What changed in this filing

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Item 1. Financial Statements

2025-05-01 compared with 2024-10-29 · 196 added, 259 removed, 457 unchanged (50% of the section changed)

3 unchanged sentences

Dollars in thousands, except per share amounts

Three Months Ended Nine Months Ended

September 27, 2024 September 29, 2023 September 27, 2024 September 29, 2023

Three Months Ended

April 4, 2025 March 29, 2024

Net sales $ 678,138 $ 689,744

23 unchanged sentences

ESAB CORPORATION

CONSOLIDATED AND CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED AND CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

Dollars in thousands

Three Months Ended Nine Months Ended

September 27, 2024 September 29, 2023 September 27, 2024 September 29, 2023

Three Months Ended

April 4, 2025 March 29, 2024

Net income $ 69,832 $ 61,594

5 unchanged sentences

Defined benefit pension and other post-retirement plan activity, net of tax expense of $ 11 and $ 203

343 240 1,299 1,404

Other comprehensive income (loss) 77,835 ( 23,712 )

Comprehensive income (loss) 130,721 ( 4,502 ) 236,891 154,871

Comprehensive income 147,667 37,882

Comprehensive income attributable to noncontrolling interest ( 2,587 ) ( 1,320 )

Comprehensive income (loss) attributable to ESAB Corporation $ 128,419 $ ( 5,355 ) $ 232,176 $ 150,494

Comprehensive income attributable to ESAB Corporation $ 145,080 $ 36,562

See Notes to Consolidated and Condensed Financial Statements.

2 unchanged sentences

Dollars in thousands, except share and per share amounts

September 27, 2024 December 31, 2023

April 4, 2025 December 31, 2024

CURRENT ASSETS:

14 unchanged sentences

CURRENT LIABILITIES:

Current portion of debt $ 17,759 $ 15,000

Accounts payable 349,716 318,493

4 unchanged sentences

Total liabilities 2,267,150 2,225,726

Common stock - $ 0.001 par value - 600,000,000 shares authorized, 60,444,246 and 60,295,634 shares outstanding as of September 27, 2024 and December 31, 2023, respectively

Common stock - $ 0.001 par value - 600,000,000 shares authorized, 60,622,736 and 60,517,574 shares outstanding as of April 4, 2025 and December 31, 2024, respectively

Additional paid-in capital 1,901,849 1,901,337

16 unchanged sentences

— — — ( 4,868 ) — — ( 4,868 )

Other comprehensive loss, net of tax expense of $ 2,029

— — — — ( 23,389 ) ( 323 ) ( 23,712 )

Common stock-based award activity 128,787 — 480 — — — 480

Balance at March 29, 2024

60,424,421 $ 60 $ 1,881,534 $ 406,867 $ ( 647,661 ) $ 41,578 $ 1,682,378

Net income — — — 82,907 — 1,462 84,369

Dividends declared ($ 0.08 per share)

— — — ( 4,856 ) — — ( 4,856 )

Distributions to noncontrolling owners — — — — — ( 1,168 ) ( 1,168 )

Other comprehensive loss, net of tax benefit of $ 79

— — — — ( 15,712 ) ( 369 ) ( 16,081 )

Common stock-based award activity 14,417 — 4,833 — — — 4,833

Balance at June 28, 2024

60,438,838 $ 60 $ 1,886,367 $ 484,918 $ ( 663,373 ) $ 41,453 $ 1,749,425

Net income — — — 68,240 — 1,593 69,833

Dividends declared ($ 0.08 per share)

— — — ( 4,858 ) — — ( 4,858 )

Distributions and purchases related to noncontrolling interest — — 2,860 — ( 1,706 ) ( 3,155 ) ( 2,001 )

Other comprehensive income, net of tax benefit of $ 4,808

1 unchanged sentence

Common stock-based award activity 105,162 — 512 — — — 512

Balance at September 27, 2024

Balance at April 4, 2025

60,622,736 $ 61 $ 1,901,849 $ 659,675 $ ( 651,857 ) $ 40,664 $ 1,950,392

6 unchanged sentences

— — — ( 3,641 ) — — ( 3,641 )

Distributions to noncontrolling owners — — — — — ( 1,359 ) ( 1,359 )

Other comprehensive income, net of tax benefit of $ 934

— — — — 38,279 501 38,780

Common stock-based award activity 127,538 — 2,229 — — — 2,229

Balance at March 31, 2023

60,222,263 $ 60 $ 1,868,133 $ 188,101 $ ( 636,709 ) $ 38,706 $ 1,458,291

Net income — — — 65,573 — 1,650 67,223

Dividends declared ($ 0.06 per share)

— — — ( 3,644 ) — — ( 3,644 )

Other comprehensive income, net of tax expense of $ 1,193

— — — — 20,094 60 20,154

Common stock-based award activity 37,106 — 4,701 — — — 4,701

Balance at June 30, 2023

60,259,369 $ 60 $ 1,872,834 $ 250,030 $ ( 616,615 ) $ 40,416 $ 1,546,725

Net income — — — 57,570 — 1,543 59,113

Dividends declared ($ 0.06 per share)

— — — ( 3,646 ) — — ( 3,646 )

Distributions to noncontrolling owners — — — — — ( 982 ) ( 982 )

Other comprehensive loss, net of tax expense of $ 2,029

1 unchanged sentence

Common stock-based award activity 128,787 — 480 — — — 480

Balance at September 29, 2023

Balance at March 29, 2024

60,424,421 $ 60 $ 1,881,534 $ 406,867 $ ( 647,661 ) $ 41,578 $ 1,682,378

3 unchanged sentences

Dollars in thousands

Nine Months Ended

September 27, 2024 September 29, 2023

Three Months Ended

April 4, 2025 March 29, 2024

Cash flows from operating activities:

2 unchanged sentences

Depreciation, amortization and other impairment charges 17,491 16,387

(Gain) loss on sale of property, plant and equipment ( 5,665 ) 44

Stock-based compensation expense 5,361 4,133

11 unchanged sentences

Proceeds from sale of property, plant and equipment 4,605 368

Acquisitions, net of cash received ( 86,537 ) ( 18,665 )

Acquisition, net of cash received — ( 18,067 )

Other investing — ( 1,501 )

1 unchanged sentence

Cash flows from financing activities:

Proceeds from borrowings on Senior Notes 700,000 —

Proceeds from borrowings on revolving credit facilities and other — 115,000

1 unchanged sentence

Repayments of borrowings on revolving credit facilities and other — ( 135,005 )

Payment of debt issuance costs and other ( 15,522 ) —

Payment of dividends ( 4,861 ) ( 3,635 )

Distributions to noncontrolling interest holders ( 1,168 ) —

Net cash provided by (used in) financing activities 40,576 ( 142,183 )

Other financing ( 4,590 ) ( 4,030 )

Net cash used in financing activities ( 13,119 ) ( 33,920 )

Effect of foreign exchange rates on Cash and cash equivalents 22,388 ( 9,441 )

Increase in Cash and cash equivalents 151,667 10,809

Increase (decrease) in Cash and cash equivalents 41,990 ( 25,508 )

Cash and cash equivalents, beginning of period 249,358 102,003

6 unchanged sentences

ESAB provides its partners with fabrication technology advanced equipment, consumables, gas control equipment, robotics and digital solutions.

