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

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

+254 added−237 removedSource: 10-K (2026-02-20) vs 10-K (2025-02-20)

Top changes in ESAB Corp's 2025 10-K

254 paragraphs added · 237 removed · 209 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

38 edited+11 added−1 removed73 unchanged
Biggest changeWhile the United States has not yet adopted Pillar Two, various other jurisdictions in which we operate around the world have enacted legislation and the OECD continues to release additional guidance. Based upon existing legislation and OECD guidance, Pillar Two could increase our future tax obligations in the countries in which we operate.
Biggest changeWhile the United States has not adopted Pillar Two, and the Group of Seven countries have proposed to exempt United States multinational companies from Pillar Two by adopting a “side-by-side” system between Pillar Two and the existing United States global minimum tax provisions, various other jurisdictions in which we operate around the world have enacted legislation and the OECD continues to release additional guidance.
Additionally, some of our hedging activity addresses long-term exposures, such as our net investment in our subsidiaries. If we fail to comply with hedge accounting requirements, the gains or losses on those hedges could be recognized before the offsetting exposure materializes to offset them, potentially causing volatility in our earnings, cash or debt balances and therefore our leverage.
Additionally, some of our hedging activity addresses long-term exposures, such as our net investment in our subsidiaries. If we fail to comply with hedge accounting 17 requirements, the gains or losses on those hedges could be recognized before the offsetting exposure materializes to offset them, potentially causing volatility in our earnings, cash or debt balances and therefore our leverage.
For example, from 2016 through 2020, one of our 18 foreign subsidiaries engaged in certain transactions, a limited number of which included United States origin goods, either directly or indirectly through distributors, involving sales to specially designated nationals and/or to the Crimea region of Ukraine, which may have been made in violation of relevant trade sanctions or export control laws.
For example, from 2016 through 2020, one of our foreign subsidiaries engaged in certain transactions, a limited number of which included United States origin goods, either directly or indirectly through distributors, involving sales to specially designated nationals and/or to the Crimea region of Ukraine, which may have been made in violation of relevant trade sanctions or export control laws.
If these audits result in assessments different from amounts recorded, our future financial results may include unfavorable tax adjustments. Our business subjects us to the possibility of product liability lawsuits, which could harm our business. As the manufacturer of equipment for use in industrial markets and healthcare facilities, we may be subject to product liability claims.
If these audits result in assessments different from amounts recorded, our future financial results may include unfavorable tax adjustments. 16 Our business subjects us to the possibility of product liability lawsuits, which could harm our business. As the manufacturer of equipment for use in industrial markets and healthcare facilities, we may be subject to product liability claims.
Moreover, noncompliance could subject us to private claims for property damage or personal injury based on exposure to hazardous materials or unsafe working conditions. In addition, changes in applicable requirements or stricter interpretation of existing requirements may result in costly compliance requirements or otherwise subject us to future liabilities. 19 In addition, any environmental liability may be joint and several.
Moreover, noncompliance could subject us to private claims for property damage or personal injury based on exposure to hazardous materials or unsafe working conditions. In addition, changes in applicable requirements or stricter interpretation of existing requirements may result in costly compliance requirements or otherwise subject us to future liabilities. In addition, any environmental liability may be joint and several.
We could be subject to environmental liabilities in the future as a result of historic or current operations, including historic operations at properties we acquire from third parties, which have resulted or will result in contamination. The occurrence of any of the foregoing could have a material adverse effect on our business, financial condition and results of operations.
We could be subject to environmental liabilities in the future as a result of historic or 20 current operations, including historic operations at properties we acquire from third parties, which have resulted or will result in contamination. The occurrence of any of the foregoing could have a material adverse effect on our business, financial condition and results of operations.
We submitted a voluntary disclosure report to relevant United States government agencies regarding these transactions. On March 26, 2021 and August 26, 2021, the Former Parent received letters from BIS and OFAC, respectively, warning the Former Parent against future violations, and closing their respective matters without further action.
We submitted a voluntary disclosure report to relevant United States government agencies regarding these transactions. On March 26, 2021 and August 19 26, 2021, the Former Parent received letters from BIS and OFAC, respectively, warning the Former Parent against future violations, and closing their respective matters without further action.
The scope of the laws that may be applicable to us is often uncertain and may be conflicting, particularly with respect to foreign laws. Foreign laws we are subject to include the European Union’s General Data Protection Regulation (the “GDPR”) and the domestic version of the GDPR adopted by the United Kingdom in January 2021.
The scope of the laws that may be applicable to us is often uncertain and may be conflicting, particularly with respect to foreign laws. Foreign laws we are subject to include the European Union’s General Data Protection Regulation (the “GDPR”), the European Union’s Data Act and the domestic version of the GDPR adopted by the United Kingdom in January 2021.
In Canada, Australia, various countries in Europe, Asia and Central and South America, by law, certain of our associates are represented by a number of different trade unions and works councils, which subject us to employment arrangements very similar to collective bargaining agreements.
In Canada, Mexico, Australia, various countries in Europe, Asia and Central and South America, by law, certain of our associates are represented by a number of different trade unions and works councils, which subject us to employment arrangements very similar to collective bargaining agreements.
With the exception of the United States sanctions against Cuba and Iran, the applicable sanctions generally do not prohibit our foreign subsidiaries from selling non-United States-origin products and services to countries that are or have previously been subject to sanctions.
With the exception of the United States’ sanctions against Cuba and Iran, the applicable sanctions generally do not prohibit our foreign subsidiaries from selling non-United States-origin products and services to countries that are or have previously been subject to sanctions.
Moreover, if we fail to comply with these laws and regulations, we could be subject to fines and other penalties. We are subject to a variety of increasingly stringent environmental and health and safety laws for which compliance, or related liabilities, could be costly.
Moreover, if we fail to comply with these laws and regulations, we could be subject to litigation, fines and other penalties. We are subject to a variety of increasingly stringent environmental and health and safety laws for which compliance, or related liabilities, could be costly.
Furthermore, since a significant proportion of the plans’ assets are invested in publicly traded debt and equity securities, they are, and will be, affected by market risks.
Furthermore, since a significant proportion of the plans’ assets are invested in publicly traded debt securities, they are, and will be, affected by market risks.
In addition, our amended and restated certificate of incorporation (our “certificate of incorporation”) authorizes us to issue, without the approval of our stockholders, one or more classes or series of preferred stock having such designation, powers, preferences and relative, participating, optional and other special rights, including preferences over our common stock respecting dividends and distributions, as the Board generally may determine.
In addition, our amended and restated certificate of incorporation (our “certificate of incorporation”) authorizes us to issue, without the approval of our stockholders, one or more classes or series of preferred stock having such designation, powers, preferences and relative, participating, optional and other special rights, including preferences over our common stock respecting dividends and distributions, as the BOD generally may determine.
Risks Related to Shares of Our Common Stock If we are unable to maintain effective internal control over financial reporting in the future, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock may be negatively affected . 20 As a public company, we are required to maintain internal controls over financial reporting and to report any material weaknesses in such internal controls.
Risks Related to Shares of Our Common Stock If we are unable to maintain effective internal control over financial reporting in the future, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock may be negatively affected . 21 As a public company, we are required to maintain internal controls over financial reporting and to report any material weaknesses in such internal controls.
Our certificate of incorporation and bylaws contain, and Delaware law contains, provisions that are intended to deter coercive takeover practices and inadequate takeover bids and to encourage prospective acquirers to negotiate with the Board rather than to attempt an unsolicited takeover not approved by the Board.
Our certificate of incorporation and bylaws contain, and Delaware law contains, provisions that are intended to deter coercive takeover practices and inadequate takeover bids and to encourage prospective acquirers to negotiate with the BOD rather than to attempt an unsolicited takeover not approved by the BOD.
The terms of one or more classes or series of preferred stock could dilute the voting power or reduce the value of our common stock. Similarly, the repurchase or 21 redemption rights or liquidation preferences that we could assign to holders of preferred stock could affect the residual value of the common stock.
The terms of one or more classes or series of preferred stock could dilute the voting power or reduce the value of our common stock. Similarly, the repurchase or 22 redemption rights or liquidation preferences that we could assign to holders of preferred stock could affect the residual value of the common stock.
We cannot guarantee that we will continue to pay a dividend in the future. The payment of any dividends in the future, and the timing and amount thereof, to our stockholders will fall within the discretion of our Board.
We cannot guarantee that we will continue to pay a dividend in the future. The payment of any dividends in the future, and the timing and amount thereof, to our stockholders will fall within the discretion of our Board of Directors (“BOD”).
The Board’s decisions regarding the payment of dividends will depend on many factors, such as our financial condition, earnings, capital requirements, debt service obligations, restrictive covenants in our then existing debt agreements, industry practice, legal requirements and other factors that the Board deems relevant.
The BOD’s decisions regarding the payment of dividends will depend on many factors, such as our financial condition, earnings, capital requirements, debt service obligations, restrictive covenants in our then existing debt agreements, industry practice, legal requirements and other factors that the BOD deems relevant.
We declared and paid a quarterly cash dividend of $0.06 per share of ESAB’s common stock to our stockholders of record for the first quarter of 2024 and a quarterly cash dividend of $0.08 per share of ESAB’s common stock to our stockholders of record for the second, third and fourth quarters of 2024.
We declared and paid a quarterly cash dividend of $0.08 per share of ESAB’s common stock to our stockholders of record for the first quarter of 2025 and a quarterly cash dividend of $0.10 per share of ESAB’s common stock to our stockholders of record for the second, third and fourth quarters of 2025.
Item 1. “Business—Industry and Competition” for a dditional information about the competitive markets in which we operate. 15 Changes in our tax rates or exposure to additional income tax liabilities could adversely affect our financial results.
Item 1. “Business—Industry and Competition” of this Form 10-K for a dditional information about the competitive markets in which we operate. Changes in our tax rates or exposure to additional income tax liabilities could adversely affect our financial results.
Note 19, “Commitments and Contingencies.” For purposes of our financial statements, we have estimated the future claims exposure and the amount of insurance available based upon certain assumptions with respect to future claims and liability costs.
For purposes of our financial statements, we have estimated the future claims exposure and the amount of insurance available based upon certain assumptions with respect to future claims and liability costs.
These provisions include, among others, the inability of our stockholders to call a special meeting or to act by written consent, rules regarding how stockholders may present proposals or nominate directors for election at stockholder meetings, the right of the Board to issue preferred stock without stockholder approval, the division of the Board into three classes of directors, with each class serving a staggered three-year term, provision that stockholders may only remove directors with cause and the ability of our directors, and not stockholders, to fill vacancies (including those resulting from an enlargement of the Board) on the Board.
These provisions include, among others, the inability of our stockholders to call a special meeting or to act by written consent, rules regarding how stockholders may present proposals or nominate directors for election at stockholder meetings, the right of the BOD to issue preferred stock without stockholder approval, provision that stockholders may only remove directors with cause and the ability of our directors, and not stockholders, to fill vacancies (including those resulting from an enlargement of the BOD) on the BOD.
This could materially adversely affect our business, financial condition, or results of operations and result in a diversion of the time and resources of our management and Board of Directors. 22
This could materially adversely affect our business, financial condition, or results of operations and result in a diversion of the time and resources of our management and BOD. 23
Although we believe our current estimates are reasonable, a change in the time period used for forecasting liability costs, the actual number of future claims brought, the cost of resolving these claims, the likelihood of payment by, and the solvency of, insurers and the amount of remaining insurance available 17 could be substantially different than the estimates, and future revaluation of liabilities and insurance recoveries could result in material adjustments to these estimates, any of which could materially and adversely affect our business, financial condition and results of operations.
Although we believe our current estimates are reasonable, a change in the time period used for forecasting liability costs, the actual number of future claims brought, the cost of resolving these claims, the likelihood of payment by, and the solvency of, insurers and the amount of remaining insurance available could be substantially different than the estimates, and future revaluation of liabilities and insurance recoveries could result in material adjustments to these estimates, any of which could materially and adversely affect our business, financial condition and results of operations. 18 In addition, we incur defense, settlement and/or judgment costs related to those claims, a portion of which has historically been reimbursed by insurers.
The representation committees that negotiate with the foreign trade unions or works councils on our behalf may not be successful in negotiating new collective bargaining agreements or other employment arrangements when the current ones expire.
The representation committees that negotiate with the foreign trade unions or works councils on our behalf may not be successful in negotiating new collective bargaining agreements or other employment arrangements when the current ones expire. Furthermore, future labor negotiations could result in significant increases in our labor costs.
In connection with the Separation, we agreed to indemnify the Former Parent for, among other things, the retained asbestos-related contingencies and liabilities related to these businesses. See Item 3. “Legal Proceedings” and Part II, Item 8.
In connection with the Separation, we agreed to indemnify the Former Parent for, among other things, the retained asbestos-related contingencies and liabilities related to these businesses. See Item 3. “Legal Proceedings” and Part II, Item 8. Note 19, “Commitments and Contingencies” of this Form 10-K.
Certain subsidiaries contributed by the Former Parent immediately prior to the consummation of the Separation and pursuant to the terms of the separation agreement entered into with the Former Parent in connection with the Separation are one of many defendants in a large number of lawsuits that claim personal injury as a result of exposure to asbestos from products manufactured or used with components that are alleged to have contained asbestos.
Certain of our subsidiaries, which were contributed by the Former Parent, Colfax Corporation now known as Enovis Corporation (“Former Parent”), immediately prior to the consummation of the separation from the Former Parent (the “Separation”) and pursuant to the terms of the separation agreement entered into with the Former Parent in connection with the Separation are among the many defendants named in a large number of lawsuits that claim personal injury as a result of exposure to asbestos from products manufactured or used with components that are alleged to have contained asbestos.
As of December 31, 2024, approximately 36% of our associates were represented by a number of different trade unions and works councils. Further, as of that date, we had approximately 8,000 associates, representing approximately 86% of our worldwide associate base, in foreign locations.
As of December 31, 2025, approximately 37% of our associates were represented by a number of different trade unions and works councils. Further, as of that date, we had approximately 9,200 associates, representing approximately 90% of our worldwide associate base, in foreign locations.
See Item 3.”Legal Proceedings.” We have done and may continue to do business in countries subject to United States sanctions. Failure to comply with various sanction laws may result in enforcement or other regulatory actions. Certain of our independent foreign subsidiaries have conducted and may continue to conduct business in countries subject to United States sanctions and other export controls.
Certain of our independent foreign subsidiaries have conducted and may continue to conduct business in countries subject to United States sanctions and other export controls. Failure to comply properly with various sanction laws to which we, our operations and certain of our independent foreign subsidiaries may be subject may result in enforcement or other regulatory actions.
