Envista Holdings Corp

Previous wording

Management’s Discussion and Analysis of Financial Condition and Results of Operations of our business is designed to provide a reader of our financial statements with a narrative from the perspective of management. You should read the following discussion in conjunction with the sections entitled “Envista Holdings Corporation Audited Consolidated Financial Statements” included in this Annual Report on Form 10-K. This section of the Form 10-K generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023. Discussion of 2022 items and year-to-year comparisons between 2023 and 2022 are not included in this Form 10-K, and can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Current wording

Management’s Discussion and Analysis of Financial Condition and Results of Operations of our business is designed to provide a reader of our financial statements with a narrative from the perspective of management. You should read the following discussion in conjunction with the sections entitled “Envista Holdings Corporation Audited Annual Consolidated Financial Statements” included in this Annual Report on Form 10-K. This section of the Form 10-K generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. Discussion of 2023 items and year-to-year comparisons between 2024 and 2023 are not included in this Form 10-K, and can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Previous wording

We provide products that are used to diagnose, treat and prevent disease and ailments of the teeth, gums and supporting bone, as well as to improve the aesthetics of the human smile. We help our customers deliver the best possible patient care through industry-leading dental consumables, solutions, technologies, and services. With leading brand names, innovative technology and strong market positions, we are a leading worldwide provider of a broad range of solutions to support implant-based tooth replacements, orthodontic treatments, and diagnostic solutions, as well as general dental consumable products, equipment and services, and are dedicated to driving technological innovations that help dental professionals improve clinical outcomes and enhance productivity. Our research and development, manufacturing, sales, distribution, service and administrative facilities are located in more than 30 countries across North America, Asia, Europe, the Middle East and Latin America.

Current wording

We provide products that are used to diagnose, treat and prevent disease and ailments of the teeth, gums and supporting bone, as well as to improve the aesthetics of the human smile. We help our customers deliver the best possible patient care through industry-leading dental consumables, solutions, technologies, and services. With leading brand names, innovative technology and strong market positions, we are a leading worldwide provider of a wide range of solutions to support dental implants, orthodontic treatments, and diagnostic solutions, as well as general dental consumable products, equipment and services, and are dedicated to driving technological innovations that help dental professionals improve clinical outcomes and enhance productivity. Our research and development, manufacturing, sales, distribution, service and administrative facilities are located in more than 30 countries across North America, Asia, Europe, the Middle East and Latin America.

Previous wording

During 2024, 52% of our sales were derived from customers outside the United States. As a global provider of dental consumable products, equipment and services, our operations are affected by worldwide, regional and industry-specific economic and political factors. Given the broad range of dental products, software and services provided and geographies served, we do not use any indices other than general economic trends to predict our overall outlook. Our individual businesses monitor key competitors and customers, including to the extent possible their sales, to gauge relative performance and the outlook for the future.

Current wording

During 2025, 53% of our sales were derived from customers outside the U.S. As a global provider of dental consumable products, equipment and services, our operations are affected by worldwide, regional and industry-specific economic and political factors. Given the wide range of dental products, software and services provided and geographies served, we do not use any indices other than general economic trends to predict our overall outlook. Our individual businesses monitor key competitors and customers, including to the extent possible their sales, to gauge relative performance and the outlook for the future.

Previous wording

As a result of our geographic and product line diversity, we face a variety of opportunities and challenges, including rapid technological development in most of our served markets, the expansion and evolution of opportunities in emerging markets, trends and costs associated with a global labor force, consolidation of our competitors and increasing regulation. We operate in a highly competitive business environment in most markets, and our long-term growth and profitability will depend in particular on our ability to expand our business in emerging geographies and emerging market segments, identify, consummate and integrate appropriate acquisitions, develop innovative and differentiated new products and services, expand and improve the effectiveness of our sales force, continue to reduce costs and improve operating efficiency and quality and effectively address the demands of an increasingly regulated global environment. We are making significant investments to address the rapid pace of technological change in our served markets and to globalize our manufacturing, research and development and customer-facing resources (particularly in emerging markets and our dental implant business) in order to be responsive to our customers throughout the world and improve the efficiency of our operations.

