VNT 10-K & 10-Q changes, risk factors and insider trading
Vontier Corp · NYSE · Totalizing Fluid Meters & Counting Devices · CIK 1786842 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “We are subject to governmental regulation and other legal obligations, particularly related to privacy, data protection and information security, and our actual or perceived failure to comply with such obligations could harm our business. Compliance with such laws could also impair our efforts to maintain and expand our customer base and business lines, and thereby decrease our revenue.”
Largest changes
“Through executive and legislative action, the U.S. federal government has also taken steps to restrict data transactions involving persons affiliated with countries of concern such as China and Russia. For example, Executive Order 14117 on "Preventing Access to Americans' Bulk Sensitive Personal Data and U.S. Government-Related Data by Countries of Concern" as implemented by Department of Justice regulations issued in December 2024, prohibits data brokerage transactions involving certain sensitive personal data categories to countries of concern. …”see in full comparison
see in full comparisonIf we are unable to maintain reliable information technology systems and appropriate controls with respect to global data privacy and security requirements and prevent data breaches, we may suffer adverse regulatory consequences, business consequences and litigation.As a global organization, we are subject to data privacy and security laws, regulations, and customer-imposed controls in numerous jurisdictions as a result of having access to and processing confidential, personal, special category and/or sensitive data in the course of our business.FailureFor example, failure to comply with the requirements of EU General Data Protection Regulationthat became effective in May 2018(“GDPR”) and the applicable national data protection laws of the EU member states may result in fines of up to €20 million or up to 4% of the total worldwide annual turnover of the preceding financial year, whichever is higher, and other administrative penalties.SeveralWe may be required to modify our policies, procedures, and data processing measures in order to address requirements under these or other privacy, data protection, or cyber security regimes, and may face claims, litigation, investigations, or other proceedings regarding them and may incur related liabilities, expenses, costs, and operational losses. In addition, certain other countries such as China and Russia have passed, and other countries are considering passing, laws thatrequire personal data relating to their citizens to be maintained on local servers andimpose additional data transferrestrictions.restrictionsThewith respect to the personal data of their citizens. In the U.S. numerous states have passed comprehensive privacy and data security laws, such as the California Consumer Privacy Act, whichcameimposeintosimilareffect(butinnotJanuaryidentical)2020,obligationshason covered businesses, as those created under the GDPR. Furthermore, the U.S. federal government and someofU.S.thestatessamehavefeaturespassedas the GDPR,privacy andhascybersecuritypromptedlawsseveralgoverningotherspecificstatessectors,totechnologies,followorwith similar laws. Government enforcement actions can be costly and interrupt the regular operationcategories ofourpersonalbusiness, and data breaches or violations of data privacy laws can result in fines, reputational damage and civil lawsuits, any of which may adversely affect our business, reputation and financial statements. In addition, compliance with the varying data privacy regulations across the United States and around the world, including the EU Data Act and artificial intelligence regulations in the United States and Europe, has required significant expenditures and may require additional expenditures, and may require further changes in our products or business models that increase competition or reduce revenue.data.
“Like many multinational corporations, our information technology systems and infrastructure, and the information technology systems and infrastructure of our third party vendors, have been subject to threats and cybersecurity incidents. While we have implemented security measures, the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and may be difficult to detect, and we may be unable to anticipate these techniques or implement adequate preventive measures. …”see in full comparison
“We rely on information technology systems, some of which are managed by third parties or on an independent basis by our operating companies, to process, transmit and store electronic information, including personal data, and to manage or support a variety of critical business processes and activities. …”see in full comparison
“We rely on information technology systems, some of which are managed by third parties and some of which are managed on a decentralized, independent basis by our operating companies, to process, transmit and store electronic information (including sensitive data such as confidential business information and personally identifiable data relating to employees, customers, customer’s employees and end users and other business partners), and to manage or support a variety of critical business processes and activities (such as receiving and fulfilling orders, billing, collecting and making payments …”see in full comparison
“We are subject to governmental regulation and other legal obligations, particularly related to privacy, data protection and information security, and our actual or perceived failure to comply with such obligations could harm our business. Compliance with such laws could also impair our efforts to maintain and expand our customer base and business lines, and thereby decrease our revenue.”see in full comparison
Full comparison: every changed paragraph (20)
If we cannot adjust our manufacturing capacity, supply chain management or the purchases required for our manufacturing activities to reflect changes in market conditions, customer demand and supply chain or transportation disruptions, our profitability may suffer. In addition, our reliance upon sole or limited sources of supply for certain materials, components and services has in the pastpast, and could in the futurefuture, cause production interruptions, delays and inefficiencies.
We purchase materials, components and equipment from third parties for use in our manufacturing operations. Our income has in the past and could in the future be adversely impacted if we are unable to adjust our manufacturing capacity, purchases required for our manufacturing activities and supply chain management to reflect any supply chain disruptions or changes in customer demand and market fluctuations, including those caused by a pandemic, natural disaster or other catastrophe, increases in demand outpacing supply chain capabilities, labor shortages, changes in governmental regulations and policies, seasonality or cyclicality. During a market upturn or supply chain disruption, suppliers may extend lead times, limit supplies or increase prices. If we cannot purchase sufficient materials at competitive prices and quality and on a timely enough basis to meet demand, we may not be able to satisfy market demand, product shipments may be delayed, our costs may increase or we may breach our contractual commitments and incur liabilities. Conversely, in order to secure supplies for the production of products, we sometimes enter into noncancelable purchase commitments with vendors, which could impact our ability to adjust our inventory or reduce our costs to reflect declining market demands. If demand for our products is less than we expect, we may experience additional excess and obsolete inventories and be forced to incur additional charges and our profitability may suffer.
In addition, some of our businesses purchase certain requirements from sole or limited source suppliers for reasons such as quality assurance, contractual commitment, cost effectiveness, availability or uniqueness of design. If these or other suppliers encounter financial, operating or other difficulties or if our relationship with them changes, we might not be able to quickly establish or qualify replacement sources of supply. The supply chains for our businesses have in the pastpast, and could in the futurefuture, be disrupted by supplier capacity constraints, cybersecurity issues, bankruptcy or exiting of the business for other reasons, decreased availability of key raw materials or commodities and external events such as natural disasters, pandemic health issues, war, terrorist actions, governmental actions and legislative or regulatory changes. Any of these factors could result in production interruptions, delays, extended lead times and inefficiencies.
Because we cannot always immediately adapt our production capacity and related cost structures to changing market conditions, our manufacturing capacity may at times exceed or fall short of our production requirements. Any or all of these problems have in the pastpast, and could in the futurefuture, result in the loss of customers, provide an opportunity for competing products to gain market acceptance and otherwise adversely affect our profitability.
Our customer acquisition and renewal rates have in the pastpast, and may in the futurefuture, decline or fluctuate as a result of a number of factors, including overall economic conditions, the health of their businesses, competitive offerings, and customer dissatisfaction with our services. If customers do not renew their contracts for our products, our maintenance and subscription revenue will decline, and our financial results will suffer.
In recent years, we have implemented restructuring activities across our businesses to adjust our cost structure, and we may engage in similar restructuring activities in the future. These restructuring activities and our regular ongoing cost reduction activities (including in connection with the integration of acquired businesses) reduce our available talent, assets and other resources and have in the pastpast, and could in the futurefuture, slow improvements in our products and services, adversely affect our ability to respond to customers and limit our ability to increase production quickly if demand for our products increases. In addition, delays in implementing planned restructuring activities or other productivity improvements, unexpected costs or failure to meet targeted improvements may diminish the operational or financial benefits we realize from such actions. Any of the circumstances described above could adversely impact our business and financial statements.
We continually assess the strategic fit of our existing businesses and may divest, spin-off, split-off or otherwise dispose of businesses that are deemed not to fit with our strategic plan or are not achieving the desired return on investment. For example, during the year ended December 31,January 2024, we divested our Coats business in an all-cash transaction. These transactions pose risks and challenges that could negatively impact our business and financial statements. For example, when we decide to sell or otherwise dispose of a business or assets, we may be unable to do so on satisfactory terms within our anticipated timeframe or at all, and even after reaching a definitive agreement to sell or dispose a business the sale is typically subject to satisfaction of pre-closing conditions which may not become satisfied. In addition, divestitures or other dispositions may dilute our earnings per share, have other adverse tax, financial and accounting impacts and distract management, and disputes may arise with buyers. In addition, we have retained responsibility for and/or have agreed to indemnify buyers against some known and unknown contingent liabilities related to certain businesses or assets we or our predecessors have sold or disposed. The resolution of these contingencies has not had a material effect on our financial statements, but we cannot be certain that this favorable pattern will continue.
In 2025, the U.S. government announced the imposition of various tariffs including additional country-specific tariffs on all imports into the U.S. In response, certain countries announced reciprocal tariffs on imports from the U.S. While the U.S. has reached trade agreements with certain countries, tariffs on imports from other countries and other reciprocal tariffs either remain in effect or have been temporarily paused, and as such, significant uncertainty around future tariff policies remains. The U.S. may continue to alter its approach to international trade, which may impact existing bilateral or multi-lateral trade agreements and treaties with foreign countries. The U.S. has imposed tariffs on certain foreign goods and may increase tariffs or impose new ones, and certain foreign governments have retaliated and may continue to do so. We derive a significant portion of our revenues from international sales, which makes us especially vulnerable to increased tariffs. Changes in U.S. trade policy have created ongoing turmoil in international trade relations, and it is unclear what future actions governments will or will not take with respect to tariffs or other international trade agreements and policies. DuringWe hishave campaign,actively Presidentmanaged Trumpour expressedtariff variousexposure intentionsand continue to imposediversify our supply chain to reduce our exposure to tariffs on imports.imports It is unclear what actioninto the newUnited presidentialStates, administrationparticularly orfrom Congresshigh-tariff will take with respect to these proposals.countries. Ongoing or new trade wars or other governmental action related to tariffs or international trade agreements or policies or our ability to effectively mitigate the financial impact of tariffs could reduce demand for our products and services, increase our costs, reduce our profitability, adversely impact our supply chain or otherwise have a material adverse effect on our business and resultsfinancial of operations.statements.
Certain of our businesses sell a significant amount of their products to key distributors and other channel partners that have valuable relationships with customers and end-users. Some of these distributors and other partners also sell our competitors’ products or compete with us directly, and if they favor competing products for any reason, they may fail to market our products effectively. Adverse changes in our relationships with these distributors and other partners, or adverse developments in their financial condition, performance or purchasing patterns, could adversely affect our financial statements. The levels of inventory maintained by our distributors and other channel partners, and changes in those levels, can also significantly impact our results of operations in any given period. In addition, the consolidation of distributors and customers in certain of our served industries could adversely impactaffect our profitability.financial statements.
As further discussed in the section entitled “Business—Materials,” our manufacturing and other operations employ a wide variety of components, raw materials and other commodities. Prices for and availability of these components, raw materials and other commodities have fluctuated significantly in the past. Any sustained interruption in the supply of these items has in the pastpast, and could in the futurefuture, adversely affect our business. In addition, due to the highly competitive nature of the industries that we serve, the cost-containment efforts of our customers and the terms of certain contracts we are party to, if commodity prices rise, we may be unable to pass along cost increases through higher prices to our customers. If we are unable to fully recover higher commodity costs through price increases or offset these increases through cost reductions, or if there is a time delay between the increase in costs and our ability to recover or offset these costs, we could experience lower margins and profitability and our financial statements could be adversely affected.
Third parties have in the past, and may in the future, claim that we are infringing or misappropriating their intellectual property rights and we could suffer significant litigation expenses, losses or licensing expenses or be prevented from selling products or services.
Work stoppages, union and works council campaigns and other labor disputes could adversely impact our productivity and resultsfinancial of operations.statements.
In 2024,2025, approximately 32%31% of our sales were derived from customers outside the U.S. In addition, many of our manufacturing operations, suppliers and employees are located outside the U.S. Since our growth strategy depends in part on our ability to further penetrate markets outside the U.S. and increase the localization of our products and services, we expect to continue to increase our sales and presence outside the U.S., particularly in high-growth markets.U.S. Our global business (and particularly our business in high-growth markets) is subject to risks that are customarily encountered in non-U.S. operations, including:
•trade protection measures,measures (including tariffs), embargoes and import or export restrictions and requirements;
We rely on information technology systems, some of which are managed by third parties or on an independent basis by our operating companies, to process, transmit and store electronic information, including personal data, and to manage or support a variety of critical business processes and activities. These systems, products and services may be damaged, disrupted or shut down due to cybersecurity incidents and data breaches, including attacks by computer hackers, nation states, cyber-criminals, computer viruses, employee error or malfeasance, denial-of-service attacks, ransomware attacks, business email compromises, computer malware, malicious codes, viruses, breakdown, wrongful intrusions, social engineering (including phishing attacks), power outages, hardware failures, telecommunication or utility failures, catastrophes or other unforeseen events, and in any such circumstances our system redundancy and other disaster recovery planning may be ineffective or inadequate. In addition, cybersecurity incidents and data breaches (including cybersecurity incidents or data breaches that impact the systems of our customers, suppliers or other business partners) could result in the misappropriation, destruction or unauthorized disclosure of confidential information or personal data belonging to us or to our employees, partners, customers or suppliers.
Like many multinational corporations, our information technology systems and infrastructure, and the information technology systems and infrastructure of our third party vendors, have been subject to threats and cybersecurity incidents. While we have implemented security measures, the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and may be difficult to detect, and we may be unable to anticipate these techniques or implement adequate preventive measures. If we experienced an actual or perceived cybersecurity incident or data breach, we may suffer adverse regulatory consequences, business consequences and be subject to litigation. Our contracts may not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability will be sufficient to protect us from liabilities, damages, or claims related to our privacy and data security obligations. Further, although we maintain cyber liability insurance, this insurance may not provide adequate coverage against potential liabilities related to any experienced cybersecurity incident or data breach. If we experience a cybersecurity incident or data breach, unauthorized persons may be able to obtain access to or acquire personal or other confidential data. Depending on the nature of the information compromised, we may have obligations to notify consumers and/or employees as well as regulatory agencies about the incident, and we may need to provide some form of remedy, such as credit monitoring services. The attacks, breaches or other disruptions or damage described above could interrupt our operations, delay production and shipments, result in theft of our and our customers’ intellectual property and trade secrets, damage customer and business partner relationships and our reputation or result in defective products or services, legal claims and proceedings, liability and penalties under privacy laws and increased costs for security and remediation, each of which could adversely affect our business and financial statements.
We are subject to governmental regulation and other legal obligations, particularly related to privacy, data protection and information security, and our actual or perceived failure to comply with such obligations could harm our business. Compliance with such laws could also impair our efforts to maintain and expand our customer base and business lines, and thereby decrease our revenue.
We rely on information technology systems, some of which are managed by third parties and some of which are managed on a decentralized, independent basis by our operating companies, to process, transmit and store electronic information (including sensitive data such as confidential business information and personally identifiable data relating to employees, customers, customer’s employees and end users and other business partners), and to manage or support a variety of critical business processes and activities (such as receiving and fulfilling orders, billing, collecting and making payments, shipping products, providing services and support to customers and fulfilling contractual obligations). These systems, products and services (including those we acquire through business acquisitions) may be damaged, disrupted or shut down due to attacks by computer hackers, nation states, cyber-criminals, computer viruses, employee error or malfeasance, power outages, hardware failures, telecommunication or utility failures, catastrophes or other unforeseen events, and in any such circumstances our system redundancy and other disaster recovery planning may be ineffective or inadequate. In addition, security breaches of our systems (or the systems of our customers, suppliers or other business partners) could result in the misappropriation, destruction or unauthorized disclosure of confidential information or personal data belonging to us or to our employees, partners, customers or suppliers. Like many multinational corporations, our information technology systems have been subject to computer viruses, malicious codes, unauthorized access and other cyber-attacks and we expect to be subject to similar incidents in the future as such attacks become more sophisticated and frequent. We have programs in place that are intended to detect, contain, and respond to data security incidents and that provide at least annual employee awareness training regarding phishing, malware, and other cyber risks. However, because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and may be difficult to detect, we may be unable to anticipate these techniques or implement adequate preventive measures. If our security measures are breached or fail, unauthorized persons may be able to obtain access to or acquire personal or other confidential data. Depending on the nature of the information compromised, we may also have obligations to notify consumers and/or employees as well as regulatory agencies about the incident, and we may need to provide some form of remedy, such as a subscription to a credit monitoring service, for the individuals affected by the incident. While to date none of these incidents have been material to our operations, any of the attacks, breaches or other disruptions or damage described above could interrupt our operations, delay production and shipments, result in theft of our and our customers’ intellectual property and trade secrets, damage customer and business partner relationships and our reputation or result in defective products or services, legal claims and proceedings, liability and penalties under privacy laws and increased costs for security and remediation, each of which could adversely affect our business and financial statements.
If we are unable to maintain reliable information technology systems and appropriate controls with respect to global data privacy and security requirements and prevent data breaches, we may suffer adverse regulatory consequences, business consequences and litigation. As a global organization, we are subject to data privacy and security laws, regulations, and customer-imposed controls in numerous jurisdictions as a result of having access to and processing confidential, personal, special category and/or sensitive data in the course of our business. FailureFor example, failure to comply with the requirements of EU General Data Protection Regulation that became effective in May 2018 (“GDPR”) and the applicable national data protection laws of the EU member states may result in fines of up to €20 million or up to 4% of the total worldwide annual turnover of the preceding financial year, whichever is higher, and other administrative penalties. SeveralWe may be required to modify our policies, procedures, and data processing measures in order to address requirements under these or other privacy, data protection, or cyber security regimes, and may face claims, litigation, investigations, or other proceedings regarding them and may incur related liabilities, expenses, costs, and operational losses. In addition, certain other countries such as China and Russia have passed, and other countries are considering passing, laws that require personal data relating to their citizens to be maintained on local servers and impose additional data transfer restrictions.restrictions Thewith respect to the personal data of their citizens. In the U.S. numerous states have passed comprehensive privacy and data security laws, such as the California Consumer Privacy Act, which cameimpose intosimilar effect(but innot Januaryidentical) 2020,obligations hason covered businesses, as those created under the GDPR. Furthermore, the U.S. federal government and some ofU.S. thestates samehave featurespassed as the GDPR,privacy and hascybersecurity promptedlaws severalgoverning otherspecific statessectors, totechnologies, followor with similar laws. Government enforcement actions can be costly and interrupt the regular operationcategories of ourpersonal business, and data breaches or violations of data privacy laws can result in fines, reputational damage and civil lawsuits, any of which may adversely affect our business, reputation and financial statements. In addition, compliance with the varying data privacy regulations across the United States and around the world, including the EU Data Act and artificial intelligence regulations in the United States and Europe, has required significant expenditures and may require additional expenditures, and may require further changes in our products or business models that increase competition or reduce revenue.data.
Through executive and legislative action, the U.S. federal government has also taken steps to restrict data transactions involving persons affiliated with countries of concern such as China and Russia. For example, Executive Order 14117 on "Preventing Access to Americans' Bulk Sensitive Personal Data and U.S. Government-Related Data by Countries of Concern" as implemented by Department of Justice regulations issued in December 2024, prohibits data brokerage transactions involving certain sensitive personal data categories to countries of concern. The regulations also restrict certain investment agreements, employment agreements and vendor agreements involving such data and countries of concern, absent specified cybersecurity controls. Actual or alleged violations of these regulations may be punishable by criminal and/or civil sanctions. The evolving complexity of privacy and data security legislation in the U.S. may complicate our compliance efforts and further increase our risk of regulatory enforcement, penalties and litigation. Government enforcement actions can be costly and interrupt the regular operation of our business, and data breaches or violations of data privacy laws can result in fines, reputational damage and civil lawsuits, any of which may adversely affect our business, reputation and financial statements. In addition, compliance with the varying data privacy regulations across the United States and around the world and artificial intelligence (“AI”) regulations in the United States and Europe, has required significant expenditures and may require additional expenditures, and may require further changes in our products or business models that increase competition or reduce revenue.
Management's Discussion & Analysis (MD&A)
New heading “One Big Beautiful Bill”
Removed heading “Business Combinations”
Largest changes
“During April 2025, the United States announced a new baseline tariff of 10%, plus an additional country-specific tariff, on all imports into the United States. In response, certain countries announced reciprocal tariffs on imports from the United States. While the United States has reached trade agreements with certain countries, tariffs on imports from other countries and other reciprocal tariffs either remain in effect or have been temporarily paused, and as such, significant uncertainty around future tariff policies remains. …”see in full comparison
Corporate & other unallocated costssee in full comparisondecreasedincreased$16.5$4.2 million, or8.0%,2.2%, during the year ended December 31,2024,2025, as compared to the prior year, due toana$11.7$12.4 million increase in other unallocated expense from $7.0 million of asset impairments recognized during the year ended December 31, 2025, partially offset by a $5.6 million decrease incostsamortizationassociatedofwithacquisition-related intangible assets from certain intangible assets becoming fully amortized between periods and a $3.1 million decrease in restructuringactivities.and other related charges. Corporate & other unallocated costs as a percentage of total sales decreased3010 basis points during the year ended December 31,2024,2025, as compared to the prior year.
see in full comparisonRSG&DA expenses increased$14.2$9.7 million, or8.7%,1.5%, during the year ended December 31,2024,2025, as compared to the prior year and as a percentage of sales,increaseddecreased7030 basis points during the same period, due tocontinued$7.0growthmillioninvestmentsof asset impairments recognized during the year ended December 31, 2025 and a $4.8 million increase inourtransactionMobilityandTechnologiesdeal-relatedsegment.costs.
“We record inventory at the lower of cost or net realizable value, which is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. We estimate the net realizable value of inventory based on assumptions of future demand and related pricing. Estimating the net realizable value of inventory is inherently uncertain because levels of demand, technological advances and pricing competition in many of our markets can fluctuate significantly from period to period due to circumstances beyond our control. …”see in full comparison
Full comparison: every changed paragraph (60)
This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is designed to provide a reader of our financial statements with a narrative from the perspective of management and is intended to help the reader understand theour results andof operations and financial condition of the Company.condition. Our MD&A should be read in conjunction with our Consolidated Financial Statements and the accompanying Notes to the Consolidated Financial Statements included elsewhere in this Annual Report.
Vontier is a global industrial technology company uniting productivity, automation and multi-energy technologies to meet the needs of a rapidly evolving, more connected mobility ecosystem. Leveraging leading market positions, decades of domain expertise and unparalleled portfolio breadth, Vontier enablespowers the way the world moves, delivering smart, safe and sustainable solutions to our customers and the planet. Vontier has a culture of continuous improvement and innovation built upon the foundation of the Vontier Business System and embraced by colleagues worldwide. Refer to “Item 1. Business – General” included in this Annual Report for a discussion of our strategies for delivering long-term shareholder value.
We operate through three reportable segments which align to our three operating segments: (i) Mobility Technologies, which provides digitally enabled equipment and solutions to support efficient operations across the mobility ecosystem, including point-of-sale and payment systems, workflow automation solutions, telematics, data analytics, software platform for electric vehicle charging networks, and integrated solutions for alternative fuel dispensing; (ii) Repair Solutions, which manufactures and distributes aftermarket vehicle repair tools, toolboxes, automotive diagnostic equipment and software through a network of mobile franchisees; and (iii) Environmental & Fueling Solutions, which provides environmental and fueling hardware and software, and aftermarket solutions for global fueling infrastructure. Our Global Traffic Technologies and Coats businesses,business, which werewas divested during April 2023 and January 2024, respectively, areis presented in Other for periods prior to the divestitures.divestiture.
We expect core sales to increase on a year-over-year basis in 2025 due to increasing demand across our portfolio.2026. Our outlook is subject to various assumptions and risks, including but not limited to the impact of changes in United States and international trade policies, other changes in governmental policies or regulations, the resilience and durability of the economies of the United States and other critical regions, the condition of global supply chains, including the availability of electronic components, the impact of international conflicts, including Russia-Ukraine and conflicts in the Middle East,East and market conditions in key end product segments, no significant changes in governmental policies or regulations and the impact of energy disruption in Europe.segments. Additional uncertainties are identified in “Information Relating to Forward-Looking Statements” and “Risk Factors” in this Form 10-K.
We continue to monitor the macroeconomic and geopolitical conditions which may impact our business, including monetary and fiscal policies, changes in the banking system, international trade and relations between the U.S., China and other nations,system and investment and taxation policy initiatives being considered in the United States and by the Organization for Economic Co-operation and Development (the “OECD”).Development. We also continue to monitor the Russia-Ukraine conflict andconflict, conflicts in the Middle East and political and economic conditions in Latin America and the impact on our business and operations. As of the filing date of this report, we do not believe they are material.
During April 2025, the United States announced a new baseline tariff of 10%, plus an additional country-specific tariff, on all imports into the United States. In response, certain countries announced reciprocal tariffs on imports from the United States. While the United States has reached trade agreements with certain countries, tariffs on imports from other countries and other reciprocal tariffs either remain in effect or have been temporarily paused, and as such, significant uncertainty around future tariff policies remains. We import inventory into the United States from a number of countries, and as such, if tariffs remain in effect for a prolonged period of time, we expect our cost to import inventory into the United States to increase. We have actively managed our tariff exposure and continue to diversify our supply chain to reduce our exposure to tariffs on imports into the United States, particularly from high-tariff countries. In addition, certain of our products manufactured in the United States are exported internationally and are subject to reciprocal tariffs. If we are unable to effectively mitigate the financial impact of tariffs, or if tariffs lead to other impacts, including but not limited to a decrease in demand for our products, it would have a material impact on our business, financial condition and results of operations.
(a) Includes $74.9 million and $30.0 million of intersegment sales for the years ended December 31, 2025 and 2024, respectively, that are eliminated in consolidation.
Total sales within our Mobility Technologies segment increased 1.1%10.8% during the year ended December 31, 2024,2025, as compared to the prior year, driven by a 2.1%10.7% increase in core sales, partially offset by a 1.0% decrease due to the impact of currency translation.sales. The increase in core sales was due to solid demand for our convenience storeretail payment and enterprise productivity solutions, partially offset by lower demand for our cashcar wash solutions.
Total sales and core sales within our Repair Solutions segment decreased 2.8%6.9% during the year ended December 31, 2024,2025, as compared to the prior year, driven by a 6.8% decrease in core sales. The decrease in core sales was due to a decrease in volume in the hardline, tool storagestorage, hardline and specialtypower tools product categories driven by macroeconomic impacts on service technicians’ discretionary spending, partially offset by an increase in the power tools product category.spending.
Total sales within our Environmental & Fueling Solutions segment increased 2.7%5.7% during the year ended December 31, 2024,2025, as compared to the prior year, driven by a 5.9%6.4% increase in core sales, partially offset by a 2.3%1.0% decrease due to the impact of recently exited businesses and product lines and a 0.9%0.3% decreaseincrease due to the impact of currency translation. The increase in core sales was drivendue byto highergrowth demandin forenvironmental aftermarketsolutions products,and dispenser systems and environmental solutions.systems.
Cost of sales, excluding amortization of acquisition-related intangible assets, decreasedincreased $109.1$69.9 million, or 6.6%,4.5%, during the year ended December 31, 2024,2025, as compared to the prior year and as a percentage of sales, decreasedincreased 16060 basis points during the same period, mainly due to acore $115.0sales milliongrowth decreaseas fromdiscussed the impact of recently divested and exited businesses and product lines.above.
SG&A expenses decreased $13.4 million, or 2.1%, during the year ended December 31, 2024, as compared to the prior year and as a percentage of sales, increased 30 basis points during the same period, due to a $18.6 million decrease from the impact of recently divested and exited businesses and product lines, partially offset by a $10.1 million increase from the impact of reserve-related adjustments to the Repair Solutions receivables portfolio.
RSG&DA expenses increased $14.2$9.7 million, or 8.7%,1.5%, during the year ended December 31, 2024,2025, as compared to the prior year and as a percentage of sales, increaseddecreased 7030 basis points during the same period, due to continued$7.0 growthmillion investmentsof asset impairments recognized during the year ended December 31, 2025 and a $4.8 million increase in ourtransaction Mobilityand Technologiesdeal-related segment.costs.
AmortizationR&D of acquisition-related intangible assetsexpenses decreased $1.5$2.0 million, or 1.8%,1.1%, during the year ended December 31, 2024,2025, as compared to the prior year and as a percentage of sales, increaseddecreased 1030 basis points during the same period.period, due to savings from focus and prioritization process initiatives and adoption of AI technologies.
Amortization of acquisition-related intangible assets decreased $5.6 million, or 7.0%, during the year ended December 31, 2025, due to certain intangible assets becoming fully amortized between periods. Amortization of acquisition-related intangible assets as a percentage of sales decreased 30 basis points during the same period.
Operating profit decreasedincreased $6.4$24.6 million, or 1.2%,4.6%, during the year ended December 31, 2024,2025, as compared to the prior year, and operating profit margin increased 4030 basis points during the same period.
Segment operating profit for our Mobility Technologies segment decreasedincreased $7.3$18.9 million, or 3.7%,9.8%, during the year ended December 31, 2024,2025, as compared to the prior year, and segment operating profit margin decreased 9020 basis points during the same period. The decrease in segment operating profit margin was due to a 180 basis points decrease from an increase in R&D from continued growth investments, offset by a 150 basis points increase from SG&A savings. The remaining decrease was due to the impact of product mix from lower demand for our cash wash solutions.mix.
Segment operating profit for our Repair Solutions segment decreased $29.3$17.6 million, or 17.2%,12.5%, during the year ended December 31, 2024,2025, as compared to the prior year, and segment operating profit margin decreased 390130 basis points during the same period. The decrease in segment operating profit margin was due to a 130 basis points decrease fromin reserve-related adjustments to the receivables portfolio. The remaining decrease was due to the impact of lower volume and product mix,volume, as servicefurther techniciansdiscussed have purchased lower price point products in response to the macroeconomic impacts on service technicians’ discretionary spending.above.
Segment operating profit for our Environmental & Fueling Solutions segment increased $25.4$27.1 million, or 6.9%, during the year ended December 31, 2024,2025, as compared to the prior year, and segment operating profit margin increased 11040 basis points during the same period. The increase in segment operating profit margin was due to a 170 basis pointsan increase fromin thevolume, netas impactfurther ofdiscussed our productivity initiatives that have reduced manufacturing, procurementabove, and other costsfocus and unfavorableprioritization productprocess mix as compared to the prior year, offset by increased costs from inflationary pressures.initiatives.
Corporate & other unallocated costs decreasedincreased $16.5$4.2 million, or 8.0%,2.2%, during the year ended December 31, 2024,2025, as compared to the prior year, due to ana $11.7$12.4 million increase in other unallocated expense from $7.0 million of asset impairments recognized during the year ended December 31, 2025, partially offset by a $5.6 million decrease in costsamortization associatedof withacquisition-related intangible assets from certain intangible assets becoming fully amortized between periods and a $3.1 million decrease in restructuring activities.and other related charges. Corporate & other unallocated costs as a percentage of total sales decreased 3010 basis points during the year ended December 31, 2024,2025, as compared to the prior year.
Interest expense, net was $74.7$59.8 million during the year ended December 31, 20242025 as compared to $93.7$74.7 million during the prior year, a decrease of $19.0$14.9 million, driven by a decrease in our outstanding debt obligations, a decrease in variable interest rates on certain of our outstanding debt obligations and an increase in interest income between periods.
We are routinely examined by various domestic and international taxing authorities. The amount of income taxes we pay is subject to audit by federal, state and foreign tax authorities, which may result in proposed assessments. TheWe Company isare subject to examination in the United States, various states and foreign jurisdictions. We review our global tax positions on a quarterly basis. Based on these reviews, the results of discussions and resolutions of matters with certain tax authorities, tax rulings and court decisions and the expiration of statutes of limitationslimitations, reserves for contingent tax liabilities are accrued or adjusted as necessary. The IRS concludedstarted an examination proceduresof on the Company’s initialour U.S. federal income tax return for the2023. post-SeparationAt periodthis ofpoint, 2020. Nono material issues or adjustments werehave identified,been asidentified. suchWe theremain Companysubject has released all uncertain tax positions associated with theto U.S. federal income tax returnaudit for the post-Separation period in 2020. The Company remains subject to U.S. Federal income tax audityears for2022 2021and through2024. 2023.We The Company isare subject to tax audits for itsour combined/consolidated state income tax returns for post-Separationthe 2020tax throughyears 2023.2021 Theto Company2024. remainsWe remain subject to tax audits for itsour separate company tax returns in various U.S. states for the tax years 20202021 to 2023.2024. Our operations in certain foreign jurisdictions remain subject to routine examinations for the tax years 20172018 to 2023.2024.
The OECD agreed among over 130 countries on the Pillar Two proposals which establish a global minimum effective tax rate of 15% for multinational groups with annual global revenue exceeding €750 million. Many countries continue to announce changes in their tax laws and regulations based on the Pillar Two proposals, including the European Union (“EU”) Member States which unanimously adopted the EU Pillar Two Directive, providing for a minimum effective tax rate of 15%. As of December 31, 2024, various EU Member States have enacted Pillar Two legislation. The Company performed an analysis of the impact of the legislation, and we expect no significant impact to our financial statements.
Our effective tax rate for the years ended December 31, 20242025 and 20232024 was 15.2%20.1% and 22.0%,15.2%, respectively. The decreaseincrease in our effective tax rate during the year ended December 31, 2024,2025, as compared to the prior year, was primarily due to favorable impacts related toof business reorganizations and divestitures andduring athe decreaseyear toended uncertainDecember tax31, positions.2024.
Our effective tax rate for the year ended December 31, 2025 differs from the U.S. federal statutory rate of 21.0% primarily due to the effect of state taxes, non-U.S. income taxed at different rates than the U.S. federal statutory rate, foreign derived intangible income, and tax credits.
One Big Beautiful Bill
On July 4, 2025, the One Big Beautiful Bill (“OBBB”) was signed into law. The OBBB includes several changes to corporate taxation, notably modifications to capitalization of research and development expenses and accelerated depreciation of fixed assets. We have reflected the impact of the enacted changes in our financial statements for the year ended December 31, 2025. The OBBB has reduced cash tax payments by $30.0 million during the year ended December 31, 2025, and will reduce cash tax payments by $30.0 million during the year ended December 31, 2026, due to the accelerated deduction for previously capitalized research and development expense. The other provisions within the OBBB have not and are not expected to have a material impact.
Pillar Two
On January 5, 2026, the OECD released additional Administrative Guidance under Pillar Two, including the new Side‑by‑Side safe harbour framework. These updates clarify how certain jurisdictions, including the United States, may apply safe‑harbour relief once local legislation is enacted. We evaluated the impact of these developments and, consistent with our prior assessment of Pillar Two, we do not expect a significant impact on our financial statements.
Our effective tax rate for the year ended December 31, 2023 differs from the U.S. federal statutory rate of 21.0% primarily due to the effect of state taxes, foreign derived intangible income and tax credits. Additionally, there were favorable impacts related to non-taxable income and business reorganizations and divestitures which were offset by an increase to uncertain tax positions.
Comprehensive income decreasedincreased by $2.4$108.6 million during the year ended December 31, 2024,2025, as compared to the prior year. Comprehensive income for the year ended December 31, 2025 includes a favorable foreign currency translation adjustment of $75.8 million. Comprehensive income for the year ended December 31, 2024 includes an unfavorable foreign currency translation adjustment of $49.6 million and a gain on the sale of the Company’sour Coats business of $37.2 million. Comprehensive income for the year ended December 31, 2023 includes a gain on the sale of the Company’s Global Traffic Technologies business of $34.4 million.
Refer to Note 20. Divestitures to the Consolidated Financial Statements for additional information on the divestituresdivestiture of our Coats and Global Traffic Technologies businesses.
Currency exchange rates negativelydid impactednot have a material impact on reported sales for the year ended December 31, 2024 by 0.8%2025 as compared to the prior year, as the U.S. dollar was, on average, stronger against most major currencies during the year ended December 31, 2024 as compared to exchange rate levels during the prior year. If the exchange rates in effect as of December 31, 20242025 were to prevail throughout the year ended December 31, 2025,2026, currency exchange rates would negativelypositively impact estimated sales for the year ended December 31, 20252026 by approximately 1.2%0.5% compared to the year ended December 31, 2024.2025.
•Voluntarily repaid $150.0$50.0 million of the Three-Year Term Loans Due 2024 and the Three-Year Term Loans Due 2025;
•Executed an amendment to extend the maturity date of the Three-Year Term Loans Due 2025 to February 2028, remove the credit spread adjustment and reduce the ratings-based margin by 12.5 basis points;
•Executed an amendment to the Revolving Credit Facility, which extended the maturity date to February 2030 and removed the SOFR adjustment;
•Repurchased 3.0 million shares for $100.0 million through an accelerated share repurchase (“ASR”) agreement;
•Repurchased 0.6 million shares for $25.0 million through a share repurchase agreement; and
Cash flows from operating activities were $427.5$511.0 million during the year ended December 31, 2024,2025, aan decreaseincrease of $27.5$83.5 million as compared to the prior year. The year-over-year change in operating cash flows was primarily attributable to the following factors:
•The aggregate of accounts receivable and long-term financing receivables usedgenerated $56.0$10.4 million of operating cash flows during the year ended December 31, 20242025 as compared to using $6.9$56.0 million in the prior year. The amount of cash flow generated from or used by accounts receivable depends upon how effectively we manage the cash conversion cycle and can be significantly impacted by the timing of collections in a period. Additionally, when we originate certain financing receivables, we assume the financing receivable by decreasing the franchisee’s trade accounts receivable. As a result, originations of certain financing receivables are non-cash transactions.
•The aggregate of other operating assets and liabilities used $30.7$66.9 million of cash during the year ended December 31, 20242025 compared to generatingusing $6.8$30.7 million in the prior year. This difference is due primarily to working capital needs and the timing of accruals and payments and tax-related amounts.
Net cash used in investing activities was $20.7 million during the year ended December 31, 2025, driven by payments for additions to property, plant and equipment and cash paid for the acquisition of Sergeant Sudz, partially offset by proceeds from the sale of businesses. Net cash used in investing activities was $11.4 million during the year ended December 31, 2024, driven by payments for additions to property, plant and equipment, partially offset by proceeds from the sale of our Coats business.
Net cash used in investing activities was $11.4 million during the year ended December 31, 2024, driven by payments for additions to property, plant and equipment, partially offset by proceeds from the sale of our Coats business. Net cash provided by investing activities was $69.3 million during the year ended December 31, 2023, driven by proceeds from the sale of our Global Traffic Technologies business and equity securities, partially offset by payments for additions to property, plant and equipment.
Refer to Note 3. Acquisitions to the Consolidated Financial Statements for additional information on our acquisition of Sergeant Sudz and Note 20. Divestitures to the Consolidated Financial Statements for additional information on our dispositions.
Net cash used in financing activities was $371.3 million during the year ended December 31, 2025, driven by repurchases of our common stock of $300.2 million and the voluntary repayment of $50.0 million of the Three-Year Term Loans due 2025. Net cash used in financing activities was $392.3 million during the year ended December 31, 2024, driven by repurchases of our common stock of $224.7 million and the voluntary repayment of $150.0 million of the Three-Year Term Loans due 2024 and Three-Year Term Loans due 2025.
Net cash used in financing activities was $392.3 million during the year ended December 31, 2024, driven by the voluntary repayment of $150.0 million of the Three-Year Term Loans due 2024 and Three-Year Term Loans due 2025 and repurchases of the Company’s common stock of $224.7 million. Net cash used in financing activities was $387.8 million during the year ended December 31, 2023, driven primarily by the voluntary repayment of $300.0 million of the Three-Year Term Loans due 2024 and repurchases of the Company’s common stock of $74.7 million.
Refer to Note 19. Capital Stock and Earnings per Share to the Consolidated Financial Statements for a description of the Company’sour share repurchase program.
As of December 31, 2024,2025, the Companywe had guarantees consisting primarily of outstanding standby letters of credit, bank guarantees, and performance and bid bonds of $81.4$77.1 million. These guarantees have been provided in connection with certain arrangements with vendors, customers, financing counterparties, and governmental entities to secure the Company’sour obligations and/or performance requirements related to specific transactions.
Inventories
We record inventory at the lower of cost or net realizable value, which is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. We estimate the net realizable value of inventory based on assumptions of future demand and related pricing. Estimating the net realizable value of inventory is inherently uncertain because levels of demand, technological advances and pricing competition in many of our markets can fluctuate significantly from period to period due to circumstances beyond our control. If actual market conditions are less favorable than those projected, we could be required to reduce the value of our inventory, which would adversely impact our financial statements.
When evaluating for impairment, we may first perform a qualitative assessment to determine whether it is more likely than not that a reporting unit or indefinite-lived intangible asset is impaired. If we do not perform a qualitative assessment, or if we determine that it is not more likely than not that the fair value of the reporting unit or indefinite-lived intangible asset exceeds its carrying amount, we will calculate the estimated fair value of the reporting unit or indefinite-lived intangible asset. Our decision to perform a qualitative impairment assessment for an individual reporting unit in a given year is influenced by a number of factors, inclusive of the size of the reporting unit's goodwill, the significance of the excess of the reporting unit's estimated fair value over carrying value at the last quantitative assessment date,date and the amount of time in between quantitative fair value assessments and the date of acquisition.assessments.
We review identified intangible assets for impairment whenever events or changes in circumstances indicate that the related carrying amounts may not be recoverable. Determining whether an impairment loss occurred requires a comparison of the carrying amount to the sum of undiscounted cash flows expected to be generated by the asset. We also test intangible assets with indefinite lives at least annually for impairment. In these analysesanalyses, management considers general macroeconomic conditions, industry and market conditions, cost factors, financial performance and other entity and asset specific events and may require management to make judgments and estimates about future revenues, expenses, market conditions and discount rates related to these assets.
If actual results are not consistent with management’s estimates and assumptions, goodwill and other intangible assets may be overstated, and a charge would need to be taken against net earnings which would adversely affect our financial statements. No goodwill or other intangible assets impairment charges were recorded during the years ended December 31, 2024,2025, 20232024 and 2022.2023. We recognized an immaterial other intangible assets impairment charge during the year ended December 31, 2025. There were no other intangible assets impairment charges during the years ended December 31, 2024 and 2023.
We derive revenues from the sale of products and services. Revenue is recognized when control over the promised products or services is transferred to the customer in an amount that reflects the consideration that we expect to receive in exchange for those products or services. In determining if control has transferred, we consider whether certain indicators of the transfer of control are present, such as the transfer of title, present right to payment, significant risks and rewards of ownership and customer acceptance when acceptance is not a formality.
We derive revenues from the sale of products and services. For revenue related to a product or service toTo qualify for revenue recognition, we must have an enforceable contract with a customer that defines the goods or services to be transferred and the payment terms related to those goods or services. Further,We assess whether collection of substantially all consideration for the goods or services transferred must beis probable based on the customer’s intent and ability to pay the promised consideration. WeThis applyassessment requires judgment in determining the customer’s ability and intention to pay, which is based on a combination ofconsiders financial and qualitative factors, including the customers’ financial condition, collateral, debt-servicing ability, past payment experience and credit bureau information.
CustomerVariable allowancesconsideration, and rebates, consisting primarily ofincluding volume discountsdiscounts, rebates and other short-term incentive programs, areis consideredestimated and included in determining the transaction price foronly to the contract.extent it is probable that a significant reversal of cumulative revenue will not occur. Significant judgment is exercised in determining product returns, customer allowances and rebates, which are estimated based on historical experience and known trends.
Certain customer arrangements, including our SaaS product offerings, include multiple performance obligations, typically hardware, installation, training, consulting, services and/or post-contract customer support (“PCS”). TheWe Company allocatesallocate the contract transaction price to each performance obligation using the observablestandalone selling price. Whenever possible, standalone selling price thatis based on observable prices and when such observable data is not available, the goodCompany orestimates servicethe sellsstandalone forselling separatelyprice using an approach designed to maximize the use of observable inputs in similaraccordance circumstanceswith and to similar customers.ASC 606. Allocating the transaction price to each performance obligation may require judgment.
In accordance with GAAP, deferred tax liabilities and assets are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted rates expected to be in effect during the year in which the differences reverse. Deferred tax assets generally represent items that can be used as a tax deduction or credit in our tax return in future years for which the tax benefit has already been reflected in our Consolidated Statements of Earnings and Comprehensive Income. We establish valuation allowances for our deferred tax assets if it is more likely than not that some or all of the deferred tax asset will not be realized. This requires the Companyus to make judgments and estimates regarding the timing and amount of the reversal of taxable temporary differences, expected future taxable income and the impact of tax planning strategies.
Business Combinations
Accounting for business combinations requires management to make significant estimates and assumptions, especially at the acquisition date, for intangible assets. Although we believe the assumptions and estimates we have made have been reasonable and appropriate, they are based, in part, on historical experience and information obtained from management of the acquired companies and are inherently uncertain. Critical estimates in valuing certain of the intangible assets we have acquired include, but are not limited to, estimates about future results such as revenues, margin, net working capital and other valuation assumptions such as useful lives, royalty rates, attrition rates and discount rates. The discount rates used to discount expected future cash flows to present value are typically derived from a weighted-average cost of capital analysis and adjusted to reflect inherent risks. Unanticipated events and circumstances may occur that could affect either the accuracy or validity of such assumptions, estimates or actual results.
What changed in the latest 10-Q
Risk Factors
Information regarding risk factors appears in “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Information Relating to Forward-Looking Statements,” in Part I - Item 2 of this Form 10-Q and in “Risk Factors” in Part I - Item 1A of our 2025 Annual Report on Form 10-K. There have been no material changes to the risk factors reported in our 2025 Annual Report on Form 10-K.
Full comparison: every changed paragraph (1)
Information regarding risk factors appears in “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Information Relating to Forward-Looking Statements,” in Part I - Item 2 of this Form 10-Q and in “Risk Factors” in Part I - Item 1A of our 2025 Annual Report on Form 10-K. There werehave been no material changes during the three months ended April 3, 2026 to the risk factors reported in our 2025 Annual Report on Form 10-K.
Management's Discussion & Analysis (MD&A)
Largest changes
“Corporate & other unallocated costs decreased $12.0 million, or 11.2%, during the six months ended July 3, 2026, as compared to the comparable period in 2025, due to a $11.9 million decrease in other unallocated expense from $6.6 million of asset impairments recognized during the six months ended June 27, 2025 and a $6.1 million decrease in amortization of acquisition-related intangible assets from certain intangible assets becoming fully amortized between periods, partially offset by a $4.5 million increase in expense from asbestos reserve related adjustments and an increase in restructuring …”see in full comparison
“Cost of sales, excluding amortization of acquisition-related intangible assets, decreased $4.0 million, or 0.5%, for the six months ended July 3, 2026, as compared to the comparable period in 2025, due to an approximately $12.0 million benefit related to the refund of tariffs related to inventory sold in the prior year, partially offset by increased costs from inflationary pressures. Cost of sales, excluding amortization of acquisition-related intangible assets, as a percentage of sales was flat during the same period.”see in full comparison
SG&A expensessee in full comparisondecreasedincreased$1.3$0.3 million, or0.8%,0.2%, during the three months endedAprilJuly 3, 2026, as compared to the comparable period in2025, due to $6.6 million of asset impairments recognized during the three months ended March 28, 2025, partially offset by increased costs from inflationary pressures.2025. SG&A expenses as a percentage of salesdecreasedincreased4050 basis points during the same period.
Since the second quarter of 2025, the United States has adopted a markedly enhanced and continually shifting tariff policy affecting imports into the U.S., including a baseline tariff against most imported goods in addition to certain country- and product-specific tariffs. In response, certain countries have announced retaliatory tariffs on their imports of U.S.-origin goods. Though the United States has reached trade agreements with certain countries and the U.S. Supreme Court has struck down the legal basis for some of the implemented tariffs, the U.S. President has imposed new tariffs to replace the invalidated tariffs and continues to implement historically elevated tariffs affecting certain types of imports and certain countries of origin. Many of these tariffs are subject to current legal challenges, while others may be vulnerable to new, near-term legal challenges. Accordingly, significant uncertainty around future tariff policies remains. The United States is conducting investigations regarding certain products that could result in higher tariffs. We import inventory into the United States from a number of countries, andsee in full comparisonas such, if U.S. tariffs are reimposed under other authorities and/or remain in effect for a prolonged period of time,we expect costs to import inventory into the United States to increase. We continue to diversify our supply chain to reduce our exposure to tariffs on imports into the United States, particularly on products from countries that are currently subject to comparatively high tariffs. In addition, certain of our products that are manufactured in the United States are exported internationally and are subject to retaliatory tariffs in the countries of import. If we are unable to effectively mitigate the financial impact of tariffs, or if tariffs lead to other impacts, including but not limited to a decrease in demand for our products or an increase in our costs, it could have a material impact on our business, financial conditionandor results of operations.
“Segment operating profit for our Environmental & Fueling Solutions segment increased $14.3 million, or 7.0%, during the six months ended July 3, 2026, as compared to the comparable period in 2025, and segment operating profit margin increased 120 basis points during the same period. The increase in segment operating profit margin was driven by the benefit from the refund of tariffs related to inventory sold in the prior year.”see in full comparison
“SG&A expenses decreased $1.0 million, or 0.3%, during the six months ended July 3, 2026, as compared to the comparable period in 2025 due to productivity and cost savings initiatives, partially offset by an approximately $2.0 million increase in variable compensation from the tariff refund benefit further discussed above. SG&A expenses as a percentage of sales increased 10 basis points during the same period.”see in full comparison
Full comparison: every changed paragraph (46)
This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is designed to provide a reader of our financial statements with a narrative from the perspective of management and is intended to help the reader understand the results of operations and financial condition of the Company. Our MD&A should be read in conjunction with our MD&A and Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the “2025 Annual Report on Form 10-K”) and our Consolidated Condensed Financial Statements as of and for the three and six months ended AprilJuly 3, 2026 included in this Form 10-Q.
Forward-looking statements are not guarantees of future performance and actual results may differ materially from the results, developments and business decisions contemplated by our forward-looking statements. Accordingly, you should not place undue reliance on any such forward-looking statements. Forward-looking statements speak only as of the date of the report, document, press release, webcast, call, materials or other communication in which they are made. Important factors that could cause actual results to differ materially from those envisaged in the forward-looking statements include the following:
•As of AprilJuly 3, 2026, we have outstanding indebtedness of approximately $1.9 billion and the ability to incur an additional $750.0 million of indebtedness under the Revolving Credit Facility and in the future we may incur additional indebtedness. This indebtedness could adversely affect our businesses and our ability to meet our obligations and pay dividends.
We operate through three reportable segments which align to our three operating segments: (i) Environmental & Fueling Solutions, which provides environmental and fueling hardware and software, and aftermarket solutions for global fueling infrastructure; (ii) Mobility Technologies, which provides digitally enabled equipment and solutions to support efficient operations across the mobility ecosystem, including point-of-sale and payment systems, workflow automation solutions, telematics, data analytics, software platform for electric vehicle charging networks and integrated solutions for alternative fuel dispensing; and (iii) Repair Solutions, which manufactures and distributes aftermarket vehicle repair tools, toolboxes, automotive diagnostic equipment and software through a network of mobile franchisees.
Since the second quarter of 2025, the United States has adopted a markedly enhanced and continually shifting tariff policy affecting imports into the U.S., including a baseline tariff against most imported goods in addition to certain country- and product-specific tariffs. In response, certain countries have announced retaliatory tariffs on their imports of U.S.-origin goods. Though the United States has reached trade agreements with certain countries and the U.S. Supreme Court has struck down the legal basis for some of the implemented tariffs, the U.S. President has imposed new tariffs to replace the invalidated tariffs and continues to implement historically elevated tariffs affecting certain types of imports and certain countries of origin. Many of these tariffs are subject to current legal challenges, while others may be vulnerable to new, near-term legal challenges. Accordingly, significant uncertainty around future tariff policies remains. The United States is conducting investigations regarding certain products that could result in higher tariffs. We import inventory into the United States from a number of countries, and as such, if U.S. tariffs are reimposed under other authorities and/or remain in effect for a prolonged period of time, we expect costs to import inventory into the United States to increase. We continue to diversify our supply chain to reduce our exposure to tariffs on imports into the United States, particularly on products from countries that are currently subject to comparatively high tariffs. In addition, certain of our products that are manufactured in the United States are exported internationally and are subject to retaliatory tariffs in the countries of import. If we are unable to effectively mitigate the financial impact of tariffs, or if tariffs lead to other impacts, including but not limited to a decrease in demand for our products or an increase in our costs, it could have a material impact on our business, financial condition andor results of operations.