We are continuing to evaluate and monitor the impacts of Pillar Two legislation in the jurisdictions we operate. In addition, the amount of income taxes we pay is subject to ongoing audits by United States federal, state and local tax authorities and by non-United States tax authorities.
In addition, the amount of income taxes we pay is subject to ongoing audits by United States federal, state and local tax authorities and by non-United States tax authorities.
These costs may be significant, and we may not be able to predict the amount or duration of such costs. Additionally, we may experience delays in receiving reimbursement from insurers, during which time we may be required to pay cash for settlement or legal defense costs.
Additionally, we may experience delays in receiving reimbursement from insurers, during which time we may be required to pay cash for settlement or legal defense costs.
Furthermore, future labor negotiations could result in significant increases in our labor costs. 16 Our defined benefit pension plans and post-retirement medical and death benefit plans are or may become subject to funding requirements or obligations that could adversely affect our business, financial condition and results of operations.
Our defined benefit pension plans and post-retirement medical and death benefit plans are or may become subject to funding requirements or obligations that could adversely affect our business, financial condition and results of operations. We operate defined benefit pension plans and post-retirement medical and death benefit plans for current and former employees worldwide.
Any detrimental change in any of the above factors is likely to worsen the funding position of each of the relevant plans, and this would likely require the plans’ sponsoring employers to increase the contributions currently made to the plans to satisfy our obligations. Our hedging activity could negatively impact our results of operations, cash flows, or leverage.
Any detrimental change in any of the factors described in the preceding paragraph is likely to worsen the funding position of each of the relevant plans, which could likely require the plans’ sponsoring employers, including one or more of our subsidiaries, to increase the contributions currently made to the plans to satisfy our obligations.
Our inability to effectively address customer concerns with respect to climate change and related sustainability matters could similarly impact customer demand for our products and services and adversely affect our business. Our businesses are subject to extensive regulation; failure to comply with those regulations could adversely affect our reputation and our business, financial condition and results of operations.
Our businesses are subject to extensive regulation; failure to comply with those regulations could adversely affect our reputation and our business, financial condition and results of operations.
We have entered into derivatives to manage our exposure to interest rate and currency movements.
Our hedging activity could negatively impact our results of operations, cash flows, or leverage. We have entered into derivatives to manage our exposure to interest rate and currency movements.
As these and other tax laws, regulations and norms change or evolve, our financial results could be materially impacted. Given the unpredictability of these possible changes, we currently cannot assess whether the overall effect of such potential tax changes could adversely impact our financial results.
Given the unpredictability of these possible changes, we currently cannot assess whether the overall effect of such potential tax changes could adversely impact our financial results. We are continuing to evaluate and monitor the impacts of Pillar Two legislation or other tax initiatives in the jurisdictions where we do business.
In addition, we incur defense, settlement and/or judgment costs related to those claims, a portion of which has historically been reimbursed by insurers. We also incur legal costs in connection with efforts to recover insurance from certain of the contributed subsidiaries’ insurers relating to insurance coverage.
We also incur legal costs in connection with efforts to recover insurance from certain of the contributed subsidiaries’ insurers relating to insurance coverage. These costs may be significant, and we may not be able to predict the amount or duration of such costs.
Failure to comply properly with various sanction laws to which we, our operations and certain of our independent foreign subsidiaries may be subject may result in enforcement or other regulatory actions.
See Item 3.”Legal Proceedings” of this Form 10-K. We have done and may continue to do business in countries subject to United States sanctions. Failure to comply with various sanction laws may result in enforcement or other regulatory actions.
Removed
We operate defined benefit pension plans and post-retirement medical and death benefit plans for current and former employees worldwide.
Added
Based upon existing legislation and OECD guidance, Pillar Two could increase our future tax obligations in the countries in which we operate. As these and other tax laws, regulations and norms change or evolve, our financial results could be materially impacted.
Added
On July 4, 2025, the One Big Beautiful Bill Act (the “Act”) was signed into law. The Act makes permanent key elements of the Tax Cuts and Jobs Act, including 100 percent bonus depreciation and domestic research cost expensing, and modifications to the international tax framework.
Added
The Act also makes modifications to the interest limitation rules that may result in a material increase in the amount of carryforward interest expense under Section 163(j) and our ability to utilize the carryforward would depend on the Company’s United States EBITDA in future years.
Added
The Act includes multiple effective dates, with certain provisions effective in 2025 and others phased-in through 2027. We continue to evaluate the impact of the Act's provisions that take effect in future years.
Added
Failure to successfully integrate new technologies, including artificial intelligence and machine learning, could limit our ability to grow and maintain our competitive position and adversely affect our financial condition, results of operations and cash flow.
Added
The continued creation, development, and advancement of new technologies, such as artificial intelligence and machine learning, amongst others, as well as other technologies in the future that are not foreseen today, continue to transform the Company’s processes, products, and services.
Added
In order to remain competitive, the Company will need to stay abreast of such technologies, require its employees to continue to learn and adapt to new technologies and be able to integrate them into its current and future business models, products, services and processes and also guard against disruptions to its business by existing and new competitors using such technologies.
Added
The Company’s strategy, operating model, and new product innovation pipeline all have important technological elements and many of the Company’s products and services are based on technological advances. In addition, the Company will need to compete for talent that is familiar with such technologies, including upskilling its workforce.
Added
There can be no assurance that the Company will continue to compete effectively with its industry peers as new technology evolves, which could result in a material adverse effect on the Company's business and results of operations.
Added
Conversely, changing political and regulatory perspectives, delays in regulatory initiatives and uncertainty about potential changes, could cause customers to cancel or delay projects or initiatives, which could negatively impact their demand for our products and services.
Added
Our inability to effectively manage the rapidly evolving, varied and potentially confusing expectations with respect to products and services implicated by climate change and related sustainability considerations could similarly impact customer demand for our products and services and adversely affect our business.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

48 edited+9 added−4 removed62 unchanged
Biggest changeAdditional tariffs imposed by the United States on imports from China or other countries, or retaliatory trade measures in response, could result in an increase in supply chain costs that we may not be able to offset or otherwise adversely impact our results of operations.
Biggest changeThese and future changes in tariffs and trade policies by the United States on imports from China or other countries, or retaliatory trade measures in response, have resulted and may continue to result in additional costs and pricing pressures, supply chain disruptions, volatile or unpredictable customer spending patterns and increased economic or geopolitical risk that we may not be able to offset or otherwise, any or all of which could adversely impact our business and relative competitive position, financial condition and results of operations, perhaps materially or in ways that we cannot predict.
These risks include: economic or political instability; partial or total expropriation of international assets; limitations on ownership or participation in local enterprises; trade protection measures by the United States or other nations, including tariffs or import-export restrictions or licensing requirements and other changes in trade relations; currency exchange rate fluctuations and restrictions on currency repatriation; inflation; labor, employment and environmental, health and safety laws and regulations that may be more restrictive than in the United States; changes in laws and regulations, including taxation policies, or in how such provisions are interpreted or administered; difficulties in enforcing our rights outside the United States, including intellectual property rights; difficulties in hiring and maintaining qualified staff and managing geographically diverse operations; the disruption of operations from natural or man-made disasters or adverse weather conditions (including events that may be caused or exacerbated by climate change), world 9 health events, labor or political disturbances, terrorist activities, insurrection or war; the imposition of additional foreign governmental controls or regulations on the sale of our products; increased costs of transportation or shipping; and uncertainties arising from local business practices and cultural considerations.
These risks include: economic or political instability; partial or total expropriation of international assets; limitations on ownership or participation in local enterprises; trade protection measures by the United States or other nations, including tariffs or import-export restrictions or licensing requirements and other changes in trade relations; currency exchange rate fluctuations and restrictions on currency repatriation; inflation; labor, employment and environmental, health and safety laws and regulations that may be more 9 restrictive than in the United States; changes in laws and regulations, including taxation policies, or in how such provisions are interpreted or administered; difficulties in enforcing our rights outside the United States, including intellectual property rights; difficulties in hiring and maintaining qualified staff and managing geographically diverse operations; the disruption of operations from natural or man-made disasters or adverse weather conditions (including events that may be caused or exacerbated by climate change), world health events, labor or political disturbances, terrorist activities, insurrection or war; the imposition of additional foreign governmental controls or regulations on the sale of our products; increased costs of transportation or shipping; and uncertainties arising from local business practices and cultural considerations.
The potential for future such events, the national and international response to such events and the perceived risk of such events, have created, and may continue to create economic and political uncertainties. Significant movements in foreign currency exchange rates have adversely impacted our financial results in the past and may adversely impact our results in the future.
The potential for such future events, the national and international response to such events and the perceived risk of such events, have created, and may continue to create economic and political uncertainties. Significant movements in foreign currency exchange rates have adversely impacted our financial results in the past and may adversely impact our results in the future.
While we are not aware of any material cybersecurity threats or incidents that have had or are reasonably likely to have a material effect on us, we can p rovide no assurance that our efforts to actively manage technology risks potentially affecting our systems will be successful in deterring or mitigating risks to or intrusions into our systems, networks and data or in effectively detecting or resolving such risks or intrusions when they materialize.
While we are not aware of any material cybersecurity threats or incidents that have had or are reasonably likely to have a material effect on us, we can p rovide no assurance that our efforts to actively manage technology risks potentially affecting our systems have been or will be successful in deterring or mitigating risks to or intrusions into our systems, networks and data or in effectively detecting or resolving such risks or intrusions when they materialize.
Any determination requiring the write-off of a significant portion of unamortized intangible assets would adversely affect our business, financial condition, results of operations and total capitalization, the effect of which could be material. Our electronic information systems have been and could in the future be, subject to service interruptions, data corruption, cyber-based attacks, network security breaches and other cybersecurity incidents.
Any determination requiring the write-off of a significant portion of unamortized intangible assets would adversely affect our business, financial condition, results of operations and total capitalization, the effect of which could be material. 12 Our electronic information systems have been, and could in the future be, subject to service interruptions, data corruption, cyber-based attacks, network security breaches and other cybersecurity incidents.
Acquisitions involve numerous risks, including difficulties in the assimilation of the operations, systems, compliance and reporting controls, including internal control over financial reporting, technologies, personnel, services and products of the acquired company, the potential loss of key employees, customers, suppliers and distributors of the acquired company and the diversion of our management’s attention from other business concerns.
Acquisitions involve numerous risks, including difficulties in the assimilation of the operations, systems, compliance and reporting controls, including internal control over financial reporting, technologies, personnel, services and products of the 11 acquired company; the potential loss of key employees, customers, suppliers and distributors of the acquired company; and the diversion of our management’s attention from other business concerns.
Such events may negatively impact our results of operations, cash flows and financial condition. 10 Natural or man-made disasters, adverse weather events or conditions, epidemics, pandemics and other widespread health events have adversely impacted, and may in the future adversely impact, our results of operations, financial condition and overall financial performance.
Such events may negatively impact our results of operations, cash flows and financial condition. Natural or man-made disasters, adverse weather events or conditions, epidemics, pandemics and other widespread health events have adversely impacted, and may in the future adversely impact, our results of operations, financial condition and overall financial performance.
On April 9, 2024, the Company issued $700.0 million in aggregate principal amount of 6.25% senior notes due 2029 (the “Senior Notes”) governed by an indenture (the “Indenture”). In addition, the Indenture also includes certain restrictive covenants.
On April 9, 2024, the Company issued $700.0 million in aggregate principal amount of 6.25% senior notes due 2029 (the “Senior Notes”) governed by an indenture (the “Indenture”). The Indenture also includes certain restrictive covenants.
In addition, any failure to obtain and maintain credit ratings from independent rating agencies would adversely 13 affect our cost of funds and could adversely affect our liquidity and access to the capital markets.
In addition, any failure to obtain and maintain credit ratings from independent rating agencies would adversely affect our cost of funds and could adversely affect our liquidity and access to the capital markets.
In addition, volatility in commodity prices can negatively affect the level of these new activities and can postpone capital spending decisions or the delay or cancellation of existing orders.
In addition, volatility in commodity prices can negatively affect the level of these new activities and can postpone capital spending decisions or delay or result in the cancellation of existing orders.
If we breach any of these restrictions and cannot obtain a waiver from the lenders on favorable terms, subject to applicable cure periods, the outstanding indebtedness (and any other indebtedness with cross-default provisions) could be declared immediately due and payable, which would adversely affect our liquidity and financial statements.
If we breach any of these restrictions and are unable to obtain a waiver from the lenders on favorable terms, subject to applicable cure periods, the outstanding indebtedness (and any other indebtedness with cross-default provisions) could be declared immediately due and payable, which would adversely affect our liquidity and financial statements.
Our existing and any future indebtedness could adversely affect our businesses and our ability to meet our obligations and pay dividends. We have outstanding debt and other financial obligations and unused borrowing capacity and may incur or assume more debt in the future. As of December 31, 2024, we have $1.1 billion of outstanding indebtedness.
Our existing and any future indebtedness could adversely affect our businesses and our ability to meet our obligations and pay dividends. We have outstanding debt and other financial obligations and unused borrowing capacity and may incur or assume more debt in the future. As of December 31, 2025, we have $1.2 billion of outstanding indebtedness.
If economic, business and industry conditions deteriorate, capital spending in those sectors may be substantially decreased, which could reduce demand for our products and have an adverse impact on our revenues and results of operations.
If economic, business and industry conditions deteriorate, capital spending in those sectors may substantially decrease, which could reduce demand for our products and have an adverse impact on our revenues and results of operations.
We are exposed to fluctuations in currency exchange rates. During the year ended December 31, 2024, approximately 78% of our sales were derived from operations outside of the United States. A significant portion of our revenues and income are denominated in foreign currencies. Large fluctuations in the rate of exchange between foreign currencies and the U.S.
We are exposed to fluctuations in currency exchange rates. During the year ended December 31, 2025, approximately 80% of our sales were derived from operations outside of the United States. A significant portion of our revenues and income are denominated in foreign currencies. Large fluctuations in the rate of exchange between foreign currencies and the U.S.
We also have the ability to incur an additional $50.0 million of indebtedness pursuant to certain uncommitted credit lines, access up to $750.0 million under our revolving credit facility under our Credit Agreement (as defined below), and in the future we may incur additional indebtedness.
We also have the ability to incur an additional $50.0 million of indebtedness pursuant to certain uncommitted credit lines, access up to $865.0 million under our revolving credit facility under our A&R Credit Agreement (as defined below), and in the future we may incur 13 additional indebtedness.
