What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-04-30 compared with 2025-10-29 · 87 added, 203 removed, 116 unchanged (71% of the section changed)

6 unchanged sentences

Amounts in the following discussion are presented in millions, except employee, share and per share data, or unless otherwise stated.

Due to rounding, numbers presented throughout this report may not add up precisely to totals we provide, and percentages may not precisely reflect the absolute figures.

We have based the forward-looking statements relating to our operations on our current expectations, estimates and projections about us and the markets we serve.

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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;

• Economic, social and political instability, geopolitical uncertainties including the ongoing conflict in the Middle East, currency fluctuation and other risks of doing business outside of the United States;

• 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;

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

• 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;

• 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;

• A reduction in congressional appropriations that affect defense spending;

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• Investment performance of our pension plan assets and fluctuations in interest rates, which may affect the amount and timing of future pension plan contributions;

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

• Adverse effects as a result of further increases in environmental remediation activities, costs and related claims.

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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” 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

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 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.

See Item 1 under Note 3, “Discontinued Operations,” in the Notes to Condensed Consolidated Financial Statements for additional detail.

Marion Site Hurricane and Recovery

In September 2024, our manufacturing site in Marion, North Carolina was directly affected by flooding from Hurricane Helene.

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 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 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.

Acquisition of Druck, Panametrics and Reuter-Stokes

On January 1, 2026, the Company completed the acquisition of Druck, Panametrics and Reuter-Stokes.

Collectively, they are leading providers of sensor-based technologies for aerospace, nuclear and process industries.

The Druck brand is integrated into the Aerospace & Advanced Technologies segment.

Panametrics and Reuter-Stokes brands are integrated into the Process Flow Technologies segment.

Other Acquisition

On January 1, 2026, the Company completed the acquisition of a leading provider of inline process control optical measurement solutions for biopharma, pharmaceutical and other demanding markets.

The acquired company has been integrated into our Process Flow Technologies segment.

On February 20, 2026, the U.S.

Supreme Court ruled that tariffs imposed under the International Emergency Economic Powers Act ("IEEPA") were not authorized by the statute.

The Company is the importer of record for certain raw materials and products that were previously subject to such tariffs under IEEPA.

Because the process, timing, and amount of any tariff recovery are uncertain, we have not recorded any benefit from a potential refund at this time.

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 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.

(“Technifab”) and CryoWorks, Inc.

(“CryoWorks”) acquisitions.

Aerospace & Electronics

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.

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 and higher pricing.

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

Demand in these industries is affected by fluctuations in domestic and international economic conditions, geopolitical instability including the ongoing conflict in the Middle East, as well as currency fluctuations, commodity costs, tariff impacts, and a variety of other factors.

For 2026, we expect total sales growth in the low-to-mid 20%s, driven by the Druck, Panametrics, Reuter-Stokes, and Optek acquisitions, as well as mid-single digit core sales growth and a slight foreign exchange benefit.

We expect an improvement in operating profit driven primarily by productivity benefits and operating leverage on higher volumes, lower transaction related expenses, higher pricing net of inflation and contributions from the Druck, Panametrics, Reuter-Stokes, and Optek acquisitions.

Aerospace & Advanced Technologies

In 2026, we expect Aerospace & Advanced Electronics sales to increase in the low to mid 20% range driven by high-single digit core sales growth, a low-to-mid-teen percentage contribution from the Druck acquisition and a slight benefit from favorable foreign exchange.

We expect an improvement in our commercial OEM business driven by higher aircraft build rates, and increased demand for our military OEM and aftermarket business driven by continued global geopolitical uncertainty.

We expect growth in our military aftermarket business to be approximately offset by softer commercial aftermarket sales reflecting elevated fuel prices and the conflict in the Middle East.

We expect segment operating profit to increase compared to 2025 due to higher volumes, positive net price and the contribution from the Druck acquisition.

However, we expect operating margin to decline modestly compared to 2025 driven by the dilutive impact of the Druck acquisition.

Process Flow Technologies

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.

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

In 2026, we expect Process Flow Technologies sales to increase in the low-to-mid 20%s driven by flat-to-low single digit core sales growth, a low-20% contribution from the Panametrics, Reuter-Stokes, and Optek acquisitions, as well as a 1.5% benefit from foreign exchange.

We expect core sales to be driven by demand in the pharmaceutical, water and waste-water and cryogenic markets offset by ongoing sluggishness in the chemical markets.

