# Avantor, Inc.: Form 10-Q for the period ended Mar 31, 2025

- Company: [Avantor, Inc.](/companies/avtr.md) (CIK 1722482)
- Form: 10-Q
- Filed: 2025-04-25
- Accepted by EDGAR: Apr 25, 2025, 09:00 ET
- Period: 2025-03-31
- Accession: 0001722482-25-000080
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1722482/000172248225000080/avtr-20250331.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1722482/000172248225000080/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-01-01 to 2025-03-31 | $1.58bn | us-gaap:Revenues |
| Cost of revenue | 3 months, 2025-01-01 to 2025-03-31 | $1.05bn | us-gaap:CostOfGoodsAndServicesSold |
| Gross profit | 3 months, 2025-01-01 to 2025-03-31 | $534.9m | us-gaap:GrossProfit |
| Selling, general and administrative | 3 months, 2025-01-01 to 2025-03-31 | $387.5m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2025-01-01 to 2025-03-31 | $147.4m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2025-01-01 to 2025-03-31 | $42.2m | us-gaap:InterestExpense |
| Income tax | 3 months, 2025-01-01 to 2025-03-31 | $21.2m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-01-01 to 2025-03-31 | $64.5m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-01-01 to 2025-03-31 | $0.09 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-01-01 to 2025-03-31 | $0.09 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-01-01 to 2025-03-31 | 682,400,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2025-01-01 to 2025-03-31 | $109.3m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2025-01-01 to 2025-03-31 | $28.0m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2025-03-31 | $315.7m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-03-31 | $2.28bn | us-gaap:AssetsCurrent |
| Total assets | at 2025-03-31 | $12.33bn | us-gaap:Assets |
| Current liabilities | at 2025-03-31 | $2.03bn | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-03-31 | $6.23bn | us-gaap:Liabilities |
| Long-term debt | at 2025-03-31 | $3.28bn | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2025-03-31 | $827.5m | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | at 2025-03-31 | $6.10bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 24,725 characters.

*This discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results may differ materially from those contained in or implied by any forward-looking statements. See “Cautionary factors regarding forward-looking statements.”*

### Basis of presentation

This discussion should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and notes. Pursuant to SEC rules for reports covering interim periods, we have prepared this discussion and analysis to enable you to assess material changes in our financial condition and results of operations since December 31, 2024, the date of our Annual Report. Therefore, we encourage you to read this discussion and analysis in conjunction with our Annual Report.

### Overview

During the three months ended March 31, 2025, we recorded net sales of $1,581.4 million, net income of $64.5 million, Adjusted EBITDA of $269.5 million and Adjusted Operating Income of $242.8 million. Net sales declined 5.9%, which included a 2.2% organic net sales decrease compared to the same period in 2024. See “Reconciliations of non-GAAP measures” for reconciliations of net income to Adjusted

EBITDA and Adjusted Operating Income, and net income margin to Adjusted EBITDA margin and Adjusted Operating Income margin. See “Results of operations” for a reconciliation and explanation of changes of net sales growth (decline) to organic net sales growth (decline).

### Factors and current trends affecting our business and results of operations

The following updates the factors and current trends disclosed in our Annual Report. These updates may affect our performance and financial condition in future periods.

### Our results are impacted by a divestiture to further refine our business model

We completed the sale of our Clinical Services business, a component of the Company’s Laboratory Solutions reportable segment, on October 17, 2024, pursuant to a definitive agreement that was signed on August 16, 2024. The Clinical Services business was not classified as a discontinued operation as it did not represent a strategic shift that will have a major effect on the Company’s operations and financial results.

### We have been impacted by inflationary pressures

We have experienced inflationary pressures across all of our cost categories. While we have implemented pricing and productivity measures to combat these pressures, they may continue to adversely impact our results.

### We continue to invest in a differentiated innovation model

We are engaging with our customers early in their product development cycles to advance their programs from research and discovery through development and commercialization. These projects include enhancing product purity and performance characteristics, improving product packaging and streamlining workflows. We are also developing new products in emerging areas of science such as cell and gene therapy.

### We continue to advance our cost transformation initiative to reduce our expenses

We are advancing a global cost transformation initiative to further enhance productivity through increased organizational efficiency, footprint optimization, reduced cost-to-serve and procurement savings that are expected to generate approximately $300 million in run rate gross cost savings by the end of 2026.

We have expanded this initiative and now expect to generate approximately $400 million in run rate gross savings by the end of 2027.

