ESAB Corporation Announces Third Quarter 2024 Results

Positive core organic growth
New equipment gaining traction
EBX driving record margin
Raised mid-point of 2024 outlook

ESAB Corporation (“ESAB” or the “Company”) (NYSE: ESAB), a focused premier industrial compounder, today announced financial results for the third quarter of 2024.

ESAB reported third quarter sales of $673 million, a decrease of 1% on a reported basis or an increase of 1% on a core organic growth basis before acquisitions and currency translation, as compared to the prior year. ESAB also reported third quarter net income from continuing operations attributable to ESAB of $69 million or $1.13 diluted earnings per share and core adjusted net income of $77 million or $1.25 diluted earnings per share. Core adjusted EBITDA of $125 million rose 6% and margin expanded 130 basis points to 19.6%, both as compared to the prior year quarter.

“ESAB delivered another strong quarter, marked by positive volume growth, record margin, and robust cash flow, amid a challenging end market environment,” said Shyam P. Kambeyanda, President and CEO of ESAB. “Our growth is driven by our unmatched geographic footprint, the launch of new award-winning products, and strategic investments in commercial transformation and bolt-on acquisitions. ESAB continues to enhance margin and cash flow through the use of EBX, further boosting our confidence in achieving our long-term targets by 2028."

Updated Full Year 2024 Outlook

ESAB now expects full year 2024 total core sales growth of (1.5)% to (0.5)%, core organic sales growth of 0.0% to 1.0%, M&A of 1.0% and FX of ~(2.5)% from prior guidance of total core sales growth of (2.5)% to (0.5)%, core organic sales growth of (1.0)% to 1.0%, M&A of 1.0% and FX of ~(2.5)%. ESAB updated its estimated core adjusted EBITDA for the full year 2024 to $500 to $515 million, and core adjusted EPS to $4.80 to $4.95 from prior guidance of core adjusted EBITDA of $495 to $515 million and core adjusted EPS of $4.75 to $4.95.

About ESAB Corporation

Founded in 1904, ESAB Corporation is a focused premier industrial compounder. The Company’s rich history of innovative products, workflow solutions and its business system ESAB Business Excellence (“EBX”), enables the Company’s purpose of Shaping the world we imagine™. ESAB Corporation is based in North Bethesda, Maryland and employs approximately 9,000 associates and serves customers in approximately 150 countries. To learn more, visit www.ESABcorporation.com.

Conference Call and Webcast

The Company will hold a conference call to discuss its third quarter 2024 results beginning at 8:00 a.m. Eastern on Tuesday, October 29, 2024, which will be open to the public by calling +1-888-550-5302 (U.S. callers) and +1-646-960-0685 (International callers) and referencing the conference ID number 4669992 and through webcast via ESAB’s website www.ESABcorporation.com under the “Investors” section. Access to a supplemental slide presentation can also be found on ESAB's website under the same heading. Both the audio of this call and the slide presentation will be archived on the website later today and will be available until the next quarterly call. The Company’s quarterly report on Form 10-Q for the fiscal quarter ended September 27, 2024, filed October 29, 2024, is also available on ESAB’s website under the “Investors” section.

Non-GAAP Financial Measures and Other Adjustments

ESAB has provided in this press release financial information that has not been prepared in accordance with accounting principles generally accepted in the United States of America (“non-GAAP”). ESAB presents some of these non-GAAP financial measures including and excluding Russia due to economic and political volatility caused by the war in Ukraine, which results in enhanced investor interest in this information. Core non-GAAP financial measures exclude Russia for the nine months ended September 27, 2024 and September 29, 2023. These non-GAAP financial measures may include one or more of the following: adjusted net income from continuing operations, Core adjusted net income from continuing operations, adjusted EBITDA (earnings before interest, taxes, pension settlement loss, Restructuring and other related charges, acquisition-amortization and other related charges and depreciation and other amortization), Core adjusted EBITDA, organic sales growth, Core organic sales growth, adjusted free cash flow and ratios based on the foregoing measures. ESAB also provides adjusted EBITDA and adjusted EBITDA margin on a segment basis, as well as Core adjusted EBITDA and Core adjusted EBITDA margin on a segment basis.

