What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-07-31 compared with 2025-05-01 · 63 added, 54 removed, 159 unchanged (42% of the section changed)

8 unchanged sentences

• Generate free cash flow margin approaching 10%;

• Execute a disciplined capital allocation strategy while maintaining net leverage around 1.5x;

• Execute a disciplined capital allocation strategy with long-term net leverage around 1.5x;

• Realize annual Adjusted EPS growth of 10% to 12%.

9 unchanged sentences

dollar weakens against foreign currencies, our revenues and earnings are positively impacted.

Approximately 41% of our consolidated revenues during the quarter ended March 30, 2025 were to customers outside of the U.S.

Approximately 43% of our consolidated revenues during the quarter ended June 29, 2025 were to customers outside of the U.S.

In addition to the translation impact described above, currency rate fluctuations have an economic impact on our financial results.

28 unchanged sentences

To the extent that we exceed the market growth rates, we consider it to be the result of capturing market share.

Borrowings on Revolver

During the three months ended June 29, 2025 , we borrowed $50.0 million under our revolver for general business purposes, and then subsequently repaid the entire $50.0 million during the quarter.

Share Repurchase Program

During the three months ended March 30, 2025 , we repurchased 0.8 million shares of our common stock for an aggregate cost of $84.5 million at an average price per share of $104.28.

During the six months ended June 29, 2025 , we repurchased 1.0 million shares of our common stock for an aggregate cost of $100.0 million at an average price per share of $103.76.

Off-Balance Sheet Arrangements

1 unchanged sentence

Critical Accounting Policies

During the three months ended March 30, 2025:

During the six months ended June 29, 2025:

• We did not change any of our existing critical accounting policies from those listed in our 2024 Annual Report on Form 10-K;

3 unchanged sentences

Consolidated Income before Taxes

Three Months Ended % Change

March 30, 2025 March 31, 2024

Three Months Ended % Change Six Months Ended % Change

June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024

(In thousands, except percentages)

8 unchanged sentences

Income before taxes 66,672 60,125 10.9 % 128,753 105,794 21.7 %

Revenues increased $89.2 million in the three months ended March 30, 2025, respectively, from the comparable period of 2024 due to the following factors:

• Higher sales volume contributed $59.8 million in revenues.

• Acquisitions contributed $26.7 million in revenues.

• Copper pass-through pricing had a $9.6 million favorable impact on revenues.

• Currency translation had a $6.9 million unfavorable impact on revenues.

Gross profit increased $44.2 million in the three months ended March 30, 2025 from the comparable period of 2024 primarily due to the changes in revenues discussed above.

Gross profit margins were robust, expanding 170 basis points from 37.6% to 39.3%.

Selling, general and administrative expenses increased $20.8 million in the three months ended March 30, 2025 from the comparable period of 2024.

The increase in the three months ended March 30, 2025 was primarily attributable to expenses from the operations of companies acquired in 2024 and higher incentive compensation.

Research and development expenses remained relatively flat increasing $1.4 million in the three months ended March 30, 2025 from the comparable period of 2024.

Amortization of intangibles increased $2.5 million in the three months ended March 30, 2025 from the comparable period of 2024 primarily due to acquisitions.

Operating income increased $19.6 million in the three months ended March 30, 2025 from the comparable period of 2024 primarily due to the increase in revenues, partially offset by the increase in selling, general and administrative expenses discussed above.

Net interest expense increased $2.5 million in the three months ended March 30, 2025 from the comparable period of 2024 due to fluctuations in interest income and foreign currency translation.

Income before taxes increased $16.4 million in the three months ended March 30, 2025 from the comparable period of 2024 primarily due to the changes in operating income discussed above.

Three Months Ended % Change

March 30, 2025 March 31, 2024

Revenues increased $67.7 million and $156.8 million in the three and six months ended June 29, 2025, respectively, from the comparable periods of 2024 due to the following factors:

• Higher sales volume contributed $31.8 million and $91.5 million in revenues, respectively.

• Acquisitions contributed $27.5 million and $54.2 million in revenues, respectively.

