ESAB Corp 10-Q for FY2025 Q1

ESAB Corp (ESAB)

10-Q 2025-05-01 For: 2025-04-04

Added on April 12, 2026

About this 10-Q

ESAB Corp filed this 10-Q on May 1, 2025, covering the quarter ended April 4, 2025 (FY2025 Q1).

Headline figures

Quarter ended April 4, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $678.14M; down 1.7% from $689.74M a year earlier
Net income: $67.36M; up 12.4% from net income of $59.95M a year earlier
Diluted EPS: $1.10; up 12.2% from $0.98 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			9
Note 5. Earnings per Share from Continuing Operations			9
Note 6. Income Taxes			10
Note 7. Inventories, Net			10
Note 8. Accrued and Other Liabilities			10
Note 9. Benefit Plans			11
Note 10. Debt			11
Note 11. Derivatives			13
Note 12. Financial Instruments and Fair Value Measurements			15
Note 13. Equity			16
Note 14. Commitments and Contingencies			18
Note 15. Segment Information			19
Note 16. Subsequent Event			21
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			22
Item 3. Quantitative and Qualitative Disclosures About Market Risk			34
Item 4. Controls and Procedures			35

PART II - OTHER INFORMATION
Item 1. Legal Proceedings			36
Item 1A. Risk Factors			36
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			37
Item 3. Defaults Upon Senior Securities			37
Item 4. Mine Safety Disclosures			37
Item 5. Other Information			37
Item 6. Exhibits			38

SIGNATURES			39


	Three Months Ended
	April 4, 2025		March 29, 2024
Net sales	$	678,138	$	689,744
Cost of sales	422,936		434,717
Gross profit	255,202		255,027
Selling, general and administrative expense	140,858		142,450
Restructuring and other related charges	4,499		1,924
Operating income	109,845		110,653
Pension settlement loss	—		12,155
Interest expense and other, net	16,782		17,091
Income from continuing operations before income taxes	93,063		81,407
Income tax expense	20,499		18,504
Net income from continuing operations	72,564		62,903
Loss from discontinued operations, net of taxes	(2,732)		(1,309)
Net income	69,832		61,594
Income attributable to noncontrolling interest, net of taxes	(2,469)		(1,643)
Net income attributable to ESAB Corporation	$	67,363	$	59,951
Earnings (loss) per share – basic
Income from continuing operations	$	1.15	$	1.01
Loss on discontinued operations	(0.05)		(0.02)
Net income per share – basic	$	1.10	$	0.99
Earnings (loss) per share – diluted
Income from continuing operations	$	1.14	$	1.00
Loss on discontinued operations	(0.04)		(0.02)
Net income per share – diluted	$	1.10	$	0.98


	Three Months Ended
	April 4, 2025		March 29, 2024
Net income	$	69,832	$	61,594
Other comprehensive income (loss):
Foreign currency translation, net of tax (benefit) expense of $(4,322) and $1,531	79,330		(25,354)
Unrealized (loss) income on derivatives designated and qualifying as cash flow hedges, net of tax (benefit) expense of $(497) and $295	(1,816)		1,013
Defined benefit pension and other post-retirement plan activity, net of tax expense of $11 and $203	321		629
Other comprehensive income (loss)	77,835		(23,712)
Comprehensive income	147,667		37,882
Comprehensive income attributable to noncontrolling interest	(2,587)		(1,320)
Comprehensive income attributable to ESAB Corporation	$	145,080	$	36,562


☒			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 4, 2025		December 31, 2024
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	291,348	$	249,358
Trade receivables, less allowance for credit losses of $24,446 and $23,850	414,796		370,321
Inventories, net	450,705		403,711
Prepaid expenses	56,941		55,665
Other current assets	72,241		69,327
Total current assets	1,286,031		1,148,382
Property, plant and equipment, net	307,487		298,347
Goodwill	1,684,829		1,651,993
Intangible assets, net	502,895		487,993
Lease assets - right of use	86,320		89,859
Other assets	349,980		357,401
Total assets	$	4,217,542	$	4,033,975

LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current portion of debt	$	17,759	$	15,000
Accounts payable	349,716		318,493
Accrued liabilities	304,525		298,558
Total current liabilities	672,000		632,051
Long-term debt	1,056,296		1,060,739
Other liabilities	538,854		532,936
Total liabilities	2,267,150		2,225,726
Equity:
Common stock - $0.001 par value - 600,000,000 shares authorized, 60,622,736 and 60,517,574 shares outstanding as of April 4, 2025 and December 31, 2024, respectively	61		61
Additional paid-in capital	1,901,849		1,901,337
Retained earnings	659,675		597,180
Accumulated other comprehensive loss	(651,857)		(729,574)
Total ESAB Corporation equity	1,909,728		1,769,004
Noncontrolling interest	40,664		39,245
Total equity	1,950,392		1,808,249
Total liabilities and equity	$	4,217,542	$	4,033,975


