What changed in this filing

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Item 1. Financial Statements

2025-07-24 compared with 2025-04-29 · 162 added, 74 removed, 433 unchanged (35% of the section changed)

4 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Net sales $ 1,011.3 $ 1,024.3 $ 1,975.2 $ 2,003.1

8 unchanged sentences

Basic Net Earnings Per Share of Common Stock (1)

$ 1.07 $ 1.07 $ 2.03 $ 2.07

Diluted Net Earnings Per Share of Common Stock (1)

$ 1.07 $ 1.06 $ 2.01 $ 2.05

Dividends Per Share of Common Stock $ 0.34 $ 0.32 $ 0.68 $ 0.64

(1) Earnings per share amounts are calculated discretely and, therefore, may not add up to the total due to rounding.

SMITH CORPORATION

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Net earnings $ 152.2 $ 156.2 $ 288.8 $ 303.8

1 unchanged sentence

Foreign currency translation adjustments 14.5 ( 2.4 ) 15.2 ( 7.2 )

Unrealized gains on cash flow derivative instruments, less related income tax provision of $( 0.3 ) in 2025, and $( 0.3 ) in 2024

Adjustment to pension liability, less related income tax provision of $ 0.0 in 2025, and $ 0.0 in 2024

Unrealized (losses) gains on cash flow derivative instruments, less related income tax benefit (provision) of $ 0.0 and $( 0.2 ) in 2025, $ 0.5 and $ 0.2 in 2024

( 0.2 ) ( 1.7 ) 0.6 ( 0.7 )

Adjustment to pension liability, less related income tax provision of $ 0.1 and $ 0.1 in 2025, $ 0.0 and $ 0.1 in 2024

0.1 — 0.2 0.1

Comprehensive Earnings $ 166.6 $ 152.1 $ 304.8 $ 296.0

31 unchanged sentences

Stockholders’ Equity

Class A Common Stock (shares issued, 26,000,449 and 26,014,825 as of March 31, 2025 and December 31, 2024, respectively)

Common Stock (shares issued 164,707,143 and 164,692,769 as of March 31, 2025 and December 31, 2024, respectively)

Class A Common Stock (shares issued, 26,000,441 and 26,014,825 as of June 30, 2025 and December 31, 2024, respectively)

Common Stock (shares issued 164,707,153 and 164,692,769 as of June 30, 2025 and December 31, 2024, respectively)

Capital in excess of par value 609.4 601.3

8 unchanged sentences

(dollars in millions)

Three Months Ended

Six Months Ended

Operating Activities

2 unchanged sentences

Depreciation and amortization 41.2 39.2

Stock based compensation expense 6.1 8.3

Share based compensation expense 8.6 10.4

Deferred income taxes ( 9.1 ) ( 1.5 )

10 unchanged sentences

Financing Activities

Long-term debt incurred (repaid) 76.5 ( 6.8 )

Long-term debt incurred 108.2 14.3

Common stock repurchases ( 251.3 ) ( 153.2 )

11 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Class A Common Stock

10 unchanged sentences

Vesting of share units ( 0.1 ) — ( 1.8 ) ( 1.8 )

Stock based compensation expense 6.0 7.7

Share based compensation expense 2.3 1.7 8.3 9.4

Exercises of stock options 0.5 0.9 0.6 6.3

10 unchanged sentences

Exercise of stock options 0.7 0.5 ( 1.1 ) 3.2

Share incentives and directors' compensation 0.3 0.2 0.3 0.2

Shares repurchased ( 130.7 ) ( 78.7 ) ( 251.3 ) ( 153.2 )

6 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

June 30, 2025

Basis of Presentation

2 unchanged sentences

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

Operating results for the three months ended March 31, 2025 are not necessarily indicative of the results expected for the full year.

Operating results for the three and six months ended June 30, 2025 are not necessarily indicative of the results expected for the full year.

It is suggested the accompanying condensed consolidated financial statements be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on February 11, 2025.

2 unchanged sentences

Disaggregation of Income Statement Expenses.” The ASU requires additional disclosures by disaggregating the costs and expense line items that are presented on the face of the income statement.

