# Envista Holdings Corp: Form 10-Q for the period ended Mar 28, 2025

- Company: [Envista Holdings Corp](/companies/nvst.md) (CIK 1757073)
- Form: 10-Q
- Filed: 2025-05-01
- Accepted by EDGAR: May 1, 2025, 16:17 ET
- Period: 2025-03-28
- Accession: 0001757073-25-000028
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1757073/000175707325000028/nvst-20250328.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1757073/000175707325000028/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-03-28.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-01-01 to 2025-03-28 | $616.9m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2025-01-01 to 2025-03-28 | $280.9m | us-gaap:CostOfGoodsAndServicesSold |
| Gross profit | 3 months, 2025-01-01 to 2025-03-28 | $336.0m | us-gaap:GrossProfit |
| Research and development | 3 months, 2025-01-01 to 2025-03-28 | $25.3m | us-gaap:ResearchAndDevelopmentExpense |
| Selling, general and administrative | 3 months, 2025-01-01 to 2025-03-28 | $271.7m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2025-01-01 to 2025-03-28 | $39.0m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2025-01-01 to 2025-03-28 | $11.0m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-01-01 to 2025-03-28 | $18.0m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-01-01 to 2025-03-28 | $0.10 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-01-01 to 2025-03-28 | $0.10 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-01-01 to 2025-03-28 | 173,600,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2025-01-01 to 2025-03-28 | $300.0k | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2025-01-01 to 2025-03-28 | $5.9m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2025-03-28 | $1.08bn | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-03-28 | $1.85bn | us-gaap:AssetsCurrent |
| Total assets | at 2025-03-28 | $5.47bn | us-gaap:Assets |
| Current liabilities | at 2025-03-28 | $873.3m | us-gaap:LiabilitiesCurrent |
| Long-term debt | at 2025-03-28 | $1.30bn | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2025-03-28 | $116.2m | us-gaap:DebtCurrent |
| Short-term borrowings | at 2025-03-28 | $116.2m | us-gaap:ShortTermBorrowings |
| Shareholders' equity | at 2025-03-28 | $3.04bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 36,545 characters.

*The following discussion and analysis of our financial condition and results of operations should be read in conjunction with other information, including our Condensed Consolidated Financial Statements and related notes included in Part I, Item 1, Financial Information, of this Quarterly Report on Form 10-Q, our consolidated financial statements appearing in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 10-K”), and Part II, Item 1A, Risk Factors, of this Quarterly Report on Form 10-Q. Unless the context otherwise requires, all references herein to the “Company,” “we,” “us” or “our,” or similar terms, refer to Envista Holdings Corporation and its consolidated subsidiaries.*

*Certain statements included or incorporated by reference in this Quarterly Report are “forward-looking statements” within the meaning of the U.S. federal securities laws. All statements other than historical factual information are forward-looking statements, including without limitation statements regarding: projections of revenue, expenses, profit, profit margins, tax rates, tax provisions, cash flows, pension and benefit obligations and funding requirements, our liquidity position or other projected financial measures; management’s plans and strategies for future operations, including statements relating to anticipated operating performance, cost reductions, restructuring activities, new product and service developments, competitive strengths or market position, acquisitions and the integration thereof, divestitures, spin-offs, split-offs or other distributions, strategic opportunities, securities offerings, stock repurchases, dividends and executive compensation; growth, declines and other trends in markets we sell into; future regulatory approvals and the timing thereof; outstanding claims, legal proceedings, tax audits and assessments and other contingent liabilities; future foreign currency exchange rates and fluctuations in those rates; the anticipated timing of any of the foregoing; assumptions underlying any of the foregoing; and any other statements that address events or developments that Envista intends or believes will or may occur in the future. Terminology such as “believe,” “anticipate,” “should,” “could,” “intend,” “will,” “plan,” “expect,” “estimate,” “project,” “target,” “may,” “possible,” “potential,” “forecast” and “positioned” and similar references to future periods are intended to identify forward-looking statements, although not all forward-looking statements are accompanied by such words. Forward-looking statements are based on assumptions and assessments made by our management in light of their experience and perceptions of historical trends, current conditions, expected future developments and other factors they believe to be appropriate. These forward-looking statements are subject to a number of risks and uncertainties, including but not limited to, the following: the conditions in the U.S. and global economy, the impact of inflation and increasing interest rates, slower economic growth or recession, international economic, political, legal, compliance and business factors, the markets served by us and the financial markets, the impact of our debt obligations on our operations and liquidity, developments and uncertainties in trade policies and regulations, including tariffs or other impositions on imported goods, contractions or growth rates and cyclicality of markets we serve, risks relating to product manufacturing, commodity costs and surcharges, our ability to adjust purchases and manufacturing capacity to reflect market conditions, reliance on sole or limited sources of supply, disruptions relating to war, terrorism, climate change, widespread protests and civil unrest, man-made and natural disasters, public health issues and other events, security breaches or other disruptions of our information technology systems or violations of data privacy laws, security breaches or other disruptions affecting our external information technology contractors, vendors or other service providers, fluctuations in inventory of our distributors and customers, loss of a key distributor, our relationships with and the performance of our channel partners, competition, our ability to develop and successfully market new products and services, our ability to attract, develop and retain our key personnel, the potential for improper conduct by our employees, agents or business partners, our compliance with applicable laws and regulations (including regulations relating to medical devices and the health care industry), the results of our clinical trials and perceptions thereof, penalties associated with any off-label marketing of our products, modifications to our products that require new marketing clearances or authorizations, our ability to effectively address cost reductions and other changes in the health care industry, our ability to successfully identify and consummate appropriate acquisitions and strategic investments, our ability to integrate the businesses we acquire and achieve the anticipated benefits of such acquisitions, contingent liabilities relating to acquisitions, investments and divestitures, our ability to adequately protect our intellectual property, the impact of our restructuring activities on our ability to grow, risks relating to impairment charges for our goodwill and intangible assets, changes in accounting standards and subjective assumptions, estimates and judgments by management, currency exchange rates, changes in tax laws applicable to multinational companies, litigation and other contingent liabilities including intellectual property and environmental, health and safety matters, risks relating to product, service or software defects, the impact of regulation on demand for our products and services, and labor matters, and other risks and uncertainties set forth under “Item 1A. Risk Factors” in the 2024 10-K and this Quarterly Report on Form 10-Q.*

