Vontier Corporation

10/30/2025 | Press release | Distributed by Public on 10/30/2025 11:55

Quarterly Report for Quarter Ending September 26, 2025 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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, 2024 (the "2024 Annual Report on Form 10-K") and our Consolidated Condensed Financial Statements as of and for the three and nine months ended September 26, 2025 included in this Form 10-Q.
INFORMATION RELATING TO FORWARD-LOOKING STATEMENTS
Certain statements included or incorporated by reference in this quarterly report, in other documents we file with or furnish to the Securities and Exchange Commission ("SEC"), in our press releases, webcasts, conference calls, materials delivered to shareholders and other communications, are "forward-looking statements" within the meaning of the United States federal securities laws.
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:
•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 past and could in the future cause production interruptions, delays and inefficiencies.
•Our growth depends in part on the timely development and commercialization, and customer acceptance, of new and enhanced products and services based on technological innovation.
•Changes in our software and subscription businesses may adversely impact our business, financial condition and results of operations.
•The indemnification provisions of acquisition agreements by which we have acquired companies may not fully protect us and as a result we may face unexpected liabilities.
•Our restructuring actions could have long-term adverse effects on our business.
•As of September 26, 2025, we have outstanding indebtedness of approximately $2.1 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 may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.
•Any inability to consummate acquisitions at our historical rates and at appropriate prices, and to make appropriate investments that support our long-term strategy, could negatively impact our growth rate and stock price.
•Our acquisition of businesses, investments, joint ventures and other strategic relationships could negatively impact our financial statements.
•Divestitures or other dispositions could negatively impact our business, and contingent liabilities from businesses that we or our predecessors have sold could adversely affect our financial statements.
•Conditions in the global economy, the particular markets we serve and the financial markets may adversely affect our business and financial statements.
•Changes in U.S. trade policy, including changes to existing trade agreements and any resulting changes in international trade relations, may have a material adverse effect on us.
•Adverse changes in our relationships with, or the financial condition, performance, purchasing patterns or inventory levels of, key distributors and other channel partners could adversely affect our financial statements.
•Our financial results are subject to fluctuations in the cost and availability of commodities that we use in our operations.
•Defects, tampering, unanticipated use or inadequate disclosure with respect to our products or services (including software), or allegations thereof, could adversely affect our business, reputation and financial statements.
•Our growth could suffer if the markets into which we sell our products and services decline, do not grow as anticipated or experience cyclicality.
•Our reputation, ability to do business and financial statements may be impaired by improper conduct by any of our employees, agents or business partners.
•If we do not or cannot adequately protect our intellectual property, or if third parties infringe our intellectual property rights, we may suffer competitive injury or expend significant resources enforcing our rights.
•Third parties may 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.
•If we suffer a loss to our facilities, supply chains, distribution systems or information technology systems due to catastrophe or other events, our operations could be seriously harmed.
•Our ability to attract, develop and retain talented executives and other key employees is critical to our success.
•Work stoppages, union and works council campaigns and other labor disputes could adversely impact our productivity and results of operations.
•Global economic, political, legal, compliance, supply chain, epidemic, pandemic and business factors could negatively affect our financial statements.
•Foreign currency exchange rates may adversely affect our financial statements.
•Changes in, or status of implementation of, industry standards and governmental regulations, including the interpretation or enforcement thereof, may reduce demand for our products or services, increase our expenses or otherwise adversely impact our business model.
•Our businesses are subject to extensive regulation; failure to comply with those regulations could adversely affect our financial statements and our business, including our reputation.
•We are party to asbestos-related product litigation that could adversely affect our financial condition, results of operations and cash flows.
•A significant disruption in, or breach in security of, our information technology systems or data or violation of data privacy laws could adversely affect our business, reputation and financial statements.
•Our operations, products and services expose us to the risk of environmental, health and safety liabilities, costs and violations that could adversely affect our business, reputation and financial statements.
•We are subject to a variety of litigation and other legal and regulatory proceedings in the course of our business that could adversely affect our business and financial statements.
•If we are unable to implement and maintain effective internal control over financial reporting in the future, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock may be negatively affected.
