What changed in this filing

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Item 1. Financial Statements

2026-04-30 compared with 2025-10-28 · 130 added, 217 removed, 394 unchanged (47% of the section changed)

4 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Net sales $ 945.6 $ 963.9

8 unchanged sentences

Basic Net Earnings Per Share of Common Stock $ 0.85 $ 0.95

$ 0.94 $ 0.82 $ 2.97 $ 2.90

Diluted Net Earnings Per Share of Common Stock $ 0.85 $ 0.95

$ 0.94 $ 0.82 $ 2.95 $ 2.87

Dividends Per Share of Common Stock $ 0.36 $ 0.34

(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

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Net earnings $ 118.0 $ 136.6

Other comprehensive earnings (loss)

Other comprehensive (loss) earnings

Foreign currency translation adjustments ( 3.5 ) 0.7

Unrealized gains (losses) on cash flow derivative instruments, less related income tax (provision) benefit of $( 0.5 ) and $( 0.7 ) in 2025, $ 0.3 and $ 0.5 in 2024

1.4 ( 0.9 ) 2.0 ( 1.6 )

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

— 0.1 0.2 0.2

Unrealized gains on cash flow derivative instruments, less related income provision of $( 0.4 ) in 2026, and $( 0.3 ) in 2025

Adjustment to pension liability, less related income tax provision of $ 0.0 in 2026 and $ 0.0 2025

Comprehensive Earnings $ 115.9 $ 138.2

3 unchanged sentences

(dollars in millions, except for shares)

September 30,

Current Assets

26 unchanged sentences

Stockholders’ Equity

Class A Common Stock (shares issued, 25,996,077 and 26,014,825 as of September 30, 2025 and December 31, 2024, respectively)

Common Stock (shares issued 164,711,517 and 164,692,769 as of September 30, 2025 and December 31, 2024, respectively)

Class A Common Stock (shares issued, 25,993,539 and 25,993,539 as of March 31, 2026 and December 31, 2025, respectively)

Common Stock (shares issued 164,714,053 and 164,714,053 as of March 31, 2026 and December 31, 2025, respectively)

Capital in excess of par value 619.0 614.4

8 unchanged sentences

(dollars in millions)

Nine Months Ended

September 30,

Three Months Ended

Operating Activities

15 unchanged sentences

Financing Activities

Long-term debt incurred ( 6.8 ) ( 6.9 )

Proceeds from debt 564.4 240.5

Repayments of debt ( 101.1 ) ( 164.0 )

Common stock repurchases ( 51.3 ) ( 120.6 )

Net proceeds from stock option activity 0.7 17.2

Net payments from stock option activity ( 0.5 ) ( 1.8 )

Dividends paid ( 50.2 ) ( 49.2 )

Cash Used in Financing Activities ( 486.6 ) ( 367.7 )

Cash Provided by (Used in) Financing Activities 361.3 ( 95.1 )

Effect of exchange rate changes on cash and cash equivalents 0.5 0.6

Net decrease in cash and cash equivalents ( 86.9 ) ( 120.6 )

Net increase (decrease) in cash and cash equivalents 10.7 ( 66.6 )

Cash and cash equivalents - beginning of period 174.5 239.6

5 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Class A Common Stock

23 unchanged sentences

Exercise of stock options ( 3.1 ) ( 1.8 )

Share incentives and directors' compensation — — 0.3 0.2

Shares repurchased ( 51.3 ) ( 120.6 )

6 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2025

March 31, 2026

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 and nine months ended September 30, 2025 are not necessarily indicative of the results expected for the full year.

Operating results for the three months ended March 31, 2026 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, 2025 filed with the SEC on February 10, 2026.

Recent Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2024-03 “Income Statement - Reporting Comprehensive Income (Topic 220):

In December 2025, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2025-11, Interim Reporting (Topic 270):

Narrow-Scope Improvements, which clarifies the guidance in Topic 270 to improve the consistency of interim financial reporting.

The ASU provides a comprehensive list of required interim disclosures and introduces a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity.

ASU 2025-11 is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted.

The Company is currently evaluating the impact of adopting ASU 2025-11.

In September 2025, the FASB issued ASU No.