Adjusted net income from continuing operations represents Net income from continuing operations attributable to ESAB Corporation, excluding Restructuring and other related charges, acquisition-amortization and other related charges and pension settlement loss. Adjusted net income, includes the tax effect of non-GAAP adjusting items at applicable tax rates and excludes the impact of discrete tax charges or gains in each period. ESAB also presents adjusted net income margin from continuing operations, which is subject to the same adjustments as adjusted net income from continuing operations. Adjusted net income per diluted share from continuing operations is a calculation of adjusted net income from continuing operations over the weighted-average diluted shares outstanding. ESAB also presents Core adjusted net income from continuing operations and Core adjusted net income per share - diluted from continuing operations, which are subject to the same adjustments as Adjusted net income from continuing operations and Adjusted net income per diluted share from continuing operations, further removing the impact of Russia for the nine months ended September 27, 2024 and September 29, 2023.

Adjusted EBITDA excludes from Net income from continuing operations the effect of Income tax expense, Interest expense (income) and other, net, Restructuring and other related charges, acquisition-amortization and other related charges, pension settlement loss and depreciation and other amortization. ESAB presents adjusted EBITDA margin, which are subject to the same adjustments as adjusted EBITDA. Further, ESAB presents these non-GAAP performance measures on a segment basis, which excludes the impact of Restructuring and other related charges, separation costs, acquisition-amortization and other related charges, pension settlement loss and depreciation and other amortization from operating income. ESAB also presents Core adjusted EBITDA and Core adjusted EBITDA margin, which are subject to the same adjustments as Adjusted EBITDA and Adjusted EBITDA margin, respectively, further removing the impact of Russia for the nine months ended September 27, 2024 and September 29, 2023.

ESAB presents organic sales growth, which excludes the impact of acquisitions and foreign exchange rate fluctuations and presents core organic sales growth, which further excludes the impact of the Russia business for the nine months ended September 27, 2024 and September 29, 2023 from core organic sales growth.

Adjusted free cash flow represents cash flows from operating activities excluding cash outflows related to the Company’s separation from Enovis Corporation and discontinued operations, less Purchases of property, plant and equipment net of proceeds from sale of certain properties. Cash conversion represents Adjusted free cash flow divided by Adjusted net income from continuing operations.

These non-GAAP financial measures assist ESAB management in comparing its operating performance over time because certain items may obscure underlying business trends and make comparisons of long-term performance difficult, as they are of a nature and/or size that occur with inconsistent frequency or relate to unusual events or discrete restructuring plans and other initiatives that are fundamentally different from the ongoing productivity and core business of the Company.

ESAB management also believes that presenting these measures allows investors to view its performance using the same measures that the Company uses in evaluating its financial and business performance and trends.

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information calculated in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures. A reconciliation of non-GAAP financial measures presented above to GAAP results has been provided in the financial tables included in this press release.

Forward Looking Statements

This press release includes forward-looking statements, including forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, statements concerning the Company’s plans, goals, objectives, outlook, expectations, and intentions, and other statements that are not historical or current fact. Forward-looking statements are based on the Company’s current expectations and involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such forward-looking statements, including general risks and uncertainties such as market conditions, economic conditions, geopolitical events, changes in laws, regulations or accounting rules, fluctuations in interest rates, terrorism, wars or conflicts, major health concerns, natural disasters or other disruptions of expected business conditions. Factors that could cause the Company’s results to differ materially from current expectations include, but are not limited to, risks related to the impact of the wars in Ukraine and Middle East and the resulting escalating geopolitical tensions; impact of supply chain disruptions; the impact of creditworthiness and financial viability of customers; impact of inflationary pressures, foreign exchange fluctuations and commodity prices; other impacts on the Company’s business and ability to execute business continuity plans; and the other factors detailed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the U.S. Securities and Exchange Commission (“SEC”) on February 29, 2024, as well as other risks discussed in the Company’s filings with the SEC. In addition, these statements are based on assumptions that are subject to change. This press release speaks only as of the date hereof. The Company disclaims any duty to update the information herein.