Excluding any goodwill allocation, Russia has approximately 4% of our total net assets as of December 31, 2024, including approximately $30 million of Cash and cash equivalents that may be subject to delays in withdrawing from Russia, based upon the current environment at that time.
Excluding any goodwill allocation, Russia has approximately 5% of our total net assets as of December 31, 2025, including approximately $50 million of Cash and cash equivalents that may be subject to delays in withdrawing from Russia, based upon the current environment at that time.
The loss of suppliers in these areas, any other interruption or delay in the supply of required materials or our inability to obtain these materials at acceptable prices and within a reasonable amount of time could impair our ability to meet scheduled product deliveries to our customers and could hurt our reputation and cause customers to cancel orders.
The loss of suppliers in these areas, any other interruption or delay in the supply of required materials or our inability to obtain these materials at acceptable prices and within a reasonable amount of time could impair our ability to meet scheduled product deliveries to our customers and could hurt our reputation and cause customers to cancel orders. 15 The markets we serve are highly competitive.
The market for many of our products is, in part, dependent upon patent, trademark, copyright and trade secret laws, agreements with employees, customers and other third parties including confidentiality agreements, invention assignment agreements and proprietary information agreements, to establish and maintain our intellectual property rights, and the Goodwill engendered by our trademarks and trade names.
The market for many of our products is, in part, dependent upon patent, trademark, copyright and trade secret laws, agreements with employees, customers and other third parties including confidentiality agreements, invention assignment agreements and proprietary information agreements, to establish and maintain our intellectual property rights. The protection and enforcement of these intellectual property rights is therefore material to our business.
Additionally, changes in government regulations, any pandemics or other contagious outbreaks, or political and economic instability could affect our ability to continue to receive materials from suppliers in the impacted region.
Additionally, changes in government regulations, including any trade protection measures or other actions by the United States or other nations, pandemics or other contagious outbreaks, or political and economic instability could affect our ability to continue to receive materials from suppliers in the impacted region.
For the year ended December 31, 2024, 43% and 57% of our Net sales were derived from the Americas and EMEA & APAC, respectively.
For the year ended December 31, 2025, 40% and 60% of our Net sales were derived from the Americas and EMEA & APAC, respectively.
Additionally, advanced persistent attempts to gain unauthorized access or deny access to, or otherwise disrupt, our systems and those of third-party service providers we rely on are increasing in sophistication and frequency.
Additionally, advanced persistent attempts to gain unauthorized access or deny access to, or otherwise disrupt, our systems and those of third-party service providers we rely on are increasing in sophistication and frequency, including through artificial intelligence technologies, and are increasingly more difficult to detect and defend against.
For the year ended December 31, 2024, our operations in Russia represented approximately 5% of our total revenue, and approximately $13 million in Net income.
For the year ended December 31, 2025, our operations in Russia represented approximately 5% of our Net sales, and approximately $9 million in Net income.
As such, we have incurred and expect to continue to incur expenses relating to restructuring activities. We may not achieve or sustain the anticipated benefits, including any anticipated savings, of these restructuring programs or initiatives.
We have implemented, and plan to continue to implement, restructuring programs designed to facilitate key strategic initiatives and maintain long-term sustainable growth. As such, we have incurred, and expect to continue to incur, expenses relating to restructuring activities. We may not achieve or sustain the anticipated benefits, including any anticipated savings, of these restructuring programs or initiatives.
In addition, other wars and conflicts, turmoil in the geopolitical environment, terrorism and social unrest may put pressure on economic conditions, which could lead to reduced demand for our products and services and have other adverse impacts including increased costs of raw materials and inputs, supply chain interruptions, delays in manufacturing or shipping delays.
Our operations in Russia had a cumulative translation loss of approximately $110 million, which would be realized upon a transition out. 10 In addition, other wars and conflicts, turmoil in the geopolitical environment, terrorism and social unrest may put pressure on economic conditions, or international trade relations, which could lead to reduced demand for our products and services and have other adverse impacts including increased costs of raw materials and inputs, supply chain interruptions, delays in manufacturing or shipping delays.
Some of our competitors may also have greater financial, marketing and research and development resources than we have or stronger name recognition. As a result, those competitors may be better able to withstand the effects of periodic economic downturns. In addition, pricing pressures could cause us to adjust the prices of some of our products to stay competitive.
Some of our competitors may also have greater financial, marketing and research and development resources than we have or stronger name recognition. As a result, those competitors may be better able to withstand the effects of periodic economic downturns or other disruptions or challenges.
If these information technology systems suffer severe damage, disruption or shutdown and business continuity plans do not effectively resolve the issues in a timely manner, our business, financial condition, results of operations and liquidity could be materially adversely affected. 12 In addition, our information systems and those of third parties upon which we rely are subject to security threats and sophisticated cyber-based attacks, including, but not limited to, denial-of-service attacks, hacking, “phishing” attacks, computer viruses, ransomware, malware, employee or insider error, malfeasance, social engineering, vulnerabilities, or physical breaches, that can cause deliberate or unintentional damage, destruction or misuse, manipulation, denial of access to or disclosure of confidential or important information, either directly or by our employees, suppliers or third-party service providers.
In addition, our information systems and those of third parties upon which we rely are subject to security threats and sophisticated cyber-based attacks, including, but not limited to, denial-of-service attacks, hacking, “phishing” attacks, computer viruses, ransomware, malware, employee or insider error, malfeasance, social engineering, vulnerabilities, or physical breaches, that can cause deliberate or unintentional damage, destruction or misuse, manipulation, denial of access to or disclosure of confidential or important information, either directly or by our employees, suppliers or third-party service providers.
A reduction in demand for our products and services has resulted in the past, and in the future could result in, the delay or cancellation of existing orders or lead to excess manufacturing capacity, which unfavorably impacts our absorption of fixed manufacturing costs.
A reduction in demand for our products and services has in the past resulted, and in the future could result in, the delay or cancellation of existing orders or excess manufacturing capacity, which unfavorably impacts our absorption of fixed manufacturing costs. Any reduced demand could have a material adverse effect on our business, financial condition and results of operations.
The welding and cutting industry is generally a mature industry in developed markets such as North America and Western Europe and is cyclical in nature.
Risks Related to our Business The cyclical nature and maturity of the welding and cutting industry in developed markets may adversely affect our performance. The welding and cutting industry is generally a mature industry in developed markets such as North America and Western Europe and is cyclical in nature.
In the year ended December 31, 2024, we derived 78% of our sales from operations outside of the United States and, as of that date, we had principal manufacturing facilities in 14 countries in addition to the United States.
The majority of our sales are derived from international operations. We are subject to specific risks associated with international operations. In the year ended December 31, 2025, we derived approximately 80% of our sales from operations outside of the United States and, as of that date, we had principal manufacturing facilities in 16 countries in addition to the United States.
Any action we take to protect or enforce our intellectual property rights could be costly and could absorb significant management time and attention. As a result of any such litigation, we could lose our proprietary rights. In addition, third parties may claim that we or our customers are infringing upon their intellectual property rights.
It may be particularly difficult to enforce our intellectual property rights in countries where such rights are not highly developed or protected. Any action we take to protect or enforce our intellectual property rights could be costly and could absorb significant management time and attention. As a result of any such litigation, we could lose our proprietary rights.
The development of new technologies by competitors that may compete with our technologies could reduce demand for our products and affect our financial performance.
In addition, pricing pressures could cause us to adjust the prices of some of our products to stay competitive. The development of new technologies by competitors that may compete with our technologies could reduce demand for our products and affect our financial performance.
If we are not able to realize the anticipated benefits and synergies from our acquisitions within a reasonable time, our business, financial condition and results of operations may be adversely affected. 11 Additionally, we may underestimate or fail to discover liabilities relating to acquisitions during our due diligence investigations, and we, as the successor owner of an acquired company, might be responsible for those liabilities.
Additionally, we may underestimate or fail to discover liabilities relating to acquisitions during our due diligence investigations, and we, as the successor owner of an acquired company, might be responsible for those liabilities. Such liabilities could have a material adverse effect on our business, financial condition and results of operations.
Even if future debt financing is available, it may result in (i) increased interest expense, (ii) increased term loan payments, (iii) increased leverage and (iv) decreased income available to fund further acquisitions and expansion. It may also limit our ability to withstand competitive pressures and make us more vulnerable to economic downturns.
If we are unable to obtain sufficient additional capital in the future, it may limit our ability to fully implement our growth strategy. Even if future debt financing is available, it may result in (i) increased interest expense, (ii) increased term loan payments, (iii) increased leverage and (iv) decreased income available to fund further acquisitions and expansion.
Additional risks and uncertainties, which are currently unknown to us or that we do not currently consider to be material, could have material adverse effects on our business, financial condition and results of operations. Risks Related to our Business The cyclical nature and maturity of the welding and cutting industry in developed markets may adversely affect our performance.
Additional risks and uncertainties, which are currently unknown to us or that we do not currently consider to be material, could have material adverse effects on our business, financial condition and results of operations, including our prospects, and thereby impact the value of our common stock.
To the extent that we do not generate sufficient cash internally to provide the capital we require to fund our growth strategy and future operations, we will require additional debt or equity financing. This additional financing may not be available or, if available, may not be on terms acceptable to us.
The acquisition is expected to be funded with a combination of cash on hand, debt and approximately $318 million of fully committed equity. To the extent that we do not generate sufficient cash internally to provide the capital we require to fund our growth strategy and future operations, we will require additional debt or equity financing.
The protection and enforcement of these intellectual property rights 14 is therefore material to our business. The failure to protect these rights may have a material adverse effect on our business, financial condition and results of operations.
The failure to protect these rights may have a material adverse effect on our business, financial condition and results of operations. Litigation may be required to enforce our intellectual property rights, protect our trade secrets or determine the validity and scope of proprietary rights of others.
On April 4, 2022, the Company entered into a credit agreement (as amended and restated from time-to-time, the “Credit Agreement”). The Credit Agreement, which governs our term loan and revolving credit facility, contain restrictive covenants that limit our ability to engage in activities that may be in our long-term interest, including for example EBITDA-based leverage and interest coverage ratios.
The A&R Credit Agreement, which governs our term loan and revolving credit facility, contains restrictive covenants, including for example, earnings before interest, taxes, depreciation and amortization (“EBITDA”) based leverage and interest coverage ratios, that limit our ability to engage in activities that may be in our long-term interest.
Each subsidiary is a distinct legal entity and, under certain circumstances, legal, tax and contractual restrictions may limit our ability to obtain cash from our subsidiaries. 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.
Each subsidiary is a distinct legal entity and, under certain circumstances, legal, tax and contractual restrictions may limit our ability to obtain cash from our subsidiaries.
Further, high volatility in the capital markets and in our stock price may make it difficult for us to access the capital markets at attractive prices, if at all. If we are unable to obtain sufficient additional capital in the future, it may limit our ability to fully implement our growth strategy.
This additional financing may not be available or, if available, may not be on terms acceptable to us. Further, high volatility in the capital markets and in our stock price may make it difficult for us to access the capital markets at attractive prices, if at all.
The markets we serve are highly competitive. If we are unable to respond successfully to this competition, this could reduce our sales and operating margins. Our business operates in highly fragmented and competitive markets.
If we are unable to respond successfully to this competition, this could reduce our sales and operating margins. Our business operates in highly fragmented and competitive markets. To maintain and enhance our competitive position, we intend to, among other things, continue investing in manufacturing quality, marketing, customer service and support, distribution networks and research and development.
To maintain and enhance our competitive position, we intend to, among other things, continue investing in manufacturing quality, marketing, customer service and support, distribution networks and research and development. We may not have sufficient resources to continue to make these investments and we may not be able to maintain our competitive position.
We may not have sufficient resources to continue to make these investments and we may not be able to maintain our competitive position.
Additionally, changes in United States policy regarding international trade, including import and export regulation and international trade agreements, could also negatively impact our business. In 2018, the United States imposed tariffs on steel and aluminum as well as on goods imported from China and certain other countries, which resulted in retaliatory tariffs by China and other countries.
Additionally, changes in United States policy regarding international trade, including import and export regulation and international trade agreements, could also negatively impact our business. For example, in 2025, the United States expanded and increased existing tariffs on steel and aluminum, imposing 50% tariffs on steel, aluminum and products containing steel and aluminum from a range of United States trading partners.
A material disruption at any of our manufacturing facilities could adversely affect our ability to generate sales and meet customer demand.
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. 14 A material disruption at any of our manufacturing facilities could adversely affect our ability to generate sales and meet customer demand.
If future equity financing is available, issuances of our equity securities may significantly dilute our existing stockholders. Our restructuring activities may subject us to additional uncertainty in our operating results. We have implemented, and plan to continue to implement, restructuring programs designed to facilitate key strategic initiatives and maintain long-term sustainable growth.
It may also limit our ability to withstand competitive pressures and make us more vulnerable to economic downturns. If future equity financing is available, issuances of our equity securities may significantly dilute our existing stockholders. Our restructuring activities may subject us to additional uncertainty in our operating results.
We expect to continue to confront efforts by hackers and other third parties to gain unauthorized access or deny access to, or otherwise disrupt, our information systems and those of third parties upon which we rely. Any such attacks could have a material adverse effect on our business, financial condition, results of operations or liquidity.
We expect to continue to confront efforts by hackers and other unauthorized parties, including criminal threat actors, nation-states, or insiders (including associates or third-party contractors engaged in fraudulent or malicious activities), to gain unauthorized access or deny access to, or otherwise disrupt, our information systems and those of third parties upon which we rely.
Our growth strategy will require additional capital investment to complete acquisitions, integrate the completed acquisitions into our existing operations and expand into new markets. We intend to pay for future acquisitions using cash, capital stock, financing, assumption of indebtedness or any combination of the foregoing.
We may require additional capital to finance our acquisitions and operation needs, and such capital may not be available, impacting our ability to pursue our growth strategy. Our growth strategy will require additional capital investment to complete acquisitions, integrate the completed acquisitions into our existing operations and expand into new markets.
Any reduced demand could have a material adverse effect on our business, financial condition and results of operations. The majority of our sales are derived from international operations. We are subject to specific risks associated with international operations.
Any such attacks could have a material adverse effect on our business, financial condition, results of operations or liquidity. Furthermore, businesses that we have acquired, or may in the future acquire, may have cybersecurity weaknesses that could subject us to increased risks of cybersecurity incidents.
Any of the foregoing may be exacerbated by a delay or failure to detect a cybersecurity incident or the full extent of such incident.