The ASU is effective for the Company beginning with its 2027 annual disclosures and subsequent interim periods.

Early adoption is permitted.

The ASU is effective for the Company beginning with its 2027 annual disclosures and subsequent interim periods with early adoption permitted.

This ASU requires a public company to apply the amendments either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the financial statements.

15 unchanged sentences

The Company’s payment terms for the majority of its customers are 30 to 90 days from shipment.

Additionally, certain customers in China pay the Company prior to the shipment of products resulting in a customer deposits liability of $ 43.0 million and $ 54.4 million at March 31, 2025 and December 31, 2024, respectively.

Additionally, certain customers in China pay the Company prior to the shipment of products resulting in a customer deposits liability of $ 21.3 million and $ 54.4 million at June 30, 2025 and December 31, 2024, respectively.

Customer deposit liabilities are short term in nature, recognized into revenue within one year of receipt.

2 unchanged sentences

In addition, the Company monitors other risk factors including forward-looking information when establishing adequate allowances for credit losses, which reflects the current estimate of credit losses expected to be incurred over the life of the receivables.

The Company’s allowance for credit losses was $ 14.6 million and $ 12.9 million at March 31, 2025 and December 31, 2024, respectively.

The Company’s allowance for credit losses was $ 14.9 million and $ 12.9 million at June 30, 2025 and December 31, 2024, respectively.

Revenue Recognition (continued)

Rebates and incentives are based on pricing agreements and are tied to sales volume.

The amount of revenue is reduced for variable consideration related to customer rebates which are calculated using expected values and are based on program specific factors such as expected rebate percentages based on expected volumes.

In situations where the customer has the right to return

Revenue Recognition (continued)

eligible products, the Company reduces revenue for its estimates of expected product returns, which are primarily based on an analysis of historical experience.

In situations where the customer has the right to return eligible products, the Company reduces revenue for its estimates of expected product returns, which are primarily based on an analysis of historical experience.

Changes in such accruals may be required if actual sales volume differs from estimated sales volume or if future returns differ from historical experience.

30 unchanged sentences

(dollars in millions) Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

North America

17 unchanged sentences

The excess of the acquisition purchase price over the fair value assigned to the assets acquired and liabilities assumed was recorded as goodwill.

The following table summarizes the estimated fair values of Pureit's assets acquired and liabilities assumed at the date of acquisition:

November 1, 2024 (dollars in millions)

The allocation of the purchase price to goodwill decreased by $ 0.9 million in the second quarter of 2025 due to valuation adjustments related to identifiable intangible assets.

(dollars in millions)

Current assets $ 5.6

11 unchanged sentences

The following table presents the components of the Company’s inventory balances:

(dollars in millions) March 31,

(dollars in millions) June 30,

2025 December 31, 2024

9 unchanged sentences

(dollars in millions) Three Months Ended

Balance at April 1, $ 194.3 $ 185.0

Expense 23.4 22.8

Claims settled ( 16.6 ) ( 20.2 )

Balance at June 30, $ 201.1 $ 187.6

(dollars in millions) Six Months Ended

Balance at January 1, $ 190.4 $ 188.1

2 unchanged sentences

Claims settled ( 33.2 ) ( 43.0 )

Balance at March 31, $ 194.3 $ 185.0

Balance at June 30, $ 201.1 $ 187.6

(1) Refer to Note 3 for additional information regarding the acquisition of Pureit

2 unchanged sentences

Borrowings under the Company's bank credit lines and commercial paper borrowings are supported by a $ 500 million revolving credit agreement.

As a result of the long-term nature of this facility, the Company’s commercial paper and credit line borrowings are classified as long-term debt at March 31, 2025.

As a result of the long-term nature of this facility, the Company’s commercial paper and credit line borrowings are classified as long-term debt at June 30, 2025.

At its option, the Company either maintains cash balances or pays fees for bank credit and services.

The facility requires the Company to maintain two financial covenants, a leverage ratio test and an interest coverage test.