2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40), which modernizes the accounting guidance for internal-use software costs by eliminating the requirement to assess software development stages and introduces a new capitalization threshold.

ASU 2025-06 is effective for fiscal years beginning after December 15, 2027, with early adoption permitted.

The Company is currently in the process of reviewing the guidance and evaluating the impact on its financial statements.

In November 2024, the FASB issued ASU 2024-03 “Income Statement - Reporting Comprehensive Income (Topic 220):

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 with early adoption permitted.

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

Early adoption is 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.

2 unchanged sentences

This ASU requires added disclosures related to the tax rate reconciliation and income taxes paid and includes other amendments intended to improve effectiveness and comparability.

The amendment is effective for the Company beginning with its 2025 annual disclosures with early adoption permitted and should be applied on a prospective basis.

The Company is currently evaluating the impact the adoption of ASU 2023-09 will have on its annual disclosures.

The update is effective for the Company beginning with its 2025 annual disclosures and interim periods beginning in 2026.

The adoption of ASU 2023-09 did not affect the Company’s financial position or its results of operations.

Refer to Note 12, Income Taxes, for additional disclosures.

Revenue Recognition

9 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 $ 28.6 million and $ 54.4 million at September 30, 2025 and December 31, 2024, respectively.

Additionally, certain

Revenue Recognition (continued)

customers in China pay the Company prior to the shipment of products resulting in a customer deposits liability of $ 28.9 million and $ 34.2 million at March 31, 2026 and December 31, 2025, 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 $ 15.2 million and $ 12.9 million at September 30, 2025 and December 31, 2024, respectively.

Revenue Recognition (continued)

The Company’s allowance for credit losses was $ 15.3 million and $ 14.1 million at March 31, 2026 and December 31, 2025, respectively.

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

8 unchanged sentences

Both segments manufacture and market comprehensive lines of residential and commercial gas, heat pump and electric water heaters, boilers, tanks and water treatment products.

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

As each segment manufactures and markets products in its respective region of the world, the Company has determined that geography is the primary factor in reporting its sales.

Both segments primarily manufacture and market in their respective regions of the world, and as a result, the Company has determined that geography is the primary factor in reporting its sales.

The Company further disaggregates its North America segment sales by major product line as each of North America’s major product lines is sold through distinct distribution channels and these product lines may be impacted differently by certain economic factors.

7 unchanged sentences

A significant portion of the Company’s water heater sales in the North America segment is derived from the replacement of existing products.

Boilers The Company’s boilers are closed loop water heating systems used primarily for space heating or hydronic heating.

Boilers and Components The Company’s boilers are closed loop water heating systems used primarily for space heating or hydronic heating.

The Company’s boilers are primarily used in applications in commercial settings for hospitals, schools, hotels and other large commercial buildings while residential boilers are used in homes, apartments and condominiums.

The Company’s boiler distribution channel is comprised primarily of manufacturer representative firms, with the remainder of its boilers distributed through wholesale channels.

The Company’s boiler sales in the North America segment are derived from a combination of replacement of existing products and new construction.

Additionally, the Company designs and manufactures components related to water temperature control valves and boiler controls.

The valves and controls are primarily used for institutional, commercial, and residential applications, including digital monitoring solutions for multi‑family, education, and light commercial facilities.

The Company’s boiler and component distribution channel is comprised primarily of manufacturer representative firms, with the remainder distributed through wholesale channels.

The Company’s boiler and component sales in the North America segment are derived from a combination of replacement of existing products and new construction.

Water treatment products The Company’s water treatment products range from point-of-entry water softeners, solutions for problem well water, and whole-home water filtration products to on-the-go filtration bottles, point-of-use carbon, and reverse osmosis products.

6 unchanged sentences

As described above, the Company’s North America segment sales are further disaggregated by major product line.

In addition, the Company’s Rest of World segment sales are disaggregated by China and all other Rest of World:

The Company’s Rest of World segment sales are disaggregated by China and all other Rest of World:

(dollars in millions) Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

North America

Water heaters and related parts $ 611.8 $ 624.6

Boilers and related parts 78.0 71.1 213.6 197.2

Boilers, related parts, and components (1)

Water treatment products and related parts 60.1 59.7

6 unchanged sentences

Total Net Sales $ 945.6 $ 963.9

During the fourth quarter of 2024, the Company acquired Pureit, a residential water purification business in South Asia, from Unilever for an aggregate purchase price of $ 124.6 million.