Current wording

As a result of our geographic and product line diversity, we face a variety of opportunities and challenges, including rapid technological development in most of our served markets, the expansion and evolution of opportunities in emerging markets, trends and costs associated with a global labor force, consolidation of our competitors, trade restrictions and tariffs, and increasing regulation. We operate in a highly competitive business environment in most markets, and our long-term growth and profitability will depend in particular on our ability to expand our business in emerging geographies and emerging market segments, identify, consummate and integrate appropriate acquisitions, develop innovative and differentiated new products and services, expand and improve the effectiveness of our sales force, continue to reduce costs and improve operating efficiency and quality and effectively address the demands of an increasingly regulated global environment. We are making significant investments to address the rapid pace of technological change in our served markets and to globalize our manufacturing, research and development and customer-facing resources (particularly in emerging markets and our dental implant business) in order to be responsive to our customers throughout the world and improve the efficiency of our operations.

Previous wording

In addition to industry-specific factors, we, like other businesses, face challenges related to global economic conditions, including sustained inflation, increases in interest rates, fluctuating foreign currency exchange rates, slower economic growth, customer channel inventory realignment and continuing supply chain disruptions. Dental costs are largely out-of-pocket for the consumer and thus utilization rates can vary significantly depending on economic growth. While many of our products are considered necessary by patients regardless of the economic environment, certain products and services that support discretionary dental procedures may be more susceptible to changes in economic conditions.

Current wording

In addition to industry-specific factors, we, like other businesses, face challenges related to global economic conditions, including sustained inflation, increases in interest rates, fluctuating foreign currency exchange rates, slower economic growth or recession, trade policies and regulations, customer channel inventory realignment and continuing supply chain disruptions. Dental costs are largely out-of-pocket for the consumer and thus utilization rates can vary significantly depending on economic growth. While many of our products are considered necessary by patients regardless of the economic environment, certain products and services that support discretionary dental procedures may be more susceptible to changes in economic conditions.

Previous wording

Increasing protectionism and economic nationalism may lead to further changes in trade policies and regulations, domestic sourcing initiatives, or other formal and informal measures that could make it more difficult to sell our products in, or restrict our access to, some markets. In particular, trade tensions between the U.S. and China have led to increased tariffs and trade restrictions. In addition, the U.S. has recently implemented new tariffs on China and proposed to significantly increase tariffs on foreign imports into the U.S. from other countries, particularly from Canada and Mexico. It is difficult to predict what further trade-related actions governments may take, which may include trade restrictions and additional or increased tariffs and export controls imposed on short notice. Existing and future tariffs may have a material adverse effect on our business and results of operations.

Current wording

Increasing protectionism and economic nationalism may lead to further changes in trade policies and regulations, domestic sourcing initiatives, or other formal and informal measures that could make it more difficult to sell our products in, or restrict our access to certain markets. For example, trade tensions between the U.S. and China have led to increased tariffs and trade restrictions. The U.S. has significantly increased tariffs on products imported from China into the U.S. and implemented new tariffs on imports into the U.S. from other countries, particularly from Canada, Mexico, and the EU. In response to these tariffs, some foreign countries, including China, have instituted retaliatory tariffs, which impact our products, while other countries have threatened retaliatory tariffs on certain U.S. products. It is difficult to predict what further trade-related actions governments may take, which may include trade restrictions and additional or increased tariffs and export controls imposed on short notice. While we expect to largely offset the impact of the existing tariffs with mitigating actions including supply chain adjustments, pricing strategies, and cost management, we have already experienced an increase in cost due to higher tariffs. To the extent that we are unable to offset the tariffs or if the tariffs or our countermeasures negatively impact demand, our business, financial condition, results of operations or cash flows will continue to be adversely affected. Any future tariffs and trade restrictions may also adversely affect our business, financial condition, results of operations or cash flows.

Previous wording

Significant portions of our sales and costs are exposed to changes in foreign exchange rates. During the year ended December 31, 2024, our products were sold in more than 130 countries and 52% of our sales were to customers outside of the United States. We seek to manage our foreign exchange risk, in part, through our operations, including managing same-currency sales in relation to same-currency costs and same-currency assets in relation to same-currency liabilities. As our operations use multiple foreign currencies, including the euro, British pound, Brazilian real, Australian dollar, Japanese yen, Canadian dollar and Chinese yuan, changes in those currencies relative to the U.S. dollar will impact our sales, cost of sales and expenses, and consequently, net income. Exchange rate fluctuations in emerging markets may also directly affect our customers’ ability to buy our products in these geographic markets.