*Forward-looking statements are not guarantees of future performance and actual results may differ materially from the results, developments and business decisions contemplated by our forward-looking statements. Accordingly, you should not place undue reliance on any such forward-looking statements. Forward-looking statements contained herein speak only as of the date of this Quarterly Report. Except to the extent required by applicable law, we do not assume any obligation to update or revise any forward-looking statement, whether as a result of new information, future events and developments or otherwise.*

### BASIS OF PRESENTATION

The accompanying Condensed Consolidated Financial Statements present our historical financial position, results of operations, changes in stockholders’ equity and cash flows in accordance with GAAP.

### OVERVIEW

### General

We provide products that are used to diagnose, treat and prevent disease and ailments of the teeth, gums and supporting bone, as well as to improve the aesthetics of the human smile. We help our customers deliver the best possible patient care through industry-leading dental consumables, solutions, technologies, and services. With leading brand names, innovative technology and significant market positions, we are a leading worldwide provider of a broad range of solutions to support implant-based tooth replacements, orthodontic treatments, diagnostic solutions, as well as general dental consumables, equipment and services, and are dedicated to driving technological innovations that help dental professionals improve clinical outcomes and enhance productivity. Our research and development, manufacturing, sales, distribution, service and administrative facilities are located in more than 30 countries across North America, Asia, Europe, the Middle East and Latin America.

We operate in two business segments: Specialty Products & Technologies and Equipment & Consumables. Our Specialty Products & Technologies segment develops, manufactures and markets products primarily related to dental implant systems, including regenerative solutions, dental prosthetics and associated treatment software and technologies, as well as orthodontic bracket systems, aligners and lab products. Our Equipment & Consumables segment develops, manufactures and markets products primarily related to dental equipment and supplies used in dental offices, including digital imaging systems, software and other visualization/magnification systems; endodontic systems and related consumables; and restorative materials and instruments, rotary burs, impression materials, bonding agents and cements and infection prevention products.

For the three months ended March 28, 2025, sales derived from customers outside of the United States were 51.5% compared to the three months ended March 29, 2024 of 52.8%. As a global provider of dental consumables, equipment and services, our operations are affected by worldwide, regional and industry-specific economic and political factors. Given the broad range of dental products, software and services provided and geographies served, we do not use any indices other than general economic trends to predict our overall outlook. Our individual businesses monitor key competitors and customers, including to the extent possible their sales, to gauge relative performance and the outlook for the future.