(a) Includes $16.4$21.2 millionmillion, $19.1 million, $37.6 million, and $12.2$31.3 million of intersegment sales for the three and six months ended AprilJuly 3, 2026 and MarchJune 28,27, 2025, respectively, that are eliminated in consolidation.
Total sales within our Environmental & Fueling Solutions segment increased 4.5%1.3% during the three months ended AprilJuly 3, 2026, as compared to the comparable period in 2025, driven by a 6.1%4.6% increase in core sales and a 1.9%0.4% increase due to the impact of currency translation, partially offset by a 3.5%3.7% decrease due to the impact of recently exited businesses and product lines. The increase in core sales was due to growth in dispenser systems and aftermarket products.
Total sales within our Environmental & Fueling Solutions segment increased 2.8% during the six months ended July 3, 2026, as compared to the comparable period in 2025, driven by a 5.3% increase in core sales and a 1.1% increase due to the impact of currency translation, partially offset by a 3.6% decrease due to the impact of recently exited businesses and product lines. The increase in core sales was due to growth in dispenser systems and aftermarket products.
Total sales within our Mobility Technologies segment decreased 0.4%6.2% during the three months ended AprilJuly 3, 2026, as compared to the comparable period in 2025, driven by a 1.5%4.9% decrease in core sales and a 2.0% decrease due to the impact of recently exited businesses and product lines and a 1.2% decrease in core sales,lines, partially offset by a 2.3%0.7% increase due to the impact of currency translation. The decrease in core sales was due to the timing of revenue recognition related to certain projects during the three months ended MarchJune 28,27, 2025.2025, partially offset by growth in our convenience retail payment and enterprise productivity solutions.
Total sales within our Mobility Technologies segment decreased 3.4% during the six months ended July 3, 2026 as compared to the comparable period in 2025, driven by a 3.1% decrease in core sales and a 1.7% decrease due to the impact of recently exited businesses and product lines, partially offset by a 1.4% increase due to the impact of currency translation. The decrease in core sales was due to the timing of revenue recognition related to certain projects during the six months ended June 27, 2025, partially offset by growth in our convenience retail payment and enterprise productivity solutions.
Total sales and core sales within our Repair Solutions segment decreased 0.1%1.3% during the three months ended AprilJuly 3, 2026, as compared to the comparable period in 2025.2025 due to macroeconomic impacts on service technicians’ discretionary spending on higher-cost products.
Total sales and core sales within our Repair Solutions segment decreased 0.7% during the six months ended July 3, 2026, as compared to the comparable period in 2025 due to macroeconomic impacts on service technicians’ discretionary spending on higher-cost products.
Cost of sales, excluding amortization of acquisition-related intangible assets, increaseddecreased $7.4$11.4 million, or 1.9%,2.8%, for the three months ended AprilJuly 3, 2026, as compared to the comparable period in 2025, consistentdue withto ouran consolidatedapproximately sales$12.0 growth.million benefit related to the refund of tariffs related to inventory sold in the prior year. Cost of sales, excluding amortization of acquisition-related intangible assets, as a percentage of sales increaseddecreased 4030 basis points during the same period.
Cost of sales, excluding amortization of acquisition-related intangible assets, decreased $4.0 million, or 0.5%, for the six months ended July 3, 2026, as compared to the comparable period in 2025, due to an approximately $12.0 million benefit related to the refund of tariffs related to inventory sold in the prior year, partially offset by increased costs from inflationary pressures. Cost of sales, excluding amortization of acquisition-related intangible assets, as a percentage of sales was flat during the same period.
SG&A expenses decreasedincreased $1.3$0.3 million, or 0.8%,0.2%, during the three months ended AprilJuly 3, 2026, as compared to the comparable period in 2025, due to $6.6 million of asset impairments recognized during the three months ended March 28, 2025, partially offset by increased costs from inflationary pressures.2025. SG&A expenses as a percentage of sales decreasedincreased 4050 basis points during the same period.
SG&A expenses decreased $1.0 million, or 0.3%, during the six months ended July 3, 2026, as compared to the comparable period in 2025 due to productivity and cost savings initiatives, partially offset by an approximately $2.0 million increase in variable compensation from the tariff refund benefit further discussed above. SG&A expenses as a percentage of sales increased 10 basis points during the same period.
R&D expenses increaseddecreased $1.2$12.4 million, or 3.0%,26.1%, during the three months ended AprilJuly 3, 2026, as compared to the comparable period in 2025, due to growthproductivity investmentsand incost thesavings Mobility Technologies segment.initiatives. R&D expenses as a percentage of sales increaseddecreased 10150 basis points during the three months ended AprilJuly 3, 2026, as compared to the comparable period in 2025.
R&D expenses decreased $11.2 million, or 12.8%, during the six months ended July 3, 2026, as compared to the comparable period in 2025, due to productivity and cost savings initiatives. R&D expenses as a percentage of sales decreased 70 basis points during the six months ended July 3, 2026, as compared to the comparable period in 2025.
Amortization of acquisition-related intangible assets decreased $2.5$3.6 million, or 12.8%,18.8%, during the three months ended AprilJuly 3, 2026, as compared to the comparable period in 2025, due to certain intangible assets becoming fully amortized between periods. Amortization of acquisition-related intangible assets as a percentage of sales decreased 3040 basis points during the same periods.
Amortization of acquisition-related intangible assets decreased $6.1 million, or 15.7%, during the six months ended July 3, 2026, as compared to the comparable period in 2025, due to certain intangible assets becoming fully amortized between periods. Amortization of acquisition-related intangible assets as a percentage of sales decreased 40 basis points during the same periods.
Operating profit increased $4.7$10.3 million, or 3.6%,7.6%, during the three months ended AprilJuly 3, 2026, as compared to the comparable period in 2025, and operating profit margins increased 40180 basis points during the same period.
Operating profit increased $15.0 million, or 5.6%, during the six months ended July 3, 2026, as compared to the comparable period in 2025, and operating profit margins increased 110 basis points during the same period.
Segment operating profit for our Environmental & Fueling Solutions segment increased $4.4$9.9 million, or 4.5%,9.4%, during the three months ended AprilJuly 3, 2026, as compared to the comparable period in 2025, and segment operating profit margin wasincreased flat240 basis points during the same period. The increase in segment operating profit margin was driven by the benefit from the refund of tariffs related to inventory sold in the prior year.
Segment operating profit for our Environmental & Fueling Solutions segment increased $14.3 million, or 7.0%, during the six months ended July 3, 2026, as compared to the comparable period in 2025, and segment operating profit margin increased 120 basis points during the same period. The increase in segment operating profit margin was driven by the benefit from the refund of tariffs related to inventory sold in the prior year.
Segment operating profit for our Mobility Technologies segment decreasedincreased $7.2$1.8 million, or 13.9%,3.4%, during the three months ended AprilJuly 3, 2026, as compared to the comparable period in 2025, and segment operating profit margin decreasedincreased 260190 basis points during the same period. The decreaseincrease in segment operating profit margin was due to product mix and a $2.0 million increasedecrease in R&D expenses supportingfrom newproductivity productand launches.cost savings initiatives.
Segment operating profit for our Mobility Technologies segment decreased $5.4 million, or 5.1%, during the six months ended July 3, 2026, as compared to the comparable period in 2025, and segment operating profit margin decreased 30 basis points during the same period. The decrease in segment operating profit margin was due to product mix, partially offset by a decrease in R&D expenses from productivity and cost savings initiatives.
Segment operating profit for our Repair Solutions segment decreased $2.8$3.1 million, or 8.4%,9.9%, during the three months ended AprilJuly 3, 2026, as compared to the comparable period in 2025, and segment operating profit margin decreased 180 basis points during the same period. The decrease in segment operating profit margin was due to productunfavorable mixprice-cost and aproduct $0.7 million increase in reserve-related adjustments to the receivables portfolio.mix.
Segment operating profit for our Repair Solutions segment decreased $5.9 million, or 9.1%, during the six months ended July 3, 2026, as compared to the comparable period in 2025, and segment operating profit margin decreased 180 basis points during the same period. The decrease in segment operating profit margin was due to unfavorable price-cost and product mix.
Corporate & other unallocated costs decreased $10.3$1.7 million, or 19.6%,3.1%, during the three months ended AprilJuly 3, 2026, as compared to the comparable period in 2025, due to a $9.2 million decrease in other unallocated expensesavings from $6.6focus millionand ofprioritization assetprocess impairments recognized during the three months ended March 28, 2025initiatives and a $2.5$3.6 million decrease in amortization of acquisition-related intangible assets from certain intangible assets becoming fully amortized between periods.periods, partially offset by a $3.6 million increase in expense from asbestos reserve related adjustments. Corporate & other unallocated costs as a percentage of total sales decreased 15010 basis points during the three months ended AprilJuly 3, 2026, as compared to the comparable period in 2025.
