ESAB Corp 10-Q for FY2026 Q1

ESAB Corp (ESAB)

10-Q 2026-05-07 For: 2026-04-03

Added on May 07, 2026

About this 10-Q

ESAB Corp filed this 10-Q on May 7, 2026, covering the quarter ended April 3, 2026 (FY2026 Q1).

Headline figures

Quarter ended April 3, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $745.6M; up 9.9% from $678.14M a year earlier
Net income: $47.64M; down 29.3% from net income of $67.36M a year earlier
Diluted EPS: $0.78; down 29.1% from $1.10 a year earlier

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Delaware									87-0923837
(State or other jurisdiction of incorporation or organization)									(I.R.S. Employer Identification Number)

909 Rose Avenue, 8th Floor
North Bethesda, Maryland									20852
(Address of principal executive offices)									(Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	ESAB	New York Stock Exchange


			Page
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements			2
Consolidated and Condensed Statements of Operations			2
Consolidated and Condensed Statements of Comprehensive Income			3
Consolidated and Condensed Balance Sheets			4
Consolidated and Condensed Statements of Equity			5
Consolidated and Condensed Statements of Cash Flows			6
Notes to Consolidated and Condensed Financial Statements			6
Note 1. Organization and Basis of Presentation			7
Note 2. Discontinued Operations			8
Note 3. Acquisitions			8
Note 4. Revenue			10
Note 5. Earnings per Share from Continuing Operations			10
Note 6. Income Taxes			11
Note 7. Inventories, Net			11
Note 8. Accrued and Other Liabilities			11

Note 9. Debt			12
Note 10. Derivatives			14
Note 11. Financial Instruments and Fair Value Measurements			15
Note 12. Equity			17
Note 13. Commitments and Contingencies			19
Note 14. Segment Information			21
Note 15. Subsequent Event			22
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			23
Item 3. Quantitative and Qualitative Disclosures About Market Risk			36
Item 4. Controls and Procedures			37

PART II - OTHER INFORMATION
Item 1. Legal Proceedings			38
Item 1A. Risk Factors			38
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			39
Item 3. Defaults Upon Senior Securities			39
Item 4. Mine Safety Disclosures			39
Item 5. Other Information			39
Item 6. Exhibits			40

SIGNATURES			41


	Three Months Ended
		April 3, 2026		April 4, 2025
Net sales		$	745,597	$	678,138
Cost of sales		470,485		422,936
Gross profit		275,112		255,202
Selling, general and administrative expense		174,472		140,858
Restructuring and other related charges		10,161		4,499
Operating income		90,479		109,845

Interest expense and other, net		25,577		16,782
Income from continuing operations before income taxes		64,902		93,063
Income tax expense		13,111		20,499
Net income from continuing operations		51,791		72,564
Loss from discontinued operations, net of taxes		(2,554)		(2,732)
Net income		49,237		69,832
Income attributable to noncontrolling interest, net of taxes		(1,593)		(2,469)
Net income attributable to ESAB Corporation		$	47,644	$	67,363
Earnings (loss) per share – basic
Income from continuing operations		$	0.82	$	1.15
Loss on discontinued operations		(0.04)		(0.05)
Net income per share – basic		$	0.78	$	1.10
Earnings (loss) per share – diluted
Income from continuing operations		$	0.82	$	1.14
Loss on discontinued operations		(0.04)		(0.04)
Net income per share – diluted		$	0.78	$	1.10


	Three Months Ended
		April 3, 2026		April 4, 2025
Net income		$	49,237	$	69,832
Other comprehensive (loss) income:
Foreign currency translation, net of tax expense (benefit) of $2,897 and $(4,322)		(18,753)		79,330
Unrealized loss on derivatives designated and qualifying as cash flow hedges, net of tax benefit of $— and $(497)		—		(1,816)
Defined benefit pension and other post-retirement plan activity, net of tax expense of $87 and $11		369		321
Other comprehensive (loss) income		(18,384)		77,835
Comprehensive income		30,853		147,667
Comprehensive income attributable to noncontrolling interest		(506)		(2,587)
Comprehensive income attributable to ESAB Corporation		$	30,347	$	145,080


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


(301)			323-9099
(Registrant’s telephone number, including area code)


	April 3, 2026		December 31, 2025
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	1,004,790	$	185,863
Trade receivables, less allowance for credit losses of $21,638 and $21,765	488,460		451,298
Inventories, net	520,597		481,765
Prepaid expenses	79,022		66,103
Other current assets	77,289		76,876
Total current assets	2,170,158		1,261,905
Property, plant and equipment, net	377,352		381,876
Goodwill	1,930,604		1,949,702
Intangible assets, net	655,922		673,006
Lease assets - right of use	106,178		113,310
Other assets	384,455		386,295
Total assets	$	5,624,669	$	4,766,094

LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt	$	3,788	$	2,412
Accounts payable	398,501		360,391
Accrued liabilities	327,707		301,986
Total current liabilities	729,996		664,789
Long-term debt	2,032,436		1,232,540
Other liabilities	626,569		657,236
Total liabilities	3,389,001		2,554,565
Equity:
Common stock - $0.001 par value - 600,000,000 shares authorized, 60,881,557 and 60,721,079 shares outstanding as of April 3, 2026 and December 31, 2025, respectively	61		61
Additional paid-in capital	1,905,399		1,904,889
Retained earnings	842,343		800,806
Accumulated other comprehensive loss	(557,013)		(539,716)
Total ESAB Corporation equity	2,190,790		2,166,040
Noncontrolling interest	44,878		45,489
Total equity	2,235,668		2,211,529
Total liabilities and equity	$	5,624,669	$	4,766,094


	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Noncontrolling Interest		Total
	Shares	Amount
Balance at December 31, 2025	60,721,079	$	61	$	1,904,889	$	800,806	$	(539,716)	$	45,489	$	2,211,529
Net income	—	—		—		47,644		—		1,593		49,237
Dividends declared ($0.10 per share)	—	—		—		(6,107)		—		—		(6,107)
Distributions to noncontrolling owners	—	—		—		—		—		(1,117)		(1,117)
Other comprehensive loss, net of tax expense of $(2,984)	—	—		—		—		(17,297)		(1,087)		(18,384)
Common stock-based award activity	160,478	—		510		—		—		—		510
Balance at April 3, 2026	60,881,557	$	61	$	1,905,399	$	842,343	$	(557,013)	$	44,878	$	2,235,668


	Three Months Ended April 3, 2026
	Balance at Beginning of Period		Charged to Expense, net		Write-Offs and Deductions		Foreign Currency Translation		Balance at End of Period
	(In thousands)
Allowance for credit losses	$	21,765	$	117	$	(359)	$	115	$	21,638


	April 3, 2026				December 31, 2025
	Current		Noncurrent		Current		Noncurrent
	(In thousands)
Accrued taxes and deferred tax liabilities	$	58,078	$	176,314	$	53,728	$	182,898
Compensation and related benefits	66,880		51,511		68,535		52,706
Asbestos liability	44,101		263,012		42,242		269,829
Contract liabilities	33,885		—		19,663		—
Lease liabilities	22,317		81,537		22,081		88,141
Warranty liability	12,540		—		12,573		—
Third-party commissions	13,398		—		19,371		—
Restructuring liability	15,919		—		17,297		319
Accrued interest	19,792		—		8,570		—

Other	40,797		54,195		37,926		63,343
	$	327,707	$	626,569	$	301,986	$	657,236


	Three Months Ended April 3, 2026
	Balance at Beginning of Period		Charges		Payments		Foreign Currency Translation and Other		Balance at End of Period
	(In thousands)
Americas:
Termination benefits(1)	$	8,827	$	1,176	$	(1,049)	$	(89)	$	8,865
Facility closure costs and other(2)	1,677		5,186		(6,057)		—		806
Subtotal	10,504		6,362		(7,106)		(89)		9,671
Non-cash charges(2)			2,619
			8,981
EMEA & APAC:
Termination benefits(1)	6,223		687		(1,322)		(62)		5,526
Facility closure costs and other(2)	889		493		(709)		49		722
Subtotal	7,112		1,180		(2,031)		(13)		6,148
Non-cash charges(2)			—
			1,180

Total	$	17,616	7,542		$	(9,137)	$	(102)	$	15,919
Non-cash charges(2)			2,619
Total Provision			$	10,161


	April 3, 2026				December 31, 2025
Designated as Hedging Instruments	Other Liabilities		Other Assets		Other Liabilities		Other Assets
	(In thousands)
Cross-currency swap agreements	$	40,092	$	—	$	48,778	$	—


	April 3, 2026				December 31, 2025
Not Designated as Hedging Instruments	Accrued Liabilities		Other Current Assets		Accrued Liabilities		Other Current Assets
	(In thousands)
Foreign currency contracts	$	1,159	$	163	$	183	$	780


FORM			10-Q


	Three Months Ended
	April 3, 2026		April 4, 2025
Cash flows from operating activities:
Net income	$	49,237	$	69,832
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and other impairment charges	23,868		17,491
Net gain on sale of property, plant and equipment	(56)		(5,665)
Stock-based compensation expense	3,948		5,361
Deferred income tax benefit	(4,771)		(2,774)
Amortization of debt issuance costs	5,764		628

Changes in operating assets and liabilities:
Trade receivables, net	(33,819)		(32,026)
Inventories, net	(40,123)		(35,393)
Accounts payable	39,662		21,405
Other operating assets and liabilities	3,205		(3,449)
Net cash provided by operating activities	46,915		35,410
Cash flows from investing activities:
Purchases of property, plant and equipment	(13,703)		(7,294)
Proceeds from sale of property, plant and equipment	275		4,605


Net cash used in investing activities	(13,428)		(2,689)
Cash flows from financing activities:
Proceeds from borrowings on Senior Notes	1,000,000		—


Repayments of borrowings on Term Loans	—		(2,500)
Proceeds from borrowings on revolving credit facilities and other	131,217		—
Repayments of borrowings on revolving credit facilities and other	(317,374)		—

Payment of debt issuance costs	(17,017)		—

Payment of dividends	(6,092)		(4,861)
Distributions to noncontrolling interest holders	(1,117)		(1,168)
Other financing	(3,438)		(4,590)
Net cash provided by (used in) financing activities	786,179		(13,119)
Effect of foreign exchange rates on Cash and cash equivalents	(739)		22,388
Increase in Cash and cash equivalents	818,927		41,990


	April 3, 2026		December 31, 2025
	(In thousands)
Raw materials	$	186,279	$	173,458
Work in process	46,640		40,033
Finished goods	324,085		307,517
	557,004		521,008
Allowance for excess, slow-moving and obsolete inventory	(36,407)		(39,243)
	$	520,597	$	481,765


	Three Months Ended
	April 3, 2026		April 4, 2025
	(In thousands)
Warranty liability, beginning of period	$	12,573	$	12,794
Accrued warranty expense	2,652		1,967
Changes in estimates related to pre-existing warranties	433		465
Cost of warranty service work performed	(3,099)		(2,885)

Foreign exchange translation effect and other	(19)		261
Warranty liability, end of period	$	12,540	$	12,602


	April 3, 2026								December 31, 2025
	Level One		Level Two		Level Three		Total		Level One		Level Two		Level Three		Total
	(In thousands)
Assets:
Cash equivalents	$	765,917	$	—	$	—	$	765,917	$	11,965	$	—	$	—	$	11,965
Foreign currency contracts	—		519		—		519		—		857		—		857

Deferred compensation plans	—		7,099		—		7,099		—		7,214		—		7,214
	$	765,917	$	7,618	$	—	$	773,535	$	11,965	$	8,071	$	—	$	20,036

Liabilities:
Foreign currency contracts	$	—	$	1,515	$	—	$	1,515	$	—	$	260	$	—	$	260
Cross-currency swap agreements	—		40,092		—		40,092		—		48,778		—		48,778
Deferred compensation plans	—		7,099		—		7,099		—		7,214		—		7,214
	$	—	$	48,706	$	—	$	48,706	$	—	$	56,252	$	—	$	56,252


	Accumulated Other Comprehensive Loss Components
	Net Unrecognized Pension and Other Post-Retirement Benefit Cost		Foreign Currency Translation Adjustment		Net Investment Hedges		Total
	(In thousands)
Balance at December 31, 2025	$	(51,677)	$	(450,325)	$	(37,714)	$	(539,716)
Other comprehensive income (loss) before reclassifications:

Foreign currency translation adjustment	110		(29,642)		6,729		(22,803)
Gain on long-term intra-entity foreign currency transactions	—		5,137		—		5,137

Other comprehensive income (loss) before reclassifications	110		(24,505)		6,729		(17,666)
Amounts reclassified from Accumulated other comprehensive loss(1)	369		—		—		369
Net current period Other comprehensive income (loss)	479		(24,505)		6,729		(17,297)
Balance at April 3, 2026	$	(51,198)	$	(474,830)	$	(30,985)	$	(557,013)


	Three Months Ended April 3, 2026
		Americas			EMEA & APAC			Total
		(Dollars in millions)(1)
Net income from continuing operations (GAAP)								$	51.8
Income tax expense								13.1
Interest expense and other, net								25.6

Operating income (GAAP)		$	35.2		$	55.3		$	90.5

Adjusted to add:
Restructuring and other related charges(2)		9.0			1.2			10.2
Acquisition-amortization and other related charges(3)		7.7			15.1			22.8
Depreciation and other amortization		4.2			8.9			13.1
Adjusted EBITDA (non-GAAP)		56.0			80.6			136.6
Adjusted EBITDA attributable to Russia (non-GAAP)(4)		—			0.7			0.7
Core adjusted EBITDA (non-GAAP)		$	56.0		$	79.9		$	135.9
Adjusted EBITDA margin (non-GAAP)		19.4		%	17.6		%	18.3		%
Core adjusted EBITDA margin (non-GAAP)(5)		19.4		%	18.7		%	19.0		%


	Three Months Ended April 4, 2025
		Americas			EMEA & APAC			Total
		(Dollars in millions)(1)
Net income from continuing operations (GAAP)								$	72.6
Income tax expense								20.5
Interest expense and other, net								16.8

Operating income (GAAP)		$	43.2		$	66.6		$	109.8
Adjusted to add:
Restructuring and other related charges(2)		1.7			2.8			4.5
Acquisition-amortization and other related charges(3)		5.6			4.0			9.6
Depreciation and other amortization		3.9			6.0			10.0

Adjusted EBITDA (non-GAAP)		54.5			79.4			133.9
Adjusted EBITDA attributable to Russia (non-GAAP)(4)		—			6.0			6.0
Core adjusted EBITDA (non-GAAP)		$	54.5		$	73.4		$	127.9
Adjusted EBITDA margin (non-GAAP)		19.4		%	20.0		%	19.7		%
Core adjusted EBITDA margin (non-GAAP)(5)		19.4		%	20.0		%	19.8		%


	Three Months Ended
		Net Sales		Change %
		(Dollars in millions)
For the three months ended April 4, 2025		$	678.1
Components of Change:
Existing businesses (organic sales)(1)		(12.6)		(1.9)	%
Acquisitions(2)		42.8		6.3	%
Foreign currency translation(3)		37.3		5.5	%
Total Net sales growth		67.5		9.9	%
For the three months ended April 3, 2026		$	745.6


	Three Months Ended
		Core Sales(4)		Change %
		(Dollars in millions)
For the three months ended April 4, 2025		$	646.9
Components of Change:
Existing businesses (organic sales)(1)		(7.4)		(1.1)	%
Acquisitions(2)		42.8		6.6	%
Foreign currency translation(3)		32.2		5.0	%
Total Core sales growth		67.6		10.5	%
For the three months ended April 3, 2026		$	714.5


Exhibit No.			Exhibit Description
2.1			Share Purchase Agreement, dated January 31, 2026, by and among the Company, the Purchaser, the Vendors and the Vendors’ Representatives. (incorporated by reference to Exhibit 2.1 to ESAB Corporation’s Form 8-K (File No. 001-41297) as filed with the SEC on February 2, 2026).

4.1			Indenture, dated as of March 26, 2026, by and among ESAB Corporation, as issuer, the guarantors named therein, and U.S. Bank Trust Company, National Association, as trustee (incorporated by reference to Exhibit 4.1 to ESAB Corporation’s Form 8-K (File No. 001-41297) as filed with the SEC on March 26, 2026).

4.2			Form of Global Note (included in Exhibit 4.1). (incorporated by reference to Exhibit 4.2 to ESAB Corporation’s Form 8-K (File No. 001-41297) as filed with the SEC on March 26, 2026).

10.1#			ESAB Corporation Amended and Restated Executive Severance Plan

10.2#			Offer letter from ESAB Corporation to Brent Jones, dated March 30, 2026

31.1			Certification of Chief Executive Officer and Interim Principal Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.



32.1			Certification of Chief Executive Officer and Interim Principal Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.



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101.PRE			Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104			Cover Page Interactive Data File - The cover page from this Quarterly Report on Form 10-Q for the quarter ended April 3, 2026 is formatted in Inline XBRL (included as Exhibit 101).


			Severance Plan
Name of Plan			ESAB Corporation Amended and Restated Executive Officer Severance Plan
Type of Plan			ERISA “welfare plan” that is a severance pay arrangement
Plan Records			Kept on a calendar-year basis
Plan Year			January 1 — December 31
Plan Funding			Unfunded—Company and Participating Employers provide severance benefits from general assets.
Plan Sponsor			ESAB Corporation
Plan Sponsor’s Employer Identification Number			87-0923837
Plan Administrator and Named Fiduciary			ESAB Corporation 909 Rose Avenue, Suite 800 North Bethesda, Maryland 20852
Agent for Service of Legal Process on the Plan			ESAB Corporation c/o General Counsel 909 Rose Avenue, Suite 800 North Bethesda, Maryland 20852
Trustee			Not applicable
Insurance Company			Not applicable


1.			I have reviewed this quarterly report on Form 10-Q of ESAB Corporation;


2.			Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.			Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.			The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


			(a)			Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


			(b)			Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


			(c)			Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


			(d)			Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and


			(a)			All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and


			(b)			Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.


/s/ Shyam P. Kambeyanda
Shyam P. Kambeyanda President and Chief Executive Officer (Principal Executive Officer and Interim Principal Financial Officer)