As a result of our geographic and product line diversity, we face a variety of opportunities and challenges, including rapid technological development in most of our served markets, the expansion and evolution of opportunities in emerging markets, trends and costs associated with a global labor force, consolidation of our competitors, trade restrictions and tariffs, and increasing regulation. We operate in a highly competitive business environment in most markets, and our long-term growth and profitability will depend in particular on our ability to expand our business in emerging geographies and emerging market segments, identify, consummate and integrate appropriate acquisitions, develop innovative and differentiated new products and services, expand and improve the effectiveness of our sales force, continue to reduce costs and improve operating efficiency and quality and effectively address the demands of an increasingly regulated global environment. We are making significant investments to address the rapid pace of technological change in our served markets and to globalize our manufacturing, research and development and customer-facing resources (particularly in emerging markets and our dental implant business) in order to be responsive to our customers throughout the world and improve the efficiency of our operations.

### Key Trends and Conditions Affecting Our Results of Operations

### General Economic Conditions

In addition to industry-specific factors, we, like other businesses, face challenges related to global economic conditions, including sustained inflation, increases in interest rates, fluctuating foreign currency exchange rates, slower economic growth or recession, trade policies and regulations, customer channel inventory realignment and continuing supply chain disruptions. Dental costs are largely out-of-pocket for the consumer and thus utilization rates can vary significantly depending on economic growth. While many of our products are considered necessary by patients regardless of the economic environment, certain products and services that support discretionary dental procedures may be more susceptible to changes in economic conditions.

### Trade Policies and Regulations

Increasing protectionism and economic nationalism may lead to further changes in trade policies and regulations, domestic sourcing initiatives, or other formal and informal measures that could make it more difficult to sell our products in, or restrict our access to certain markets. In particular, trade tensions between the U.S. and China have led to increased tariffs and trade restrictions. The U.S. has recently significantly increased tariffs on products imported from China into the U.S. and implemented new tariffs on imports into the U.S. from other countries, particularly from Canada and Mexico. In response to these proposed tariffs, some foreign countries, including China, have instituted retaliatory tariffs, which impact our products, while other countries have threatened retaliatory tariffs on certain U.S. products. It is difficult to predict what further trade-related actions governments may take, which may include trade restrictions and additional or increased tariffs and export controls imposed on short notice. We expect to largely offset the impact of the existing tariffs with mitigating actions including supply chain adjustments, pricing strategies, and managing costs. To the extent that we are unable to offset the tariffs or if the tariffs or our countermeasures negatively impact demand, our business, financial condition, results of operations or cash flows would be adversely affected. Any future tariffs and trade restrictions may also adversely affect our business, financial condition, results of operations or cash flows.

### Foreign Currency Exchange Rates

On a period-over-period basis, currency exchange rates negatively impacted reported sales by 1.4% for the three months ended March 28, 2025, compared to the comparable period of 2024, primarily due to the strengthening U.S. dollar against major currencies. Any future strengthening of the U.S. dollar against major currencies would adversely impact our sales and results of operations for the remainder of the year, and any weakening of the U.S. dollar against major currencies would positively impact our sales and results of operations for the remainder of the year.

We also hold certain receivables and payables denominated in a currency other than the U.S dollar. Movement in the related foreign currency rates in relation to the U.S. dollar may also impact our results of operations.

### Pricing Controls

Certain countries, as well as some private payors, also control the price of health care products, directly or indirectly, through reimbursement, payment, pricing or coverage limitations, tying reimbursement to outcomes or (in the case of governmental entities) compulsory licensing. For example, China has implemented volume-based procurement policies (“VBP”), a series of centralized reforms instituted in China on both a national and regional basis that has resulted in significant price cuts for medical and dental consumables.

### Russia-Ukraine Conflict

Russia’s invasion of Ukraine and the global response to this invasion, including sanctions imposed by the U.S. and other countries, could have an adverse impact on our business, including our ability to market and sell products in the affected regions, potentially heightening our risk of cyber security attacks, impacting our ability to enforce our intellectual property rights in Russia, creating disruptions in the global supply chain, and potentially having an adverse impact on the global economy, financial markets, energy markets, currency rates and otherwise. While we are experiencing volatility in sales from this region, Russia’s invasion of Ukraine did not have a material impact on our overall financial position or results of operations as of and for the three months ended March 28, 2025 and March 29, 2024.

### Israel-Hamas War and Related Conflict

In response to the attacks in Israel and the related hostilities and despite the recent ceasefire agreement and hostage deal, we continue to monitor the social, political, and economic environment in Israel and in the region for any impact to our operations. We maintain a production facility in Israel related to our Alpha-Bio Tech Implant brand. While we have experienced some volatility in the region, the Israel-Hamas War and related hostilities have not had a material impact on our business.