Any of the foregoing may be exacerbated by a delay or failure to detect a cybersecurity incident, and it may take considerable time for us to investigate and evaluate the full impact of such incidents, particularly for sophisticated attacks, which may divert our management’s attention from other business concerns and inhibit our ability to provide prompt, full and reliable information about the incident to our customers, regulators and the public or the full extent of such incident.
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In addition, the new Trump administration has proposed tariffs on imports from other countries and other changes to United States policy regarding international trade.
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The disclosures in this section reflect our beliefs and opinions as to factors that could materially and adversely affect us in the future.
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Our operations in Russia had a cumulative translation loss of approximately $130 million, which would be realized upon a transition out.
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References to past events are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such factors have occurred in the past or their likelihood of occurring in the future.
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Such liabilities could have a material adverse effect on our business, financial condition and results of operations. We may require additional capital to finance our operation needs, and such capital may not be available, impacting our ability to pursue our growth strategy.
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The United States has also announced other significant tariffs on imports from a wide range of countries, including China, which was followed by retaliatory tariffs by China and a number of countries and a cycle of further retaliatory tariff announcements and trade actions.
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Litigation may be required to enforce our intellectual property rights, protect our trade secrets or determine the validity and scope of proprietary rights of others. It may be particularly difficult to enforce our intellectual property rights in countries where such rights are not highly developed or protected.
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While certain of the tariffs have been and may be delayed, others have taken or may take effect. Further, tariffs announced or imposed by the United States could be altered or delayed through presidential actions, bilateral negotiations, judicial orders or congressional action, and tariffs announced or imposed by other countries can be affected by similar developments.
Added
If we are not able to realize the anticipated benefits and synergies from our acquisitions within a reasonable time, our business, financial condition and results of operations may be adversely affected.
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We intend to pay for future acquisitions using cash, capital stock, financing, assumption of indebtedness or any combination of the foregoing. For example, on January 31, 2026, the Company entered into an agreement to acquire Eddyfi Technologies (“Eddyfi”), a global leader in advanced inspection and monitoring technologies headquartered in Quebec, Canada, for approximately $1.45 billion.
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If these information technology systems suffer severe damage, disruption or shutdown and business continuity plans do not effectively resolve the issues in a timely manner, our business, financial condition, results of operations and liquidity could be materially adversely affected.
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On April 4, 2022, the Company entered into a credit agreement (as amended and restated from time-to-time, the “Credit Agreement”). On October 16, 2025, the Company entered into an Amended and Restated Credit Agreement (the “A&R Credit Agreement”).
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In addition, third parties may claim that we or our customers are infringing upon their intellectual property rights.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeSignificant disruptions in, or breaches in security of, our electronic information systems or data can adversely affect our business and financial statements .”
Biggest changeSignificant disruptions in, or breaches in security of, our electronic information systems or data can adversely affect our business and financial statements ” and “Risk Factors—Risks Related to Our Business— Failure to successfully integrate new technologies, including artificial intelligence and machine learning, could limit our ability to grow and maintain our competitive position and adversely affect our financial condition, results of operations and cash flow ” of this Form 10-K.
These reports and updates may address a wide range of topics, including recent developments, evolving standards, vulnerability assessments, third-party and independent reviews, the threat environment, technological trends and information security considerations arising with respect to the Company’s peers and third parties. The Audit Committee periodically reports to the Board on data protection and cybersecurity matters.
These reports and updates may address a wide range of topics, including recent developments, evolving standards, vulnerability assessments, third-party and independent reviews, the threat environment, technological trends and information security considerations arising with respect to the Company’s peers and third parties. The Audit Committee periodically reports to the BOD on data protection and cybersecurity matters.
We also have protocols by which certain cybersecurity incidents are escalated within the Company and, in certain circumstances, reported to the Board and/or Audit Committee in a timely manner. At the management level, our CIO is responsible for overseeing and implementing a cybersecurity strategy aligned with the Company’s goals and needs.
We also have protocols by which certain cybersecurity incidents are escalated within the Company and, in certain circumstances, reported to the BOD and/or Audit Committee in a timely manner. At the management level, our CIO is responsible for overseeing and implementing a cybersecurity strategy aligned with the Company’s goals and needs.
In addition, we expect all of our associates as well as our third-party vendors to help protect against cybersecurity risks, and we conduct periodic awareness campaigns, emerging threats communications and specific trainings. We have adopted a Global Cybersecurity Incident Response Procedure that applies in the event of a cybersecurity threat or incident.
In addition, we expect all of our associates as well as our third-party vendors to help protect against cybersecurity risks, and we conduct periodic awareness campaigns, emerging threats communications and specific training. We have adopted a Global Cybersecurity Incident Response Procedure that applies in the event of a cybersecurity threat or incident.
Internal Cybersecurity Team and Governance The Board maintains responsibility for oversight of risks that may affect the Company. Our Board has delegated the primary responsibility to oversee cybersecurity matters to the Audit Committee. The Audit Committee reviews the Company’s policies with respect to risk assessment and enterprise risk management, including with respect to cybersecurity risks.
Internal Cybersecurity Team and Governance The BOD maintains responsibility for oversight of risks that may affect the Company. Our BOD has delegated the primary responsibility to oversee cybersecurity matters to the Audit Committee. The Audit Committee reviews the Company’s policies with respect to risk assessment and enterprise risk management, including with respect to cybersecurity risks.
The results of this risk assessment, including cybersecurity, are presented to the Board of Directors annually. The cybersecurity team implements, monitors and maintains controls that are aligned with the guidance defined by the National Institute of Standards and Technology (“NIST”) CyberSecurity Framework. These controls are designed to protect the confidentiality, availability and integrity of information systems.
The results of this risk assessment, including cybersecurity, are presented to the BOD annually. The cybersecurity team implements, monitors and maintains controls that are aligned with the guidance defined by the National Institute of Standards and Technology CyberSecurity Framework. These controls are designed to protect the confidentiality, availability and integrity of information systems.
These procedures include an incident response playbook that outlines the steps to be addressed in the event of a 23 cybersecurity incident, from incident detection to mitigation, recovery and notification within the Company and to the Audit Committee and/or Board of Directors, as specified.
These procedures include an incident response playbook that outlines the steps to be addressed in the event of a 24 cybersecurity incident, from incident detection to mitigation, recovery and notification within the Company and to the Audit Committee and/or BOD, as specified.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeAs of December 31, 2024, we had a total of 5 production facilities in the United States, representing a total of 0.6 million and 0.5 million square feet of owned and leased space, respectively, and 24 production facilities outside the United States, representing a total of 9.6 million and 2.2 million square feet of owned and leased space, respectively, in 14 countries in Europe, North and South America and Asia.
Biggest changeItem 2. Properties Our corporate headquarters are located in North Bethesda, Maryland in a leased facility. As of December 31, 2025, we had a total of 4 production facilities in the United States and 33 production facilities outside the United States in 16 countries in Europe, Mexico, South America, the Middle East, India and Southeast Asia.
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Item 2. Properties Our corporate headquarters are located in North Bethesda, Maryland in a leased facility.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

12 edited+2 added−6 removed4 unchanged
Biggest changeKevin Johnson has been ESAB’s Chief Financial Officer (“CFO”) since May 2019, managing financial planning, controlling, tax, treasury, investor relations and information technology functions. From 2017 to 2019, he served as Vice President of Finance at Colfax Corporation (now Enovis), where he handled investor relations, financial planning and acquisition support.
Biggest changeFrom 2017 to 2019, he served as Vice President of Finance at Colfax Corporation (now Enovis), where he handled investor relations, financial planning and acquisition support. Prior to that, he held various senior financial positions at Howden starting in 2001, working in Australia, Europe and South Africa. Mr.
Prior to his appointment at ESAB, he was the Corporate Secretary of Colfax Corporation, where he held roles of increasing responsibility since joining in February 2011. Before joining Colfax, Mr. Jewell was in private practice at Hogan Lovells LLP, where he focused on securities law and corporate governance, mergers and acquisitions and capital market transactions.
Prior to his appointment at ESAB, he was the Corporate Secretary of Colfax Corporation, where he held roles of increasing responsibility since joining in February 2011. 26 Before joining Colfax, Mr. Jewell was in private practice at Hogan Lovells LLP, where he focused on securities law and corporate governance, mergers and acquisitions and capital market transactions.
Curtis Jewell has been Senior Vice President and Corporate Secretary of ESAB Corporation since April 2022 and previously served as General Counsel of ESAB. He has significant experience leading legal teams through complex 25 acquisitions and crossborder initiatives while driving process improvement.
Curtis Jewell has been Senior Vice President and Corporate Secretary of ESAB Corporation since April 2022 and previously served as General Counsel of ESAB. He has significant experience leading legal teams through complex acquisitions and crossborder initiatives while driving process improvement.
Kambeyanda has served as a member of our Board of Directors since April 2022. Mr. Kambeyanda has been President and Chief Executive Officer of ESAB since May 2016. As the leader of ESAB, Mr. Kambeyanda has overseen the growth of the fabrication technology business, expanding ESAB’s global operations, improving financial performance and driving EBX throughout the business.
Kambeyanda has been President and Chief Executive Officer of ESAB since May 2016 and has served as a member of our BOD since April 2022. As the leader of ESAB, Mr. Kambeyanda has overseen the growth of the fabrication technology business, expanding ESAB’s global operations, improving financial performance and driving EBXai throughout the business. Mr.
Item 4. Mine Safety Disclosures None. 24 INFORMATION ABOUT OUR EXECUTIVE OFFICERS Set forth below are the names, ages, positions and experience of our executive officers. All of our executive officers hold office at the pleasure of our Board of Directors. Name Age Position Shyam P.
Item 4. Mine Safety Disclosures None. 25 INFORMATION ABOUT OUR EXECUTIVE OFFICERS Set forth below are the names, ages, positions and experience of our executive officers. All of our executive officers hold office at the pleasure of our BOD. Name Age Position Shyam P.
Olivier Biebuyck has been President, Fabrication Technology of ESAB since January 2023. Prior to his current role, Mr. Biebuyck served as President, EMEA of ESAB from April 2021 to January 2023. Mr. Biebuyck joined ESAB in May 2017 as VP/GM of ESAB’s filler metals business and served in senior global positions with the company. Before joining ESAB, Mr.
Biebuyck served as President, EMEA of ESAB from April 2021 to January 2023. Mr. Biebuyck joined ESAB in May 2017 as VP/GM of ESAB’s filler metals business and served in senior global positions with the company. Before joining ESAB, Mr.
Kambeyanda 54 President and Chief Executive Officer and Director Kevin Johnson 49 Chief Financial Officer Olivier Biebuyck 54 President, Fabrication Technology Michele Campion 48 Chief Human Resources Officer Curtis Jewell 43 Senior Vice President, General Counsel and Corporate Secretary Eleanor Lukens 60 President, Americas Vusa Mlingo 55 Senior Vice President, Strategy and Business Development Shyam P.
Kambeyanda 55 President and Chief Executive Officer and Director Kevin Johnson 50 Chief Financial Officer Olivier Biebuyck 55 President, Fabrication Technology Michele Campion 49 Chief Human Resources Officer Curtis Jewell 44 Senior Vice President, General Counsel and Corporate Secretary Shyam P.
He began his legal career at Schulte Roth & Zabel LLP in New York. Mr. Jewell earned his bachelor’s degree in philosophy and political science from Washington University in St. Louis, and his law degree from The University of Pennsylvania Carey Law School, where he also received a Certificate in Business and Public Policy from The Wharton School.
He began his legal career at Schulte Roth & Zabel LLP in New York. Mr. Jewell earned his bachelor’s degree in philosophy and political science from Washington University in St.
Kambeyanda maintains a keen international perspective on driving growth and business development in emerging markets. Mr. Kambeyanda also serves on the board of directors and Audit Committee of Veralto Corporation, a global leader in essential water and product quality solutions that was spun off from Danaher Corporation in October 2023. Mr.
Kambeyanda also serves on the board of directors and audit committee of Veralto Corporation, a global leader in essential water and product quality solutions that was spun off from Danaher Corporation in October 2023. Mr. Kambeyanda holds bachelor’s degrees in physics and general science from Coe College in Iowa and in electrical engineering from Iowa State University. Mr.
Prior to joining ESAB, Mr. Kambeyanda most recently served as the President Americas for Eaton Corporation’s Hydraulics Group. Mr. Kambeyanda joined Eaton in 1995 and held a variety of positions of increasing responsibility in engineering, quality, e-commerce, product strategy and operations management in the United States, Mexico, Europe and Asia. Mr.
Kambeyanda joined Eaton in 1995 and held a variety of positions of increasing responsibility in engineering, quality, e-commerce, product strategy and operations management in the United States, Mexico, Europe and Asia. Mr. Kambeyanda maintains a keen international perspective on driving growth and business development in emerging markets. Mr.
Prior to that, he held various senior financial positions at Howden starting in 2001, working in Australia, Europe and South Africa. Mr. Johnson is an Australian CPA with a bachelor’s degree from Queens University, Northern Ireland, a master’s degree in accounting from Macquarie University, Australia and an M.B.A. from Hasselt University, Belgium.
Johnson is an Australian CPA with a bachelor’s degree from Queens University, Northern Ireland, a master’s degree in accounting from Macquarie University, Australia and an M.B.A. from Hasselt University, Belgium. Olivier Biebuyck has been President, Fabrication Technology of ESAB since January 2023. Prior to his current role, Mr.
Kambeyanda holds bachelor’s degrees in physics and general science from Coe College in Iowa and in electrical engineering from Iowa State University. Mr. Kambeyanda also earned his M.B.A from Kellogg School of Management at Northwestern University and is a Six Sigma Green Belt.
Kambeyanda also earned his M.B.A from Kellogg School of Management at Northwestern University and is a Six Sigma Green Belt. Kevin Johnson has been ESAB’s Chief Financial Officer (“CFO”) since May 2019, managing financial planning, controlling, tax, treasury, investor relations, business development and information technology functions.
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Eleanor Lukens has been President, Americas of ESAB Corporation since January 2023. Ms. Lukens oversees ESAB’s fabrication technology business in North America and South America. Before joining ESAB, Ms. Lukens served in multiple leadership roles at AMETEK, a leading global manufacturer of electronic instruments and electromechanical devices, for fifteen years.
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Kambeyanda also served as Executive Vice President at Colfax Corporation (now Enovis) from December 2019 until April 2022. Prior to joining ESAB, Mr. Kambeyanda most recently served as the President Americas for Eaton Corporation’s Hydraulics Group. Mr.