• Copper pass-through pricing had a $3.8 million and $13.4 million favorable impact on revenues, respectively.

• Currency translation had a $4.6 million favorable and $2.3 million unfavorable impact on revenues, respectively.

Gross profit increased $31.8 million and $76.0 million in the three and six months ended June 29, 2025, respectively, from the comparable periods of 2024 primarily due to the increases in revenues discussed above.

Gross profit margins were robust, expanding 100 basis points and 130 basis points from 37.5% to 38.5% and 37.6% to 38.9%, respectively.

Selling, general and administrative expenses increased $12.4 million and $33.2 million in the three and six months ended June 29, 2025, respectively, from the comparable periods of 2024 primarily due to expenses from the operations of companies acquired in 2024.

Research and development expenses increased $5.5 million and $6.9 million in the three and six months ended June 29, 2025, respectively, from the comparable periods of 2024 primarily due to strategic investments.

Amortization of intangibles increased $3.5 million and $6.0 million in the three and six months ended June 29, 2025, respectively, from the comparable periods of 2024 primarily due to acquisitions.

Operating income increased $10.3 million and $29.9 million in the three and six months ended June 29, 2025, respectively, from the comparable periods of 2024 primarily due to the increase in revenues, partially offset by the increase in selling, general and administrative expenses and research and development expenses discussed above.

Net interest expense increased $3.2 million and $5.7 million in the three and six months ended June 29, 2025, respectively, from the comparable periods of 2024 due to fluctuations in interest income and foreign currency translation.

Income before taxes increased $6.5 million and $23.0 million in the three and six months ended June 29, 2025, respectively, from the comparable periods of 2024 primarily due to the changes in operating income discussed above.

Three Months Ended % Change Six Months Ended % Change

June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024

(In thousands, except percentages)

2 unchanged sentences

Effective tax rate 8.5 % 18.4 % 12.3 % 18.4 %

For the three months ended March 30, 2025, we recognized income tax expense of $10.1 million representing an effective tax rate of 16.3%.

The effective tax rate was primarily impacted by the effect of our foreign operations, including statutory tax rate differences and foreign tax credits.

For the three and six months ended June 29, 2025, we recognized income tax expense of $5.7 million and $15.8 million, respectively, representing effective tax rates of 8.5% and 12.3%, respectively.

The effective tax rates for both periods were primarily impacted by the release of an uncertain tax position reserve related to certain foreign tax credits and by the effect of our foreign operations, including statutory tax rate differences and foreign tax credits.

On July 4, 2025, the OBBBA was enacted, which includes permanent extensions of most expiring Tax Cuts and Jobs Act provisions and international tax changes.

We are still evaluating the potential impacts of the act on our consolidated financial statements and disclosures.

Consolidated Adjusted EBITDA

Three Months Ended % Change

March 30, 2025 March 31, 2024

Three Months Ended % Change Six Months Ended % Change

June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024

(In thousands, except percentages)

2 unchanged sentences

as a percent of revenues 17.0 % 16.5 % 16.8 % 16.2 %

Adjusted EBITDA increased $19.2 million in the three months ended March 30, 2025 from the comparable period of 2024 primarily due to the increases in revenues discussed above and favorable mix, partially offset by an increase in incentive compensation and strategic investments.

Accordingly, adjusted EBITDA margins expanded 80 basis points to 16.6%.

Adjusted EBITDA increased $14.7 million and $33.9 million in the three and six months ended June 29, 2025, respectively, from the comparable periods of 2024 primarily due to the increases in revenues discussed above and favorable mix, partially offset by an increase in incentive compensation and strategic investments.

Accordingly, adjusted EBITDA margins expanded 50 basis points and 60 basis points to 17.0% and 16.8%, respectively.

