What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-02-23 compared with 2025-02-20 · 256 added, 233 removed, 493 unchanged (50% of the section changed)

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This section provides a general description of our Company and reportable segments, business and industry trends, our key business strategies, and background information on other matters discussed in this MD&A.

• Consolidated Results of Operations and Operating Results by Business Segment.

This section provides our analysis and outlook for the significant line items on our consolidated statements of operations, as well as other information that we deem meaningful to an understanding of our results of operations on both a consolidated basis and a business segment basis.

• Results of Operations.

This section provides our analysis and outlook for the significant line items on our consolidated statements of operations, as well as highlights key events or changes since the reporting period that may affect our financial condition, results, or future outlook.

• Segment Results and Non-GAAP Reconciliations.

This section provides other information that we deem meaningful to an understanding of our results on both a consolidated basis and a reportable segment basis.

It also includes non-GAAP financial measures used by management to assess performance and make decisions regarding the allocation of resources, along with reconciliations to the most directly comparable GAAP measures.

• Liquidity and Capital Resources.

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For many product lines, our manufacturing processes are vertically integrated, enhancing our range of capabilities, our ability to innovate, and our quality control as well as providing supply chain, transportation, and working capital savings.

Business Segments

Reportable Segments

Our business is organized in geographic regions to ensure integration across operations serving common end markets and customers.

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As a result, we were required to divest our Towanda facility and related assets, which occurred on January 17, 2025.

As of December 31, 2024, and prior to the court-ordered divestiture closing, we believed the court-ordered divestiture would occur within the next twelve months and qualifies for held for sale accounting.

We have reclassified certain assets and liabilities to assets held for sale in the accompanying financial statements.

We have reported Towanda within our North America operations through 2024.

Refer to Note 25 - Commitments and Contingencies included in this Form 10-K for more information on the Steves litigation and court-ordered divestiture.

We have reported Towanda within our North America operations through the date of sale.

Refer to Note 2 - Discontinued Operations and Divestiture included in this Form 10-K for more information.

On April 17, 2023, we entered into a Share Sale Agreement with Aristotle Holding III Pty Limited, a subsidiary of Platinum Equity Advisors, LLC, to sell our Australasia business.

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The consolidated statements of cash flows include cash flows from discontinued operations through the divestiture date of July 2, 2023.

Refer to Note 2 - Discontinued Operations included in this Form 10-K for more information.

Refer to Note 2 - Discontinued Operations and Divestiture included in this Form 10-K for more information.

Factors and Trends Affecting Our Business

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• the effects of governmental regulation and initiatives to manage economic conditions;

• armed conflicts, acts of terrorism or civil unrest;

• geographical shifts in population and other changes in demographics;

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Cost Reduction and Productivity Initiatives

Our senior management team has a proven track record of implementing operational excellence programs at various large, global manufacturing businesses, and we believe the same successes can be realized at JELD-WEN.

Our senior management team has a proven history of implementing operational excellence programs at various large, global manufacturing businesses, and we believe the same successes can be realized at JELD-WEN.

Key areas of focus of our operational excellence, productivity, and footprint rationalization programs include:

• reducing labor, overtime, and waste costs by reducing facility count while optimizing manufacturing capacity and improving planning and manufacturing processes;

• reducing labor, overtime, and waste costs by optimizing manufacturing capacity and improving planning and manufacturing processes;

• increasing rigor and alignment around capital expenditures with a clear linkage to our strategy and optimizing returns;

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• redesigning our supply chain network to reduce lead times and optimize inventory levels to increase cash flow;

• reducing warranty costs by improving quality.

• reducing warranty costs and scrap by improving quality.

We continue to implement our strategic cost-reduction and productivity initiatives to develop the culture and processes of operational excellence and continuous improvement.

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Global supply markets and supply chains have been impacted by certain events, resulting in shortages and extended lead times impacting our operations and profitability.

We continue to apply a number of different strategies to mitigate the impact of these challenges on our operations, including extending our demand planning, seeking alternative sources, utilizing substitute products and leveraging our supplier relationships.

We continue to apply several different strategies to mitigate the impact of these challenges on our operations, including extending our demand planning, seeking alternative sources, utilizing substitute products and leveraging our supplier relationships.

Foreign Currency Exchange Rates

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dollar can affect our reported operating results and our cash flows as we translate our foreign subsidiaries’ financial statements from their reporting currencies into U.S.

Refer to Item 1A - Risk Factors - Risks Relating to Our Business and Industry, Item 1A - Risk Factors - Exchange rate fluctuations may impact our business, financial condition, and results of operations, and Item 7A - Quantitative and Qualitative Disclosures About Market Risk- Exchange Rate Risk included in this Form 10-K.

Components of our Operating Results

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Outbound freight includes payments to third-party carriers for shipments of orders to our customers, as well as driver, vehicle, and fuel expenses when we deliver orders to customers.

Third-party carriers ship the majority of our products.

Third-party carriers ship most of our products.

Insurance and Benefits, Supervision, and Tax Expenses.

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Tax expenses are impacted by changes in tax rates, headcount and wage levels, and the number and value of properties owned.

In addition, an appropriate portion of each of the insurance and benefits, supervision and tax expenses are allocated to SG&A expenses.

In addition, an appropriate portion of each of the insurance and benefits, supervision and tax expenses are allocated to SG&A.

Selling, General, and Administrative Expenses

SG&A expenses primarily consist of research and development, sales and marketing, and general and administrative expenses.

SG&A primarily consists of R&D, sales and marketing, and general and administrative expenses.

Research and Development .

Research and development expenses consist primarily of personnel expenses related to research and development, consulting and contractor expenses, tooling and prototype materials, and overhead costs allocated to such expenses.

Substantially all our research and development expenses are related to developing new products and services and improving our existing products and services.

To date, research and development expenses have been expensed as incurred, because the period between achieving technological feasibility and the release of products and services for sale has been short and development costs qualifying for capitalization have been insignificant.

R&D expenses consist primarily of personnel expenses related to R&D, consulting and contractor expenses, tooling and prototype materials, and overhead costs allocated to such expenses.

Substantially all our R&D expenses are related to developing new products and services and improving our existing products and services.

To date, R&D expenses have been expensed as incurred, because the period between achieving technological feasibility and the release of products and services for sale has been short and development costs qualifying for capitalization have been insignificant.

Sales and Marketing.

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Goodwill Impairment

Goodwill impairment consists of goodwill impairment charges associated with our Europe reporting unit during the years ended December 31, 2022 and 2024.

Goodwill impairment consists of goodwill impairment charges associated with our North America reporting unit during the year ended December 31, 2025, and our Europe reporting unit during the years ended December 31, 2025 and 2024.

During the year ended December 31, 2024, goodwill impairment also consists of goodwill impairment charges related to the court-ordered divestiture of Towanda.

Refer to Note 6 - Goodwill included in this Form 10-K for more information.

Restructuring and Asset Related Charges

Restructuring charges, net consist primarily of all salary-related severance and employee termination benefits that are accrued and expensed when a restructuring plan has been put into place, the plan has received approval from the appropriate level of management and the benefit is probable and reasonably estimable.

Refer to Note 6 - Goodwill to our consolidated financial statements included in this Form 10-K for more information.

Restructuring and Asset Related Charges, Net

Restructuring and asset-related charges, net consist primarily of all salary-related severance and employee termination benefits that are accrued and expensed when a restructuring plan has been put into place, the plan has received approval from the appropriate level of management, and the benefit is probable and reasonably estimable.

In addition to salary-related costs, we incur other restructuring costs and adjustments when facilities are closed, or capacity is realigned within the organization.

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For non-contractual restructuring activities, liabilities and expenses are measured and recorded at fair value in the period in which they are incurred.

Asset related charges consist of accelerated depreciation and amortization of assets due to changes in asset useful lives.

Refer to Note 19.

Restructuring and Asset-Related Charges to our consolidated financial statements included in this Form 10-K for more information.

Asset related charges, net consist of accelerated depreciation and amortization of assets due to changes in asset useful lives.

Refer to Note 19 - Restructuring and Asset-Related Charges, Net to our consolidated financial statements included in this Form 10-K for more information.

Interest Expense, Net

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Accordingly, totals may not equal the sum of the line items in the tables below.

We present several financial metrics in “Core” terms, such as Core Revenue, which excludes the impact of foreign exchange, acquisitions and divestitures completed in the last twelve months.

We believe Core Revenue assists management, investors, and analysts in understanding the organic performance of our operations.

We present several financial metrics in “Core” terms, such as Core Revenues, which excludes the impact of foreign exchange, acquisitions, and divestitures completed in the last twelve months.

We believe Core Revenues assists management, investors, and analysts in understanding the organic performance of our operations.

Comparison of the Year Ended December 31, 2025 to the Year Ended December 31, 2024

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Goodwill impairment 334,617 10.4 % 94,801 2.5 %

Restructuring and asset-related charges 68,092 1.8 % 35,741 0.8 %

Restructuring and asset-related charges, net 44,511 1.4 % 68,092 1.8 %

Operating loss (416,044) (13.0) % (126,446) (3.3) %

Interest expense, net 67,182 2.1 % 67,237 1.8 %

Loss on extinguishment and refinancing of debt 237 — % 1,908 0.1 %

Other income, net (9,144) (0.3) % (24,773) (0.7) %

Loss from continuing operations before taxes (474,319) (14.8) % (170,818) (4.5) %

Income tax expense 147,930 4.6 % 16,762 0.4 %

Loss from continuing operations, net of tax (622,249) (19.4) % (187,580) (5.0) %

Gain (loss) on sale of discontinued operations, net of tax 1,040 — % (1,440) — %

Net loss $ (621,209) (19.3) % $ (189,020) (5.0) %

Consolidated Results

Net Revenues – Net revenues decreased $564.4 million, or 14.9%, to $3.21 billion in the year ended December 31, 2025, from $3.78 billion in the year ended December 31, 2024.