### Assumptions Related To Aligner Treatment Plans

Our aligner business, included in the Specialty Products & Technologies segment, enters into revenue contracts that involve multiple performance obligations which include optional aligners at no additional charge. Our treatment plans are comprised of the following performance obligations: initial aligner shipment and the subsequent shipments of any optional refinement aligners. For such plans, we also consider usage rates, which is the number of times a customer is expected to order additional refinement aligners. This usage rate is the basis for estimating the amount of transaction price to allocate to future performance obligations.

We continually review and update the usage rate and other related assumptions. Future changes to usage rates and related assumptions may impact the pattern of revenue recognition for future treatment plans. The process of estimating the number of times a clear aligner customer is expected to order additional aligners after the initial aligner shipment requires judgment and evaluation of inputs, including historical usage data in order to predict future usage patterns.

### Seasonal Nature of Business

General economic conditions impact our business and financial results, and certain of our businesses experience seasonal and other trends related to the end markets and regions that they serve. For example, sales of capital equipment have historically been stronger in the fourth calendar quarter. However, as a whole, we are not subject to material seasonality.

### Non-GAAP Measures

In order to establish period-to-period comparability, we include the non-GAAP measure of core sales in this report. References to the non-GAAP measure of core sales (also referred to as core revenues or sales/revenues from existing businesses) refer to sales calculated according to GAAP, but excluding:

- sales from acquired businesses for one year from the acquisition date;
- sales from discontinued products; and
- the impact of currency translation.

We exclude sales from acquired businesses in order to provide accurate year over year comparisons. Sales from discontinued products includes major brands or major products that we have made the decision to discontinue as part of a portfolio restructuring. Discontinued brands or products consist of those which we (1) are no longer manufacturing, (2) are no longer investing in the research or development of, and (3) expect to discontinue all significant sales of within one year from the decision date to discontinue. The portion of sales attributable to discontinued brands or products is calculated as the net decline of the applicable discontinued brand or product from period-to-period. We exclude sales from discontinued products because discontinued products do not have a continuing contribution to operations and management believes that excluding such items provides investors with a means of evaluating our on-going operations and facilitates comparisons to our peers.

The portion of sales attributable to currency translation is calculated as the difference between:

- the period-to-period change in sales; and
- the period-to-period change in sales after applying current period foreign exchange rates to the prior year period.

Core sales growth should be considered in addition to, and not as a replacement for or superior to, sales, and may not be comparable to similarly titled measures reported by other companies. We believe that reporting the non-GAAP financial measure of core sales growth provides useful information to investors by helping identify underlying growth trends in our on-going business and facilitating comparisons of our sales performance with our performance in prior and future periods and to our peers. We also use core sales growth to measure our operating and financial performance. We exclude the effect of currency translation from core sales because currency translation is not under our control, is subject to volatility and can obscure underlying business trends.

### RESULTS OF OPERATIONS

All comparisons, variances, increases or decreases discussed below are for the three months ended March 28, 2025, compared to the three months ended March 29, 2024.

*($ in millions)*

|  | Three Months Ended March 28, 2025 |  | March 29, 2024 |  | % Change |
| --- | ---: | ---: | ---: | ---: | ---: |
| Sales | $616.9 | 100.0% | $623.6 | 100.0% | (1.1)% |
| Cost of sales | 280.9 | 45.5% | 267.3 | 42.9% | 5.1% |
| Gross profit | 336.0 | 54.5% | 356.3 | 57.1% | (5.7)% |
| Operating costs: |  |  |  |  |  |
| Selling, general and administrative (“SG&A”) expenses | 271.7 | 44.0% | 284.9 | 45.7% | (4.6)% |
| Research and development (“R&D”) expenses | 25.3 | 4.1% | 23.3 | 3.7% | 8.6% |
| Operating profit | 39.0 | 6.3% | 48.1 | 7.7% | (18.9)% |
| Nonoperating (expense) income: |  |  |  |  |  |
| Other (expense) income, net | (0.7) | (0.1)% | 0.1 | —% | NM |
| Interest expense, net | (9.3) | (1.5)% | (12.9) | (2.1)% | (27.9)% |
| Income before income taxes | 29.0 | 4.7% | 35.3 | 5.7% | (17.8)% |
| Income tax expense | 11.0 | 1.8% | 11.7 | 1.9% | (6.0)% |
| Net income | $18.0 | 2.9% | $23.6 | 3.8% | (23.7)% |
| Effective tax rate | 37.9% |  | 33.1% |  |  |

Non-meaningful percentage change related to year-to-year comparisons are designated as NM.

