ESAB

ESAB Corp

NYSE · INDUSTRIALS · GENERAL INDUSTRIAL MACHINERY & EQUIPMENT, NEC

66.36

+1.17 +1.79%

USD · close Oct 21

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MKT CAP $4.1BP/E 23.9DIV YIELD —FCF YIELD 4.77%REV TTM $3B +9.7%NET INCOME $172.5M −32.7%NET DEBT $2.2B52W 64.51 – 134.82SEC XBRL · TTM TO Invalid Date

How ESAB rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

Text kept

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New in FY2025

The disclosures in this section reflect our beliefs and opinions as to factors that could materially and adversely affect us in the future.
References to past events are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such factors have occurred in the past or their likelihood of occurring in the future.
Additional risks and uncertainties, which are currently unknown to us or that we do not currently consider to be material, could have material adverse effects on our business, financial condition and results of operations, including our prospects, and thereby impact the value of our common stock.
If economic, business and industry conditions deteriorate, capital spending in those sectors may substantially decrease, which could reduce demand for our products and have an adverse impact on our revenues and results of operations.
In addition, volatility in commodity prices can negatively affect the level of these new activities and can postpone capital spending decisions or delay or result in the cancellation of existing orders.
A reduction in demand for our products and services has in the past resulted, and in the future could result in, the delay or cancellation of existing orders or excess manufacturing capacity, which unfavorably impacts our absorption of fixed manufacturing costs.
In the year ended December 31, 2025, we derived approximately 80% of our sales from operations outside of the United States and, as of that date, we had principal manufacturing facilities in 16 countries in addition to the United States.
For the year ended December 31, 2025, 40% and 60% of our Net sales were derived from the Americas and EMEA & APAC, respectively.
For example, in 2025, the United States expanded and increased existing tariffs on steel and aluminum, imposing 50% tariffs on steel, aluminum and products containing steel and aluminum from a range of United States trading partners.
The United States has also announced other significant tariffs on imports from a wide range of countries, including China, which was followed by retaliatory tariffs by China and a number of countries and a cycle of further retaliatory tariff announcements and trade actions.
While certain of the tariffs have been and may be delayed, others have taken or may take effect.
Further, tariffs announced or imposed by the United States could be altered or delayed through presidential actions, bilateral negotiations, judicial orders or congressional action, and tariffs announced or imposed by other countries can be affected by similar developments.
These and future changes in tariffs and trade policies by the United States on imports from China or other countries, or retaliatory trade measures in response, have resulted and may continue to result in additional costs and pricing pressures, supply chain disruptions, volatile or unpredictable customer spending patterns and increased economic or geopolitical risk that we may not be able to offset or otherwise, any or all of which could adversely impact our business and relative competitive position, financial condition and results of operations, perhaps materially or in ways that we cannot predict.
For the year ended December 31, 2025, our operations in Russia represented approximately 5% of our Net sales, and approximately $9 million in Net income.
Excluding any goodwill allocation, Russia has approximately 5% of our total net assets as of December 31, 2025, including approximately $50 million of Cash and cash equivalents that may be subject to delays in withdrawing from Russia, based upon the current environment at that time.
Our operations in Russia had a cumulative translation loss of approximately $110 million, which would be realized upon a transition out.
In addition, other wars and conflicts, turmoil in the geopolitical environment, terrorism and social unrest may put pressure on economic conditions, or international trade relations, which could lead to reduced demand for our products and services and have other adverse impacts including increased costs of raw materials and inputs, supply chain interruptions, delays in manufacturing or shipping delays.
The potential for such future events, the national and international response to such events and the perceived risk of such events, have created, and may continue to create economic and political uncertainties.
During the year ended December 31, 2025, approximately 80% of our sales were derived from operations outside of the United States.
We may require additional capital to finance our acquisitions and operation needs, and such capital may not be available, impacting our ability to pursue our growth strategy.