Use of Non-GAAP Financial Information

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The following tables reconcile our GAAP results to our non-GAAP financial measures:

Three Months Ended

March 30, 2025 March 31, 2024

Three Months Ended Six Months Ended

June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024

(In thousands, except percentages)

16 unchanged sentences

Smart Infrastructure Solutions

Three Months Ended % Change

March 30, 2025 March 31, 2024

Three Months Ended % Change Six Months Ended % Change

June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024

(In thousands, except percentages)

2 unchanged sentences

as a percent of segment revenues 11.8 % 11.6 % 11.6 % 11.3 %

Smart Infrastructure Solutions revenues increased $40.0 million in the three months ended March 30, 2025 from the comparable period of 2024.

The increase in revenues in the three months ended March 30, 2025 was primarily due to acquisitions, increases in volume, and higher copper pass-through pricing of $26.2 million, $13.2 million, and $3.0 million, respectively, partially offset by unfavorable currency translation of $2.4 million.

Smart Infrastructure Solutions EBITDA increased $5.3 million in the three months ended March 30, 2025 from the comparable period of 2024 primarily due to the the increase in revenues discussed above and favorable mix, partially offset by an increase in incentive compensation and strategic investments.

Accordingly, adjusted EBITDA margins expanded 40 basis points to 11.4%.

Smart Infrastructure Solutions revenues increased $35.5 million and $75.5 million in the three and six months ended June 29, 2025, respectively, from the comparable periods of 2024.

The increase in revenues in the three months ended June 29, 2025 was primarily due to acquisitions, increases in volume, favorable currency translation, and higher copper pass-through pricing of $27.2 million, $6.6 million, $0.9 million, and $0.8 million, respectively.

The increase in revenues in the six months ended June 29, 2025 was primarily due to acquisitions, increases in volume, and higher copper pass-through pricing of $53.4 million, $19.8 million, and $3.8 million, respectively, partially offset by unfavorable currency translation of $1.5 million.

Smart Infrastructure Solutions EBITDA increased $4.8 million and $10.1 million in the three and six months ended June 29, 2025, respectively, from the comparable periods of 2024 primarily due to the the increase in revenues discussed above and favorable mix, partially offset by an increase in incentive compensation and strategic investments.

Accordingly, adjusted EBITDA margins expanded 20 basis points and 30 basis points to 11.8% and 11.6%, respectively.

Automation Solutions

Three Months Ended % Change

March 30, 2025 March 31, 2024

Three Months Ended % Change Six Months Ended % Change

June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024

(In thousands, except percentages)

2 unchanged sentences

as a percent of segment revenues 21.4 % 20.3 % 21.1 % 19.9 %

Automation Solutions revenues increased $49.2 million in the three months ended March 30, 2025 from the comparable period of 2024.

The increase in revenues in the three months ended March 30, 2025 was primarily due to increases in volume, higher copper pass-through pricing, and acquisitions of $46.6 million, $6.6 million, and $0.5 million, respectively, partially offset by unfavorable currency translation of $4.5 million.

Automation Solutions EBITDA increased $14.6 million in the three months ended March 30, 2025 from the comparable period of 2024 primarily as a result of the increase in revenues discussed above and favorable mix, partially offset by an increase in incentive compensation and strategic investments.

Accordingly, adjusted EBITDA margins expanded 140 basis points to 20.9%.

Automation Solutions revenues increased $32.1 million and $81.3 million in the three and six months ended June 29, 2025, respectively, from the comparable periods of 2024.

The increase in revenues in the three months ended June 29, 2025 was primarily due to increases in volume, favorable currency translation, higher copper pass-through pricing, and acquisitions of $25.1 million, $3.7 million, $3.0 million, and $0.3 million, respectively.

The increase in revenues in the six months ended June 29, 2025 was primarily due to increases in volume, higher copper pass-through pricing, and acquisitions of $71.7 million, $9.6 million, and $0.8 million, respectively, partially offset by unfavorable currency translation of $0.8 million.

Automation Solutions EBITDA increased $10.5 million and $25.1 million in the three and six months ended June 29, 2025 from the comparable periods of 2024 primarily as a result of the increase in revenues discussed above and favorable mix, partially offset by an increase in incentive compensation and strategic investments.

Accordingly, adjusted EBITDA margins expanded 110 basis points and 120 basis points to 21.4% and 21.1%, respectively.