### GAAP Reconciliation

### Sales and Core Sales Growth

|  | % Change Three Month Period Ended March 28, 2025 vs. Comparable 2024 Period |
| --- | ---: |
| Total sales growth (GAAP) | (1.1)% |
| Plus the impact of: |  |
| Acquisition | (0.1)% |
| Currency exchange rates | 1.4% |
| Core sales growth (non-GAAP) | 0.2% |

Sales for the three months ended March 28, 2025 decreased 1.1% while core sales growth increased by 0.2% as compared to the comparable period in 2024. An increase in sales price positively impacted sales by 1.0% on a period-over-period basis, partially offset by changes in revenue deferral related to our clear aligner treatment plans. Geographically, sales for the three months ended March 28, 2025 was negatively impacted by an overall sales decrease driven by lower demand in China, partially offset by an increase in North America.

### COST OF SALES AND GROSS PROFIT MARGIN

*($ in millions)*

|  | Three Months Ended March 28, 2025 | March 29, 2024 |
| --- | ---: | ---: |
| Cost of sales | $280.9 | $267.3 |
| Gross profit margin | 54.5% | 57.1% |

29

The increase in cost of sales and the decrease in gross profit margin during the three months ended March 28, 2025 as compared to the comparable period in 2024, was primarily driven by higher costs due to unfavorable foreign currency exchange rates and unfavorable product mix, partially offset by a 1.0% increase in sales price and higher period-over-period savings associated with productivity improvements.

### OPERATING EXPENSES

*($ in millions)*

|  | Three Months Ended March 28, 2025 | March 29, 2024 |
| --- | ---: | ---: |
| SG&A expenses | $271.7 | $284.9 |
| R&D expenses | $25.3 | $23.3 |
| SG&A as a % of sales | 44.0% | 45.7% |
| R&D as a % of sales | 4.1% | 3.7% |

The decrease in SG&A expenses as a percentage of sales for the three months ended March 28, 2025 as compared to the comparable period of 2024, was primarily due to lower general and administrative costs, including lower amortization expense on intangible assets, and bad debt.

R&D expenses as a percentage of sales for the three months ended March 28, 2025, was consistent with the comparable period in 2024.

### INTEREST COSTS AND FINANCING

Interest costs were $9.3 million and $12.9 million for the three months ended March 28, 2025 and March 29, 2024, respectively. The decrease in interest expense was primarily due to lower debt balances and interest rates.

### INCOME TAXES

|  | Three Months Ended March 28, 2025 | March 29, 2024 |
| --- | ---: | ---: |
| Effective tax rate | 37.9% | 33.1% |

Our effective tax rate of 37.9% for the three months ended March 28, 2025 differed from the comparable period in 2024 primarily due to a shift in the geographical mix of earnings and the relative impact of the valuation allowance against certain U.S. interest carryforwards.

### RESULTS OF OPERATIONS - BUSINESS SEGMENTS

### Specialty Products & Technologies

Our Specialty Products & Technologies segment primarily develops, manufactures and markets dental implant systems, including regenerative solutions, dental prosthetics and associated treatment software and technologies, as well as orthodontic bracket systems, aligners and lab products.

### Specialty Products & Technologies Selected Financial Data

*($ in millions)*

|  | Three Months Ended March 28, 2025 | March 29, 2024 |
| --- | ---: | ---: |
| Sales | $400.3 | $408.7 |
| Operating profit | $37.6 | $44.2 |
| Operating profit as a % of sales | 9.4% | 10.8% |

30

### Sales and Core Sales Growth

|  | % Change Three Month Period Ended March 28, 2025 vs. Comparable 2024 Period |
| --- | ---: |
| Total sales growth (GAAP) | (2.1)% |
| Plus the impact of: |  |
| Acquisitions | (0.1)% |
| Currency exchange rates | 1.5% |
| Core sales growth (non-GAAP) | (0.7)% |

#### Sales

Sales and core sales growth for the three months ended March 28, 2025 decreased 2.1% and 0.7%, respectively, compared to the comparable period in 2024. A decrease in sales volume negatively impacted sales by 1.3% and was partially due to changes in revenue deferral related to our clear aligner treatment plans. This decrease in sales volume was partially offset by a 0.6% increase to price. Geographically, sales for the three months ended March 28, 2025 decreased primarily due to lower demand in China and North America, partially offset by Europe.