ESAB CORPORATION

CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS

Dollars in thousands, except per share data

(Unaudited)

Three Months Ended

Nine Months Ended

September 27, 2024

September 29, 2023

September 27, 2024

September 29, 2023

Net sales

673,250

680,996

2,070,047

2,085,418

Cost of sales

419,460

431,282

1,290,915

1,324,392

Gross profit

253,790

249,714

779,132

761,026

Selling, general and administrative expense

145,900

145,439

434,537

442,836

Restructuring and other related charges

1,875

3,129

8,572

17,742

Operating income

106,015

101,146

336,023

300,448

Pension settlement loss

—

12,155

—

Interest expense and other, net

16,894

20,502

49,925

58,831

Income from continuing operations before income taxes

89,121

80,644

273,943

241,617

Income tax expense

18,074

19,808

54,463

77,806

Net income from continuing operations

71,047

60,836

219,480

163,811

Loss from discontinued operations, net of taxes

(1,214

)

(1,723

)

(3,684

)

(4,259

)

Net income

69,833

59,113

215,796

159,552

Income attributable to noncontrolling interest, net of taxes

(1,593

)

(1,543

)

(4,698

)

(4,506

)

Net income attributable to ESAB Corporation

68,240

57,570

211,098

155,046

Earnings (loss) per share – basic

Income from continuing operations

1.14

0.98

3.54

2.63

Loss on discontinued operations

(0.02

)

(0.03

)

(0.06

)

(0.07

)

Net income per share - basic

1.12

0.95

3.48

2.56

Earnings (loss) per share – diluted

Income from continuing operations

1.13

0.97

3.50

2.61

Loss on discontinued operations

(0.02

)

(0.03

)

(0.06

)

(0.07

)

Net income per share – diluted

1.11

0.94

3.44

2.54

ESAB CORPORATION

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

Dollars in millions, except per share data

(Unaudited)

Three Months Ended(1)

Nine Months Ended(1)

September 27, 2024

September 29, 2023

September 27, 2024

September 29, 2023

Adjusted Net Income

Net income from continuing operations (GAAP)

71.0

60.8

219.5

163.8

Less: Income attributable to noncontrolling interest, net of taxes

1.6

1.5

4.7

4.5

Net income from continuing operations attributable to ESAB Corporation (GAAP)

69.4

59.3

214.8

159.3

Restructuring and other related charges – pretax(2)

1.9

3.1

8.6

17.7

Acquisition-amortization and other related charges – pretax(3)

10.0

9.3

25.5

27.8

Pension settlement loss – pretax

—

12.2

—

Tax effect on above items(4)

(2.8

)

(3.2

)

(11.3

)

(11.0

)

Discrete tax adjustments(5)

0.1

0.5

(6.5

)

20.1

Adjusted net income from continuing operations (non-GAAP)

78.6

69.0

243.3

213.9

Adjusted net income from continuing operations attributable to Russia (non-GAAP)(6)

1.9

3.2

11.3

10.8

Core adjusted net income from continuing operations (non-GAAP)

76.7

65.8

232.0

203.1

Adjusted net income margin from continuing operations

11.7

10.2

11.8

10.3

Adjusted Net Income Per Share

Net income per share – diluted from continuing operations (GAAP)

1.13

0.97

3.50

2.61

Restructuring and other related charges – pretax(2)

0.03

0.05

0.14

0.29

Acquisition-amortization and other related charges – pretax(3)

