What changed in this filing

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Item 1. Financial Statements

2025-10-28 compared with 2025-07-29 · 148 added, 109 removed, 434 unchanged (37% of the section changed)

3 unchanged sentences

(in Millions, except share amounts)

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Current assets:

15 unchanged sentences

Compensation and benefits 41.2 37.9

Current portion of pension and postretirement benefit obligations 1.2 1.2

Current portion of pension and other postretirement benefit obligations 1.2 1.2

Other current liabilities 162.7 136.2

1 unchanged sentence

Long-term debt 495.5 494.8

Pension and postretirement benefit obligations 14.0 14.1

Pension and other postretirement benefit obligations 8.8 14.1

Deferred income taxes 182.8 196.5

6 unchanged sentences

shares issued and outstanding:

167,661,315 at June 30, 2025 and 170,308,023 at December 31, 2024

167,469,305 at September 30, 2025 and 170,308,023 at December 31, 2024

Additional paid-in capital 2,816.9 2,828.2

7 unchanged sentences

(in Millions, except share and per share amounts)

Three Months Ended Six Months Ended

June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

Three Months Ended Nine Months Ended

September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024

Net sales $ 455.4 $ 410.0 $ 1,288.7 $ 1,195.8

7 unchanged sentences

Interest expense, net ( 7.1 ) ( 8.3 ) ( 22.1 ) ( 25.6 )

Other expense, net ( 2.0 ) ( 1.6 ) ( 2.0 ) ( 3.0 )

Other income (expense), net 8.7 ( 1.5 ) 6.7 ( 4.5 )

Income before income taxes 79.1 60.4 203.1 165.2

19 unchanged sentences

(in Millions)

Three Months Ended Six Months Ended

June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

Three Months Ended Nine Months Ended

September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024

Net income $ 61.8 $ 43.5 $ 155.9 $ 123.8

1 unchanged sentence

Foreign currency translation adjustments ( 2.5 ) 0.6 2.2 ( 3.4 )

Change in pension and other postretirement benefit obligations, net of tax ( 6.2 ) — ( 6.2 ) —

Other comprehensive income (loss), net of tax ( 8.7 ) 0.6 ( 4.0 ) ( 3.4 )

4 unchanged sentences

(in Millions)

Six Months Ended

June 30, 2025 June 30, 2024

Nine Months Ended

September 30, 2025 September 30, 2024

Operating activities

7 unchanged sentences

Other non-cash expense 1.7 2.1

Pension curtailment ( 0.7 ) —

Pension curtailment and settlement ( 10.7 ) —

Stock-based compensation expense 29.1 29.2

24 unchanged sentences

Notes to Condensed Consolidated Financial Statements

June 30, 2025

September 30, 2025

Basis of Presentation and Significant Accounting Policies

19 unchanged sentences

Restructuring and Other Similar Charges

During the three and six months ended June 30, 2025, the Company continued to execute various restructuring actions.

During the three and nine months ended September 30, 2025, the Company continued to execute various restructuring actions.

These initiatives were implemented to drive efficiencies and reduce operating costs while also modifying the Company's footprint to reflect changes in the markets it serves, the impact of mergers and acquisitions on the Company's overall manufacturing capacity and the refinement of its overall product portfolio.

1 unchanged sentence

Management expects to continue executing similar initiatives to optimize the Company's operating margin and manufacturing footprint.

As such, the Company expects further expenses related to workforce reductions, potential impairment or accelerated depreciation of assets, lease termination

costs and other facility rationalization costs.

As such, the Company expects further expenses related to workforce reductions, potential impairment or accelerated depreciation of assets, lease

termination costs and other facility rationalization costs.

The Company's restructuring plans are preliminary and the full extent of related expenses are not yet estimable.

The following table summarizes the Company's restructuring and other similar charges during the three and six months ended June 30, 2025 and June 30, 2024, (in millions):

Three Months Ended Six Months Ended

June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

The following table summarizes the Company's restructuring and other similar charges during the three and nine months ended September 30, 2025 and September 30, 2024, (in millions):

Three Months Ended Nine Months Ended

September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024

Employee termination benefits $ 0.6 $ 0.6 $ 1.9 $ 1.0

1 unchanged sentence

Total restructuring and other similar charges $ 1.8 $ 2.7 $ 5.4 $ 9.7

The following table summarizes the activity in the Company's restructuring accrual for the six months ended June 30, 2025 (in millions):

The following table summarizes the activity in the Company's restructuring accrual for the nine months ended September 30, 2025 (in millions):

Employee termination benefits Contract termination and other associated costs Total

3 unchanged sentences

Non-cash charges (2) — ( 0.5 ) ( 0.5 )

Accrued restructuring costs, June 30, 2025 (1) $ 0.9 $ — $ 0.9

(1) As of June 30, 2025 and December 31, 2024, the restructuring accrual is included in other current liabilities in the condensed consolidated balance sheets.