•We may be required to recognize impairment charges for our goodwill and other intangible assets.
•Changes in our effective tax rates or exposure to additional income tax liabilities or assessments could affect our profitability. In addition, audits by tax authorities could result in additional payments for prior periods.
See "Item 1A. Risk Factors" in our 2024 Annual Report on Form 10-K and "Part II - Item 1A. Risk Factors" in this Form 10-Q for further discussion regarding reasons that actual results may differ materially from the results, developments and business decisions contemplated by our 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. Except to the extent required by applicable law, we do not assume any obligation to update or revise any forward-looking statement, whether as a result of new information, future events and developments or otherwise.
OVERVIEW
General
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 enables 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.
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 Coats business, which was divested during January 2024, is presented in Other for periods prior to the divestiture.
Outlook
We expect core sales to increase on a year-over-year basis in 2025. 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 and market conditions in key end product segments. Additional uncertainties are identified in "Information Relating to Forward-Looking Statements" above and in "Risk Factors" in our 2024 Annual Report on 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 and investment and taxation policy initiatives being considered in the United States and by the Organization for Economic Co-operation and Development. We also continue to monitor the Russia-Ukraine conflict and conflicts in the Middle East 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 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.
RESULTS OF OPERATIONS
Comparison of Results of Operations
Three Months Ended Nine Months Ended
($ in millions) September 26, 2025 % of Sales September 27, 2024 % of Sales September 26, 2025 % of Sales September 27, 2024 % of Sales
Sales $ 752.5 $ 750.0 $ 2,267.1 $ 2,202.2
Operating costs and expenses:
Cost of sales(a)
(396.4) 52.7 % (395.8) 52.8 % (1,190.4) 52.5 % (1,140.5) 51.8 %
Selling, general and administrative expenses ("SG&A") (151.0) 20.1 % (157.0) 20.9 % (478.6) 21.1 % (478.7) 21.7 %
Research and development expenses ("R&D") (44.4) 5.9 % (45.7) 6.1 % (132.1) 5.8 % (135.3) 6.1 %
Amortization of acquisition-related intangible assets (18.3) 2.4 % (20.0) 2.7 % (57.1) 2.5 % (60.0) 2.7 %
Operating profit $ 142.4 18.9 % $ 131.5 17.5 % $ 408.9 18.0 % $ 387.7 17.6 %
(a)Excluding amortization of acquisition-related intangible assets.
Sales
The components of our consolidated sales growth were as follows for the periods indicated:
% Change Three Months Ended September 26, 2025 vs. Comparable 2024 Period % Change Nine Months Ended September 26, 2025 vs. Comparable 2024 Period
Total sales growth (GAAP) 0.3 % 2.9 %
Core sales (Non-GAAP) - % 3.1 %
Acquisitions and divestitures (Non-GAAP) - % - %
Currency exchange rates (Non-GAAP) 0.3 % (0.2) %
Sales for each of our segments were as follows for the periods indicated:
Three Months Ended Nine Months Ended
($ in millions) September 26, 2025 September 27, 2024 September 26, 2025 September 27, 2024
Mobility Technologies(a)
$ 270.6 $ 257.4 $ 821.3 $ 737.7
Repair Solutions 141.6 152.1 445.4 485.3
Environmental & Fueling Solutions 357.8 349.9 1,049.2 992.1
Other - - - 1.3
Intersegment eliminations (17.5) (9.4) (48.8) (14.2)
Total $ 752.5 $ 750.0 $ 2,267.1 $ 2,202.2
(a)Includes $17.5 million, $9.4 million, $48.8 million and $14.2 million of intersegment sales for three and nine months ended September 26, 2025 and September 27, 2024, respectively, that are eliminated in consolidation.