For example, on January 31, 2026, the Company entered into an agreement to acquire Eddyfi Technologies (“Eddyfi”), a global leader in advanced inspection and monitoring technologies headquartered in Quebec, Canada, for approximately $1.45 billion.
The acquisition is expected to be funded with a combination of cash on hand, debt and approximately $318 million of fully committed equity.
Additionally, advanced persistent attempts to gain unauthorized access or deny access to, or otherwise disrupt, our systems and those of third-party service providers we rely on are increasing in sophistication and frequency, including through artificial intelligence technologies, and are increasingly more difficult to detect and defend against.
We expect to continue to confront efforts by hackers and other unauthorized parties, including criminal threat actors, nation-states, or insiders (including associates or third-party contractors engaged in fraudulent or malicious activities), to gain unauthorized access or deny access to, or otherwise disrupt, our information systems and those of third parties upon which we rely.
Furthermore, businesses that we have acquired, or may in the future acquire, may have cybersecurity weaknesses that could subject us to increased risks of cybersecurity incidents.
While we are not aware of any material cybersecurity threats or incidents that have had or are reasonably likely to have a material effect on us, we can p rovide no assurance that our efforts to actively manage technology risks potentially affecting our systems have been or will be successful in deterring or mitigating risks to or intrusions into our systems, networks and data or in effectively detecting or resolving such risks or intrusions when they materialize.
Any of the foregoing may be exacerbated by a delay or failure to detect a cybersecurity incident, and it may take considerable time for us to investigate and evaluate the full impact of such incidents, particularly for sophisticated attacks, which may divert our management’s attention from other business concerns and inhibit our ability to provide prompt, full and reliable information about the incident to our customers, regulators and the public or the full extent of such incident.
As of December 31, 2025, we have $1.2 billion of outstanding indebtedness.
We also have the ability to incur an additional $50.0 million of indebtedness pursuant to certain uncommitted credit lines, access up to $865.0 million under our revolving credit facility under our A&R Credit Agreement (as defined below), and in the future we may incur additional indebtedness.
On October 16, 2025, the Company entered into an Amended and Restated Credit Agreement (the “A&R Credit Agreement”).
The A&R Credit Agreement, which governs our term loan and revolving credit facility, contains restrictive covenants, including for example, earnings before interest, taxes, depreciation and amortization (“EBITDA”) based leverage and interest coverage ratios, that limit our ability to engage in activities that may be in our long-term interest.
If we breach any of these restrictions and are unable to obtain a waiver from the lenders on favorable terms, subject to applicable cure periods, the outstanding indebtedness (and any other indebtedness with cross-default provisions) could be declared immediately due and payable, which would adversely affect our liquidity and financial statements.
The Indenture also includes certain restrictive covenants.
The market for many of our products is, in part, dependent upon patent, trademark, copyright and trade secret laws, agreements with employees, customers and other third parties including confidentiality agreements, invention assignment agreements and proprietary information agreements, to establish and maintain our intellectual property rights.
Additionally, changes in government regulations, including any trade protection measures or other actions by the United States or other nations, pandemics or other contagious outbreaks, or political and economic instability could affect our ability to continue to receive materials from suppliers in the impacted region.
As a result, those competitors may be better able to withstand the effects of periodic economic downturns or other disruptions or challenges.
“Business—Industry and Competition” of this Form 10-K for a dditional information about the competitive markets in which we operate.
While the United States has not adopted Pillar Two, and the Group of Seven countries have proposed to exempt United States multinational companies from Pillar Two by adopting a “side-by-side” system between Pillar Two and the existing United States global minimum tax provisions, various other jurisdictions in which we operate around the world have enacted legislation and the OECD continues to release additional guidance.
We are continuing to evaluate and monitor the impacts of Pillar Two legislation or other tax initiatives in the jurisdictions where we do business.
On July 4, 2025, the One Big Beautiful Bill Act (the “Act”) was signed into law.

