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Item 1. Financial Statements

2025-10-29 compared with 2025-08-06 · 196 added, 109 removed, 594 unchanged (34% of the section changed)

3 unchanged sentences

Dollars in thousands, except per share amounts

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

October 3, 2025 September 27, 2024 October 3, 2025 September 27, 2024

Net sales $ 727,845 $ 673,250 $ 2,121,569 $ 2,070,047

25 unchanged sentences

Dollars in thousands

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

October 3, 2025 September 27, 2024 October 3, 2025 September 27, 2024

Net income $ 56,521 $ 69,833 $ 194,457 $ 215,796

Other comprehensive income (loss):

Foreign currency translation, net of tax (benefit) expense of $( 7,250 ), $ 416 , $( 11,572 ) and $ 1,947

Other comprehensive (loss) income:

Foreign currency translation, net of tax expense (benefit) of $ 947 , $( 2,871 ), $( 10,625 ) and $( 924 )

( 6,087 ) 63,675 175,461 23,764

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

Unrealized loss on derivatives designated and qualifying as cash flow hedges, net of tax benefit of $ — , $( 911 ), $( 497 ) and $( 1,155 )

— ( 3,130 ) ( 1,816 ) ( 3,968 )

1 unchanged sentence

250 343 773 1,299

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

Other comprehensive (loss) income ( 5,837 ) 60,888 174,418 21,095

Comprehensive income 50,684 130,721 368,875 236,891

5 unchanged sentences

Dollars in thousands, except share and per share amounts

July 4, 2025 December 31, 2024

October 3, 2025 December 31, 2024

CURRENT ASSETS:

21 unchanged sentences

Total liabilities 2,707,376 2,225,726

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

Common stock - $ 0.001 par value - 600,000,000 shares authorized, 60,709,740 and 60,517,574 shares outstanding as of October 3, 2025 and December 31, 2024, respectively

Additional paid-in capital 1,900,871 1,901,337

31 unchanged sentences

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

Net income — — — 54,847 — 1,674 56,521

Dividends declared ($ 0.10 per share)

— — — ( 6,088 ) — — ( 6,088 )

Distributions and purchases relating to noncontrolling owners — — — — — 3,590 3,590

Other comprehensive income, net of tax expense of $ 997

— — — — ( 4,511 ) ( 1,326 ) ( 5,837 )

Common stock-based award activity 12,954 — 2,070 — — — 2,070

Balance at October 3, 2025

60,709,740 $ 61 $ 1,900,871 $ 769,226 $ ( 554,210 ) $ 46,079 $ 2,162,027

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

19 unchanged sentences

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 to noncontrolling owners — — 2,860 — ( 1,706 ) ( 3,155 ) ( 2,001 )

Other comprehensive loss, net of tax benefit of $ 3,759

— — — — 60,179 709 60,888

Common stock-based award activity 5,408 — 4,438 — — — 4,438

Balance at September 27, 2024

60,444,246 $ 60 $ 1,893,665 $ 548,300 $ ( 604,900 ) $ 40,600 $ 1,877,725

See Notes to Consolidated and Condensed Financial Statements.

2 unchanged sentences

Dollars in thousands

Six Months Ended

July 4, 2025 June 28, 2024

Nine Months Ended

October 3, 2025 September 27, 2024

Cash flows from operating activities:

2 unchanged sentences

Depreciation, amortization and other impairment charges 58,731 50,028

(Gain) loss on sale of property, plant and equipment ( 5,703 ) 63

Net gain on sale of property, plant and equipment ( 5,697 ) ( 1,060 )

Stock-based compensation expense 12,542 14,473

23 unchanged sentences

Other financing ( 13,008 ) ( 5,099 )

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

Net cash provided by financing activities 227,263 40,576

Effect of foreign exchange rates on Cash and cash equivalents 40,137 ( 3,218 )

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

(Decrease) increase in Cash and cash equivalents ( 31,139 ) 151,667

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 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.

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

As used herein, the third quarter results for 2025 and 2024 refer to the 13-week periods ended October 3, 2025 and September 27, 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 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.

For the three and nine months ended October 3, 2025, Russia represented approximately 6 % and 5 %, respectively, of the Company’s Net sales and approximately $ 3 million and $ 9 million, respectively, of its Net income.

Russia also has approximately 5 % of the Company’s total net assets as of October 3, 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 July 4, 2025, which would be realized upon a transition out.

Russia has a cumulative translation loss of approximately $ 110 million as of October 3, 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 $ 10.5 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.

Research and development costs were $ 10.5 million and $ 31.1 million during the three and nine months ended October 3, 2025, respectively, and $ 9.2 million and $ 29.0 million for the three and nine months ended September 27, 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 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.

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.

Cas h used in operating activities related to discontinued operations was $ 3.6 million and $ 10.8 million for the three and nine months ended October 3, 2025, respectively, and $ 3.6 million and $ 12.1 million for the three and nine months ended September 27, 2024, respectively .

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

The Company has completed a number of acquisitions that have been accounted for using the acquisition method and have resulted in the recognition of goodwill in the Company’s financial statements.

This goodwill arises because the purchase prices for these businesses exceeded the fair value of acquired identifiable net assets.

This excess is attributable to a variety of factors, including, but not limited to, the anticipated future earnings and cash flow potential of the acquired businesses;

prevailing market multiples applied to earnings and cash flows in comparable transactions;

the competitive nature of the acquisition processes;

the strategic benefits of accelerating market entry or enhancing existing product offerings without incurring the time, cost and risk associated with internal development;

and the complementary fit and expected synergies these businesses contribute to the Company’s existing operations.

Under the acquisition method of accounting, the Company makes an initial allocation of the purchase price at the date of acquisition based upon its understanding of the fair value of the acquired assets and assumed liabilities from information obtained 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 fair values of acquired intangibles are determined based on estimates and assumptions that form the basis of the forecasted results of the acquired business including earnings before interest, taxes, depreciation and amortization (“EBITDA”), revenue, revenue growth rates, royalty rates and customer attrition rates.

These assumptions are forward looking and could be affected by future economic and market conditions.

The Company engages third-party valuation specialists who provide guidance on the Company’s critical assumptions and calculations of the fair value of acquired intangible assets in connection with significant acquisitions.

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 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.

Only facts and circumstances that existed as of the acquisition date are considered for subsequent adjustment.

The following table describes the Company’s 2025 acquisition activity, for which it acquired 100% of the equity and voting interest of each acquired entity.

Acquisition Date Company Description Segment

April 30, 2025 Bavaria Schweisstechnik (“Bavaria”) A European provider of submerged-arc welding applications EMEA & APAC

June 4, 2025 DeltaP s.r.l.

(“DeltaP”) A European provider of medical central gas systems and aftermarket services EMEA & APAC

July 9, 2025 Aktiv Technologies Private Limited (“Aktiv”)

An industrial gas equipment manufacturer based in India

August 22, 2025 EWM GmbH (“EWM”)

A Global leader in heavy industrial welding equipment and advanced automation

The following table summarizes the preliminary allocation of the purchase price to the assets acquired and liabilities assumed for the nine months ended October 3, 2025.

These amounts, including inventories, deferred taxes, intangible assets, and property, plant and equipment, are determined based upon certain valuations and studies that have yet to be finalized.

Accordingly, the assets acquired and liabilities assumed, as detailed below, are subject to adjustment once the detailed analyses are completed.

None of the goodwill is expected to be deductible for tax purposes.

ESAB CORPORATION

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS — (Continued)

EWM All Others Total

(in thousands)

Cash and cash equivalents $ 10,349 $ 6,803 $ 17,152

Inventories, net 39,903 7,662 47,565

Property, plant and equipment, net 31,470 6,284 37,754

162,926 65,865 228,791

Identifiable intangible assets (2)

137,141 43,938 181,079

Customer relationships (3)

96,433 35,771 132,204

Trade names 20,536 6,294 26,830

Technology 20,172 1,873 22,045

Deferred tax liability ( 35,605 ) ( 12,006 ) ( 47,611 )

Other, net (4)

( 11,438 ) ( 890 ) ( 12,328 )

Preliminary purchase price consideration 334,746 117,656 452,402

(1) Goodwill for “All Others” includes approximately $ 39 million for Bavaria and $ 17 million for Aktiv.

(2) Definite-lived intangibles are subject to estimated weighted-average useful lives ranging from five to twenty years .

(3) Customer relationships for “All Others” includes approximately $ 23 million for Bavaria.

(4) Includes current and non-current amounts and non-controlling interest.

For the three and nine months ended October 3, 2025, the above acquisitions added approximately $ 27 million and $ 35 million, respectively, to Net sales.

The Company incurred approximately $ 1 million and $ 10 million of acquisition-related costs for the acquisitions completed in 2025 in the three and nine months ended October 3, 2025, respectively.

These costs were expensed in Selling, general and administrative expense in the Consolidated and Condensed Statements of Operations.

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 Six Months Ended

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

Three Months Ended Nine Months Ended

October 3, 2025 September 27, 2024 October 3, 2025 September 27, 2024

(in thousands)

Equipment $ 249,948 $ 219,415 $ 714,375 $ 665,934

Consumables 477,897 453,835 1,407,194 1,404,113

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

ESAB CORPORATION

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS — (Continued)

$ 727,845 $ 673,250 $ 2,121,569 $ 2,070,047

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 July 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 October 3, 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 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.

During the three and nine months ended October 3, 2025, revenue recognized that was included in the contract liabilities balance at the beginning of the year was $ 1.9 million and $ 15.5 million, respectively.

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.

As of October 3, 2025 and September 27, 2024, total contract liabilities were $ 27.2 million and $ 27.8 million, respectively.

ESAB CORPORATION

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS — (Continued)

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:

Six months ended July 4, 2025

Nine Months Ended October 3, 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 Six Months Ended

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

Three Months Ended Nine Months Ended

October 3, 2025 September 27, 2024 October 3, 2025 September 27, 2024

(In thousands, except share and per share data)

13 unchanged sentences

Net income per share from continuing operations – diluted $ 1.04 $ 1.13 $ 3.29 $ 3.50

(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.

(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 $ 1.7 million and $ 5.4 million for the three and nine months ended October 3, 2025, respectively, and $ 1.6 million and $ 4.7 million for the three and nine months ended September 27, 2024, respectively.

(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 October 3, 2025, Income from continuing operations before income taxes was $ 83.0 million and $ 264.2 million, respectively, while Income tax expense was $ 17.7 million and $ 56.5 million, respectively.

The effective tax rate was 21.3 % and 21.4 % for the three and nine months ended October 3, 2025, respectively.

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

federal statutory rate of 21.0% primarily due to the impact of a law change in a foreign jurisdiction and withholding tax offset by a release of a valuation allowance in a foreign jurisdiction.

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.

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 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 a favorable final ruling in a tax case in a foreign jurisdiction.

effective tax rate differed from the 2024 U.S.

federal statutory rate of 21.0% primarily due to a favorable final ruling in a tax case in a foreign jurisdiction and an agreement with a taxing authority on the treatment of subsidy income in a foreign jurisdiction.

Inventories, Net

Inventories, net consisted of the following:

July 4, 2025 December 31, 2024

October 3, 2025 December 31, 2024

(In thousands)

7 unchanged sentences

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

July 4, 2025 December 31, 2024

October 3, 2025 December 31, 2024

Current Noncurrent Current Noncurrent

11 unchanged sentences

$ 324,685 $ 704,179 $ 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:

Six Months Ended

July 4, 2025 June 28, 2024

Nine Months Ended

October 3, 2025 September 27, 2024

(In thousands)

5 unchanged sentences

Warranty liability, end of period $ 13,325 $ 13,914

ESAB CORPORATION

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS — (Continued)

Accrued Restructuring Liability

1 unchanged sentence

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:

Six Months Ended July 4, 2025

Nine Months Ended October 3, 2025

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

(In thousands)

Restructuring and other related charges:

Termination benefits (1)

7 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 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.

During the nine months ended September 27, 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:

July 4, 2025 December 31, 2024

October 3, 2025 December 31, 2024

(In thousands)

1 unchanged sentence

Senior unsecured notes 700,000 700,000

Revolving credit facility 260,000 —

Other debt 8,888 —

3 unchanged sentences

Long-term debt $ 1,334,123 $ 1,060,739

ESAB CORPORATION

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS — (Continued)

Senior Notes, Term Loans and Revolving Credit Facility

5 unchanged sentences

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.

Also on June 28, 2022, the

ESAB CORPORATION

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS — (Continued)

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”) 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 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;

After the quarter ended October 3, 2025, on October 16, 2025, the Company entered into an Amended and Restated Credit Agreement that, among other things, provides for (i) a senior term loan A facility in an aggregate principal amount of $ 350 million, and (ii) a senior revolving credit facility in the amount of $ 1.05 billion to replace the Company’s existing $ 400 million Term Loan A-1 Facility and $ 750 million Revolving Facility and pay off the outstanding principal and interest thereunder.

Both facilities mature on October 16, 2030, subject to a springing maturity date under certain circumstances.

The new covenants and applicable interest rate under the Amended and Restated Credit Agreement are substantially similar to the prior agreement.

Refer to “Note 16, Subsequent Events” for further details.

As of October 3, 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 $ 260 million drawn;

• A Term Loan A-1 Facility with an aggregate principal amount of $ 375 million and a maturity date of April 4, 2027;

2 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 July 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 October 3, 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.

6 unchanged sentences

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

As of October 3, 2025, the weighted-average interest rate of borrowings under the Credit Agreement and Indenture was 5.55 %, including the net impact from the cross-currency swaps and excluding accretion of deferred financing fees, and there was $ 490 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 $ 113.3 million.

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

Total letters of credit of $ 32.4 million were outstanding as of October 3, 2025.

Deferred Financing Fees

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 Company had total deferred financing fees of $ 8.0 million included in its Consolidated and Condensed Balance Sheets as of October 3, 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.

5 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 July 4, 2025.

None of the concentrations of risk with an individual counterparty was considered significant as of October 3, 2025.

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

10 unchanged sentences

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.

Therefore, the Company does not have any interest rate swaps outstanding as of October 3, 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.

2 unchanged sentences

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

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

Three Months Ended Nine Months Ended

Derivative Type Gain Recognized in the Consolidated and Condensed Statements of Operations October 3, 2025 September 27, 2024 October 3, 2025 September 27, 2024

(In thousands)

16 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 six months ended July 4, 2025.

The Company did not have any ineffectiveness related to net investment hedges during the nine months ended October 3, 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 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

Three Months Ended Nine Months Ended

Derivative Type Gain Recognized in the Consolidated and Condensed Statements of Operations October 3, 2025 September 27, 2024 October 3, 2025 September 27, 2024

(In thousands)

1 unchanged sentence

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

July 4, 2025 December 31, 2024

October 3, 2025 December 31, 2024

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

7 unchanged sentences

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

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.

As of October 3, 2025 and December 31, 2024, the Company had foreign currency contracts related to purchases and sales with notional values of $ 130.2 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:

July 4, 2025 December 31, 2024

October 3, 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 $ 387 $ 2,209 $ 379 $ 255

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.

The amounts in the table above as of October 3, 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 $ 0.4 million increase in Other current assets with a corresponding increase in Accrued liabilities.

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 Six Months Ended

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

Three Months Ended Nine Months Ended

Foreign Currency Contracts October 3, 2025 September 27, 2024 October 3, 2025 September 27, 2024

(In thousands)

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

Change in unrealized gains (losses) $ 660 $ ( 1,220 ) $ 1,945 $ ( 591 )

Realized gains $ 670 $ 919 $ 2,260 $ 903

3 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:

July 4, 2025 December 31, 2024

October 3, 2025 December 31, 2024

Three Total Level

4 unchanged sentences

Deferred compensation plans — 6,895 — 6,895 — 5,242 — 5,242

Other — 1,380 — 1,380 — — — —

$ 14,997 $ 9,509 $ — $ 24,506 $ 8,990 $ 6,741 $ — $ 15,731

3 unchanged sentences

$ — $ 57,428 $ — $ 57,428 $ — $ 7,853 $ — $ 7,853

ESAB CORPORATION

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS — (Continued)

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

For the nine months ended October 3, 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 six months ended July 4, 2025.

There were no transfers in or out of Level One, Two or Three during the nine months ended October 3, 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 six months ended July 4, 2025.

No repurchases of the Company’s Common stock have been made through the nine months ended October 3, 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 six months ended July 4, 2025 and June 28, 2024.

The following tables present the changes in the balances of each component of AOCL including reclassifications out of AOCL for the nine months ended October 3, 2025 and September 27, 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

23 unchanged sentences

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

Other comprehensive (loss) income before reclassifications:

Foreign currency translation adjustment ( 56 ) ( 7,176 ) 3,244 — ( 3,988 )

Loss on long-term intra-entity foreign currency transactions — ( 773 ) — — ( 773 )

Other comprehensive (loss) income before reclassifications ( 56 ) ( 7,949 ) 3,244 — ( 4,761 )

Amounts reclassified from Accumulated other comprehensive loss (1)

250 — — — 250

Net current period Other comprehensive (loss) income 194 ( 7,949 ) 3,244 — ( 4,511 )

Balance at October 3, 2025

$ ( 50,487 ) $ ( 465,322 ) $ ( 38,401 ) $ — $ ( 554,210 )

(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.

28 unchanged sentences

( 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

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

343 — — ( 1,900 ) ( 1,557 )

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

Net current period Other comprehensive income (loss) 52 70,496 ( 8,945 ) ( 3,130 ) 58,473

Balance at September 27, 2024

$ ( 58,548 ) $ ( 529,275 ) $ ( 20,479 ) $ 3,402 $ ( 604,900 )

(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.

26 unchanged sentences

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

Six Months Ended

July 4, 2025 June 28, 2024

Nine Months Ended

October 3, 2025 September 27, 2024

(Number of claims)

9 unchanged sentences

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

July 4, 2025 December 31, 2024

October 3, 2025 December 31, 2024

(In thousands)

16 unchanged sentences

The Company is involved in various pending legal proceedings arising out of the ordinary course of the Company’s business.

None of these legal proceedings is expected to have a material adverse effect on the financial condition, results of operations or cash flow of the Company.

None of these legal proceedings are expected to have a material adverse effect on the financial condition, results of operations or cash flow of the Company.

With respect to these proceedings, and the litigation and claims described in the preceding paragraphs, management of the Company believes that it will either prevail, has adequate insurance coverage or has established appropriate accruals to cover potential liabilities.

13 unchanged sentences

The Com pany’s segment results were as follows:

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

October 3, 2025 September 27, 2024 October 3, 2025 September 27, 2024

(In thousands)

27 unchanged sentences

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

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

October 3, 2025 September 27, 2024 October 3, 2025 September 27, 2024

(In thousands)

12 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 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

(2) Includes transaction, diligence and integration expenses totaling $ 6.1 million and $ 20.4 million for the three and nine months ended October 3, 2025, respectively, and $ 2.5 million and $ 3.1 million for the three and nine months ended September 27, 2024, respectively.

Additionally, it includes amortization of intangibles and fair value charges on acquired inventories totaling $ 10.3 million and $ 27.3 million three and nine months ended October 3, 2025, respectively, and $ 7.6 million and $ 22.4 million for the three and nine months ended September 27, 2024, respectively.

October 3, 2025 December 31, 2024

(In thousands)

16 unchanged sentences

(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 $ 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.

Subsequent Events

The dividend of $ 6.1 million included in Accrued liabilities in the Consolidated and Condensed Balance Sheets at October 3, 2025 was paid on October 17, 2025 to stockholders of record as of October 3, 2025.

On October 16, 2025, the Company entered into an Amended and Restated Credit Agreement, by and among the Company, as the lead borrower, the other loan parties from time to time party thereto, including certain subsidiaries of the Company identified therein, as guarantors, the lenders from time to time party thereto, and Bank of America, N.A., as administrative agent (the “A&R Credit Agreement”).

The A&R Credit Agreement, among other things, provides for (i) a senior term loan A facility in an aggregate principal amount of $ 350 million, and (ii) a senior revolving credit facility in the amount of $ 1.05 billion to pay off the outstanding principal and interest on the Company’s existing $ 400 million Term Loan A-1 Facility and replace the Company’s $ 750 million Revolving Facility.

Both facilities mature on October 16, 2030, subject to a springing maturity date under certain circumstances.

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