Accrued restructuring costs, September 30, 2025 (1) $ 0.7 $ — $ 0.7

(1) As of September 30, 2025 and December 31, 2024, the restructuring accrual is included in other current liabilities in the condensed consolidated balance sheets.

(2) Non-cash charges consist primarily of asset impairments based on Level 3 inputs.

3 unchanged sentences

The operating results of PMC are reported as discontinued operations in the consolidated statements of operations for all periods presented, as the Spin-Off Transaction of PMC represented a strategic shift that had a major impact on operations and financial results.

The condensed consolidated statements of cash flows for the six months ended June 30, 2025 and June 30, 2024 have not been adjusted to separately disclose cash flows related to the discontinued operations.

The major components of the Income from discontinued operations, net of tax presented in the condensed consolidated statements of operations for the three and six months ended June 30, 2025 and June 30, 2024, are as follows (in millions):

Three Months Ended Six Months Ended

June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

The condensed consolidated statements of cash flows for the nine months ended September 30, 2025 and September 30, 2024 have not been adjusted to separately disclose cash flows related to the discontinued operations.

The major components of the Income from discontinued operations, net of tax presented in the condensed consolidated statements of operations for the three and nine months ended September 30, 2025 and September 30, 2024, are as follows (in millions):

Three Months Ended Nine Months Ended

September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024

Selling, general and administrative expense (1) $ ( 2.1 ) $ — $ ( 4.7 ) $ ( 0.7 )

16 unchanged sentences

The Company classifies shipping and handling fees billed to customers as net sales and the corresponding costs are classified as cost of sales in the condensed consolidated statements of operations.

Unsatisfied performance obligations as of June 30, 2025 have an expected duration of one year or less.

Unsatisfied performance obligations as of September 30, 2025 have an expected duration of one year or less.

Revenue by Category

2 unchanged sentences

The following tables present revenue disaggregated by customer type and the geographic region of the end customer (in millions):

Three Months Ended Six Months Ended

Customer Type June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

Three Months Ended Nine Months Ended

Customer Type September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024

Institutional $ 223.5 $ 193.4 $ 632.7 $ 567.8

2 unchanged sentences

Total $ 455.4 $ 410.0 $ 1,288.7 $ 1,195.8

Three Months Ended Six Months Ended

Geography June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

Three Months Ended Nine Months Ended

Geography September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024

United States $ 414.9 $ 375.2 $ 1,182.8 $ 1,094.7

9 unchanged sentences

A contract liability exists when the Company has received consideration or the amount is due from the customer in advance of revenue recognition.

Contract liabilities and contract assets as of June 30, 2025 and December 31, 2024 were not material.

Contract liabilities and contract assets as of September 30, 2025 and December 31, 2024 were not material.

Timing of Performance Obligations Satisfied at a Point in Time

16 unchanged sentences

On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted.

The Company has incorporated the OBBBA changes related to bonus depreciation and the expensing of research and development expenditures, among other items for the income tax provision ended September 30, 2025.

These changes accelerate applicable deductions;

however, such accelerated deductions did not have a material impact on the financial statements for the period ended September 30, 2025.

There are multiple business tax provisions for which further guidance from the U.S.

Treasury and the Internal Revenue Service is needed.

The Company is currently reviewing and evaluating the impact of the guidance provided to date that could affect our income tax payable and deferred tax liability, including changes related to bonus depreciation and the expensing of research and development expenditures, among other topics.

Treasury and the Internal Revenue Service is still needed.

The Company regularly reviews its deferred tax assets for recoverability and valuation allowances are established based on historical losses, projected future taxable income and the expected timing of the reversals of existing temporary differences, as deemed appropriate.

4 unchanged sentences

Future changes to the balances of these valuation allowances, as a result of this continued review and analysis by the Company, could impact the financial statements for such period of change.

The income tax provision was $ 17.8 million for the three months ended June 30, 2025, compared to $ 16.5 million for the three months ended June 30, 2024.

The effective income tax rate for the three months ended June 30, 2025 was 26.2 % versus 26.7 % for the three months ended June 30, 2024.