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Most recently, she was Vice President and General Manager at AMETEK from August 2020 until January 2023, with global responsibility for four operating business units serving commercial aerospace, defense, aftermarket and business jet, and Vice President, General Manager for AMETEK’s measurement and power systems division from September 2016 to July 2020. Earlier in her career, Ms.
Added
Louis, and his law degree from The University of Pennsylvania Carey Law School, where he also received a Certificate in Business and Public Policy from The Wharton School. 27 PART II
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Lukens worked for Teleflex Incorporated and Drexelbrook Engineering. Ms. Lukens earned a bachelor’s degree in mechanical engineering technology from Spring Garden College and a M.B.A. with honors from Temple University, Fox School of Management. Vusa Mlingo has been the Senior Vice President, Strategy and Business Development of ESAB Corporation since January 2022. Mr.
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Mlingo oversees ESAB’s strategic planning, market and growth opportunity assessments and ESAB’s global acquisition pipeline. Prior to ESAB, Mr.
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Mlingo served as Vice President of Corporate Development & Strategy at SPX FLOW, Inc., a leading provider of process solution components and systems, from April 2019 to January 2022 and previously led the company’s mergers and acquisitions as Vice President of Business Development from March 2018 to April 2019. From 2006 to March 2019, Mr.
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Mlingo worked for Ingersoll Rand, a diversified industrial company, where he served in various roles of increasing responsibility within corporate development and strategy, product management and capital markets. Mr. Mlingo holds a bachelor’s degree with honors from the University of Zimbabwe and an M.B.A. from Howard University. 26 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeNo repurchases of the Company’s common stock were made during the year ended December 31, 2024 . The timing and amount of any shares repurchased will be determined by the Company’s management based on its evaluation of market conditions, applicable legal requirements and other factors. There is no term associated with the repurchase authorization. Recent Issuances of Unregistered Securities None.
Biggest changeNo repurchases of the Company’s common stock were made during the year ended December 31, 2025 since program inception . The timing and amount of any shares repurchased will be determined by the Company’s management based on its evaluation of market conditions, applicable legal requirements and other factors. There is no term associated with the repurchase authorization.
Issuer Repurchase of Equity Securities On August 13, 2024, the Board of Directors authorized and approved a stock repurchase program to repurchase up to five million shares of the Company’s common stock, par value $0.001 per share, from time-to-time on the open market, in privately negotiated transactions or as may otherwise be determined by the Company’s management in its discretion.
Issuer Repurchase of Equity Securities On August 13, 2024, the BOD authorized and approved a stock repurchase program to repurchase up to five million shares of the Company’s common stock, par value $0.001 per share, from time-to-time on the open market, in privately negotiated transactions or as may otherwise be determined by the Company’s management in its discretion.
The Board’s decisions regarding the payment of dividends will depend on many factors, such as our financial condition, earnings, capital requirements, debt service obligations, restrictive covenants in our then existing debt agreements, industry practice, legal requirements and other factors that the Board deems relevant.
The BOD’s decisions regarding the payment of dividends will depend on many factors, such as our financial condition, earnings, capital requirements, debt service obligations, restrictive covenants in our then existing debt agreements, industry practice, legal requirements and other factors that the BOD deems relevant.
The payment of dividends to our stockholders in the future, and the timing and amount thereof will fall within the discretion of our Board.
The payment of dividends to our stockholders in the future, and the timing and amount thereof will fall within the discretion of our BOD.
The graph tracks the performance of a $100 investment, assuming reinvestment of dividends, in our common stock and in each index from April 5, 2022, the date our stock commenced regular-way trading on the New York Stock Exchange, to December 31, 2024. 27
The graph tracks the performance of a $100 investment, assuming reinvestment of dividends, in our common stock and in each index from April 5, 2022, the date our stock commenced regular-way trading on the New York Stock Exchange, to December 31, 2025. 28
We declared and paid a quarterly dividend of $0.06 per share of ESAB’s common stock to our stockholders of record for the first quarter of 2024 and a quarterly dividend of $0.08 per share of ESAB’s common stock to our stockholders of record for the second, third and fourth quarters of 2024.
We declared and paid a quarterly dividend of $0.08 per share of ESAB’s common stock to our stockholders of record for the first quarter of 2025 and a quarterly dividend of $0.10 per share of ESAB’s common stock to our stockholders of record for the second, third and fourth quarters of 2025.
Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock began trading on the New York Stock Exchange under the symbol ESAB on April 5, 2022. As of February 13, 2025, there were 1,172 holders of record of our common stock.
Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock began trading on the New York Stock Exchange under the symbol ESAB on April 5, 2022. As of February 12, 2026, there were 398 holders of record of our common stock.
Stock Performance Graph The graph below compares the cumulative total return of holders of our common stock with the cumulative total return of the S&P MidCap 400 Index (the "S&P 400") and the S&P MidCap 400 Industrials Index (the "S&P 400 Industrials”).
Recent Issuances of Unregistered Securities None. Stock Performance Graph The graph below compares the cumulative total return of holders of our common stock with the cumulative total return of the S&P MidCap 400 Index (the "S&P 400") and the S&P MidCap 400 Industrials Index (the "S&P 400 Industrials”).

Item 7. Management's Discussion & Analysis

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

87 edited+22 added−15 removed54 unchanged
Biggest changeYear Ended December 31, 2023 Americas EMEA & APAC Total (Dollars in millions) (1) Net income from continuing operations (GAAP) $ 223.4 Income tax expense 95.7 Interest expense and other, net 85.1 Operating income (GAAP) $ 182.5 $ 221.7 $ 404.2 Adjusted to add: Restructuring and other related charges (2) 6.5 17.6 24.1 Acquisition-amortization and other related charges (3) 20.9 15.9 36.9 Depreciation and other amortization 14.8 21.2 36.0 Adjusted EBITDA (non-GAAP) $ 224.7 $ 276.4 $ 501.1 Adjusted EBITDA attributable to Russia (non-GAAP) (4) — 18.4 18.4 Core adjusted EBITDA (non-GAAP) $ 224.7 $ 258.0 $ 482.7 Adjusted EBITDA margin (non-GAAP) 18.5 % 17.7 % 18.1 % Core adjusted EBITDA margin (non-GAAP) (5) 18.5 % 18.4 % 18.4 % (1) Numbers may not sum due to rounding.
Biggest changeThe following tables set forth a reconciliation of Net income from continuing operations, the most directly comparable financial statement measure, to Adjusted EBITDA, Adjusted EBITDA margin, Core adjusted EBITDA and Core adjusted EBITDA margin by segment for the years ended December 31, 2025 and 2024. 31 Year Ended December 31, 2025 Americas EMEA & APAC Total (Dollars in millions) (1) Net income from continuing operations (GAAP) $ 259.1 Income tax expense 69.2 Interest expense and other, net 83.9 Operating income (GAAP) $ 167.8 $ 244.3 $ 412.2 Adjusted to add: Restructuring and other related charges (2) 11.6 16.1 27.8 Acquisition-amortization and other related charges (3) 29.2 42.9 72.1 Depreciation and other amortization 16.7 31.0 47.7 Adjusted EBITDA (non-GAAP) 225.4 334.3 559.7 Adjusted EBITDA attributable to Russia (non-GAAP) (4) — 19.7 19.7 Core adjusted EBITDA (non-GAAP) $ 225.4 $ 314.7 $ 540.0 Adjusted EBITDA margin (non-GAAP) 19.9 % 19.5 % 19.7 % Core adjusted EBITDA margin (non-GAAP) (5) 19.9 % 20.0 % 20.0 % (1) Numbers may not sum due to rounding.
These segments consist of the “Americas,” which includes operations in North America and South America, and “EMEA & APAC,” which includes Europe, Middle East, India, Africa and Asia Pacific. We serve a global customer base across multiple markets through a combination of direct sales and third-party distribution channels. Our customer base is highly diversified in the industrial end markets.
These segments consist of the “Americas,” which includes operations in North America and South America, and “EMEA & APAC,” which includes Europe, the Middle East, India, Africa and Asia Pacific. We serve a global customer base across multiple markets through a combination of direct sales and third-party distribution channels. Our customer base is highly diversified in the industrial end markets.
For a detailed discussion on the application of these and other accounting policies, see Note 2, “Summary of Significant Accounting Policies” in the accompanying Notes included elsewhere in this Form 10-K. Impairment of Goodwill and Indefinite-Lived Intangible Assets Goodwill represents the costs in excess of the fair value of net assets acquired associated with our business acquisitions.
For a detailed discussion on the application of these and other accounting policies, see Note 2, “Summary of Significant Accounting Policies” in the accompanying Notes included elsewhere in this Form 10-K. 38 Impairment of Goodwill and Indefinite-Lived Intangible Assets Goodwill represents the costs in excess of the fair value of net assets acquired associated with our business acquisitions.
We have projected future asbestos-related liability costs with regard to pending and future unasserted claims based upon the Nicholson methodology. The Nicholson methodology is a standard approach used by experts and has been accepted by 41 numerous courts. This methodology is based upon risk equations, exposed population estimates, mortality rates and other demographic statistics.
We have projected future asbestos-related liability costs with regard to pending and future unasserted claims based upon the Nicholson methodology. The Nicholson methodology is a standard approach used by experts and has been accepted by numerous courts. This methodology is based upon risk equations, exposed population estimates, mortality rates and other demographic statistics.
We account for income taxes under ASC 740, Income Taxes (“ASC 740”), which requires recognition of deferred income tax assets and liabilities reflecting the tax consequences attributable to differences between the carrying amounts of existing assets and liabilities in the Consolidated and Combined Financial Statements and their respective tax basis.
Income Taxes We account for income taxes under ASC 740, Income Taxes (“ASC 740”), which requires recognition of deferred income tax assets and liabilities reflecting the tax consequences attributable to differences between the carrying amounts of existing assets and liabilities in the Consolidated Financial Statements and their respective tax basis.
Revenue Recognition We recognize revenue when control of promised goods or services is transferred to the customer. The amount of revenue recognized reflects the consideration to which we expect to be entitled in exchange for transferring the goods or services. 40 We provide a variety of products and services to our customers.
Revenue Recognition We recognize revenue when control of promised goods or services is transferred to the customer. The amount of revenue recognized reflects the consideration to which we expect to be entitled in exchange for transferring the goods or services. We provide a variety of products and services to our customers.
“Risk Factors” and the accompanying Consolidated and Combined Financial Statements and Notes to Consolidated and Combined Financial Statements (the “Notes”) included in Item 8. of this Form 10-K. The MD&A includes forward-looking statements.
“Risk Factors” and the accompanying Consolidated Financial Statements and Notes to Consolidated Financial Statements (the “Notes”) included in Item 8. of this Form 10-K. The MD&A includes forward-looking statements.
For a discussion of important factors that could cause actual results to differ materially from the results referred to in these forward-looking statements, see “Special Note Regarding Forward-Looking Statements.” Overview See Part I, Item 1. “Business” in our Form 10-K for a discussion of ESAB’s objectives and methodologies for deliver ing stockholder va lue.
For a discussion of important factors that could cause actual results to differ materially from the results referred to in these forward-looking statements, see “Special Note Regarding Forward-Looking Statements.” Overview See Part I, Item 1. “Business” of this Form 10-K for a discussion of ESAB’s objectives and methodologies for deliver ing stockholder va lue.
Such components were acquired from third-party suppliers, and were not manufactured by any of our, or our Former Parent’s, subsidiaries nor were the subsidiaries, producers or direct suppliers of asbestos. The manufactured products that are alleged to have contained or used asbestos generally were provided to meet the specifications of the subsidiaries’ customers, including the United States Navy.
Such components were acquired from third-party suppliers, and were not manufactured by any of our subsidiaries nor were the subsidiaries producers or direct suppliers of asbestos. The manufactured products that are alleged to have contained or used asbestos generally were provided to meet the specifications of the subsidiaries’ customers, including the United States Navy.
A quantitative impairment test was performed for all the indefinite-lived trade name brands for the years ended December 31, 2024 and 2023, which indicated no impairment existed. A sustained decline in our end-markets and geographic markets could increase the risk of impairments in future years.
A quantitative impairment test was performed for all the indefinite-lived trade name brands for the years ended December 31, 2025 and 2024, which indicated no impairment existed. A sustained decline in our end-markets and geographic markets could increase the risk of impairments in future years.
We recognize interest and penalties related to unrecognized income tax benefits in Income tax expense in the Consolidated and Combined Statements of Operations.
We recognize interest and penalties related to unrecognized income tax benefits in Income tax expense in the Consolidated Statements of Operations.
We are a focused premier industrial compounder. Our rich history of innovating products, workflow solutions and our business system, EBX, enables our purpose of Shaping the world we imagine TM. . We conduct our operations through two reportable segments.
We are a focused premier industrial compounder. Our rich history of innovating products, workflow solutions and our business system, EBXai, enables our purpose of Shaping the world we imagine TM. . We conduct our operations through two reportable segments.
If the carrying amount of the indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. We measure the fair value of our indefinite-lived intangible assets using the “relief from royalty” method. Significant estimates in this approach include projected revenues and royalty and discount rates for each trade name evaluated.
If the carrying amount of the indefinite-lived intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. We measure the fair value of our indefinite-lived intangible assets using the relief from royalty method. Significant estimates in this approach include projected revenues and royalty and discount rates for each trade name evaluated.
Stock Repurchase Program On August 13, 2024, the Board of Directors authorized and approved a stock repurchase program to repurchase up to five million shares of the Company’s common stock, par value $0.001 per share, from time-to-time on the open market, in privately negotiated transactions or as may otherwise be determined by the Company’s management in its discretion.
Stock Repurchase Program On August 13, 2024, the BOD authorized and approved a stock repurchase program to repurchase up to five million shares of the Company’s common stock, par value $0.001 per share, from time-to-time on the open market, in privately negotiated transactions or as may otherwise be determined by the Company’s management in its discretion.
Items Affecting Comparability of Reported Results The comparability of our operating results for the years ended December 31, 2024 and 2023 are affected by the following additional significant items: Russia and Ukraine conflict The invasion of Ukraine by Russia and the sanctions and other actions taken by governments in response to the crisis have increased the level of economic and political uncertainty.
Items Affecting Comparability of Reported Results The comparability of our operating results for the years ended December 31, 2025 and 2024 are affected by the following additional significant items: Russia and Ukraine conflict The invasion of Ukraine by Russia and the sanctions and other actions taken by governments in response to this crisis have increased the level of economic and political uncertainty.