### Fluctuations in foreign currency rates impact our results

Our consolidated results of operations are comprised of many different functional currencies that translate into our U.S. dollar reporting currency. The movement of the U.S. dollar against those functional currencies, particularly the Euro, has caused significant variability in our results and may continue to do so in the future.

### Our results may be impacted by changes in trade policy

The imposition of tariffs and other trade restrictions by the U.S., as well as reciprocal trade restrictions imposed by other countries, could adversely affect global economies, financial markets and the overall environment in which we do business as further described in Part II, Item 1A, “Risk Factors.”

### Key indicators of performance and financial condition

To evaluate our performance, we monitor a number of key indicators. As appropriate, we supplement our results of operations determined in accordance with GAAP with certain non-GAAP financial measurements that we believe are useful to investors, creditors and others in assessing our performance. These measures should not be considered in isolation or as a substitute for reported GAAP results because they may include or exclude certain items as compared to similar GAAP-based measures, and such measures may not be comparable to similarly titled measures reported by other companies. Rather, these measures should be considered as an additional way of viewing aspects of our operations that provide a more complete understanding of our business.

The key indicators that we monitor are as follows:

- ***Net sales, gross margin, operating income, operating income margin, net income or loss and net income or loss margin***. These measures are discussed in the section entitled “Results of operations”;
- ***Organic net sales growth (decline),*** which is a non-GAAP measure discussed in the section entitled “Results of operations.” Organic net sales growth (decline) eliminates from our reported net sales change the impacts of revenues from acquisitions and divestitures that occurred in the last year (as applicable) and changes in foreign currency exchange rates. We believe that this measurement is useful to investors as a way to measure and evaluate our underlying commercial operating performance consistently across our segments and the periods presented. This measurement is used by our management for the same reason. Reconciliations to the change in reported net sales, the most directly comparable GAAP financial measure, are included in the section entitled “Results of operations”;
- ***Adjusted EBITDA and Adjusted EBITDA margin***, which are non-GAAP measures discussed in the section entitled “Results of operations.” Adjusted EBITDA is our net income or loss adjusted for the following items: (i) interest expense, (ii) income tax expense, (iii) amortization of acquired intangible assets, (iv) depreciation expense, (v) losses on extinguishment of debt, (vi) charges associated with the impairment of certain assets, (vii) gain on sale of business, and (viii) certain other adjustments. Adjusted EBITDA margin is Adjusted EBITDA divided by net sales as determined under GAAP. We believe that these measurements are useful to investors as ways to analyze the underlying trends in our business consistently across the periods presented. These measurements are used by our management for the same reason. A reconciliation of net income or loss and net income or loss margin, the most directly comparable GAAP financial measures, to Adjusted EBITDA and Adjusted EBITDA margin, respectively, are included in the section entitled “Reconciliations of non-GAAP measures”;
- ***Adjusted Operating Income and Adjusted Operating Income margin***, which are non-GAAP measures discussed in the section entitled “Results of operations.” Adjusted Operating Income is our net income or loss adjusted for the following items: (i) interest expense, (ii) income tax

expense, (iii) amortization of acquired intangible assets, (iv) losses on extinguishment of debt, (v) charges associated with the impairment of certain assets, (vi) gain on sale of business, and (vii) certain other adjustments. This measurement is our segment reporting profitability measure under GAAP. Adjusted Operating Income margin is Adjusted Operating Income divided by net sales as determined under GAAP. We believe that these measurements are useful to investors as ways to analyze the underlying trends in our business consistently across the periods presented. These measurements are used by our management for the same reason. A reconciliation of net income or loss and net income or loss margin, the most directly comparable GAAP financial measures, to Adjusted Operating Income and Adjusted Operating Income margin, respectively, are included in the section entitled “Reconciliations of non-GAAP measures”;

- ***Cash flows from operating activities***, which we discuss in the section entitled “Liquidity and capital resources—Historical cash flows”;
- ***Free cash flow***, which is a non-GAAP measure, is equal to our cash flows from operating activities, less capital expenditures, plus direct transaction costs and income taxes paid related to acquisitions and divestitures (as applicable) in the period. We believe that this measurement is useful to investors as it provides a view on the Company’s ability to generate cash for use in financing or investing activities. This measurement is used by management for the same reason. A reconciliation of cash flows from operating activities, the most directly comparable GAAP financial measure, to free cash flow, is included in the section entitled “Liquidity and capital resources—Historical cash flows.”

