What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-07-31 compared with 2025-05-01 · 173 added, 59 removed, 138 unchanged (63% of the section changed)

30 unchanged sentences

Recent Transactions and Events

Entry into a Definitive Agreement to Acquire Precision Sensors & Instrumentation

On June 6, 2025, the Company entered into a definitive Purchase Agreement with the Baker Hughes Company for the acquisition of Precision Sensors & Instrumentation (“PSI”).

PSI is a leading provider of sensor-based technologies for aerospace, nuclear and process industries.

The purchase price of the transaction is $1,150.0 million, subject to post-closing adjustments.

The transaction is expected to close at the end of 2025 or early 2026, contingent upon regulatory approvals and the satisfaction of customary closing conditions.

PSI is expected to have 2025 sales of approximately $390 million.

The One Big Beautiful Bill Act

On July 4, 2025, the “One Big Beautiful Bill Act” (“OBBBA”) was signed into law, which includes changes to federal tax law and other regulatory provisions that may impact the Company.

The Company is currently evaluating the provisions of the new law and the potential effects on our consolidated financial statements.

Additional disclosures will be provided in future periods as the impact of the legislation is determined.

Divestiture of Engineered Materials

Effective on January 1, 2025, the Company completed the sale of the Engineered Materials segment to KPS Capital Partners, L.P (“KPS”) for approximately $208.0 million, on a cash-free and debt-free basis.

In connection with the divestiture, the Company recognized a pre-tax gain of $35.7 million, subject to a net working capital adjustment and was recorded in income from discontinued operations.

We determined that the Engineered Materials segment met the criteria of being reported as a discontinued operation as of March 31, 2025 and December 31, 2024.

Effective on January 1, 2025, the Company completed the sale of the Engineered Materials segment for approximately $208.0 million, on a cash-free and debt-free basis.

During the second quarter of 2025, the Company received $7.8 million related to a final working capital adjustment.

In connection with the divestiture, the Company recognized a pre-tax gain of $43.5 million, which was recorded in income from discontinued operations.

We determined that the Engineered Materials segment met the criteria of being reported as a discontinued operation as of June 30, 2025 and December 31, 2024.

As a result, the related assets, liabilities and operating results of Engineered Materials are presented as discontinued operations and, as such, have been excluded from both continuing operations and segment results for all periods presented.

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Our insurance generally covers the repair or replacement of assets that suffered damage or loss and also provides business interruption coverage, including lost profits, and reimbursement for other expenses and costs that have been incurred relating to the damages and losses suffered.

The recovery related to business interruption will be recognized when realized and received.

We are working with our insurance carrier to assess the damage and ascertain the amount of insurance recoveries due to us as a result of the damage and loss we incurred, as such the timing of insurance proceeds may lag behind actual losses incurred.

For the three months ended March 31, 2025, we incurred losses and expenses of $5.6 million related to damages caused by the hurricane, which included professional fees to restore and maintain the site.

For the period ended March 31, 2025 we have an insurance receivable of $8.4 million, which is net of the $0.5 million deductible.

The recovery related to business interruption is recognized when realized and received.

We are working with our insurance carrier to ascertain the amount of insurance recoveries due to us as a result of the damage and loss we incurred, as such the timing of insurance proceeds will lag behind actual losses incurred.

For the three and six months ended June 30, 2025, we incurred losses and expenses of $0.2 and $5.8 million, respectively, related to damages caused by the hurricane, which included professional fees to restore and maintain the site.

For the period ended June 30, 2025 we received insurance proceeds of $5.0 million and have an insurance receivable of $3.6 million, which is net of the $0.5 million deductible.

These costs and insurance recoveries are included in Selling, general and administrative expenses in the Condensed Consolidated Statements of Operations.

During the second quarter, we also received insurance proceeds for lost profits of $4.0 million, included in Miscellaneous income, net in the Condensed Consolidated Statements of Operations.

Our sales depend heavily on industries that are cyclical in nature or are subject to market conditions, which may cause customer demand for our products to be volatile and unpredictable.

Demand in these industries is affected by fluctuations in domestic and international economic conditions, as well as currency fluctuations, commodity costs, tariff impacts, and a variety of other factors.

In 2025, we expect a total year-over-year sales increase of approximately 5%, driven by approximately 4% to 6% core sales growth, and an acquisition benefit of approximately 1% to 2%, partially offset by an approximate 1% headwind from foreign exchange.

We expect an improvement in operating profit driven primarily by productivity benefits, operating leverage on higher volumes, lower transaction related expenses and higher pricing net of inflation and contributions from the Technifab and CryoWorks, Inc.

In 2025, we expect a total year-over-year sales increase of approximately 6% to 7%, driven by approximately 4% to 6% core sales growth, an acquisition benefit of approximately 1% to 2%, and a modest benefit from foreign exchange.

We expect an improvement in operating profit driven primarily by productivity benefits, operating leverage on higher volumes, lower transaction related expenses and higher pricing net of inflation, inclusive of the recent enactment of tariffs and contributions from the Technifab Products, Inc.

(“Technifab”) and CryoWorks, Inc.

(“CryoWorks”) acquisitions.

Aerospace & Electronics

In 2025, we expect Aerospace & Electronics sales to increase in the high single-digit range compared to 2024.

In 2025, we expect Aerospace & Electronics sales to increase in the high single-digit to low double-digit range compared to 2024.

We expect a substantial improvement in our OEM business driven by higher commercial aircraft build rates.

We expect growth in our commercial and military aftermarket businesses driven by continued high utilization of aircraft, but at decelerating rates compared to 2023 and 2024 due to increasingly challenging year-over-year comparisons.

We expect segment operating profit and operating margin to increase compared to 2024 driven primarily by productivity benefits and the impact of operating leverage on higher volumes.

We expect segment operating profit and operating margin to increase compared to 2024 driven primarily by productivity benefits and the impact of operating leverage on higher volumes and higher pricing.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Process Flow Technologies

In 2025, we expect Process Flow Technologies sales to increase approximately 4% to 5% driven by low- to mid-single digit core sales growth, a 2% to 3% contribution from the Technifab and CryoWorks acquisitions, partially offset by approximately 1% of unfavorable foreign exchange.

The core sales increase is primarily due to demand in the Chemical, Pharmaceutical, Industrial and Cryogenic markets.

We expect an improvement in segment operating profit and operating margin compared to 2024, driven primarily by strong productivity and higher pricing net of inflation.

In 2025, we expect Process Flow Technologies sales to increase low single-digit driven by slight core sales growth, a 2% to 3% contribution from the Technifab and CryoWorks acquisitions, and an approximately 1% benefit from favorable foreign exchange.

The core sales increase is primarily due to demand in the Water, Pharmaceutical, Industrial and Cryogenic markets, offset by a generally softer chemical end market, globally.

We expect an improvement in segment operating profit and operating margin compared to 2024, driven primarily by strong productivity and higher pricing.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results from Continuing Operations – Three Months Ended March 31, 2025 and 2024

Results from Continuing Operations – Three Months Ended June 30, 2025 and 2024

The following information should be read in conjunction with our condensed consolidated financial statements and related notes.

All comparisons below refer to the first quarter 2025 versus the first quarter 2024, unless otherwise specified.

First Quarter Favorable/(Unfavorable) Change

All comparisons below refer to the second quarter 2025 versus the second quarter 2024, unless otherwise specified.

Second Quarter Favorable/(Unfavorable) Change

(dollars in millions) 2025 2024 $ %

2 unchanged sentences

as a percentage of sales 58.0 % 60.0 %

Selling, general and administrative 136.5 125.5 (11.0) (8.8) %

Engineering, selling and administrative 139.4 122.2 (17.2) (14.1) %

as a percentage of sales 24.2 % 23.1 %

4 unchanged sentences

Interest expense (4.3) (7.4) 3.1 41.9 %

Miscellaneous expense, net (1.0) (1.2) 0.2 16.7 %

Total other expense, net (2.3) (7.2) 4.9 68.1 %

Miscellaneous income, net 3.1 1.3 1.8 138.5 %

Total other income (expense) net 1.7 (4.8) 6.5 135.4 %

Income from continuing operations before income taxes 104.6 84.5 20.1 23.8 %

3 unchanged sentences

The period-over-period change in sales included:

• an increase in core sales of $38.5 million, or 7.5%, which was driven primarily by higher pricing and to a lesser extent higher volumes;

• an increase in core sales of $34.4 million, or 6.5%, which was driven primarily by higher pricing;

• an increase in sales related to the CryoWorks and Technifab acquisitions of $9.5 million, or 1.8%;

• partially offset by unfavorable foreign currency translation of $3.8 million, or 0.7%.

• favorable foreign currency translation of $4.7 million, or 0.9%.

Cost of sales increased by $17.8 million, or 5.6%, to $334.9 million in 2025.

The increase is primarily related to higher material, labor and other manufacturing costs $17.0 million, or 5.6%, the impact from the CryoWorks and Technifab acquisitions of $8.8 million, or 2.9%, higher volumes of $6.7 million, or 2.2%, partially offset by strong productivity gains $11.6 million, or 3.8%, favorable foreign currency translation of $2.0 million, or 0.7%, favorable mix of $1.3 million, or 0.4%, and savings of $1.0 million, or 0.3%.

Selling, general and administrative expenses increased by $11.0 million, or 8.8%, to $136.5 million in 2025, reflecting a $10.9 million, or 8.7% increase in administrative expenses.

The increase in administrative expenses was primarily driven by the acquisitions of CryoWorks and Technifab and investments in core businesses.

The increase is primarily related to higher material, labor and other manufacturing costs of $31.6 million, or 10.0%, the impact from the CryoWorks and Technifab acquisitions of $6.2 million, or 2.0%, unfavorable foreign currency translation of $2.8 million, or 0.9%, partially offset by strong productivity gains $13.3 million, or 4.2%, favorable mix of $6.4 million, or 2.0%, and lower volumes of $2.8 million, or 0.9%.

Engineering, selling and administrative expenses increased by $17.2 million, or 14.1%, to $139.4 million in 2025, reflecting a $12.3 million, or 10.1%, increase in administrative expenses and a $2.8 million, or 2.3%, increase in selling expenses.

The increases was primarily driven by investments in core businesses and the acquisitions of CryoWorks and Technifab.

Operating profit increased by $13.6 million, or 15.2%, to $102.9 million in 2025.

The increase primarily reflected the impact from continued pricing gains and strong productivity of $12.2 million, or 15.0%, higher volumes of $6.6 million, or 8.1%, favorable mix of $1.3 million, or 1.6%, partially offset by unfavorable foreign currency translation of $0.9 million, or 1.1%.

Our effective tax rate for the three months ended March 31, 2025, is slightly higher than the prior year’s comparable period due to a lower statutory U.S.

deduction related to our non-U.S.

subsidiaries’ income and slightly higher statutorily non-deductible costs, partially offset by excess share-based compensation benefits.

Our effective tax rate for the three months ended March 31, 2025 is approximately equal to the statutory U.S.

The increase primarily reflected strong productivity gains of $14.7 million, or 16.5%, favorable mix of $6.4 million, or 7.2%, partially offset by higher material labor and other manufacturing costs of $6.7 million, or 7.5%, and lower volumes of $1.7 million, or 1.9%.

Our effective tax rate for the three months ending June 30, 2025 is higher than the prior year’s comparable period primarily due to higher statutorily non-deductible costs and lower benefit related to share-based compensation, partially offset by lower non-U.S.

Our effective tax rate for the three months ended June 30, 2025 is higher than the statutory U.S.

federal tax rate of 21%, and any overall net differences are primarily due to earnings in jurisdictions with statutory tax rates higher than the United States, expenses that are statutorily non-deductible for income tax purposes and the impact of U.S.

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Comprehensive income attributable to common shareholders $ 130.8 $ 71.3

For the three months ended March 31, 2025, comprehensive income before allocation to noncontrolling interests was $128.1 million compared to $55.4 million in the same period of 2024.

The $72.7 million increase was primarily driven by higher net income before allocation to noncontrolling interests of $42.3 million, and $30.7 million year-over-year favorable impact of foreign currency translation, primarily related to the euro and British pound.

For the three months ended June 30, 2025, comprehensive income before allocation to noncontrolling interests was $130.8 million compared to $71.3 million in the same period of 2024.

The $59.5 million increase was primarily driven by $45.0 million year-over-year favorable impact of foreign currency translation, primarily related to the euro and British pound, and higher net income before allocation to noncontrolling interests of $14.8 million.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Segment Results of Operations - Three Months Ended March 31, 2025 and 2024

Segment Results of Operations - Three Months Ended June 30, 2025 and 2024

Aerospace & Electronics

First Quarter Favorable/(Unfavorable) Change

Second Quarter Favorable/(Unfavorable) Change

(dollars in millions) 2025 2024 $ %

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as a percentage of sales 59.0 % 62.3 %

Selling, general and administrative $ 36.5 $ 35.9 $ (0.6) (1.7) %

Engineering, selling and administrative $ 38.0 $ 34.3 $ (3.7) (10.8) %

as a percentage of sales 14.7 % 14.9 %

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Backlog $ 1,052.8 $ 814.9 $ 237.9 29.2 %

Sales increased $23.0 million, or 10.2%, to $248.9 million in 2025, primarily due to higher pricing and volumes of $23.3 million, or 10.3%, offset to a lesser extent of unfavorable foreign currency translation of $0.3 million, or 0.1%.

Sales increased $27.3 million, or 11.8%, to $258.2 million in 2025, primarily due to higher pricing and volumes of $26.9 million, or 11.6%, and to a lesser extent of favorable foreign currency translation of $0.4 million, or 0.2%.

• Sales of Commercial Original Equipment increased $8.0 million, or 9.0%, to $96.6 million in 2025, reflecting strong demand from aircraft manufacturers.

• Sales of Military Original Equipment increased $0.4 million, or 0.6%, to $71.8 million in 2025.

• Sales of Military Original Equipment increased $5.8 million, or 8.7%, to $72.7 million in 2025, primarily reflecting strong demand from defense and space customers.

• Sales of Commercial Aftermarket Products increased $4.9 million, or 9.4%, to $57.2 million in 2025, reflecting continued strong demand from the airlines due to improving air traffic.

• Sales of Military Aftermarket Products increased $8.6 million, or 37.2%, to $31.7 million in 2025, reflecting stronger demand for military products, partly in response to heightened geopolitical tensions globally.

Cost of sales increased by $6.1 million, or 4.3%, to $147.8 million in 2025, primarily reflecting increased material, labor and other manufacturing costs of $8.8 million, or 6.2%, higher volumes of $5.3 million, or 3.7%, partially offset by strong productivity gains of $6.1 million, or 4.3%, and favorable mix and savings of $1.9 million, or 1.3%.

Selling, general and administrative expense increased by $0.6 million, or 1.7%, to $36.5 million in 2025, primarily related to higher administrative costs, offset by lower engineering costs.

Cost of sales increased by $8.4 million, or 5.8%, to $152.3 million in 2025, primarily reflecting increased material, labor and other manufacturing costs of $13.8 million, or 9.6%, higher volumes of $2.5 million, or 1.7%, partially offset by strong productivity gains of $6.7 million, or 4.7%, and favorable mix of $1.5 million, or 1.0%.

Engineering, selling and administrative expense increased by $3.7 million, or 10.8%, to $38.0 million in 2025, primarily related to higher selling and administrative costs.

Operating profit increased by $15.2 million, or 28.8%, to $67.9 million in 2025.

The increase primarily reflected the impact from higher volumes of $5.6 million, or 11.6%, strong pricing and productivity gains of $8.6 million, or 17.8%, and favorable mix of $1.3 million, or 2.7%.

The increase primarily reflected strong productivity gains of $7.2 million, or 13.7%, impact from higher volumes and pricing of $6.2 million, or 11.8%, and favorable mix of $1.5 million, or 2.8%.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Process Flow Technologies

First Quarter Favorable/(Unfavorable) Change

Second Quarter Favorable/(Unfavorable) Change

(dollars in millions) 2025 2024 $ %

6 unchanged sentences

as a percentage of sales 57.2 % 58.2 %

Selling, general and administrative $ 73.7 $ 65.7 $ (8.0) (12.2) %

Engineering, selling and administrative $ 72.5 $ 65.0 $ (7.5) (11.5) %

as a percentage of sales 22.7 % 21.8 %

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$ 403.1 $ 399.9 $ 3.2 0.8 %

(a) Includes $21.8 million of backlog as of March 31, 2025 pertaining to the CryoWorks and Technifab acquisitions.

Sales increased by $24.4 million, or 8.6%, to $308.7 million in 2025, primarily driven by higher core sales of $15.2 million, or 5.3%, primarily due to higher pricing, the impact of the CryoWorks and Technifab acquisitions of $12.7 million, or 4.5%, offset by unfavorable foreign currency translation of $3.5 million, or 1.2%.

• Sales of Process Valves and Related Products increased by $19.5 million, or 9.1%, to $233.5 million in 2025, primarily driven by the impact of the CryoWorks and Technifab acquisitions and higher core sales.

• Sales of Commercial Valves increased by $4.5 million, or 13.7%, to $37.4 million in 2025, reflecting an increase in core sales driven by higher volumes and pricing.

Cost of sales increased by $10.5 million, or 6.5%, to $172.2 million, primarily related to the impact of the CryoWorks and Technifab acquisitions of $8.8 million, or 5.4%, higher material, labor and other manufacturing costs of $8.1 million, or 5.0%, higher volumes of $1.4 million, or 0.9%, offset by productivity gains of $5.6 million, or 3.5%, favorable foreign currency translation of $2.0 million, or 1.2%, and to a lesser extent favorable cost savings of $0.2 million, or 0.1%.

Selling, general and administrative expenses increased by $8.0 million, or 12.2%, to $73.7 million, reflecting an increase in administrative costs of $7.3 million, or 11.1%, primarily from the impact of the CryoWorks and Technifab acquisitions.

(a) Includes $8.2 million of backlog as of June 30, 2025 pertaining to the Technifab acquisition.

Sales increased by $21.3 million, or 7.2%, to $319.0 million in 2025, primarily driven by the impact of the CryoWorks and Technifab acquisitions of $9.5 million, or 3.2%, higher core sales of $7.6 million, or 2.6%, primarily due to higher pricing, and favorable foreign currency translation of $4.2 million, or 1.4%.

• Sales of Process Valves and Related Products increased by $14.4 million, or 6.3%, to $241.2 million in 2025, primarily driven by the impact of the CryoWorks and Technifab acquisitions and an increase in core sales driven by higher pricing.

• Sales of Commercial Valves increased by $3.4 million, or 10.1%, to $37.1 million in 2025, reflecting an increase in core sales driven by higher pricing.

• Sales of Pumps and Systems increased by $3.5 million, or 9.4%, to $40.7 million in 2025, reflecting an increase in core sales driven by higher volumes and pricing.

Cost of sales increased by $9.4 million, or 5.4%, to $182.6 million, primarily related to the higher material, labor and other manufacturing costs of $17.8 million, or 10.3%, the impact of the CryoWorks and Technifab acquisitions of $6.2 million, or 3.6%, unfavorable foreign currency translation of $2.7 million, or 1.6%, partially offset by productivity gains of $6.6 million, or 3.8%, lower volumes of $5.3 million, or 3.1%, favorable mix of $4.8 million or 2.8 %, and to a lesser extent cost savings of $0.6 million, or 0.3%.

Engineering, selling and administrative expenses increased by $7.5 million, or 11.5%, to $72.5 million, reflecting an increase in administrative costs of $5.3 million, or 8.2%, primarily from investments in core businesses and the impact of the CryoWorks and Technifab acquisitions, coupled with unfavorable foreign currency translation of $1.1 million or 1.7%.

Operating profit increas ed by $4.4 million, or 7.4%, to $63.9 million in 2025.

The increase is primarily due to continued strong pricing and higher productivity gains of $6.0 million or 10.5%, higher volumes of $0.9 million, or 1.6%, partially offset by unfavorable foreign currency translation of $0.7 million or 1.2%.

The increase is primarily due to higher productivity gains of $7.5 million, or 12.6%, coupled with favorable mix of $4.8 million, or 8.1%, partially offset by lower volumes of $5.0 million, or 8.4%, and higher investments in core businesses of $3.6 million, or 6.1%.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Results from Continuing Operations – Six Months Ended June 30,

The following information should be read in conjunction with our condensed consolidated financial statements and related notes.

All comparisons below refer to the first six months of 2025 versus the first six months of 2024, unless otherwise specified.

Year-to-Date Favorable/(Unfavorable) Change

(dollars in millions) 2025 2024 $ % (a)

Net sales $ 1,134.8 $ 1,038.8 $ 96.0 9.2 %

Cost of sales 654.9 620.5 (34.4) (5.5) %

as a percentage of sales 57.7 % 59.7 %

Engineering, selling and administrative 275.9 247.7 (28.2) (11.4) %

as a percentage of sales 24.3 % 23.8 %

Operating profit 204.0 170.6 33.4 19.6 %

Operating margin 18.0 % 16.4 %

Other income (expense):

Interest income 6.1 2.5 3.6 144.0 %

Interest expense (8.8) (14.6) 5.8 39.7 %

Miscellaneous income, net 2.1 0.1 2.0 NM

Total other expense, net (0.6) (12.0) 11.4 95.0 %

Income from continuing operations before income taxes 203.4 158.6 44.8 28.2 %

Provision for income taxes 44.8 33.5 (11.3) (33.7) %

Net income from continuing operations attributable to common shareholders $ 158.6 $ 125.1 $ 33.5 26.8 %

(a) A variance designated as “NM” indicates such calculation is not meaningful.

Sales increased by $96.0 million, or 9.2%, to $1,134.8 million in 2025.

The year-over-year change in sales included:

• an increase in core sales of $72.9 million, or 7.0%, which was driven primarily by higher pricing, and to a lesser extent, higher volume;

• an increase in sales related to the CryoWorks and Technifab acquisitions of $22.1 million, or 2.1%;

• favorable foreign currency translation of $1.0 million, or 0.1%.

Cost of sales increased by $34.4 million, or 5.5%, to $654.9 million in 2025.

The increase is primarily related to higher material, labor and other manufacturing costs $48.6 million, or 7.8%, the impact from the CryoWorks and Technifab acquisitions of $15.0 million, or 2.4%, higher volumes of $3.9 million, or 0.6%, partially offset by strong productivity gains $24.9 million, or 4.0%, favorable mix of $7.6 million, or 1.2%, and to a lesser extent cost savings of $1.4 million, or 0.2%.

Engineering, selling and administrative expenses increased by $28.2 million, or 11.4%, to $275.9 million in 2025, primarily driven by the increase in administrative expenses of $23.2 million, or 9.4%, coupled with higher selling expenses of $4.7 million, or 1.9%.

The increase in administrative expenses was primarily driven by the acquisitions of CryoWorks and Technifab and investments in core businesses.

Operating profit increased by $33.4 million, or 19.6%, to $204.0 million in 2025.

The increase primarily reflected strong productivity gains of $27.3 million, or 16.0%, favorable mix of $7.6 million, or 4.5%, higher volumes of $4.8 million, or 2.8%, partially offset by higher investments in core businesses of $7.1 million, or 4.2%.

Our effective tax rate for six months ending June 30, 2025, is higher than the prior year’s comparable period primarily due to higher statutorily non-deductible costs, partially offset by greater benefit related to share-based compensation.

Our effective tax rate for six months ended June 30, 2025 is higher than the statutory U.S.

state taxes, partially offset by excess share-based compensation benefits, tax credit utilization, and the statutory U.S.

deduction related to our non-U.S.

subsidiaries’ income.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Comprehensive Income

Six Months Ended

(in millions) 2025 2024

Net income before allocation to noncontrolling interests $ 193.5 $ 136.4

Components of other comprehensive income (loss), net of tax

Currency translation adjustment 60.0 (15.7)

Changes in pension and postretirement plan assets and benefit obligation, net of tax 5.4 6.0

Other comprehensive income, net of tax 65.4 (9.7)

Comprehensive income before allocation to noncontrolling interests 258.9 126.7

Noncontrolling interests in comprehensive income — (0.1)

Comprehensive income attributable to common shareholders $ 258.9 $ 126.8

For the six months ended June 30, 2025, comprehensive income before allocations to noncontrolling interests was $258.9 million compared to $126.7 million in the same period of 2024.

The $132.2 million increase was primarily driven by a $75.7 million favorable impact of foreign currency translation, primarily related to the euro and British pound, and higher net income before allocation to noncontrolling interests of $57.1 million.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Segment Results of Operations - Six Months Ended June 30,

Aerospace & Electronics

Year-to-Date Favorable/(Unfavorable) Change

(dollars in millions) 2025 2024 $ %

Net sales by product line:

Commercial Original Equipment $ 190.6 $ 174.1 $ 16.5 9.5 %

Military Original Equipment 144.5 138.3 6.2 4.5 %

Commercial Aftermarket Products 117.6 103.0 14.6 14.2 %

Military Aftermarket Products 54.4 41.4 13.0 31.4 %

Total net sales $ 507.1 $ 456.8 $ 50.3 11.0 %

Cost of sales $ 300.1 $ 285.6 $ (14.5) (5.1) %

as a percentage of sales 59.2 % 62.5 %

Engineering, selling and administrative $ 74.5 $ 70.2 $ (4.3) (6.1) %

as a percentage of sales 14.7 % 15.4 %

Operating profit $ 132.5 $ 101.0 $ 31.5 31.2 %

Operating margin 26.1 % 22.1 %

Sales increased $50.3 million, or 11.0%, to $507.1 million in 2025, primarily due to higher pricing and volumes of $50.1 million, or 11.0%.

• Sales of Commercial Original Equipment increased $16.5 million, or 9.5%, to $190.6 million in 2025, reflecting strong demand from aircraft manufacturers.

• Sales of Military Original Equipment increased $6.2 million, or 4.5%, to $144.5 million in 2025, primarily reflecting strong demand from defense and space customers.

• Sales of Commercial Aftermarket Products increased $14.6 million, or 14.2%, to $117.6 million in 2025, reflecting continued strong demand from the airlines due to improving air traffic.

• Sales of Military Aftermarket Products increased $13.0 million, or 31.4%, to $54.4 million in 2025, reflecting stronger demand for military products, partly in response to heightened geopolitical tensions globally.

Cost of sales increased by $14.5 million, or 5.1%, to $300.1 million in 2025, primarily reflecting higher material, labor and other manufacturing costs of $22.6 million, or 7.9%, increased volumes of $7.8 million, or 2.7%, partially offset by strong productivity gains of $12.8 million, or 4.5%, favorable mix of $2.9 million, or 1.0%, and to a lesser extent cost savings of $0.4 million, or 0.1%.

Engineering, selling and administrative expense increased by $4.3 million, or 6.1%, to $74.5 million in 2025, primarily related to higher selling costs of $3.7 million, or 5.3%.

Operating profit increased by $31.5 million, or 31.2%, to $132.5 million in 2025, t he increase primarily reflected higher volumes and net pricing of $13.9 million, or 13.8%, strong productivity gains of $13.7 million, or 13.6%, coupled with favorable mix of $2.9 million, or 2.9%.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Process Flow Technologies

Year-to-Date Favorable/(Unfavorable) Change

(dollars in millions) 2025 2024 $ %

Net sales by product line:

Process Valves and Related Products $ 474.7 $ 440.8 $ 33.9 7.7 %

Commercial Valves 74.5 66.6 7.9 11.9 %

Pumps and Systems 78.5 74.6 3.9 5.2 %

Total net sales $ 627.7 $ 582.0 $ 45.7 7.9 %

Cost of sales $ 354.8 $ 334.9 $ (19.9) (5.9) %

as a percentage of sales 56.5 % 57.5 %

Engineering, selling and administrative $ 146.2 $ 130.7 $ (15.5) (11.9) %

as a percentage of sales 23.3 % 22.5 %

Operating profit $ 126.7 $ 116.4 $ 10.3 8.8 %

Operating margin 20.2 % 20.0 %

Sales increased by $45.7 million, or 7.9%, to $627.7 million in 2025, primarily driven by higher core sales of $22.9 million, or 3.9%, primarily driven by higher pricing, the impact of the CryoWorks and Technifab acquisitions of $22.1 million, or 3.8%, and to a lesser extent favorable foreign currency translation of $0.7 million, or 0.1%.

• Sales of Process Valves and Related Products increased by $33.9 million, or 7.7%, to $474.7 million in 2025, primarily driven by the impact of the CryoWorks and Technifab acquisitions of $22.1 million, or 5.0%, and higher core sales of $12.3 million, or 2.8%, driven by higher pricing, partially offset by unfavorable foreign currency translation of $0.5 million, or 0.1%.

• Sales of Commercial Valves increased by $7.9 million, or 11.9%, to $74.5 million in 2025, primarily driven by increase in core sales of $6.4 million, or 9.6%, driven by higher pricing and volumes, and favorable foreign currency translation of $1.5 million, or 2.3%, as the British pound strengthened against the U.S.

• Sales of Pumps and Systems increased by 3.9 million, or 5.2%, to $78.5 million in 2025, reflecting an increase in core sales driven by higher pricing and volumes.

Cost of sales increased by $19.9 million, or 5.9%, to $354.8 million, primarily related to the higher material, labor and other manufacturing costs of $25.9 million, or 7.7%, the impact of the CryoWorks and Technifab acquisitions of $15.0 million, or 4.5%, partially offset by strong productivity gains of $12.1 million, or 3.6%, favorable mix of $4.8 million, or 1.4 %, lower volumes of $3.9 million, or 1.2%, and to a lesser extent cost savings of $1.0 million, or 0.3%.

Engineering, selling and administrative expense increased by $15.5 million, or 11.9%, to $146.2 million, reflecting an increase in administrative costs of $12.6 million, or 9.6%, primarily from investments in core businesses and the impact of the CryoWorks and Technifab acquisitions

Operating profit increased by $10.3 million, or 8.8%, to $126.7 million in 2025.

The increase is primarily due to strong productivity gains of $13.6 million, or 11.7 %, favorable mix of $4.8 million, or 4.1%, partially offset by the impact of lower volumes coupled with higher investments in core businesses of $7.9 million, or 6.8%.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Liquidity and Capital Resources

Three Months Ended

Six Months Ended

(in millions) 2025 2024

Net cash (used for) provided by :

Net cash provided by (used for):

Operating activities from continuing operations $ 58.8 $ (19.6)

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Increase (decrease) in cash and cash equivalents $ 25.5 $ (100.3)

(a) For the three months ended March 31, 2025, the cash provided by discontinued operations is from the sale of the Engineered Materials business.

(a) For the six months ended June 30, 2025, the cash provided by discontinued operations is from the sale of the Engineered Materials business.

See Note 3, “Discontinued Operations” for additional information.

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Operating Activities

Cash used for operating activities from continuing operations was $46.2 million in the first three months of 2025, as compared to $70.9 million during the same period last year.

The decrease in cash used for operating activities from continuing operations was primarily driven by the $27.2 million increase in net income from continuing operations adjusted for the exclusion of non-cash items.

Cash provided by operating activities from continuing operations was $58.8 million in the first six months of 2025, as compared to cash used for operating activities from continuing operations of $19.6 million during the same period last year.

The increase in cash provided by operating activities from continuing operations was primarily driven by the $46.6 million increase in net income from continuing operations adjusted for the exclusion of non-cash items and improved working capital of $30.3 million.

Investing Activities

Cash flows relating to investing activities from continuing operations consist primarily of cash used for capital expenditures and acquisitions of businesses.

Cash used for investing activities from continuing operations was $14.4 million in the first three months of 2025, as compared to $113.4 million in the comparable period of 2024.

The decrease in cash used for investing activities was primarily driven by the net cash paid in the prior period for the Vian Enterprises, Inc.

acquisition of $102.5 million, partially offset by a $6.2 million increase in capital expenditures.

Cash used for investing activities from continuing operations was $30.3 million in the first six months of 2025, as compared to $175.3 million in the comparable period of 2024.

The decrease in cash used for investing activities was primarily driven by the net cash paid of $163.2 million in the prior period for the acquisitions of Vian Enterprises, Inc.

and CryoWorks, Inc., partially offset by a $15.6 million increase in capital expenditures.

Capital expenditures are made primarily for increasing capacity, replacing equipment, supporting new product development, and improving information systems.

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Financing cash flows consist primarily of dividend payments to shareholders, repayments of indebtedness, proceeds from our Credit Facilities and proceeds from the issuance of common stock in connection with employee stock plans.

Cash used for financing activities was $23.6 million during the first three months of 2025 compared to cash provided by financing activities of $87.9 million in the comparable period of 2024.

The increase in cash used for financing activities was driven by a $108.1 million decrease in net borrowings.

Cash used for financing activities was $235.3 million during the first six months of 2025 compared to cash provided by financing activities of $99.6 million in the comparable period of 2024.

The increase in cash used for financing activities was driven by a $138.1 million increase in debt repayments and $190.0 million of borrowings under the Revolving Facility in 2024.

Quantitative and Qualitative Disclosures About Market Risk

1 unchanged sentence

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