The Company was in compliance with the covenants as of March 31, 2025.

The Company was in compliance with the covenants as of June 30, 2025.

Earnings per Share of Common Stock

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Denominator for basic earnings per share - weighted average shares 141,629,971 146,465,276 142,599,394 146,822,116

1 unchanged sentence

Denominator for diluted earnings per share 142,483,521 147,599,585 143,440,329 147,948,559

Stock Based Compensation

Share Based Compensation

The Company adopted the A.

2 unchanged sentences

Smith Combined Executive Incentive Compensation Plan which was originally approved by stockholders in 2002.

The number of shares available for granting of stock based compensation at March 31, 2025 was 2,079,233 .

Upon vesting or exercise of stock based compensation, shares are issued from treasury stock.

The number of shares available for granting of share based compensation at June 30, 2025 was 2,095,645 .

Upon vesting or exercise of share based compensation, shares are issued from treasury stock.

Participants in the Incentive Plan may be awarded share units.

Share units vest three years after the date of grant.

The Company granted 209,366 and 189,792 share units under the Incentive Plan in the three months ended March 31, 2025 and 2024, respectively.

The Company granted 211,010 and 194,668 share units under the Incentive Plan in the six months ended June 30, 2025 and 2024, respectively.

The share units were valued at $ 13.8 million and $ 16.0 million at the date of issuance in 2025 and 2024, respectively, based on the price of the Company’s Common Stock at the date of grant.

The share units are recognized as compensation expense ratably over the three-year vesting period.

however, included in share unit expense in the three months ended March 31, 2025 and 2024 was expense associated with accelerated vesting of share unit awards for certain employees who are retirement eligible or will become retirement eligible during the vesting period.

Stock based compensation expense attributable to share units of $ 5.5 million and $ 7.8 million was recognized in the three months ended March 31, 2025 and 2024, respectively.

Included in share unit expense in the six months ended June 30, 2025 and 2024 was expense associated with accelerated vesting of share unit awards for certain employees who are retirement eligible or will become retirement eligible during the vesting period.

Share based compensation expense attributable to share units of $ 1.8 million and $ 1.4 million was recognized in the three months ended June 30, 2025 and 2024, respectively.

Share based compensation expense attributable to share units of $ 7.3 million and $ 9.2 million was recognized in the six months ended June 30, 2025 and 2024, respectively.

Certain non-U.S.-based employees receive the cash value of the share price at the vesting date in lieu of shares.

Unvested cash-settled awards are remeasured at each reporting period.

A summary of share unit activity under the Incentive Plan is as follows for the three months ended March 31, 2025:

A summary of share unit activity under the Incentive Plan is as follows for the six months ended June 30, 2025:

Number of Units Weighted-Average

4 unchanged sentences

Forfeited ( 8,909 ) 71.34

Issued and unvested at March 31, 2025 592,523 68.83

Issued and unvested at June 30, 2025 585,903 68.84

Share Based Compensation (continued)

Performance Stock Units

Beginning in 2023, certain executives may be awarded performance stock units under the Incentive Plan.

Performance stock units vest over three years following the date of the grant.

Performance stock units vest under a set of measurement criteria which are based upon achievement of certain Sustainability targets.

Performance stock units vest over three years following the grant date.

Performance stock units vest under a set of measurement criteria that are based upon achievement of certain Sustainability targets.

Potential payouts range from zero to 150 % of the target awards and changes from target amounts are reflected as performance adjustments.

The Company granted 35,365 and 28,390 performance stock units under the Incentive Plan in the three months ended March 31, 2025 and 2024, respectively.

The Company granted 35,365 and 29,475 performance stock units under the Incentive Plan in the six months ended June 30, 2025 and 2024, respectively.

The performance stock units were valued at $ 2.3 million and $ 2.4 million at the date of issuance in 2025 and 2024, respectively, based on the price of the Company’s Common Stock at the date of grant.

The performance stock units are recognized as compensation expense ratably over the three-year vesting period.

Stock based compensation expense attributable to performance stock units of $ 0.5 million and $ 0.3 million was recognized in the three months ended March 31, 2025 and 2024, respectively.