We also present Core adjusted EBITDA and Core adjusted EBITDA margin, which are subject to the same adjustments as Adjusted EBITDA and Adjusted EBITDA margin, respectively, and which remove the impact of Russia for the years ended December 31, 2024 and 2023.
We also present Core adjusted EBITDA and Core adjusted EBITDA margin, which are subject to the same adjustments as Adjusted EBITDA and Adjusted EBITDA margin, respectively, and which remove the impact of Russia for the years ended December 31, 2025 and 2024.
We have elected not to include a comparison of our results of operations and liquidity and capital resources for the years ended December 31, 2023 and 2022 in this report in reliance upon Instruction 1 to 28 Item 303(b) of Regulation S-K.
We have elected not to include a comparison of our results of operations and liquidity and capital resources for the years ended December 31, 2024 and 2023 in this report in reliance upon Instruction 1 to Item 303(b) of Regulation S-K.
The subsidiaries settle asbestos claims for amounts we consider reasonable given the facts and circumstances of each claim. The annual average settlement payment per asbestos claimant has fluctuated during the past several years while the number of cases has steadily declined.
The subsidiaries settle asbestos claims for amounts we consider reasonable given the facts and circumstances of each claim. The annual number of cases and average settlement payment per asbestos claimant has fluctuated during the past several years.
For additional information about these challenges and opportunities, refer to Part I, Item 1A. “Risk Factors” in our Form 10-K. The discussion that follows includes a comparison of our results of operations and liquidity and capital resources for the years ended December 31, 2024 and 2023.
For additional information about these challenges and opportunities, refer to Part I, Item 1A. “Risk Factors” of this Form 10-K. The discussion that follows includes a comparison of our results of operations and liquidity and capital resources for the years ended December 31, 2025 and 2024.
The mix of sales was as follows for the periods presented. Year Ended December 31, 2024 2023 Consumables 67 % 69 % Equipment 33 % 31 % Non-GAAP Measures Adjusted EBITDA is a non-GAAP performance measure that we include in this report because it is a key metric used by our management to assess our operating performance.
The mix of sales was as follows for the periods presented. Year Ended December 31, 2025 2024 Consumables 66 % 67 % Equipment 34 % 33 % Non-GAAP Measures Adjusted EBITDA is a non-GAAP performance measure that we include in this report because it is a key metric used by our management to assess our operating performance.
During the year ended December 31, 2024, the Company recognized a non-cash Pension settlement loss of $12.2 million related to the transfer of plan assets to a third party as part of externalizing the risk associated with a foreign defined benefit plan.
During the year ended December 31, 2024, the Company recognized a non-cash Pension settlement loss of $12.2 million related to the transfer of plan assets to a third party as part of externalizing the risk associated with a foreign defined benefit plan. No such settlement occurred during the year ended December 31, 2025.
This discussion can be found in our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on February 29, 2024. Results of Operations The following discussion of Results of Operations addresses the comparison of the periods presented.
This discussion can be found in our Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on February 20, 2025. Results of Operations The following discussion of Results of Operations addresses the comparison of the periods presented.
No repurchases of the Company’s common stock have been made through the year ended December 31, 2024 . The timing and amount of any shares repurchased will be determined by the Company’s management based on its evaluation of market conditions, applicable legal requirements and other factors. There is no term associated with the remaining repurchase authorization.
No repurchases of the Company’s common stock have been made through the year ended December 31, 2025 since program inception . The timing 36 and amount of any shares repurchased will be determined by the Company’s management based on its evaluation of market conditions, applicable legal requirements and other factors. There is no term associated with the remaining repurchase authorization.
Cash flows from operating activities can fluctuate significantly from period to period due to changes in working capital and the timing of payments for items such as pension funding, asbestos-related costs and restructuring program funding.
Cash flows from operating activities can fluctuate significantly from period to period due to changes in working capital and the timing of payments for items such as restructuring program funding, acquisition deal expenses and asbestos-related costs.
We evaluate our estimates and judgments on an ongoing basis. Our estimates are based upon our historical experience, our evaluation of business and macroeconomic trends and information from other outside sources, as appropriate. Our experience and assumptions form the basis for our judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.
Our estimates are based upon our historical experience, our evaluation of business and macroeconomic trends and information from other outside sources, as appropriate. Our experience and assumptions form the basis for our judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.
We have funding requirements associated with our pension benefit plans as of December 31, 2024, which are estimated to be $4.5 million for the year ending December 31, 2025.
We have funding requirements associated with our pension benefit plans as of December 31, 2025, which are estimated to be $5.2 million for the year ending December 31, 2026.
An evaluation of Goodwill for impairment was performed for the three reporting units for the years ended December 31, 2024 and 2023, which indicated no impairment existed. For the year ended December 31, 2024, a qualitative assessment was performed for the three reporting units.
An evaluation of Goodwill for impairment was performed for the three reporting units for the years ended December 31, 2025 and 2024, which indicated no impairment existed. For the year ended December 31, 2025, a quantitative assessment was performed for the three reporting units.
Net liabilities for unrecognized income tax benefits, including accrued interest and penalties, were $17.1 million and $30.9 million as of December 31, 2024 and 2023, respectively, and are included in Other liabilities or as a reduction to deferred tax assets in the accompanying Consolidated Balance Sheets.
Net liabilities for unrecognized income tax benefits, including accrued interest and penalties, were $18.6 million and $17.1 million as of December 31, 2025 and 2024, respectively, and are included in Other liabilities or as a reduction to deferred tax assets in the accompanying Consolidated Balance Sheets.
Actual results could differ from our estimates and projections, which would also affect the assessment of impairment. As of December 31, 2024, we have Goodwill of $1,652.0 million and indefinite-lived trade names of $173.9 million that are subject to at least annual review for impairment. See Note 9, “Goodwill and Intangible Assets” in the accompanying Notes for further information.
Actual results could differ from our estimates and projections, which would also affect the assessment of impairment. As of December 31, 2025, we have Goodwill of $1,949.7 million and indefinite-lived trade names of $197.1 million that are subject 39 to at least annual review for impairment. See Note 9, “Goodwill and Intangible Assets” in the accompanying Notes for further information.
In addition to the outstanding principal on our debt, we are subject to contractual obligations and commitments to make future interest payments on the Term Loans and Senior Notes on various payment dates as provided in the Credit Agreement Amendment and the Indenture.
In addition to the outstanding principal on our debt, we are subject to contractual obligations and commitments to make future interest payments on the senior term loan A facility and Senior Notes on various payment dates as provided in the A&R Credit Agreement and the Indenture.
Foreign Currency Fluctuations During 2024 and 2023, a significant portion of our Net sales, 78% in each period, were derived from operations outside of the United States with th e majority of those sales denominated in currencies other than the U.S. Dollar.
Foreign Currency Fluctuations During 2025 and 2024, a significant portion of our Net sale s, 80% and 78%, respectively, were derived from operations outside of the United States with th e majority of those sales denominated in currencies other than the U.S. Dollar.
Adjusted EBITDA increased by $13.2 million and margin expanded 80 basis points primarily due to the aforementioned factors. Core adjusted EBITDA increased by $13.5 million and margin expanded by 80 basis points due to the aforementioned factors. 35 Liquidity and Capital Resources Overview We expect to finance our liquidity requirements through cash flows from operating activities.
Adjusted EBITDA increased by $44.7 million and margin expanded 100 basis points primarily due to the aforementioned factors. Core adjusted EBITDA increased by $43.2 million and margin expanded by 80 basis points due to the aforementioned factors. Liquidity and Capital Resources Overview We expect to finance our liquidity requirements through cash flows from operating activities.
We expect such fluctuations to continue in the future based upon, among other things, the number and type of claims settled in a particular period and the jurisdictions in which such claims arise. To date, the majority of settled claims have been dismissed for no payment.
The Company expects such settlement value fluctuations to continue in the future based upon, among other things, the number and type of claims settled in a particular period and the jurisdictions in which such claims arise. To date, the majority of settled claims have been dismissed for no payment to plaintiffs.
We expect that our primary ongoing requirements for cash will be for working capital, funding of acquisitions, capital expenditures and restructuring related cash outflows, asbestos-related cash outflows, debt service and required amortization of principal, stock repurchases and, pending approval from the Board of Directors, payment of cash dividends.
We expect that our primary ongoing requirements for cash will be for working capital, funding of acquisitions, capital expenditures, restructuring and asbestos-related cash outflows, debt service and required principal payments, stock repurchases and, subject to approval from the BOD, payment of cash dividends.
The increase in Core sales from acquisitions of $23.5 million was primarily attributable to the Sager, ESAB Bangladesh and SUMIG acquisitions. T he changes in foreign exchange rates caused a $77.9 million unfavorable currency translation impact . Operating Results The following table summarizes our results for the comparable periods.
The increase in Core sales from acquisitions of $115.9 million was attributable to the acquisitions of the Sager, ESAB Bangladesh, SUMIG, Bavaria, DeltaP, Aktiv and EWM. T he changes in foreign exchange rates caused a $1.5 million unfavorable currency translation impact . 33 Operating Results The following table summarizes our results for the comparable periods.
As of end of the year, we had the capacity for additional indebtedness of up to $750 million a vailable on the revolving credit facility.
As of end of the year, we had the capacity for additional indebtedness of up to $865 million a vailable on the senior revolving credit facility (“Revolving Facility”).
Year Ended December 31, 2024 2023 (Dollars in millions) Gross profit $ 1,037.5 $ 1,015.8 Gross profit margin 37.9 % 36.6 % Selling, general and administrative expense $ 575.6 $ 587.5 Net income from continuing operations $ 293.1 $ 223.4 Net income margin from continuing operations 10.7 % 8.0 % Adjusted EBITDA (non-GAAP) $ 528.8 $ 501.1 Adjusted EBITDA margin (non-GAAP) 19.3 % 18.1 % Core adjusted EBITDA (non-GAAP) $ 510.7 $ 482.7 Core adjusted EBITDA margin (non-GAAP) 19.7 % 18.4 % Items excluded from Adjusted EBITDA: Restructuring and other related charges (1) $ 10.2 $ 24.1 Pension settlement loss 12.2 — Acquisition - amortization and other related charges (2) 34.5 36.9 Interest expense and other, net 64.9 85.1 Income tax expense 77.3 95.7 Depreciation and other amortization 36.6 36.0 Items excluded from Core adjusted EBITDA: Adjusted EBITDA attributable to Russia (non-GAAP) (3) $ 18.1 $ 18.4 (1) Includes severance and other termination benefits, including outplacement services as well as the cost of relocating associates, relocating equipment, lease termination expenses, impairment of long-lived assets and other costs in connection with the closure and optimization of facilities and product lines.
Year Ended December 31, 2025 2024 (Dollars in millions) Gross profit $ 1,048.3 $ 1,037.5 Gross profit margin 36.9 % 37.9 % Selling, general and administrative expense $ 608.4 $ 579.8 Net income from continuing operations $ 259.1 $ 293.1 Net income margin from continuing operations 9.1 % 10.7 % Adjusted EBITDA (non-GAAP) $ 559.7 $ 528.8 Adjusted EBITDA margin (non-GAAP) 19.7 % 19.3 % Core adjusted EBITDA (non-GAAP) $ 540.0 $ 510.7 Core adjusted EBITDA margin (non-GAAP) 20.0 % 19.7 % Items excluded from Adjusted EBITDA: Restructuring and other related charges (1) $ 27.8 $ 10.2 Pension settlement loss — 12.2 Acquisition - amortization and other related charges (2) 72.1 34.5 Interest expense and other, net 83.9 64.9 Income tax expense 69.2 77.3 Depreciation and other amortization 47.7 36.6 Items excluded from Core adjusted EBITDA: Adjusted EBITDA attributable to Russia (non-GAAP) (3) $ 19.7 $ 18.1 (1) Includes severance and other termination benefits, including outplacement services as well as the cost of relocating associates, relocating equipment, impairment of long-lived assets and other costs in connection with the closure and optimization of facilities and product lines.
Year Ended December 31, 2024 2023 (Dollars in millions) Net sales $ 1,176.7 $ 1,215.0 Gross profit $ 465.7 $ 454.9 Gross profit margin 39.6 % 37.4 % Selling, general and administrative expense $ 257.6 $ 265.8 Adjusted EBITDA (non-GAAP) $ 239.2 $ 224.7 Adjusted EBITDA margin (non-GAAP) 20.3 % 18.5 % Items excluded from Adjusted EBITDA: Restructuring and other related charges $ 3.0 $ 6.5 Acquisition - amortization and other related charges 18.6 20.9 Depreciation and other amortization $ 14.5 $ 14.8 Net sales in our Americas segment decreased by $38.3 million during 2024 compared to 2023.
Year Ended December 31, 2025 2024 (Dollars in millions) Net sales $ 1,130.3 $ 1,176.7 Gross profit $ 437.2 $ 465.7 Gross profit margin 38.7 % 39.6 % Selling, general and administrative expense $ 247.2 $ 257.6 Adjusted EBITDA (non-GAAP) $ 225.4 $ 239.2 Adjusted EBITDA margin (non-GAAP) 19.9 % 20.3 % Items excluded from Adjusted EBITDA: Restructuring and other related charges $ 11.6 $ 3.0 Acquisition - amortization and other related charges 29.2 18.6 Depreciation and other amortization $ 16.7 $ 14.5 Net sales in our Americas segment decreased by $46.4 million during 2025 compared to 2024.
Trade receivables are presented net of an allowance for credit losses. The estimate of current expected credit losses on trade receivables considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. The allowance for credit losses was $23.9 million as of December 31, 2024 compared to $25.5 million as of December 31, 2023.
The estimate of current expected credit losses on trade receivables considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. The allowance for credit losses was $21.8 million as of December 31, 2025 compared to $23.9 million as of December 31, 2024.
The changes in foreign exchange rates caused a $89.7 million unfavorable currency translation impact. Sales excluding Russia Sales excluding Russia (“Core sales”) for ESAB decreased fo r the year ended December 31, 2024 as compared with the year ended December 31, 2023. The following table presents the components of changes in our consolidated Core sales.
The changes in foreign exchange rates caused a $17.3 million favorable currency translation impact. Net sales excluding Russia Net sales excluding Russia (“Core sales”) for ESAB increased fo r the year ended December 31, 2025 as compared with the year ended December 31, 2024. The following table presents the components of changes in our consolidated Core sales.
Core Sales (1)(6) $ % (Dollars in millions) For the year ended December 31, 2023 $ 2,620.9 Components of change: Existing businesses (core organic sales growth) (2) 24.6 0.9 % Acquisitions (3) 23.5 0.9 % Foreign Currency translation (4) (77.9) (3.0) % Total Core sales decline (5) (29.8) (1.1) % For the year ended December 31, 2024 $ 2,591.2 (1) Numbers may not sum due to rounding.