The effective income tax rate for the three months ended June 30, 2025 and the three months ended June 30, 2024 was above the U.S.

The income tax provision was $ 19.5 million for the three months ended September 30, 2025, compared to $ 16.9 million for the three months ended September 30, 2024.

The effective income tax rate for the three months ended September 30, 2025 was 24.7 % versus 28.0 % for the three months ended September 30, 2024.

The effective income tax rate for the three months ended September 30, 2025 and the three months ended September 30, 2024 was above the U.S.

federal statutory rate of 21% primarily due to the accrual of additional income taxes associated with compensation deduction limitations under Section 162(m) of the Internal Revenue Code, the accrual of various state income taxes and the accrual of foreign income taxes, which are generally above the U.S.

federal statutory rate, partially offset by the recognition of income tax benefits associated with share-based payments.

The income tax provision was $ 32.9 million for the six months ended June 30, 2025, compared to $ 25.5 million for the six months ended June 30, 2024.

The effective income tax rate for the six months ended June 30, 2025 was 26.5 % versus 24.3 % for the six months ended June 30, 2024.

The effective income tax rate for the six months ended June 30, 2025 and for the six months ended June 30, 2024 was above the U.S.

The income tax provision was $ 52.4 million for the nine months ended September 30, 2025, compared to $ 42.4 million for the nine months ended September 30, 2024.

The effective income tax rate for the nine months ended September 30, 2025 was 25.8 % versus 25.7 % for the nine months ended September 30, 2024.

The effective income tax rate for the nine months ended September 30, 2025 was above the U.S.

federal statutory rate of 21% primarily due to the accrual of additional income taxes associated with compensation deduction limitations under Section 162(m) of the Internal Revenue Code, the

accrual of various state income taxes and the accrual of foreign income taxes, which are generally above the U.S.

federal statutory rate, partially offset by the recognition of income tax benefits associated with share-based payments.

The Company’s total liability for net unrecognized tax benefits as of June 30, 2025 and December 31, 2024 was $ 2.0 million and $ 1.8 million, respectively.

The effective income tax rate for the nine months ended September 30, 2024 was above the U.S.

federal statutory rate, partially offset by the recognition of certain previously unrecognized tax benefits due to the lapse of the applicable statutes of limitations and income tax benefits associated with share-based payments.

The Company’s total liability for net unrecognized tax benefits as of September 30, 2025 and December 31, 2024 was $ 2.0 million and $ 1.8 million, respectively.

The Company recognizes accrued interest and penalties related to unrecognized income tax benefits in income tax expense.

As of June 30, 2025 and December 31, 2024, the total amount of unrecognized tax benefits includes gross accrued interest and penalties of $ 0.5 million.

The Company recognized $ 0.1 million and $( 0.2 ) million of net interest and penalties as income tax expense (benefit) during the six months ended June 30, 2025 and June 30, 2024, respectively.

As of September 30, 2025 and December 31, 2024, the total amount of unrecognized tax benefits includes gross accrued interest and penalties of $ 0.6 million and $ 0.5 million, respectively.

The Company recognized $ 0.2 million and $( 0.1 ) million of net interest and penalties as income tax expense (benefit) during the nine months ended September 30, 2025 and September 30, 2024, respectively.

The Company conducts business in multiple locations within and outside the U.S.

7 unchanged sentences

Diluted net income per share from continuing and discontinued operations is computed based on the weighted average number of common shares outstanding, increased by the number of incremental shares that would have been outstanding if the potential dilutive shares were issued through the exercise of outstanding stock options to purchase common shares and the vesting of restricted stock units and performance stock units using the treasury stock method, except when the effect would be anti-dilutive.

The computation for diluted net income per share for the three and six months ended June 30, 2025 excludes 0.1 million shares due to their anti-dilutive effects.

The computation for diluted net income per share for the three and six months ended June 30, 2024 excludes 0.5 million shares and 0.3 million shares due to their anti-dilutive effects, respectively.

The computation for diluted net income per share for the three and nine months ended September 30, 2025 excludes 0.1 million shares due to their anti-dilutive effects.

The computation for diluted net income per share for the three and nine months ended September 30, 2024 excludes 0.3 million shares due to their anti-dilutive effects.