The acquired company is included in the Rest of World segment.

The purchase price consisted of an initial cash payment of $ 117.9 million upon the closing of the transaction and a separate payment of $ 6.7 million for inventory made under a transitional supply agreement with Unilever.

The Company incurred acquisition costs of approximately $ 1.4 million.

The purchase price allocation remains preliminary and subject to final valuation adjustments that will be completed within the one-year period following the acquisition date.

(1) Includes $ 15.9 million of sales of LVC Holdco LLC (Leonard Valve) from January 6, 2026, the date of acquisition.

2026 Acquisition

On January 6, 2026, the Company acquired 100 percent of the shares and related assets of Leonard Valve a leading manufacturer of water temperature and flow solutions.

The addition of Leonard Valve is an advancement of its presence in the water management market, and Leonard Valve is included in its North America segment.

The transaction was completed for $ 470.0 million, net of cash acquired and subject to customary adjustments.

The all-cash transaction was funded with cash borrowed under a new credit agreement.

Upon closing of the acquisition, $ 2.0 million was placed into escrow to cover potential working capital adjustments.

This escrow amount is included in the total purchase consideration.

Most of the combined purchase price for assets and operations acquired was recorded as intangibles and goodwill with the remaining portion allocated to identifiable assets acquired and liabilities assumed.

As of March 31, 2026, the purchase price allocation remains preliminary and subject to final valuation adjustments that will be completed within the one-year period following the acquisition date.

The Company incurred acquisition costs of approximately $ 6.8 million that were recorded in "Selling, general and administrative expenses."

The following table summarizes the preliminary allocation of the fair value of the assets acquired and liabilities assumed at the date of acquisition.

Of the $ 56.5 million of acquired identifiable intangible assets, $ 48.5 million was assigned to trademarks that are not subject to amortization, $ 3.8 million was assigned to patents which are amortized over 15 years, and the remaining $ 4.2 million was assigned to customer relationships which are amortized over two to three years .

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

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)

(in millions)

Current assets $ 14.8

2 unchanged sentences

Goodwill 212.2

Other assets 0.3

Total assets acquired 476.4

Current liabilities ( 5.9 )

Other liabilities ( 0.5 )

Net assets acquired $ 470.0

During the first quarter of 2024, the Company acquired a privately-held water treatment company.

The Company paid an aggregate cash purchase price of $ 21.3 million, net of cash acquired.

The Company also agreed to make contingent payments based on the amount by which sales of products increase over the next three years .

The addition of the acquired company expanded the Company's water treatment footprint in North America.

The acquired company is included in the North America segment.

Of the $ 244.5 million of acquired identifiable intangible assets, $ 39.6 million was assigned to trademarks that are not subject to amortization, $ 5.9 million was assigned to patents which are amortized over 10 years, and the remaining $ 199.0 million was assigned to customer relationships which are amortized over 19 and 20 years.

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

Acquisitions (continued)

Revenues and pre-tax earnings associated with Leonard Valve included in the consolidated statement of earnings for the quarter ended March 31, 2026 totaled $ 15.9 million and $ 5.5 million, respectively.

As required under ASC 805 Business Combinations , results of operations have been included in the Company’s consolidated financial statements from the date of their acquisition.

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

(dollars in millions) September 30,

(dollars in millions) March 31,

2026 December 31, 2025

9 unchanged sentences

(dollars in millions) Three Months Ended

September 30,

Balance at July 1, $ 201.1 $ 187.6

Expense 18.2 16.0

Claims settled ( 15.8 ) ( 16.4 )

Balance at September 30, $ 203.5 $ 187.2

(dollars in millions) Nine Months Ended

September 30,

Balance at January 1, $ 209.7 $ 190.4

2 unchanged sentences

Claims settled ( 20.9 ) ( 16.6 )

Balance at September 30, $ 203.5 $ 187.2

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

Balance at March 31, $ 210.4 $ 194.3

In 2024, the Company renewed and amended its $ 500 million multi-year, multi-currency revolving credit agreement with a new expiration date of August 23, 2029.