The Company’s rich history of innovative products and workflow solutions and its business system ESAB Business Excellence (“EBX”) enables the Company’s purpose of Shaping the world we imagine TM .

The Company’s rich history of innovative products, workflow solutions and its business management system, ESAB Business Excellence (“EBX”), enables the Company’s purpose of Shaping the world we imagine TM .

The Company’s products are utilized to solve challenges in a wide range of industries, including cutting, joining and automated welding and gas control.

The Company conducts its operations through two reportable segments.

These segments consist of the “Americas,” which includes operations in North America and South America, and “EMEA & APAC,” which includes Europe, Middle East, India, Africa and Asia Pacific.

On April 4, 2022, ESAB Corporation completed its spin-off from Colfax Corporation (“Colfax,” “Enovis” or “Former Parent”) becoming an independent, publicly traded company (the “Separation”).

The Company’s fiscal year ends December 31.

The Company’s third quarter ends on the last business day of the 13 th week after the end of the prior quarter.

As used herein, the third quarter results for 2024 and 2023 refer to the 13-week periods ended September 27, 2024 and September 29, 2023, respectively.

The Company’s first quarter ends on the last business day of the 13 th complete week after the end of the prior quarter.

As used herein, the first quarter results for 2025 and 2024 refer to the 13-week periods ended April 4, 2025 and March 29, 2024, respectively.

Russia and Ukraine Conflict

1 unchanged sentence

While ESAB continues to closely monitor the situation and evaluate options, the Company is meeting current contractual obligations while addressing applicable laws and regulations.

For the three and nine months ended September 27, 2024, Russia represented approximately 6 % and 5 % of the Company’s total revenue, respectively, and approximately $ 2 million and $ 12 million of its Net income, respectively.

Russia also has approximately 5 % of the Company’s total net assets excluding any goodwill allocation as of September 27, 2024.

In case of a disposition of the Russia business, a portion of goodwill would need to be allocated and disposed of at the relative fair value attributable to the Russia business.

Russia has a cumulative translation loss of approximately $ 119 million as of September 27, 2024, which could be realized upon a transition out.

For the three months ended April 4, 2025, Russia represented approximately 5 % of the Company’s total revenue and approximately $ 4 million of its Net income.

Russia also has approximately 5 % of the Company’s total net assets as of April 4, 2025, including approximately $ 40 million of Cash and cash equivalents that may be subject to delays in withdrawing from Russia, based upon the current environment at that time.

In case of the disposition of the Russia business, a portion of goodwill would need to be allocated and disposed of at the relative fair value attributable to the Russia business.

Russia has a cumulative translation loss of approximately $ 110 million as of April 4, 2025, which could be realized upon a transition out.

The Company is closely monitoring developments in Ukraine and Russia.

7 unchanged sentences

Intercompany transactions and accounts are eliminated in consolidation.

Certain line items on our Consolidated and Condensed Statements of Cash Flows have been reclassified to conform to the current presentation.

In the normal course of business, the Company incurs research and development costs related to new product development, which are expensed as incurred and included in Selling, general and administrative expense on the Company’s Consolidated and Condensed Statements of Operations.

Research and development costs were $ 9.2 million and $ 29.0 million during the three and nine months ended September 27, 2024, respectively, and $ 9.0 million and $ 28.1 million during the three and nine months ended September 29, 2023, respectively.

Research and development costs were $ 10.1 million during the three months ended April 4, 2025 and March 29, 2024.

T hese amounts do not include development and application engineering costs incurred in conjunction with fulfilling customer orders and executing customer projects, nor do they include costs related to securing third party product rights.

5 unchanged sentences

The Company holds certain asbestos-related contingencies and insurance coverages from divested businesses for which it does not have an interest in the ongoing operations.

The Company has classified asbestos-related activity in its Consolidated and Condensed Statements of Operations as part of Loss from discontinued operations, net of taxes.

The Company has classified asbestos-related activity included in its Consolidated and Condensed Statements of Operations as part of Loss from discontinued operations, net of taxes.

This activity consists primarily of expected settlements, legal and administrative expenses associated with the above liabilities.

Loss from discontinued operations, net of taxes was $ 1.2 million and $ 3.7 million for the three and nine months ended September 27, 2024, respectively, and $ 1.7 million and $ 4.3 million for the three and nine months ended September 29, 2023, respectively.

S ee Note 14, “Commitments and Contingencies” for further information.

Cas h used in operating activities related to discontinued operations for the three and nine months ended September 27, 2024 was $ 3.6 million and $ 12.1 million, respectively, and for the three and nine months ended September 29, 2023 it was $ 2.5 million and $ 12.2 million , respectively.

On July 2, 2024, the Company completed the acquisition of Linde Industries Private Limited, a leading welding company in Bangladesh, for approximately $ 69 million, net of cash received, to extend the Company’s position in this fast-growing region.

The Company recognized intangible assets and goodwill of approximately $ 20 million and $ 40 million, respectively.

The valuation of the acquired intangible assets and certain other assets and liabilities are determined based upon third-party valuations that have yet to be finalized.

On April 30, 2024, the Company reached an agreement to acquire SUMIG Soluções para Solda e Corte Ltda., a South American light automation and equipment business for approximately $ 74 million of cash consideration.

This acquisition is expected to be completed during the fourth quarter of 2024, subject to customary closing conditions.

On February 26, 2024, the Company completed the acquisition of Sager S.A., a welding repair and maintenance product and service leader in South America, for approximately $ 18 million, net of cash received.

On January 11, 2023, the Company completed the acquisition of Therapy Equipment Limited, a regional leader in oxygen regulators, for approximately $ 19 million, net of cash received.

Discontinued operations consist primarily of Selling, general and administrative expense, with an associated tax impact that is considered immaterial.

See Note 14, “Commitments and Contingencies” for further information.

Cas h used in operating activities related to discontinued operations for the three months ended April 4, 2025 was $ 2.3 million and for the three months ended March 29, 2024 it was $ 3.7 million .

The Company continually evaluates potential acquisitions that either strategically fit with our existing portfolio or expand our portfolio into a new and attractive business area.

The Company makes an initial allocation of the purchase price at the date of acquisition based upon our understanding of the fair value of the acquired assets and assumed liabilities.

The Company obtains this information during due diligence and through other sources.

As the Company obtains additional information about these assets and liabilities, including through tangible and intangible asset appraisals, and learns more about the newly acquired business, the Company is able to refine the estimates of fair value and more accurately allocate the purchase price.

The Company makes appropriate adjustments to purchase price allocations prior to completion of the applicable measurement period, as required.

The following describes our acquisition activity for the three months ended April 4, 2025.

On February 18, 2025, the Company entered into an agreement to acquire Bavaria Schweisstechnik, a European provider of submerged-arc welding applications, for approximately € 60 million of cash consideration.

This acquisition was subsequently completed on April 30, 2025.

For a description of the Company’s acquisition activity for the year ended December 31, 2024, reference is made to the financial statements as of and for the year ended December 31, 2024 and Note 5, “Acquisitions” thereto in the Company’s 2024 Annual Report.

The Company provides fabrication technology advanced equipment, consumables, gas control equipment, robotics and digital solutions.

The Company’s products are utilized to solve challenges in a wide range of industries.

Substantially all revenue is recognized at a point in time.