### Results of operations

We present results of operations in the same way that we manage our business, evaluate our performance and allocate our resources. We also provide discussion of net sales and Adjusted Operating Income by segment: Laboratory Solutions and Bioscience Production. Corporate costs are managed on a standalone basis, certain of which are allocated to our reportable segments.

### Executive summary

*(dollars in millions)*

| 2025 | Three months ended March 31, 2024 |  | Change |
| --- | ---: | ---: | ---: |
| Net sales | $1,581.4 | $1,679.8 | $(98.4) |
| Gross margin | 33.8% | 34.0% | (20) bps |
| Operating income | $147.4 | $146.3 | $1.1 |
| Operating income margin | 9.3% | 8.7% | 60 bps |
| Net income | $64.5 | $60.4 | $4.1 |
| Net income margin | 4.1% | 3.6% | 50 bps |
| Adjusted EBITDA | $269.5 | $283.0 | $(13.5) |
| Adjusted EBITDA margin | 17.0% | 16.8% | 20 bps |
| Adjusted Operating Income | $242.8 | $258.4 | $(15.6) |
| Adjusted Operating Income margin | 15.4% | 15.4% | — bps |

The first quarter net sales decline was primarily driven by reduced customer demand in the Laboratory Solutions segment and the divestiture of our Clinical Services business. Sales volume decline and the divestiture of our Clinical Services business contributed to a contraction in gross profit, while gross margin decreased due to an unfavorable manufacturing variances, partially offset by lower inventory reserves. Lower gross profit, partially offset by savings from our cost transformation initiative, resulted in lower Adjusted Operating Income and Adjusted EBITDA.

### Net Sales

#### Three months ended

*(in millions)*

| 2025 | Three months ended March 31, Net sales growth (decline) 2024 | Foreign currency impact | Reconciliation of net sales growth (decline) to organic net sales growth (decline) Divestiture impact | Organic net sales growth (decline) |  |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Laboratory Solutions | $1,065.0 | $1,157.1 | $(92.1) | $(14.5) | $(44.1) | $(33.5) |
| Bioscience Production | 516.4 | 522.7 | (6.3) | (4.5) | — | (1.8) |
| Total | $1,581.4 | $1,679.8 | $(98.4) | $(19.0) | $(44.1) | $(35.3) |

Net sales decreased $98.4 million or 5.9%, which included $19.0 million or 1.1% of unfavorable foreign currency impact and $44.1 million or 2.6% of impact related to our Clinical Services divestiture. Organic net sales decreased by $35.3 million or 2.2%.

In the Laboratory Solutions segment, net sales decreased by $92.1 million or 8.0%, which included $14.5 million or 1.3% of unfavorable foreign currency impact and $44.1 million or 3.8% of impact related to our Clinical Services divestiture. Organic net sales decreased by $33.5 million or 2.9%. The sales decrease was primarily driven by lower demand for our Total Science Solutions consumables offerings due to the uncertainty around funding and macroeconomic outlook.

In the Bioscience Production segment, net sales decreased by $6.3 million or 1.2%, which included $4.5 million or 0.9% of unfavorable foreign currency impact. Organic net sales decreased by $1.8 million or 0.3%. The sales decline was primarily driven by decreased demand for our formulated solutions offerings to customers in the semiconductor industry and by lower demand for third party clean room consumables due to lower usage.

### Gross margin

| 2025 | Three months ended March 31, 2024 |  | Change |
| --- | ---: | ---: | --- |
| Gross margin | 33.8% | 34.0% | (20) bps |

#### Three months ended

Gross margin for the three months ended March 31, 2025, contracted by 20 basis points due to unfavorable manufacturing variances, which was partially offset by lower inventory reserves.

### Operating income

*(in millions)*

| 2025 | Three months ended March 31, 2024 |  | Change |
| --- | ---: | ---: | ---: |
| Gross profit | $534.9 | $570.5 | $(35.6) |
| Operating expenses | 387.5 | 424.2 | (36.7) |
| Operating income | $147.4 | $146.3 | $1.1 |

#### Three months ended

Operating income for the three months ended March 31, 2025, increased primarily due to lower SG&A expenses, driven by reduced restructuring and severance charges and the divestiture of our Clinical Services business, partially offset by lower gross profit as previously discussed.