We expect segment operating profit to increase compared to 2025 due primarily to the contribution from the Panametrics, Reuter-Stokes, and Optek acquisitions.

However, we expect operating margin to decline modestly compared to 2025 driven primarily by the dilutive impact of the Panametrics, Reuter-Stokes, and Optek acquisitions.

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

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

Results from Continuing Operations – Three Months Ended March 31, 2026 and 2025

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

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

Third Quarter Favorable/(Unfavorable) Change

All comparisons below refer to the first quarter 2026 versus the first quarter 2025, unless otherwise specified.

First Quarter Favorable/(Unfavorable) Change

(dollars in millions) 2026 2025 $ %

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Interest expense (16.8) (4.5) (12.3) (273.3) %

Miscellaneous income, net 0.8 0.8 — — %

Total other income (expense) net 2.0 (5.0) 7.0 140.0 %

Miscellaneous income (expense), net 0.2 (1.0) 1.2 120.0 %

Total other expense, net (15.0) (2.3) (12.7) (552.2) %

Income from continuing operations before income taxes 85.1 98.8 (13.7) (13.9) %

3 unchanged sentences

The period-over-period change in sales included:

• 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 Technifab acquisition of $5.1 million, or 0.9%;

• an increase in sales related to the Druck, Panametrics, Reuter-Stokes and Optek acquisitions of $102.2 million, or 18.3%;

• an increase in core sales of $21.4 million, or 3.8%, which was driven by higher pricing;

• favorable foreign currency translation of $15.2 million, or 2.7%.

Cost of sales increased by $95.1 million, or 29.7%, to $415.1 million in 2026.

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 $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.

The increase primarily reflects the impact of the Druck, Panametrics, Reuter-Stokes and Optek acquisitions of $73.4 million, or 22.9%, higher material, labor and other manufacturing costs of $23.1 million, or 7.2%, unfavorable mix of $10.5 million, or 3.3%, unfavorable foreign currency translation of $9.0 million, or 2.8%, partially offset by strong productivity gains of $14.0 million, or 4.4%, lower volumes of $4.5 million, or 1.4%, and cost savings of $2.4 million, or 0.8%.

Engineering, selling and administrative expenses increased by $44.7 million, or 32.7%, to $181.2 million in 2026, primarily driven by the acquisitions of Druck, Panametrics, and Reuter-Stokes, including the transaction related costs associated with them.

Operating profit decreased by $1.0 million, or 1.0%, to $100.1 million in 2026.

The decrease primarily reflected unfavorable mix of $10.5 million, or 10.4%, lower volumes of $4.1 million, or 4.1%, net investments in core businesses of $3.5 million, or 3.5%, partially offset by strong productivity gains of $15.4 million, or 15.2%, and favorable foreign currency translation of $1.7 million, or 1.7%.

Our effective tax rate for the three months ended March 31, 2026 is higher than the prior year’s comparable period, primarily due to an increase in non-U.S.

taxes and statutorily non-deductible costs.

Our effective tax rate for the three months ended March 31, 2026 is approximately equal to 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.

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) 2026 2025

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Changes in pension and postretirement plan assets and benefit obligation, net of tax 2.4 2.7

Other comprehensive income (loss), net of tax (5.5) 28.3

Other comprehensive (loss) income, net of tax (16.2) 21.0

Comprehensive income before allocation to noncontrolling interests 50.9 128.1

1 unchanged sentence

Comprehensive income attributable to common shareholders $ 50.9 $ 128.1

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.

For the three months ended March 31, 2026, comprehensive income before allocation to noncontrolling interests was $50.9 million compared to $128.1 million in the same period of 2025.

The $77.2 million decrease was primarily driven by lower net income before allocation to noncontrolling interests of $40.0 million and $36.9 million year-over-year unfavorable impact of foreign currency translation, primarily related to the euro and British pound.

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

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

Aerospace & Electronics

Third Quarter Favorable/(Unfavorable) Change

Segment Results of Operations - Three Months Ended March 31, 2026 and 2025

Aerospace & Advanced Technologies

First Quarter Favorable/(Unfavorable) Change

(dollars in millions) 2026 2025 $ %

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Military Aftermarket Products 29.1 22.7 6.4 28.2 %

Other $ 25.0 $ — $ 25.0 NM

Total net sales $ 318.3 $ 248.9 $ 69.4 27.9 %

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Supplemental Data:

Backlog $ 1,054.1 $ 833.3 $ 220.8 26.5 %

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.