Stockholders' Equity

16 unchanged sentences

Balance at June 30, 2024 $ 1.7 $ 2,842.5 $ ( 1,178.1 ) $ ( 71.7 ) $ 1,594.4

Total comprehensive income — — 43.5 0.6 44.1

Stock-based compensation expense — 9.8 — — 9.8

Proceeds from exercise of stock options — 2.3 — — 2.3

Taxes withheld and paid on employees' share-based payment awards — ( 0.1 ) — — ( 0.1 )

Repurchase of common stock — — ( 50.4 ) — ( 50.4 )

Common stock dividends ($ 0.08 per share)

— ( 13.6 ) — — ( 13.6 )

Balance at September 30, 2024 $ 1.7 $ 2,840.9 $ ( 1,185.0 ) $ ( 71.1 ) $ 1,586.5

Common stock (1) Additional

19 unchanged sentences

Balance at June 30, 2025 $ 1.7 $ 2,817.9 $ ( 1,185.5 ) $ ( 69.7 ) $ 1,564.4

(1) During the three and six months ended June 30, 2025, the Company issued 109,796 and 597,933 shares of common stock, upon the exercise of stock options, vesting of restricted stock units and performance stock units, and for other common stock issuances, respectively.

During the three and six months ended June 30, 2024, the Company issued 171,495 and 1,398,393 shares of common stock, upon the exercise of stock options, vesting of restricted stock units and performance stock units, and for other common stock issuances, respectively.

Total comprehensive income — — 61.8 ( 8.7 ) 53.1

Stock-based compensation expense — 9.6 — — 9.6

Proceeds from exercise of stock options and ESPP contributions — 5.0 — — 5.0

Taxes withheld and paid on employees' share-based payment awards — ( 0.1 ) — — ( 0.1 )

Repurchase of common stock — — ( 25.0 ) — ( 25.0 )

Common stock dividends ($ 0.09 per share)

— ( 15.5 ) — — ( 15.5 )

Balance at September 30, 2025 $ 1.7 $ 2,816.9 $ ( 1,148.7 ) $ ( 78.4 ) $ 1,591.5

(1) During the three and nine months ended September 30, 2025, the Company issued 383,590 and 981,523 shares of common stock, upon the exercise of stock options, vesting of restricted stock units and performance stock units, and for other common stock issuances, respectively.

During the three and nine months ended September 30, 2024, the Company issued 1,300,020 and 2,698,413 shares of common stock, upon the exercise of stock options, vesting of restricted stock units and performance stock units, and for other common stock issuances, respectively.

Share Repurchase Program

4 unchanged sentences

however, the program will continue until the maximum amount of dollars authorized have been expended or until it is modified or terminated by the Board of Directors.

During the three months ended June 30, 2025, the Company repurchased 972,619 shares of common stock at a total cost of $ 32.5 million at an average price of $ 33.41 per share.

During the six months ended June 30, 2025, the Company repurchased 3,244,641 shares of common stock at a total cost of $ 109.9 million at a weighted average price of $ 33.87 per share.

During the three months ended June 30, 2024, the Company repurchased 1,942,016 shares of common stock at a total cost of $ 61.0 million at an average

price of $ 31.38 per share.

During the six months ended June 30, 2024, the Company repurchased 2,562,860 shares of common stock at a total cost of $ 79.9 million at an average price of $ 31.15 per share.

During the three months ended September 30, 2025, the Company repurchased 575,600 shares of common stock at a total cost of $ 25.0 million at an average price of $ 43.43 per share.

During the nine months ended September 30, 2025, the Company repurchased 3,820,241 shares of common stock at a total cost of $ 134.9 million at an average price of $ 35.31 per share.

During the three months ended September 30, 2024, the Company repurchased 1,622,895 shares of common stock at a total cost of $ 50.0 million at an average price of $ 30.81 per share.

During the nine months ended September 30, 2024, the Company repurchased 4,185,755 shares of common stock at a total cost of $ 129.9 million at an average price of $ 31.02 per share.

The repurchased shares were canceled by the Company upon receipt.

Approximately $ 130.3 million of the existing authority remained under the Repurchase Program at June 30, 2025.

Approximately $ 105.3 million of the existing authority remained under the Repurchase Program at September 30, 2025.

As discussed in Note 18, Subsequent Events, on October 28, 2025, the Board of Directors approved increasing the Company's existing share repurchase authority to $ 500.0 million of available capacity under the Repurchase Program.