### Net income

*(in millions)*

| 2025 | Three months ended March 31, 2024 |  | Change |
| --- | ---: | ---: | ---: |
| Operating income | $147.4 | $146.3 | $1.1 |
| Interest expense, net | (42.2) | (64.3) | 22.1 |
| Loss on extinguishment of debt | — | (2.5) | 2.5 |
| Other (expense) income, net | (19.5) | 1.1 | (20.6) |
| Income tax expense | (21.2) | (20.2) | (1.0) |
| Net income | $64.5 | $60.4 | $4.1 |

#### Three months ended

Net income increased primarily due to higher operating income, as previously discussed, and lower interest expense resulting from debt repayments made over the last twelve months, partially offset by pension termination charges.

### Adjusted EBITDA and Adjusted EBITDA margin

For reconciliations of Adjusted EBITDA and Adjusted EBITDA margin to net income and net income margin, respectively, the most directly comparable measures under GAAP, see “Reconciliations of non-GAAP financial measures.”

*(dollars in millions)*

| 2025 | Three months ended March 31, 2024 |  | Change |
| --- | ---: | ---: | ---: |
| Adjusted EBITDA | $269.5 | $283.0 | $(13.5) |
| Adjusted EBITDA margin | 17.0% | 16.8% | 20 bps |

#### Three months ended

For the three months ended March 31, 2025, Adjusted EBITDA decreased by $13.5 million or 4.8%, which included an unfavorable foreign currency translation impact of $3.2 million or 1.1%. The remaining decline of $10.3 million or 3.7% was primarily driven by the divestiture of our Clinical Services business, partially offset by savings from our cost transformation initiative.

### Adjusted Operating Income and Adjusted Operating Income margin

For reconciliations of Adjusted Operating Income and Adjusted Operating Income margin to net income and net income margin, respectively, the most directly comparable measures under GAAP, see “Reconciliations of non-GAAP financial measures.”

*(dollars in millions)*

| 2025 Adjusted Operating Income: | Three months ended March 31, 2024 |  | Change |
| --- | ---: | ---: | ---: |
| Laboratory Solutions | $139.0 | $148.2 | $(9.2) |
| Bioscience Production | 123.4 | 126.9 | (3.5) |
| Corporate | (19.6) | (16.7) | (2.9) |
| Total | $242.8 | $258.4 | $(15.6) |
| Adjusted Operating Income margin | 15.4% | 15.4% | — bps |

#### Three months ended

Adjusted Operating Income decreased $15.6 million or 6.0%, which included an unfavorable foreign currency translation impact of $3.0 million or 1.2%. The remaining decline of $12.6 million or 4.8% is further discussed below.

In the Laboratory Solutions segment, Adjusted Operating Income declined $9.2 million or 6.2%, or 4.9% when adjusted for unfavorable foreign currency translation impact. The decrease was primarily due to the divestiture of our Clinical Services business and lower sales volume, partially offset by savings from our cost transformation initiative.

In the Bioscience Production segment, Adjusted Operating Income declined $3.5 million or 2.8%, or 1.9% when adjusted for unfavorable foreign currency translation impact. The decrease was primarily driven by unfavorable manufacturing variances, partially offset by commercial excellence.

In Corporate, Adjusted Operating Income decreased $2.9 million due to various immaterial factors.

### Reconciliations of non-GAAP measures

The following table presents the reconciliation of net income and net income margin to Adjusted EBITDA and Adjusted EBITDA margin, respectively:

*(dollars in millions, % based on net sales)*

| 2025 $% | Three months ended March 31, |  | 2024 $% |  |
| --- | ---: | ---: | ---: | ---: |
| Net income | $64.5 | 4.1% | $60.4 | 3.6% |
| Interest expense, net | 42.2 | 2.7% | 64.3 | 3.8% |
| Income tax expense | 21.2 | 1.3% | 20.2 | 1.2% |
| Depreciation and amortization | 99.7 | 6.3% | 99.6 | 5.9% |
| Loss on extinguishment of debt | — | —% | 2.5 | 0.1% |
| Restructuring and severance charges1 | 4.4 | 0.3% | 23.2 | 1.4% |
| Transformation expenses2 | 15.4 | 1.0% | 13.3 | 0.8% |
| Other3 | 4.0 | 0.2% | (0.5) | —% |
| Pension termination charges4 | 18.1 | 1.1% | — | —% |
| Adjusted EBITDA | $269.5 | 17.0% | $283.0 | 16.8% |

1\. Reflects the incremental expenses incurred in the period related to restructuring initiatives to increase profitability and productivity. Costs included in this caption are specific to employee severance, site-related exit costs, and contract termination costs. These expenses represent costs incurred to achieve the Company’s publicly-announced cost transformation initiative.