• Sales of Military Original Equipment increased $6.8 million, or 9.7%, to $76.8 million in 2025, primarily reflecting strong demand from defense and space customers.

• Sales of Commercial Aftermarket Products increased $12.6 million, or 23.2%, to $67.0 million in 2025, reflecting continued strong demand from the airlines due to improving air traffic.

$ 1,188.6 $ 960.1 $ 228.5 23.8 %

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

(b) Includes $93.4 million of backlog as of March 31, 2026 pertaining to the Druck acquisition.

Sales increased $69.4 million, or 27.9%, to $318.3 million in 2026, primarily driven from the impact of the Druck acquisition of $42.9 million, or 17.2%, higher core sales of $23.4 million, or 9.4%, and favorable foreign currency translation of $3.1 million, or 1.2%.

• Sales of Commercial Original Equipment increased $32.6 million, or 34.7%, to $126.6 million in 2026, reflecting the impact of the Druck acquisition and strong demand from aircraft manufacturers.

• Sales of Military Original Equipment increased $12.8 million, or 17.8%, to $84.6 million in 2026, reflecting strong demand from defense and space customers and the impact of the Druck acquisition.

• Sales of Commercial Aftermarket Products decreased $7.4 million, or 12.3%, to $53.0 million in 2026, due to lower initial provisioning and commercial spares replenishment.

• Sales of Military Aftermarket Products increased $6.4 million, or 28.2%, to $29.1 million in 2026, reflecting stronger demand for military products, partly in response to heightened geopolitical tensions globally.

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 $7.8 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%.

• Other sales increased $25.0 million, reflecting the impact of the Druck acquisition.

Cost of sales increased by $48.4 million, or 32.7%, to $196.2 million in 2026, primarily reflecting the impact of the Druck acquisition of $28.8 million, or 19.5%, increased material, labor and other manufacturing costs of $11.3 million, or 7.6%, unfavorable mix of $11.0 million, or 7.4%, and higher volumes of $2.6 million, or 1.8%, partially offset by strong productivity gains of $5.9 million, or 4.0%.

Engineering, selling and administrative expenses increased by $14.1 million, or 38.6%, to $50.6 million in 2026, primarily driven by the acquisition of Druck.

Operating profit increased by $6.9 million, or 10.7%, to $71.5 million in 2026, primarily reflecting productivity gains, higher volumes and strong net price, inclusive of tariffs, and cost savings of $16.4 million, or 25.4%, favorable contribution from the acquisition of Druck of $0.9 million, or 1.4%, offset by unfavorable mix of $11.0 million, or 17.0%.

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

Process Flow Technologies

Third Quarter Favorable/(Unfavorable) Change

First Quarter Favorable/(Unfavorable) Change

(dollars in millions) 2026 2025 $ %

12 unchanged sentences

$ 606.2 $ 389.9 $ 216.3 55.5 %

(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.

(a) Includes $222.2 million of backlog as of March 31, 2026 pertaining to the Panametrics, Reuter-Stokes, and Optek acquisitions.

Sales increased by $69.4 million, or 22.5%, to $378.1 million in 2026, primarily driven by the impact of Panametrics, Reuter-Stokes and Optek acquisitions of $59.3 million, or 19.2%, favorable foreign currency translation of $12.1 million, or 3.9% and to a lesser extent offset by lower core sales of $2.0 million, or 0.6%.

• Sales of Process Valves and Related Products increased by $61.7 million, or 26.4%, to $295.2 million in 2026, primarily driven by the impact of the Panametrics, Reuter-Stokes and Optek acquisitions of $59.3 million, or 25.4%, favorable foreign currency translation of $9.1 million, or 3.9%, and to a lesser extent offset by lower core sales of $6.7 million, or 2.9%, driven by lower volumes.

• Sales of Commercial Valves increased by $3.6 million, or 9.6%, to $41.0 million in 2026, primarily driven by the impact of favorable foreign currency translation.

• Sales of Pumps and Systems increased by $4.1 million, or 10.8%, to $41.9 million in 2026, 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.

