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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

2.6

—

15.5

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.

⁽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⁾ 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

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

4.7

—

15.7

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

%

18.1

%

⁽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⁾ 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 %

$

Change %

$

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 %

$

Change %

$

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 %

$

Change %

$

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 %

$

Change %

$

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

1.9

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

$2.62B

Organic growth

(1.0)%-1.0%

0.0%-1.0%

Acquisitions

1.0%

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

$ 482.7

2024 Core adjusted EBITDA range

$495-$515

$500-$515

2023 Core adjusted EPS

$ 4.46

$ 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

60

60

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