2\. Represents incremental expenses directly associated with the Company’s publicly-announced cost transformation initiative, primarily related to the cost of external advisors.

3\. Represents net foreign currency (gain) loss from financing activities, other stock-based compensation expense (benefit) and a purchase price adjustment related to the sale of our Clinical Services business in 2024.

4\. As described in note 12 to our unaudited condensed consolidated financial statements.

The following table presents the reconciliation of net income and net income margin to Adjusted Operating Income and Adjusted Operating Income margin, respectively:

*(dollars in millions, % based on net sales)*

| 2025 $% | Three months ended March 31, |  | 2024 $% |  |
| --- | ---: | ---: | ---: | ---: |
| Net income | $64.5 | 4.1% | $60.4 | 3.6% |
| Interest expense, net | 42.2 | 2.7% | 64.3 | 3.8% |
| Income tax expense | 21.2 | 1.3% | 20.2 | 1.2% |
| Loss on extinguishment of debt | — | —% | 2.5 | 0.1% |
| Other (expense) income, net | 19.5 | 1.2% | (1.1) | —% |
| Operating income | 147.4 | 9.3% | 146.3 | 8.7% |
| Amortization | 73.9 | 4.7% | 75.3 | 4.5% |
| Restructuring and severance charges1 | 4.4 | 0.3% | 23.2 | 1.4% |
| Transformation expenses2 | 15.4 | 1.0% | 13.3 | 0.8% |
| Other3 | 1.7 | 0.1% | 0.3 | —% |
| Adjusted Operating Income | $242.8 | 15.4% | $258.4 | 15.4% |

1\. Reflects the incremental expenses incurred in the period related to restructuring initiatives to increase profitability and productivity. Costs included in this caption are specific to employee severance, site-related exit costs, and contract termination costs. These expenses represent costs incurred to achieve the Company’s publicly-announced cost transformation initiative.

2\. Represents incremental expenses directly associated with the Company’s publicly-announced cost transformation initiative, primarily related to the cost of external advisors.

3\. Represents other stock-based compensation expense (benefit) and a purchase price adjustment related to the sale of our Clinical Services business in 2024.

### Liquidity and capital resources

We fund short-term cash requirements primarily from operating cash flows and credit facilities. Most of our long-term financing is from indebtedness. For the three months ended March 31, 2025, we generated $109.3 million of cash from operating activities, ended the quarter with $315.7 million of cash and cash equivalents and our availability under our credit facilities was $1,126.4 million. In the next twelve months, we have coming due a $702.0 million debt repayment related to 2.625% secured notes, required term loan payments of $19.8 million and repayment of receivables facility borrowings of $100.0 million.

### Liquidity

The following table presents our primary sources of liquidity:

*(in millions)*

| March 31, 2025 Receivables facility Revolving credit facility Total Unused availability under credit facilities: |  |
| --- | ---: |
| Capacity $269.8 $975.0 | $1,244.8 |
| Undrawn letters of credit outstanding (15.3) (3.1) | (18.4) |
| Outstanding borrowings (100.0) — | (100.0) |
| Unused availability $154.5 $971.9 | $1,126.4 |
| Cash and cash equivalents | 315.7 |
| Total liquidity | $1,442.1 |

Some of our credit line availability depends upon maintaining a sufficient borrowing base of eligible accounts receivable. We believe that we have sufficient capital resources to meet our liquidity needs.

Our debt agreements include representations and covenants that we consider usual and customary, and our receivables facility and senior secured credit facilities include a financial covenant that becomes applicable for periods in which we have drawn more than 35% of our revolving credit facility under the senior secured credit facilities. In this circumstance, we are not permitted to have combined borrowings on our senior secured credit facilities and secured notes in excess of a pro forma net leverage ratio, as defined in our credit agreements. As we had not drawn more than 35% of our revolving credit facility in this period, this covenant was not applicable at March 31, 2025.

At March 31, 2025, $230.9 million or 73.1% of our $315.7 million in cash and cash equivalents was held by our non-U.S. subsidiaries and may be subject to certain taxes upon repatriation, primarily where foreign withholding taxes apply.