Cost of sales increased by $46.7 million, or 27.1%, to $218.9 million, primarily driven by the impact of the Panametrics, Reuter-Stokes and Optek acquisitions of $44.6 million, or 25.9%, higher material, labor and other manufacturing costs, inclusive of tariffs, of $11.7 million, or 6.8%, unfavorable foreign currency translation of $7.3 million, or 4.2%, partially offset by strong productivity gains of $8.1 million, or 4.7%, lower volumes of $7.1 million, or 4.1%, and to a lesser extent cost savings and net favorable mix of $1.8 million, or 1.0%.

Engineering, selling and administrative expenses increased by $21.3 million, or 28.9%, to $95.0 million, primarily driven by the acquisitions of Panametrics, Reuter-Stokes and Optek.

Operating profit increas ed by $1.4 million, or 2.2%, to $64.2 million in 2026.

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 – 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 nine months of 2025 versus the first nine months of 2024, unless otherwise specified.

Year-to-Date Favorable/(Unfavorable) Change

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

Net sales $ 1,724.0 $ 1,587.1 $ 136.9 8.6 %

Cost of sales 992.8 941.8 (51.0) (5.4) %

as a percentage of sales 57.6 % 59.3 %

Engineering, selling and administrative 408.8 375.7 (33.1) (8.8) %

as a percentage of sales 23.7 % 23.7 %

Operating profit 322.4 269.6 52.8 19.6 %

Operating margin 18.7 % 17.0 %

Other income (expense):

Interest income 8.3 4.0 4.3 107.5 %

Interest expense (9.8) (21.9) 12.1 55.3 %

Miscellaneous income, net 2.9 0.9 2.0 NM

Total other expense, net 1.4 (17.0) 18.4 108.2 %

Income from continuing operations before income taxes 323.8 252.6 71.2 28.2 %

Provision for income taxes 73.8 54.7 (19.1) (34.9) %

Net income from continuing operations attributable to common shareholders $ 250.0 $ 197.9 $ 52.1 26.3 %

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

Sales increased by $136.9 million, or 8.6%, to $1,724.0 million in 2025.

The year-over-year change in sales included:

• 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%;

• favorable foreign currency translation of $6.3 million, or 0.4%.

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 $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 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 $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.

deduction related to our non-U.S.

subsidiaries’ income.

Comprehensive Income

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, net of tax

Currency translation adjustment 51.8 9.6

Changes in pension and postretirement plan assets and benefit obligation, net of tax 8.1 9.0

Other comprehensive income, net of tax 59.9 18.6

Comprehensive income before allocation to noncontrolling interests 344.8 232.3

Noncontrolling interests in comprehensive income — —

Comprehensive income attributable to common shareholders $ 344.8 $ 232.3

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 - Nine Months Ended September 30,

Aerospace & Electronics

Year-to-Date Favorable/(Unfavorable) Change

(dollars in millions) 2025 2024 $ %

Net sales by product line:

Commercial Original Equipment $ 290.1 $ 264.6 $ 25.5 9.6 %

Military Original Equipment 221.3 208.3 13.0 6.2 %

Commercial Aftermarket Products 184.6 157.4 27.2 17.3 %

Military Aftermarket Products 81.3 65.6 15.7 23.9 %

Total net sales $ 777.3 $ 695.9 $ 81.4 11.7 %

Cost of sales $ 462.8 $ 430.4 $ (32.4) (7.5) %

as a percentage of sales 59.5 % 61.8 %

Engineering, selling and administrative $ 114.3 $ 109.6 $ (4.7) (4.3) %

as a percentage of sales 14.7 % 15.7 %

Operating profit $ 200.2 $ 155.9 $ 44.3 28.4 %

Operating margin 25.8 % 22.4 %

Sales increased $81.4 million, or 11.7%, to $777.3 million in 2025, primarily due to higher pricing and volumes of $80.7 million, or 11.6%.

• Sales of Commercial Original Equipment increased $25.5 million, or 9.6%, to $290.1 million in 2025, reflecting strong demand from aircraft manufacturers.

• Sales of Military Original Equipment increased $13.0 million, or 6.2%, to $221.3 million in 2025, primarily reflecting strong demand from defense and space customers.

• Sales of Commercial Aftermarket Products increased $27.2 million, or 17.3%, to $184.6 million in 2025, reflecting continued strong demand from the airlines due to improving air traffic.