Current wording

Significant portions of our sales and costs are exposed to changes in foreign exchange rates. During the year ended December 31, 2025, our products were sold in more than 130 countries and 53% of our sales were to customers outside of the U.S. We seek to manage our foreign exchange risk, in part, through our operations, including managing same-currency sales in relation to same-currency costs and same-currency assets in relation to same-currency liabilities. As our operations use multiple foreign currencies, including the euro, British pound, Brazilian real, Australian dollar, Japanese yen, Canadian dollar and Chinese yuan, changes in those currencies relative to the U.S. dollar will impact our sales, cost of sales and expenses, and consequently, net income. Exchange rate fluctuations in emerging markets may also directly affect our customers’ ability to buy our products in these geographic markets.

Previous wording

On a year-over-year basis, currency exchange rates negatively impacted reported sales by 0.7% for the year ended December 31, 2024 compared to 2023, primarily due to the strengthening of the U.S. dollar against most major currencies. Any future strengthening of the U.S. dollar against major currencies would adversely impact our sales and results of operations and any weakening of the U.S. dollar against major currencies would positively impact our sales and results of operations.

Current wording

On a year-over-year basis, currency exchange rates positively impacted reported sales by 1.6% for the year ended December 31, 2025 compared to 2024, primarily due to the weakening U.S. dollar against most major currencies. Any future weakening of the U.S. dollar against major currencies would positively impact our sales and results of operations and any strengthening of the U.S. dollar against major currencies would adversely impact our sales and results of operations.

Previous wording

Certain countries, as well as some private payors, also control the price of health care products, directly or indirectly, through reimbursement, payment, pricing or coverage limitations, tying reimbursement to outcomes or (in the case of governmental entities) compulsory licensing. For example, China has implemented volume-based procurement (“VBP”) policies, a series of centralized reforms instituted in China on both a national and regional basis that has resulted in significant price cuts for medical and dental consumable products.

Current wording

Certain countries, as well as some private payors, also control the price of health care products, directly or indirectly, through reimbursement, payment, pricing or coverage limitations, tying reimbursement to outcomes or (in the case of governmental entities) compulsory licensing. For example, China has implemented VBP policies, a series of centralized reforms instituted in China on both a national and regional basis that has resulted in significant price cuts for medical and dental consumables.

Previous wording

In response to the attacks in Israel and the related hostilities and despite the recent ceasefire agreement and hostage deal, we continue to monitor the social, political, and economic environment in Israel and in the region for any impact to our operations. We maintain a production facility in Israel related to our Alpha-Bio Tech Implant brand. While we have experienced some volatility in the region, the Israel-Hamas War and related hostilities have not had a material impact on our business.

Current wording

We continue to monitor the evolving social, political, and economic environment in Israel and in the region for any impact to our operations. We maintain a production facility in Israel related to our Alpha-Bio Tech Implant brand. While we have experienced some volatility in the region, the Israel-Hamas War and related hostilities have not had a material impact on our business.

Previous wording

Our aligner business, included in the Specialty Products & Technologies segment, enters into revenue contracts that involve multiple future performance obligations which include optional aligners at no additional charge. Our treatment plans are comprised of the following performance obligations: initial aligner shipment and the subsequent shipments of any optional refinement aligners. For such plans, we also consider usage rates, which is the number of times a customer is expected to order additional refinement aligners. This usage rate is the basis for estimating the amount of transaction price to allocate to future performance obligations.

Current wording

Our aligner business, included in the Specialty Products & Technologies segment, enters into revenue contracts that involve multiple performance obligations which include optional aligners at no additional charge. Our treatment plans are comprised of the following performance obligations: initial aligner shipment and the subsequent shipments of any optional refinement aligners. For such plans, we also consider usage rates, which is the number of times a customer is expected to order additional refinement aligners. This usage rate is the basis for estimating the amount of transaction price to allocate to future performance obligations.

Previous wording

We continually review and update the usage rate and other related assumptions. As part of this review throughout 2024, we updated our assumptions based on our evaluation of current inputs and historical usage data. This evaluation resulted in certain changes, including an increase in the aggregate amount of transaction price allocated to future performance obligations for new treatment plans entered into during the year, which impacted the timing of revenue recognition. Future changes to usage rates and related assumptions may impact the pattern of revenue recognition for future treatment plans. The process of estimating the number of times a clear aligner customer is expected to order additional aligners after the initial aligner shipment requires judgment and evaluation of inputs, including historical usage data in order to predict future usage patterns.

Current wording

We continually review and update the usage rate and other related assumptions. Future changes to usage rates and related assumptions may impact the pattern of revenue recognition for future treatment plans. The process of estimating the number of times a clear aligner customer is expected to order additional aligners after the initial aligner shipment requires judgment and evaluation of inputs, including historical usage data in order to predict future usage patterns.

Previous wording

We continue transforming our portfolio by investing in our Implant-Based Tooth Replacement and Orthodontic Solutions businesses and also making investments in emerging markets, critical to our growth strategy. The cost reduction initiatives we have taken and will continue to undertake in the future allow us to further invest in this growth strategy, which in turn we believe should improve our margins.

Current wording

We continue transforming our portfolio by investing in our Dental Implant Solutions and Orthodontic Solutions businesses and also making investments in emerging markets, critical to our growth strategy. The cost reduction initiatives we have taken and will continue to undertake in the future allow us to further invest in this growth strategy, which in turn we believe should improve our margins.

Previous wording

Our continued investment in Spark, our clear aligner system, has led to increased manufacturing capacity and continues to gain market adoption as orthodontists and their patients see the benefits of the clear, stain resistant and comfortable design. We believe that Spark will provide growth opportunities for our Orthodontic Solutions business over the next several years.

Current wording

Our continued investment in Spark, our clear aligner system, has led to increased manufacturing capacity and continues to gain market adoption as orthodontists and their patients see the benefits of the clear, stain resistant and comfortable design. We believe that Spark will provide growth opportunities for our Orthodontic Solutions business.

Previous wording

Our sales are primarily derived from the sale of dental consumable products, equipment and services to third-party distributors and end-users. For additional information regarding our products, including descriptions of our products, refer to “Item 1. Business—Business Segments.”

Current wording

Our sales are primarily derived from the sale of dental consumable products, equipment and services to third-party distributors and end-users. For additional information regarding our products, including descriptions of our products, refer to “Item 1. Business—Our Business Segments.”

Previous wording

Cost of sales consists primarily of cost of materials, facilities and other infrastructure used to manufacture our products and shipping and handling costs attributable to delivering our products to our customers. Also included in cost of sales are productivity improvement and restructuring expenses related to our manufacturing operations.

Current wording

Cost of sales consists primarily of cost of materials, labor, facilities, restructuring costs, and other infrastructure used to manufacture our products, and shipping and handling costs attributable to delivering our products to our customers.

Previous wording

Selling, general and administrative (“SG&A”) expenses consist of, among other things, the costs of selling, marketing, promotion, advertising and administration (including business technology, facilities, legal, finance, human resources, business development and procurement) and amortization expense for intangible assets that have been acquired through business combinations. Also included are productivity improvement and restructuring expenses related to our SG&A.

Current wording

Selling, general and administrative (“SG&A”) expenses consist of, among other things, the costs of selling, marketing, advertising and administration (including business technology, facilities, legal, finance, human resources, business development and procurement), restructuring costs, and amortization expense for intangible assets that have been acquired through business combinations.

Previous wording

Nonoperating income (expense)consists of the non-service cost components of net periodic benefit costs (which include interest costs, expected return on plan assets, amortization of prior service cost or credits and actuarial gains and losses), net gains or losses on equity investments, inducement charges related to convertible debt exchanges, and interest expense, net.

Current wording

Nonoperating income (expense)consists of the non-service cost components of net periodic benefit costs (which include interest costs, expected return on plan assets, amortization of prior service cost or credits and actuarial gains and losses), net gains or losses on equity and other investments, inducement charges related to convertible debt exchanges, and interest expense, net.

Previous wording

During the year ended December 31, 2024, our sales decreased 2.2%, while core sales decreased 1.5% as compared to the comparable period of 2023. The impact of foreign currency exchange rates reduced sales in the year ended December 31, 2024, by 0.7% compared to the comparable period of 2023.

Current wording

During the year ended December 31, 2025, our sales increased 8.3%, while core sales increased 6.5% as compared to the comparable period of 2024. The impact of foreign currency exchange rates increased sales in the year ended December 31, 2025, by 1.6% compared to the comparable period of 2024.

Previous wording

Core sales growth should be considered in addition to, and not as a replacement for or superior to, sales, and may not be comparable to similarly titled measures reported by other companies. We believe that reporting the non-GAAP financial measure of core sales growth provides useful information to investors by helping identify underlying growth trends in our on-going business and facilitating comparisons of our sales performance with our performance in prior and future periods and to our peers. We also use core sales growth to measure our operating and financial performance. We exclude the effect of currency translation from core sales because currency translation is not under our control, is subject to volatility and can obscure underlying business trends.

Current wording

We exclude the effect of currency translation from core sales because currency translation is not under our control, is subject to volatility and can obscure underlying business trends. Core sales growth should be considered in addition to, and not as a replacement for or superior to, sales, and may not be comparable to similarly titled measures reported by other companies. We believe that reporting the non-GAAP financial measure of core sales growth provides useful information to investors by helping identify underlying growth trends in our on-going business and facilitating comparisons of our sales performance with our performance in prior and future periods and to our peers. We also use core sales growth to measure our operating and financial performance.

Previous wording

The following discussion and analysis of our consolidated statements of earnings should be read along with our Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K. Unless otherwise indicated, all financial data in this Annual Report on Form 10-K refer to continuing operations only. For more information on the consolidated basis of preparation, see Note 1 to our Consolidated Financial Statements elsewhere in this Annual Report on Form 10-K.

Current wording

The following discussion and analysis of our consolidated statements of earnings should be read along with our Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K. Unless otherwise indicated, all financial data in this Annual Report on Form 10-K refer to continuing operations only. For more information on the consolidated basis of presentation, see Note 1 to our Consolidated Financial Statements elsewhere in this Annual Report on Form 10-K.

Previous wording

The increase in SG&A expenses as a percentage of sales for the year ended December 31, 2024, as compared to the comparable period of 2023, was primarily due to higher sales and marketing investments, increased compensation, increased bad debt, higher restructuring costs, and higher legal settlement costs, partially offset by a decrease in amortization of intangible assets.

Current wording

The decrease in SG&A expenses as a percentage of sales for the year ended December 31, 2025, as compared to the comparable period of 2024, was driven primarily by higher sales, along with lower bad debt, amortization of intangible assets, legal settlement costs, and general and administrative costs, partially offset by our continuing investment in our long-term growth initiatives.

Previous wording

R&D expenses as a percentage of sales for the year ended December 31, 2024, was consistent with the comparable period in 2023.

Current wording

The increase in R&D expenses as a percentage of sales for the year ended December 31, 2025, as compared to the comparable period of 2024, was driven by increased investment in existing R&D projects and new product development initiatives.

Previous wording

Goodwill and intangible asset impairment for the year ended December 31, 2023 consisted of a $212.3 million goodwill charge and a $46.0 million intangible asset charge. Approximately $134.5 million of the goodwill impairment charge related to our Specialty Products & Technologies segment and $77.8 million related to our Equipment & Consumables segment. The reduction in value was primarily due to significant increases in discount rates utilized in valuing these reporting units, adverse macroeconomic factors such as higher cost of borrowing and inflationary pressures, geopolitical factors, and lower forecast of operating results which contributed to reduced expectation of future cash flows. The intangible asset impairment charge related to certain indefinite-lived trade names within the Specialty Products & Technologies segment. The reduction in the intangible value was primarily due to higher discount rates and reduction in projected cash flows as discussed above.

Current wording

There was no impairment of goodwill or intangible assets as a result of the Company’s annual test during 2025. Goodwill and intangible asset impairment for the year ended December 31, 2024 of $1,153.8 million consisted of a $960.5 million goodwill charge and a $193.3 million intangible asset charge. Approximately $707.8 million of the goodwill impairment charge related to our Specialty Products & Technologies segment and $252.7 million related to our Equipment & Consumables segment. The reduction in value was due to adverse macroeconomic factors as a result of weakened global demand, a sustained suppressed stock price, higher cost of capital, and increased raw material, supply chain and service costs, which contributed to reduced revenue forecasts, lower operating margins, and reduced expectations of future cash flows. The intangible asset impairment charges consisted of $101.1 million related to certain indefinite-lived trade names within the Specialty Products & Technologies segment, and $92.2 million consisted of certain finite-lived patents and technology and customer relationships within the Equipment & Consumables segment and were primarily due to a reduction in projected cash flows discussed above.

Previous wording

Interest costs were $46.4 million and $63.4 million for the years ended December 31, 2024 and 2023, respectively. The decrease in interest expense for the year ended December 31, 2024 as compared to the comparable period of 2023 was primarily due tohigher returns on cash and cash equivalents and lower variable rate term borrowings and interest rates.

Current wording

Interest costs were $36.6 million and $46.4 million for the years ended December 31, 2025 and 2024, respectively. The decrease in interest expense for the year ended December 31, 2025 as compared to the comparable period of 2024 was primarily due to lower debt balances and interest rates.

Previous wording

Our effective tax rate for the year ended December 31, 2024 was(3.1)% compared to (82.5)% in 2023. The change in the effective rate was primarily due to larger nondeductible impairment charges for goodwill in the current year compared to the prior year.

Current wording

Our effective tax rate for the year ended December 31, 2025 was 73.5% compared to (3.1)% in 2024. The change in the effective rate was primarily due to the impact of nondeductible impairment charges for goodwill and intangible assets in 2024 and a change in the indefinite reinvestment assertion related to the restructuring of a foreign subsidiary with certain intercompany loans in 2025. We anticipate the restructuring will have a beneficial tax impact going forward.

Previous wording

Operating profit margin was 5.6% for the year ended December 31, 2024, as compared to an operating profit margin of 14.1% for the comparable period of 2023. The decrease in operating profit margin was primarily due to lower sales, including the impact from changes to the revenue deferral related to our clear aligner treatment plans, the impairment of certain long-lived assets, unfavorable product mix, lower period-over-period savings associated with productivity improvements, higher bad debt costs, and our investment in our long-term growth initiatives.

Current wording

Operating profit margin was 10.9% for the year ended December 31, 2025, as compared to an operating profit margin of 5.6% for the comparable period of 2024. The increase in operating profit margin was primarily due to higher sales volume, including the timing of deferred revenue recognition related to our clear aligner treatment plans, higher sales price, lower bad debt expense, manufacturing productivity, and the absence of impairment of certain long-lived assets from the comparable prior period, partially offset by increased tariffs, higher costs due to the impact of unfavorable foreign exchange rates and our continuing investment in our long-term growth initiatives.

Previous wording

Operating profit margin was 17.0% for the year ended December 31, 2024, as compared to an operating profit margin of 16.9% for the comparable period of 2023. The increase in operating profit margin was primarily due to an increase in sales price and a decrease in amortization of intangibles, partially offset by a decrease in sales volume driven by channel inventory realignment and unfavorable product mix.

Current wording

Operating profit margin was 16.3% for the year ended December 31, 2025, as compared to an operating profit margin of 17.0% for the comparable period of 2024, primarily due to the impact of unfavorable foreign exchange rates, unfavorable product mix, increased tariffs, partially offset by higher sales volume and sales price and a decrease in amortization of intangibles.

Previous wording

Following is an overview of our cash flows and liquidity, which includes the cash flows of the KaVo Treatment Unit and Instrument Business for the year ended December 31, 2022 as discussed in Note 3 to our Consolidated Financial Statements elsewhere in this Annual Report on Form 10-K:

Current wording

Following is an overview of our cash flows and liquidity:

Previous wording

Net cash provided by operating activities was $336.5 million during the year ended December 31, 2024, as compared to net cash provided by operating activities of $275.7 million in 2023. The increase is primarily due to better overall working capital management and tax payments.

Current wording

Net cash provided by operating activities was $275.7 million during the year ended December 31, 2025, as compared to net cash provided by operating activities of $336.5 million in 2024. The decrease is primarily due to lower prior year incentive compensation payments, combined with the timing of cash collections, inventory payments, vendor payments and tax payments, partially offset by higher net income.

Previous wording

Cash flows relating to investing activities consist primarily of cash used for capital expenditures and acquisitions. Capital expenditures are made primarily for increasing capacity, replacing equipment, supporting new product development and improving information technology systems.

Current wording

Cash flows relating to investing activities consist primarily of cash used for the purchase of investments, capital expenditures and acquisitions. Capital expenditures are made primarily for increasing capacity, replacing equipment, supporting new product development and improving information technology systems.

Previous wording

Net cash used in investing activities was$54.6 million during the year ended December 31, 2024, as compared to net cash used in investing activities of$62.4 million for the comparable period in 2023. The decrease is primarily due to lower net payments for purchases of property, plant and equipment, partially offset by the net purchases of investments held in a rabbi trust combined with the absence of proceeds for the sale of an equity investment in the prior year.

Current wording

Net cash used in investing activities was$51.1 million during the year ended December 31, 2025, as compared to net cash used in investing activities of$54.6 million for the comparable period in 2024. The decrease is primarily due to lower purchases of investments held in the rabbi trust, partially offset by higher net payments for purchases of property, plant and equipment and higher spend on certain investing activities.

Previous wording

Net cash used in financing activities was $103.7 million during the year ended December 31, 2024, compared to net cash provided by financing activities of$118.9 million for the comparable period of 2023 and was primarily due to a repayment of $100.0 million of the 2028 Term Loan during 2024 compared to net borrowings during 2023.

Current wording

Net cash used in financing activities was $170.9 million during the year ended December 31, 2025, compared to net cash used in financing activities of$103.7 million for the comparable period of 2024 and was primarily driven by stock repurchases and the repayment of the 2025 Convertible Notes which matured on June 1, 2025, partially offset by the borrowings under the Revolving Credit Facility and the repayment of $100.0 million of the 2028 Term Loan during 2024.

Previous wording

As of December 31, 2024, we had no borrowings outstanding under the revolving credit facility and we had the ability to incur an additional $750.0 million of indebtedness in direct borrowings under the revolving credit facility. As of December 31, 2024, we were in compliance with all of our debt covenants.

Current wording

As of December 31, 2025, we had $117.5 million in outstanding borrowings under our Revolving Credit Facility and we have the ability to incur an additional $632.5 million of indebtedness in direct borrowings under this facility. As of December 31, 2025, we were in compliance with all of our debt covenants.

Previous wording

As of December 31, 2024, $1,069.1 million of cash and cash equivalents were held on deposit with financial institutions. Of this amount, $218.3 million was held within the United States and $850.8 million was held outside of the United States. We will continue to have cash requirements to support working capital needs, capital expenditures and acquisitions, pay interest and service debt, pay taxes and any related interest or penalties and fund our restructuring activities as required and support other business needs. We generally intend to use available cash and internally generated funds to meet these cash requirements, but in the event that additional liquidity is required, particularly in connection with acquisitions, we may need to enter into new credit facilities or access the capital markets. We may also access the capital markets from time to time to take advantage of favorable interest rate environments or other market conditions. However, there is no guarantee that we will be able to obtain alternative sources of financing on commercially reasonable terms or at all. See “Item 1A. Risk Factors—Risks Related to Our Business.”

Current wording

As of December 31, 2025, $1,211.7 million of cash and cash equivalents were held on deposit with financial institutions. Of this amount, $374.4 million was held within the U.S. and $837.3 million was held outside of the U.S. We will continue to have cash requirements to support working capital needs, capital expenditures and acquisitions, pay interest and service debt, pay taxes and any related interest or penalties and fund our restructuring activities as required and support other business needs. We generally intend to use available cash, internally generated funds, and our Revolving Credit Facility to meet these cash requirements, but in the event that additional liquidity is required, particularly in connection with acquisitions, we may need to enter into new credit facilities or access the capital markets. We may also access the capital markets from time to time to take advantage of favorable interest rate environments or other market conditions. However, there is no guarantee that we will be able to obtain alternative sources of financing on commercially reasonable terms or at all. See “Item 1A. Risk Factors—Risks Related to Our Business.”

Previous wording

As of February 7, 2025, we believe that we have sufficient sources of liquidity to satisfy our cash needs over the next 12 months and beyond, including our cash needs in the United States.

Current wording

As of February 6, 2026, we believe that we have sufficient sources of liquidity to satisfy our cash needs over the next 12 months and beyond, including our cash needs in the U.S.

Previous wording

We are exposed to market risk from changes in foreign currency exchange rates and commodity prices as well as credit risk, each of which could impact our consolidated financial statements. We generally address our exposure to these risks through our normal operating activities. Please refer to Note 2 to our Consolidated Financial Statements included in this Annual Report for information regarding derivative financial instruments and discussion of exposures to foreign currency and foreign currency-denominated debt.

Current wording

We are exposed to market risk from changes in interest rates, foreign currency exchange rates and commodity prices as well as credit risk, each of which could impact our consolidated financial statements. We generally address our exposure to these risks through our normal operating activities. Please refer to Note 2 to our Consolidated Financial Statements included in this Annual Report for information regarding derivative financial instruments and discussion of exposures to foreign currency and foreign currency-denominated debt.

Previous wording

Certain of our borrowings are at variable rates of interest, which may expose us to interest rate risk. We have a variable rate 2028 Term Loan for $430.0 million and a 2028 Euro Term Loan for €350.0 million as of December 31, 2024. We have from time to time entered into interest rate swap agreements to manage our interest rate risk, however we do not have any interest rate swap agreements as of December 31, 2024. A 100 basis point increase in the interest rate related to our 2028 Term Loan and our 2028 Euro Term Loan would have increased interest expense by $8.0 million for 2024.

Current wording

Certain of our borrowings are at variable rates of interest, which may expose us to interest rate risk. We have a variable rate 2028 Term Loan for $430.0 million, a 2028 Euro Term Loan for €350.0, and a Revolving Credit Facility with outstanding borrowings of €100.0 million as of December 31, 2025. A 100-basis point increase in the interest rate related to our 2028 Term Loan, our 2028 Euro Term Loan and our outstanding borrowings from our Revolving Credit Facility, would have increased interest expense by $9.7 million for 2025.

Previous wording

We face transactional exchange rate risk from transactions with customers in countries outside the United States and from intercompany transactions between affiliates. Transactional exchange rate risk arises from the purchase and sale of goods and services in currencies other than our functional currency or the functional currency of our applicable subsidiary. We also face translational exchange rate risk related to the translation of financial statements of our foreign operations into U.S. dollars, our functional currency. Costs incurred and sales recorded by subsidiaries operating outside of the United States are translated into U.S. dollars using exchange rates effective during the respective period. As a result, we are exposed to movements in the exchange rates of various currencies against the U.S. dollar. In particular, we have more sales in European currencies than we have expenses in those currencies. Therefore, when European currencies strengthen or weaken against the U.S. dollar, operating profits are increased or decreased, respectively. The effect of a change in currency exchange rates on our net investment in international subsidiaries is reflected in the accumulated other comprehensive loss component of equity.

Current wording

We face transactional exchange rate risk from transactions with customers in countries outside the U.S. and from intercompany transactions between affiliates. Transactional exchange rate risk arises from the purchase and sale of goods and services in currencies other than our functional currency or the functional currency of our applicable subsidiary. We also face translational exchange rate risk related to the translation of financial statements of our foreign operations into U.S. dollars, our functional currency. Costs incurred and sales recorded by subsidiaries operating outside of the U.S. are translated into U.S. dollars using exchange rates effective during the respective period. As a result, we are exposed to movements in the exchange rates of various currencies against the U.S. dollar. The effect of a change in currency exchange rates on our net investment in international subsidiaries is reflected in the accumulated other comprehensive loss component of equity.

Previous wording

On January 17, 2023, we entered into a two-year $150.0 million cross-currency swap derivative contract to partially hedge our net investment in foreign operations against the adverse movement in exchange rates between the U.S. dollar and the euro. This cross-currency contract effectively converts a portion of our U.S. dollar senior term loan facilities to obligations denominated in euros and will partially offset the impact of changes in currency rates on foreign currency denominated net investments. On December 23, 2024, this cross-currency swap derivative contract was extended for an additional three years and will mature in January 2028. For additional information on hedging transactions and derivative financial instruments, please refer to Note 11 to our Consolidated Financial Statements in this Annual Report on Form 10-K.

Current wording

On January 17, 2023, we entered into a two-year $150.0 million cross-currency swap derivative contract to partially hedge our net investment in foreign operations against the adverse movement in exchange rates between the U.S. dollar and the euro. This cross-currency contract effectively converts a portion of our U.S. dollar senior term loan facilities to obligations denominated in Euros and will partially offset the impact of changes in currency rates on foreign currency denominated net investments. On December 23, 2024, we extended the cross-currency swap derivative contract for an additional three years and it will mature in January 2028.