The decrease in net revenues was primarily driven by a decrease in Core Revenues of 12% and a decrease in net revenues from the court-ordered divestiture of Towanda of 4%.

These were partially offset by a favorable foreign exchange impact of 1%.

The decline in Core Revenues was driven by a 13% decrease in volume/mix, partially offset by a 1% benefit from price realization.

Gross Margin – Gross margin decreased $174.8 million, or 25.4%, to $514.2 million in the year ended December 31, 2025, from $689.0 million in the year ended December 31, 2024.

Gross margin as a percentage of net revenues was 16.0% in the year ended December 31, 2025, compared to 18.2% in the year ended December 31, 2024.

The decrease in gross margin percentage was primarily due to the decremental impact of volume/mix and negative price/cost, partially offset by favorable productivity.

SG&A – SG&A decreased $101.4 million, or 15.5%, to $551.1 million in the year ended December 31, 2025, from $652.5 million in the year ended December 31, 2024.

SG&A as a percentage of net revenues remained flat at 17.2% for the years ended December 31, 2025 and 2024.

The decrease in SG&A was primarily due to a decrease in professional fees, including non-recurring transformation journey expenses, gains on sale of property and equipment, including the sale-leaseback transaction in 2025 for our industrial warehouse located in Coral Springs, Florida, lower salaries and benefits driven by a reduction in headcount, and lower amortization expense resulting from accelerated amortization in the prior year for an ERP that we are no longer utilizing after we completed our related obligations under the JW Australia Transition Services Agreement.

Goodwill Impairment – Goodwill impairment charges of $334.6 million in the year ended December 31, 2025, related to the full impairment of goodwill in our North America and Europe reporting units.

Goodwill impairment charges of $94.8 million in the year ended December 31, 2024, consisted of goodwill impairment charges of $63.4 million related to our Europe reporting unit and $31.4 million related to our North America reporting unit in connection with the court‑ordered divestiture of Towanda.

Refer to Note 6 – Goodwill to our consolidated financial statements included in this Form 10-K for more information.

Restructuring and Asset-Related Charges, Net – Restructuring and asset-related charges, net decreased $23.6 million, or 34.6% to $44.5 million in the year ended December 31, 2025, from $68.1 million in the year ended December 31, 2024.

The decrease in restructuring and asset-related charges, net was primarily due to a decrease in charges incurred to close certain manufacturing facilities in our North America and Europe segments and to transform the operating structure of our Europe segment.

Refer to Note 19 - Restructuring and Asset-Related Charges, Net to our consolidated financial statements included in this Form 10-K for more information.

Interest Expense, Net – Interest expense, net, was $67.2 million for both the years ended December 31, 2025 and 2024.

Higher interest on our Senior Notes due September 2032, issued in the third quarter of 2024, driven by a higher principal balance and interest rate, was offset by lower interest on the Term Loan Facility due to a partial principal repayment in the third quarter of 2024 and a lower interest rate in 2025.

Refer to Note 21 - Interest Expense, Net to our consolidated financial statements included in this Form 10-K for more information.

Loss on Extinguishment and Refinancing of Debt – Loss on extinguishment and refinancing of debt decreased $1.7 million, or 87.6%, to $0.2 million in the year ended December 31, 2025, from $1.9 million in the year ended December 31, 2024.

Refer to Note 12 - Long-Term Debt to our consolidated financial statements included in this Form 10-K for more information.

Other Income, Net – Other income, net decreased $15.6 million, or 63.1%, to $9.1 million in the year ended December 31, 2025, from $24.8 million in the year ended December 31, 2024.

Refer to Note 22 - Other Income, Net to our consolidated financial statements included in this Form 10-K for more information.

Income Tax Expense – Income tax expense was $147.9 million in the year ended December 31, 2025, compared to $16.8 million in the year ended December 31, 2024.

The effective tax rate in the year ended December 31, 2025, was (31.2)%.

The effective tax rate for the year ended December 31, 2025, was driven primarily by the $174.8 million increase to valuation allowances on foreign and U.S.

tax attributes and $55.4 million of tax expense attributable to nondeductible goodwill impairment.

The effective tax rate in the year ended December 31, 2024, was (9.8)%.

The effective tax rate for the year ended December 31, 2024, was driven primarily by the $24.6 million increase to valuation allowances on foreign and state NOL and credit carryforwards, $20.2 million of tax expense attributable to nondeductible goodwill impairment, $7.1 million of tax expense attributed to nondeductible expenses, and $4.5 million of tax expense attributed to the expiration of U.S.

attributes, partially offset by $2.7 million of tax benefit attributable to R&D credits.

Refer to Note 15 - Income Taxes to our consolidated financial statements included in this Form 10-K for more information.

Gain (Loss) On Sale Of Discontinued Operations, Net Of Tax – The $1.0 million gain and $1.4 million loss on sale of discontinued operations, net of tax in the years ended December 31, 2025 and 2024, respectively, is related to the July 2, 2023, sale of JW Australia.

The $1.0 million incurred in the year ended December 31, 2025, is due to a release of reserve associated with purchases under a supply agreement in the second quarter of 2025.

The $1.4 million incurred in the year ended December 31, 2024, is related to settlement of an outstanding tax liability related to JW Australia.

Refer to Note 2 - Discontinued Operations and Divestiture to our consolidated financial statements included in this Form 10-K for more information.

Comparison of the Year Ended December 31, 2024 to the Year Ended December 31, 2023

Year Ended December 31,

(amounts in thousands) % of Net

Revenues % of Net

Net revenues $ 3,775,592 100.0 % $ 4,304,334 100.0 %

Cost of sales 3,086,618 81.8 % 3,471,713 80.7 %

Gross margin 688,974 18.2 % 832,621 19.3 %

Selling, general and administrative 652,527 17.3 % 655,280 15.2 %

Goodwill impairment 94,801 2.5 % — — %

Restructuring and asset-related charges, net 68,092 1.8 % 35,741 0.8 %

Operating (loss) income (126,446) (3.3) % 141,600 3.3 %

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Consolidated Results

Net Revenues – Net revenues decreased $528.7 million, or 12.3%, to $3,775.6 million in the year ended December 31, 2024, from $4,304.3 million in the year ended December 31, 2023.

Net Revenues – Net revenues decreased $528.7 million, or 12.3%, to $3.78 billion in the year ended December 31, 2024, from $4.30 billion in the year ended December 31, 2023.

The decrease in net revenues was primarily driven by a decrease in Core Revenues of 12%.

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The decrease in gross margin percentage was due to a decremental impact of volume/mix, partially offset by an increase in productivity.

SG&A Expense – SG&A expense decreased $2.8 million, or 0.4%, to $652.5 million in the year ended December 31, 2024, from $655.3 million in the year ended December 31, 2023.

SG&A expense as a percentage of net revenues increased to 17.3% in the year ended December 31, 2024, from 15.2% in the year ended December 31, 2023.

The decrease in SG&A expense was primarily due to decreased performance-based variable compensation expense partially offset by increased professional fees, including non-recurring transformation journey expenses.

SG&A – SG&A decreased $2.8 million, or 0.4%, to $652.5 million in the year ended December 31, 2024, from $655.3 million in the year ended December 31, 2023.

SG&A as a percentage of net revenues increased to 17.3% in the year ended December 31, 2024, from 15.2% in the year ended December 31, 2023.

The decrease in SG&A was primarily due to decreased performance-based variable compensation expense partially offset by increased professional fees, including non-recurring transformation journey expenses.

Goodwill Impairment – Goodwill impairment charges of $94.8 million in the year ended December 31, 2024, consist of a $63.4 million goodwill impairment charge associated with our Europe reporting unit, and a $31.4 million goodwill impairment charge in our North America reporting unit related to the court-ordered divestiture of Towanda.

Refer to Note 6 – Goodwill to our consolidated financial statements included in this Form 10-K for more information.

Restructuring and Asset-Related Charges – Restructuring and asset-related charges increased $32.4 million, or 90.5% to $68.1 million in the year ended December 31, 2024, from $35.7 million in the year ended December 31, 2023.

The increase in restructuring charges was primarily due to an increase in charges incurred to close certain manufacturing facilities in our North America and Europe segments and to transform the operating structure of our Europe segment.

Refer to Note 19 - Restructuring and Asset-Related Charges of our consolidated financial statements included in this Form 10-K for more information.

Restructuring and Asset-Related Charges, Net – Restructuring and asset-related charges, net increased $32.4 million, or 90.5% to $68.1 million in the year ended December 31, 2024, from $35.7 million in the year ended December 31, 2023.

The increase in restructuring charges, net was primarily due to an increase in charges incurred to close certain manufacturing facilities in our North America and Europe segments and to transform the operating structure of our Europe segment Refer to Note 19 - Restructuring and Asset-Related Charges, Net to our consolidated financial statements included in this Form 10-K for more information.

Interest Expense, Net – Interest expense, net, decreased $5.0 million, or 6.9%, to $67.2 million in the year ended December 31, 2024, from $72.3 million in the year ended December 31, 2023.

The decrease was primarily due to lower long-term debt balances resulting from the redemption of our Senior Secured Notes and partial redemption of our 4.63% Senior Notes in the third quarter of 2023, and an increase in interest income from invested cash balances, partially offset by a decrease in interest income from interest rate derivatives and a higher interest rate on our Senior Notes maturing in 2032 issued during the third quarter of 2024.

Refer to Note 21 - Interest Expense, Net of our consolidated financial statements included in this Form 10-K for more information.

Refer to Note 21 - Interest Expense, Net to our consolidated financial statements included in this Form 10-K for more information.

Loss on Extinguishment and Refinancing of Debt – The $1.9 million loss on extinguishment and refinancing of debt during the year ended December 31, 2024, is related to the amendment of our Term Loan Facility as well as the redemption of the remaining $200.0 million of our 4.63% Senior Notes.

