Veralto Corp

Previous wording

You should read this discussion along with the Company’s MD&A and audited financial statements and Notes thereto as of and for the year ended December 31, 2024, included within the 2024 Annual Report on Form 10-K, and the unaudited financial statements and related Notes as of and for the three and nine-month periods ended October 3, 2025 included in this Quarterly Report on Form 10-Q (this “Report”).

Current wording

You should read this discussion along with the Company’s MD&A and audited financial statements and Notes thereto as of and for the year ended December 31, 2025, included within the 2025 Annual Report on Form 10-K, and the unaudited financial statements and related Notes as of and for the three-month period ended April 3, 2026 included in this Quarterly Report on Form 10-Q (this “Report”).

Previous wording

Certain statements included or incorporated by reference in this Report, in other documents we file with or furnish to the Securities and Exchange Commission (“SEC”), in our press releases, webcasts, conference calls, materials delivered to shareholders and other communications, are “forward-looking statements” within the meaning of the U.S. federal securities laws. All statements other than historical factual information are forward-looking statements, including without limitation statements regarding: projections of revenue, expenses, profit, profit margins, asset values, pricing, tax rates, tax provisions, cash flows, pension and benefit obligations and funding requirements, our liquidity position or other projected financial measures; management’s plans and strategies for future operations, including statements relating to anticipated operating performance, customer demand, cost reductions, restructuring activities, new product and service developments, competitive strengths or market position, acquisitions and the integration thereof, divestitures, spin-offs, split-offs, initial public offerings, other securities offerings or other distributions, strategic opportunities, stock repurchases, dividends and executive compensation; growth, declines and other trends in markets we sell into, including the impact of changes to global trade policies, restrictions on imports, related countermeasures and reciprocal tariffs; future new or modified laws, regulations, accounting pronouncements or public policy changes; regulatory approvals and the timing and conditionality thereof; outstanding claims, legal proceedings, tax audits and assessments and other contingent liabilities; future foreign currency exchange rates and fluctuations in those rates; results of operations and/or financial condition; general economic and capital markets conditions; the anticipated timing of any of the foregoing; assumptions underlying any of the foregoing; and any other statements that address events or developments that Veralto intends or believes will or may occur in the future. Terminology such as “believe,” “anticipate,” “assume,” “continue,” “should,” “could,” “intend,” “will,” “plan,” “aim,” “expect,” “estimate,” “project,” “target,” “can,” “may,” “possible,” “potential,” “upcoming,” “forecast” and “positioned” and similar references to future periods are intended to identify forward-looking statements, although not all forward-looking statements are accompanied by such words. Forward-looking statements are based on assumptions and assessments made by our management in light of their experience and perceptions of historical trends, current conditions, expected future developments and other factors they believe to be appropriate. These forward-looking statements are subject to a number of risks and uncertainties, including but not limited to the risks and uncertainties set forth below and under “Item 1A. Risk Factors” in the 2024 Annual Report on Form 10-K and any sub…

Excerpt shortened here; the source contains the full paragraph.

Current wording

Certain statements included or incorporated by reference in this Report, in other documents we file with or furnish to the Securities and Exchange Commission (“SEC”), in our press releases, webcasts, conference calls, materials delivered to shareholders and other communications, are “forward-looking statements” within the meaning of the U.S. federal securities laws. All statements other than historical factual information are forward-looking statements, including without limitation statements regarding: projections of revenue, expenses, profit, profit margins, asset values, pricing, tax rates, tax provisions, cash flows, pension and benefit obligations and funding requirements, our liquidity position or other projected financial measures; management’s plans and strategies for future operations, including statements relating to anticipated operating performance, customer demand, cost reductions, restructuring activities, new product and service developments, competitive strengths or market position, acquisitions and the integration thereof, divestitures, spin-offs, split-offs, initial public offerings, other securities offerings or other distributions, strategic opportunities, stock repurchases, dividends and executive compensation; growth, declines and other trends in markets we sell into, the impact of global trade policies, tariffs, restrictions on imports, related countermeasures and reciprocal tariffs; future new or modified laws, regulations, accounting pronouncements or public policy changes; future regulatory approvals and the timing and conditionality thereof; outstanding claims, legal proceedings, tax audits and assessments and other contingent liabilities; future foreign currency exchange rates and fluctuations in those rates; results of operations and/or financial condition; general economic and capital markets conditions; the anticipated timing of any of the foregoing; assumptions underlying any of the foregoing; and any other statements that address events or developments that Veralto intends or believes will or may occur in the future. Terminology such as “believe,” “anticipate,” “assume,” “continue,” “should,” “could,” “intend,” “will,” “plan,” “aim,” “expect,” “estimate,” “project,” “target,” “can,” “may,” “possible,” “potential,” “upcoming,” “forecast” and “positioned” and similar references to future periods are intended to identify forward-looking statements, although not all forward-looking statements are accompanied by such words. Forward-looking statements are based on assumptions and assessments made by our management in light of their experience and perceptions of historical trends, current conditions, expected future developments and other factors they believe to be appropriate. These forward-looking statements are subject to a number of risks and uncertainties, including but not limited to the risks and uncertainties set forth below and under “Item 1A. Risk Factors” in the 2025 Annual Report on Form 10-K and any subseque…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