The Company disaggregates its revenue into the following product groups:

Three Months Ended Nine Months Ended

September 27, 2024 September 29, 2023 September 27, 2024 September 29, 2023

Three Months Ended

April 4, 2025 March 29, 2024

(In thousands)

4 unchanged sentences

The consumables product grouping generally has less production complexity and shorter production cycles than equipment products.

Given the nature of the business, the total amount of unsatisfied performance obligations with an original contract duration of greater than one year as of September 27, 2024 is immaterial.

Given the nature of the business, the total amount of unsatisfied performance obligations with an original contract duration of greater than one year as of April 4, 2025 is immaterial.

In some circumstances, customers are billed in advance of revenue recognition, resulting in contract liabilities.

As of December 31, 2024 and December 31, 2023, total contract liabilities were $ 26.4 million and $ 31.2 million, respectively, and were included in Accrued liabilities on the Consolidated and Condensed Balance Sheets.

During the three and nine months ended September 27, 2024, revenue recognized that was included in the contract liabilities balance at the beginning of the year was $ 1.3 million and $ 22.6 million, respectively.

During the three and nine months ended September 29, 2023, revenue recognized that was included in the contract liabilities balance at the

During the three months ended April 4, 2025, revenue recognized that was included in the contract liabilities balance at the beginning of the year was $ 14.9 million.

During the three months ended March 29, 2024, revenue recognized that was included in the contract liabilities balance at the beginning of the year was $ 16.2 million.

As of April 4, 2025 and March 29, 2024, total contract liabilities were $ 25.3 million and $ 29.5 million, respectively.

ESAB CORPORATION

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS — (Continued)

beginning of the year was $ 2.3 million and $ 16.7 million, respectively.

As of September 27, 2024 and September 29, 2023, total contract liabilities were $ 27.8 million and $ 29.5 million, respectively.

Allowance for Credit Losses

A summary of the activity in the Company’s allowance for credit losses included within Trade receivables in the Consolidated and Condensed Balance Sheets is as follows:

Nine months ended September 27, 2024

Three months ended April 4, 2025

of Period Charged to Expense, net Write-Offs and Deductions Foreign

5 unchanged sentences

The Company allocates earnings to participating securities and computed earnings per share using the two-class method as follows:

Three Months Ended Nine Months Ended

September 27, 2024 September 29, 2023 September 27, 2024 September 29, 2023

Three Months Ended

April 4, 2025 March 29, 2024

(In thousands, except share and per share data)

13 unchanged sentences

Net income per share from continuing operations – diluted $ 1.14 $ 1.00

(1) Net income from continuing operations attributable to ESAB Corporation for the respective periods is calculated using Net income from continuing operations, less Income attributable to noncontrolling interest, net of taxes, of $ 1.6 million and $ 4.7 million for the three and nine months ended September 27, 2024, respectively, and $ 1.5 million and $ 4.5 million for the three and nine months ended September 29, 2023, respectively.

(1) Net income from continuing operations attributable to ESAB Corporation for the respective periods is calculated using Net income from continuing operations, less Income attributable to noncontrolling interest, net of taxes, of $ 2.5 million for the three months ended April 4, 2025 and $ 1.6 million for the three months ended March 29, 2024.

(2) Potentially dilutive securities include stock options, performance-based restricted stock units and non-performance-based restricted stock units.

During the three and nine months ended September 27, 2024, Income from continuing operations before income taxes was $ 89.1 million and $ 273.9 million, respectively, while Income tax expense was $ 18.1 million and $ 54.5 million, respectively.

The effective tax rate was 20.3 % and 19.9 % for the three and nine months ended September 27, 2024, respectively.

During the three months ended April 4, 2025, Income from continuing operations before income taxes was $ 93.1 million while Income tax expense was $ 20.5 million.

The effective tax rate was 22.0 % for the three months ended April 4, 2025.

The effective tax rate differed from the 2025 U.S.

federal statutory rate of 21.0% primarily due to a favorable final ruling in a tax case in a foreign jurisdiction during the three months ended June 28, 2024 and an agreement with a taxing authority on the treatment of subsidy income in a foreign jurisdiction during the three months ended September 27, 2024.

federal statutory rate of 21.0% primarily due to the mix of income outside of the U.S.

taxed at higher statutory tax rates.

During the three months ended March 29, 2024, Income from continuing operations before income taxes was $ 81.4 million while Income tax expense was $ 18.5 million.

The effective tax rate was 22.7 % for the three months ended March 29, 2024.

The effective tax rate differed from the 2024 U.S.

federal statutory rate of 21.0% primarily due to withholding taxes.

ESAB CORPORATION

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS — (Continued)

During the three and nine months ended September 29, 2023, Income from continuing operations before income taxes was $ 80.6 million and $ 241.6 million, respectively, while Income tax expense was $ 19.8 million and $ 77.8 million, respectively.

The effective tax rate was 24.6 % and 32.2 % for the three and nine months ended September 29, 2023, respectively.

The effective tax rate differed from the 2023 U.S.

federal statutory rate of 21.0% primarily due to discrete tax expenses in 2023 for dividend withholding taxes and an increase in the liability for uncertain tax positions.

During the nine months ended September 29, 2023, the Company recorded total tax expense of $ 10.9 million relating to a change in its indefinite reinvestment assertion on certain foreign undistributed earnings.

Additionally, the Company increased the net liability for uncertain tax positions by $ 9.4 million primarily relating to an adverse court ruling in a tax case in a foreign jurisdiction.

During the nine months ended September 27, 2024, a favorable final ruling in a tax case in a foreign jurisdiction was decided and the Company released the related liability for uncertain tax positions for a net tax benefit of $ 7.9 million.

This resulted in a decrease in the ending unrecognized tax benefit balance of $ 17.7 million.

The Company also recorded a tax benefit of $ 4.9 million due to an agreement with a taxing authority on the treatment of subsidy income in a foreign jurisdiction.

Inventories, Net

Inventories, net consisted of the following:

September 27, 2024 December 31, 2023

April 4, 2025 December 31, 2024

(In thousands)

3 unchanged sentences

494,744 444,940

LIFO reserve ( 4,880 ) ( 4,279 )

Allowance for excess, slow-moving and obsolete inventory ( 44,039 ) ( 41,229 )

$ 450,705 $ 403,711

At September 27, 2024 and December 31, 2023 , 24.0 % a nd 27.4 % of total inventories, respectively, were valued using the last-in, first-out (“LIFO”) method.

Accrued and Other Liabilities

Accrued and Other liabilities in the Consolidated and Condensed Balance Sheets consisted of the following:

September 27, 2024 December 31, 2023

April 4, 2025 December 31, 2024

Current Noncurrent Current Noncurrent

11 unchanged sentences

$ 304,525 $ 538,854 $ 298,558 $ 532,936

ESAB CORPORATION

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS — (Continued)

Accrued Warranty Liability

A summary of the activity in the Company’s warranty liability included in Accrued liabilities in the Company’s Consolidated and Condensed Balance Sheets is as follows:

Nine Months Ended

September 27, 2024 September 29, 2023

Three Months Ended

April 4, 2025 March 29, 2024

(In thousands)

8 unchanged sentences

A summary of the activity in the Company’s restructuring liability included in Accrued liabilities and Other liabilities in the Consolidated and Condensed Balance Sheets is as follows:

Nine Months Ended September 27, 2024

ESAB CORPORATION

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS — (Continued)

Three Months Ended April 4, 2025

Balance at Beginning of Period Charges Payments Foreign Currency Translation Balance at End of Period

5 unchanged sentences

1,261 1,136 ( 1,235 ) ( 202 ) 960

Total $ 5,699 $ 8,572 $ ( 8,335 ) $ ( 355 ) $ 5,581

$ 5,106 $ 4,499 $ ( 3,251 ) $ 33 $ 6,387

(1) Includes severance and other termination benefits, including outplacement services.