Share based compensation expense attributable to performance stock units of $ 0.7 million and $ 0.6 million was recognized in the three months ended June 30, 2025 and 2024, respectively.

Share based compensation expense attributable to performance stock units of $ 1.2 million and $ 0.9 million was recognized in the six months ended June 30, 2025 and 2024, respectively.

Certain non-U.S.-based executives receive the cash value of the share price at the vesting date in lieu of shares.

Unvested cash-settled awards are remeasured at each reporting period.

A summary of performance stock unit activity under the Incentive Plan is as follows for the three months ended March 31, 2025:

A summary of performance stock unit activity under the Incentive Plan is as follows for the six months ended June 30, 2025:

Number of Units Weighted-Average

2 unchanged sentences

Granted 35,365 65.51

Issued and unvested at March 31, 2025 109,763 72.21

Issued and unvested at June 30, 2025 109,763 72.21

Segment Results

4 unchanged sentences

Both segments primarily manufacture and market in their respective regions of the world.

Three Months Ended March 31, 2025

(dollars in millions) North America Rest of World Inter-segment Elimination Total Segments Less:

Corporate Expenses Total

Three Months Ended June 30, 2025

(dollars in millions) North America Rest of World Inter-segment Elimination Total Segments Corporate Expenses Total

Sales from external customers $ 774.0 $ 237.3 $ — $ 1,011.3 $ — $ 1,011.3

11 unchanged sentences

Earnings before provision for income taxes $ 201.6

Three Months Ended March 31, 2024

(dollars in millions) North America Rest of World Inter-segment Elimination Total Segments Less:

Corporate Expenses Total

Segment Results (continued)

Three Months Ended June 30, 2024

(dollars in millions) North America Rest of World Inter-segment Elimination Total Segments Corporate Expenses Total

Sales from external customers $ 784.4 $ 239.9 $ — $ 1,024.3 $ — $ 1,024.3

11 unchanged sentences

Earnings before provision for income taxes $ 206.6

Six Months Ended June 30, 2025

(dollars in millions) North America Rest of World Inter-segment Elimination Total Segments Corporate Expenses Total

Sales from external customers $ 1,517.4 $ 457.8 $ — $ 1,975.2 $ — $ 1,975.2

Inter-segment sales 10.3 9.0 — 19.3 — 19.3

1,527.7 466.8 — 1,994.5 — 1,994.5

Elimination of Inter-segment sales ( 10.3 ) ( 9.0 ) — ( 19.3 ) — ( 19.3 )

Net Sales 1,517.4 457.8 — 1,975.2 — 1,975.2

Cost of products sold 909.0 293.7 — 1,202.7 — 1,202.7

Gross Profit 608.4 164.1 — 772.5 — 772.5

Inter-segment Profit — 0.2 ( 0.2 ) — — —

Selling, general and administrative expenses 226.2 118.0 — 344.2 39.7 383.9

Other (income) expense, net ( 1.1 ) 1.3 — 0.2 ( 1.8 ) ( 1.6 )

Earnings $ 383.3 $ 45.0 $ ( 0.2 ) $ 428.1 $ ( 37.9 ) $ 390.2

Interest expense ( 7.5 )

Earnings before provision for income taxes $ 382.7

Segment Results (continued)

Six Months Ended June 30, 2024

(dollars in millions) North America Rest of World Inter-segment Elimination Total Segments Corporate Expenses Total

Sales from external customers $ 1,546.0 $ 457.1 $ — $ 2,003.1 $ — $ 2,003.1

Inter-segment sales 11.0 14.6 — 25.6 — 25.6

1,557.0 471.7 — 2,028.7 — 2,028.7

Elimination of Inter-segment sales ( 11.0 ) ( 14.6 ) — ( 25.6 ) — ( 25.6 )