Mobility Technologies
The components of sales growth for our Mobility Technologies segment were as follows for the periods indicated:
% Change Three Months Ended September 26, 2025 vs. Comparable 2024 Period % Change Nine Months Ended September 26, 2025 vs. Comparable 2024 Period
Total sales growth (GAAP) 5.1 % 11.3 %
Core sales (Non-GAAP) 4.8 % 11.6 %
Acquisitions and divestitures (Non-GAAP) 0.1 % 0.1 %
Currency exchange rates (Non-GAAP) 0.2 % (0.4) %
Total sales within our Mobility Technologies segment increased 5.1% during the three months ended September 26, 2025, as compared to the comparable period in 2024, driven by a 4.8% increase in core sales. The increase in core sales was due to solid demand for our convenience retail payment and enterprise productivity solutions.
Total sales within our Mobility Technologies segment increased 11.3% during the nine months ended September 26, 2025, as compared to the comparable period in 2024, driven by a 11.6% increase in core sales, partially offset by a 0.4% decrease due to the impact of currency translation. The increase in core sales was due to solid demand for our convenience retail payment and enterprise productivity solutions, partially offset by lower demand for our car wash solutions.
Repair Solutions
The components of sales growth for our Repair Solutions segment were as follows for the periods indicated:
% Change Three Months Ended September 26, 2025 vs. Comparable 2024 Period % Change Nine Months Ended September 26, 2025 vs. Comparable 2024 Period
Total sales growth (GAAP) (6.9) % (8.2) %
Core sales (Non-GAAP) (6.9) % (8.1) %
Acquisitions and divestitures (Non-GAAP) - % - %
Currency exchange rates (Non-GAAP) - % (0.1) %
Total sales and core sales within our Repair Solutions segment decreased 6.9% during the three months ended September 26, 2025, as compared to the comparable period in 2024, due to a decrease in volume in the tool storage, diagnostics and hardline product categories driven by macroeconomic impacts on service technicians' discretionary spending.
Total sales and core sales within our Repair Solutions segment decreased 8.2% and 8.1%, respectively, during the nine months ended September 26, 2025, as compared to the comparable period in 2024, due to a decrease in volume in the tool storage, hardline and power tools product categories driven by macroeconomic impacts on service technicians' discretionary spending.
Environmental & Fueling Solutions
The components of sales growth for our Environmental & Fueling Solutions segment were as follows for the periods indicated:
% Change Three Months Ended September 26, 2025 vs. Comparable 2024 Period % Change Nine Months Ended September 26, 2025 vs. Comparable 2024 Period
Total sales growth (GAAP) 2.3 % 5.8 %
Core sales (Non-GAAP) 1.8 % 5.8 %
Acquisitions and divestitures (Non-GAAP) - % - %
Currency exchange rates (Non-GAAP) 0.5 % - %
Total sales within our Environmental & Fueling Solutions segment increased 2.3% during the three months ended September 26, 2025, as compared to the comparable period in 2024, driven by a 1.8% increase in core sales and a 0.5% increase due to the impact of currency translation. The increase in core sales was due to growth in aftermarket products.
Total sales and core sales within our Environmental & Fueling Solutions segment increased 5.8% during the nine months ended September 26, 2025, as compared to the comparable period in 2024. The increase in core sales was due to growth in environmental solutions and dispenser systems.
Cost of Sales
Cost of sales, excluding amortization of acquisition-related intangible assets, increased $0.6 million, or 0.2%, for the three months ended September 26, 2025, as compared to the comparable period in 2024, consistent with our consolidated sales growth. Cost of sales, excluding amortization of acquisition-related intangible assets, as a percentage of sales decreased 10 basis points during the same period.
Cost of sales, excluding amortization of acquisition-related intangible assets, increased $49.9 million, or 4.4%, for the nine months ended September 26, 2025, as compared to the comparable period in 2024, and as a percentage of sales, increased 70 basis points during the same period, due to core sales growth in the Environmental & Fueling Solutions and Mobility Technologies segments as discussed above.
Operating Costs and Other Expenses
SG&A Expenses
SG&A expenses decreased $6.0 million, or 3.8%, during the three months ended September 26, 2025, as compared to the comparable period in 2024, and as a percentage of sales, decreased 80 basis points during the same period, due to productivity initiatives.
SG&A expenses decreased $0.1 million during the nine months ended September 26, 2025, as compared to the comparable period in 2024, and as a percentage of sales, decreased 60 basis points during the same period, due to productivity initiatives, partially offset by $7.0 million of asset impairments recognized during the nine months ended September 26, 2025.