Core Sales (1)(6) $ % (Dollars in millions) For the year ended December 31, 2024 $ 2,591.2 Components of change: Existing businesses (core organic sales) (2) (5.1) (0.2) % Acquisitions (3) 115.9 4.5 % Foreign Currency translation (4) (1.5) (0.1) % Total Core sales growth (5) 109.2 4.2 % For the year ended December 31, 2025 $ 2,700.4 (1) Numbers may not sum due to rounding.
As of December 31, 2024, we were in compliance with the covenants under the Credit Agreement and the Indenture. The Company’s weighted average interest rate of borrowings under the Credit Agreement and the Indenture was 5.24%, excluding accretion of deferred financing fees and net of interest rate hedge impacts .
As of December 31, 2025, we were in compliance with the covenants under the A&R Credit Agreement and the Indenture. The Company’s weighted average interest rate of borrowings under the A&R Credit Agreement and the Indenture was 5.40%, excluding accretion of deferred financing fees .
In 2024, the effective tax rate was lower than the United States federal statutory rate of 21.0% primarily due to favorable impacts from an agreement with a taxing authority on the treatment of subsidy income in a foreign jurisdiction, favorable changes in tax reserves primarily related to a final ruling in a tax case in a foreign jurisdiction, partially offset by withholding taxes and the impact of jurisdictional mix of income in 2023. 33 Net income from continuing operations increased in 2024 compared to 2023, due to changes discussed above.
In 2024, the rate was lower than the United States federal statutory rate of 21.0% due to favorable impacts from an agreement with a taxing authority on the treatment of subsidy income in a foreign jurisdiction, favorable changes in tax reserves primarily related to a final ruling in a tax case in a foreign jurisdiction partially offset by withholding taxes.
Asbestos Liabilities and Insurance Assets Certain entities that became our subsidiaries in connection with the Separation are the legal obligor for certain asbestos obligations including long-term asbestos insurance assets, long-term asbestos insurance receivables, accrued asbestos liabilities, long-term asbestos liabilities, asbestos indemnity expenses, asbestos-related defense costs and asbestos insurance recoveries related to the asbestos obligations from our Former Parent’s other legacy industrial businesses.
Asbestos Liabilities and Insurance Assets Certain entities are the legal obligor for certain asbestos obligations including long-term asbestos insurance assets, long-term asbestos insurance receivables, accrued asbestos liabilities, long-term asbestos liabilities, asbestos indemnity expenses, asbestos-related defense costs and asbestos insurance recoveries related to the asbestos obligations of the Former Parent’s other legacy industrial businesses.
These trend factors have both positive and negative effects on the dynamics of asbestos litigation in the tort system and the related best estimate of our asbestos liability, and these effects do not move in linear fashion but rather change over multiple year periods.
These trend factors have both positive and negative effects on the dynamics of asbestos litigation in the tort system and the related best estimate of our asbestos liability, and these effects do not move in linear fashion but rather change over multiple year periods. 41 Accordingly, we monitor these trend factors over time and periodically assess whether an alternative forecast period is appropriate.
Accordingly, we monitor these trend factors over time and periodically assess whether an alternative forecast period is appropriate. Taking these factors into account and the inherent uncertainties, we believe that we can reasonably estimate the asbestos-related liability for pending and future claims that will be resolved in the next 15 years and have recorded that liability as our best estimate.
Taking these factors into account and the inherent uncertainties, we believe that we can reasonably estimate the asbestos-related liability for pending and future claims that will be resolved in the next 15 years and have recorded that liability as our best estimate.
Year Ended December 31, 2024 2023 (Dollars in millions) Net sales $ 1,564.1 $ 1,559.8 Gross profit $ 571.8 $ 560.9 Gross profit margin 36.6 % 36.0 % Selling, general and administrative expense $ 317.9 $ 321.6 Adjusted EBITDA (non-GAAP) $ 289.6 $ 276.4 Adjusted EBITDA margin (non-GAAP) 18.5 % 17.7 % Core adjusted EBITDA (non-GAAP) $ 271.5 $ 258.0 Core adjusted EBITDA margin (non-GAAP) 19.2 % 18.4 % Items excluded from Adjusted EBITDA: Restructuring and other related charges $ 7.2 $ 17.6 Acquisition - amortization and other related charges 15.9 15.9 Depreciation and other amortization 22.2 21.2 Items excluded from Core adjusted EBITDA: Adjusted EBITDA attributable to Russia (non-GAAP) $ 18.1 $ 18.4 Net sales increased for our EMEA & APAC segment by $4.3 million during 2024 compared to 2023.
EMEA & APAC The following table summarizes selected financial data for our EMEA & APAC segment. 35 Year Ended December 31, 2025 2024 (Dollars in millions) Net sales $ 1,712.2 $ 1,564.1 Gross profit $ 611.1 $ 571.8 Gross profit margin 35.7 % 36.6 % Selling, general and administrative expense $ 329.7 $ 317.9 Adjusted EBITDA (non-GAAP) $ 334.3 $ 289.6 Adjusted EBITDA margin (non-GAAP) 19.5 % 18.5 % Core adjusted EBITDA (non-GAAP) $ 314.7 $ 271.5 Core adjusted EBITDA margin (non-GAAP) 20.0 % 19.2 % Items excluded from Adjusted EBITDA: Restructuring and other related charges $ 16.1 $ 7.2 Acquisition - amortization and other related charges 42.9 15.9 Depreciation and other amortization 31.0 22.2 Items excluded from Core adjusted EBITDA: Adjusted EBITDA attributable to Russia (non-GAAP) $ 19.7 $ 18.1 Net sales increased for our EMEA & APAC segment by $148.1 million during 2025 compared to 2024.
(2) Includes severance and other termination benefits, including outplacement services, as well as the cost of relocating associates, relocating equipment, lease termination expenses, impairment of long-lived assets and other costs in connection with the closure and optimization of facilities and product lines. (3) Includes transaction expenses, amortization of acquired intangibles, fair value charges on acquired inventories and integration expenses.
(2) Includes severance and other termination benefits, including outplacement services as well as the cost of relocating associates, relocating equipment, impairment of long-lived assets and other costs in connection with the closure and optimization of facilities and product lines.
(4) Represents the difference between prior year sales valued at the actual prior year foreign exchange rates and prior year sales valued at current year foreign exchange rates. (5) Numbers calculated following the same definition as total sales decline for total Company.
(4) Represents the difference between prior year sales valued at the actual prior year foreign exchange rates and prior year sales valued at current year foreign exchange rates. (5) Numbers calculated following the same definition as total sales growth for total Company. (6) Represents sales excluding Russia for the year ended December 31, 2025 and 2024, respectively.
While we seek to take actions to manage this risk, future changes in component and raw material costs may adversely impact earnings. 29 Sales and Cost Mix The Gross profit margins within our business vary in relation to the relative mix of many factors, including the type of product, the location in which the product is manufactured, the end market application for which the product is designed, and the percentage of total revenue represented by consumables, which often have lower margins than equipment.
Sales and Cost Mix The Gross profit margins within our business vary in relation to the relative mix of many factors, including the type of product, the location in which the product is manufactured, the end market application for which the product is designed, and the percentage of total revenue represented by consumables, which often have lower margins than equipment.
Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements that provide liquidity, capital resources, market or credit risk support that expose us to any liability that is not reflected in our Consolidated and Combined Financial Statements at December 31, 2024 other than outstanding letters of credit of $27.2 million and unconditional purchase obligations with suppliers noted above. 38 Critical Accounting Policies The methods, estimates and judgments we use in applying our critical accounting policies have a significant impact on our results of operations and financial position.
Off-Balance Sheet Arrangements We do not have any off-balance sheet arrangements that provide liquidity, capital resources, market or credit risk support that expose us to any liability that is not reflected in our Consolidated Financial Statements at December 31, 2025 other than outstanding letters of credit of $33.7 million and unconditional purchase obligations with suppliers noted above.
(2) Includes transaction expenses, amortization of acquired intangibles, fair value charges on acquired inventories and integration expenses. (3) Numbers calculated following the same definition as Adjusted EBITDA for total Company.
(3) I ncludes transaction, diligence and integration expenses totaling $4.2 million and amortization of intangibles and fair value charges on acquired inventories totaling $30.3 million for the year ended December 31, 2024, respectively. (4) Numbers calculated following the same definition as Adjusted EBITDA for total Company.
The following table summarizes the change in Cash and cash equivalents during the periods indicated. 36 Year Ended December 31, 2024 2023 (Dollars in millions) (1) Net cash provided by operating activities $ 355.4 $ 330.5 Purchases of property, plant and equipment (51.8) (48.2) Proceeds from sale of property, plant and equipment 3.8 4.6 Acquisitions, net of cash received (153.7) (18.7) Other investing (4.1) — Net cash used in investing activities (205.7) (62.2) Proceeds from borrowings on Senior Notes 700.0 — Proceeds from borrowings on revolving credit facility and other 205.0 574.2 Repayments of borrowings on Term Loans (602.5) (12.5) Repayments of borrowings on revolving credit facility and other (237.0) (763.2) Payment of debt issuance costs and other (13.2) (1.0) Payment of dividends (17.0) (13.3) Distribution to noncontrolling interest holders (3.7) (3.9) Net cash provided by (used in) financing activities 31.7 (219.7) Effect of foreign exchange rates on Cash and cash equivalents (34.0) (18.6) Increase in Cash and cash equivalents $ 147.4 $ 30.0 (1) Numbers may not sum due to rounding.
Year Ended December 31, 2025 2024 (In millions) (1) Net cash provided by operating activities $ 260.6 $ 355.4 Purchases of property, plant and equipment (47.3) (51.8) Proceeds from sale of property, plant and equipment 6.5 3.8 Acquisitions, net of cash received (438.3) (153.7) Other investing (0.8) (4.1) Net cash used in investing activities (479.9) (205.7) Proceeds from borrowings on Senior Notes — 700.0 Proceeds from borrowings on Term Loan 350.0 — Proceeds from borrowings on revolving credit facilities and other 410.7 205.0 Repayments of borrowings on Term Loan (385.0) (602.5) Repayments of borrowings on revolving credit facilities and other (217.1) (237.0) Payment of debt issuance costs (5.4) (10.4) Payment of dividends (21.9) (17.0) Distributions to noncontrolling interest holders (4.2) (3.7) Other financing (13.4) (2.7) Net cash provided by financing activities 113.7 31.7 Effect of foreign exchange rates on Cash and cash equivalents 42.1 (34.0) (Decrease) increase in Cash and cash equivalents $ (63.5) $ 147.4 (1) Numbers may not sum due to rounding.
Changes in significant operating cash flow items are discussed below. • Operating cash flow was positively impacted by increased operating income and lower interest and income tax payments, partially offset by lower other operating cash flow for the year ended December 31, 2024. • Discontinued operations outflows for the years ended December 31, 2024 and 2023 were $15.0 million and $15.2 million, respectively, which were primarily asbestos related. • Restructuring initiative payments of $10.4 million and $20.7 million for the years ended December 31, 2024 and 2023, respectively, which includes severance and other termination benefits, including outplacement services, as well as the cost of relocating associates, relocating equipment, lease termination expenses, impairment of long-lived assets and other costs in connection with the closure and optimization of facilities and product lines.
Changes in significant operating cash flow items are discussed below. • Operating cash flow for the year ended December 31, 2025 decreased compared to the prior year period due to higher working capital, higher interest expenses and transaction costs associated with acquisition activity . • Discontinued operations outflows for the years ended December 31, 2025 and 2024 were $15.0 million, which were primarily asbestos related. • Restructuring initiative payments of $14.9 million and $10.4 million for the years ended December 31, 2025 and 2024, respectively, which includes severance and other termination benefits, including outplacement services, as well as the cost of relocating associates, relocating equipment, lease termination expenses and other costs in connection with the closure and optimization of facilities and product lines.
Adjusted EBITDA increased by $14.5 million and margin expanded 180 basis points primarily due to the aforementioned factors. 34 EMEA & APAC The following table summarizes selected financial data for our EMEA & APAC segment.
Core adjusted EBITDA increased $29.3 million and Core adjusted EBITDA margin expanded by 30 basis points primarily due to the aforementioned factors. Reportable Segments We report results in two reportable segments: Americas and EMEA & APAC. Americas The following table summarizes selected financial data for our Americas segment.
An increase in discount rates, a reduction in projected cash flows due to lower revenue growth rates or lower margins compared to our projections, or a combination of the two could lead to a reduction in the estimated fair values, which may result in impairment charges that could materially affect our financial statements in any given year. 39 In the evaluation of indefinite-lived intangible assets for impairment, we first assess qualitative factors to determine whether it is more likely than not that the fair value of the indefinite-lived intangible asset is less than its carrying value.
An increase in discount rates, a reduction in projected cash flows due to lower revenue growth rates or lower margins compared to our projections, or a combination of the two could lead to a reduction in the estimated fair values, which may result in impairment charges that could materially affect our financial statements in any given year.
(2) Includes severance and other termination benefits, including outplacement services, as well as the cost of relocating associates, relocating equipment, lease termination expenses and other costs in connection with the closure and optimization of facilities and product lines . (3) Includes transaction expenses, amortization of acquired intangibles, fair value charges on acquired inventories and integration expenses.
(2) Includes severance and other termination benefits, including outplacement services as well as the cost of relocating associates, relocating equipment, impairment of long-lived assets and other costs in connection with the closure and optimization of facilities and product lines.
Net income margin from continuing operations expanded primarily due to the items discussed above. Adjusted EBITDA increased $27.7 million and Adjusted EBITDA margin expanded by 120 basis points in 2024 compared to 2023 due to the aforementioned factors. Core adjusted EBITDA increased $28.0 million and Core adjusted EBITDA margin expanded by 130 basis points primarily due to the aforementioned factors.
Net income from continuing operations decreased in 2025 compared to 2024, due to the changes discussed above. Adjusted EBITDA increased $30.9 million and Adjusted EBITDA margin expanded by 40 basis points in 2025 compared to 2024 due to 34 the aforementioned factors.
As of December 31, 2024, the Company had fixed lease payment obligations of $98.4 million, with $24.5 million payable within 12 months. Purchase Obligations As of December 31, 2024, the Company had other purchase obligation s of $143.3 million, with $132.8 million payable within 12 months.
As of December 31, 2025, the Company had fixed lease payment obligations of $151.5 million, with $28.4 million payable within 12 months. Purchase Obligations As of December 31, 2025, the Company had other purchase obligations of $162.4 million, with $155.2 million payable within 12 months.