4 unchanged sentences

This amount is reflected in Pension settlement loss in the Consolidated and Condensed Statements of Operations.

Long-term debt consisted of the following:

September 27, 2024 December 31, 2023

The following table shows the components of the Company’s debt:

April 4, 2025 December 31, 2024

(In thousands)

1 unchanged sentence

Senior unsecured notes 700,000 700,000

Revolving credit facilities — 32,000

Other debt 259 —

Total debt 1,082,759 1,085,000

Current portion of debt ( 17,759 ) ( 15,000 )

Unamortized deferred financing fees ( 8,704 ) ( 9,261 )

Long-term debt $ 1,056,296 $ 1,060,739

ESAB CORPORATION

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS — (Continued)

Senior Notes, Term Loans and Revolving Credit Facility

On April 4, 2022, the Company entered into a credit agreement (as amended and restated from time-to-time, the “Credit Agreement”) in connection with the Separation.

The Credit Agreement initially consisted of a $ 750 million revolving credit facility (the “Revolving Facility”) with a maturity date of April 4, 2027, a Term A-1 loan with an initial aggregate principal amount of $ 400 million (the “Term Loan A-1 Facility”), with a maturity date of April 4, 2027;

On April 4, 2022, the Company entered into a credit agreement (as amended and restated from time-to-time, the “Credit Agreement”) that initially consisted of a $ 750 million revolving credit facility (the “Revolving Facility”) with a maturity date of April 4, 2027, a Term A-1 loan with an initial aggregate principal amount of $ 400 million (the “Term Loan A-1 Facility”), with a maturity date of April 4, 2027;

and a $ 600 million 364 -day senior term loan facility (the “Term Loan A-2 Facility”) with a maturity date of April 3, 2023.

The Revolving Facility contains a $ 300 million foreign currency sublimit and a $ 50 million swing line loan sub-facility.

On April 4, 2022, the Company drew down $ 1.2 billion available under the credit facilities consisting of (i) $ 200 million under the Revolving Facility, (ii) $ 400 million under the Term Loan A-1 Facility and (iii) $ 600 million under the Term Loan A-2 Facility.

The Company used these proceeds to make payments to Enovis of $ 1.2 billion, which was used as part of the consideration for the contribution of certain assets and liabilities to the Company by Enovis in connection with the Separation.

On June 28, 2022, the Company amended and restated the Credit Agreement by entering into Amendment No.

2 to the Credit Agreement (“Credit Agreement Amendment”).

The Credit Agreement Amendment provides for a $ 600 million term loan facility (the “Term Loan A-3 Facility”) with a maturity date of April 3, 2025 to refinance the Company’s existing Term Loan A-2 Facility.

The Credit Agreement Amendment provides for a $ 600 million term loan facility (the “Term Loan A-3 Facility,” collectively the “Term Facilities” with Term A-1 Facility and Term A-2 Facility) with a maturity date of April 3, 2025 to refinance the Company’s existing Term Loan A-2 Facility.

Also on June 28, 2022, the Company borrowed the entire $ 600 million under Term Loan A-3 Facility to fund the repayment of the Term Loan A-2 Facility.

On April 9, 2024, the Company issued $ 700 million in aggregate principal amount of 6.25 % senior notes due 2029 (the “Senior Notes”).

The Senior Notes have a contractual interest rate of 6.25 % and maturity date of April 15, 2029.

The Company used the net proceeds from the Senior Notes offering to pay off its Term Loan A-3 Facility and pay fees associated with the offering.

As of September 27, 2024, the Company’s long-term Debt consisted of the following facilities:

ESAB CORPORATION

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS — (Continued)

On April 9, 2024, the Company issued $ 700 million in aggregate principal amount of 6.25 % senior notes due 2029 (the “Senior Notes”) governed by an indenture (the “Indenture”).

The Company used the net proceeds from the Senior Notes to pay off its Term Loan A-3 Facility and pay fees associated with the offering.

As of April 4, 2025, the Company’s Debt consisted of the following facilities:

• A $ 750 million Revolving Facility with a maturity date of April 4, 2027, with zero dollars drawn;

1 unchanged sentence

• Senior Notes with an aggregate principal amount of $ 700 million and a maturity date of April 15, 2029.

The Credit Agreement contains customary covenants limiting the ability of the Company and its subsidiaries to, among other things, incur debt or liens, merge or consolidate with others, dispose of assets, make investments or pay dividends.

In addition, the Credit Agreement contains financial covenants requiring the Company to maintain (i) a maximum total leverage ratio of not more than 4.00 :1.00, with step-downs to, commencing with the fiscal quarter ending June 30, 2023, 3.75 :1.00, and commencing with the fiscal quarter ending June 30, 2024, 3.50 :1.00, and (ii) a minimum interest coverage ratio of 3.00 :1.00.

The Credit Agreement contains various events of default (including failure to comply with the covenants under the Credit Agreement and related agreements) and upon an event of default the lenders may, subject to various customary cure rights, require the immediate payment of all amounts outstanding under the term loan facilities (the “Term Facilities”) and the Revolving Facility.

Certain United States subsidiaries of the Company have agreed to guarantee the obligations of the Company under the Credit Agreement.

Loans made under the Term Facilities will bear interest, at the election of the Company, at either the base rate (as defined in the Credit Agreement) or at the term Secured Overnight Financing Rate (“SOFR”) plus an adjustment (as defined in the Credit Agreement), in each case, plus the applicable interest rate margin.

The Credit Agreement and the Indenture contain customary covenants.

These covenants limit the ability of the Company and its subsidiaries to, among other things, incur debt or liens, merge or consolidate with others, dispose of assets, make investments or pay dividends.

In addition, the Credit Agreement requires that the Company maintains certain financial covenants and the Company was in compliance with all of its debt covenants as of April 4, 2025.

The Credit Agreement and the Indenture contain various events of default (including failure to comply with the covenants under the Credit Agreement and related agreements) and upon an event of default the lenders may, subject to various customary cure rights, require the immediate payment of all amounts outstanding under the Term A-1 Facility, Senior Notes and the Revolving Facility.

Certain United States subsidiaries of the Company have agreed to guarantee the obligations of the Company under the Credit Agreement and Senior Notes.

Loans made under the Term A-1 Facility will bear interest, at the election of the Company, at either the base rate (as defined in the Credit Agreement) or at the term Secured Overnight Financing Rate (“SOFR”) plus an adjustment (as defined in the Credit Agreement), in each case, plus the applicable interest rate margin.

Loans made under the Revolving Facility will bear interest, at the election of the Company, at either the base rate or, (i) in the case of loans denominated in dollars, the term SOFR plus an adjustment or the daily simple SOFR plus an adjustment, (ii) in the case of loans denominated in euros, the adjusted Euro Interbank Offered Rate (“EURIBOR”) rate and, (iii) in the case of loans denominated in sterling, Sterling Overnight Index Average (“SONIA”) plus an adjustment (as all such rates are defined in the Credit Agreement Amendment), in each case, plus the applicable interest rate margin.