1 unchanged sentence

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 September 30, 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 March 31, 2026.

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 September 30, 2025.

The Company was in compliance with the covenants as of March 31, 2026.

On January 5, 2026, the Company entered into an agreement for a new three-year , $ 470 million term loan with a group of eight banks.

The Company borrowed the full available amount on January 5, 2026, and used the proceeds to finance the purchase of Leonard Valve.

The term loan matures in January 2029, and the terms of the agreement outline a balloon payment at maturity.

The interest rate on the loan is variable based on the SOFR (secured overnight financing rate) plus 0.88 %.

For the period ending March 31, 2026, the interest rate was 4.55 %.

Earnings per Share of Common Stock

2 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

Denominator for basic earnings per share - weighted average shares 138,292,701 143,579,588

6 unchanged sentences

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

The number of shares available for granting of share based compensation at September 30, 2025 was 2,043,675 .

The number of shares available for granting of share based compensation at March 31, 2026 was 1,893,236 .

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

1 unchanged sentence

Share units vest three years after the date of grant.

The Company granted 245,168 and 195,363 share units under the Incentive Plan in the nine months ended September 30, 2025 and 2024, respectively.

The share units were valued at $ 16.1 million at the date of issuance in both 2025 and 2024, based on the price of the Company’s Common Stock at the date of grant.

The Company granted 182,070 and 209,366 share units under the Incentive Plan in the three months ended March 31, 2026 and 2025, respectively.

The share units were valued at $ 14.4 million and $ 13.7 million at the date of issuance in 2026 and 2025, 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.

Included in share unit expense in the nine months ended September 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 $ 2.1 million and $ 1.7 million was recognized in the three months ended September 30, 2025 and 2024, respectively.

Share based compensation expense attributable to share units of $ 9.4 million and $ 10.9 million was recognized in the nine months ended September 30, 2025 and 2024, respectively.

Included in share unit expense in the three months ended March 31, 2026 and 2025 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 $ 5.7 million and $ 5.5 million was recognized in the three months ended March 31, 2026 and 2025, 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 nine months ended September 30, 2025:

A summary of share unit activity under the Incentive Plan is as follows for the three months ended March 31, 2026:

Number of Units Weighted-Average

3 unchanged sentences

Vested ( 153,295 ) 67.14

Forfeited ( 11,861 ) 70.82

Issued and unvested at September 30, 2025 616,704 68.75

Share Based Compensation (continued)

Issued and unvested at March 31, 2026 660,082 72.09

Performance Stock Units

3 unchanged sentences

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

The Company granted 38,150 and 29,475 performance stock units under the Incentive Plan in the nine months ended September 30, 2025 and 2024, respectively.

The Company granted 30,015 and 35,365 performance stock units under the Incentive Plan in the three months ended March 31, 2026 and 2025, respectively.

The performance stock units were valued at $ 2.4 million and $ 2.3 million at the date of issuance in 2026 and 2025, 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.

Share based compensation expense attributable to performance stock units of $ 0.7 million and $ 0.4 million was recognized in the three months ended September 30, 2025 and 2024, respectively.

Share based compensation expense attributable to performance stock units of $ 1.9 million and $ 1.3 million was recognized in the nine months ended September 30, 2025 and 2024, respectively.

Share based compensation expense attributable to performance stock units of $ 0.9 million and $ 0.5 million was recognized in the three months ended March 31, 2026 and 2025, 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 nine months ended September 30, 2025:

Share Based Compensation (continued)

A summary of performance stock unit activity under the Incentive Plan is as follows for the three months ended March 31, 2026:

Number of Units Weighted-Average

2 unchanged sentences

Granted 30,015 79.09

Forfeited ( 1,600 ) 71.23

Issued and unvested at September 30, 2025 110,948 72.10

Vested ( 33,107 ) 67.14

Performance adjustments 10,911 65.68

Issued and unvested at March 31, 2026 117,521 74.71

Segment Results

4 unchanged sentences

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

Three Months Ended September 30, 2025

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

The Company’s Chief Executive Officer (CEO) is the Chief Operating Decision Maker (CODM).

The CODM allocates resources and makes operating decisions based on the financial information presented by the two reporting segments.