Net Sales 1,546.0 457.1 — 2,003.1 — 2,003.1

Cost of products sold 923.5 298.9 — 1,222.4 — 1,222.4

Gross Profit 622.5 158.2 — 780.7 — 780.7

Inter-segment Profit — 0.4 ( 0.4 ) — — —

Selling, general and administrative expenses 224.3 117.1 — 341.4 39.3 380.7

Other expense (income), net 1.1 ( 1.6 ) — ( 0.5 ) ( 1.6 ) ( 2.1 )

Earnings $ 397.1 $ 43.1 $ ( 0.4 ) $ 439.8 $ ( 37.7 ) $ 402.1

Interest expense ( 2.8 )

Earnings before provision for income taxes $ 399.3

Assets, depreciation and capital expenditures by segment

(dollars in millions) March 31, 2025 December 31, 2024

(dollars in millions) June 30, 2025 December 31, 2024

North America $ 2,434.2 $ 2,315.2

5 unchanged sentences

Depreciation and amortization Three Months Ended

June 30, Six Months Ended

(dollars in millions) 2025 2024 2025 2024

5 unchanged sentences

Capital expenditures Three Months Ended

June 30, Six Months Ended

(dollars in millions) 2025 2024 2025 2024

14 unchanged sentences

Assets (liabilities) measured at fair value on a recurring basis are as follows (dollars in millions):

Fair Value Measurement Using Balance Sheet Location March 31,

Fair Value Measurement Using Balance Sheet Location June 30,

2025 December 31, 2024

2 unchanged sentences

Items measured at fair value were comprised of the Company’s marketable securities (Level 1) and derivative instruments (Level 2).

There were no changes in the Company's valuation techniques used to measure fair values on a recurring basis during the three months ended March 31, 2025.

There were no changes in the Company's valuation techniques used to measure fair values on a recurring basis during the six months ended June 30, 2025.

Derivative Instruments

15 unchanged sentences

The majority of the amounts in accumulated other comprehensive loss for cash flow hedges are expected to be reclassified into earnings within one year.

The combined fair value of the foreign currency forward contracts was an asset balance of $ 0.1 million as of March 31, 2025 which was recorded in Other current assets within the condensed consolidated balance sheet.

The combined fair value of the foreign currency forward contracts was an asset balance of $ 0.5 million as of June 30, 2025 which was recorded in Other current assets within the condensed consolidated balance sheet.

The combined fair value of the foreign currency forward contracts was a liability balance of $ 1.4 million as of December 31, 2024 which was recorded in Accrued liabilities within the condensed consolidated balance sheet.

Derivative Instruments (continued)

The following table summarizes, by currency, the contractual amounts of the Company’s foreign currency forward contracts as of the dates indicated that were designated as cash flow hedges:

(dollars in millions) March 31, 2025 December 31, 2024

(dollars in millions) June 30, 2025 December 31, 2024

Buy Sell Buy Sell

3 unchanged sentences

Total $ 19.3 $ 76.3 $ 41.2 $ 28.9

Derivative Instruments (continued)

Interest Rate Swaps

The Company is exposed to interest rate risk as a result of the Company’s floating rate borrowings.

The Company entered into a forward interest rate swap agreement with an independent counterparty to hedge the variability in cash flows due to changes in Secured Overnight Financing Rate (SOFR) benchmark interest rate associated with variable rate borrowings.

An interest rate swap at March 31, 2025 has a maturity date of September 30, 2029 and effectively converts the Company’s variable interest rate obligation to a fixed interest rate obligation.

The interest rate swap had an aggregate notional amount of 4.2 billion rupees outstanding as of March 31, 2025 and December 31, 2024.

The aggregate effective interest rate of the swap as of March 31, 2025 was 8.25 %.

The fair value of the interest rate swap contract was a liability balance of $ 0.8 million and $ 0.5 million as of March 31, 2025 and December 31, 2024, respectively, which was recorded in Accrued liabilities within the condensed consolidated balance sheet.

The Company is exposed to interest rate risk as a result of its floating rate borrowings.

The Company entered into a forward interest rate swap agreement with an independent counterparty to hedge the variability in cash flows due to changes in the Secured Overnight Financing Rate (SOFR) benchmark interest rate associated with variable rate borrowings.