1 unchanged sentence

Each swing line loan denominated in dollars will bear interest at the base rate plus the applicable interest rate margin.

ESAB CORPORATION

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS — (Continued)

To manage exposures to currency exchange rates and interest rates arising in Long-term debt, the Company entered into interest rate and cross-currency swap agreements.

To manage exposures to currency exchange rates and interest rates rising in Long-term debt, the Company entered into interest rate and cross-currency swap agreements.

Refer to Note 11, “Derivatives” for additional information.

As of September 27, 2024, the weighted-average interest rate of borrowings under the Credit Agreement and Senior Notes was 5.01 %, including the net impact from the interest rate and cross-currency swaps and excluding accretion of deferred financing fees, and there was $ 750 million of borrowing capacity available under the Revolving Facility, subject to the Company meeting financial covenants and other requirements.

As of April 4, 2025, the weighted-average interest rate of borrowings under the Credit Agreement and Indenture was 5.16 %, including the net impact from the interest rate and cross-currency swaps and excluding accretion of deferred financing fees, and there was $ 750 million of borrowing capacity available under the Revolving Facility, subject to the Company meeting financial covenants and other requirements.

Other Indebtedness

1 unchanged sentence

The Company is party to letter of credit facilities with an aggregate capacity of $ 107.3 million.

Total letters of credit of $ 28.6 million were outstanding as of September 27, 2024.

Total letters of credit of $ 28.0 million were outstanding as of April 4, 2025.

Deferred Financing Fees

The Company had total deferred financing fees of $ 10.5 million included in its Consolidated and Condensed Balance Sheets as of September 27, 2024, which will be charged to Interest expense and other, net, over the term of the related debt instruments.

The costs associated with the Term Facilities will be amortized over the contractual term of the Term Facilities, the costs associated with the Revolving Facility will be amortized over the life of the Credit Agreement and the costs associated with the Senior Notes will be amortized over the life of the Note.

The Company had total deferred financing fees of $ 9.3 million included in its Consolidated and Condensed Balance Sheets as of April 4, 2025, which will be charged to Interest expense and other, net, over the term of the related debt instruments.

ESAB CORPORATION

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS — (Continued)

costs associated with the Term Facilities and Senior Notes noted above will be amortized over the contractual term of the related facility and the costs associated with these will be amortized over the life of the Credit Agreement or the Indenture.

Of the $ 9.3 million, $ 0.6 million of deferred financing fees relating to the Revolving Facility are included in Other assets and $ 8.7 million of deferred financing fees relating to the Term Facilities and Senior Notes are recorded as a contra-liability within Long-term debt.

4 unchanged sentences

Counterparties include a number of major banks and financial institutions.

None of the concentrations of risk with an individual counterparty was considered significant as of September 27, 2024.

None of the concentrations of risk with an individual counterparty was considered significant as of April 4, 2025.

The Company does not expect any counterparties to fail to meet their obligations.

2 unchanged sentences

On July 14, 2022, the Company entered into two interest rate swap agreements to manage interest rate risk exposure.

The aggregate notional amount of these contracts was $ 600 million and they mature in April 2025.

The aggregate notional amount of these contracts was $ 600 million and they were set to mature in April 2025.

These interest rate swap agreements utilized by the Company effectively modify the Company’s exposure to interest rate risk by converting a portion of the Company’s floating-rate debt to a fixed rate of 3.293 %, plus a spread, thus reducing the impact of interest-rate changes on future interest expense.

3 unchanged sentences

Refer to Note 10, “Debt” for further information.

As this interest rate swap was designated as a cash flow hedge, $ 5.5 million was deferred in accumulated other comprehensive income (loss) (“AOCI”) and will be recognized in earnings over the period the originally forecasted hedged transaction impacts earnings.

The remaining $ 300 million swap is expected to continue to be hedged against the remaining floating-rate debt.

ESAB CORPORATION

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS — (Continued)

For the remaining swap, the spread was 1.250 % as of September 27, 2024.

This agreement involves the receipt of floating-rate amounts in exchange for fixed-rate interest payments over the life of the agreement without an exchange of the underlying principal amount.

This interest rate swap agreement is designated and qualifies as a cash flow hedge and as such, the gain or loss on the derivative instrument due to the change in fair value is reported as a component of AOCI and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings.

If a derivative is deemed to be ineffective, the change in fair value of the derivative is recognized directly in earnings.

The Company did not have any ineffectiveness related to the cash flow hedges during the nine months ended September 27, 2024.

The cash inflows and outflows associated with the Company’s interest rate swap agreement designated as cash flow hedges are classified in cash flows from operating activities in the accompanying Consolidated and Condensed Statements of Cash Flows.

The Company expects a gain of $ 1.6 million, net of tax, related to interest rate swap agreements to be reclassified from AOCI to earnings through such agreements’ maturity in April 2025 as the hedged transactions are realized.

The expected gain to be reclassified is based on current forward rates in active markets as of September 27, 2024.

As this interest rate swap was designated as a cash flow hedge, $ 5.5 million was deferred in accumulated other comprehensive loss (“AOCL”) and was recognized in earnings over the period the originally forecasted hedged transaction impacted earnings.

The remaining $ 300 million swap was hedged against the remaining floating-rate debt through its maturity on April 3, 2025, therefore the Company does not have any interest rate swaps outstanding as of April 4, 2025.

The cash inflows and outflows associated with the Company’s interest rate swap agreement designated as cash flow hedges were classified in cash flows from operating activities in the accompanying Consolidated and Condensed Statements of Cash Flows.

The effects of designated cash flow hedges on the Company’s Consolidated and Condensed Statements of Operations consisted of the following:

Three Months Ended Nine Months Ended

Derivative Type (Gain) Recognized in the Consolidated and Condensed Statements of Operations September 27, 2024 September 29, 2023 September 27, 2024 September 29, 2023

Three Months Ended

Derivative Type Gain Recognized in the Consolidated and Condensed Statements of Operations April 4, 2025 March 29, 2024

(In thousands)

3 unchanged sentences

Dollar and the Euro.

The cross-currency swap agreements include provisions to exchange fixed-rate payments in U.S.

Dollar for fixed-rate payments in Euro and are designated and qualify as a net investment hedge.

The cross-currency swap agreements included provisions to exchange fixed-rate payments in U.S.

Dollar for fixed-rate payments in Euro and were designated and qualified as a net investment hedge.

These contracts had a Euro aggregate notional amount of approximately € 270 million and a U.S.

Dollar aggregate notional amount of $ 275 million.

ESAB CORPORATION

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS — (Continued)

Prior to the maturity of these two cross-currency swaps, on June 25, 2024, the Company de-designated these swaps and entered into four new cross-currency swaps for the same above notional amounts that mature in October 2026.

7 unchanged sentences

Due to the de-designation transaction above on June 25, 2024, the Company will keep the balance in AOCI related to the original derivative for the duration that the investment is held.

The Company did not have any ineffectiveness related to net investment hedges during the nine months ended September 27, 2024.

The Company did not have any ineffectiveness related to net investment hedges during the three months ended April 4, 2025.

The cash inflows and outflows associated with the excluded components of the Company’s cross-currency swap agreements designated as net investment hedges are classified in operating activities in the accompanying Consolidated and Condensed Statements of Cash Flows.

ESAB CORPORATION

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS — (Continued)

The effects of the excluded components of designated net investment hedges on the Company’s Consolidated and Condensed Statements of Operations consisted of the following:

Three Months Ended Nine Months Ended

Derivative Type (Gain) Recognized in the Consolidated and Condensed Statements of Operations September 27, 2024 September 29, 2023 September 27, 2024 September 29, 2023

Three Months Ended

Derivative Type Gain Recognized in the Consolidated and Condensed Statements of Operations April 4, 2025 March 29, 2024

(In thousands)

1 unchanged sentence

The table below shows the fair value of the derivatives recognized in the Consolidated and Condensed Balance Sheets:

September 27, 2024 December 31, 2023

April 4, 2025 December 31, 2024

Designated as Hedging Instruments Other Liabilities Other Assets Other Liabilities Other Assets

1 unchanged sentence

Cross-currency swap agreements $ 21,677 $ — $ 1,830 $ —

Interest rate swap agreement(s) — 1,520 — 9,522

Interest rate swap agreement — — — 842

$ 21,677 $ — $ 1,830 $ 842

1 unchanged sentence

The Company has certain foreign currency contracts that are not designated as hedges.

As of September 27, 2024 and December 31, 2023, the Company had foreign currency contracts related to purchases and sales with notional values of $ 232.8 million and $ 232.5 million, respectively.

As of April 4, 2025 and December 31, 2024, the Company had foreign currency contracts related to purchases and sales with notional values of $ 229.8 million and $ 178.7 million, respectively.

The table below shows the fair value of derivative instruments not designated in a hedging relationship recognized in the Consolidated and Condensed Balance Sheets:

September 27, 2024 December 31, 2023

April 4, 2025 December 31, 2024

Not Designated as Hedging Instruments Accrued Liabilities Other Current Assets Accrued Liabilities Other Current Assets

1 unchanged sentence

Foreign currency contracts $ 2,114 $ 698 $ 379 $ 255

The amounts in the table above as of September 27, 2024 reflect the fair value of the Company’s foreign currency contracts on a net basis where allowable under master netting agreements.

The amounts in the table above as of April 4, 2025 reflect the fair value of the Company’s foreign currency contracts on a net basis where allowable under master netting agreements.

Had these amounts been recognized on a gross basis, the impact would have been a $ 0.7 million increase in Other current assets with a corresponding increase in Accrued liabilities.

ESAB CORPORATION

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS — (Continued)

The Company recognized the following in its Consolidated and Condensed Financial Statements related to its derivative instruments not designated in a hedging relationship:

Three Months Ended Nine Months Ended

Foreign Currency Contracts September 27, 2024 September 29, 2023 September 27, 2024 September 29, 2023

Three Months Ended

Foreign Currency Contracts April 4, 2025 March 29, 2024

(In thousands)

5 unchanged sentences

The estimated fair values may not represent actual values of the financial instruments that could be realized as of the balance sheet date or that will be realized in the future.

ESAB CORPORATION

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS — (Continued)

A summary of the Company’s assets and liabilities that are measured at fair value for each fair value hierarchy level for the periods presented is as follows:

September 27, 2024

April 4, 2025 December 31, 2024

Three Total Level

(In thousands)

8 unchanged sentences

$ — $ 29,710 $ — $ 29,710 $ — $ 7,853 $ — $ 7,853

December 31, 2023

(In thousands)

Cash equivalents $ 6,027 $ — $ — $ 6,027

Foreign currency contracts — 2,261 — 2,261

Interest rate swap agreements — 9,522 — 9,522

Deferred compensation plans — 3,488 — 3,488

$ 6,027 $ 15,271 $ — $ 21,298

Foreign currency contracts $ — $ 1,769 $ — $ 1,769

Cross-currency swap agreements — 22,232 — 22,232

Deferred compensation plans — 3,488 — 3,488

$ — $ 27,489 $ — $ 27,489

The Company measures the fair value of foreign currency contracts, cross-currency swap agreements and interest rate swap agreement(s) using Level Two inputs based on observable spot and forward rates in active markets.

Additionally, the fair value of derivatives designated in hedging relationships includes a credit valuation adjustment to appropriately incorporate nonperformance risk for the Company and the respective counterparty.

For the nine months ended September 27, 2024, the impact of the credit valuation adjustment on the Company’s derivatives is immaterial.

For the three months ended April 4, 2025, the impact of the credit valuation adjustment on the Company’s derivatives is immaterial.

Refer to Note 11, “Derivatives” for additional information.

There were no transfers in or out of Level One, Two or Three during the nine months ended September 27, 2024.

There were no transfers in or out of Level One, Two or Three during the three months ended April 4, 2025.

ESAB CORPORATION

2 unchanged sentences

On August 13, 2024, the Board of Directors authorized and approved a stock repurchase program to repurchase up to five million shares of the Company’s Common stock, par value $ 0.001 per share, from time-to-time on the open market, in privately negotiated transactions or as may otherwise be determined by the Company’s management in its discretion.

No repurchases of the Company’s Common stock have been made through the nine months ended September 27, 2024.

No repurchases of the Company’s Common stock have been made through the three months ended April 4, 2025.

The timing and amount of any shares repurchased will be determined by the Company’s management based on its evaluation of market conditions, applicable legal requirements and other factors.

There is no term associated with the repurchase authorization.

Accumulated Other Comprehensive Loss (“AOCL”)

The following tables present the changes in the balances of each component of AOCL including reclassifications out of AOCL for the nine months ended September 27, 2024 and September 29, 2023.

Accumulated Other Comprehensive Loss

The following tables present the changes in the balances of each component of AOCL including reclassifications out of AOCL for the three months ended April 4, 2025 and March 29, 2024.

All amounts are net of tax and noncontrolling interest, if any.

ESAB CORPORATION

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS — (Continued)

Accumulated Other Comprehensive Loss Components

3 unchanged sentences

$ ( 50,352 ) $ ( 679,791 ) $ ( 1,247 ) $ 1,816 $ ( 729,574 )

Other comprehensive income (loss) before reclassifications:

Foreign currency translation adjustment 243 ( 38,265 ) 4,995 — ( 33,027 )

Gain on long-term intra-entity foreign currency transactions — 7,996 — — 7,996

Unrealized gain on cash flow hedges — — — 3,920 3,920

Other comprehensive income (loss) before reclassifications 243 ( 30,269 ) 4,995 3,920 ( 21,111 )

Amounts reclassified from Accumulated other comprehensive loss (1)(2)

629 — — ( 2,907 ) ( 2,278 )

Net current period Other comprehensive income (loss) 872 ( 30,269 ) 4,995 1,013 ( 23,389 )

Balance at March 29, 2024

$ ( 58,933 ) $ ( 584,891 ) $ ( 12,220 ) $ 8,383 $ ( 647,661 )

Other comprehensive income (loss) before reclassifications:

Other comprehensive (loss) income before reclassifications:

Net actuarial loss 48 — — — 48

Foreign currency translation adjustment ( 421 ) 99,089 ( 19,847 ) — 78,821

1 unchanged sentence

Unrealized gain on cash flow hedges — — — 16 16

Other comprehensive income (loss) before reclassifications 6 ( 14,880 ) 686 811 ( 13,377 )

Amounts reclassified from Accumulated other comprehensive loss (1)(2)

327 — — ( 2,662 ) ( 2,335 )

Net current period Other comprehensive income (loss) 333 ( 14,880 ) 686 ( 1,851 ) ( 15,712 )

Balance at June 28, 2024

$ ( 58,600 ) $ ( 599,771 ) $ ( 11,534 ) $ 6,532 $ ( 663,373 )

Other comprehensive income (loss) before reclassifications:

Foreign currency translation adjustment ( 291 ) 63,336 ( 8,945 ) — 54,100

Gain on long-term intra-entity foreign currency transactions — 8,866 — — 8,866

Unrealized loss on cash flow hedges — — — ( 1,230 ) ( 1,230 )

Other comprehensive income (loss) before reclassifications ( 291 ) 72,202 ( 8,945 ) ( 1,230 ) 61,736

Other comprehensive (loss) income before reclassifications ( 373 ) 99,480 ( 19,847 ) 16 79,276

Amounts reclassified from Accumulated other comprehensive loss (1)(2)

273 — — ( 1,832 ) ( 1,559 )

Purchase related to noncontrolling interest — ( 1,706 ) — — ( 1,706 )

Net current period Other comprehensive (loss) income ( 100 ) 99,480 ( 19,847 ) ( 1,816 ) 77,717

Balance at September 27, 2024

Balance at April 4, 2025

$ ( 50,452 ) $ ( 580,311 ) $ ( 21,094 ) $ — $ ( 651,857 )

(1) The amounts on this line within the Net Unrecognized Pension and Other Post-Retirement Benefit Cost column are included in the computation of net periodic benefit cost.

(2) During the three and nine months ended September 27, 2024, the amount within the Cash Flow Hedges column is a component of Interest expense and other, net.

(2) During the three months ended April 4, 2025, the amount within the Cash Flow Hedges column is a component of Interest expense and other, net.

See Note 11, “Derivatives” for additional details.

6 unchanged sentences

$ ( 59,805 ) $ ( 554,622 ) $ ( 17,215 ) $ 7,370 $ ( 624,272 )

Other comprehensive (loss) income before reclassifications:

Net actuarial loss ( 2 ) — — — ( 2 )

Foreign currency translation adjustment ( 108 ) 31,276 ( 2,086 ) — 29,082

Gain on long-term intra-entity foreign currency transactions — 12,501 — — 12,501

Unrealized loss on cash flow hedges — — — ( 2,051 ) ( 2,051 )

Other comprehensive (loss) income before reclassifications ( 110 ) 43,777 ( 2,086 ) ( 2,051 ) 39,530

Amounts reclassified from Accumulated other comprehensive loss (1)(2)

279 — — ( 1,530 ) ( 1,251 )

Net current period Other comprehensive income (loss) 169 43,777 ( 2,086 ) ( 3,581 ) 38,279

Balance at March 31, 2023

$ ( 63,678 ) $ ( 570,130 ) $ ( 10,422 ) $ 7,521 $ ( 636,709 )

Other comprehensive (loss) income before reclassifications:

Net actuarial loss ( 2 ) — — — ( 2 )

Foreign currency translation adjustment ( 49 ) ( 6,381 ) ( 3,036 ) — ( 9,466 )

Gain on long-term intra-entity foreign currency transactions — 23,142 — — 23,142

Unrealized gain on cash flow hedges — — — 7,640 7,640

Other comprehensive (loss) income before reclassifications ( 51 ) 16,761 ( 3,036 ) 7,640 21,314

Amounts reclassified from Accumulated other comprehensive loss (1)(2)

889 — — ( 2,109 ) ( 1,220 )

Net current period Other comprehensive income (loss) 838 16,761 ( 3,036 ) 5,531 20,094

Balance at June 30, 2023

$ ( 62,840 ) $ ( 553,369 ) $ ( 13,458 ) $ 13,052 $ ( 616,615 )

Other comprehensive income (loss) before reclassifications:

Net actuarial gain 4 — — — 4

Net actuarial loss — — — — —

Foreign currency translation adjustment 243 ( 38,265 ) 4,995 — ( 33,027 )

5 unchanged sentences

Net current period Other comprehensive income (loss) 872 ( 30,269 ) 4,995 1,013 ( 23,389 )

Balance at September 29, 2023

Balance at March 29, 2024

$ ( 58,933 ) $ ( 584,891 ) $ ( 12,220 ) $ 8,383 $ ( 647,661 )

(1) The amounts on this line within the Net Unrecognized Pension and Other Post-Retirement Benefit Cost column are included in the computation of net periodic benefit cost.

(2) During the three and nine months ended September 29, 2023, the amount within the Cash Flow Hedges column is a component of Interest expense and other, net.

(2) During the three months ended March 29, 2024, the amount within the Cash Flow Hedges column is a component of Interest expense and other, net.

See Note 11, “Derivatives” for additional details.

3 unchanged sentences

Asbestos Contingencies

Certain entities that became subsidiaries of ESAB Corporation in connection with the Separation are the legal obligor, or owner, for certain asbestos obligations including long-term asbestos insurance assets, long-term asbestos insurance receivables, accrued asbestos liabilities, long-term asbestos liabilities, asbestos indemnity expenses, asbestos-related defense costs and asbestos insurance recoveries related to the asbestos obligations from the Former Parent’s other legacy industrial businesses.

Certain entities are the legal obligor, or owner, for certain asbestos obligations including long-term asbestos insurance assets, long-term asbestos insurance receivables, accrued asbestos liabilities, long-term asbestos liabilities, asbestos indemnity expenses, asbestos-related defense costs and asbestos insurance recoveries related to the asbestos obligations of the Company’s legacy industrial businesses.

As a result, the Company holds certain asbestos-related contingencies and insurance coverages.

These subsidiaries are each one of many defendants in a large number of lawsuits that claim personal injury as a result of exposure to asbestos from products manufactured or used with components that are alleged to have contained asbestos.

Such components were acquired from third-party suppliers, and were not manufactured by any of the Company’s, or Former Parent’s, subsidiaries, nor were the subsidiaries producers or direct suppliers of asbestos.

Such components were acquired from third-party suppliers, and were not manufactured by any of the Company’s subsidiaries, nor were the subsidiaries producers or direct suppliers of asbestos.

The manufactured products that are alleged to have contained or used asbestos generally were provided to meet the specifications of the subsidiaries’ customers, including the U.S.

The subsidiaries settle asbestos claims for amounts the Company considers reasonable given the facts and circumstances of each claim.

The annual average settlement payment per asbestos claimant has fluctuated during the past several years while the number of cases has steadily declined.

The annual average settlement payment per asbestos claimant has fluctuated during the past several years while the number of cases has steadily declined, except for 2024 when they were substantially even versus prior year.

The Company expects such settlement value fluctuations to continue in the future based upon, among other things, the number and type of claims settled in a particular period and the jurisdictions in which such claims arise.

1 unchanged sentence

The Company has classified asbestos-related activity in Loss from discontinued operations, net of taxes in the Consolidated and Condensed Statements of Operations.

This is consistent with the Former Parent’s classification on the basis that, pursuant to the purchase agreement from the Former Parent’s Fluid Handling business divestiture, the Former Parent retained its asbestos-related contingencies and insurance coverages.

However, as the Former Parent did not retain an interest in the ongoing operations of the business subject to the contingencies, asbestos-related activity was classified as part of Loss from discontinued operations, net of taxes in the Consolidated and Condensed Statements of Operations of the Former Parent.

Refer to the 2024 Form 10-K for further detail on this classification.

The Company has projected each subsidiary’s future asbestos-related liability costs with regard to pending and future unasserted claims based upon the Nicholson methodology.

The Nicholson methodology is a standard approach used by experts and has been accepted by numerous courts.

Consistent with the Former Parent, it is ESAB’s policy to record a liability for asbestos-related liability costs for the longest period of time that ESAB management can reasonably estimate.

It is ESAB’s policy to record a liability for asbestos-related liability costs for the longest period of time that ESAB management can reasonably estimate.

The Company believes that it can reasonably estimate the asbestos-related liability for pending and future claims that will be resolved in the next 15 years and has recorded that liability as its best estimate.

4 unchanged sentences

The Company estimates the insurance assets for each subsidiary based upon the applicable policy language, expected recoveries and allocation methodologies, and law pertaining to the affected subsidiary’s insurance policies.

ESAB CORPORATION

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS — (Continued)

Asbestos-related claims activity since December 31 is as follows:

Nine Months Ended

September 27, 2024 September 29, 2023

Three Months Ended

April 4, 2025 March 29, 2024

(Number of claims)

6 unchanged sentences

(2) Claims resolved include all asbestos claims that have been settled, dismissed or that are in the process of being settled or dismissed based upon agreements or understandings in place with counsel for the claimants.

ESAB CORPORATION

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS — (Continued)

The Company’s Consolidated and Condensed Balance Sheets included the following amounts related to asbestos-related litigation:

September 27, 2024 December 31, 2023

April 4, 2025 December 31, 2024

(In thousands)

12 unchanged sentences

Projecting future events, such as new claims to be filed each year, the average cost of resolving each claim, coverage issues among layers of insurers, the method in which losses will be allocated to the various insurance policies, interpretation of the effect on coverage of various policy terms and limits and their interrelationships, the continuing solvency of various insurance companies, the amount of remaining insurance available, as well as the numerous uncertainties inherent in asbestos litigation could cause the actual liabilities and insurance recoveries to be higher or lower than those projected or recorded that could materially affect the Company’s financial condition, results of operations or cash flow.

From time to time, other asbestos allegations related to the Company’s legacy industrial businesses are brought against the Company.

Management currently believes no loss is probable or estimable for these other matters.

General Litigation

6 unchanged sentences

Segment Information

ESAB is a focused premier industrial compounder.

ESAB is a focused industrial compounder.

ESAB provides its partners with fabrication technology advanced equipment, consumables, gas control equipment, welding robotics and digital solutions.

ESAB CORPORATION

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS — (Continued)

The Company conducts its operations through two reportable segments.

These segments consist of the “Americas,” which includes operations in North America and South America, and “EMEA & APAC,” which includes Europe, Middle East, India, Africa and Asia Pacific.

The Company’s management evaluates the operating results of each of its reportable segments based upon Net sales and Adjusted EBITDA, which represents Net income from continuing operations excluding the impact of Income tax expense, Interest expense and other, net, Pension settlement (loss), Restructuring and other related charges, acquisition - amortization and other related charges and depreciation and other amortization .

The Company’s management considers its Chief Operating Decision Maker (“CODM”) as Shyam Kambeyanda, President, Chief Executive Officer and Director.

The Company’s management and CODM evaluate the operating results of each reportable segments, including assessment of profit or loss, performance and allocation of resources, based upon Net sales and Adjusted EBITDA, which represents Net income from continuing operations excluding the impact of Income tax expense, Interest expense and other, net, Pension settlement loss, Restructuring and other related charges, acquisition - amortization and other related charges and depreciation and other amortization .

Segment results reflect the allocation of overhead costs, which primarily consist of Selling, general and administrative expense.

ESAB CORPORATION

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS — (Continued)

The Com pany’s segment results were as follows:

Three Months Ended Nine Months Ended

September 27, 2024 September 29, 2023 September 27, 2024 September 29, 2023

Three Months Ended

April 4, 2025 March 29, 2024

(In thousands)

2 unchanged sentences

$ 678,138 $ 689,744

Cost of sales:

Americas $ 170,608 $ 184,996

EMEA & APAC 252,328 249,721

$ 422,936 $ 434,717

Allocated operating expense:

Americas $ 17,440 $ 17,737

EMEA & APAC 26,794 26,482

$ 44,234 $ 44,219

Other operating expense:

Americas $ 38,097 $ 39,216

EMEA & APAC 38,971 42,455

$ 77,068 $ 81,671

Adjusted EBITDA (1) :

2 unchanged sentences

$ 133,900 $ 129,137

Depreciation, amortization and other impairment charges:

Americas $ 8,204 $ 7,849

EMEA & APAC 9,287 8,538

$ 17,491 $ 16,387

Capital expenditures:

Americas $ 3,735 $ 2,287

EMEA & APAC 3,559 5,127

$ 7,294 $ 7,414

(1) The following is a reconciliation of Net income from continuing operations to Adjusted EBITDA.

Three Months Ended Nine Months Ended

September 27, 2024 September 29, 2023 September 27, 2024 September 29, 2023

Three Months Ended

April 4, 2025 March 29, 2024

(In thousands)

2 unchanged sentences

Interest expense and other, net 16,782 17,091

16,894 20,502 49,925 58,831

Pension settlement loss — 12,155

1 unchanged sentence

Acquisition - amortization and other related charges (2)

10,064 9,285 25,571 27,826

Depreciation and other amortization 9,955 8,783

Adjusted EBITDA $ 133,900 $ 129,137

(1) Relates to removal of interest expense, net included within the Interest expense and other, net line within the Consolidated and Condensed Statements of Operations.

(2) Includes transaction expenses, amortization of intangibles, fair value charges on acquired inventories and integration expenses.

ESAB CORPORATION

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS — (Continued)

(1) I ncludes severance and other termination benefits, including outplacement services, as well as the cost of relocating associates, relocating equipment, lease termination expenses, impairment of long-lived assets and other costs in connection with the closure and optimization of facilities and product lines .

(2) Includes transaction, diligence and integration expenses, amortization of intangibles, fair value charges on acquired inventories and integration expenses.

April 4, 2025 December 31, 2024

(In thousands)

Investments in equity method investees:

Americas $ — $ —

EMEA & APAC 30,634 28,885

$ 30,634 $ 28,885

Total assets:

Americas $ 1,833,061 $ 1,796,167

EMEA & APAC 2,384,481 2,237,808

$ 4,217,542 $ 4,033,975

Property, plant and equipment, net (1) :

United States $ 71,455 $ 73,036

Czech Republic 57,557 55,554

India 32,230 31,506

Mexico 20,718 20,495

Poland 18,155 17,227

Other foreign countries 107,372 100,529

$ 307,487 $ 298,347

(1) As the Company does not allocate all long-lived assets, specifically intangible assets, to each individual country, evaluation of long-lived assets in total is impracticable.

Subsequent Event

The dividend of $ 4.9 million included in Accrued liabilities in the Consolidated Balance Sheets at September 27, 2024 was paid on October 11, 2024 to stockholders of record as of September 27, 2024.

The dividend of $ 4.9 million included in Accrued liabilities in the Consolidated Balance Sheets at April 4, 2025 was paid on April 17, 2025 to stockholders of record as of April 4, 2025.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements