What changed in this filing

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Item 1. Financial Statements

2025-08-06 compared with 2025-05-01 · 156 added, 106 removed, 547 unchanged (32% of the section changed)

3 unchanged sentences

Dollars in thousands, except per share amounts

Three Months Ended

April 4, 2025 March 29, 2024

Three Months Ended Six Months Ended

July 4, 2025 June 28, 2024 July 4, 2025 June 28, 2024

Net sales $ 715,586 $ 707,053 $ 1,393,724 $ 1,396,797

25 unchanged sentences

Dollars in thousands

Three Months Ended

April 4, 2025 March 29, 2024

Three Months Ended Six Months Ended

July 4, 2025 June 28, 2024 July 4, 2025 June 28, 2024

Net income $ 68,104 $ 84,369 $ 137,936 $ 145,963

2 unchanged sentences

102,218 ( 14,557 ) 181,548 ( 39,911 )

Unrealized (loss) income on derivatives designated and qualifying as cash flow hedges, net of tax (benefit) expense of $( 497 ) and $ 295

Unrealized income (loss) on derivatives designated and qualifying as cash flow hedges, net of tax (benefit) expense of $ — , $( 539 ), $( 497 ) and $( 244 )

— ( 1,851 ) ( 1,816 ) ( 838 )

Defined benefit pension and other post-retirement plan activity, net of tax expense of $ 97 , $ 44 , $ 108 and $ 247

202 327 523 956

Other comprehensive income (loss) 102,420 ( 16,081 ) 180,255 ( 39,793 )

6 unchanged sentences

Dollars in thousands, except share and per share amounts

April 4, 2025 December 31, 2024

July 4, 2025 December 31, 2024

CURRENT ASSETS:

21 unchanged sentences

Total liabilities 2,320,592 2,225,726

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

Common stock - $ 0.001 par value - 600,000,000 shares authorized, 60,696,786 and 60,517,574 shares outstanding as of July 4, 2025 and December 31, 2024, respectively

Additional paid-in capital 1,898,801 1,901,337

22 unchanged sentences

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

Net income — — — 66,883 — 1,221 68,104

Dividends declared ($ 0.10 per share)

— — — ( 6,091 ) — — ( 6,091 )

Distributions to noncontrolling owners — — — — — ( 6 ) ( 6 )

Other comprehensive income, net of tax benefit of $ 7,153

— — — — 102,158 262 102,420

Common stock-based award activity 74,050 — ( 3,048 ) — — — ( 3,048 )

Balance at July 4, 2025

60,696,786 $ 61 $ 1,898,801 $ 720,467 $ ( 549,699 ) $ 42,141 $ 2,111,771

Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Loss Noncontrolling Interest Total

10 unchanged sentences

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 — — — — — ( 1,218 ) ( 1,218 )

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

See Notes to Consolidated and Condensed Financial Statements.

2 unchanged sentences

Dollars in thousands

Three Months Ended

April 4, 2025 March 29, 2024

Six Months Ended

July 4, 2025 June 28, 2024

Cash flows from operating activities:

4 unchanged sentences

Stock-based compensation expense 9,900 9,886

Deferred income tax ( 2,774 ) ( 638 )

Deferred income tax (benefit) expense ( 6,761 ) 1,760

Non-cash interest expense 1,255 1,632

9 unchanged sentences

Proceeds from sale of property, plant and equipment 4,732 608

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

Acquisitions, net of cash received ( 86,252 ) ( 18,050 )

Other investing ( 500 ) ( 3,059 )

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 8,674 205,000

1 unchanged sentence

Repayments of borrowings on revolving credit facilities and other — ( 237,005 )

Payment of debt issuance costs — ( 10,423 )

Payment of dividends ( 9,729 ) ( 7,278 )

1 unchanged sentence

Other financing ( 12,418 ) ( 5,295 )

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

Net cash (used in) provided by financing activities ( 19,647 ) 46,281

Effect of foreign exchange rates on Cash and cash equivalents 44,969 ( 10,359 )

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

Increase in Cash and cash equivalents 8,865 126,467

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

11 unchanged sentences

The Company’s fiscal year ends December 31.

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.

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

As used herein, the second quarter results for 2025 and 2024 refer to the 13-week periods ended July 4, 2025 and June 28, 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 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.

For the three and six months ended July 4, 2025, Russia represented approximately 5 % of the Company’s total revenue and approximately $ 3 million and $ 7 million of its Net income, respectively.