The measures regularly reviewed by the CODM include segment sales, earnings, and segment margin.

Segment earnings, defined by the Company as earnings before interest expense, taxes, corporate expense, and corporate research and development expenses, were used to measure the performance of the segments.

The CODM uses these financial measures to evaluate and allocate capital and company resources as critical determinants of segment performance.

Three Months Ended March 31, 2026

(dollars in millions) North America Rest of World Total Segments Corporate Expenses Total

Sales from external customers $ 748.9 $ 196.7 $ 945.6 $ — $ 945.6

5 unchanged sentences

Gross Profit 297.2 68.5 365.7 — 365.7

Inter-segment Profit — — — — — —

Selling, general and administrative expenses 122.2 54.9 177.1 26.8 203.9

4 unchanged sentences

Segment Results (continued)

Three Months Ended September 30, 2024

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

Sales from external customers $ 697.6 $ 205.0 $ — $ 902.6 $ — $ 902.6

Inter-segment sales 5.7 5.3 — 11.0 — 11.0

703.3 210.3 — 913.6 — 913.6

Elimination of Inter-segment sales ( 5.7 ) ( 5.3 ) — ( 11.0 ) — ( 11.0 )

Net Sales 697.6 205.0 — 902.6 — 902.6

Cost of products sold 432.8 132.5 — 565.3 — 565.3

Gross Profit 264.8 72.5 — 337.3 — 337.3

Inter-segment Profit — — — — — —

Selling, general and administrative expenses 102.7 58.6 — 161.3 15.3 176.6

Other expense (income), net ( 0.4 ) 0.3 — ( 0.1 ) 2.7 2.6

Earnings $ 162.5 $ 13.6 $ — $ 176.1 $ ( 18.0 ) $ 158.1

Interest expense ( 1.5 )

Earnings before provision for income taxes $ 156.6

Nine Months Ended September 30, 2025

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

Three Months Ended March 31, 2025

(dollars in millions) North America Rest of World Total Segments Corporate Expenses Total

Sales from external customers $ 743.4 $ 220.5 $ 963.9 $ — $ 963.9

5 unchanged sentences

Gross Profit 297.7 77.7 375.4 — 375.4

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

Selling, general and administrative expenses 113.4 57.4 170.8 21.8 192.6

3 unchanged sentences

Earnings before provision for income taxes $ 181.1

Segment Results (continued)

Nine Months Ended September 30, 2024

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

Sales from external customers $ 2,243.6 $ 662.1 $ — $ 2,905.7 $ — $ 2,905.7

Inter-segment sales 16.7 19.9 — 36.6 — 36.6

2,260.3 682.0 — 2,942.3 — 2,942.3

Elimination of Inter-segment sales ( 16.7 ) ( 19.9 ) — ( 36.6 ) — ( 36.6 )

Net Sales 2,243.6 662.1 — 2,905.7 — 2,905.7

Cost of products sold 1,356.3 431.4 — 1,787.7 — 1,787.7

Gross Profit 887.3 230.7 — 1,118.0 — 1,118.0

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

Selling, general and administrative expenses 327.0 175.7 — 502.7 54.6 557.3

Other expense (income), net 0.7 ( 1.3 ) — ( 0.6 ) 1.1 0.5

Earnings $ 559.6 $ 56.7 $ ( 0.4 ) $ 615.9 $ ( 55.7 ) $ 560.2

Interest expense ( 4.3 )

Earnings before provision for income taxes $ 555.9

Assets, depreciation and capital expenditures by segment

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

(dollars in millions) March 31, 2026 December 31, 2025

North America $ 2,858.8 $ 2,325.7

5 unchanged sentences

Depreciation and amortization Three Months Ended

September 30, Nine Months Ended

September 30,

(dollars in millions) 2026 2025

5 unchanged sentences

Capital expenditures Three Months Ended

September 30, Nine Months Ended

September 30,

(dollars in millions) 2026 2025

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 September 30,

Fair Value Measurement Using Balance Sheet Location March 31,

2026 December 31, 2025

Quoted prices in active markets for identical assets (Level 1) Marketable Securities $ 18.7 $ 18.7

Significant other observable inputs (Level 2) Other current assets / (Accrued liabilities) 1.0 ( 1.9 )

Significant other observable inputs (Level 2) Net Derivative Assets (1)

(1) See Footnote 11 for additional details regarding the classifications of the derivative contracts.

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 nine months ended September 30, 2025.

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, 2026.

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 $ 2.1 million as of September 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.

The combined fair value of the foreign currency forward contracts was an asset balance of $ 2.0 million as of March 31, 2026 and $ 1.0 million as of December 31, 2025, respectively, which was recorded in Other current assets 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) September 30, 2025 December 31, 2024

(dollars in millions) March 31, 2026 December 31, 2025

Buy Sell Buy Sell

6 unchanged sentences

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 September 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 September 30, 2025 and December 31, 2024.

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

The fair value of the interest rate swap contract was a liability balance of $ 1.1 million and $ 0.5 million as of September 30, 2025 and December 31, 2024, respectively, which was recorded in Accrued liabilities within the condensed consolidated balance sheet.

The interest rate swap at March 31, 2026 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 March 31, 2026 and December 31, 2025.

The aggregate effective interest rate of the swap as of March 31, 2026 was 8.25 %.

The fair value of the interest rate swap contract was a liability balance of $ 0.4 million and $ 1.0 million as of March 31, 2026 and December 31, 2025, 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 September 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 gain (loss)

reclassified from

accumulated other

comprehensive loss

into earnings Amount of gain (loss)

reclassified from

accumulated other

comprehensive

loss into earnings

2025 2024 2025 2024

Foreign currency contracts $ 2.0 $ ( 0.8 ) Cost of products sold $ 0.7 $ 0.5

Interest rate swap 0.2 — Interest expense ( 0.2 ) —

$ 2.2 $ ( 0.8 ) $ 0.5 $ 0.5

Nine Months Ended September 30 (dollars in millions):

Three Months Ended March 31 (dollars in millions):

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

13 unchanged sentences

$ 2.1 $ 1.0 $ 0.5 $ ( 0.2 )

Derivative Instruments (continued)

Net Investment Hedges

5 unchanged sentences

The Company recognized $ 2.8 million and $ 1.2 million of after-tax losses associated with hedges of net investments in non-U.S.

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

The Company recognized $( 5.1 ) 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 nine months ended September 30, 2025 and September 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 September 30, 2025 and December 31, 2024.

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

Balance Sheet Hedges

Foreign Exchange Contracts

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 September 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) September 30, 2025 December 31, 2024

Buy Sell Buy Sell

Canadian dollar $ — $ — $ — $ 6.4

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 September 30 (dollars in millions):

Derivatives not designated as hedging instruments:

Location of expense within the condensed consolidated statements of earnings

Foreign exchange contracts Other income, net $ — $ ( 3.6 )

Nine Months Ended September 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 $ — $ 2.1

The Company’s effective income tax rate for the three and nine months ended September 30, 2025 was 23.2 percent and 24.1 percent respectively.

subsidiaries in currency translation adjustment in other comprehensive loss in the three months ended March 31, 2026 and March 31, 2025, 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, 2026 and December 31, 2025.

The fair value of the net investment hedge was zero as of March 31, 2026 and December 31, 2025.

The Company’s effective income tax rate for the three months ended March 31, 2026 was 23.7 percent.

The Company estimates that its annual effective income tax rate for the full year 2026 will be approximately between 24.0 and 24.5 percent.

The effective income tax rate for the three and nine months ended September 30, 2024 was 23.3 percent and 23.7 percent, respectively.

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

As of September 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 effective income tax rate for the three months ended March 31, 2025 was 24.6 percent.

The change in the effective income tax rate for the three months ended March 31, 2026 compared to the effective income tax rate for the three months ended March 31, 2025 was primarily due to the geographical earnings mix.

As of March 31, 2026, the Company had $ 13.0 million of unrecognized tax benefits of which $ 4.9 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.

4 unchanged sentences

Commitments and Contingencies

The Company maintains a commercial relationship with a supply-chain service provider (the Provider) in connection with the Company’s business in China.

In this capacity, the Provider offers order-entry, warehousing and logistics support.

The Provider also offers asset-backed financing to certain of the Company’s distributors in China to facilitate their working capital needs.