Corporate & other unallocated costs decreased $12.0 million, or 11.2%, during the six months ended July 3, 2026, as compared to the comparable period in 2025, due to a $11.9 million decrease in other unallocated expense from $6.6 million of asset impairments recognized during the six months ended June 27, 2025 and a $6.1 million decrease in amortization of acquisition-related intangible assets from certain intangible assets becoming fully amortized between periods, partially offset by a $4.5 million increase in expense from asbestos reserve related adjustments and an increase in restructuring and other related charges of $2.4 million from certain restructuring activities during the period. Corporate & other unallocated costs as a percentage of total sales decreased 70 basis points during the six months ended July 3, 2026, as compared to the comparable period in 2025.
Interest expense, net was $13.7$16.6 million during the three months ended AprilJuly 3, 2026, as compared to $15.1$15.6 million for the comparable period in 2025, aan decreaseincrease of $1.4$1.0 million, driven by a decrease in variable interest rates on certain of our outstanding debt obligations and an increase in interest incomerates between periods.
Interest expense, net was $30.3 million during the six months ended July 3, 2026, as compared to $30.7 million for the comparable period in 2025, a decrease of $0.4 million.
Our effective tax rate for the three and six months ended AprilJuly 3, 2026 was 22.1%37.4% and 26.2% as compared to 20.9%23.9% and 22.4% for the three and six months ended MarchJune 28,27, 2025. The increase in the effective tax rate for the three and six months ended AprilJuly 3, 2026 as compared to the comparable period in the prior year was primarily due to favorableunfavorable tax impacts ofrelated ato changebusiness inreorganizations contingentand considerationdivestitures, state income taxes, and non-U.S. income taxed at different rates during the three and six months ended MarchJuly 28,3, 2025.2026.
Comprehensive income decreased by $13.9$87.2 million during the three months ended AprilJuly 3, 2026, as compared to the comparable period in 2025. Comprehensive income for the three months ended AprilJuly 3, 2026 includes unfavorablea loss on the sale of our Teletrac Navman business of $86.2 million and favorable foreign currency translation adjustments of $4.8$32.2 million while comprehensive income for the three months ended MarchJune 28,27, 2025 includes favorable foreign currency translation adjustments of $15.0$55.0 million.
Comprehensive income decreased by $101.1 million during the six months ended July 3, 2026, as compared to the comparable period in 2025. Comprehensive income for the six months ended July 3, 2026 includes a loss on the sale of our Teletrac Navman business of $86.2 million and favorable foreign currency translation adjustments of $27.4 million while comprehensive income for the six months ended June 27, 2025 includes favorable foreign currency translation adjustments of $70.0 million.
We assess our liquidity in terms of our ability to generate cash to fund our operating, investing and financing activities. As of AprilJuly 3, 2026, we held $233.8$265.8 million of cash and cash equivalents and had $750.0 million of borrowing capacity under our revolving credit facility. We generate substantial cash from operating activities and believe that our operating cash flow and other sources of liquidity will be sufficient to allow us to continue to support working capital needs, capital expenditures, pay interest and service debt, pay taxes and any related interest or penalties, fund our restructuring activities and pension plans as required, invest in existing businesses, consummate strategic acquisitions, manage our capital structure on a short and long-term basis and support other business needs or objectives. We also have purchase obligations which consist of agreements to purchase goods or services that are enforceable and legally binding on us and that specify all significant terms, including fixed or minimum quantities to be purchased, fixed, minimum or variable price provisions and the approximate timing of the transaction. As of AprilJuly 3, 2026, we believe that we have sufficient liquidity to satisfy our cash needs.
Our long-term debt requires, among others, that we maintain certain financial covenants, and we were in compliance with all of these covenants as of AprilJuly 3, 2026.
During the threesix months ended AprilJuly 3, 2026, we completed the following financing and capital transactions:
Cash flows from operating activities were $46.5$162.8 million during the threesix months ended AprilJuly 3, 2026, a decrease of $63.9$47.6 million, as compared to the comparable period in 2025. The year-over-year change in operating cash flows was primarily attributable to the following factors:
•The aggregate of accounts receivable and long-term financing receivables used $7.3$52.2 million of operating cash flows during the threesix months ended AprilJuly 3, 2026 compared to generating $3.3$17.5 million in the comparable period of 2025. The amount of cash flow generated from or used by accounts receivable depends upon how effectively we manage the cash conversion cycle and can be significantly impacted by the timing of collections in a period. Additionally, when we originate certain financing receivables, we assume the financing receivable by decreasing the franchisee’s trade accounts receivable. As a result, originations of certain financing receivables are non-cash transactions.
•The aggregate of other operating assets and liabilities used $84.8$73.3 million during the threesix months ended AprilJuly 3, 2026 compared to using $26.1$69.4 million in the comparable period of 2025. This change is due primarily to working capital needs and the timing of accruals and payments and tax-related amounts.
Net cash usedprovided inby investing activities was $21.0$33.6 million during the threesix months ended AprilJuly 3, 2026, driven by proceeds from the sale of our Teletrac Navman business, partially offset by payments for additions to property, plant and equipment. Net cash used in investing activities was $17.7$44.7 million during the threesix months ended MarchJune 28,27, 2025, driven by payments for additions to property, plant and equipment.equipment and cash paid for the acquisition of Sergeant Sudz.
We made capital expenditures of $21.7$43.1 million and $17.7$34.4 million during the threesix months ended AprilJuly 3, 2026 and MarchJune 28,27, 2025, respectively.
Net cash used in financing activities was $281.2$418.9 million during the threesix months ended AprilJuly 3, 2026, driven by the net repayment of $200.0 million of debt and repurchases of the Company’s common stock of $70.0$200.0 million. Net cash used in financing activities was $119.7$174.6 million during the threesix months ended MarchJune 28,27, 2025, driven by repurchases of the Company’s common stock of $105.1 million and the voluntary repayment of $50.0 million of the Three-Year Term Loans due 2025 and repurchases of the Company’s common stock of $55.0 million.2025.
We paid regular quarterly cash dividends of $0.025 per share during the threesix months ended AprilJuly 3, 2026. The declaration of future cash dividends is at the discretion of our Board of Directors and will depend upon, among other things, our future earnings, cash flows, capital requirements, financial condition and general business conditions.
As of AprilJuly 3, 2026, we had $1.1 billion in aggregate principal amount of the Registered Notes and $800.0 million in aggregate principal amount outstanding of the Term Loans. Our obligations to pay principal and interest on the Registered Notes and Term Loans are fully and unconditionally guaranteed on a joint and several basis on an unsecured, unsubordinated basis by Gilbarco Inc. and Matco Tools Corporation, two of Vontier’s wholly-owned subsidiaries (the “Guarantor Subsidiaries”). Our other subsidiaries do not guarantee any such indebtedness (collectively, the “Non-Guarantor Subsidiaries”). Refer to Note 4. Financing to the Consolidated Condensed Financial Statements for additional information regarding the terms of our Registered Notes and the Term Loans.
VNT insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-25 | Eatroff Robert L |
Grant/award | 1,060 | $31.95 | $33.9K |
| 2026-09-24 | Eatroff Robert L |
Grant/award | 1 | $31.43 | $40 |
| 2026-06-26 | Eatroff Robert L |
Grant/award | 1,160 | $29.13 | $33.8K |
| 2026-06-25 | Eatroff Robert L |
Grant/award | 1 | $30.36 | $40 |
| 2026-06-04 | Thomas James Darrell |
Grant/award | 6,055 | $28.91 | $175.1K |
| 2026-06-04 | Sylvester Maryrose |
Grant/award | 6,055 | $28.91 | $175.1K |
| 2026-06-04 | Foulkes David M |
Grant/award | 6,055 | $28.91 | $175.1K |
| 2026-06-04 | Eatroff Robert L |
Grant/award | 6,055 | $28.91 | $175.1K |
| 2026-06-04 | Boyland Gloria R. |
Grant/award | 6,055 | $28.91 | $175.1K |
| 2026-06-04 | Francis Karen C |
Grant/award | 9,255 | $28.91 | $267.6K |
Well-known investors holding VNT (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 674,348 | $19.6M | 0.01% | Added 111% |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 372,407 | $10.7M | 0.0% | Reduced 32% |
| Gotham Asset Management (Joel Greenblatt) | 2026-06-30 | 290,280 | $8.4M | 0.02% | Reduced 45% |
| Renaissance Technologies | 2026-06-30 | 232,300 | $6.7M | 0.01% | Added 71% |
| Bridgewater Associates | 2026-06-30 | 190,533 | $5.5M | 0.02% | Added 107% |
| D. E. Shaw & Co. | 2026-06-30 | 120,920 | $3.5M | 0.0% | Reduced 49% |
| Millennium Management (Israel Englander) | 2026-06-30 | 76,177 | $2.2M | 0.0% | Reduced 96% |