R&D Expenses
R&D expenses decreased $1.3 million, or 2.8%, during the three months ended September 26, 2025, as compared to the comparable period in 2024, due to savings from focus and prioritization process initiatives. R&D expenses as a percentage of sales decreased 20 basis points during the three months ended September 26, 2025, as compared to the comparable period in 2024.
R&D expenses decreased $3.2 million, or 2.4%, during the nine months ended September 26, 2025, as compared to the comparable period in 2024, due to savings from focus and prioritization process initiatives. R&D expenses as a percentage of sales decreased 30 basis points during the nine months ended September 26, 2025, as compared to the comparable period in 2024.
Amortization of Acquisition-Related Intangible Assets
Amortization of acquisition-related intangible assets decreased $1.7 million, or 8.5%, during the three months ended September 26, 2025, as compared to the comparable period in 2024, 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 periods.
Amortization of acquisition-related intangible assets decreased $2.9 million, or 4.8%, during the nine months ended September 26, 2025, as compared to the comparable period in 2024, due to certain intangible assets becoming fully amortized between periods. Amortization of acquisition-related intangible assets as a percentage of sales decreased 20 basis points during the same periods.
Operating Profit
Operating profit increased $10.9 million, or 8.3%, during the three months ended September 26, 2025, as compared to the comparable period in 2024, and operating profit margins increased 140 basis points during the same period.
Operating profit increased $21.2 million, or 5.5%, during the nine months ended September 26, 2025, as compared to the comparable period in 2024, and operating profit margins increased 40 basis points during the same period.
Segment operating profit is used as a performance metric by the CODM in determining how to allocate resources and assess performance. Segment operating profit represents total segment sales less operating costs attributable to the segment, which does not include unallocated corporate costs and other operating costs not allocated to the reportable segments as part of the CODM's assessment of reportable segment operating performance, including amortization of acquisition-related intangible assets, stock-based compensation expense, restructuring and other related charges and other unallocated income or expense not indicative of the segment's core operating performance. As part of the CODM's assessment of the Repair Solutions segment, a capital charge calculated based on the segment's average gross outstanding financing receivables portfolio during the period and an estimated weighted average cost of capital is assessed by Corporate (the "Repair Solutions Capital Charge"). Refer to Note 9. Segment Information to the Consolidated Condensed Financial Statements for additional information.
Segment operating profit, operating profit and related margins were as follows for the periods indicated:
Three Months Ended Nine Months Ended
($ in millions) September 26, 2025 Margin September 27, 2024 Margin September 26, 2025 Margin September 27, 2024 Margin
Mobility Technologies $ 50.1 18.5 % $ 46.6 18.1 % $ 155.5 18.9 % $ 135.4 18.4 %
Repair Solutions 29.6 20.9 32.6 21.4 94.2 21.1 109.4 22.5
Environmental & Fueling Solutions 104.4 29.2 103.0 29.4 307.6 29.3 289.6 29.2
Other - - - - - - (0.4) (30.8)
Corporate & other unallocated costs(a)
(41.7) (5.5) (50.7) (6.8) (148.4) (6.5) (146.3) (6.6)
Total operating profit $ 142.4 18.9 % $ 131.5 17.5 % $ 408.9 18.0 % $ 387.7 17.6 %
(a)Margin for corporate & other unallocated costs is presented as a percentage of total sales. Refer to further discussion of Corporate & other unallocated costs below.
Mobility Technologies
Segment operating profit for our Mobility Technologies segment increased $3.5 million, or 7.5%, during the three months ended September 26, 2025, as compared to the comparable period in 2024, and segment operating profit margin increased 40 basis points during the same period. The increase in segment operating profit margin was due to savings from focus and prioritization process initiatives.
Segment operating profit for our Mobility Technologies segment increased $20.1 million, or 14.8%, during the nine months ended September 26, 2025, as compared to the comparable period in 2024, and segment operating profit margin increased 50 basis points during the same period. The increase in segment operating profit margin was due to an increase in volume, as further discussed above, and cost optimization.