Liquidity and Capital Resources

5 unchanged sentences

The following table is derived from our Condensed Consolidated Cash Flow Statements:

Three Months Ended

March 30, 2025 March 31, 2024

Six Months Ended

June 29, 2025 June 30, 2024

(In thousands)

7 unchanged sentences

Cash and cash equivalents, end of period $ 301,486 $ 564,751

Net cash provided by operating activities totaled $7.4 million in the three months ended March 30, 2025 compared to $2.7 million in the year ago period due to an increase in earnings, partially offset by unfavorable changes in operating assets and liabilities.

While receivables were a use of cash in 2025 as compared to a source of cash in 2024, days sales outstanding remained constant at about 60 days during each of Q1 2025 and Q1 2024.

Net cash used for investing activities totaled $24.2 million for both the three months ended March 30, 2025 and March 31, 2024.

Investing activities for the three months ended March 30, 2025 included capital expenditures of $32.2 million, partially offset by cash from business acquisitions and asset sales of $7.9 million and $0.1 million, respectively.

Investing activities for the three months ended March 31, 2024 included $24.3 million for capital expenditures, partially offset by $0.1 million for asset sales.

Net cash used for financing activities totaled $96.8 million for the three months ended March 30, 2025 compared to $64.9 million in the year ago period.

Financing activities for the three months ended March 30, 2025 included payments under our share repurchase program of $84.5 million, payments related to share based compensation activities of $13.7 million, cash dividend payments of $2.0 million, financing lease payments of $0.4 million, and proceeds from the issuance of common stock of $3.8 million.

Financing activities for the three months ended March 31, 2024 included payments under our share repurchase program of $57.9 million, payments related to share based compensation activities of $7.9 million, cash dividend payments of $2.1 million, financing lease payments of $0.2 million, and proceeds from the issuance of common stock of $3.1 million.

Our cash and cash equivalents balance was $259.0 million as of March 30, 2025.

Net cash provided by operating activities totaled $89.5 million in the six months ended June 29, 2025 compared to $85.7 million in the year ago period due to an increase in earnings, partially offset by unfavorable changes in operating assets and liabilities.

Net cash used for investing activities totaled $49.3 million in the six months ended June 29, 2025 compared to $45.7 million in the year ago period.

Investing activities for the six months ended June 29, 2025 included capital expenditures of $57.4 million, partially offset by cash from business acquisitions and asset sales of $7.9 million and $0.1 million, respectively.

Investing activities for the six months ended June 30, 2024 included capital expenditures of $46.2 million, partially offset by asset sales of $0.5 million.

Net cash used for financing activities totaled $116.2 million for the six months ended June 29, 2025 compared to $67.4 million in the year ago period.

Financing activities for the six months ended June 29, 2025 included payments under our share repurchase program, including excise tax of $100.9 million;

payments on our revolving credit facility of $50.0 million;

payments related to share based compensation activities of $14.2 million;

cash dividend payments of $4.0 million;

and financing lease payments of $0.9 million;

partially offset by borrowings on our revolving credit facility and proceeds from the issuance of common stock of $50.0 million and $3.8 million, respectively.

Financing activities for the six months ended June 30, 2024 included payments under our share repurchase program of $57.9 million, payments related to share based compensation activities of $8.1 million, cash dividend payments of $4.1 million, financing lease payments of $0.4 million, and proceeds from the issuance of common stock of $3.1 million.

Our cash and cash equivalents balance was $301.5 million as of June 29, 2025.

Of the total cash balance, $180.8 million was held outside of the U.S.

6 unchanged sentences

tax rules and regulations as a result of the repatriation.

Our outstanding debt obligations as of March 30, 2025 consisted of $1,186.6 million of senior subordinated notes.

Our outstanding debt obligations as of June 29, 2025 consisted of $1,278.8 million of senior subordinated notes.

Additional discussion regarding our various borrowing arrangements is included in Notes 10 and 16 to the Condensed Consolidated Financial Statements.

6 unchanged sentences

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 2. Management’s Discussion and Analysis