and 31 more.

Gone since FY2024

Additional risks and uncertainties, which are currently unknown to us or that we do not currently consider to be material, could have material adverse effects on our business, financial condition and results of operations.
If economic, business and industry conditions deteriorate, capital spending in those sectors may be substantially decreased, which could reduce demand for our products and have an adverse impact on our revenues and results of operations.
In addition, volatility in commodity prices can negatively affect the level of these new activities and can postpone capital spending decisions or the delay or cancellation of existing orders.
A reduction in demand for our products and services has resulted in the past, and in the future could result in, the delay or cancellation of existing orders or lead to excess manufacturing capacity, which unfavorably impacts our absorption of fixed manufacturing costs.
In the year ended December 31, 2024, we derived 78% of our sales from operations outside of the United States and, as of that date, we had principal manufacturing facilities in 14 countries in addition to the United States.
For the year ended December 31, 2024, 43% and 57% of our Net sales were derived from the Americas and EMEA & APAC, respectively.
In 2018, the United States imposed tariffs on steel and aluminum as well as on goods imported from China and certain other countries, which resulted in retaliatory tariffs by China and other countries.
In addition, the new Trump administration has proposed tariffs on imports from other countries and other changes to United States policy regarding international trade.
Additional tariffs imposed by the United States on imports from China or other countries, or retaliatory trade measures in response, could result in an increase in supply chain costs that we may not be able to offset or otherwise adversely impact our results of operations.
For the year ended December 31, 2024, our operations in Russia represented approximately 5% of our total revenue, and approximately $13 million in Net income.
Excluding any goodwill allocation, Russia has approximately 4% of our total net assets as of December 31, 2024, including approximately $30 million of Cash and cash equivalents that may be subject to delays in withdrawing from Russia, based upon the current environment at that time.
Our operations in Russia had a cumulative translation loss of approximately $130 million, which would be realized upon a transition out.
In addition, other wars and conflicts, turmoil in the geopolitical environment, terrorism and social unrest may put pressure on economic conditions, which could lead to reduced demand for our products and services and have other adverse impacts including increased costs of raw materials and inputs, supply chain interruptions, delays in manufacturing or shipping delays.
The potential for future such events, the national and international response to such events and the perceived risk of such events, have created, and may continue to create economic and political uncertainties.
During the year ended December 31, 2024, approximately 78% of our sales were derived from operations outside of the United States.
We may require additional capital to finance our operation needs, and such capital may not be available, impacting our ability to pursue our growth strategy.
Additionally, advanced persistent attempts to gain unauthorized access or deny access to, or otherwise disrupt, our systems and those of third-party service providers we rely on are increasing in sophistication and frequency.
We expect to continue to confront efforts by hackers and other third parties to gain unauthorized access or deny access to, or otherwise disrupt, our information systems and those of third parties upon which we rely.
While we are not aware of any material cybersecurity threats or incidents that have had or are reasonably likely to have a material effect on us, we can p rovide no assurance that our efforts to actively manage technology risks potentially affecting our systems will be successful in deterring or mitigating risks to or intrusions into our systems, networks and data or in effectively detecting or resolving such risks or intrusions when they materialize.
Any of the foregoing may be exacerbated by a delay or failure to detect a cybersecurity incident or the full extent of such incident.
As of December 31, 2024, we have $1.1 billion of outstanding indebtedness.
We also have the ability to incur an additional $50.0 million of indebtedness pursuant to certain uncommitted credit lines, access up to $750.0 million under our revolving credit facility under our Credit Agreement (as defined below), and in the future we may incur additional indebtedness.
The Credit Agreement, which governs our term loan and revolving credit facility, contain restrictive covenants that limit our ability to engage in activities that may be in our long-term interest, including for example EBITDA-based leverage and interest coverage ratios.
If we breach any of these restrictions and cannot obtain a waiver from the lenders on favorable terms, subject to applicable cure periods, the outstanding indebtedness (and any other indebtedness with cross-default provisions) could be declared immediately due and payable, which would adversely affect our liquidity and financial statements.
In addition, the Indenture also includes certain restrictive covenants.
The market for many of our products is, in part, dependent upon patent, trademark, copyright and trade secret laws, agreements with employees, customers and other third parties including confidentiality agreements, invention assignment agreements and proprietary information agreements, to establish and maintain our intellectual property rights, and the Goodwill engendered by our trademarks and trade names.
Additionally, changes in government regulations, any pandemics or other contagious outbreaks, or political and economic instability could affect our ability to continue to receive materials from suppliers in the impacted region.
As a result, those competitors may be better able to withstand the effects of periodic economic downturns.
“Business—Industry and Competition” for a dditional information about the competitive markets in which we operate.
While the United States has not yet adopted Pillar Two, various other jurisdictions in which we operate around the world have enacted legislation and the OECD continues to release additional guidance.
We are continuing to evaluate and monitor the impacts of Pillar Two legislation in the jurisdictions we operate.
As of December 31, 2024, approximately 36% of our associates were represented by a number of different trade unions and works councils.
Further, as of that date, we had approximately 8,000 associates, representing approximately 86% of our worldwide associate base, in foreign locations.
In Canada, Australia, various countries in Europe, Asia and Central and South America, by law, certain of our associates are represented by a number of different trade unions and works councils, which subject us to employment arrangements very similar to collective bargaining agreements.
Furthermore, since a significant proportion of the plans’ assets are invested in publicly traded debt and equity securities, they are, and will be, affected by market risks.
Any detrimental change in any of the above factors is likely to worsen the funding position of each of the relevant plans, and this would likely require the plans’ sponsoring employers to increase the contributions currently made to the plans to satisfy our obligations.
Certain subsidiaries contributed by the Former Parent immediately prior to the consummation of the Separation and pursuant to the terms of the separation agreement entered into with the Former Parent in connection with the Separation are one of many defendants in a large number of lawsuits that claim personal injury as a result of exposure to asbestos from products manufactured or used with components that are alleged to have contained asbestos.
Note 19, “Commitments and Contingencies.” For purposes of our financial statements, we have estimated the future claims exposure and the amount of insurance available based upon certain assumptions with respect to future claims and liability costs.
See Item 3.”Legal Proceedings.” We have done and may continue to do business in countries subject to United States sanctions.
Foreign laws we are subject to include the European Union’s General Data Protection Regulation (the “GDPR”) and the domestic version of the GDPR adopted by the United Kingdom in January 2021.

and 9 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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