0.16

0.15

0.42

0.46

Pension settlement loss – pretax

—

0.20

—

Tax effect on above items(4)

(0.05

)

(0.05

)

(0.19

)

(0.18

)

Discrete tax adjustments(5)

—

0.01

(0.11

)

0.33

Adjusted net income per share – diluted from continuing operations (non-GAAP)

1.28

1.13

3.96

3.51

Adjusted net income per share – diluted from continuing operations attributable to Russia (non-GAAP)(6)

0.03

0.05

0.19

0.17

Core adjusted net income per share – diluted from continuing operations (non-GAAP)

1.25

1.08

3.78

3.34

__________

(1) Numbers may not sum due to rounding.

(2) Includes severance and other termination benefits, including outplacement services as well as the cost of relocating associates, relocating equipment, lease termination expenses, impairment of long-lived assets and other costs in connection with the closure and optimization of facilities and product lines.

(3) Includes transaction expenses, amortization of intangibles, fair value charges on acquired inventories and integration expenses.

(4) This line item reflects the aggregate tax effect of all non-tax adjustments reflected in the proceeding line items of the table. ESAB estimates the tax effect of each adjustment item by applying ESAB’s overall estimated effective tax rate to the pretax amount, unless the nature of the item and/or tax jurisdiction in which the item has been recorded requires application of a specific tax rate or tax treatment, in which case the tax effect of such item is estimated by applying such specific tax rate or tax treatment.

(5) For 2024, discrete adjustments relate to a favorable final ruling in the 2023 tax case in a foreign jurisdiction mentioned below. For 2023, discrete tax adjustments include the impact of net discrete tax expenses related to dividend withholding tax and the impact of an uncertain tax position due to an adverse court ruling in a foreign jurisdiction.

(6) Represents Russia contribution for the three and nine months ended September 27, 2024 and September 29, 2023.

ESAB CORPORATION

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

Dollars in millions

(Unaudited)

Three Months Ended September 27, 2024(1)

Nine Months Ended September 27, 2024(1)

Americas

EMEA & APAC

Total

Americas

EMEA & APAC

Total

Net income from continuing operations (GAAP)

71.0

219.5

Income tax expense

18.1

54.5

Interest expense and other, net

16.9

49.9

Pension settlement loss

—

12.2

Operating income (GAAP)

49.9

56.1

106.0

151.8

184.3

336.0

Adjusted to add

Restructuring and other related charges(2)

0.9

1.0

1.9

2.0

6.6

8.6

Acquisition-amortization and other related charges(3)

4.8

5.2

10.0

13.5

12.1

25.6

Depreciation and other amortization

3.8

5.7

9.5

10.9

16.5

27.4

Adjusted EBITDA (non-GAAP)

59.4

68.1

127.4

178.2

219.4

397.5

Adjusted EBITDA attributable to Russia (non-GAAP)(4)

—

2.6

—

15.5

Core adjusted EBITDA (non-GAAP)

59.4

65.5

124.8

178.2

203.9

382.1

Adjusted EBITDA margin (non-GAAP)

20.6

17.7

18.9

19.9

18.7

19.2

Core adjusted EBITDA margin (non-GAAP)(5)

20.6

18.9

19.6

19.9

19.2

19.5

__________

(1) Numbers may not sum due to rounding.

(3) Includes transaction expenses, amortization of intangibles, fair value charges on acquired inventories and integration expenses.

(4) Numbers calculated following the same definition as Adjusted EBITDA for total Company.

(5) Net sales were $37.7 million and $112.0 million relating to Russia for the three and nine months ended September 27, 2024, respectively.

ESAB CORPORATION

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

Dollars in millions

(Unaudited)

Three Months Ended September 29, 2023(1)

Nine Months Ended September 29, 2023(1)

Americas

EMEA & APAC

Total

Americas

EMEA & APAC

Total

Net income from continuing operations (GAAP)

60.8

163.8

Income tax expense

19.8

77.8

Interest expense and other, net

20.5

58.8

Operating income (GAAP)

46.5

54.7

101.1

132.4

168.0

300.4

Adjusted to add

Restructuring and other related charges(2)

1.6

3.1

5.4

12.3

17.7

Acquisition-amortization and other related charges(3)

5.2

4.0

9.3

16.0

11.9

27.8

Depreciation and other amortization

3.9

5.0

9.0

11.1

15.5

26.6

Adjusted EBITDA (non-GAAP)

57.2

65.3

122.5

164.9

207.7

372.6

Adjusted EBITDA attributable to Russia (non-GAAP)(4)

—

4.7

—

15.7

Core adjusted EBITDA (non-GAAP)

57.2

60.6

117.8

164.9

192.0

356.9

Adjusted EBITDA margin (non-GAAP)

18.7

17.4

18.0

18.2

17.6

17.9

Core adjusted EBITDA margin (non-GAAP)(5)

18.7

17.9

18.3

18.2

18.1

(1) Numbers may not sum due to rounding.

(3) Includes transaction expenses, amortization of intangibles, fair value charges on acquired inventories and integration expenses.

(4) Numbers calculated following the same definition as Adjusted EBITDA for total Company.

(5) Net sales were $36.9 million and $114.4 million relating to Russia for the three and nine months ended September 29, 2023, respectively.

ESAB CORPORATION

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

Change in Sales

Dollars in millions

(Unaudited)

Sales Growth(1)

Americas

EMEA & APAC

Total ESAB

Change %

For the three months ended September 29, 2023

305.8

375.2

681.0

Components of Change:

Existing businesses (organic sales growth)(2)

6.2

2.0

0.4

0.1

6.6

1.0

Acquisitions(3)

2.8

0.9

3.8

1.0

6.6

1.0

Foreign Currency translation(4)

(26.0

)

(8.5

5.1

1.4

(20.9

)

(3.1

Total sales growth

(17.0

)

(5.6

9.3

2.5

(7.7

)

(1.1

For the three months ended September 27, 2024

288.8

384.4

673.3

(1) Numbers may not sum due to rounding.

(2) Excludes the impact of acquisitions and foreign exchange rate fluctuations, thus providing a measure of change due to organic growth factors such as price, product mix and volume.

(3) Represents the incremental sales in comparison to the portion of the prior period during which we did not own the business.

(4) Represents the difference between prior year sales valued at the actual prior year foreign exchange rates and prior year sales valued at current year foreign exchange rates.

Core Sales Growth(1)(5)

Americas

EMEA & APAC

ESAB

Change %

For the three months ended September 29, 2023

305.8

338.3

644.1

Components of Change:

Existing businesses (core organic sales growth)(2)

6.2

2.0

1.8

0.5

8.0

1.2

Acquisitions(3)

2.8

0.9

3.8

1.1

6.6

1.0

Foreign Currency translation(4)

(26.0

)

(8.5

2.9

0.9

(23.1

)

(3.6

Total core sales growth

(17.0

)

(5.6

8.5

2.5

(8.5

)

(1.3

For the three months ended September 27, 2024

288.8

346.8

635.6

(1) Numbers may not sum due to rounding.

(2) Excludes the impact of acquisitions and foreign exchange rate fluctuations, thus providing a measure of change due to organic growth factors such as price, product mix and volume.

(3) Represents the incremental sales in comparison to the portion of the prior period during which we did not own the business.

(4) Represents the difference between prior year sales valued at the actual prior year foreign exchange rates and prior year sales valued at current year foreign exchange rates.

(5) Represents sales excluding Russia for the three months ended September 27, 2024 and September 29, 2023.

ESAB CORPORATION

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

Change in Sales

Dollars in millions

(Unaudited)

Sales Growth(1)

Americas

EMEA & APAC

Total ESAB

Change %

For the nine months ended September 29, 2023

907.7

1,177.8

2,085.4

Components of Change:

Existing businesses (organic sales growth)(2)

27.6

3.0

4.0

0.3

31.6

1.5

Acquisitions(3)

6.4

0.7

3.9

0.3

10.3

0.5

Foreign Currency translation(4)

(47.0

)

(5.2

(10.3

)

(0.9

(57.3

)

(2.7

Total sales growth

(13.0

)

(1.4

(2.4

)

(0.2

(15.4

)

(0.7

For the nine months ended September 27, 2024

894.6

1,175.4

2,070.0

(1) Numbers may not sum due to rounding.

(2) Excludes the impact of acquisitions and foreign exchange rate fluctuations, thus providing a measure of change due to organic growth factors such as price, product mix and volume.

(3) Represents the incremental sales in comparison to the portion of the prior period during which we did not own the business.

(4) Represents the difference between prior year sales valued at the actual prior year foreign exchange rates and prior year sales valued at current year foreign exchange rates.

Core Sales Growth(1)(5)

Americas

EMEA & APAC

ESAB

Change %

For the nine months ended September 29, 2023

907.7

1,063.3

1,971.0

Components of Change:

Existing businesses (core organic sales growth)(2)

27.6

3.0

(2.7

)

(0.3

24.9

1.3

Acquisitions(3)

6.4

0.7

3.9

0.4

10.3

0.5

Foreign Currency translation(4)

(47.0

)

(5.2

(1.3

)

(0.1

(48.3

)

(2.5

Total core sales growth

(13.0

)

(1.4

(0.1

)

—

(13.1

)

(0.7

For the nine months ended September 27, 2024

894.6

1,063.4

1,958.0

(1) Numbers may not sum due to rounding.

(2) Excludes the impact of acquisitions and foreign exchange rate fluctuations, thus providing a measure of change due to organic growth factors such as price, product mix and volume.

(3) Represents the incremental sales in comparison to the portion of the prior period during which we did not own the business.

(4) Represents the difference between prior year sales valued at the actual prior year foreign exchange rates and prior year sales valued at current year foreign exchange rates.

(5) Represents sales excluding Russia for the nine months ended September 27, 2024 and September 29, 2023.

ESAB CORPORATION

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

Adjusted Free Cash Flow

Dollars in millions

(Unaudited)

Three Months Ended

Nine Months Ended

September 27, 2024

September 29, 2023

September 27, 2024

September 29, 2023

Net cash provided by operating activities (GAAP)

101.0

107.4

228.5

208.1

Purchases of property, plant and equipment (GAAP)

(10.7

)

(11.9

)

(27.1

)

(28.9

)

Proceeds from the sale of certain properties(1)

1.9

2.8

Payments related to the Separation(2)

—

4.4

Payments related to discontinued operations

3.6

2.5

12.1

12.2

Adjusted free cash flow (non-GAAP)

95.8

99.9

215.4

198.6

(1) Includes proceeds from the sale of certain properties related to restructuring efforts for which previous cash outlays were included in Net cash provided by operating activities.

(2) Separation payments relate to one-time non-recurring professional fees and employee costs incurred in the planning and execution of the Company’s separation from Enovis Corporation.

ESAB CORPORATION

2024 Outlook

Dollars in millions, except per share amounts

(Unaudited)

ESAB 2024 Outlook

Previous Guidance

New Guidance

2023 Core net sales

$2.62B

Organic growth

(1.0)%-1.0%

0.0%-1.0%

Acquisitions

1.0%

Currency

(2.5) %

~(2.5)%

2024 Core net sales growth range

(2.5)%-(0.5)%

(1.5)%-(0.5)%

2023 Core adjusted EBITDA

$ 482.7

2024 Core adjusted EBITDA range

$495-$515

$500-$515

2023 Core adjusted EPS

$ 4.46

2024 Core adjusted EPS range

$4.75-$4.95

$4.80-$4.95

ESAB CORPORATION

CONSOLIDATED AND CONDENSED BALANCE SHEETS

Dollars in thousands, except share and per share amounts

(Unaudited)

September 27, 2024

December 31, 2023

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

253,670

102,003

Trade receivables, less allowance for credit losses of $24,637 and $25,477

420,938

385,198

Inventories, net

422,654

392,858

Prepaid expenses

58,732

61,771

Other current assets

65,517

55,890

Total current assets

1,221,511

997,720

Property, plant and equipment, net

296,437

294,305

Goodwill

1,667,878

1,588,331

Intangible assets, net

499,789

499,535

Lease assets - right of use

94,413

95,607

Other assets

304,506

353,131

Total assets

4,084,534

3,828,629

LIABILITIES AND EQUITY

CURRENT LIABILITIES:

Accounts payable

320,252

306,593

Accrued liabilities

316,819

313,489

Total current liabilities

637,071

620,082

Long-term debt

1,080,182

1,018,057

Other liabilities

489,556

542,833

Total liabilities

2,206,809

2,180,972

Equity:

Common stock - $0.001 par value - Authorized 600,000,000, 60,442,246 and 60,295,634 shares outstanding as of September 27, 2024 and December 31, 2023, respectively

Additional paid-in capital

1,893,665

1,881,054

Retained earnings

548,300

350,557

Accumulated other comprehensive loss

(604,900

)

(624,272

)

Total ESAB Corporation equity

1,837,125

1,607,399

Noncontrolling interest

40,600

40,258

Total equity

1,877,725

1,647,657

Total liabilities and equity

4,084,534

3,828,629

ESAB CORPORATION

CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS

Dollars in thousands

(Unaudited)

Nine Months Ended

September 27, 2024

September 29, 2023

Cash flows from operating activities:

Net income

215,796

159,552

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation, amortization and other impairment charges

50,028

57,090

Stock-based compensation expense

14,473

11,150

Deferred income tax

2,394

756

Non-cash interest expense

2,259

896

Pension settlement loss

12,155

—

Changes in operating assets and liabilities:

Trade receivables, net

(39,075

)

(15,170

)

Inventories, net

(31,651

)

(16,212

)

Accounts payable

16,895

(17,746

)

Other operating assets and liabilities

(14,751

)

27,783

Net cash provided by operating activities

228,523

208,099

Cash flows from investing activities:

Purchases of property, plant and equipment

(27,071

)

(28,865

)

Proceeds from sale of property, plant and equipment

3,452

5,171

Acquisitions, net of cash received

(86,537

)

(18,665

)

Other investing

(4,058

)

—

Net cash used in investing activities

(114,214

)

(42,359

)

Cash flows from financing activities:

Proceeds from borrowings on Senior Notes

700,000

—

Proceeds from borrowings on revolving credit facilities and other

205,000

454,671

Repayments of borrowings on Term Loans

(597,500

)

(6,250

)

Repayments of borrowings on revolving credit facilities and other

(236,623

)

(578,623

)

Payment of debt issuance costs and other

(15,522

)

—

Payment of dividends

(12,135

)

(9,702

)

Distributions to noncontrolling interest holders

(2,644

)

(2,279

)

Net cash provided by (used in) financing activities

40,576

(142,183

)

Effect of foreign exchange rates on Cash and cash equivalents

(3,218

)

(12,748

)

Increase in Cash and cash equivalents

151,667

10,809

Cash and cash equivalents, beginning of period

102,003

72,024

Cash and cash equivalents, end of period

253,670

82,833

View source version on businesswire.com: https://www.businesswire.com/news/home/20241029328363/en/

Investor Relations Contact: Mark Barbalato Vice President, Investor Relations E-mail: investorrelations@esab.com Phone: 1-301-323-9098 Media Contact: Tilea Coleman Vice President, Corporate Communications E-mail: mediarelations@esab.com Phone: 1-301-323-9092

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