Repair Solutions
Segment operating profit for our Repair Solutions segment decreased $3.0 million, or 9.2%, during the three months ended September 26, 2025, as compared to the comparable period in 2024, and segment operating profit margin decreased 50 basis points during the same period. The decrease in segment operating profit margin was due to a decrease in volume, as further discussed above, partially offset by price-cost benefits.
Segment operating profit for our Repair Solutions segment decreased $15.2 million, or 13.9%, during the nine months ended September 26, 2025, as compared to the comparable period in 2024, and segment operating profit margin decreased 140 basis points during the same period. The decrease in segment operating profit margin was due to a decrease in volume, as further discussed above.
Environmental & Fueling Solutions
Segment operating profit for our Environmental & Fueling Solutions segment increased $1.4 million, or 1.4%, during the three months ended September 26, 2025, as compared to the comparable period in 2024, and segment operating profit margin decreased 20 basis points during the same period. The decrease in segment operating profit margin was due to unfavorable product and geographic mix, partially offset by savings from focus and prioritization process initiatives.
Segment operating profit for our Environmental & Fueling Solutions segment increased $18.0 million, or 6.2%, during the nine months ended September 26, 2025, as compared to the comparable period in 2024, and segment operating profit margin increased 10 basis points during the same period. The increase in segment operating profit margin was due to an increase in volume, as further discussed above, and price-cost benefits.
Corporate & Other Unallocated Costs
Corporate & other unallocated costs consists of the following for the periods indicated:
Three Months Ended Nine Months Ended
($ in millions) September 26, 2025 September 27, 2024 September 26, 2025 September 27, 2024
Amortization of acquisition-related intangible assets $ (18.3) $ (20.0) $ (57.1) $ (60.0)
Stock-based compensation expense (7.2) (7.9) (23.3) (25.3)
Restructuring and other related charges (1.1) (4.2) (8.0) (10.7)
Other unallocated income (expense) 0.5 (0.1) (12.7) (4.0)
Corporate costs (26.3) (29.6) (79.7) (79.2)
Repair Solutions Capital Charge 10.7 11.1 32.4 32.9
Total corporate & other unallocated costs $ (41.7) $ (50.7) $ (148.4) $ (146.3)
Corporate & other unallocated costs decreased $9.0 million, or 17.8%, during the three months ended September 26, 2025, as compared to the comparable period in 2024, due to a $3.3 million decrease in corporate costs from cost optimization, a $3.1 million decrease in restructuring and other related charges and a $1.7 million decrease in amortization of acquisition-related intangible assets from certain intangible assets becoming fully amortized between periods. Corporate & other unallocated costs as a percentage of total sales decreased 130 basis points during the three months ended September 26, 2025, as compared to the comparable period in 2024.
Corporate & other unallocated costs increased $2.1 million, or 1.4%, during the nine months ended September 26, 2025, as compared to the comparable period in 2024, due to a $8.7 million increase in other unallocated expense from $7.0 million of asset impairments recognized during the nine months ended September 26, 2025, partially offset by a $2.9 million decrease in amortization of acquisition-related intangible assets from certain intangible assets becoming fully amortized between periods and a $2.7 million decrease in restructuring and other related charges. Corporate & other unallocated costs as a percentage of total sales decreased 10 basis points during the nine months ended September 26, 2025, as compared to the comparable period in 2024.
NON-GAAP FINANCIAL MEASURES
Core Sales
We define core sales as total sales excluding (i) sales from acquired and certain divested businesses; (ii) the impact of currency translation; and (iii) certain other items.
•References to sales attributable to acquisitions or acquired businesses refer to GAAP sales from acquired businesses recorded prior to the first anniversary of the acquisition less the amount of sales attributable to certain divested or exited businesses or product lines not considered discontinued operations.
•The portion of sales attributable to the impact of currency translation is calculated as the difference between (a) the period-to-period change in sales (excluding sales from acquired businesses) and (b) the period-to-period change in sales, including foreign operations, (excluding sales from acquired businesses) after applying the current period foreign exchange rates to the prior year period.
•The portion of sales attributable to other items is calculated as the impact of those items which are not directly correlated to core sales which do not have an impact on the current or comparable period.