#### Operating Profit

Operating profit margin was 9.4% for the three months ended March 28, 2025, as compared to an operating profit margin of 10.8% for the comparable period of 2024. The decrease in operating profit margin was primarily due to lower sales, unfavorable product mix, higher costs due to unfavorable foreign exchange rates and our investment in our long-term growth initiatives, partially offset by lower bad debt expense and higher period-over-period savings associated with productivity improvements.

### EQUIPMENT & CONSUMABLES

Our Equipment & Consumables segment primarily develops, manufactures and markets dental equipment and supplies used in dental offices, including digital imaging systems, software and other visualization/magnification systems; endodontic systems and related consumable products; restorative materials and instruments, rotary burs, impression materials, bonding agents and cements and infection prevention products.

### Equipment & Consumables Selected Financial Data

*($ in millions)*

|  | Three Months Ended March 28, 2025 | March 29, 2024 |
| --- | ---: | ---: |
| Sales | $216.6 | $214.9 |
| Operating profit | $31.9 | $35.6 |
| Operating profit as a % of sales | 14.7% | 16.6% |

### Sales and Core Sales Growth

|  | % Change Three Month Period Ended March 28, 2025 vs. Comparable 2024 Period |
| --- | ---: |
| Total sales growth (GAAP) | 0.8% |
| Plus the impact of: |  |
| Currency exchange rates | 0.9% |
| Core sales growth (non-GAAP) | 1.7% |

31

#### Sales

Sales and core sales growth for the three months ended March 28, 2025 increased 0.8%, and 1.7%, respectively, compared to the comparable period in 2024. Price positively impacted sales by 1.7% on a period-over-period basis while geographically, the increase in sales for the three months ended March 28, 2025 is primarily due to higher demand from North America, partially offset by lower demand in China and Europe.

#### Operating Profit

Operating profit margin was 14.7% for the three months ended March 28, 2025, as compared to an operating profit margin of 16.6% for the comparable period of 2024. The decrease in operating profit margin for the three months ended March 28, 2025 was primarily due to unfavorable product mix, higher costs due to unfavorable foreign exchange rates, partially offset by favorable sales price and a decrease in amortization of intangibles.

### LIQUIDITY AND CAPITAL RESOURCES

We assess our liquidity in terms of our ability to generate cash to fund our operating and investing activities. We continue to generate substantial cash from operating activities and believe that our operating cash flow and other sources of liquidity are sufficient to allow us to manage our capital structure on a short-term and long-term basis and continue investing in existing businesses and consummating strategic acquisitions.

Following is an overview of our cash flows and liquidity:

### Overview of Cash Flows and Liquidity

|  | Three Months Ended March 28, 2025 | March 29, 2024 |
| --- | ---: | ---: |
| Net cash provided by operating activities | $0.3 | $40.3 |
| Payments for additions to property, plant and equipment | $(5.9) | $(11.0) |
| Purchase of investments held in rabbi trust | (0.7) | — |
| Proceeds from sale of investments held in rabbi trust | 0.7 | — |
| Proceeds from sales of property, plant and equipment | 0.5 | — |
| All other investing activities, net | (3.4) | 0.3 |
| Net cash used in investing activities | $(8.8) | $(10.7) |
| Proceeds from stock option exercises | $0.8 | $1.3 |
| Cash paid for treasury stock | (14.6) | — |
| Tax withholding payment related to net settlement of equity awards | (3.8) | (3.3) |
| All other financing activities | — | (0.6) |
| Net cash used in financing activities | $(17.6) | $(2.6) |

#### Operating Activities

Cash flows from operating activities can fluctuate significantly from period-to-period due to working capital needs and the timing of payments for income taxes, restructuring activities, pension funding and other items impacting reported cash flows.

Net cash provided by operating activities was $0.3 million during the three months ended March 28, 2025, as compared to net cash provided by operating activities of $40.3 million for the comparable period of 2024. The decrease in cash provided by operating activities during the three months ended March 28, 2025 is primarily due to lower net income, timing of vendor payments and higher incentive compensation payments.

#### Investing Activities

Cash flows relating to investing activities consist primarily of cash used for capital expenditures and acquisitions. Capital expenditures are made primarily for increasing capacity, replacing equipment, supporting new product development and improving information technology systems.

Net cash used in investing activities was $8.8 million for the three months ended March 28, 2025, as compared to net cash used in investing activities of $10.7 million for the comparable period in 2024. The decrease in net cash used was primarily due to lower net payments for purchases of property, plant and equipment, partially offset by certain investing activities.

#### Financing Activities

Cash flows relating to financing activities consist primarily of cash flows associated with debt borrowings and the issuance of common stock.