The interest rate swap at June 30, 2025 has a maturity date of September 30, 2029 and effectively converts the Company’s variable interest rate obligation to a fixed interest rate obligation.

The interest rate swap had an aggregate notional amount of 4.2 billion rupees as of June 30, 2025 and December 31, 2024.

The aggregate effective interest rate of the swap as of June 30, 2025 was 8.25 %.

The fair value of the interest rate swap contract was a liability balance of $ 1.3 million and $ 0.5 million as of June 30, 2025 and December 31, 2024, respectively, which was recorded in Accrued liabilities within the condensed consolidated balance sheet.

The effect of cash flow hedges on the condensed consolidated statement of earnings:

Three Months Ended March 31 (dollars in millions):

Three Months Ended June 30 (dollars in millions):

Derivatives in ASC 815 cash flow hedging relationships Amount of gain (loss) recognized in other

13 unchanged sentences

$ ( 0.2 ) $ ( 1.3 ) $ — $ 0.8

Six Months Ended June 30 (dollars in millions):

Derivatives in ASC 815 cash flow hedging relationships Amount of gain (loss) recognized in other

comprehensive

loss on derivatives Location of (loss) gain

reclassified from

accumulated other

comprehensive loss

into earnings Amount of (loss) gain

reclassified from

accumulated other

comprehensive

loss into earnings

2025 2024 2025 2024

Foreign currency contracts $ 1.6 $ 0.5 Cost of products sold $ ( 0.1 ) $ 1.4

Interest rate swap ( 0.8 ) — Interest expense ( 0.1 ) —

$ 0.8 $ 0.5 $ ( 0.2 ) $ 1.4

Derivative Instruments (continued)

Net Investment Hedges

5 unchanged sentences

The Company recognized $( 2.6 ) million of after-tax losses and $ 1.4 million of after-tax gains associated with hedges of net investments in non-U.S.

subsidiaries in currency translation adjustment in other comprehensive loss in the three months ended March 31, 2025 and March 31, 2024, respectively.

The contractual amount of the Company’s foreign currency denominated intercompany debt that is designated as a net investment hedge was ¥ 1.5 billion RMB as of March 31, 2025 and December 31, 2024.

The fair value of the net investment hedge was zero as of March 31, 2025 and December 31, 2024.

subsidiaries in currency translation adjustment in other comprehensive loss in the three months ended June 30, 2025 and June 30, 2024, respectively.

The Company recognized $( 3.8 ) million of after-tax losses and $ 5.4 million of after-tax gains associated with hedges of net investments in non-U.S.

subsidiaries in currency translation adjustment in other comprehensive loss in the six months ended June 30, 2025 and June 30, 2024, respectively.

The contractual amount of the Company’s foreign currency denominated intercompany debt that is designated as a net investment hedge was ¥ 1.5 billion RMB as of June 30, 2025 and December 31, 2024.

The fair value of the net investment hedge was zero as of June 30, 2025 and December 31, 2024.

Balance Sheet Hedges

Foreign Exchange Contracts

The Company periodically enters into foreign exchange contracts to mitigate the foreign currency volatility relative to certain intercompany loans.

The Company historically entered into foreign exchange contracts to mitigate the foreign currency volatility relative to certain intercompany loans.

These foreign exchange contracts did not qualify for hedge accounting in accordance with ASC 815 and as such were marked to market through earnings.

The fair value of the foreign exchange contracts was zero as of March 31, 2025 and December 31, 2024.

The fair value of the foreign exchange contracts was zero as of June 30, 2025 and December 31, 2024.

The following table summarizes the contractual amounts of the Company's foreign exchange contracts that are designated as balance sheet hedges:

(dollars in millions) March 31, 2025 December 31, 2024

(dollars in millions) June 30, 2025 December 31, 2024

Buy Sell Buy Sell

Canadian dollar $ — $ — $ — $ 6.4

Derivative Instruments (continued)

The amounts recognized within the condensed consolidated statements of earnings related to the Company's foreign exchange contracts are set forth below.