Core sales should be considered in addition to, and not as a replacement for or superior to, total sales, and may not be comparable to similarly titled measures reported by other companies.
Management believes that reporting the non-GAAP financial measure of core sales provides useful information to investors by helping identify underlying growth trends in our business and facilitating easier comparisons of our sales performance with our performance in prior and future periods and to our peers. We exclude the effect of acquisitions and certain divestiture-related items because the nature, size and number of such transactions can vary dramatically from period to period and between us and our peers. We exclude the effect of currency translation and certain other items from core sales because these items are either not under management's control or relate to items not directly correlated to core sales. Management believes the exclusion of these items from core sales may facilitate assessment of underlying business trends and may assist in comparisons of long-term performance.
INTEREST COSTS
Interest expense, net was $14.8 million during the three months ended September 26, 2025, as compared to $18.9 million for the comparable period in 2024, a decrease of $4.1 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.
Interest expense, net was $45.5 million during the nine months ended September 26, 2025, as compared to $56.2 million for the comparable period in 2024, a decrease of $10.7 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.
For a discussion of our outstanding indebtedness, refer to Note 5. Financing to the Consolidated Condensed Financial Statements.
INCOME TAXES
Our effective tax rate for the three and nine months ended September 26, 2025 was 24.4% and 23.2%, respectively, as compared to 18.3% and 18.6% for the three and nine months ended September 27, 2024. The increase in the effective tax rate for the three months ended September 26, 2025 as compared to the comparable period in the prior year was primarily due to an increase in foreign earnings taxed at higher rates than the U.S. federal statutory rate and favorable changes in uncertain tax position reserves during the three months ended September 27, 2024. The increase in the effective tax rate for the nine months ended September 26, 2025 as compared to the prior year was primarily due to the favorable impacts related to uncertain tax position reserves and business reorganizations and divestitures during the nine months ended September 27, 2024.
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. The Company has reflected the impact of the enacted changes in its financial statements for the three and nine months ended September 26, 2025. The Company currently expects a $60.0 million reduction in cash tax payments due to the accelerated deduction of previously capitalized research and development expenses that can now be deducted under the OBBB. The other provisions within the OBBB are not expected to have a material impact.
COMPREHENSIVE INCOME
Comprehensive income decreased by $28.2 million during the three months ended September 26, 2025, as compared to the comparable period in 2024. Comprehensive income for the three months ended September 26, 2025 includes unfavorable foreign currency translation adjustments of $10.1 million while comprehensive income for the three months ended September 27, 2024 includes favorable foreign currency translation adjustments of $29.1 million.
Comprehensive income increased by $41.7 million during the nine months ended September 26, 2025, as compared to the comparable period in 2024. Comprehensive income for the nine months ended September 26, 2025 includes favorable foreign currency translation adjustments of $59.9 million while comprehensive income for the nine months ended September 27, 2024 includes a gain on the sale of the Company's Coats business of $37.2 million.
LIQUIDITY AND CAPITAL RESOURCES
We assess our liquidity in terms of our ability to generate cash to fund our operating, investing and financing activities. As of September 26, 2025, we held $433.8 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 September 26, 2025, 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 September 26, 2025.
2025 Financing and Capital Transactions
During the nine months ended September 26, 2025, we completed the following financing and capital transactions:
•Voluntarily repaid $50.0 million of 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 4.6 million shares for $175.1 million in the open market.
Refer to Note 5. Financing to the Consolidated Condensed Financial Statements for more information related to our long-term indebtedness and Note 11. Capital Stock and Earnings per Share to the Consolidated Condensed Financial Statements for more information related to our share repurchases.