Russia also has approximately 5 % of the Company’s total net assets as of July 4, 2025, including approximately $ 48 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.

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

The Company is closely monitoring developments in Ukraine and Russia.

9 unchanged sentences

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

Research and development costs were $ 10.5 million and $ 20.6 million during the three and six months ended July 4, 2025, respectively, and $ 9.7 million and $ 19.8 million for the three and six months ended June 28, 2024, respectively.

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.

9 unchanged sentences

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 .

Cas h used in operating activities related to discontinued operations was $ 4.9 million and $ 7.2 million for the three and six months ended July 4, 2025, respectively, and $ 4.8 million and $ 8.5 million for the three and six months ended June 28, 2024, respectively .

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.

3 unchanged sentences

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.

The following describes our acquisition activity for the six months ended July 4, 2025.

On April 30, 2025, the Company completed the acquisition of Bavaria Schweisstechnik, a European provider of submerged-arc welding applications, for approximately $ 68 million, net of cash received.

The Company recognized intangible assets and goodwill of approximately $ 26 million and $ 40 million, respectively.

On May 5, 2025, the Company entered into an agreement to acquire Aktiv Technologies Private Limited, a family-owned gas equipment manufacturer based in India, for approximately $ 29 million of cash consideration.

This acquisition was subsequently completed on July 9, 2025.

On June 4, 2025, the Company completed the acquisition of DeltaP, a European provider of comprehensive medical central gas systems and aftermarket services, for approximately $ 16 million, net of cash received.

On June 13, 2025, the Company entered into an agreement to acquire EWM GmbH (“EWM”), a global leader in heavy industrial welding equipment and advanced automation, for approximately $ 324 million of cash consideration.

2025 EWM projected annual revenue is approximately $ 141 million.

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.

2 unchanged sentences

The Company disaggregates its revenue into the following product groups:

Three Months Ended

April 4, 2025 March 29, 2024

(In thousands)

Three Months Ended Six Months Ended

July 4, 2025 June 28, 2024 July 4, 2025 June 28, 2024

Equipment $ 231,939 $ 231,659 $ 464,427 $ 446,518

1 unchanged sentence

Total $ 715,586 $ 707,053 $ 1,393,724 $ 1,396,797

ESAB CORPORATION

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS — (Continued)

The sales mix in the above table is relatively consistent across both reportable segments.

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 April 4, 2025 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 July 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 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)

During the three and six months ended July 4, 2025, revenue recognized that was included in the contract liabilities balance at the beginning of the year was $ 3.6 million and $ 13.6 million, respectively.

During the three and six months ended June 28, 2024, revenue recognized that was included in the contract liabilities balance at the beginning of the year was $ 5.1 million and $ 21.3 million, respectively.

As of July 4, 2025 and June 28, 2024, total contract liabilities were $ 25.1 million and $ 27.9 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:

Three months ended April 4, 2025

Six months ended July 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

April 4, 2025 March 29, 2024

Three Months Ended Six Months Ended

July 4, 2025 June 28, 2024 July 4, 2025 June 28, 2024

(In thousands, except share and per share data)

13 unchanged sentences

Net income per share from continuing operations – diluted $ 1.12 $ 1.37 $ 2.26 $ 2.37

(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.

(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 $ 1.2 million and $ 3.7 million for the three and six months ended July 4, 2025, respectively, and $ 1.5 million and $ 3.1 million for the three and six months ended June 28, 2024, respectively.

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

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.

ESAB CORPORATION

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS — (Continued)

During the three and six months ended July 4, 2025, Income from continuing operations before income taxes was $ 88.1 million and $181.2 million, respectively, while Income tax expense was $ 18.3 million and $38.8 million, respectively.

The effective tax rate was 20.8 % and 21.4 % for the three and six months ended July 4, 2025, respectively.

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

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.

taxed at different statutory tax rates.

During the three and six months ended June 28, 2024, Income from continuing operations before income taxes was $ 103.4 million and $184.8 million, respectively, while Income tax expense was $ 17.9 million and $36.4 million, respectively.

The effective tax rate was 17.3 % and 19.7% for the three and six months ended June 28, 2024, respectively.

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)

federal statutory rate of 21.0% primarily due to a favorable final ruling in a tax case in a foreign jurisdiction.

Inventories, Net

Inventories, net consisted of the following:

April 4, 2025 December 31, 2024

July 4, 2025 December 31, 2024

(In thousands)

7 unchanged sentences

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

April 4, 2025 December 31, 2024

July 4, 2025 December 31, 2024

Current Noncurrent Current Noncurrent

11 unchanged sentences

$ 295,204 $ 575,291 $ 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:

Three Months Ended

April 4, 2025 March 29, 2024

Six Months Ended

July 4, 2025 June 28, 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:

ESAB CORPORATION

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS — (Continued)

Three Months Ended April 4, 2025

Six Months Ended July 4, 2025

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

10 unchanged sentences

The Company sponsors various defined benefit plans and other post-retirement benefits plans, including health and life insurance, for certain eligible employees or former employees.

During the three months ended March 29, 2024, the Company recognized a non-cash pension settlement loss of $ 12.2 million related to the transfer of plan assets to a third party as part of externalizing the risk associated with a foreign defined benefit plan.

During the six months ended June 28, 2024, the Company recognized a non-cash pension settlement loss of $ 12.2 million related to the transfer of plan assets to a third party as part of externalizing the risk associated with a foreign defined benefit plan.

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

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

April 4, 2025 December 31, 2024

July 4, 2025 December 31, 2024

(In thousands)

6 unchanged sentences

Long-term debt $ 1,058,832 $ 1,060,739

ESAB CORPORATION

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS — (Continued)

Senior Notes, Term Loans and Revolving Credit Facility

6 unchanged sentences

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.

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:

As of July 4, 2025, the Company’s debt primarily consisted of the following facilities:

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

3 unchanged sentences

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.

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 July 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.

4 unchanged sentences

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

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.

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.

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

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.

ESAB CORPORATION

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS — (Continued)

As of July 4, 2025, the weighted-average interest rate of borrowings under the Credit Agreement and Indenture was 5.52 %, including the net impact from the 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 $ 110.0 million.

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

Total letters of credit of $ 28.5 million were outstanding as of July 4, 2025.

Deferred Financing Fees

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.

The Company had total deferred financing fees of $ 8.6 million included in its Consolidated and Condensed Balance Sheets as of July 4, 2025, 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 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 $ 8.6 million, $ 0.5 million of deferred financing fees relating to the Revolving Facility are included in Other assets and $ 8.1 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 April 4, 2025.

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

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

9 unchanged sentences

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 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 July 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.

ESAB CORPORATION

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS — (Continued)

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

Three Months Ended

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

Three Months Ended Six Months Ended

Derivative Type Gain Recognized in the Consolidated and Condensed Statements of Operations July 4, 2025 June 28, 2024 July 4, 2025 June 28, 2024

(In thousands)

7 unchanged sentences

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 three months ended April 4, 2025.

The Company did not have any ineffectiveness related to net investment hedges during the six months ended July 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.

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

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

Three Months Ended Six Months Ended

Derivative Type Loss (Gain) Recognized in the Consolidated and Condensed Statements of Operations July 4, 2025 June 28, 2024 July 4, 2025 June 28, 2024

(In thousands)

1 unchanged sentence

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

April 4, 2025 December 31, 2024

July 4, 2025 December 31, 2024

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

3 unchanged sentences

$ 53,941 $ — $ 1,830 $ 842

ESAB CORPORATION

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS — (Continued)

Derivatives Not Designated as Hedging Instruments

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

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.

As of July 4, 2025 and December 31, 2024, the Company had foreign currency contracts related to purchases and sales with notional values of $ 203.7 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:

April 4, 2025 December 31, 2024

July 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 $ 1,474 $ 2,636 $ 379 $ 255

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.

The amounts in the table above as of July 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 $ 0.8 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

Foreign Currency Contracts April 4, 2025 March 29, 2024

Three Months Ended Six Months Ended

Foreign Currency Contracts July 4, 2025 June 28, 2024 July 4, 2025 June 28, 2024

(In thousands)

Change in unrealized losses $ ( 1,416 ) $ ( 49 )

Realized gains (losses) 1,448 ( 394 )

Change in unrealized gains $ 2,578 $ 678 $ 1,285 $ 629

Realized gains 142 2,542 1,590 378

The above gains or losses on foreign currency contracts are usually offset by foreign exchange exposure on cash and intercompany positions, all of which are recognized in Interest expense and other, net, in the Consolidated and Condensed Statements of Operations.

2 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:

April 4, 2025 December 31, 2024

July 4, 2025 December 31, 2024

Three Total Level

4 unchanged sentences

Deferred compensation plans — 6,336 — 6,336 — 5,242 — 5,242

Other — 1,380 — 1,380 — — — —

$ 14,078 $ 11,126 $ — $ 25,204 $ 8,990 $ 6,741 $ — $ 15,731

5 unchanged sentences

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

For the six months ended July 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 three months ended April 4, 2025.

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

No repurchases of the Company’s Common stock have been made through the six months ended July 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.

1 unchanged sentence

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.

The following tables present the changes in the balances of each component of AOCL including reclassifications out of AOCL for the six months ended July 4, 2025 and June 28, 2024.

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

15 unchanged sentences

( 50,452 ) ( 584,787 ) ( 16,618 ) — ( 651,857 )

Other comprehensive (loss) income before reclassifications:

Foreign currency translation adjustment ( 431 ) 117,446 ( 25,027 ) — 91,988

Gain on long-term intra-entity foreign currency transactions — 9,968 — — 9,968

Other comprehensive (loss) income before reclassifications ( 431 ) 127,414 ( 25,027 ) — 101,956

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

202 — — — 202

Net current period Other comprehensive (loss) income ( 229 ) 127,414 ( 25,027 ) — 102,158

Balance at July 4, 2025

$ ( 50,681 ) $ ( 457,373 ) $ ( 41,645 ) $ — $ ( 549,699 )

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

(2) The amount within the Cash Flow Hedges column is a component of Interest expense and other, net.

See Note 11, “Derivatives” for additional details.

7 unchanged sentences

Other comprehensive income (loss) before reclassifications:

Net actuarial loss — — — — —

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

7 unchanged sentences

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

Other comprehensive income (loss) before reclassifications:

Foreign currency translation adjustment 6 ( 23,042 ) 686 — ( 22,350 )

Gain on long-term intra-entity foreign currency transactions — 8,162 — — 8,162

Unrealized gain on cash flow hedges — — — 811 811

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 )

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

(2) The amount within the Cash Flow Hedges column is a component of Interest expense and other, net.

See Note 11, “Derivatives” for additional details.

9 unchanged sentences

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, except for 2024 when they were substantially even versus prior year.

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

5 unchanged sentences

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.

While it is reasonably possible that the subsidiaries will incur costs after this period, the Company does not believe the reasonably possible loss or a range of reasonably possible losses is estimable at the current time.

4 unchanged sentences

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

Three Months Ended

April 4, 2025 March 29, 2024

Six Months Ended

July 4, 2025 June 28, 2024

(Number of claims)

4 unchanged sentences

Claims unresolved, end of period 14,820 14,718

(1) Claims filed include all asbestos claims for which notification have been received or a file has been opened.

(1) Claims filed include all asbestos claims for which notification has been received or a file has been opened.

(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.

2 unchanged sentences

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

April 4, 2025 December 31, 2024

July 4, 2025 December 31, 2024

(In thousands)

22 unchanged sentences

Segment Information

ESAB is a focused industrial compounder.

ESAB is a focused premier industrial compounder.

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

2 unchanged sentences

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 .

The Company’s management and CODM evaluate the operating results of each reportable segment, 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.

2 unchanged sentences

The Com pany’s segment results were as follows:

Three Months Ended

April 4, 2025 March 29, 2024

Three Months Ended Six Months Ended

July 4, 2025 June 28, 2024 July 4, 2025 June 28, 2024

(In thousands)

27 unchanged sentences

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

Three Months Ended

April 4, 2025 March 29, 2024

Three Months Ended Six Months Ended

July 4, 2025 June 28, 2024 July 4, 2025 June 28, 2024

(In thousands)

4 unchanged sentences

Restructuring and other related charges (1)

1,390 4,773 5,889 6,697

Acquisition - amortization and other related charges (2)

21,592 7,730 31,193 15,507

Depreciation and other amortization 11,422 9,115 21,377 17,898

3 unchanged sentences

(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

(2) Includes transaction, diligence and integration expenses totaling $ 12.8 million and $ 14.2 million for the three and six months ended July 4, 2025, respectively, and $ 0.5 million and $ 0.6 million for the three and six months ended June 28, 2024, respectively.

Additionally, it includes amortization of intangibles and fair value charges on acquired inventories totaling $ 8.8 million and $ 17.0 million three and six months ended July 4, 2025, respectively, and $ 7.3 million and $ 14.9 million for the three and six months ended June 28, 2024, respectively.

July 4, 2025 December 31, 2024

(In thousands)

17 unchanged sentences

Subsequent Event

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.

The dividend of $ 6.1 million included in Accrued liabilities in the Consolidated and Condensed Balance Sheets at July 4, 2025 was paid on July 18, 2025 to stockholders of record as of July 3, 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