Three Months Ended March 31 (dollars in millions):

Three Months Ended June 30 (dollars in millions):

Derivatives not designated as hedging instruments:

1 unchanged sentence

Foreign exchange contracts Other expense, net $ — $ 1.7

The Company’s effective income tax rate for the three months ended March 31, 2025 was 24.6 percent.

Six Months Ended June 30 (dollars in millions):

Derivatives not designated as hedging instruments:

Location of expense within the condensed consolidated statements of earnings

Foreign exchange contracts Other expense, net $ — $ 5.7

The Company’s effective income tax rate for the three and six months ended June 30, 2025 was 24.5 percent.

The Company estimates that its annual effective income tax rate for the full year 2025 will be approximately between 24.0 and 24.5 percent.

The effective income tax rate for the three months ended March 31, 2024 was 23.4 percent.

The change in the effective income tax rate for the three months ended March 31, 2025 compared to the effective income tax rate for the three months ended March 31, 2024 was primarily due to the geographical earnings mix.

As of March 31, 2025, the Company had $ 16.2 million of unrecognized tax benefits of which $ 4.3 million would affect its effective income tax rate if recognized.

The effective income tax rate for the three and six months ended June 30, 2024 was 24.4 percent and 23.9 percent, respectively.

The change in the effective income tax rate for the three and six months ended June 30, 2025 compared to the effective income tax rate for the three and six months ended June 30, 2024 was primarily due to the geographical earnings mix.

As of June 30, 2025, the Company had $ 16.2 million of unrecognized tax benefits of which $ 4.3 million would affect its effective income tax rate if recognized.

The Company recognizes potential interest and penalties related to unrecognized tax benefits as a component of income tax expense.

10 unchanged sentences

Potential losses under the repurchase arrangements represent the difference between the repurchase price and net proceeds from the resale of the product plus costs incurred in the process, less related distributor rebates.

The Company’s reserves for estimated losses under these repurchase arrangements were immaterial as of March 31, 2025 and December 31, 2024.

The Company’s reserves for estimated losses under these repurchase arrangements were immaterial as of June 30, 2025 and December 31, 2024.

Changes in Accumulated Other Comprehensive Loss by Component

7 unchanged sentences

Balance at beginning of period ( 0.7 ) 1.7

Other comprehensive losses before reclassifications ( 0.3 ) ( 1.0 )

Realized losses (gains) on derivatives (net of income tax provision of $ 0.1 and $ 0.2 in 2025 and 2024, respectively)

Balance at end of period ( 0.9 ) —

Pension liability

Balance at beginning of period ( 6.0 ) ( 4.5 )

Amounts reclassified from accumulated other comprehensive loss:

Balance at end of period ( 5.9 ) ( 4.5 )

Accumulated other comprehensive loss, end of period $ ( 95.9 ) $ ( 92.0 )

Changes in Accumulated Other Comprehensive Loss by Component (continued)

Changes to accumulated other comprehensive loss by component are as follows:

(dollars in millions) Six Months Ended

Cumulative foreign currency translation

Balance at beginning of period $ ( 104.3 ) $ ( 80.3 )

Other comprehensive gain (loss) before reclassifications 15.2 ( 7.2 )

Balance at end of period ( 89.1 ) ( 87.5 )

Unrealized net (loss) gain on cash flow derivatives

Balance at beginning of period ( 1.5 ) 0.7

Other comprehensive gain before reclassifications 0.4 0.4

Realized losses (gains) on derivatives (net of income tax (benefit) provision of $( 0.1 ) and $ 0.1 in 2025 and 2024, respectively)

Realized losses (gains) on derivatives (net of income tax provision of $ 0.0 and $ 0.3 in 2025 and 2024, respectively)

Balance at end of period ( 0.9 ) —

4 unchanged sentences

Accumulated other comprehensive loss, end of period $ ( 95.9 ) $ ( 92.0 )

(1) Amortization of pension items:

Actuarial losses $ 0.1 $ 0.1

Income tax benefit — —

Reclassification net of income tax benefit $ 0.1 $ 0.1

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements