What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-10-29 compared with 2025-07-31 · 76 added, 68 removed, 243 unchanged (37% of the section changed)

14 unchanged sentences

tariff policy and retaliatory tariffs on our business, financial market conditions, end markets for our products, fluctuations in raw material prices, inflationary pressures, supply chain disruptions and access to key raw materials, higher interest rates and the financial condition of our customers and suppliers;

• Our ability to successfully identify, value and integrate acquisitions and to realize synergies and opportunities for growth and innovation;

• Economic, social and political instability, currency fluctuation and other risks of doing business outside of the United States;

• Competitive pressures, including the need for technology improvement, successful new product development and introduction, impact from pricing strategies and/or any inability to pass increased costs of raw materials, including tariffs, to customers;

• Our ability to successfully identify, value and integrate acquisitions and to realize synergies and opportunities for growth and innovation;

• The impact of commercial air traffic levels which are affected by a different array of factors including pandemic health concerns, general economic conditions and global corporate travel spending, or terrorism;

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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.

On July 4, 2025, the “One Big Beautiful Bill Act” was signed into law.

This legislation did not have a material impact on our income tax expense for the three and nine months ended September 30, 2025.

The Company is continuing to evaluate the financial statement impact of these new provisions on future reporting periods.

Divestiture of Engineered Materials

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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.

We determined that the Engineered Materials segment met the criteria of being reported as a discontinued operation as of September 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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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.

For the three months ended September 30, 2025 and 2024, we incurred expenses of $0.5 million and $3.7 million, respectively, and for the nine months ended September 30, 2025 and 2024, we incurred expenses of $6.3 million and $3.7 million, respectively, related to damages caused by the hurricane, which included professional fees to restore and maintain the site.

For the period ended September 30, 2025, we received insurance recovery proceeds of $9.1 million.

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

On a cumulative basis, we incurred expenses of $29.6 million related to damages caused by the hurricane and received corresponding insurance recoveries of $29.1 million.

During the three and nine months ended September 30, 2025, we also received insurance proceeds for lost profits of $2.7 million and $6.7 million, respectively, 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 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.

In 2025, we expect a total year-over-year sales increase of approximately 7% to 8%, driven by approximately 4% to 6% core sales growth, an acquisition benefit of approximately 1% to 2%, and a 1% contribution 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.

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Aerospace & Electronics

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

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

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

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Process Flow Technologies

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.

In 2025, we expect Process Flow Technologies sales to increase in the low single-digit percent range driven by slight core sales growth, a 2% to 3% contribution from the Technifab and CryoWorks acquisitions, and an approximately 1.5% 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.

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

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

Results from Continuing Operations – Three Months Ended September 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 second quarter 2025 versus the second quarter 2024, unless otherwise specified.

Second Quarter Favorable/(Unfavorable) Change

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

Third Quarter Favorable/(Unfavorable) Change

(dollars in millions) 2025 2024 $ %

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• an increase in core sales of $30.5 million, or 5.6%, 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%;

• an increase in sales related to the Technifab acquisition of $5.1 million, or 0.9%;

• favorable foreign currency translation of $5.3 million, or 1.0%.

Cost of sales increased by $16.6 million, or 5.2%, to $337.9 million in 2025.

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.

The increase is primarily related to higher material, labor and other manufacturing costs of $34.1 million, or 10.6%, the impact from the Technifab acquisition of $3.5 million, or 1.1%, unfavorable foreign currency translation of $3.0 million, or 0.9%, partially offset by strong productivity gains $13.9 million, or 4.3%, lower volumes of $6.6 million, or 2.1%, cost savings of $2.2 million, or 0.7% and favorable mix of $1.5 million, or 0.5%.

Engineering, selling and administrative expenses increased by $4.9 million, or 3.8%, to $132.9 million in 2025, reflecting a $4.5 million, or 3.5%, increase in administrative expenses.

The increase was primarily driven by investments in core businesses and the acquisition of Technifab.

Operating profit increased by $19.4 million, or 19.6%, to $118.4 million in 2025.

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.

The increase primarily reflected strong productivity gains of $15.0 million, or 15.2%, higher net pricing of $4.1 million, or 4.1%, cost savings of $3.0 million, or 3.0%, favorable mix of $1.5 million, or 1.5%, partially offset by lower volumes of $4.9 million, or 4.9%.

Our effective tax rate for the three months ended September 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 and lower non-U.S.

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

federal tax rate of 21%, 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.

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

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Three Months Ended

September 30,

(in millions) 2025 2024

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Comprehensive income attributable to common shareholders $ 85.9 $ 105.5

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.

For the three months ended September 30, 2025, comprehensive income before allocation to noncontrolling interests was $85.9 million compared to $105.6 million in the same period of 2024.

The $19.7 million decrease was primarily driven by $33.5 million year-over-year unfavorable impact of foreign currency translation, primarily related to the euro and British pound, offset by higher net income before allocation to noncontrolling interests of $14.1 million.

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

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

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

Aerospace & Electronics

Second Quarter Favorable/(Unfavorable) Change

Third Quarter Favorable/(Unfavorable) Change

(dollars in millions) 2025 2024 $ %

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Backlog $ 1,054.1 $ 833.3 $ 220.8 26.5 %

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 increased $31.1 million, or 13.0%, to $270.2 million in 2025, primarily due to higher pricing and volumes of $30.6 million, or 12.8%, and to a lesser extent favorable foreign currency translation of $0.5 million, or 0.2%.

• Sales of Commercial Original Equipment increased $9.0 million, or 9.9%, to $99.5 million in 2025, reflecting strong demand from aircraft manufacturers.

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• Sales of Military Aftermarket Products increased $2.7 million, or 11.2%, to $26.9 million in 2025, reflecting stronger demand for military products, partly in response to heightened geopolitical tensions globally.

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.

Cost of sales increased by $17.9 million, or 12.4%, to $162.7 million in 2025, primarily reflecting increased material, labor and other manufacturing costs of $19.6 million, or 13.5%, higher volumes of $4.0 million, or 2.8%, unfavorable mix of $3.0 million, or 2.1%, partially offset by strong productivity gains of $7.5 million, or 5.2%, and cost savings of $1.4 million, or 1.0%.

Engineering, selling and administrative expenses increased by $0.4 million, or 1.0%, to $39.8 million in 2025, primarily related to higher selling and administrative costs of $1.6 million, or 4.1%, offset by lower engineering costs of $1.2 million, or 3.0%.

Operating profit increased by $12.8 million, or 23.3%, to $67.7 million in 2025.

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%.

The increase primarily reflected strong productivity gains of $7.8 million, or 14.2%, the impact from higher volumes of $5.6 million, or 10.2%, and cost savings of $1.8 million, or 3.3%, partially offset by unfavorable mix of $3.0 million, or 5.5%.

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

Process Flow Technologies

Second Quarter Favorable/(Unfavorable) Change

Third Quarter Favorable/(Unfavorable) Change

(dollars in millions) 2025 2024 $ %

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$ 383.0 $ 392.0 $ (9.0) (2.3) %

(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%.

(a) Includes $7.3 million of backlog as of September 30, 2025 pertaining to the Technifab acquisition.

Sales increased by $9.8 million, or 3.2%, to $319.0 million in 2025, primarily driven by the impact of Technifab acquisition of $5.1 million, or 1.6% and favorable foreign currency translation of $4.7 million, or 1.6%.

• Sales of Process Valves and Related Products increased by $3.3 million, or 1.4%, to $238.2 million in 2025, primarily driven by the impact of the Technifab acquisition.

• Sales of Commercial Valves increased by $1.4 million, or 3.8%, to $38.2 million in 2025, primarily driven by the impact of favorable foreign currency translation.

• Sales of Pumps and Systems increased by $5.1 million, or 13.6%, to $42.6 million in 2025, reflecting an increase in core sales driven by higher pricing and volumes.

Cost of sales decreased by $1.3 million, or 0.7%, to $175.2 million, primarily related to lower volumes of $10.7 million, or 6.1%, higher productivity gains of $6.4 million, or 3.6%, favorable mix of $4.4 million, or 2.5%, and to a lesser extent cost savings of $0.7 million, or 0.4%, offset by higher material, labor and other manufacturing costs of $14.8 million, or 8.4%, the impact of the Technifab acquisition of $3.5 million, or 2.0% and unfavorable foreign currency translation of $2.8 million, or 1.6%.

Engineering, selling and administrative expenses increased by $5.8 million, or 8.6%, to $73.0 million, reflecting an increase in administrative costs of $4.9 million, or 7.3%, primarily from investments in core businesses and the impact of the Technifab acquisition.

Operating profit increas ed by $5.3 million, or 8.1%, to $70.8 million in 2025.

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%.

The increase is primarily due to higher productivity gains of $7.2 million, or 11.0%, coupled with favorable mix of $4.4 million, or 6.7%, higher net pricing of $2.5 million, or 3.8%, cost savings of $1.2 million, or 1.8%, partially offset by lower volumes of $10.5 million, or 16.0%.

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

Results from Continuing Operations – Six Months Ended June 30,

Results from Continuing Operations – Nine Months Ended September 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.

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

Year-to-Date Favorable/(Unfavorable) Change

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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 core sales of $103.4 million, or 6.5%, which was driven primarily by higher pricing;

• an increase in sales related to the CryoWorks and Technifab acquisitions of $27.2 million, or 1.7%;

1 unchanged sentence

Cost of sales increased by $51.0 million, or 5.4%, to $992.8 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%.

The increase is primarily related to higher material, labor and other manufacturing costs $82.7 million, or 8.8%, the impact from the CryoWorks and Technifab acquisitions of $18.4 million, or 2.0%, unfavorable foreign currency translation of $3.8 million, or 0.4%, partially offset by strong productivity gains $38.8 million, or 4.1%, favorable mix of $9.1 million, or 1.0%, cost savings of $3.3 million, or 0.4% and lower volumes of $2.7 million, or 0.3%.

Engineering, selling and administrative expenses increased by $33.1 million, or 8.8%, to $408.8 million in 2025, primarily driven by the increase in administrative expenses of $27.8 million, or 7.4%, coupled with higher selling expenses of $4.4 million, or 1.2%.

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

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

Operating profit increased by $52.8 million, or 19.6%, to $322.4 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.

The increase primarily reflected strong productivity gains of $42.4 million, or 15.7%, favorable mix of $9.1 million, or 3.4%, cost savings of $3.9 million, or 1.4%, partially offset by higher material, labor and other manufacturing costs and investments in core businesses, net of higher pricing of $3.1 million, or 1.1%.

Our effective tax rate for the nine months ended September 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 and lower non-U.S.

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

federal tax rate of 21%, primarily due to earnings in jurisdictions with statutory tax rates higher than the United States, expenses that are statutorily

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

non-deductible for income tax purposes and the impact of U.S.

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

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subsidiaries’ income.

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

Comprehensive Income

Six Months Ended

Nine Months Ended

September 30,

(in millions) 2025 2024

Net income before allocation to noncontrolling interests $ 284.9 $ 213.7

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

Components of other comprehensive income, net of tax

Currency translation adjustment 51.8 9.6

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Comprehensive income attributable to common shareholders $ 344.8 $ 232.3

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.

For the nine months ended September 30, 2025, comprehensive income before allocations to noncontrolling interests was $344.8 million compared to $232.3 million in the same period of 2024.

The $112.5 million increase was primarily driven by a $42.2 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 $71.2 million.

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

Segment Results of Operations - Six Months Ended June 30,

Segment Results of Operations - Nine Months Ended September 30,

Aerospace & Electronics

18 unchanged sentences

• Sales of Military Aftermarket Products increased $15.7 million, or 23.9%, to $81.3 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%.

Cost of sales increased by $32.4 million, or 7.5%, to $462.8 million in 2025, primarily reflecting higher material, labor and other manufacturing costs of $42.2 million, or 9.8%, increased volumes of $11.9 million, or 2.8%, partially offset by strong productivity gains of $20.3 million, or 4.7%, and to a lesser extent cost savings of $1.8 million, or 0.4%.

Engineering, selling and administrative expenses increased by $4.7 million, or 4.3%, to $114.3 million in 2025, primarily related to higher selling costs and administrative costs of $7.7 million, or 7.0%, offset by lower engineering costs of $3.0 million, or 2.7%.

Operating profit increased by $44.3 million, or 28.4%, to $200.2 million in 2025, t he increase primarily reflected strong productivity gains of $21.6 million, or 13.9%, higher volumes and net pricing of $19.8 million, or 12.7%, coupled with cost savings of $2.7 million, or 1.7%.

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

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Operating margin 20.9 % 20.4 %

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 increased by $55.5 million, or 6.2%, to $946.7 million in 2025, primarily driven by the impact of the CryoWorks and Technifab acquisitions of $27.2 million, or 3.1%, higher core sales of $22.7 million, or 2.5%, primarily driven by higher pricing, coupled with favorable foreign currency translation of $5.6 million, or 0.6%.

• Sales of Process Valves and Related Products increased by $37.3 million, or 5.5%, to $712.9 million in 2025, primarily driven by the impact of the CryoWorks and Technifab acquisitions of $27.2 million, or 4.0%, and higher core sales of $7.3 million, or 1.1%, driven by higher pricing and favorable foreign currency translation of $2.8 million, or 0.4%.

• Sales of Commercial Valves increased by $9.3 million, or 9.0%, to $112.7 million in 2025, primarily driven by increase in core sales of $6.2 million, or 6.0%, driven by higher pricing and volumes, and favorable foreign currency translation of $3.1 million, or 3.0%, as the British pound strengthened against the U.S.

• Sales of Pumps and Systems increased by 8.9 million, or 7.9%, to $121.1 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

Cost of sales increased by $18.6 million, or 3.6%, to $530.0 million, primarily related to the higher material, labor and other manufacturing costs of $40.7 million, or 8.0%, the impact of the CryoWorks and Technifab acquisitions of $18.4 million, or 3.6%, unfavorable foreign currency translation of $3.5 million, or 0.7%, partially offset by strong productivity gains of $18.5 million, or 3.6%, lower volumes of $14.6 million, or 2.9%, favorable mix of $9.2 million, or 1.8%, and to a lesser extent cost savings of $1.7 million, or 0.3%.

Engineering, selling and administrative expenses increased by $21.3 million, or 10.8%, to $219.2 million, reflecting an increase in administrative costs of $17.5 million, or 8.8%, primarily from investments in core businesses and the impact of the CryoWorks and Technifab acquisitions.

Operating profit increased by $15.6 million, or 8.6%, to $197.5 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%.

The increase is primarily due to strong productivity gains of $20.8 million, or 11.4%, favorable mix of $9.2 million, or 5.1%, partially offset by the impact of lower volumes of $14.6 million, or 8.0%.

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

Liquidity and Capital Resources

Six Months Ended

Nine Months Ended

September 30,

(in millions) 2025 2024

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Increase (decrease) in cash and cash equivalents $ 81.5 $ (71.4)

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

(a) For the nine months ended September 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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Our current cash balance, together with cash we expect to generate from future operations and borrowing capacity available under our revolving credit facility, is expected to be sufficient to finance our short- and long-term capital requirements, as well as to fund expected pension contributions.

In September 2025, we entered into a new senior unsecured credit agreement, which provides for a $900 million, 5-year revolving credit facility and a $900 million, 5-year delayed draw term loan facility.

The term facility will be used to fund (together with cash on hand) the consummation of the Company’s previously announced acquisition of PSI.

See Note 13, “Financing,” in the Notes to the Condensed Consolidated Financial Statements for additional information.

Operating Activities

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.

Cash provided by operating activities from continuing operations was $189.0 million in the first nine months of 2025, as compared to $55.8 million during the same period last year.

The increase in cash provided by operating activities from continuing operations was primarily driven by the $66.3 million increase in net income from continuing operations adjusted for the exclusion of non-cash items and improved working capital of $68.2 million.

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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 $30.3 million in the first six months of 2025, as compared to $175.3 million in the comparable period of 2024.

Cash used for investing activities from continuing operations was $43.4 million in the first nine months of 2025, as compared to $178.9 million in the comparable period of 2024.

The decrease in cash used for investing activities was primarily driven by the net cash paid of $158.6 million in the prior period for the acquisitions of Vian Enterprises, Inc.

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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 $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.

Cash used for financing activities was $296.9 million during the first nine months of 2025 compared to cash provided by financing activities of $44.5 million in the comparable period of 2024.

The increase in cash used for financing activities was driven by a $140.6 million increase in debt repayments, $190.0 million of borrowings under our revolving facility in 2024 and payment of debt refinancing costs of $3.8 million related to our new 5-year revolving credit facility in 2025.

Quantitative and Qualitative Disclosures About Market Risk

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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