The loss on extinguishment and refinancing of debt of $6.5 million in the year ended December 31, 2023, is related to the redemption of our Senior Secured Notes and partial redemption of our 4.63% Senior Notes.

Refer to Note 12 - Long-Term Debt of our consolidated financial statements included in this Form 10-K for more information.

Refer to Note 12 - Long-Term Debt to our consolidated financial statements included in this Form 10-K for more information.

Other Income, Net – Other income, net decreased $0.9 million, or 3.7%, to $24.8 million in the year ended December 31, 2024, from $25.7 million in the year ended December 31, 2023.

Other income, net in the year ended December 31, 2024, consisted primarily of cash received on investment in real estate of $7.9 million, income from the refund of deposits of China antidumping and countervailing duties of $7.2 million, recovery of the JW Australia transition services costs incurred of $6.6 million, insurance reimbursements of $1.7 million, and recovery of cost from receipts on impaired notes of $1.4 million, partially offset by pension expense of $2.0 million.

Other income, net in the year ended December 31, 2023, consisted primarily of recovery of the JW Australia transition services costs incurred of $8.3 million, income from the refund of deposits from antidumping duties of $7.0 million, an ERC from the U.S.

government of $6.1 million, recovery of cost from interest received on impaired notes of $3.5 million, and income from short-term investments and forward contracts related to the JW Australia divestiture of $3.1 million, partially offset by pension expense of $6.5 million and a $4.3 million settlement loss associated with our U.S.

defined benefit pension plan.

Refer to Note 22 - Other Income, Net of our consolidated financial statements included in this Form 10-K for more information.

Income Taxes – Income tax expense was $16.8 million in the year ended December 31, 2024, compared to $63.3 million in the year ended December 31, 2023.

Refer to Note 22 - Other Income, Net to our consolidated financial statements included in this Form 10-K for more information.

Income Tax Expense – Income tax expense was $16.8 million in the year ended December 31, 2024, compared to $63.3 million in the year ended December 31, 2023.

The effective tax rate in the year ended December 31, 2024, was (9.8)%.

The effective tax rate for the year ended December 31, 2024, was driven primarily by the $24.6 million increase to valuation allowances on foreign and state NOL and credit carryforwards, $7.1 million of tax expense attributed to nondeductible expenses, $20.2 million of tax expense attributable to nondeductible goodwill impairment and $4.5 million of tax expense attributed to the expiration of U.S.

attributes, partially offset by $2.7 million of tax benefit attributable to research and development credits.

attributes, partially offset by $2.7 million of tax benefit attributable to R&D credits.

The effective tax rate in the year ended December 31, 2023, was 71.5%.

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Refer to Note 15 - Income Taxes to our consolidated financial statements included in this Form 10-K for more information.

(Loss) Gain on Sale of Discontinued Operations – The $1.4 million loss and $15.7 million gain on sale of discontinued operations in the years ended December 31, 2024 and 2023, respectively, are related to the July 2, 2023, sale of JW Australia.

(Loss) Gain On Sale Of Discontinued Operations, Net Of Tax – The $1.4 million loss and $15.7 million gain on sale of discontinued operations in the years ended December 31, 2024 and 2023, respectively, are related to the July 2, 2023, sale of JW Australia.

The $1.4 million loss incurred in the year ended December 31, 2024, is related to settlement of an outstanding tax liability for JW Australia.

Refer to Note 2 - Discontinued Operations of our consolidated financial statements included in this Form 10-K for more information.

Comparison of the Year Ended December 31, 2023 to the Year Ended December 31, 2022

Year Ended December 31,

(amounts in thousands) % of Net

Revenues % of Net

Net revenues $ 4,304,334 100.0 % $ 4,543,808 100.0 %

Cost of sales 3,471,713 80.7 % 3,757,888 82.7 %

Gross margin 832,621 19.3 % 785,920 17.3 %

Selling, general and administrative 655,280 15.2 % 654,077 14.4 %

Goodwill impairment — — % 54,885 1.2 %

Restructuring and asset-related charges 35,741 0.8 % 17,622 0.4 %

Operating income 141,600 3.3 % 59,336 1.3 %

Interest expense, net 72,258 1.7 % 82,505 1.8 %

Loss on extinguishment of debt 6,487 0.2 % — — %

Other income, net (25,719) (0.6) % (53,433) (1.2) %

Income from continuing operations before taxes 88,574 2.1 % 30,264 0.7 %

Income tax expense 63,339 1.5 % 18,041 0.4 %

Income from continuing operations, net of tax 25,235 0.6 % 12,223 0.3 %

Gain on sale of discontinued operations, net of tax 15,699 0.4 % — — %

Income from discontinued operations, net of tax 21,511 0.5 % 33,504 0.7 %

Net income $ 62,445 1.5 % $ 45,727 1.0 %

Consolidated Results

Net Revenues – Net revenues decreased $239.5 million, or 5.3%, to $4,304.3 million in the year ended December 31, 2023, from $4,543.8 million in the year ended December 31, 2022.

The decrease was driven by a decrease in Core Revenues of 5% and a nominal impact from foreign exchange.

Core Revenues decreased 5% due to a 10% decrease in volume/mix, partially offset by a 5% benefit from price realization.

Gross Margin – Gross margin increased $46.7 million, or 5.9%, to $832.6 million in the year ended December 31, 2023, from $785.9 million in the year ended December 31, 2022.

Gross margin as a percentage of net revenues was 19.3% in the year ended December 31, 2023, and 17.3% in the year ended December 31, 2022.

The increase in gross margin percentage was due primarily to favorable price/cost, partially offset by accelerated depreciation in North America from reviews of equipment capacity optimization.

SG&A Expense – SG&A expense increased $1.2 million, or 0.2%, to $655.3 million in the year ended December 31, 2023, from $654.1 million in the year ended December 31, 2022.

SG&A expense as a percentage of net revenues increased to 15.2% in the year ended December 31, 2023, from 14.4% in the year ended December 31, 2022.

The increase in SG&A expense was primarily due to increased performance-based variable compensation expenses and accelerated amortization of an ERP system that we intend to not utilize upon completion of the JW Australia Transition Services Agreement period, partially offset by decreased labor expenses driven by a reduction in headcount and lower bad debt expense in our North America segment due to improved collections.

Goodwill Impairment – Goodwill impairment charges of $54.9 million in the year ended December 31, 2022, relate to goodwill impairment charges in our Europe reporting unit.

Refer to Note 6 – Goodwill of our consolidated financial statements included in this Form 10-K for more information.

Restructuring and Asset Related Charges – Restructuring and asset related charges of $35.7 million in the year ended December 31, 2023, increased 102.8% from $17.6 million in the year ended December 31, 2022.

The increase in restructuring charges was primarily due to an increase in charges incurred to close certain manufacturing facilities in our North America segment.

Refer to Note 19 - Restructuring and Asset-Related Charges to our consolidated financial statements included in this Form 10-K for more information.

Interest Expense, Net – Interest expense, net, decreased $10.2 million, or 12.4%, to $72.3 million in the year ended December 31, 2023, from $82.5 million in the year ended December 31, 2022.

The decrease was primarily due to higher interest income from interest rate derivatives, the redemption of our Senior Secured Notes and partial redemption of our Senior Notes, and decreased borrowings on our Revolving Credit Facilities during the year ended December 31, 2023, partially offset by an increase to the cost of borrowing on our variable rate Term Loan Facility.

Refer to Note 21 - Interest Expense, Net of our consolidated financial statements included in this Form 10-K for more information.

Loss on Extinguishment of Debt – The $6.5 million loss on extinguishment of debt is related to the redemption of our Senior Secured Notes and partial redemption of our Senior Notes during the year ended December 31, 2023.

Refer to Note 12 - Long-Term Debt of our consolidated financial statements included in this Form 10-K for more information.

Other Income, Net – Other income, net decreased $27.7 million, or 51.9%, to $25.7 million in the year ended December 31, 2023, from $53.4 million in the year ended December 31, 2022.

Other income, net in the year ended December 31, 2023, primarily consisted of recovery of the JW Australia transition services costs incurred of $8.3 million, income from the refund of deposits from antidumping duties of $7.0 million, an ERC from the U.S.

defined benefit pension plan.

Other income, net in the year ended December 31, 2022, primarily consisted of the recovery of cost from interest received on impaired notes of $14.0 million, legal settlement income of $10.5 million, reimbursements from governmental assistance and insurance of $8.0 million, pension income of $4.9 million, credit for overpayments of utility expenses of $2.0 million, and foreign currency gains of $1.0 million.

Refer to Note 22 - Other Income, Net of our consolidated financial statements included in this Form 10-K for more information.

Income Taxes – Income tax expense was $63.3 million and $18.0 million in the years ended December 31, 2023, and December 31, 2022, respectively.

The effective tax rate in the year ended December 31, 2023, was 71.5% compared to 59.6% in the year ended December 31, 2022.

The effective tax rate increased primarily due to the impacts of the $32.7 million net valuation allowance recorded in the year ended December 31, 2023, partially offset by the $54.9 million non-deductible goodwill impairment charge recorded for the year ended December 31, 2022, not recorded in the year ended December 31, 2023.

Refer to Note 15 - Income Taxes of our consolidated financial statements included in this Form 10-K for more information.

Gain on Sale of Discontinued Operations, net of tax – The $15.7 million gain on sale of discontinued operations, net of tax is related to the July 2, 2023, sale of JW Australia.

Refer to Note 2 - Discontinued Operations of our consolidated financial statements included in this Form 10-K for more information.

Segment Results

We report our segment information in the same way management internally organizes the business in assessing performance and making decisions regarding allocation of resources in accordance with ASC 280-10 - Segment Reporting .

Refer to Note 2 - Discontinued Operations and Divestiture to our consolidated financial statements included in this Form 10-K for more information.

Segment Results and Non-GAAP Reconciliations

We report our segment information in the same way management internally organizes the business in assessing performance and making decisions regarding the allocation of resources in accordance with ASC 280-10 - Segment Reporting .

We define Adjusted EBITDA from continuing operations as income (loss) from continuing operations, net of tax, adjusted for the following items:

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goodwill impairment;

restructuring and asset-related charges;

M&A related costs;

restructuring and asset-related charges, net;

M&A related costs (income);

net (gain) loss on sale of business, property and equipment;

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We report all other business activities in Corporate and unallocated costs.

Reconciliations of income (loss) from continuing operations, net of tax to Adjusted EBITDA from continuing operations by segment are as follows:

Reconciliations of (loss) income from continuing operations, net of tax to Adjusted EBITDA from continuing operations by segment are as follows:

Year Ended December 31, 2025

(amounts in thousands) North America Europe Corporate and Unallocated Costs Total Consolidated

Income (loss) from continuing operations, net of tax $ 82,836 $ (64,331) $ (206,085) $ (187,580)

Income tax expense (benefit) 18,676 8,066 (9,980) 16,762

Depreciation and amortization (1)

Loss from continuing operations, net of tax $ (267,610) $ (172,887) $ (181,752) $ (622,249)

Income tax expense (1)

114,168 12,199 21,563 147,930

Interest expense, net 2,648 2,114 62,475 67,237

Depreciation and amortization 69,418 32,895 10,068 112,381

Interest (income) expense, net (803) 2,183 65,802 67,182

Special items:

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Goodwill impairment 181,248 153,369 — 334,617

Restructuring and asset-related charges 42,817 23,729 1,546 68,092

Restructuring and asset-related charges, net 24,435 17,711 2,365 44,511

M&A related costs — — 9,053 9,053

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Share-based compensation expense 3,174 2,180 9,640 14,994

Non-cash foreign exchange transaction/translation loss (gain) 315 (3,771) 355 (3,101)

Pension settlement charge 6,644 — — 6,644

Other special items (3)

2,979 1,000 4,395 8,374

Adjusted EBITDA from continuing operations $ 99,462 $ 55,310 $ (36,783) $ 117,989

(1) Corporate and unallocated depreciation and amortization expense includes software accelerated amortization of $14.1 million for an ERP that we are no longer utilizing after we completed our related obligations under the JW Australia Transition Services Agreement during the first quarter of 2024.

(1) Income tax expense in our North America segment includes $129.2 million attributable to an increase in the valuation allowance recorded against our U.S.

tax attributes and $5.1 million attributed to withholding tax accrued on certain foreign undistributed earnings from prior years.

(2) Refer to the calculation of Adjusted EBITDA from continuing operations for a discussion of the Special items listed below.

(3) Corporate and unallocated other special items include $3.5 million in expenses related to an environmental matter.

Year Ended December 31, 2024

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Income tax expense (benefit) 18,676 8,066 (9,980) 16,762

79,210 44,095 (59,966) 63,339

Depreciation and amortization (1)

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Net legal and professional expenses and settlements 2,921 4,740 55,061 62,722

Restructuring and asset-related charges 29,207 5,738 796 35,741

Goodwill impairment 31,356 63,445 — 94,801

Restructuring and asset-related charges, net 42,817 23,729 1,546 68,092

M&A related costs — — 15,296 15,296

Net loss (gain) on sale of property and equipment 1,223 (5,101) (6,645) (10,523)

Net gain on sale of business, property, and equipment (13,415) (153) (184) (13,752)

Loss on extinguishment and refinancing of debt — — 1,908 1,908

Share-based compensation expense 3,087 1,261 11,117 15,465

Pension settlement charge 4,349 — — 4,349

Non-cash foreign exchange transaction/translation (gain) loss (261) 1,628 (772) 595

Non-cash foreign exchange transaction/translation loss (gain) 315 (3,771) 355 (3,101)

Other special items 9,302 1,911 399 11,612

Adjusted EBITDA from continuing operations $ 254,071 $ 67,713 $ (46,536) $ 275,248

(1) Income tax expense in our Europe segment includes an increase in valuation allowance against our foreign net operating loss carryforwards of $30.0 million.

(2) Corporate and unallocated costs depreciation and amortization expense in the year ended December 31, 2023, includes accelerated amortization of $14.1 million for an ERP system that we are no longer utilizing after we completed our related obligations under the JW Australia Transition Services Agreement.

North America depreciation and amortization expense in the year ended December 31, 2023, includes accelerated depreciation of $9.1 million from reviews of equipment capacity optimization.

(1) Corporate and unallocated depreciation and amortization expense in the year ended December 31, 2024, includes accelerated amortization of $14.1 million for an ERP system that we are no longer utilizing after we completed our related obligations under the JW Australia Transition Services Agreement.

(2) Refer to the calculation of Adjusted EBITDA from continuing operations for a discussion of the Special items listed below.

To conform with the current period presentation, certain amounts in prior period information have been reclassified.

Year Ended December 31, 2023

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Income (loss) from continuing operations, net of tax $ 175,980 $ (3,335) $ (147,410) $ 25,235

Income tax expense (1)

Income tax expense (benefit) (1)

79,210 44,095 (59,966) 63,339

Depreciation and amortization (2)

79,900 30,185 24,911 134,996

Interest expense, net 4,713 3,224 64,321 72,258

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Net legal and professional expenses and settlements 946 3,726 23,512 28,184

Goodwill impairment — 54,885 — 54,885

Restructuring and asset-related charges 7,338 6,042 4,242 17,622

Restructuring and asset-related charges, net 29,207 5,738 796 35,741

M&A related costs 759 — 5,816 6,575

Net (gain) loss on sale of business, property, and equipment (8,397) 354 7 (8,036)

Net loss (gain) on sale of property and equipment 1,223 (5,101) (6,645) (10,523)

Loss on extinguishment and refinancing of debt — — 6,487 6,487

Share-based compensation expense 5,121 1,890 10,466 17,477

Non-cash foreign exchange transaction/translation loss 148 876 11,413 12,437

Pension settlement charge 4,349 — — 4,349

Non-cash foreign exchange transaction/translation (gain) loss (261) 1,628 (772) 595

Other special items 1,042 (595) (4,721) (4,274)

Adjusted EBITDA from continuing operations $ 382,189 $ 81,455 $ (83,205) $ 380,439

(1) Income tax expense in Corporate and unallocated costs in the year ended December 31, 2022, includes the tax impact of U.S.

(1) Income tax expense in our Europe segment includes an increase in valuation allowance against our foreign net operating loss carryforwards of $30.0 million.

North America depreciation and amortization expense in the year ended December 31, 2023, includes accelerated depreciation of $9.1 million from reviews of equipment capacity optimization.

(3) Refer to the calculation of Adjusted EBITDA from continuing operations for a discussion of the Special items listed below.

Reconciliation of (loss) income from continuing operations, net of tax to Adjusted EBITDA from continuing operations on a consolidated basis is as follows:

Reconciliations of (loss) income from continuing operations, net of tax to Adjusted EBITDA from continuing operations on a consolidated basis are as follows:

Year Ended December 31,

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334,617 94,801 —

Restructuring and asset-related charges (5)(6)

Restructuring and asset-related charges, net (5)(6)

44,511 68,092 35,741

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Pension settlement charge (11)

6,644 — 4,349

Non-cash foreign exchange transaction/translation (gain) loss (12)

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Adjusted EBITDA from continuing operations $ 117,989 $ 275,248 $ 380,439

(1) Income tax expense in the year ended December 31, 2025, includes $129.2 million attributable to an increase in the valuation allowance recorded against our U.S.

tax attributes and $5.1 million attributed to withholding tax accrued on certain foreign undistributed earnings from prior years.

Income tax expense in the year ended December 31, 2023, includes an increase in valuation allowance against foreign net operating loss carryforwards of $30.0 million.

Refer to Note 15 - Income Taxes of our consolidated financial statements included in this Form 10-K for more information.

(2) Depreciation and amortization expense includes accelerated amortization of $14.1 million in the years ended December 31, 2024 and 2023 in Corporate and unallocated costs for an ERP that we are no longer utilizing after we completed our related obligations under the JW Australia Transition Services Agreement during the first quarter of 2024.

Refer to Note 15 - Income Taxes to our consolidated financial statements included in this Form 10-K for more information.

(2) Depreciation and amortization expense includes accelerated amortization of $14.1 million in the years ended December 31, 2024 and 2023, in Corporate and unallocated costs for an ERP system that we are no longer utilizing after we completed our related obligations under the JW Australia Transition Services Agreement.

In addition, depreciation and amortization expense in the year ended December 31, 2023, includes accelerated depreciation of $9.1 million in North America from reviews of equipment capacity optimization.

(3) Net legal and professional expenses and settlements include non-recurring transformation journey expenses of $28.7 million, $59.2 million, and $26.1 million in the years ended December 31, 2025, 2024, and 2023, respectively.

These expenses primarily relate to the engagement of one transformation consultant for a period spanning from the third quarter of 2023 through the end of 2024, for which we incurred $40.7 million and $20.0 million in the years ended December 31, 2024 and 2023, respectively.

Additionally, net legal and professional expenses and settlements include amounts relating to litigation of historic legal matters of $2.8 million and $1.8 million in the years ended December 31, 2024 and 2023, respectively, and ($10.5) million of income resulting from a legal settlement, partially offset by $3.9 million in legal expenses relating primarily to litigation in the year ended December 31, 2022.

(4) Goodwill impairment charges in the year ended December 31, 2024, consist of a $63.4 million goodwill impairment charge associated with our Europe reporting unit, and a $31.4 million goodwill impairment charge in our North America segment related to the court-ordered divestiture of Towanda.

Goodwill impairment charges in the year ended December 31, 2022, consist of a goodwill impairment charge of $54.9 million associated with our Europe reporting unit.

(5) Represents severance, accelerated depreciation and amortization, equipment relocation and other expenses directly incurred as a result of restructuring events.

For the year ended December 31, 2025, these expenses primarily relate to project-based consulting fees that directly support the transformation journey that are not expected to recur in the foreseeable future.

These projects include the centralization of human resources processes, North America supply chain network optimization strategy, and other projects related to our transformation journey.

For the years ended December 31, 2024 and 2023, these expenses primarily relate to the engagement of a transformation consultant for a period spanning from the third quarter of 2023 through April 2025, for which we incurred $40.7 million and $20.0 million, respectively.

Expenses for this transformation consultant’s engagement, which was extended into 2025, included $2.5 million in the year ended December 31, 2025.

Additionally, net legal and professional expenses and settlements include $1.6 million, $2.8 million, and $1.8 million in the years ended December 31, 2025, 2024, and 2023, respectively, relating to litigation of historic legal matters.

(4) Goodwill impairment in the year ended December 31, 2025, consists of goodwill impairment charges related to the full impairment of goodwill in our North America and Europe reporting units.

Goodwill impairment in the year ended December 31, 2024, consists of a $63.4 million goodwill impairment charge associated with our Europe reporting unit, and a $31.4 million goodwill impairment charge in our North America segment related to the court-ordered divestiture of Towanda.

Refer to Note 6 - Goodwill to our consolidated financial statements included in this Form 10-K for more information.

(5) Restructuring and asset-related charges, net represents severance, accelerated depreciation and amortization, equipment relocation and other expenses directly incurred as a result of restructuring events.

The restructuring charges primarily relate to charges incurred to change the operating structure, eliminate certain roles, and close certain manufacturing facilities in our North America and Europe segments.

(6) For the years ended December 31, 2024 and 2023, $11.8 million and $1.5 million, respectively, of product and inventory-related charges related to announced facility closures were detrimental to Adjusted EBITDA.

(7) M&A related costs consists primarily of legal and professional expenses related to the court-ordered divestiture of Towanda.

Refer to Note 19 - Restructuring and Asset-Related Charges, Net to our consolidated financial statements included in this Form 10-K for more information.

(6) Product and inventory-related charges related to announced facility closures were detrimental to Adjusted EBITDA from continuing operations.

Refer to Note 19 - Restructuring and Asset-Related Charges, Net to our consolidated financial statements included in this Form 10-K for more information.

(7) M&A related costs consist of legal and professional expenses related to the court-ordered divestiture of Towanda and other strategic initiatives.

(8) Net gain on sale of business, property, and equipment in the year ended December 31, 2025, primarily relates to the court-ordered divestiture of Towanda, the sale of property in Coral Springs, Florida and the sale of property and equipment in Marion, North Carolina.

Net gain on sale of business, property and equipment in the year ended December 31, 2024, primarily relates to the sale of our business in St.

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Net gain on sale of business, property and equipment in the year ended December 31, 2023, primarily relates to the sale of properties in the United Kingdom, Australia, and Klamath Falls, Oregon.

Net gain on sale of business, property and equipment in the year ended December 31, 2022, primarily relates to the sale of property in Phoenix, Arizona.

(9) Loss on extinguishment and refinancing of debt consists of $0.2 million in the year ended December 31, 2025, associated with an amendment of our ABL Facility.

Loss on extinguishment and refinancing of debt of $1.9 million in the year ended December 31, 2024, associated with an amendment of our Term Loan Facility and redemption of the remaining $200.0 million of our 4.63% Senior Notes.

Loss on extinguishment and refinancing of debt of $6.5 million in the year ended December 31, 2023, is related to the redemption of $250.0 million of our 6.25% Senior Secured Notes and $200.0 million of our 4.63% Senior Notes.

(10) Represents non-cash equity-based compensation expense related to the issuance of share-based awards.

(11) Represents a settlement loss associated with our U.S.

Refer to Note 12 - Long-Term Debt to our consolidated financial statements included in this Form 10-K for more information.

(10) Share-based compensation expense represents equity-based compensation expense related to the issuance of share-based awards.

(11) Pension settlement charge of $6.6 million in the year ended December 31, 2025, is due to the purchase of group annuity contracts and transfer of pension obligations associated with our U.S.

defined benefit pension plan to an insurer.

Pension settlement charge of $4.4 million in the year ended December 31, 2023, represents a settlement loss associated with our U.S.

defined benefit pension plan resulting from a one-time lump sum payment offered to pension plan participants.

Refer to Note 26 - Employee Retirement and Pension Benefits of our consolidated financial statements included in this Form 10-K for more information.

(12) Non-cash foreign exchange transaction/translation gain primarily associated with fair value adjustments of foreign currency derivatives and revaluation of balances denominated in foreign currencies.

Refer to Note 26 - Employee Retirement and Pension Benefits to our consolidated financial statements included in this Form 10-K for more information.

(12) Non-cash foreign exchange transaction/translation (gain) loss is primarily associated with fair value adjustments of foreign currency derivatives and revaluation of balances denominated in foreign currencies.

(13) Other special items not core to ongoing business activity include:

(i) in the year ended December 31, 2024, a loss of $4.8 million of cumulative foreign currency translation adjustments related to the substantial liquidation of a foreign subsidiaries in Chile and Mexico in our North America segment;

(ii) in the year ended December 31, 2023, ($3.1) million in income from short-term investments and forward contracts related to the JW Australia divestiture in Corporate and unallocated costs, ($2.8) million in adjustments to compensation and non-income taxes associated with exercises of legacy equity awards in our Europe segment, and $2.2 million in costs that do not meet the U.S.

GAAP definition of restructuring, primarily related to the closure of certain facility in our Europe segment;

(iii) in the year ended December 31, 2022, $3.3 million relating primarily to exit costs for executives in Corporate and unallocated costs, ($2.0) million relating to a credit received for overpayment of utility expenses in our North America segment, and $2.6 million and $16.3 million in our North America and Europe segments, respectively, in costs that do not meet the U.S.

GAAP definition of restructuring, primarily related to the closure of certain facilities.

To conform with the current period presentation, certain amounts in prior period information have been reclassified.

(i) in the year ended December 31, 2025 $3.5 million in expenses related to an environmental matter in Corporate and unallocated costs;

(ii) in the year ended December 31, 2024, a loss of $4.8 million of cumulative foreign currency translation adjustments related to the substantial liquidation of a foreign subsidiary in Chile and Mexico in our North America segment;

(iii) in the year ended December 31, 2023, ($3.1) million in income from short-term investments and forward contracts related to the JW Australia divestiture in Corporate and unallocated costs, ($2.8) million in adjustments to compensation and non-income taxes associated with exercises of legacy equity awards in our Europe segment, and $2.2 million in costs that do not meet the GAAP definition of restructuring, primarily related to the closure of a certain facility in our Europe segment.

Comparison of the Year Ended December 31, 2025 to the Year Ended December 31, 2024

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North America

Net revenues in North America decreased $414.7 million, or 13.3%, to $2,708.4 million in the year ended December 31, 2024, from $3,123.1 million in the year ended December 31, 2023.

The decrease was primarily due to a decrease in Core Revenues of 13%.

Core Revenues decreased due to an 13% unfavorable volume/mix driven by weaker market demand and a shift in demand to lower priced products.

Net revenues in North America decreased $554.0 million, or 20.5%, to $2.15 billion in the year ended December 31, 2025, from $2.71 billion in the year ended December 31, 2024.

The decrease was primarily due to a decrease in Core Revenues of 14% and a decrease in net revenues from the court-ordered divestiture of Towanda of 6%.

The decrease in Core Revenues was driven by a 14% decline in volume/mix due to weaker market demand.

Adjusted EBITDA from continuing operations in North America decreased $154.6 million, or 60.9%, to $99.5 million in the year ended December 31, 2025, from $254.1 million in the year ended December 31, 2024.

The decrease was primarily due to unfavorable volume mix and price/cost, partially offset by improved productivity.

Net revenues in Europe decreased $114.1 million, or 9.7%, to $1,067.2 million in the year ended December 31, 2024, from $1,181.3 million in the year ended December 31, 2023.

The decrease was primarily due to a decrease in Core Revenues of 10%.

Core Revenues decreased due to unfavorable volume/mix of 11% primarily due to market softness across the region, partially offset by a 1% benefit from price realization.

The decrease was primarily due to unfavorable volume/mix, negative price/cost, and lower productivity, partially offset by lower SG&A.

The decrease in SG&A was primarily driven by decreased salaries and benefits driven by a reduction in headcount, lower advertising and promotion expenses, reduction in R&D expenses, as well as lower non-transformational professional fees.

Net revenues in Europe decreased $10.4 million, or 1.0%, to $1.06 billion in the year ended December 31, 2025, from $1.07 billion in the year ended December 31, 2024.

The decrease was primarily due to a decrease in Core Revenues of 5%, partially offset by a favorable foreign exchange impact of 4%.

The decrease in Core Revenues was primarily driven by unfavorable volume/mix of 7%, primarily due to market softness across the region, partially offset by a 2% benefit from price realization.

Adjusted EBITDA from continuing operations in Europe decreased $12.4 million, or 18.3%, to $55.3 million in the year ended December 31, 2025, from $67.7 million in the year ended December 31, 2024.

The decrease was primarily due to unfavorable volume/mix and price/cost, partially offset by favorable productivity.

The decrease was primarily due to unfavorable volume/mix and negative price/cost, partially offset by favorable productivity.

Corporate and unallocated costs

Corporate and unallocated costs decreased by $9.8 million, or 21.0%, to $36.8 million in the year ended December 31, 2025, from $46.5 million in the year ended December 31, 2024.

The decrease in cost was primarily due to a decrease in performance-based variable compensation expense, lower insurance expense due to favorable claims experience, an increase in cash received on investment in real estate, reduction in non-transformational professional fees and corporate function expense savings in the current year, partially offset by an increase in cloud and software application costs.

The decrease in cost was primarily due to an increase in cash received on a real estate investment, lower salaries and benefits driven by a reduction in headcount in the current year, lower insurance expense due to favorable claims experience, and reduction in non-transformational professional fees, partially offset by higher foreign exchange and hedging losses.

Comparison of the Year Ended December 31, 2024 to the Year Ended December 31, 2023

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North America

Net revenues in North America decreased $136.3 million, or 4.2%, to $3,123.1 million in the year ended December 31, 2023, from $3,259.4 million in the year ended December 31, 2022.

Net revenues in North America decreased $414.7 million, or 13.3%, to $2.71 billion in the year ended December 31, 2024, from $3.12 billion in the year ended December 31, 2023.

The decrease was primarily due to a decrease in Core Revenues of 13%.

Core Revenues decreased due to an 8% unfavorable volume/mix driven by weakened market demand, partially offset by a 4% benefit from price realization.

Adjusted EBITDA from continuing operations in North America increased $29.3 million to $382.2 million, or 8.3%, in the year ended December 31, 2023, from $352.9 million in the year ended December 31, 2022.

The increase was primarily due to favorable price/cost and positive productivity, partially offset by unfavorable volume/mix and higher SG&A.

The increase in SG&A was primarily driven by increased performance-based variable compensation and the impact of inflation on labor expenses, partially offset by a reduction in bad debt expense due to improved collections.

Additionally, a decrease in other income, net, was primarily driven by net pension expense in the current period compared to gains in the same period last year, partially offset by income recognized for a refund of deposits for antidumping duties and an ERC during the year ended December 31, 2023.

Net revenues in Europe decreased $103.2 million, or 8.0%, to $1,181.3 million in the year ended December 31, 2023, from $1,284.5 million in the year ended December 31, 2022.

Core Revenues decreased due to an 13% unfavorable volume/mix driven by weaker market demand and a shift in demand to lower priced products.

Adjusted EBITDA from continuing operations in North America decreased $128.1 million, or 33.5%, to $254.1 million in the year ended December 31, 2024, from $382.2 million in the year ended December 31, 2023.

The decrease was primarily due to unfavorable volume mix and price/cost, partially offset by improved productivity.

Net revenues in Europe decreased $114.1 million, or 9.7%, to $1.07 billion in the year ended December 31, 2024, from $1.18 billion in the year ended December 31, 2023.

The decrease was primarily due to a decrease in Core Revenues of 10%.

Core Revenues decreased due to unfavorable volume/mix of 11% primarily due to market softness across the region, partially offset by a 1% benefit from price realization.

Adjusted EBITDA from continuing operations in Europe increased $7.1 million, or 9.6%, to $81.5 million in the year ended December 31, 2023, from $74.3 million in the year ended December 31, 2022.

The increase was primarily due to favorable productivity and positive price/cost, partially offset by unfavorable volume/mix.

Adjusted EBITDA from continuing operations in Europe decreased $13.7 million, or 16.9%, to $67.7 million in the year ended December 31, 2024, from $81.5 million in the year ended December 31, 2023.

The decrease was primarily due to unfavorable volume/mix and price/cost, partially offset by favorable productivity.

Corporate and unallocated costs

Corporate and unallocated costs increased by $4.8 million, or 6.2%, to $83.2 million in the year ended December 31, 2023, from $78.4 million in the year ended December 31, 2022.

The increase in cost is primarily due to losses on foreign exchange transactions in the current period compared to gains in the same period last year, and a reduction in the recovery of cost from interest received on impaired notes, partially offset by lower labor costs due to reduced headcount.

Corporate and unallocated costs decreased by $36.7 million, or 44.1%, to $46.5 million in the year ended December 31, 2024, from $83.2 million in the year ended December 31, 2023.

The decrease in cost was primarily due to a decrease in performance-based variable compensation expense, lower insurance expense due to favorable claims experience, an increase in cash received on investment in real estate, reduction in non-transformational professional fees and corporate function expense savings in 2024, partially offset by an increase in cloud and software application costs.

Liquidity and Capital Resources

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Inventories fluctuate for raw materials that have long delivery lead times, as we work through prior shipments and take delivery of new orders.

As of December 31, 2024, we had total liquidity (a non-GAAP measure) of $566.7 million, consisting of $150.3 million in unrestricted cash, $416.4 million available for borrowing under the ABL Facility, compared to total liquidity of $750.6 million as of December 31, 2023.

The decrease in total liquidity was primarily due to lower cash balances at December 31, 2024, compared to December 31, 2023.

As of December 31, 2025, we had total liquidity (a non-GAAP measure) of $484.7 million, consisting of $136.1 million in unrestricted cash and $348.6 million available for borrowing under the ABL Facility, compared to total liquidity of $566.7 million as of December 31, 2024.

The decrease in total liquidity was primarily due to lower ABL borrowing base availability as well as a lower cash balance at December 31, 2025, compared to December 31, 2024.

As of December 31, 2025, our cash balances, including $2.1 million of restricted cash, consisted of $64.3 million in cash located in the U.S.

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subsidiaries.

Based on our current and forecasted level of operations and seasonality of our business, we believe that cash provided by operations and other sources of liquidity, including cash, cash equivalents, and availability under our revolving credit facilities, will provide adequate liquidity for ongoing operations, planned capital expenditures and other investments, and debt service requirements for at least the next twelve months.

Our total indebtedness as of December 31, 2025, was $1.18 billion of which $23.7 million in short-term debt obligations is due and payable within the next 12 months.

Our $400.0 million Senior Notes bearing interest of 4.88% are due and payable in December 2027.

To service our indebtedness, we may be required to undertake various actions including, but not limited to, refinancing all or a portion of our existing long-term debt, pursuing strategic reviews of our assets and businesses, entering into sale-leaseback transactions for selected properties, adjusting our planned level of capital and other expenditures, or other strategies.

In addition, in accordance with our credit agreements, dispositions of assets or businesses may require us to use all or a portion of the proceeds of such sales to pay down certain portions of our debt.

We may, from time to time, refinance, reprice, extend, retire, or otherwise modify our outstanding debt to lower our interest payments, reduce our debt, or otherwise improve our financial position.

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In addition to our discussion and analysis surrounding our liquidity and capital resources, we have significant contractual obligations and commitments as of December 31, 2025, relating to the following:

• Long-term debt and interest obligations – As of December 31, 2024, our outstanding debt balance was $1,192.0 million.

• Long-term debt and interest obligations – As of December 31, 2025, our outstanding debt balance was $1.18 billion.

Refer to Note 12 - Long-Term Debt to our consolidated financial statements included in this Form 10-K for more information regarding the timing of expected future principal payments.

Interest on long-term debt is calculated based on debt outstanding and interest rates in effect on December 31, 2024, taking into account scheduled maturities and amortization payments.

Interest on long-term debt is calculated based on debt outstanding and interest rates in effect on December 31, 2025, considering scheduled maturities and amortization payments.

As of December 31, 2025, we estimate interest payments of $70.2 million due in 2026 and $210.0 million due in 2027 and thereafter.

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In August 2023, we redeemed all $250.0 million of our 6.25% Senior Secured Notes and $200.0 million of our 4.63% Senior Notes.

The Company recognized a pre-tax loss of $6.5 million on the redemption in year ended December 31, 2023, consisting of $3.9 million in call premium and $2.6 million in accelerated amortization of debt issuance costs.

The Company recognized a pre-tax loss of $6.5 million on the redemption in the year ended December 31, 2023, consisting of $3.9 million in call premium and $2.6 million in accelerated amortization of debt issuance costs.

In January 2024, we amended the Term Loan Facility to lower the applicable margin for replacement term loans, remove certain provisions no longer relevant to the parties, and make certain other technical amendments and related conforming changes.

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The Company recognized a pre-tax loss of $0.5 million on the redemption resulting from accelerated amortization of debt issuance costs.

In March 2025, we amended the ABL Facility to extend the maturity date from July 2026 to March 2028, replace the CDOR as the applicable rate with respect to loans denominated in Canadian Dollars with the CORRA, and make certain other technical amendments and related conforming changes.

All other material terms and conditions of the ABL Facility credit agreement were unchanged including the aggregate commitment, which remained at $500.0 million.

As a result of this amendment, the Company recognized a pre-tax loss of $0.2 million in the first quarter of 2025, consisting of unamortized issuance costs.

If there are outstanding borrowings against the ABL Facility, which results in the Company’s Global Excess Availability falling below the Level 1 Availability Trigger Amount, we would be required to comply with a minimum Fixed Charge Coverage Ratio as described in the ABL Facility credit agreement.

In December 2007, we entered into thirty-year mortgage notes secured by land and buildings in Denmark with principal payments which began in 2018.

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Refer to Note 12 - Long-Term Debt to our consolidated financial statements included in this Form 10-K for more information.

Cash Flows (1)

The following table summarizes the changes to our cash flows for the periods presented:

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(amounts in thousands) 2025 2024 2023

Cash provided by (used in):

Cash (used in) provided by:

Operating activities $ (4,861) $ 106,214 $ 345,188

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Net change in cash and cash equivalents $ (12,799) $ (138,100) $ 68,279

(1) Cash flow information for the year ended December 31, 2023 and 2022 is inclusive of cash flows from JW Australia as discontinued operations through the divestiture date of July 2, 2023.

Cash Flow from Operations

Cash Flows from Operations

Net cash used in operating activities was $4.9 million in the year ended December 31, 2025, compared to cash provided by operating activities of $106.2 million in the year ended December 31, 2024.

The change in cash flows from operating activities was primarily due to the decrease in earnings of $432.2 million, inclusive of $334.6 million in non-cash goodwill impairment charges related to our North America and Europe reporting units in the current year, $129.2 million attributable to a valuation expense recorded against our U.S.

tax attributes during 2025, and a $69.5 million increase in net cash used in our working capital accounts.

The impact of accounts receivable, net, was unfavorable by $55.6 million for the year ended December 31, 2025, compared to the same period in 2024, primarily driven by a slower pace of declining sales and accounts receivable relative to the prior year.

Accounts payable had an unfavorable impact of $38.0 million, mainly due to reduced inventory purchases in North America and lower professional expense payables related to a transformation consultant.

Inventory contributed a favorable impact of $24.1 million, primarily reflecting decreased material purchases in North America.

Net cash provided by operating activities decreased $239.0 million to $106.2 million in the year ended December 31, 2024, compared to $345.2 million in the year ended December 31, 2023.

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The $28.1 million favorable impact from accounts payable is primarily due to improved payment terms with suppliers.

The $110.1 million unfavorable impact of inventory is primarily due to the prior year benefit from intentional, one-time reductions not being repeated in the current year, as the current year began with a more normalized inventory level as compared to the prior year.

The $110.1 million unfavorable impact of inventory is primarily due to the prior year benefit from intentional, one-time reductions not being repeated in the current year, as 2024 began with a more normalized inventory level as compared to the prior year.

Further, the unfavorable impact of inventory was also driven by investments in inventory levels to aid in delivering improved service levels and lead times to our customers.

Net cash provided by operating activities increased $314.9 million to a $345.2 million source of cash in the year ended December 31, 2023, compared to a $30.3 million source of cash in the year ended December 31, 2022.

The increase in cash provided by operating activities was primarily due to a $342.5 million improvement in net cash provided by our working capital accounts.

Cash flow provided by inventory was $193.1 million favorable compared to the year ended December 31, 2022, primarily driven by demand planning that drove lower inventory days on hand, which mitigated inflation on raw materials.

Cash flow provided by Accounts receivable, net of $90.6 million was favorable in the year ended December 31, 2023, compared to the year ended December 31, 2022, which was primarily due to decreased sales, partially offset by slightly deteriorated days sales outstanding.

Cash flow provided by Accounts payable was $58.8 million favorable compared to the year ended December 31, 2022, which was primarily due to lower raw material inflation on purchases in the current year as compared to prior year, partially offset by demand planning that drove moderated purchasing.

Cash Flow from Investing Activities

Cash Flows from Investing Activities

Net cash provided by investing activities was $16.3 million in the year ended December 31, 2025, compared to cash used in investing activities of $153.3 million in the year ended December 31, 2024.

The change in cash flows from investing activities was primarily driven by $110.7 million proceeds related to the court-ordered divestiture of Towanda, proceeds of $37.6 million from sale of property in Coral Springs, Florida, during the year ended December 31, 2025, and by a decrease in capital expenditures of $37.8 million.

Net cash used in investing activities was $153.3 million in the year ended December 31, 2024, compared to cash provided by investing activities of $279.2 million in the year ended December 31, 2023, primarily driven by $365.6 million proceeds (payments) related to the sale of JW Australia during the year ended December 31, 2023, and an increase in capital expenditures of $62.8 million.

Net cash provided by (used in) investing activities improved to a $279.2 million source of cash in the year ended December 31, 2023, compared to a $67.0 million use of cash in the year ended December 31, 2022, primarily driven by $365.6 million in net proceeds (payments) related to the sale of JW Australia, partially offset by an increase in capital expenditures of $18.7 million and a decrease in cash received from the recovery of cost from interest received on impaired notes of $10.4 million.

Cash Flow from Financing Activities

Cash Flows from Financing Activities

Net cash used in financing activities decreased $47.6 million to $33.0 million in the year ended December 31, 2025, compared to $80.6 million in the year ended December 31, 2024, primarily driven by the repurchases of common stock of $24.3 million in the year ended December 31, 2024, and a reduction in net debt payments and debt extinguishment costs of $23.7 million.

Net cash used in financing activities decreased $482.5 million to $80.6 million in the year ended December 31, 2024, compared to $563.2 million in the year ended December 31, 2023, primarily due to net debt payments and payments of debt extinguishment costs of $55.2 million in the year ended December 31, 2024, compared to net debt payments and payments of debt extinguishment costs of $561.3 million in the year ended December 31, 2023.

This decrease is partially offset by the repurchases of common stock of $24.3 million during the year ended December 31, 2024.

Net cash used in financing activities increased $443.1 million to $563.2 million in the year ended December 31, 2023, compared to $120.0 million in the year ended December 31, 2022, primarily due to net debt payments and payments of debt extinguishment costs of $561.3 million in the year ended December 31, 2023, compared to net debt borrowings of $12.7 million in the year ended December 31, 2022, partially offset by the non-recurrence of repurchases of our Common Stock of $132.0 million in the year ended December 31, 2022.

Holding Company Status

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The ability of our subsidiaries to pay dividends to us is subject to applicable local law and may be limited due to the terms of other contractual arrangements, including our Credit Facilities and Senior Notes.

The amount of our consolidated net assets that were available to be distributed under our Credit Facilities as of December 31, 2024, was $931.7 million.

Critical Accounting Policies and Estimates

The following disclosure is provided to supplement the description of our accounting policies contained in Note 1 - Description of Company and Summary of Significant Accounting Policies of our consolidated financial statements.

Our MD&A is based upon our consolidated financial statements, which have been prepared in accordance with GAAP.

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The following discussion highlights the estimates we believe are critical and should be read in conjunction with the consolidated financial statements included in this Form 10-K.

We allocate the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and intangible assets acquired based on their acquisition date fair values.

Goodwill as of the acquisition date is measured as the excess of consideration transferred over the net of the acquisition date fair values of the assets acquired and the liabilities assumed.

If the fair value of the acquired assets exceeds the purchase price the difference is recorded as a bargain purchase in other income, net.

Such valuations require us to make significant estimates and assumptions, especially with respect to intangible assets.

As a result, during the measurement period, which may be up to one year from the acquisition date, material adjustments must be reflected in the comparative consolidated financial statements in the period in which the adjustment amount is determined.

Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our consolidated statements of operations.

Newly acquired entities are included in our results from the date of their respective acquisitions.

Recoverability of Long-Lived and Intangible Assets

Long-lived assets, other than goodwill, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of such asset groups may not be recoverable.

Long-lived assets, other than goodwill, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of such asset or asset groups may not be recoverable.

Such events or circumstances include, but are not limited to, a significant decrease in the fair value of the underlying business or a change in utilization of property and equipment.

We group assets to test for impairment at the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities.

Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the assets.

When a triggering event is identified, we perform an impairment test by reviewing the expected undiscounted cash flows generated from the anticipated use and eventual disposition of the asset group compared to the carrying value of the asset group.

If the expected undiscounted cash flows are less than the carrying value of the asset group, then we recognize an impairment loss, and the carrying amount of the asset is adjusted to fair value based on the discounted estimated future net cash flows.

When a triggering event is identified, we perform an impairment test by reviewing the expected undiscounted cash flows generated from the anticipated use of the asset or asset group and the residual value from the ultimate disposal of the asset or asset group, compared to the carrying value of the asset or asset group.

If the expected undiscounted cash flows are less than the carrying value of the asset or asset group, the asset or asset group is deemed not to be recoverable and possibly impaired.

We then estimate the fair value of the asset or asset group to determine whether an impairment loss should be recognized.

An impairment loss will be recognized if an asset or asset group’s fair value is determined to be less than its carrying value.

Fair value can be determined using an income approach, cost approach, or market approach.

For depreciable long-lived assets and an amortizable intangible asset, the new cost basis will be amortized over the remaining useful life of the asset.

Our impairment loss calculations require management to apply judgments in estimating future cash flows to determine asset fair values, including forecasting useful lives of the assets.

Goodwill is tested for impairment on an annual basis during the fourth quarter and between annual tests if indicators of potential impairment exist.

Current accounting guidance provides an entity with the option to perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

If we do not perform a qualitative assessment, or if we determine that it is more likely than not that the fair value of the reporting unit is less than its carrying amount, we perform a quantitative goodwill impairment test.

Prior to 2023, the estimated fair values of reporting units were derived using only an income approach (implied fair value measured on a non-recurring basis using Level 3 inputs).

Beginning in 2023, the estimated fair values of our reporting units were derived using a combination of income and market approaches, both of which yielded substantially equivalent indications of fair value.

Absent an indication of fair value from a potential buyer or similar specific transactions, we believe that the use of these methods provides a reasonable estimate of a reporting unit’s fair value.

Fair value computed by these models is arrived at using several factors and inputs.

There are inherent uncertainties, however, related to fair value models, the inputs, factors and our judgment in applying them to this analysis.

Nonetheless, we believe that the combination of these methods provides a reasonable approach to estimate the fair values of our reporting units.

Under the income approach, the fair value of a reporting unit is based on a discounted cash flow analysis of management's short-term and long-term forecast of operating performance.

This analysis contains significant assumptions and estimates including revenue growth rates, expected EBITDA margins, discount rates, capital expenditures, income tax rates, and terminal growth rates.

Under the market approach, we utilized a guideline company method in which the fair value of the reporting unit is based on weighting the financial multiples of comparable companies and applying a control premium.

Changes in assumptions or estimates used in our goodwill impairment testing could materially affect the determination of the fair value of a reporting unit, and therefore, could eliminate the excess of fair value over carrying amount of a reporting unit and, in some cases, could result in impairment.

Such changes in assumptions could be caused by items such as prolonged deterioration in economic conditions, a further decline in projected future cash flows, loss of one or more significant customers, failure to control cost increases above what can be recouped in sale price increase, or increases in the discount rates.

These types of changes would negatively affect our profits, revenues, and growth over the long term and such a decline could significantly affect the fair value assessment of our reporting units and cause our goodwill to become impaired.

Prior to 2023, we identified three reporting units for the purpose of conducting our goodwill impairment assessment:

North America, Europe and Australasia.

Our impairment loss calculations require management to apply judgments in estimating future cash flows to determine asset fair values under the income approach, including forecasting the useful lives of the assets.

Under the cost approach, we applied assumptions regarding the current replacement cost of similar assets adjusted for estimated depreciation, physical deterioration, and economic obsolescence.

For the market approach, we utilized a guideline company method in which the fair value of the asset or asset group was based on a weighting of the market multiples of comparable companies.

Goodwill was tested for impairment on an annual basis during the fourth quarter and between annual tests if indicators of potential impairment existed.

The estimated fair values of our reporting units were derived using a combination of income and market approaches, both of which yielded substantially equivalent indications of fair value.

Absent an indication of fair value from a potential buyer or similar specific transactions, we believed that the use of these methods provided a reasonable estimate of a reporting unit’s fair value.

Fair value computed by these models was arrived at using several factors and inputs.

There were inherent uncertainties related to fair value models, the inputs, factors and our judgment in applying them to this analysis.

Nonetheless, we believed that the combination of these methods provided a reasonable approach to estimate the fair values of our reporting units.

Under the income approach, the fair value of a reporting unit was based on a discounted cash flow analysis of management's short-term and long-term forecast of operating performance.

This analysis contained significant assumptions and estimates including revenue growth rates, expected EBITDA, discount rates, capital expenditures, incremental net working capital, income tax rates, and terminal growth rates.

Under the market approach, we utilized a guideline company method in which the fair value of the reporting unit was based on a weighting of the market multiples of comparable companies.

After the divestiture of our Australasia reporting unit in the third quarter of 2023, we identified two reporting units:

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In determining our reporting units, we considered (i) whether an operating segment or a component of an operating segment was a business, (ii) whether discrete financial information was available, and (iii) whether the financial information is regularly reviewed by management of the operating segment.

During the year ended December 31, 2022, upon the results of our interim impairment analysis, we concluded that the carrying amount of our Europe reporting unit exceeded its fair value, and we recorded a goodwill impairment charge of $54.9 million, representing a partial impairment of goodwill assigned to the Europe reporting unit.

In addition, we determined that our North America reporting unit was not impaired.

We performed our annual impairment assessment during the fourth quarter of 2023 using a quantitative analysis for our North America and Europe reporting units.

No indication of goodwill impairment was identified.

We determined that the fair value of our North America reporting unit would have to decline significantly to be considered for potential impairment.

We determined the fair value of our Europe reporting unit would have to decline by approximately 3% to be considered for potential impairment.

Following our 2023 annual impairment test for our Europe reporting unit, we concluded that while no impairment existed, the fair value of our reporting unit exceeded its carrying value by approximately 3%.

During the third quarter of 2024, the Company updated its financial forecast for the Europe reportable segment to reflect anticipated macroeconomic conditions of prolonged elevated interest rates leading to reduced revenue growth expectations.

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Accordingly, the Company determined that a triggering event occurred requiring an interim goodwill impairment test for its European reporting unit as of September 28, 2024.

Based upon the results of our interim impairment assessment, we concluded the carrying value of our Europe reporting unit exceeded its fair value, and we recorded a goodwill impairment charge of $63.4 million, representing a partial impairment of goodwill assigned to the Europe reporting unit.

Based upon the results of our interim impairment test, we concluded the carrying value of our Europe reporting unit exceeded its fair value, and we recorded a goodwill impairment charge of $63.4 million, representing a partial impairment of goodwill assigned to the Europe reporting unit.

Following this partial impairment, the reporting unit’s carrying amount equaled the fair value.

We performed our annual impairment assessments during the fourth quarter.

The Company elected to perform a qualitative analysis as of the fourth quarter 2024 for the Europe reporting unit.

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We determined that the fair value of our North America reporting unit would have to decline by less than 10% to be considered impaired.

We believe that our Europe and North America reporting units are at risk of impairment in the near term if the reporting units’ operating performance does not improve in line with management’s expectations, or if there is a change in the long-term outlook for the business or in other factors, such as the discount rate.

The current goodwill impairment analysis for our Europe and North America reporting units incorporates mid-to-low market outlook growth assumptions and yielding the benefits of our transformation initiatives and strategic footprint optimization.

During the first quarter of 2025, the Company determined that a triggering event occurred, requiring an interim goodwill impairment test of its North America reporting unit as of March 29, 2025.

This was due to factors that increased short-term volatility in sales and EBITDA volatility, reflecting anticipated economic headwinds, deterioration of market demand versus previous expectations, and uncertainty around how potential increases in inflationary pressures on imports will impact customer demand.

These factors included a decrease in the US GDP growth consensus estimate for 2025 by approximately 40 basis points from the end of 2024.

Further, the National Association of Homebuilders reported that single-family starts were projected to grow 70 basis points less than previously estimated, and multifamily starts were expected to decline 6.0% in 2025, down from a 3.5% decline cited in previous reports.

Additionally, during the first quarter, we saw a continued decline in the market price of our common stock, resulting in a decrease in our market capitalization.

The impairment test indicated a non-cash goodwill impairment charge related to the North America reporting unit of $137.7 million, which the Company recorded in the accompanying consolidated statements of operations during the first quarter of 2025.

Following this impairment charge to our North America reporting unit, the fair values of both of our reporting units approximate their carrying value.

During the third quarter of 2025, the Company determined that a triggering event occurred, requiring an interim goodwill impairment test of its North America and Europe reporting units as of September 27, 2025.

The end of the third fiscal quarter marks the conclusion of our generally heavier seasonal sales period, and our net sales during this period were negatively impacted by weaker than previously expected market demand in each of our reporting units.

This was due to increased economic headwinds, further deterioration of market demand versus previous expectations as well as the impacts of continued elevated interest rates and inflationary pressures extending the time horizon for market demand recovery.

Our European business also experienced lower than expected demand in some of our larger markets as well as inventory re-balancing that impacted purchasing from our larger customers.

In addition, we were unable to realize previously expected base productivity in both of our reporting units contributing to lower than expected profitability levels.

As a result of these factors, the Company updated its financial forecast for the North America and Europe reporting units to reflect current and anticipated macroeconomic conditions leading to reduced revenue growth expectations and profitability.

As a result of our impairment tests, all the remaining goodwill related to both the North America and Europe reporting units was determined to be fully impaired, and a $196.9 million non-cash goodwill impairment charge was recorded in the accompanying consolidated statements of operations during the third quarter of 2025.

Income taxes are accounted for under the asset and liability method.

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The determination of obligations and compensation expense requires the use of several mathematical and judgmental factors, including stock price, expected volatility, the anticipated life of the option, estimated risk-free rate, and the number of shares or share options expected to vest.

Any difference in the number of shares or share options that actually vest can affect future compensation expense.

Any difference in the number of shares or share options that vest can affect future compensation expense.

Other assumptions are not revised after the original estimate.

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For PSUs issued prior to 2021, the number of PSUs that vest is determined by a payout factor consisting of equally weighted performance measures of Adjusted EBITDA and Free Cash Flow, each as reported over the applicable three-year performance period, and is adjusted based upon a market condition measured by our TSR over the applicable three-year performance period as compared to the TSR of the Russell 3000 index.

For PSUs issued in 2021 and thereafter, the number of PSUs that vest is determined by a payout factor consisting of equally weighted pre-set three-year performance targets on ROIC and TSR.

For PSUs issued from 2021 to 2024, the number of PSUs that vest is determined by a payout factor consisting of equally weighted pre-set three-year cumulative performance targets on ROIC and TSR.

The fair value of the award is estimated using a Monte Carlo simulation approach in a risk-neutral framework to model future stock price movements based on historical volatility, risk-free rates of return, and correlation matrix.

For PSUs issued in 2025, the number of PSUs that vest is determined based on annual performance evaluations of Adjusted ROIC and Net Sales over three independent annual performance periods, with equally weighted performance measures of ROIC and Net Sales.

Each metric is measured annually, and the cumulative earned PSUs may be modified, at the sole discretion of the Compensation Committee of the Board of Directors, at the end of the third year, by a three-year TSR-based adjustment at the end of the award period.

This adjustment can range from a reduction of up to 10% to an increase of up to 10%, based on the Company’s relative TSR compared to the Russell 3000 index.

We estimate forfeitures based on our historical analysis of actual stock option forfeitures.

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The discount rate utilized to calculate the projected benefit obligation at the measurement date for our U.S.

pension plan increased to 5.57% at December 31, 2024, from 5.05% at December 31, 2023.

pension plan decreased to 5.41% at December 31, 2025, from 5.57% at December 31, 2024.

Lowering the discount rate by 25 bps would increase the U.S.

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We determine the expected long-term rate of return on plan assets based on the plan assets’ historical long-term investment performance, current asset allocation, and estimates of future long-term returns by asset class.

Holding all other assumptions constant, a 100 bps increase or decrease in the assumed rate of return on plan assets would decrease or increase, respectively, 2025 net periodic pension expense by approximately $2.5 million.

Holding all other assumptions constant, a 100-bps increase or decrease in the assumed rate of return on plan assets would decrease or increase 2026 net periodic pension expense by approximately $1.5 million.

The actuarial assumptions we use in determining our pension benefits may differ materially from actual results because of changing market and economic conditions, higher or lower withdrawal rates, or longer or shorter life spans of participants.

While we believe that the assumptions used are appropriate, differences in actual experience or changes in assumptions might materially affect our financial position or results of operations.

From time to time, we may execute transactions intended to reduce the volatility and long‑term risk of our U.S.

defined benefit pension plan such as one‑time lump‑sum election windows for eligible participants or the purchase of group annuity contracts from highly rated insurers when market conditions and plan fundamentals are favorable.

These market conditions and plan fundamentals include interest rate levels, insurer pricing and capacity, plan funded status, PBGC premiums, and expected administrative costs.

When a settlement occurs, GAAP requires immediate recognition in earnings of a portion of accumulated actuarial gains/losses proportional to the obligation settled.

As a result, any such action may give rise to a non‑cash pre‑tax pension settlement charge recorded within other income, net, with a corresponding impact to accumulated other comprehensive income.

Cash impacts depend on the structure of the transaction.

Capital Expenditures

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

What changed 10-K

Item 7. Management’s Discussion and Analysis