•Conditions in the global economy, including military conflicts and changes in trade and tariff policies, the particular markets we serve and the financial markets can adversely affect our business and financial statements.

Current wording

•Conditions in the global economy, including the current conflict in the Middle East and changes in trade and tariff policies, the particular markets we serve and the financial markets can adversely affect our business and financial statements.

Previous wording

•Non-U.S. economic, political, legal, compliance, social and business factors can negatively affect our business and financial statements.

Current wording

•Non-U.S. economic, political, legal, compliance, social and business factors can adversely affect our business and financial statements.

Previous wording

•Any inability to consummate acquisitions at our historical rate and appropriate prices, and to make appropriate investments that support our long-term strategy, could negatively impact our business. Our acquisition of businesses, investments, or other strategic relationships could also negatively impact our business and financial statements and our indemnification rights may not fully protect us from liabilities related thereto.

Current wording

•Any inability to consummate acquisitions at our historical rate and appropriate prices, and to make appropriate investments that support our long-term strategy, could negatively impact our business. Our acquisition of businesses, investments, or other strategic relationships could also negatively impact our business and financial statements and our indemnification or insurance rights may not fully protect us from liabilities related thereto.

Previous wording

•Divestitures or other dispositions could negatively impact our business and financial statements.

Current wording

•Divestitures or other dispositions could adversely affect our business and financial statements.

Previous wording

•Our restructuring actions can have long-term adverse effects on our business and financial statements.

Current wording

•Our restructuring actions could result in unexpected costs, may not achieve the anticipated benefits and can have long-term adverse effects on our business and financial statements.

Previous wording

•Certain provisions in Veralto’s amended and restated certificate of incorporation and bylaws, and of Delaware law, may prevent or delay an acquisition of Veralto, which could decrease the trading price of Veralto’s common stock.

Current wording

•Certain provisions in Veralto’s certificate of incorporation and bylaws, and of Delaware law, may prevent or delay an acquisition of Veralto, which could decrease the trading price of Veralto’s common stock.

Previous wording

•The forum selection provisions under Veralto’s amended and restated certificate of incorporation could discourage lawsuits against Veralto and Veralto’s directors, officers, employees and stockholders.

Current wording

•The forum selection provisions under Veralto’s certificate of incorporation could discourage lawsuits against Veralto and Veralto’s directors, officers, employees and stockholders.

Previous wording

Veralto Corporation is a Delaware corporation and was incorporated in 2023 in connection with the separation of Veralto from Danaher Corporation (“Danaher” or “Former Parent”) on September 30, 2023 as an independent, publicly traded company, listed on the New York Stock Exchange (the “Separation”). At the time of the Separation, Veralto Corporation consisted of Danaher’s former Environmental & Applied Solutions segment. The Separation was effectuated through a pro-rata dividend distribution on September 30, 2023 of all of the issued and outstanding shares of Veralto common stock held by Danaher as of September 13, 2023. Each Danaher stockholder of record as of the close of business on September 13, 2023 received one share of Veralto common stock for every three shares of Danaher common stock held on the record date.

Current wording

Veralto Corporation is a Delaware corporation and was incorporated in 2023 in connection with the separation of Veralto from Danaher Corporation (“Danaher”) on September 30, 2023 as an independent, publicly traded company, listed on the New York Stock Exchange (the “Separation”).

Previous wording

Veralto operates through two segments – Water Quality (“WQ”) and Product Quality & Innovation (“PQI”). Our businesses within these segments have strong globally recognized brands as a result of our leadership in served markets over several decades. Our WQ segment provides innovative products and services that improve the quality and reliability of water with leading brands including Hach, Trojan Technologies and ChemTreat. Our PQI segment enables our customers to promote consumer trust in their products and help enable product innovation with leading brands including Videojet, Linx, Esko, X-Rite and Pantone. We believe our leading positions result from the strength of our commercial organizations, our legacy of innovation, and our close and long-term connectivity to our customers and knowledge of their workflows, underpinned by our culture of continuous improvement. This has resulted in a large installed base of instruments that drive ongoing consumables and software sales to support our customers. As a result, our business generates recurring sales which represented approximately 62% of total sales during thenine months ended October 3, 2025. Our business model also supports a strong margin profile with limited capital expenditure requirements and has generated attractive cash flows. We believe these attributes allow us to deliver financial performance that is resilient across economic cycles.

Current wording

Veralto operates through two segments – Water Quality (“WQ”) and Product Quality & Innovation (“PQI”). Our businesses within these segments have strong globally recognized brands as a result of our leadership in served markets over several decades. Our WQ segment provides innovative products and services that improve the quality and reliability of water with leading brands including Hach, Trojan Technologies and ChemTreat. Our PQI segment enables our customers to promote consumer trust in their products and help enable product innovation with leading brands including Videojet, Linx, Esko, X-Rite and Pantone. We believe our leading positions result from the strength of our commercial organizations, our legacy of innovation, and our close and long-term connectivity to our customers and knowledge of their workflows, underpinned by our culture of continuous improvement. This has resulted in a large installed base of instruments that drive ongoing consumables and software sales to support our customers. As a result, our business generates recurring sales which represented approximately 62% of total sales during thethree months ended April 3, 2026. Our business model also supports a strong margin profile with limited capital expenditure requirements and has generated attractive cash flows. We believe these attributes allow us to deliver financial performance that is resilient across economic cycles.

Previous wording

Veralto uses VES tools to improve our profitability and cash flows, which support our ability to expand our addressable market and improve our market position through investments in areas such as our commercial organization and research and development (“R&D”), including software and digital solutions. Our cash flows also support acquisitions to enhance our product capabilities and expansion into new and attractive markets, which we have successfully done through the acquisition of over 80 businesses over more than two decades.

Current wording

Veralto uses VES tools to improve our profitability and cash flows, which support our ability to expand our addressable market and improve our market position through investments in areas such as our commercial organization and research and development (“R&D”), including software and digital solutions. Our cash flows also support acquisitions to enhance our product capabilities and expansion into new and attractive markets, which we have successfully done through the acquisition of over 85 businesses over more than two decades.

Previous wording

During the three-month period ended October 3, 2025, overall revenues increased 6.9% and core sales increased 5.1% compared to the comparable period in 2024 with growth in both segments. Currency exchange rates and acquisitions, net of divestitures increased reported sales by 1.5% and 0.3%, respectively, during the three-month period ended October 3, 2025 compared to the comparable period in 2024. For the nine-month period ended October 3, 2025, overall revenues increased 6.7% and core sales increased 5.9%, compared to the comparable period in 2024. Currency exchange rates and acquisitions, net of divestitures increased reported sales by 0.5% and 0.3%, respectively during the nine-month period ended October 3, 2025 compared to the comparable period in 2024. For the definition of “core sales” refer to “—Results of Operations” below.

Current wording

During the three-month period ended April 3, 2026, overall revenues increased 6.7% and core sales increased 1.9% compared to the comparable period in 2025 primarily driven by core sales growth in the Water Quality segment. Currency exchange rates and acquisitions, net of divestitures increased reported sales by 3.5% and 1.3%, respectively, during the three-month period ended April 3, 2026 compared to the comparable period in 2025. For the definition of “core sales” refer to “—Results of Operations” below.

Previous wording

Geographically, the Company’s sales during the nine-month period ended October 3, 2025 in developed markets increased year-over-year by 7.7%, driven by increased sales of 7.6% in North America, 8.4% in Western Europe, and 2.4% in other developed markets. Sales in high-growth markets increased 4.3% year-over-year. For the same period, core sales in developed markets increased 6.3% driven by increased core sales of 6.8% in North America and 5.6% in Western Europe. Core sales in high-growth markets increased 5.2% driven by high-single digit increases in Latin America.

Current wording

Geographically, the Company’s sales during the three-month period ended April 3, 2026 in developed markets increased year-over-year by 7.7%, driven by increased sales of 5.8% in North America, 12.3% in Western Europe, and 3.4% in other developed markets. Sales in high-growth markets increased 4.0% year-over-year. For the same period, core sales in developed markets increased 3.1% driven by increased core sales of 4.5% in North America and increased core sales of 0.6% in Western Europe. Core sales in high-growth markets decreased 0.6% driven by mid-single digit decrease in Latin America offset by low-single digit increase in China.

Previous wording

The Company’s net earnings for the three and nine-month periods ended October 3, 2025 totaled $239 million and $686 million, respectively, compared to $219 million and $606 million, respectively, for the three and nine-month periods ended September 27, 2024. The increase in net earnings during the three and nine-month periods ended October 3, 2025 as compared to the three and nine-month periods ended September 27, 2024 was primarily driven by increased sales, resulting from higher volumes and positive pricing actions, partially offset by higher cost of sales. Refer to “—Results of Operations” for further discussion of the year-over-year changes in net earnings for the three and nine-month periods ended October 3, 2025.

Current wording

The Company’s net earnings for the three-month period ended April 3, 2026 totaled $254 million, compared to $225 million for the three-month period ended April 4, 2025. The increase in net earnings was primarily driven by increased sales resulting from positive pricing actions and the impact of product mix, partially offset by higher cost of sales. Refer to “—Results of Operations” for further discussion of the year-over-year changes in net earnings for the three-month period ended April 3, 2026.

Previous wording

Across both segments, the Company continuously assesses the potential effects of tariffs and prospective changes in trade policies. The Company’s objective is to implement appropriate countermeasures designed to mitigate the impact of these items, and other forms of macroeconomic volatility. Regardless of market conditions, the Company utilizes VES to promote growth and ongoing improvement.

Current wording

The potential effects of tariffs, prospective changes in trade policies and conflict in the Middle East remain uncertain. The Company’s objective is to implement appropriate countermeasures designed to mitigate the impact of these items, and other forms of macroeconomic volatility. Regardless of market conditions, the Company leverages VES to support its customers, promote growth and drive continuous improvement.

Previous wording

The Company’s outlook for 2025 reflects its current assessment of the global macro-economic environment, trends in consumer-packaged goods demand, and fluctuations in currency exchange rates, including enacted tariffs and the Company’s actions to mitigate adverse financial impacts. The Company’s ability to meet its expectations are subject to numerous risks, including, but not limited to, those described in “Item 1A. Risk Factors” within the Company’s 2024 Annual Report on Form 10-K and any subsequent updates in “Item 1A. Risk Factors” within Quarterly Reports on Form 10-Q.

Current wording

The Company’s ability to meet its expectations are subject to numerous risks, including, but not limited to, those described in “Item 1A. Risk Factors” within the Company’s 2025 Annual Report on Form 10-K and any subsequent updates in “Item 1A. Risk Factors” within Quarterly Reports on Form 10-Q.

Previous wording

Total sales increased 6.9% and 6.7% during the three and nine-month periods ended October 3, 2025, respectively, compared to the comparable periods in 2024, primarily as a result of core sales growth driven by the factors discussed below by segment.

Current wording

Total sales increased 6.7% during the three-month period ended April 3, 2026, compared to the comparable period in 2025, primarily as a result of core sales growth driven by the factors discussed below by segment.

Previous wording

Currency exchange rates and acquisitions, net of divestitures increased reported sales by 1.5% and 0.3%, respectively, during the three-month period ended October 3, 2025, compared to the comparable period in 2024. Currency exchange rates and acquisitions, net of divestitures increased reported sales by 0.5% and 0.3%, respectively, during the nine-month period ended October 3, 2025, compared to the comparable period in 2024. Price increases contributed 2.4% and 1.8% to sales growth on a year-over-year basis during the three and nine-month periods ended October 3, 2025, respectively, and are reflected as a component of core sales growth above.

Current wording

Currency exchange rates and acquisitions, net of divestitures, increased reported sales by 3.5% and 1.3%, respectively, during the three-month period ended April 3, 2026, compared to the comparable period in 2025. Price increases contributed 1.9% to sales growth on a year-over-year basis during the three-month period ended April 3, 2026, and are reflected as a component of core sales growth above.

Previous wording

Cost of sales increased by $29 million or 5.5% and by $92 million or 6.0% on a year-over-year basis during the three and nine-month periods ended October 3, 2025, respectively, as compared to the comparable periods in 2024, driven primarily by higher year-over-year sales volumes.

Current wording

Cost of sales increased by $41 million, or 7.8%, on a year-over-year basis during the three-month period ended April 3, 2026, as compared to the comparable period in 2025, driven primarily by higher year-over-year labor costs.

Previous wording

Gross profit margins increased 50 basis points on a year-over-year basis during the three-month period ended October 3, 2025 as compared to the comparable period in 2024, due primarily to positive pricing actions and higher volume, and the net positive impact from the gross profit margin of recent acquisitions. Gross profit margins increased 30 basis points on a year-over-year basis during the nine-month period ended October 3, 2025, as compared to the comparable period in 2024, driven by positive pricing actions and higher volume, and the net positive impact from the gross profit margin of recent acquisitions. The gross profit margin increase was partially offset by incremental year-over-year labor costs and the impact of product mix.

Current wording

Gross profit margins decreased 30 basis points on a year-over-year basis during the three-month period ended April 3, 2026, as compared to the comparable period in 2025, driven by incremental year-over-year labor costs. The gross profit margin decrease was partially offset by positive pricing actions, the impact of product mix, and the net positive impact from the gross profit margin of recent acquisitions.

Previous wording

R&D expenses as a percentage of sales were flat during the three and nine-month periods ended October 3, 2025, as compared to the comparable periods in 2024.

Current wording

R&D expenses as a percentage of sales were flat during the three-month period ended April 3, 2026, as compared to the comparable period in 2025.

Previous wording

Operating profit margins were 25.5% for the nine-month period ended October 3, 2025 as compared to 24.2% for the nine-month period ended September 27, 2024. The following factors impacted year-over-year operating profit margin comparisons:

Current wording

Operating profit margins were 23.8% for the three-month period ended April 3, 2026 as compared to 24.2% for the three-month period ended April 4, 2025. The following factors impacted year-over-year operating profit margin comparisons:

Previous wording

•Costs incurred during 2025 related to certain strategic initiatives - 10 basis points

Current wording

•Costs incurred in the first quarter of 2026 related to certain strategic initiatives, including transaction costs incurred related to the acquisitions of In-Situ and GlobalVision - 30 basis points

Previous wording

Third quarter 2025 vs. third quarter 2024 operating profit margin comparisons were unfavorably impacted by:

Current wording

First quarter 2026 vs. first quarter 2025 operating profit margin comparisons were favorably impacted by:

Previous wording

•Costs incurred during the third quarter of 2025 related to certain strategic initiatives - 10 basis points

Current wording

•Transaction costs incurred during the first quarter of 2025 related to certain strategic initiatives - 20 basis points

Previous wording

Total Water Quality segment sales increased 7.0% and 6.4% year-over-year during the three and nine-month periods ended October 3, 2025, respectively, as compared to the comparable periods in 2024, primarily as a result of core sales growth driven by the factors discussed below. Geographically, sales growth was driven by North America, which saw increases of 6.0% and 6.4%, and Western Europe, which saw increases of 8.8% and 9.8% for the three and nine-month periods ended October 3, 2025, respectively, compared to the comparable periods in 2024.

Current wording

Total Water Quality segment sales increased 10.1% year-over-year during the three-month period ended April 3, 2026, as compared to the comparable period in 2025, primarily as a result of core sales growth driven by the factors discussed below. Geographically, sales growth was driven by North America, which saw increases of 7.9%, and Western Europe, which saw increases of 20.6% for the three-month period ended April 3, 2026, compared to the comparable periods in 2025. Sales in high-growth markets increased 7.7% during the three-month period ended April 3, 2026, compared to the comparable periods in 2025.

Previous wording

Price increases in the segment contributed 1.7% and 1.4% to sales growth on a year-over-year basis during the three and nine-month periods ended October 3, 2025, respectively, and are reflected as a component of the change in core sales growth.

Current wording

Price increases in the segment contributed 1.8% to sales growth on a year-over-year basis during the three-month period ended April 3, 2026, and are reflected as a component of the change in core sales growth.

Previous wording

Core sales in the Water Quality segment increased 5.3% and 5.9% year-over-year during the three and nine-month periods ended October 3, 2025, respectively. Geographically, core sales growth was driven by increases of 6.0% in North America and 1.3% in Western Europe during the three-month period ended October 3, 2025 compared to the comparable period in 2024. For the same period, core sales in high-growth markets increased 7.1%, driven by mid-single digit increases in Latin America and low-single digit increases in China. Geographically, core sales growth was driven by increases of 6.6% in North America and 6.0% in Western Europe during the nine-month period ended October 3, 2025 compared to the comparable period in 2024. For the same period, core sales in high-growth markets increased 4.6%, driven by high-single digit increases in Latin America, partially offset by mid-single digit decreases in China.

Current wording

Core sales in the Water Quality segment increased 3.8% year-over-year during the three-month period ended April 3, 2026. Geographically, core sales growth was driven by increases of 5.8% in North America and 4.7% in Western Europe during the three-month period ended April 3, 2026 compared to the comparable period in 2025. For the same period, core sales in high-growth markets increased 0.3%, driven by increases in certain Asian markets, partially offset by mid-single digit decreases in Latin America and low-single digit decreases in China.

Previous wording

The increase in core sales during the three and nine-month periods ended October 3, 2025 was driven by the chemical treatment solutions business and, to a lesser extent, the analytical instrumentation business. Core sales in the chemical treatment solutions business increased 5.3% and 6.9% year-over-year in the three and nine-month periods ended October 3, 2025, respectively, as a result of increased core sales across most major end-markets. Core sales in the analytical instrumentation business increased 4.3% and 4.8% year-over-year for the three and nine-month periods ended October 3, 2025, respectively, as a result of increased core sales across Western Europe and North America.

Current wording

The increase in core sales during the three-month period ended April 3, 2026 was driven by the chemical treatment solutions business and, to a lesser extent, the analytical instrumentation business. Core sales in the chemical treatment solutions business increased 4.1% year-over-year in the three-month period ended April 3, 2026, as a result of increased core sales across most major end-markets. Core sales in the analytical instrumentation business increased 2.6% year-over-year for the three-month period ended April 3, 2026, as a result of increased core sales across Western Europe and North America.

Previous wording

•The net dilutive impact in 2025 of acquisitions and dispositions - 30 basis points

Current wording

•The net dilutive impact during 2026 of acquisitions and dispositions - 30 basis points

Previous wording

Total Product Quality & Innovation segment sales increased 6.9% and 7.3% year-over-year during the three and nine-month periods ended October 3, 2025, respectively, primarily as a result of changes in core sales driven by the factors discussed below. Geographically, sales growth was driven by North America which saw increases of 13.1% and 10.7% and Western Europe which saw increases of 8.1% and 7.1% during the three and nine-month periods ended October 3, 2025, respectively, compared to the comparable periods in 2024. Sales in high-growth markets increased 0.5% and 4.4% during the three and nine-month periods ended October 3, 2025, respectively, compared to the comparable periods in 2024.

Current wording

Total Product Quality & Innovation segment sales increased 1.7% year-over-year during the three-month period ended April 3, 2026, primarily as a result of changes in core sales driven by the factors discussed below. Geographically, sales growth was driven by North America which saw increases of 0.5% and Western Europe which saw increases of 5.0% during the three-month period ended April 3, 2026, compared to the comparable period in 2025. Sales in high-growth markets increased 0.6% during the three-month period ended April 3, 2026, compared to the comparable periods in 2025.

Previous wording

Price increases in the segment contributed 3.3% and 2.4% to sales growth on a year-over-year basis during the three and nine-month periods ended October 3, 2025, respectively, and are reflected as a component of the change in core sales growth.

Current wording

Price increases in the segment contributed 2.0% to sales growth on a year-over-year basis during the three-month period ended April 3, 2026, and are reflected as a component of the change in core sales described below.

Previous wording

From a product line perspective, core sales in the marking and coding business increased 5.9% year-over-year during both the three and nine-month periods ended October 3, 2025, driven by higher demand across most major end-markets and geographies. Core sales in the packaging and color solutions business increased 1.6% and 5.6% year-over-year during the three and nine-month periods ended October 3, 2025, respectively, driven by continued demand for digital workflow solutions in most major end-markets.