### Historical cash flows

The following table presents a summary of cash provided by (used in) various activities:

*(in millions)*

| 2025 Operating activities: | Three months ended March 31, 2024 |  | Change |
| --- | ---: | ---: | ---: |
| Net income | $64.5 | $60.4 | $4.1 |
| Non-cash items1 | 133.9 | 129.2 | 4.7 |
| Working capital changes2 | (38.2) | (50.0) | 11.8 |
| All other | (50.9) | 2.0 | (52.9) |
| Total | $109.3 | $141.6 | $(32.3) |
| Investing activities: |  |  |  |
| Capital expenditures | (28.0) | (34.7) | 6.7 |
| Other | (0.9) | 0.5 | (1.4) |
| Total | $(28.9) | $(34.2) | $5.3 |
| Financing activities | (33.6) | (130.2) | 96.6 |

1\. Consists of typical non-cash charges including depreciation and amortization, stock-based compensation expense, deferred income tax expense and others.

2\. Includes changes to our accounts receivable, inventory, contract assets and accounts payable.

Cash flows from operating activities provided $32.3 million less cash in 2025, primarily due to higher incentive compensation payments related to fiscal year 2024, partially offset by higher income before income taxes and improved working capital changes.

Investing activities used $5.3 million less cash in 2025. The change was primarily attributable to a decrease in capital expenditures compared to the prior year.

Financing activities used $96.6 million less cash in 2025, primarily due to the absence of term loan prepayments in the current year, partially offset by a decrease in proceeds received from stock option exercises compared to the prior year.

### Free cash flow

*(in millions)*

| 2025 | Three months ended March 31, 2024 |  | Change |
| --- | ---: | ---: | ---: |
| Net cash provided by operating activities | $109.3 | $141.6 | $(32.3) |
| Capital expenditures | (28.0) | (34.7) | 6.7 |
| Divestiture-related transaction expenses and taxes paid | 0.8 | — | 0.8 |
| Free cash flow | $82.1 | $106.9 | $(24.8) |

Free cash flow was $24.8 million lower in 2025, primarily due to lower cash flow from operating activities as previously discussed, partially offset by a decrease in capital expenditures.

### Indebtedness

For information about our indebtedness, refer to the section entitled “Liquidity” and note 9 to our unaudited condensed consolidated financial statements included in Part I, Item 1 — “Financial statements.”

## Market risk

As filed, 284 characters.

Quantitative and qualitative disclosures about market risk appear in Item 7A “Quantitative and qualitative disclosures about market risk” in our Annual Report. There were no material changes during the quarter ended March 31, 2025 to this information as reported in our Annual Report.

## Controls and procedures

As filed, 1,007 characters.

### Management’s evaluation of disclosure controls and procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), as of the end of the period covered by this report. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2025, the design and operation of our disclosure controls and procedures were effective to accomplish their objectives at the reasonable assurance level.

### Changes in internal control over financial reporting

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) during the fiscal quarter ended March 31, 2025, that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

## Risk factors

As filed, 2,241 characters.

For information regarding factors that could affect the Company's results of operations, financial condition and liquidity, see the risk factors discussed in Part I, Item 1A “Risk Factors” in our Annual Report and the following risk factor, which supplements and should be read in conjunction with the risk factors discussed in Part I, Item 1A “Risk Factors” in our Annual Report.

***Changes to trade policy, including new or increased tariffs and changing import/export regulations, may adversely affect our business, financial condition and results of operations.***

Changes in U.S. or international laws and policies governing foreign trade could materially and adversely affect our business. The U.S. has instituted certain changes, and has proposed additional changes, in trade policies that include the negotiation or termination of trade agreements, the imposition of higher tariffs on imports into the U.S., and other government regulations affecting trade between the U.S. and other countries where we conduct our business. The new tariffs and other changes in U.S. trade policy have triggered retaliatory actions by affected countries, and foreign governments have instituted or are considering imposing trade sanctions on U.S. goods.

The imposition of tariffs and other trade restrictions, as well as the escalation of trade disputes and any downturns in the global economy resulting therefrom, could materially and adversely affect our business, financial condition and results of operations. The extent and duration of the tariffs and other trade restrictions and the resulting impact on general economic conditions and on our business are uncertain and depend on various factors, such as negotiations between the U.S. and affected countries, the responses of other countries or regions, exemptions or exclusions that may be granted, availability and cost of alternative sources of supply, and demand for our products in affected markets.

Further, actions we take to adapt to new tariffs or other trade restrictions may cause us to modify our operations, which could be time-consuming and expensive, impact pricing of our products, which could impact our sales and profitability, or cause us to forgo business opportunities.

Filed Apr 25, 2025.
Source: SEC EDGAR, the filing index for accession 0001722482-25-000080. Last ingested by Listed: Nov 3, 2026, 22:09 ET. No prices; not investment advice.