meet these cash requirements, but in the event that additional liquidity is required, particularly in connection with acquisitions, we may also borrow under our credit facilities, enter into new credit facilities and borrow directly thereunder and/or access the capital markets.
With respect to our cash requirements, we generally intend to use available cash and internally generated funds to meet these cash requirements, but in the event that additional liquidity is required, particularly in connection with acquisitions, we may also borrow under our credit facilities, enter into new credit facilities and borrow directly thereunder and/or access the capital markets.
The increase in core sales was due to solid demand for our convenience store payment and enterprise productivity solutions, partially offset by lower demand for our cash wash solutions. 28 Table of Contents Repair Solutions The components of sales growth for our Repair Solutions segment were as follows for the periods indicated: 2024 vs 2023 Total sales growth (GAAP) (2.8) % Core sales (Non-GAAP) (2.8) % Acquisitions and divestitures (Non-GAAP) — % Currency exchange rates (Non-GAAP) — % Total sales and core sales within our Repair Solutions segment decreased 2.8% during the year ended December 31, 2024, as compared to the prior year, due to a decrease in the hardline, tool storage and specialty tools product categories driven by macroeconomic impacts on service technicians’ discretionary spending, partially offset by an increase in the power tools product category.
The increase in core sales was due to solid demand for our convenience retail payment and enterprise productivity solutions, partially offset by lower demand for our car wash solutions. 28 Table of Contents Repair Solutions The components of sales growth for our Repair Solutions segment were as follows for the periods indicated: 2025 vs 2024 Total sales growth (GAAP) (6.9) % Core sales (Non-GAAP) (6.8) % Acquisitions and divestitures (Non-GAAP) — % Currency exchange rates (Non-GAAP) (0.1) % Total sales within our Repair Solutions segment decreased 6.9% during the year ended December 31, 2025, as compared to the prior year, driven by a 6.8% decrease in core sales.
COMPREHENSIVE INCOME Comprehensive income decreased by $2.4 million during the year ended December 31, 2024, as compared to the prior year. Comprehensive income for the year ended December 31, 2024 includes an unfavorable foreign currency translation adjustment of $49.6 million and a gain on the sale of the Company’s Coats business of $37.2 million.
Comprehensive income for the year ended December 31, 2025 includes a favorable foreign currency translation adjustment of $75.8 million. Comprehensive income for the year ended December 31, 2024 includes an unfavorable foreign currency translation adjustment of $49.6 million and a gain on the sale of our Coats business of $37.2 million. Refer to Note 20.
Summarized Balance Sheet Data ($ in millions) December 31, 2024 Assets Current assets $ 433.0 Intercompany receivables 2,090.2 Noncurrent assets 664.7 Total assets $ 3,187.9 Liabilities Current liabilities $ 895.6 Intercompany payables 256.7 Noncurrent liabilities 1,645.7 Total liabilities $ 2,798.0 Cash and Cash Requirements As of December 31, 2024, we held approximately $356.4 million of cash and cash equivalents that were held in either operating accounts or invested in highly liquid investment-grade instruments with a maturity of 90 days or less with an annual effective rate generally around 4.5% as of December 31, 2024.
(c) Includes intercompany pretax income of $35.3 million. 36 Table of Contents Summarized Balance Sheet Data ($ in millions) December 31, 2025 Assets Current assets $ 437.7 Intercompany receivables 2,537.2 Noncurrent assets 646.4 Total assets $ 3,621.3 Liabilities Current liabilities $ 846.0 Intercompany payables 211.5 Noncurrent liabilities 1,656.3 Total liabilities $ 2,713.8 Cash and Cash Requirements As of December 31, 2025, we held approximately $492.2 million of cash and cash equivalents that were held in either operating accounts or invested in highly liquid investment-grade instruments with a maturity of 90 days or less with an annual effective rate generally around 3.5% as of December 31, 2025.