Net cash used by financing activities was $17.6 million for the three months ended March 28, 2025 compared to net cash used in financing activities of $2.6 million for the comparable period of 2024. The increase in net cash used was primarily due to the repurchase of our stock.

For a description of our outstanding debt as of March 28, 2025, refer to Note 11 to our Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

We intend to satisfy any short-term liquidity needs that are not met through operating cash flow and available cash primarily through our revolving credit facility.

### Cash and Cash Requirements

As of March 28, 2025, we held $1,077.3 million of cash and cash equivalents that were held on deposit with financial institutions. Of this amount, $444.2 million was held within the United States and $633.1 million was held outside of the United States. We will continue to have cash requirements to support working capital needs, capital expenditures and acquisitions, pay interest and service debt, pay taxes and any related interest or penalties, fund our restructuring activities as required and support other business needs. We generally intend to use available cash, internally generated funds and our revolving credit facility to meet these cash requirements, but in the event that additional liquidity is required, particularly in connection with acquisitions, we may need to enter into new credit facilities or access the capital markets. We may also access the capital markets from time to time to take advantage of favorable interest rate environments or other market conditions. However, there is no guarantee that we will be able to obtain alternative sources of financing on commercially reasonable terms or at all. See “Item 1A. Risk Factors—Risks Related to Our Business” in our 2024 10-K.

Generally, cash and cash equivalents held in these financial institutions may be withdrawn or redeemed at face value, and therefore minimal credit risk exists with respect to them. Nonetheless, deposits with these financial institutions exceed the Federal Deposit Insurance Corporation (FDIC) insurance limits or similar limits in foreign jurisdictions, to the extent such deposits are even insured in such foreign jurisdictions. While we monitor on a systematic basis the cash and cash equivalent balances in the operating accounts and adjust the balances as appropriate, these balances could be impacted if one or more of the financial institutions with which we deposit our funds fails or is subject to other adverse conditions in the financial or credit markets. To date, we have experienced no loss of principal or lack of access to our invested cash or cash equivalents; however, we can provide no assurance that access to our cash and cash equivalents will not be affected if the financial institutions where we hold our cash and cash equivalents fail.

While repatriation of some cash held outside the United States may be restricted by local laws, most of our foreign cash could be repatriated to the United States. During the first quarter of 2025, we transferred approximately $320 million in international cash to the United States.

Under the Tax Cut and Jobs Act of 2017 (“TCJA”) and the associated transition tax, in general, repatriation of cash to the United States can be completed with no incremental U.S. tax; however, repatriation of cash could subject us to non-U.S. jurisdictional taxes on distributions. Additionally, we have determined that unremitted foreign earnings are not considered indefinitely reinvested to the extent foreign earnings can be distributed without a significant tax cost. As such, we have recorded foreign withholding tax liabilities related to the future repatriation of such earnings. We continue to indefinitely reinvest all other outside basis differences to the extent reversal would incur a significant tax liability.

On February 5, 2025, our Board of Directors authorized a stock repurchase program, allowing us to purchase up to $250 million of our outstanding common stock through December 31, 2026. Stock repurchases made in connection with this program totaled approximately $18.9 million or 1.1 million shares during the three months ended March 28, 2025. Refer to Part II, Item 2 “Unregistered Sales of Equity Securities and Use of Proceeds” in this Quarterly Report on Form 10-Q for more details. The cash outflows associated with the Company’s stock repurchase are classified in financing activities in the accompanying Condensed Consolidated Statements of Cash Flows.

As of March 28, 2025, we believe we have sufficient sources of liquidity to satisfy our cash needs over the next 12 months and beyond, including our cash needs in the United States.

### Contractual Obligations

There were no material changes to our contractual obligations during the three months ended March 28, 2025.

### Off-Balance Sheet Arrangements

There were no material changes to the Company’s off-balance sheet arrangements described in the 2024 10-K that would have a material impact on the Company’s Condensed Consolidated Financial Statements.

### Debt Financing Transactions

For a description of our outstanding debt as of March 28, 2025, refer to Note 11 to our Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

### Critical Accounting Estimates

There were no material changes to our critical accounting estimates described in the 2024 10-K that have had a material impact on our Condensed Consolidated Financial Statements.

## Market risk

As filed, 1,387 characters.

We are exposed to market risk from changes in foreign currency exchange rates and commodity prices as well as credit risk, each of which could impact our consolidated financial statements. We generally address our exposure to these risks through our normal operating activities. Please refer to quantitative and qualitative disclosures about market risk in “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Qualitative and Quantitative Disclosures About Market Risk,” in our 2024 10-K.