	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Noncontrolling Interest		Total
	Shares	Amount
Balance at December 31, 2024	60,517,574	$	61	$	1,901,337	$	597,180	$	(729,574)	$	39,245	$	1,808,249
Net income	—	—		—		67,363		—		2,469		69,832
Dividends declared ($0.08 per share)	—	—		—		(4,868)		—		—		(4,868)
Distributions to noncontrolling owners	—	—		—		—		—		(1,168)		(1,168)
Other comprehensive income, net of tax benefit of $4,808	—	—		—		—		77,717		118		77,835
Common stock-based award activity	105,162	—		512		—		—		—		512
Balance at April 4, 2025	60,622,736	$	61	$	1,901,849	$	659,675	$	(651,857)	$	40,664	$	1,950,392


	Three months ended April 4, 2025
	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	$	23,850	$	519	$	(589)	$	666	$	24,446


	April 4, 2025				December 31, 2024
	Current		Noncurrent		Current		Noncurrent
	(In thousands)
Accrued taxes and deferred tax liabilities	$	51,836	$	151,101	$	46,395	$	151,642
Compensation and related benefits	72,025		50,253		80,451		48,350
Asbestos liability	41,125		241,557		40,779		253,287
Contract liabilities	25,347		—		26,390		—
Lease liabilities	20,977		62,551		21,459		66,042
Warranty liability	12,602		—		12,794		—
Third-party commissions	10,642		—		17,346		—
Restructuring liability	6,342		45		4,732		374
Accrued interest	18,501		—		8,077		—
Other	45,128		33,347		40,135		13,241
	$	304,525	$	538,854	$	298,558	$	532,936


	Three Months Ended April 4, 2025
	Balance at Beginning of Period		Charges		Payments		Foreign Currency Translation		Balance at End of Period
	(In thousands)
Restructuring and other related charges:
Termination benefits(1)	$	3,845	$	3,363	$	(2,016)	$	235	$	5,427
Facility closure costs and other(2)	1,261		1,136		(1,235)		(202)		960
	$	5,106	$	4,499	$	(3,251)	$	33	$	6,387


	April 4, 2025				December 31, 2024
Designated as Hedging Instruments	Other Liabilities		Other Assets		Other Liabilities		Other Assets
	(In thousands)
Cross-currency swap agreements	$	21,677	$	—	$	1,830	$	—
Interest rate swap agreement	—		—		—		842
	$	21,677	$	—	$	1,830	$	842


	April 4, 2025				December 31, 2024
Not Designated as Hedging Instruments	Accrued Liabilities		Other Current Assets		Accrued Liabilities		Other Current Assets
	(In thousands)
Foreign currency contracts	$	2,114	$	698	$	379	$	255


FORM			10-Q


	Three Months Ended
	April 4, 2025		March 29, 2024
Cash flows from operating activities:
Net income	$	69,832	$	61,594
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, amortization and other impairment charges	17,491		16,387
(Gain) loss on sale of property, plant and equipment	(5,665)		44
Stock-based compensation expense	5,361		4,133
Deferred income tax	(2,774)		(638)
Non-cash interest expense	628		1,062
Pension settlement loss	—		12,155
Changes in operating assets and liabilities:
Trade receivables, net	(32,026)		(48,946)
Inventories, net	(35,393)		(16,078)
Accounts payable	21,405		36,196
Other operating assets and liabilities	(3,449)		(21,442)
Net cash provided by operating activities	35,410		44,467
Cash flows from investing activities:
Purchases of property, plant and equipment	(7,294)		(7,414)
Proceeds from sale of property, plant and equipment	4,605		368
Acquisition, net of cash received	—		(18,067)
Other investing	—		(1,501)
Net cash used in investing activities	(2,689)		(26,614)
Cash flows from financing activities:

Proceeds from borrowings on revolving credit facilities and other	—		115,000
Repayments of borrowings on Term Loans	(2,500)		(6,250)
Repayments of borrowings on revolving credit facilities and other	—		(135,005)



Payment of dividends	(4,861)		(3,635)
Distributions to noncontrolling interest holders	(1,168)		—
Other financing	(4,590)		(4,030)
Net cash used in financing activities	(13,119)		(33,920)
Effect of foreign exchange rates on Cash and cash equivalents	22,388		(9,441)
Increase (decrease) in Cash and cash equivalents	41,990		(25,508)
Cash and cash equivalents, beginning of period	249,358		102,003
Cash and cash equivalents, end of period	$	291,348	$	76,495


	April 4, 2025		December 31, 2024
	(In thousands)
Raw materials	$	163,171	$	151,248
Work in process	48,932		41,698
Finished goods	282,641		251,994
	494,744		444,940
Allowance for excess, slow-moving and obsolete inventory	(44,039)		(41,229)
	$	450,705	$	403,711


	Three Months Ended
	April 4, 2025		March 29, 2024
	(In thousands)
Warranty liability, beginning of period	$	12,794	$	12,606
Accrued warranty expense	1,967		2,457
Changes in estimates related to pre-existing warranties	465		727
Cost of warranty service work performed	(2,885)		(2,647)

Foreign exchange translation effect and other	261		(207)
Warranty liability, end of period	$	12,602	$	12,936


	April 4, 2025								December 31, 2024
	Level One		Level Two		Level Three		Total		Level One		Level Two		Level Three		Total
	(In thousands)
Assets:
Cash equivalents	$	11,194	$	—	$	—	$	11,194	$	8,990	$	—	$	—	$	8,990
Foreign currency contracts	—		1,420		—		1,420		—		657		—		657
Interest rate swap agreement	—		—		—		—		—		842		—		842
Deferred compensation plans	—		5,197		—		5,197		—		5,242		—		5,242
	$	11,194	$	6,617	$	—	$	17,811	$	8,990	$	6,741	$	—	$	15,731

Liabilities:
Foreign currency contracts	$	—	$	2,836	$	—	$	2,836	$	—	$	781	$	—	$	781
Cross-currency swap agreements	—		21,677		—		21,677		—		1,830		—		1,830
Deferred compensation plans	—		5,197		—		5,197		—		5,242		—		5,242
	$	—	$	29,710	$	—	$	29,710	$	—	$	7,853	$	—	$	7,853


	Accumulated Other Comprehensive Loss Components
	Net Unrecognized Pension and Other Post-Retirement Benefit Cost		Foreign Currency Translation Adjustment		Net Investment Hedges		Cash Flow Hedges		Total
	(In thousands)
Balance at December 31, 2024	$	(50,352)	$	(679,791)	$	(1,247)	$	1,816	$	(729,574)
Other comprehensive (loss) income before reclassifications:
Net actuarial loss	48		—		—		—		48
Foreign currency translation adjustment	(421)		99,089		(19,847)		—		78,821
Gain on long-term intra-entity foreign currency transactions	—		391		—		—		391
Unrealized gain on cash flow hedges	—		—		—		16		16
Other comprehensive (loss) income before reclassifications	(373)		99,480		(19,847)		16		79,276
Amounts reclassified from Accumulated other comprehensive loss(1)(2)	273		—		—		(1,832)		(1,559)
Net current period Other comprehensive (loss) income	(100)		99,480		(19,847)		(1,816)		77,717
Balance at April 4, 2025	$	(50,452)	$	(580,311)	$	(21,094)	$	—	$	(651,857)


	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)(1)	$	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)(1)	$	54.5		$	79.4		$	133.9
Adjusted EBITDA attributable to Russia (non-GAAP)(4)	—			6.0			6.0
Core adjusted EBITDA (non-GAAP)(1)	$	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 March 29, 2024
	Americas			EMEA & APAC			Total
	(Dollars in millions)(1)
Net income from continuing operations (GAAP)							$	62.9
Income tax expense							18.5
Interest expense and other, net							17.1
Pension settlement loss							12.2
Operating income (GAAP)	$	46.0		$	64.7		$	110.7
Adjusted to add:
Restructuring and other related charges(2)	0.2			1.7			1.9
Acquisition-amortization and other related charges(3)	4.4			3.3			7.7
Depreciation and other amortization	3.5			5.3			8.8

Adjusted EBITDA (non-GAAP)	$	54.1		$	75.0		$	129.1
Adjusted EBITDA attributable to Russia (non-GAAP)(4)	—			5.9			5.9
Core adjusted EBITDA (non-GAAP)	$	54.1		$	69.1		$	123.2
Adjusted EBITDA margin (non-GAAP)	18.3		%	19.1		%	18.7		%
Core adjusted EBITDA margin (non-GAAP)(5)	18.3		%	19.2		%	18.8		%


	Three Months Ended
	Net Sales		Change %
	(Dollars in millions)(1)
For the three months ended March 29, 2024	$	689.7
Components of Change:
Existing businesses (organic sales)(2)	(1.1)		(0.2)	%
Acquisitions(3)	14.8		2.1	%
Foreign currency translation(4)	(25.3)		(3.7)	%
Total Net sales decline	(11.6)		(1.7)	%
For the three months ended April 4, 2025	$	678.1


	Three Months Ended
	Core Sales(5)		Change %
	(Dollars in millions)(1)
For the three months ended March 29, 2024	$	656.1
Components of Change:
Existing businesses (core organic sales)(2)	1.3		0.2	%
Acquisitions(3)	14.8		2.3	%
Foreign currency translation(4)	(25.4)		(3.9)	%
Total Core sales decline	(9.2)		(1.4)	%
For the three months ended April 4, 2025	$	646.9


Exhibit No.			Exhibit Description























































10.1			Amended and Restated ESAB Corporation Annual Incentive Plan, effective as of February 27, 2025

31.1			Certification of Chief Executive 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.

31.2			Certification of Chief 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 pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2			Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS			Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH			Inline XBRL Taxonomy Extension Schema Document.

101.CAL			Inline XBRL Extension Calculation Linkbase Document.

101.DEF			Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB			Inline XBRL Taxonomy Extension Label Linkbase Document.

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 4, 2025 is formatted in Inline XBRL (included as Exhibit 101).


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)


/s/ Kevin Johnson
Kevin Johnson Chief Financial Officer (Principal Financial Officer)