Certain customer arrangements, including our SaaS product offerings, include multiple performance obligations, typically hardware, installation, training, consulting, services and/or post-contract customer support (“PCS”). The Company allocates the contract transaction price to each performance obligation using the observable price that the good or service sells for separately in similar circumstances and to similar customers.
Certain customer arrangements, including our SaaS product offerings, include multiple performance obligations, typically hardware, installation, training, consulting, services and/or post-contract customer support (“PCS”). We allocate the contract transaction price to each performance obligation using the standalone selling price.
Our decision to perform a qualitative impairment assessment for an individual reporting unit in a given year is influenced by a number of factors, inclusive of the size of the reporting unit's goodwill, the significance of the excess of the reporting unit's estimated fair value over carrying value at the last quantitative assessment date, the amount of time in between quantitative fair value assessments and the date of acquisition.
Our decision to perform a qualitative impairment assessment for an individual reporting unit in a given year is influenced by a number of factors, inclusive of the size of the reporting unit's goodwill, the significance of the excess of the reporting unit's estimated fair value over carrying value at the last quantitative assessment date and the amount of time in between quantitative fair value assessments. 38 Table of Contents As part of our 2025 annual impairment analysis, we elected to apply the qualitative goodwill impairment assessment guidance in ASC 350-20, Goodwill , for all three of our reporting units as of the assessment date, or approximately $1.7 billion of goodwill as of the assessment date.
INTEREST COSTS Interest expense, net was $74.7 million during the year ended December 31, 2024 as compared to $93.7 million during the prior year, a decrease of $19.0 million, driven by a decrease in our outstanding debt obligations and an increase in interest income between periods. For a discussion of our outstanding indebtedness, refer to Note 10.
INTEREST COSTS Interest expense, net was $59.8 million during the year ended December 31, 2025 as compared to $74.7 million during the prior year, a decrease of $14.9 million, driven by a decrease in our outstanding debt obligations, a decrease in variable interest rates on certain of our outstanding debt obligations and an increase in interest income between periods.
Cash flows from operating activities were $427.5 million during the year ended December 31, 2024, a decrease of $27.5 million as compared to the prior year.
Cash flows from operating activities were $511.0 million during the year ended December 31, 2025, an increase of $83.5 million as compared to the prior year.
Sales The components of our consolidated sales growth were as follows for the periods indicated: 2024 vs 2023 Total sales growth (GAAP) (3.8) % Core sales (Non-GAAP) 1.8 % Acquisitions and divestitures (Non-GAAP) (4.8) % Currency exchange rates (Non-GAAP) (0.8) % Sales for each of our segments were as follows for the periods indicated: Year Ended December 31, ($ in millions) 2024 2023 Mobility Technologies $ 1,014.5 $ 1,003.8 Repair Solutions 633.4 651.5 Environmental & Fueling Solutions 1,359.8 1,323.7 Other 1.3 118.8 Intersegment eliminations (30.0) (2.6) Total $ 2,979.0 $ 3,095.2 Mobility Technologies The components of sales growth for our Mobility Technologies segment were as follows for the periods indicated: 2024 vs 2023 Total sales growth (GAAP) 1.1 % Core sales (Non-GAAP) 2.1 % Acquisitions and divestitures (Non-GAAP) — % Currency exchange rates (Non-GAAP) (1.0) % Total sales within our Mobility Technologies segment increased 1.1% during the year ended December 31, 2024, as compared to the prior year, driven by a 2.1% increase in core sales, partially offset by a 1.0% decrease due to the impact of currency translation.