As control typically transfers to the customer upon shipment of the product in these circumstances, revenue is generally recognized at that point in time. For service contracts, we recognize revenue ratably over the period of performance as the customer simultaneously receives and consumes the benefits of the services provided.
As control typically transfers to the customer upon shipment of the product in these circumstances, revenue is generally recognized at that point in time.
Substantially all of our revenue is recognized at a point in time, and revenue recognition and billing typically occur simultaneously. The period of benefit for our incremental costs of obtaining a contract would generally have less than a one-year duration; therefore, we apply the practical expedient available and expense costs to obtain a contract when incurred.
The period of benefit for our incremental costs of obtaining a contract would generally have less than a one-year duration; therefore, we apply the practical expedient available and expense costs to obtain a contract when incurred. Trade receivables are presented net of an allowance for credit losses.
(4) Numbers calculated following the same definition as Adjusted EBITDA for total Company. (5) Net sales were $153.8 million relati ng to Russia for the year ended December 31, 2023. 31 Total Company Sales Net sales decreased for the year ended December 31, 2024 as compared with the year ended December 31, 2023 .
(5) Net sales were $149.6 million relati ng to Russia for the year ended December 31, 2024. Total Company Sales Net sales increased for the year ended December 31, 2025 as compared with the year ended December 31, 2024 .
Refer to Note 5, “Acquisitions” in the accompanying Notes contained elsewhere in this Form 10-K for additional information.
We believe our recent acquisitions are aligned with this strategic direction. Refer to Note 5, “Acquisitions” and Note 21, “Subsequent Events” in the accompanying Notes contained elsewhere in this Form 10-K for additional information.
The change in Net sales due to acquisitions for the periods presented in this filing represents the incremental sales as a result of acquisitions.
Acquisitions can significantly affect our reported results, and we report the change in our Net sales between periods both from existing and acquired businesses. The change in Net sales due to acquisitions for the periods presented in this filing represents the incremental sales as a result of acquisitions.
Adjusted EBITDA excludes from Net income from continuing operations the effect of Income tax expense, Interest expense and other, net, Pension settlement loss, Restructuring and other related charges, acquisition-amortization and other related charges and depreciation and other amortization. We also present Adjusted EBITDA margin, which is subject to the same adjustments as Adjusted EBITDA.
Adjusted EBITDA excludes from Net income from continuing operations the effect of Income tax expense, Interest expense and other, net, Pension settlement loss, Restructuring and other related charges, acquisition transaction, due diligence and integration expenses, amortization of intangibles and fair value charges on acquired inventories and depreciation and other amortization.
The carrying amount of Goodwill of the Americas, EMEA & APAC and Gas Control Equipment reporting units as of December 31, 2024 we re $629.7 million, $896.3 million and $126.0 million, respectively.
The carrying amount of Goodwill of the Americas, EMEA & APAC and GCE reporting units as of December 31, 2025 we re $647.0 million, $1,137.9 million and $164.8 million, respectively.
For the year ended December 31, 2024 compared to 2023, fluctuation s in foreign currencies reduced N et sales by 3.2%, Gross profit by 2.8% and Selling, general and administrative expenses by 1.2%. Seasonality Our European operations typically experience a slowdown during the July and August vacation seasons.
For the year ended December 31, 2025 compared to 2024, fluctuation s in foreign currencies increased N et sales by 0.6%, Gross profit by 0.8% and Selling, general and administrative expense by 1.4%.
Gross profit increased $21.7 million during 2024 in comparison to 2023, which was attributable to benefits from price increases, lower material costs, productivity gains and accretion from acquisitions, partially offset by unfavorable foreign currency impacts. Gross profit margin expanded 130 basis points to 37.9%, which was primarily due to aforementioned factors.
Gross profit increased $10.8 million during 2025 in comparison to 2024, which was primarily attributable to accretion from acquisitions, foreign currency impact and benefits from price increases partially offset by higher material costs, decreases in sales volume and tariff impacts.
(2) Excludes the impact of acquisitions and foreign exchange rate fluctuations, thus providing a measure of change due to factors such as price, product mix and volume. (3) Represents the incremental sales attributable to acquired businesses in comparison to the portion of the prior period during which we did not own the business.
(2) Represents the incremental sales attributable to acquired businesses in comparison to the portion of the prior period during which we did not own the business. (3) Represents the difference between prior year sales valued at the actual prior year foreign exchange rates and prior year sales valued at current year foreign exchange rates.
Material Costs Our results may be sensitive to cost changes in our raw materials. Our largest material purchases are for components and raw materials including steel, iron, copper and aluminum. Historically, we have been generally successful in passing raw material cost increases on to our customers in the form of higher prices.
Historically, we have been generally successful in passing raw material cost increases on to our customers in the form of higher prices. While we seek to take actions to manage this risk, future changes in component and raw material costs may adversely impact earnings.
Cash flows used in investing activities include $153.7 million of cash used for our Sager, ESAB Bangladesh and SUMIG acquisitions during the year ended December 31, 2024 and $18.7 million of cash used for our Therapy Equipment acquisition during the year ended December 31, 2023.
Cash flows used in investing activities during the year ended December 31, 2025 was primarily comprised of approximately $438 million of cash used for our Bavaria, DeltaP, Aktiv and EWM acquisitions and during the year ended December 31, 2024 was primarily comprised of approximately $154 million for our Sager, ESAB Bangladesh and SUMIG acquisitions. 37 Cash flows provided by financing activities during the year ended December 31, 2025 were $113.7 million, primarily attributable to acquisition-related financing activities.
Net sales from existing business increased by $9.3 million driven by higher sales volume, partially offset by lower customer pricing. Net sales from acquisitions contributed $9.2 million. These increases were partially offset by $14.2 million in unfavorable currency translation .
Net sales from existing business increased by $11.6 million primarily resulting from increases in sales volume partially offset by lower customer pricing. Net sales from acquisitions contributed $88.0 million. In addition, there was $48.5 million in favorable currency translation .
Selling, general and administrative expense decreased in comparison to 2023 primarily driven by savings from restructuring initiatives and favorable foreign currency impacts, partially offset by incremental costs from acquisitions and growth initiatives.
Selling, general and administrative expense increased $28.6 million during 2025 in comparison to 2024 primarily driven by incremental costs from acquisitions partially offset by benefits from lower employee costs and EBXai driven savings.
(4) Numbers calculated following the same definition as Adjusted EBITDA for total Company. (5) Net sales were $149.6 million re lating to Russia for the year ended December 31, 2024.
(5) Net sales were $142.2 million re lating to Russia for the year ended December 31, 2025.
Cash repatriation of non-United States cash into the United States may be subject to taxes, other local statutory restrictions and minority owner distributions. 37 Contractual Obligations Debt As of December 31, 2024, the Company’s Term A-1 loan and Senior Notes had principal amounts outstanding of $385.0 million and $700.0 million, respectively.
Cash repatriation of non-United States cash into the United States may be subject to taxes, other local statutory restrictions and minority owner distributions.
Our Cash and cash equivalent s as of December 31, 2024 include $213.4 million h eld in jurisdictions outside the United States.
Proceeds from debt borrowings of $760.7 million were partially offset by net repayment of $602.1 million and cash dividend payments totaling $21.9 million. Our Cash and cash equivalent s as of December 31, 2025 include $173.4 million h eld in jurisdictions outside the United States.
Net sales from existing businesses increased $32.3 million during the year ended December 31, 2024 compared to the prior year period, due to customer pricing increases of $19.9 million and increased sales volumes of $12.4 million . The increase in Net sales from acquisitions of $23.5 million was primarily attributable to the Sager, ESAB Bangladesh and SUMIG acquisitions.
Net sales from existing businesses decreased $31.4 million during the year ended December 31, 2025 compared to the prior year period, due to decreased sales volumes of $60.8 million driven primarily by lower volumes in Russia and the impact of tariffs in the Americas partially offset by $29.4 million of customer pricing increases .
Net Sales (1) $ % (Dollars in millions) For the year ended December 31, 2023 $ 2,774.8 Components of change: Existing businesses (organic sales growth) (2) 32.3 1.2 % Acquisitions (3) 23.5 0.8 % Foreign currency translation (4) (89.7) (3.2) % Total Net sales decline (34.0) (1.2) % For the year ended December 31, 2024 $ 2,740.8 (1) Numbers may not sum due to rounding.
The following table presents the components of changes in our consolidated Net sales. 32 Net Sales $ % (Dollars in millions) For the year ended December 31, 2024 $ 2,740.8 Components of change: Existing businesses (organic sales) (1) (31.4) (1.1) % Acquisitions (2) 115.9 4.2 % Foreign currency translation (3) 17.3 0.6 % Total Net sales growth 101.8 3.7 % For the year ended December 31, 2025 $ 2,842.6 (1) Excludes the impact of acquisitions and foreign exchange rate fluctuations, thus providing a measure of change due to factors such as price, product mix and volume.
For additional information of the associated risks, refer to the Part I, Item 1A. “Risk Factors” section. Acquisitions We complement our organic growth plans with acquisitions and other investments. Acquisitions can significantly affect our reported results, and we report the change in our Net sales between periods both from existing and acquired businesses.
For additional information on risks to the Company’s operations related to United States policy regarding international trade, refer to the Part I, Item 1A. “Risk Factors” section of this Form 10-K . Acquisitions We complement our organic growth plans with acquisitions and other investments.
Refer to Note 5, “Acquisitions” in the accompanying Notes contained elsewhere in this Form 10-K for additional information. We face a number of challenges and opportunities, including the successful integration of acquired businesses, the application and expansion of our EBX tools to improve business performance and the rationalization of assets and costs.
We face a number of challenges and opportunities, including the successful integration of acquired businesses, the application and expansion of our EBXai tools to improve business performance and the rationalization of assets and costs. We expect AI investment and infrastructure to contribute to supporting our margin expansion through initiatives such as operational 29 efficiencies.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

8 edited+1 added−1 removed3 unchanged
Biggest changeDuring the year ended December 31, 2024, approxima tely 78% of our sales were derived from operations outside the United States. We have significant manufacturing operations in European countries that are not part of the Eurozone. Sales are more highly weighted toward the Euro and U.S. Dollar. We also have significant contractual obligations in U.S.
Biggest changeDollar and against the currencies of other countries in which we manufacture and sell products and services. During the years ended December 31, 2025 and 2024 , approxima tely 80% and 78% of our sales, respectively, were derived from operations outside the United States. We have significant manufacturing operations in European countries that are not part of the Eurozone.
As of December 31, 2024, we have six fixed-to-fixed cross-currency swaps that are expected to provide a hedge to a portion of our European net asset position. See Note 16, “Derivatives” in our Notes included in this Form 10-K for additional information. We also face exchange rate risk from transactions from intercompany transactions between affiliates. Although we use the U.S.
As of December 31, 2025, we have six fixed-to-fixed cross-currency swaps that are expected to provide a hedge to a portion of our European net asset position. See Note 16, “Derivatives” in our Notes included in this Form 10-K for additional information. We also face exchange rate risk from transactions from intercompany transactions between affiliates. Although we use the U.S.
Interest Rate Risk We entered into certain Term Loans and a Revolving Facility pursuant to the terms of the Credit Agreement. Refer to Note 15, “Debt” in our Notes included in this Form 10-K for additional information regarding our credit facilities. We are exposed to interest rate risk on the variable-rate term loans under these facilities.
Interest Rate Risk We entered into a term loan facility and a revolving credit facility pursuant to the terms of the A&R Credit Agreement. Refer to Note 15, “Debt” in our Notes included in this Form 10-K for additional information. We are exposed to interest rate risk on the variable-rate term loans under these facilities.
To manage commodity price risk, we periodically enter into fixed price contracts directly with suppliers. 44
To manage commodity price risk, we periodically enter into fixed price contracts directly with suppliers. 43
Dollars that are met with cash flows in other currencies as well as U.S. Dollars. To better match revenue and expense as well as cash needs from contractual liabilities, we regularly enter into foreign currency swaps and forward contracts. We also face exchange rate risk from our investments in subsidiaries owned and operated in foreign countries.
Sales are more highly weighted toward the Euro and U.S. Dollar. We also have significant contractual obligations in U.S. Dollars that are met with cash flows in other currencies as well as U.S. Dollars. To better match revenue and expense as well as cash needs from contractual liabilities, we regularly enter into foreign currency swaps and forward contracts.
Exchange Rate Risk We have manufacturing sites throughout the world and sell our products globally. As a result, we are exposed to movements in the exchange rates of various currencies against the U.S. Dollar and against the currencies of other countries in which we manufacture and sell products and services.
Refer to Note 16, “Derivatives” in our Notes included in this Form 10-K for additional information. Exchange Rate Risk We have manufacturing sites throughout the world and sell our products globally. As a result, we are exposed to movements in the exchange rates of various currencies against the U.S.
The effect of a change in currency exchange rates on our net investment in international subsidiaries is reflected in the Accumulated other comprehensive loss component of Equity. A 10% depreciation in major curren cies, relative to the U.S. Dollar as of December 31, 2024, would result in a reduction in Equity of approximat ely $164 million.
We also face exchange rate risk from our investments in subsidiaries owned and operated in foreign countries. The effect of a change in currency exchange rates on our net investment in international subsidiaries is reflected in the Accumulated other comprehensive loss component of Equity. A 10% depreciation in major curren cies, relative to the U.S.
A hypothetical increase in interest rates of 1% during the year ended December 31, 2024 would have increased interest expense by approximatel y $0.9 million. T o mitigate our interest risk, in 2022, we entered into two interest rate swaps to hedge $600 million of our floating-rate debt.
A hypothetical increase in interest rates of 1% during the year ended December 31, 2025 would have increased interest expense by approximatel y $5.4 million. A hypothetical increase in interest rates of 1% during the year ended December 31, 2024 would have increased interest expense by approximatel y $0.9 million.
Removed
In 2024, the Company issued the Senior Notes, the proceeds of which paid off the Term A-3 loan. As a result, the Company terminated one of these swaps and, as of December 31, 2024 we hedge only $300 million of our floating-rate debt. Refer to Note 16, “Derivatives” in our Notes included in this Form 10-K for additional information.
Added
Dollar as of December 31, 2025, would result in a reduction in Equity of approximat ely $245 million. A 10% depreciation in major curren cies, relative to the U.S. Dollar as of December 31, 2024, would result in a reduction in Equity of approximat ely $164 million.

Other ESAB 10-K year-over-year comparisons