During the first quarter of 2025, we began using foreign exchange forward contracts to hedge our foreign currency risk associated with certain foreign denominated balance sheet transactions. These foreign exchange forward contracts are not designated as a hedge for accounting purposes and therefore the changes in the fair value of these instruments are recognized immediately in earnings. As of March 28, 2025, we did not have any outstanding foreign exchange forward contracts. Any realized gain (losses) related to forward contracts partially offset the corresponding gains (losses) related to the underlying foreign denominated balance sheet transactions.

For additional information on hedging transactions and derivative financial instruments, please refer to Note 8 to our Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

## Controls and procedures

As filed, 1,008 characters.

#### Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our President and Chief Executive Officer, and Senior Vice President and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the period covered by this report. Based on such evaluation, our President and Chief Executive Officer, and Senior Vice President and Chief Financial Officer, have concluded that, as of the end of such period, our disclosure controls and procedures were effective.

#### Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended March 28, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 4,901 characters.

You should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our 2024 10-K, which could materially affect our business, financial position, or future results of operations. The risks described in our 2024 10-K are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial position, or future results of operations. The risk factor set forth below updates, and should be read together with, the risk factors described in our 2024 10K.

***Significant developments or uncertainties stemming from trade policies and regulations could have an adverse effect on our business.***

Trade policies and disputes at times result in increased tariffs, trade barriers, and other protectionist measures, which can increase our manufacturing costs, make our products less competitive, reduce demand for our products, limit our ability to sell to certain customers, limit our ability to procure components or raw materials, or impede or slow the movement of our goods across borders. Increasing protectionism and economic nationalism may lead to further changes in trade policies and regulations, domestic sourcing initiatives, or other formal and informal measures that could make it more difficult to sell our products in, or restrict our access to certain markets.

In particular, trade tensions between the U.S. and China have led to increased tariffs and trade restrictions. The U.S. has recently significantly increased tariffs on products imported from China into the U.S. and implemented new tariffs on imports into the U.S. from other countries, particularly from Canada and Mexico. In response to these proposed tariffs, some foreign countries, including China, have instituted retaliatory tariffs, which impact our products, while other countries have threatened retaliatory tariffs on certain U.S. products.

As of the date of this Quarterly Report on Form 10-Q, discussions remain ongoing in respect of such trade restrictions and tariffs as well as retaliatory tariffs enacted in response to such actions. In light of these events, there continues to exist significant uncertainty about the future relationship between the U.S. and other countries with respect to such trade policies, treaties, and tariffs and it is difficult to predict what further trade-related actions governments may take, and we may be unable to quickly and effectively react to or mitigate such actions.

Additionally, in connection with the ongoing conflict between Russia and Ukraine, governments including the U.S., United Kingdom, and those of the European Union have imposed export controls on certain products and financial and economic sanctions on certain industry sectors and parties in Russia which has triggered retaliatory sanctions by the Russian government and its allies. Russia also imposed significant currency control measures aimed at restricting the outflow of foreign currency and capital from Russia. Although these export controls and sanctions did not have a material impact on our financial position or results of operations as of and for the three months ended March 28, 2025, the outcome and future impacts of the conflict and governmental responses thereto remain highly uncertain. Existing and future sanctions may have broad and pervasive impacts to the global economy and our operations, which could materially and adversely affect our business and results of operations.

We cannot predict whether additional U.S. and foreign customs quotas, duties (including antidumping or countervailing duties), tariffs, taxes or other charges or restrictions, requirements as to where raw materials must be purchased or other restrictions on our imports will be imposed in the future or adversely modified, whether retaliatory tariffs and trade measures will be imposed by other countries on U.S. exports, or what effect such actions would have on our costs of operations. Existing and future quotas, duties or tariffs may adversely affect our business, financial condition, results of operations or cash flows. Future trade agreements could also provide our competitors with an advantage, or increase our costs, either of which could adversely affect our business, financial condition, results of operations or cash flows. Furthermore, trade disputes and protectionist measures, or continued uncertainty about such matters, could result in declining consumer confidence and slowing economic growth or recession, and could cause our customers to reduce, cancel, or alter the timing of their purchases. Sustained geopolitical tensions could lead to long-term changes in global trade and supply chains, and decoupling of global trade networks, which could have a material adverse effect on our business, result of operations and growth prospects.

Filed May 1, 2025.
Source: SEC EDGAR, the filing index for accession 0001757073-25-000028. Last ingested by Listed: Nov 4, 2026, 17:29 ET. No prices; not investment advice.