Sales The components of our consolidated sales growth were as follows for the periods indicated: 2025 vs 2024 Total sales growth (GAAP) 3.2 % Core sales (Non-GAAP) 3.7 % Acquisitions and divestitures (Non-GAAP) (0.5) % Currency exchange rates (Non-GAAP) — % Sales for each of our segments were as follows for the periods indicated: Year Ended December 31, ($ in millions) 2025 2024 Mobility Technologies (a) $ 1,123.9 $ 1,014.5 Repair Solutions 589.9 633.4 Environmental & Fueling Solutions 1,436.7 1,359.8 Other — 1.3 Intersegment eliminations (74.9) (30.0) Total $ 3,075.6 $ 2,979.0 (a) Includes $74.9 million and $30.0 million of intersegment sales for the years ended December 31, 2025 and 2024, respectively, that are eliminated in consolidation.
Repair Solutions Segment operating profit for our Repair Solutions segment decreased $29.3 million, or 17.2%, during the year ended December 31, 2024, as compared to the prior year, and segment operating profit margin decreased 390 basis points during the same period.
The decrease in segment operating profit margin was due to the impact of product mix. Repair Solutions Segment operating profit for our Repair Solutions segment decreased $17.6 million, or 12.5%, during the year ended December 31, 2025, as compared to the prior year, and segment operating profit margin decreased 130 basis points during the same period.
Customer allowances and rebates, consisting primarily of volume discounts and other short-term incentive programs, are considered in determining the transaction price for the contract. Significant judgment is exercised in determining product returns, customer allowances and rebates, which are estimated based on historical experience and known trends.
Variable consideration, including volume discounts, rebates and other short-term incentive programs, is estimated and included in the transaction price only to the extent it is probable that a significant reversal of cumulative revenue will not occur. Significant judgment is exercised in determining product returns, customer allowances and rebates, which are estimated based on historical experience and known trends.
In addition, our broad-based business activities help to reduce the impact that volatility in any particular area or related areas may have on our operating profit as a whole. 32 Table of Contents Interest Rate Risk We are exposed to interest rate risk through fluctuations in interest rates on our debt obligations.
We generally address our exposure to these risks through our normal operating and financing activities. In addition, our broad-based business activities help to reduce the impact that volatility in any particular area or related areas may have on our operating profit as a whole.
A 10% change in major currencies relative to the U.S. dollar as of December 31, 2024 would have resulted in an impact to equity of approximately $87.0 million.
A 10% change in major currencies relative to the U.S. dollar as of December 31, 2025 would have resulted in an impact to equity of approximately $86.0 million. Currency exchange rates did not have a material impact on reported sales for the year ended December 31, 2025 as compared to the prior year.
Our effective tax rate for the year ended December 31, 2023 differs from the U.S. federal statutory rate of 21.0% primarily due to the effect of state taxes, foreign derived intangible income and tax credits. Additionally, there were favorable impacts related to non-taxable income and business reorganizations and divestitures which were offset by an increase to uncertain tax positions.
Our effective tax rate for the year ended December 31, 2025 differs from the U.S. federal statutory rate of 21.0% primarily due to the effect of state taxes, non-U.S. income taxed at different rates than the U.S. federal statutory rate, foreign derived intangible income, and tax credits.
Net cash provided by investing activities was $69.3 million during the year ended December 31, 2023, driven by proceeds from the sale of our Global Traffic Technologies business and equity securities, partially offset by payments for additions to property, plant and equipment.
Investing Activities Net cash used in investing activities was $20.7 million during the year ended December 31, 2025, driven by payments for additions to property, plant and equipment and cash paid for the acquisition of Sergeant Sudz, partially offset by proceeds from the sale of businesses.
As of the filing date of this report, we do not believe they are material. 27 Table of Contents RESULTS OF OPERATIONS Comparison of Results of Operations Year Ended December 31, ($ in millions) 2024 % of Sales 2023 % of Sales Sales $ 2,979.0 $ 3,095.2 Operating costs and expenses: Cost of sales (a) (1,554.9) 52.2 % (1,664.0) 53.8 % Selling, general and administrative expenses (“SG&A”) (629.7) 21.1 % (643.1) 20.8 % Research and development expenses (“R&D”) (177.7) 6.0 % (163.5) 5.3 % Amortization of acquisition-related intangible assets (79.7) 2.7 % (81.2) 2.6 % Operating profit $ 537.0 18.0 % $ 543.4 17.6 % (a) Excluding amortization of acquisition-related intangible assets.
If we are unable to effectively mitigate the financial impact of tariffs, or if tariffs lead to other impacts, including but not limited to a decrease in demand for our products, it would have a material impact on our business, financial condition and results of operations. 27 Table of Contents RESULTS OF OPERATIONS Comparison of Results of Operations Year Ended December 31, ($ in millions) 2025 % of Sales 2024 % of Sales Sales $ 3,075.6 $ 2,979.0 Operating costs and expenses: Cost of sales (a) (1,624.8) 52.8 % (1,554.9) 52.2 % Selling, general and administrative expenses (“SG&A”) (639.4) 20.8 % (629.7) 21.1 % Research and development expenses (“R&D”) (175.7) 5.7 % (177.7) 6.0 % Amortization of acquisition-related intangible assets (74.1) 2.4 % (79.7) 2.7 % Operating profit $ 561.6 18.3 % $ 537.0 18.0 % (a) Excluding amortization of acquisition-related intangible assets.
We establish valuation allowances for our deferred tax assets if it is more likely than not that some or all of the deferred tax asset will not be realized.
We establish valuation allowances for our deferred tax assets if it is more likely than not that some or all of the deferred tax asset will not be realized. This requires us to make judgments and estimates regarding the timing and amount of the reversal of taxable temporary differences, expected future taxable income and the impact of tax planning strategies.
FINANCIAL INSTRUMENTS AND RISK MANAGEMENT We are exposed to market risk from changes in interest rates, foreign currency exchange rates, credit risk and commodity prices, each of which could impact our financial statements. We generally address our exposure to these risks through our normal operating and financing activities.
Divestitures to the Consolidated Financial Statements for additional information on the divestiture of our Coats businesses. 32 Table of Contents FINANCIAL INSTRUMENTS AND RISK MANAGEMENT We are exposed to market risk from changes in interest rates, foreign currency exchange rates, credit risk and commodity prices, each of which could impact our financial statements.
Summarized Results of Operations Data ($ in millions) Year Ended December 31, 2024 Net sales (a) $ 1,524.9 Operating profit (b) 521.0 Net income (c) $ 363.2 (a) Includes intercompany sales of $33.2 million. (b) Includes intercompany operating profit of $14.2 million. (c) Includes intercompany pretax income of $17.7 million.
Summarized Results of Operations Data ($ in millions) Year Ended December 31, 2025 Net sales (a) $ 1,615.3 Operating profit (b) 532.5 Net income (c) $ 381.8 (a) Includes intercompany sales of $47.0 million. (b) Includes intercompany operating profit of $20.0 million.
Our Global Traffic Technologies and Coats businesses, which were divested during April 2023 and January 2024, respectively, are presented in Other for periods prior to the divestitures. Outlook We expect core sales to increase on a year-over-year basis in 2025 due to increasing demand across our portfolio.
Our Coats business, which was divested during January 2024, is presented in Other for periods prior to the divestiture. Outlook We expect core sales to increase on a year-over-year basis in 2026.
We also continue to monitor the Russia-Ukraine conflict and conflicts in the Middle East and the impact on our business and operations.
We also continue to monitor the Russia-Ukraine conflict, conflicts in the Middle East and political and economic conditions in Latin America and the impact on our business and operations. As of the filing date of this report, we do not believe they are material.
The increase in core sales was driven by higher demand for aftermarket products, dispenser systems and environmental solutions.
The increase in core sales was due to growth in environmental solutions and dispenser systems.
We apply judgment in determining the customer’s ability and intention to pay, which is based on a combination of financial and qualitative factors, including the customers’ financial condition, collateral, debt-servicing ability, past payment experience and credit bureau information.