Current wording

From a product line perspective, core sales in the marking and coding business increased 2.0% year-over-year during the three-month period ended April 3, 2026, driven by demand across most major end-markets and geographies. Core sales in the packaging and color solutions business decreased 7.5% year-over-year during the three-month period ended April 3, 2026, due to the impact of global macroeconomic conditions on certain product lines.

Previous wording

Third quarter 2025 vs. third quarter 2024 operating profit margin comparisons were unfavorably impacted by:

Current wording

First quarter 2026 vs. first quarter 2025 operating profit margin comparisons were favorably impacted by:

Previous wording

•The net dilutive impact during 2025 of acquisitions and dispositions - 20 basis points

Current wording

•The net impact in 2026 of acquisitions and dispositions - 20 basis points

Previous wording

Net interest expense of $21 million and $76 million was recorded for thethree and nine-month periods ended October 3, 2025, respectively, compared to net interest expenseof $27 million and $85 million for the three and nine-month periods ended September 27, 2024, respectively, arising from our outstanding indebtedness, which was incurred in September 2023, partially offset by interest income from larger average cash balances in 2025.

Current wording

Net interest expense of $24 million and $27 million was recorded for thethree-month periods ended April 3, 2026, and April 4, 2025, respectively, arising from our outstanding indebtedness, which was incurred in September 2023.

Previous wording

The effective tax rate for the three-month period ended October 3, 2025 differs from the U.S. federal statutory rate of 21% principally due to the geographic mix of earnings described above and a net discrete provision of $1 million related primarily to the impact of uncertain tax positions, partially offset by the impact of a German tax rate change on deferred taxes. The net discrete provision increased the effective tax rate by 0.3% for the three-month period ended October 3, 2025.

Current wording

The effective tax rate for the three-month period ended April 3, 2026 differs from the U.S. federal statutory rate of 21% principally due to the geographic mix of earnings described above and the favorable impact of tax law changes under the One Big Beautiful Bill Act (“OBBBA”), partially offset by a net discrete provision of $2 million related primarily to the impact of a gain on a minority interest holding. The net discrete provision increased the effective tax rate by 0.6% for the three-month period ended April 3, 2026.

Previous wording

The effective tax rate for the nine-month period ended September 27, 2024 differs from the U.S. federal statutory rate of 21% principally due to the geographic mix of earnings described above, the unfavorable impact of a non-deductible loss on the sale of a product line of $3 million, and a net discrete expense of $5 million related primarily to the impact of uncertain tax positions, partially offset by excess tax benefits from stock-based compensation. The net discrete expense increased the effective tax rate by 1.0% for the nine-month period ended September 27, 2024.

Current wording

The effective tax rate for the three-month period ended April 4, 2025 differs from the U.S. federal statutory rate of 21% principally due to the geographic mix of earnings described above, the unfavorable impact of a non-deductible loss on the sale of a product line of $2 million, and a net discrete benefit of $2 million related primarily to the impact of excess tax benefits from stock-based compensation. The net discrete items had no impact on the effective tax rate for the three-month period ended April 4, 2025.

Previous wording

The Company conducts business globally, and the Former Parent filed numerous consolidated and separate income tax returns in the U.S. federal and state and non-U.S. jurisdictions. The non-U.S. countries in which the Company has a significant presence include Belgium, Brazil, Canada, China, Germany, the Netherlands and the United Kingdom. Excluding these non-U.S. jurisdictions, the Company believes that a change in the statutory tax rate of any individual non-U.S. country would not have a material effect on the Company’s Consolidated Condensed Financial Statements given the geographic dispersion of the Company’s income.

Current wording

The Company conducts business globally, requiring filing numerous consolidated and separate income tax returns in the U.S. federal and state and non-U.S. jurisdictions. The non-U.S. countries in which the Company has a significant presence include Belgium, Brazil, Canada, China, Germany, the Netherlands and the United Kingdom. Excluding these non-U.S. jurisdictions, the Company believes that a change in the statutory tax rate of any individual non-U.S. country would not have a material effect on the Company’s Consolidated Condensed Financial Statements given the geographic dispersion of the Company’s income.