To facilitate its financing support business, the Provider has collateralized lending facilities in place with multiple Chinese banks under which the Company has agreed to repurchase inventory if both requested by the banks and certain defined conditions are met, primarily related to the aging of the distributors’ notes.

On January 29, 2026, the Company identified damage to a portion of the roof structure at its Ashland City, Tennessee facility as a result of a severe ice and snow weather event.

For safety reasons, production in the affected area was temporarily suspended while remediation activities were performed.

During this period, the Company shifted certain production activities to other facilities to mitigate the operational impact.

The Company maintains insurance coverage for property damage, as well as business interruption losses, including lost profits and certain incremental costs incurred as a result of the event.

The Company is actively working with its insurance carrier and claims adjusters and continues to gather all costs and losses incurred as part of the event.

The Company does not expect this matter to have a material effect on its financial position, results of operations, or cash flows, as the majority of the related costs and losses are expected to be recoverable under its insurance coverage.

The Company maintained a commercial relationship with a supply-chain service provider (the Provider) in connection with the Company’s business in China.

In this capacity, the Provider offered order-entry, warehousing and logistics support.

The Provider also offered asset-backed financing to certain of the Company’s distributors in China to facilitate their working capital needs.

To facilitate its financing support business, the Provider had collateralized lending facilities in place with multiple Chinese banks under which the Company has agreed to repurchase inventory if both requested by the banks and certain defined conditions are met, primarily related to the aging of the distributors’ notes.

As of December 31, 2025, the Company terminated the arrangement with the Provider.

Existing loan balances will be paid down throughout 2026 with no new loans offered.

The Provider is required to indemnify the Company for any losses the Company would incur in the event of an inventory repurchase under these arrangements.

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 September 30, 2025 and December 31, 2024.

The Company’s reserves for estimated losses under these repurchase arrangements were immaterial as of March 31, 2026 and December 31, 2025.

Table of Content s

Changes in Accumulated Other Comprehensive Loss by Component

1 unchanged sentence

(dollars in millions) Three Months Ended

September 30,

Cumulative foreign currency translation

2 unchanged sentences

Balance at end of period ( 94.7 ) ( 103.6 )

Unrealized net gain (loss) on cash flow derivatives

Balance at beginning of period ( 0.9 ) —

Other comprehensive gains (losses) before reclassifications 1.7 ( 0.6 )

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

( 0.3 ) ( 0.3 )

Balance at end of period 0.5 ( 0.9 )

Pension liability

Balance at beginning of period ( 5.9 ) ( 4.5 )

Amounts reclassified from accumulated other comprehensive loss:

Balance at end of period ( 5.9 ) ( 4.4 )

Accumulated other comprehensive loss, end of period $ ( 100.3 ) $ ( 85.2 )

Changes in Accumulated Other Comprehensive Loss by Component (continued)

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

(dollars in millions) Nine Months Ended

September 30,

Cumulative foreign currency translation

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

Other comprehensive gain before reclassifications 9.4 0.4

Balance at end of period ( 94.9 ) ( 79.9 )

Unrealized net gain (loss) on cash flow derivatives

Unrealized net (loss) gain on cash flow derivatives

Balance at beginning of period ( 0.2 ) ( 1.5 )

Other comprehensive gain (loss) before reclassifications 2.1 ( 0.2 )

Realized gains on derivatives (net of income tax provision of $ 0.1 and $ 0.5 in 2025 and 2024, respectively)

( 0.1 ) ( 1.4 )

Other comprehensive gains before reclassifications 1.7 0.7

Realized (gains) losses on derivatives (net of income tax provision (benefit) of $ 0.1 and ($ 0.1 ) in 2026 and 2025, respectively)

Balance at end of period 1.1 ( 0.7 )

4 unchanged sentences

Accumulated other comprehensive loss, end of period $ ( 100.7 ) $ ( 110.3 )

Subsequent Event

In April 2026 the Company approved and announced a restructuring plan in its North America water treatment business designed to increase operational efficiency and improve profitability and growth through footprint optimization as well as brand rationalization.

In the second quarter, the Company estimates that it will recognize a restructuring charge of approximately $ 20 million, the majority of which is due to non-cash impairment expenses.

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