Accumulated Other Comprehensive Loss

The changes in accumulated other comprehensive loss, net of tax, for the six months ended June 30, 2025, are as follows (in millions):

Foreign Currency Translation and Other Pension and Postretirement Plans Total

The changes in accumulated other comprehensive loss, net of tax, for the nine months ended September 30, 2025, are as follows (in millions):

Foreign Currency Translation and Other Pension and Other Postretirement Plans Total

Balance at December 31, 2024 $ ( 81.5 ) $ 7.1 $ ( 74.4 )

Other comprehensive income before reclassifications 2.2 1.8 4.0

Net current period other comprehensive income 4.7 — 4.7

Balance at June 30, 2025 $ ( 76.8 ) $ 7.1 $ ( 69.7 )

There were no amounts reclassified from accumulated other comprehensive loss to net income during the six months ended June 30, 2025 and 2024.

Amounts reclassified from accumulated other comprehensive loss — ( 8.0 ) ( 8.0 )

Net current period other comprehensive income (loss) 2.2 ( 6.2 ) ( 4.0 )

Balance at September 30, 2025 $ ( 79.3 ) $ 0.9 $ ( 78.4 )

The following table summarizes the amounts reclassified from accumulated other comprehensive loss to net income during the three and nine months ended September 30, 2025 and September 30, 2024 (in millions):

Three Months Ended Nine Months Ended

September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 Income Statement Line

Pension and other postretirement plans

Settlement gain ( 10.0 ) — ( 10.0 ) — Other income (expense), net

Provision for income taxes 2.0 — 2.0 —

Total net of tax $ ( 8.0 ) $ — $ ( 8.0 ) $ —

The major classes of inventories are summarized as follows (in millions):

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Finished goods $ 238.5 $ 228.7

5 unchanged sentences

Goodwill and Intangible Assets

The changes in the net carrying value of goodwill for the six months ended June 30, 2025, are presented below (in millions):

The changes in the net carrying value of goodwill for the nine months ended September 30, 2025, are presented below (in millions):

Net carrying amount as of December 31, 2024 $ 794.2

Currency translation adjustments 0.2

Net carrying amount as of June 30, 2025 $ 795.6

The gross carrying amount and accumulated amortization for each major class of identifiable intangible assets as of June 30, 2025 and December 31, 2024 are as follows (in millions):

June 30, 2025

Net carrying amount as of September 30, 2025 $ 794.4

The gross carrying amount and accumulated amortization for each major class of identifiable intangible assets as of September 30, 2025 and December 31, 2024 are as follows (in millions):

September 30, 2025

Weighted Average Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount

13 unchanged sentences

Total intangible assets, net 16 years $ 1,337.3 $ ( 445.7 ) $ 891.6

Intangible asset amortization expense totaled $ 14.6 million and $ 14.8 million for the three months ended June 30, 2025 and June 30, 2024, respectively.

Intangible asset amortization expense totaled $ 29.3 million and $ 29.5 million for the six months ended June 30, 2025 and June 30, 2024, respectively.

The Company expects to recognize amortization expense on the intangible assets subject to amortization of $ 58.7 million in the year ending December 31, 2025 (inclusive of the $ 29.3 million of amortization expense recognized in the six months ended June 30, 2025), $ 58.5 million in 2026, $ 58.5 million in 2027, $ 58.5 million in 2028, $ 58.5 million in 2029 and $ 58.5 million in 2030.

Intangible asset amortization expense totaled $ 14.7 million and $ 14.8 million for the three months ended September 30, 2025 and September 30, 2024, respectively.

Intangible asset amortization expense totaled $ 44.0 million and $ 44.3 million for the nine months ended September 30, 2025 and September 30, 2024, respectively.

The Company expects to recognize amortization expense on the intangible assets subject to amortization of $ 58.7 million in the year ending December 31, 2025 (inclusive of the $ 44.0 million of amortization expense recognized in the nine months ended September 30, 2025), $ 58.5 million in 2026, $ 58.5 million in 2027, $ 58.5 million in 2028, $ 58.5 million in 2029 and $ 58.5 million in 2030.

Other Current Liabilities

Other current liabilities are summarized as follows (in millions):

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Commissions $ 11.2 $ 9.2

16 unchanged sentences

Long-term debt is summarized as follows (in millions):

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Term loan (1) $ 476.1 $ 475.0

3 unchanged sentences

Long-term debt $ 495.5 $ 494.8

(1) Includes unamortized debt issuance costs of $ 4.7 million and $ 5.4 million at June 30, 2025 and December 31, 2024, respectively.

(1) Includes unamortized debt issuance costs of $ 4.3 million and $ 5.4 million at September 30, 2025 and December 31, 2024, respectively.

Senior Secured Credit Facility

6 unchanged sentences

1 dated as of July 1, 2022, executed by Elkay and its domestic subsidiaries, and certain other collateral documents.