• 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 $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

Process Flow Technologies

Year-to-Date Favorable/(Unfavorable) Change

(dollars in millions) 2025 2024 $ %

Net sales by product line:

Process Valves and Related Products $ 712.9 $ 675.6 $ 37.3 5.5 %

Commercial Valves 112.7 103.4 9.3 9.0 %

Pumps and Systems 121.1 112.2 8.9 7.9 %

Total net sales $ 946.7 $ 891.2 $ 55.5 6.2 %

Cost of sales $ 530.0 $ 511.4 $ (18.6) (3.6) %

as a percentage of sales 56.0 % 57.4 %

Engineering, selling and administrative $ 219.2 $ 197.9 $ (21.3) (10.8) %

as a percentage of sales 23.2 % 22.2 %

Operating profit $ 197.5 $ 181.9 $ 15.6 8.6 %

Operating margin 20.9 % 20.4 %

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 $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 $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%.

T he increase is primarily due to strong net price, inclusive of tariffs, favorable foreign exchange, productivity gains and cost savings of $16.1 million, or 25.6%, partially offset by the net impact of acquisitions driven primarily by amortization of acquisition-related intangibles and transaction related expenses, lower volumes, and mix impacts of $14.7 million, or 23.4%.

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

Liquidity and Capital Resources

Nine Months Ended

September 30,

Three Months Ended

(in millions) 2026 2025

5 unchanged sentences

Effect of exchange rates on cash and cash equivalents (3.3) 4.9

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

(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.

Our operating philosophy is to deploy cash provided from operating activities, when appropriate, to provide value to shareholders by reinvesting in existing businesses, by making acquisitions that will strengthen and complement our portfolio, by divesting businesses that are no longer strategic or aligned with our portfolio and where such divestitures can generate capacity for strategic investments and initiatives that further optimize our portfolio, and by paying dividends and/or repurchasing shares.

(Decrease) Increase in cash and cash equivalents $ (1,374.4) $ 128.4

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

See Note 3, “Discontinued Operations” to the Condensed Consolidated Financial Statements for additional information.

Our operating philosophy is to deploy cash provided from operating activities, when appropriate, to provide value to stockholders by reinvesting in existing businesses, by making acquisitions that will strengthen and complement our portfolio, by divesting businesses that are no longer strategic or aligned with our portfolio and where such divestitures can generate capacity for strategic investments and initiatives that further optimize our portfolio, and by paying dividends and/or repurchasing shares.

At any given time, and from time to time, we may be evaluating one or more of these opportunities, although we cannot assure you if or when we will consummate any such transactions.

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.

In September 2025, we entered into a $900 million senior unsecured delayed draw term loan facility (the “Term Facility”), which matures on September 30, 2030, and a $900 million senior unsecured revolving facility (the “Revolving Facility”), which also matures on September 30, 2030.

In December 2025, the Company borrowed $900 million under the Term Facility and an additional $250 million under the Revolving Facility.

The borrowings under the Term Facility and Revolving Facility were used, along with cash on-hand, to fund the Company’s January 2026 acquisitions of Druck, Panametrics Reuter-Stokes, and Optek.

In February 2026, the Company borrowed $50 million under the Revolving Facility for general corporate and working capital purposes.

Operating Activities

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.

Cash used for operating activities from continuing operations was $29.5 million in the first three months of 2026, as compared to $46.2 million during the same period last year.

The decrease in cash used for operating activities from continuing operations was primarily driven by improved working capital of $13.2 million and the $2.8 million increase in net income from continuing operations adjusted for the exclusion of non-cash items.

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 $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.

and CryoWorks, Inc., partially offset by a $20.9 million increase in capital expenditures.

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

Cash used for investing activities from continuing operations was $1,366.0 million in the first three months of 2026, as compared to $14.4 million in the comparable period of 2025.

The increase in cash used for investing activities was primarily related to the aggregate cash paid of $1,355.4 million for the acquisitions of Druck, Panametrics, Reuter-Stokes and Optek, partially offset by a $3.5 million decrease in capital expenditures.

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

Financing Activities

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 $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.

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

Cash provided by financing activities was $24.4 million during the first three months of 2026 compared to cash used by financing activities of $23.6 million in the comparable period of 2025.

The increase in cash provided by financing activities was primarily attributable to $50.0 million of borrowings under the Company’s Revolving Facility in the first quarter of 2026.

Quantitative and Qualitative Disclosures About Market Risk

1 unchanged sentence

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What changed 10-Q

Item 2. Management’s Discussion and Analysis