We assess whether collection of substantially all consideration for the goods or services transferred is probable based on the customer’s intent and ability to pay the promised consideration. This assessment requires judgment and considers financial and qualitative factors, including the customers’ financial condition, collateral, debt-servicing ability, past payment experience and credit bureau information.
This requires the Company to make judgments and estimates regarding the timing and amount of the reversal of taxable temporary differences, expected future taxable income and the impact of tax planning strategies. We provide for unrecognized tax benefits when, based upon the technical merits, it is “more-likely-than-not” that an uncertain tax position will not be sustained upon examination.
We provide for unrecognized tax benefits when, based upon the technical merits, it is “more-likely-than-not” that an uncertain tax position will not be sustained upon examination. Judgment is required in evaluating tax positions and determining income tax provisions.
Basis of Presentation and Summary of Significant Accounting Policies to the Consolidated Financial Statements for information regarding new accounting standards.
We recognize potential accrued interest and penalties associated with unrecognized tax positions in income tax expense. NEW ACCOUNTING STANDARDS Refer to Note 2. Basis of Presentation and Summary of Significant Accounting Policies to the Consolidated Financial Statements for information regarding new accounting standards.
Our long-term debt requires, among others, that we maintain certain financial covenants, and we were in compliance with all of these covenants as of December 31, 2024. 2024 Financing and Capital Transactions During the year ended December 31, 2024, we completed the following financing and capital transactions: • Voluntarily repaid $150.0 million of the Three-Year Term Loans Due 2024 and the Three-Year Term Loans Due 2025; • Repurchased 3.0 million shares for $100.0 million through an accelerated share repurchase (“ASR”) agreement; • Repurchased 0.6 million shares for $25.0 million through a share repurchase agreement; and • Repurchased 2.7 million shares for $99.7 million in the open market.
Our long-term debt requires, among others, that we maintain certain financial covenants, and we were in compliance with all of these covenants as of December 31, 2025. 2025 Financing and Capital Transactions During the year ended December 31, 2025, we completed the following financing and capital transactions: • Voluntarily repaid $50.0 million of the Three-Year Term Loans Due 2025; • Executed an amendment to extend the maturity date of the Three-Year Term Loans Due 2025 to February 2028, remove the credit spread adjustment and reduce the ratings-based margin by 12.5 basis points; • Executed an amendment to the Revolving Credit Facility, which extended the maturity date to February 2030 and removed the SOFR adjustment; • Repurchased 8.0 million shares for $300.2 million in the open market.
R&D expenses increased $14.2 million, or 8.7%, during the year ended December 31, 2024, as compared to the prior year and as a percentage of sales, increased 70 basis points during the same period, due to continued growth investments in our Mobility Technologies segment.
R&D expenses decreased $2.0 million, or 1.1%, during the year ended December 31, 2025, as compared to the prior year and as a percentage of sales, decreased 30 basis points during the same period, due to savings from focus and prioritization process initiatives and adoption of AI technologies.
Cost of Sales Cost of sales, excluding amortization of acquisition-related intangible assets, decreased $109.1 million, or 6.6%, during the year ended December 31, 2024, as compared to the prior year and as a percentage of sales, decreased 160 basis points during the same period, due to a $115.0 million decrease from the impact of recently divested and exited businesses and product lines.
Cost of Sales Cost of sales, excluding amortization of acquisition-related intangible assets, increased $69.9 million, or 4.5%, during the year ended December 31, 2025, as compared to the prior year and as a percentage of sales, increased 60 basis points during the same period, mainly due to core sales growth as discussed above.
Operating Costs and Other Expenses SG&A expenses decreased $13.4 million, or 2.1%, during the year ended December 31, 2024, as compared to the prior year and as a percentage of sales, increased 30 basis points during the same period, due to a $18.6 million decrease from the impact of recently divested and exited businesses and product lines, partially offset by a $10.1 million increase from the impact of reserve-related adjustments to the Repair Solutions receivables portfolio.
Operating Costs and Other Expenses SG&A expenses increased $9.7 million, or 1.5%, during the year ended December 31, 2025, as compared to the prior year and as a percentage of sales, decreased 30 basis points during the same period, due to $7.0 million of asset impairments recognized during the year ended December 31, 2025 and a $4.8 million increase in transaction and deal-related costs.
Net cash used in financing activities was $387.8 million during the year ended December 31, 2023, driven primarily by the voluntary repayment of $300.0 million of the Three-Year Term Loans due 2024 and repurchases of the Company’s common stock of $74.7 million. Share Repurchase Program Refer to Note 19.
Divestitures to the Consolidated Financial Statements for additional information on our dispositions. 35 Table of Contents Financing Activities Net cash used in financing activities was $371.3 million during the year ended December 31, 2025, driven by repurchases of our common stock of $300.2 million and the voluntary repayment of $50.0 million of the Three-Year Term Loans due 2025.
Comparison of the Years Ended December 31, 2024 and 2023 Our effective tax rate for the years ended December 31, 2024 and 2023 was 15.2% and 22.0%, respectively.
Basis of Presentation and Summary of Significant Accounting Policies and Note 14. Income Taxes to the Consolidated Financial Statements. Comparison of the Years Ended December 31, 2025 and 2024 Our effective tax rate for the years ended December 31, 2025 and 2024 was 20.1% and 15.2%, respectively.
We regularly perform detailed reviews of our accounts receivable and financing receivables portfolios to determine if changes in the aforementioned qualitative and quantitative factors have impacted the adequacy of the allowances. 37 Table of Contents Inventories We record inventory at the lower of cost or net realizable value, which is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation.
We regularly perform detailed reviews of our accounts receivable and financing receivables portfolios to determine if changes in the aforementioned qualitative and quantitative factors have impacted the adequacy of the allowances. Goodwill and Other Intangible Assets Goodwill arises from the purchase price for acquired businesses exceeding the fair value of tangible and intangible assets acquired less assumed liabilities.
Comprehensive income for the year ended December 31, 2023 includes a gain on the sale of the Company’s Global Traffic Technologies business of $34.4 million. Refer to Note 20. Divestitures to the Consolidated Financial Statements for additional information on the divestitures of our Coats and Global Traffic Technologies businesses.
Refer to Note 3. Acquisitions to the Consolidated Financial Statements for additional information on our acquisition of Sergeant Sudz and Note 20.
Removed
The decrease in segment operating profit margin was due to a 180 basis points decrease from an increase in R&D from continued growth investments, offset by a 150 basis points increase from SG&A savings. The remaining decrease was due to the impact of product mix from lower demand for our cash wash solutions.
Added
During April 2025, the United States announced a new baseline tariff of 10%, plus an additional country-specific tariff, on all imports into the United States. In response, certain countries announced reciprocal tariffs on imports from the United States.
Removed
The decrease in segment operating profit margin was due to a 130 basis points decrease from reserve-related adjustments to the receivables portfolio. The remaining decrease was due to the impact of lower volume and product mix, as service technicians have purchased lower price point products in response to the macroeconomic impacts on service technicians’ discretionary spending.
Added
While the United States has reached trade agreements with certain countries, tariffs on imports from other countries and other reciprocal tariffs either remain in effect or have been temporarily paused, and as such, significant uncertainty around future tariff policies remains.
Removed
No material adjustments were identified, as such the Company has released all uncertain tax positions associated with the U.S. federal income tax return for the post-Separation period in 2020. The Company remains subject to U.S. Federal income tax audit for 2021 through 2023.
Added
We import inventory into the United States from a number of countries, and as such, if tariffs remain in effect for a prolonged period of time, we expect our cost to import inventory into the United States to increase.
Removed
The Company is subject to tax audits for its combined/consolidated state income tax returns for post-Separation 2020 through 2023. The Company remains subject to tax audits for its separate company tax returns in various U.S. states for the tax years 2020 to 2023.

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