The Credit Agreement contains representations, warranties, covenants and events of default, including, without limitation, a financial covenant under which the Borrowers are, if certain conditions are met, obligated to maintain on a consolidated basis, as of the end of each fiscal quarter, a certain maximum Net First Lien Leverage Ratio (as defined in the Credit Agreement).

As of June 30, 2025, the Borrowers were in compliance with all applicable covenants under the Credit Agreement.

Credit Agreement).

As of September 30, 2025, the Borrowers were in compliance with all applicable covenants under the Credit Agreement.

The Credit Agreement provides for the issuance of a term loan facility in an aggregate principal amount of $ 550.0 million.

7 unchanged sentences

In the event the Borrowers’ Net First Lien Leverage Ratio is less than or equal to 1.80 to 1.00, the applicable margin on both base rate and SOFR borrowings would decrease by 0.25 %.

The Borrowers’ Net First Lien Leverage Ratio was 0.79 to 1.00 as of June 30, 2025, and therefore the applicable margin is 2.00 %.

The Borrowers’ Net First Lien Leverage Ratio was 0.63 to 1.00 as of September 30, 2025, and therefore the applicable margin is 2.00 %.

Prior to July 1, 2023, the Term Loan bore interest at the Borrowers’ option, by reference to a base rate or a rate based on LIBOR, in either case plus an applicable margin determined quarterly based on the Borrowers’ Net First Lien Leverage Ratio as of the last day of each fiscal quarter as illustrated above.

At June 30, 2025 and for the six months then ended, the borrowings under the Term Loan had weighted-average effective interest rates of 6.41 % and 6.44 %, respectively.

At September 30, 2025 and for the nine months then ended, the borrowings under the Term Loan had weighted-average effective interest rates of 6.24 % and 6.44 %, respectively.

Revolving Credit Facility

3 unchanged sentences

In the event the Borrowers' Net First Lien Leverage Ratio is less than or equal to 2.00 to 1.00, the applicable margin on both base rate and SOFR borrowings would decrease by 0.25 %.

The Borrowers’ Net First Lien Leverage Ratio was 0.79 to 1.00 as of June 30, 2025.

The Borrowers’ Net First Lien Leverage Ratio was 0.63 to 1.00 as of September 30, 2025.

The Borrowers are also required to pay a quarterly commitment fee on the average daily unused portion of the Revolving Credit Facility for each fiscal quarter and fees in connection with the issuance of letters of credit.

1 unchanged sentence

Prior to July 1, 2023, borrowings under the Revolving Credit Facility bore interest at the Borrowers’ option, by reference to a base rate or a rate based on LIBOR, in either case, plus an applicable margin determined quarterly based on the Borrowers’ Net First Lien Leverage Ratio as of the last day of each fiscal quarter as illustrated above.

At June 30, 2025 and December 31, 2024, there were no amounts borrowed under the Revolving Credit Facility.

As of June 30, 2025 and December 31, 2024, $ 10.1 million and $ 11.3 million, respectively, of the Revolving Credit Facility was considered utilized in connection with outstanding letters of credit.

At September 30, 2025 and December 31, 2024, there were no amounts borrowed under the Revolving Credit Facility.

As of September 30, 2025 and December 31, 2024, $ 10.1 million and $ 11.3 million, respectively, of the Revolving Credit Facility was considered utilized in connection with outstanding letters of credit.

Finance Leases

At June 30, 2025 and December 31, 2024, the Company had finance lease obligations of $ 20.2 million and $ 20.6 million, respectively.

At September 30, 2025 and December 31, 2024, the Company had finance lease obligations of $ 20.3 million and $ 20.6 million, respectively.

Fair Value Measurements

ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market

participants.

ASC 820 also specifies a fair value hierarchy based upon the observability of inputs used in valuation techniques.

17 unchanged sentences

Deferred compensation short-term and long-term plan liabilities are classified within Compensation and benefits and Other liabilities, respectively, on the condensed consolidated balance sheets.

The following table provides a summary of the Company's assets and liabilities that were recognized at fair value on a recurring basis as of June 30, 2025 and December 31, 2024 (in millions):

Fair Value as of June 30, 2025

The following table provides a summary of the Company's assets and liabilities that were recognized at fair value on a recurring basis as of September 30, 2025 and December 31, 2024 (in millions):

Fair Value as of September 30, 2025

Level 1 Level 2 Level 3 Total

5 unchanged sentences

Deferred compensation plan liabilities 18.9 — — 18.9

There were no transfers of assets between levels at June 30, 2025 and December 31, 2024, respectively.

There were no transfers of assets between levels at September 30, 2025 and December 31, 2024, respectively.

Fair Value of Non-Derivative Financial Instruments

The carrying amounts of cash, receivables, payables and accrued liabilities approximated fair value at June 30, 2025 and December 31, 2024, due to the short-term nature of those instruments.

The fair value of long-term debt as of June 30, 2025 and December 31, 2024, was approximately $ 503.0 million and $ 503.4 million, respectively.

The carrying amounts of cash, receivables, payables and accrued liabilities approximated fair value at September 30, 2025 and December 31, 2024, due to the short-term nature of those instruments.

The fair value of long-term debt as of September 30, 2025 and December 31, 2024, was approximately $ 503.1 million and $ 503.4 million, respectively.

The fair value is based on quoted market prices for the same instruments.

3 unchanged sentences

The following table presents changes in the Company’s product warranty liability (in millions):

Six Months Ended

June 30, 2025 June 30, 2024

Nine Months Ended

September 30, 2025 September 30, 2024

Balance at beginning of period $ 4.9 $ 4.7

7 unchanged sentences

Retirement Benefits

On January 30, 2025, the Company's Board of Directors approved a resolution to terminate the Company's U.S.

defined benefit pension plan (the "Pension Plan") with the full freeze of benefit accruals under the Pension Plan effective March 31, 2025 and the termination of the Pension Plan effective April 1, 2025.

The Pension Plan freeze resulted in a curtailment gain of $ 0.7 million in the first quarter of 2025.

Pension Plan participants were provided the opportunity to receive their full accrued benefits from the Pension Plan assets by either electing immediate lump sum distributions or annuity contracts with a qualifying third-party annuity provider.

During the nine months ended September 30, 2025, the Company entered into an agreement to purchase annuities from a third-party annuity provider and contributed $ 4.3 million to fund the liquidation of the Pension Plan.

As a result, Pension Plan liabilities were settled and the Pension Plan was exited during the quarter ended September 30, 2025, resulting in a pre-tax settlement gain of $ 10.0 million from Accumulated other comprehensive loss to Other income (expense), net in the condensed consolidated statements of operations.

The components of net periodic cost are as follows (in millions):

Three Months Ended Six Months Ended

June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

Three Months Ended Nine Months Ended

September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024

Pension Benefits:

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Expected return on plan assets ( 2.3 ) ( 1.9 ) ( 6.9 ) ( 5.6 )

Amortization of:

Prior service cost 0.3 — 0.3 —

Curtailment — — ( 0.7 ) —

Settlement ( 10.0 ) — ( 10.0 ) —

Net periodic cost $ ( 9.1 ) $ 0.9 $ ( 8.7 ) $ 2.9

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Net periodic cost $ 0.1 $ 0.1 $ 0.3 $ 0.3

The service cost component of net periodic cost is presented within Cost of sales and Selling, general and administrative expenses in the condensed consolidated statements of operations, while the other components of net periodic cost are presented within Other expense, net.

The Company recognizes the net actuarial gains or losses in excess of the corridor in operating results during the final quarter of each fiscal year (or upon any required re-measurement event).

On January 30, 2025, the Company's Board of Directors approved a resolution to terminate the Company's U.S.

defined benefit pension plan (the "Pension Plan") with the full freeze of benefit accruals under the Plan effective March 31, 2025 and the termination of the Pension Plan effective April 1, 2025.

The Pension Plan freeze resulted in a curtailment gain of $ 0.7 million in the first quarter of 2025.

The Company expects to annuitize the remaining pension liability in fiscal year 2025.

See Note 15, Retirement Benefits, to the audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 for further information regarding retirement benefits.

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The Zurn Elkay Water Solutions Corporation Performance Incentive Plan (the "Plan") is utilized to provide performance incentives to the Company's officers, employees, directors and certain others by permitting grants of equity awards (for common stock), as well as performance-based cash awards, to such persons to encourage them to maximize the Company's performance and create value for the Company's stockholders.

For the three months ended June 30, 2025 and June 30, 2024, the Company recognized $ 9.0 million and $ 9.4 million of stock-based compensation expense, respectively.

For the six months ended June 30, 2025 and June 30, 2024, the Company recognized $ 19.5 million and $ 19.4 million of stock-based compensation expense, respectively.

During the six months ended June 30, 2025, the Company granted the following stock options, restricted stock units, performance stock units, and common stock to directors, executive officers, and certain other employees:

For the three months ended September 30, 2025 and September 30, 2024, the Company recognized $ 9.6 million and $ 9.8 million of stock-based compensation expense, respectively.

For the nine months ended September 30, 2025 and September 30, 2024, the Company recognized $ 29.1 million and $ 29.2 million of stock-based compensation expense, respectively.

During the nine months ended September 30, 2025, the Company granted the following stock options, restricted stock units, performance stock units, and common stock to directors, executive officers, and certain other employees:

Award Type Number of Awards Weighted Average Grant-Date Fair Value

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The number of shares of Company common stock available for purchase under the ESPP is 2,000,000 shares, subject to adjustment in the event of a change in capitalization.

During the three and six months ended June 30, 2025, the Company issued 18,403 and 45,698 shares of common stock, respectively.

As of June 30, 2025, 1,909,866 shares remained available for future issuance.

During the three and six months ended June 30, 2025, the Company recognized $ 0.1 million and $ 0.3 million of stock-based compensation expense related to the ESPP, respectively.

During the three and nine months ended September 30, 2025, the Company issued 16,176 and 61,874 shares of common stock, respectively.

During the three and nine months ended September 30, 2024, the Company issued 29,389 shares of common stock.

As of September 30, 2025, 1,893,690 shares remained available for future issuance.

During the three and nine months ended September 30, 2025, the Company recognized $ 0.1 million and $ 0.4 million of stock-based compensation expense related to the ESPP, respectively.

During the three and nine months ended September 30, 2024, the Company recognized $ 0.2 million of stock-based compensation expense related to the ESPP.

See Note 14, Stock-Based Compensation, to the audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024, for further information regarding stock-based compensation.

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benchmarking to our peers.

The following table includes segment revenue, significant expense items and segment profit as viewed by the CODM for the three and six months ended June 30, 2025 and June 30, 2024:

Three Months Ended Six Months Ended

June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

The following table includes segment revenue, significant expense items and segment profit as viewed by the CODM for the three and nine months ended September 30, 2025 and September 30, 2024:

Three Months Ended Nine Months Ended

September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024

Net sales $ 455.4 $ 410.0 $ 1,288.7 $ 1,195.8

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Segment profit (Net income from continuing operations) $ 59.6 $ 43.5 $ 150.7 $ 122.8

(1) Other segment items include restructuring and other similar charges, amortization of intangible assets, interest expense, net, other expense, net, and provision for income taxes.

Segment net sales, amortization, interest expense, net, income before income taxes and income tax expense are included on the condensed consolidated statement of operations.

Segment assets are included on the condensed consolidated balance sheet and segment depreciation, stock-based compensation expense, non-cash restructuring charges, and expenditures for plant, property and equipment are included on the condensed consolidated statement of cash flows.

Interest income for the three months ended June 30, 2025 and June 30, 2024 was $ 1.4 million and $ 1.9 million, respectively.

Interest income for the six months ended June 30, 2025 and June 30, 2024 was $ 3.1 million and $ 3.5 million, respectively.

(1) Other segment items include restructuring and other similar charges, amortization of intangible assets, interest expense, net, other income (expense), net, and provision for income taxes.

Segment net sales, amortization of intangible assets, interest expense, net, and provision for income taxes are included on the condensed consolidated statement of operations.

Segment assets are included on the condensed consolidated balance sheet and segment depreciation, stock-based compensation expense, non-cash restructuring charges, and expenditures for property, plant and equipment are included on the condensed consolidated statement of cash flows.

Interest income for the three months ended September 30, 2025 and September 30, 2024 was $ 2.2 million and $ 2.1 million, respectively.

Interest income for the nine months ended September 30, 2025 and September 30, 2024 was $ 5.3 million and $ 5.5 million, respectively.

Subsequent Events

On July 24, 2025, the Company's Board of Directors declared a quarterly cash dividend on the Company's common stock of $ 0.09 per share to be paid on September 5, 2025, to stockholders of record as of August 20, 2025.

On October 28, 2025, the Company's Board of Directors declared a quarterly cash dividend on the Company's common stock of $ 0.11 per share to be paid on December 5, 2025, to stockholders of record as of November 20, 2025.

In addition, on October 28, 2025, the Board of Directors approved increasing the Company's existing share repurchase authority to $ 500.0 million of available capacity under the Repurchase Program.

See Note 7, Stockholders' Equity, for additional information about the Repurchase Program.

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

What changed 10-Q

Item 1. Financial Statements