Overview of Cash Flows and Liquidity
Following is an overview of our cash flows and liquidity:
Nine Months Ended
($ in millions) September 26, 2025 September 27, 2024
Net cash provided by operating activities $ 320.9 $ 259.4
Cash paid for acquisitions $ (10.3) $ -
Proceeds from sale of businesses, net of cash provided 41.6 68.4
Payments for additions to property, plant and equipment (54.6) (62.6)
Proceeds from sale of property, plant and equipment 0.2 1.3
Cash paid for equity investments (1.3) (2.3)
Proceeds from sale of equity securities 10.0 0.2
Net cash (used in) provided by investing activities $ (14.4) $ 5.0
Proceeds from issuance of long-term debt $ 83.3 $ -
Repayment of long-term debt (133.3) (100.0)
Net repayments of short-term borrowings (1.7) (1.2)
Payments for debt issuance costs (2.3) -
Payments of common stock cash dividend (11.1) (11.5)
Purchases of treasury stock (175.1) (164.6)
Proceeds from stock option exercises 9.5 14.4
Other financing activities (12.4) (13.9)
Net cash used in financing activities $ (243.1) $ (276.8)
Operating Activities
Cash flows from operating activities can fluctuate significantly from period to period as working capital needs and the timing of payments for income taxes, restructuring activities and other items impact reported cash flows.
Cash flows from operating activities were $320.9 million during the nine months ended September 26, 2025, an increase of $61.5 million, as compared to the comparable period in 2024. 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 $27.2 million of operating cash flows during the nine months ended September 26, 2025 compared to using $46.2 million in the comparable period of 2024. 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 $87.8 million during the nine months ended September 26, 2025 compared to using $69.3 million in the comparable period of 2024. This change is due primarily to working capital needs and the timing of accruals and payments and tax-related amounts.
Investing Activities
Net cash used in investing activities was $14.4 million during the nine months ended September 26, 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 provided by investing activities was $5.0 million during the nine months ended September 27, 2024, driven by proceeds from the sale of our Coats business, partially offset by payments for additions to property, plant and equipment.
We made capital expenditures of $54.6 million and $62.6 million during the nine months ended September 26, 2025 and September 27, 2024, respectively.
Refer to Note 2. Acquisitions to the Consolidated Condensed Financial Statements for additional information on our acquisition of Sergeant Sudz and Note 12. Divestitures to the Consolidated Condensed Financial Statements for additional information on our dispositions.
Financing Activities
Net cash used in financing activities was $243.1 million during the nine months ended September 26, 2025, driven by repurchases of the Company's common stock of $175.1 million and the voluntary repayment of $50.0 million of the Three-Year Term Loans due 2025. Net cash used in financing activities was $276.8 million during the nine months ended September 27, 2024, driven by repurchases of the Company's common stock of $164.6 million and the voluntary repayment of $100.0 million of the Three-Year Term Loans due 2024.
Share Repurchase Program
Refer to Note 11. Capital Stock and Earnings per Share to the Consolidated Condensed Financial Statements for a description of the Company's share repurchase program.
Dividends
We paid regular quarterly cash dividends of $0.025 per share during the nine months ended September 26, 2025. 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.
Supplemental Guarantor Financial Information
As of September 26, 2025, we had $1.6 billion in aggregate principal amount of the Registered Notes and $500.0 million in aggregate principal amount outstanding of the Term Loans. Our obligations to pay principal and interest on the Registered Notes and Term Loans are fully and unconditionally guaranteed on a joint and several basis on an unsecured, unsubordinated basis by Gilbarco Inc. and Matco Tools Corporation, two of Vontier's wholly-owned subsidiaries (the "Guarantor Subsidiaries"). Our other subsidiaries do not guarantee any such indebtedness (collectively, the "Non-Guarantor Subsidiaries"). Refer to Note 5. Financing to the Consolidated Condensed Financial Statements for additional information regarding the terms of our Registered Notes and the Term Loans.
The Registered Notes and the guarantees thereof are the Company's and the Guarantor Subsidiaries' senior unsecured obligations and:
•rank without preference or priority among themselves and equally in right of payment with our existing and any future unsecured and unsubordinated indebtedness, including, without limitation, indebtedness under our credit agreement;
•are senior in right of payment to any of our existing and future indebtedness that is subordinated to the notes;
•are effectively subordinated to any of our existing and future secured indebtedness to the extent of the assets securing such indebtedness; and
•are structurally subordinated to all existing and any future indebtedness and any other liabilities of our Non-Guarantor Subsidiaries.
The following tables present summarized financial information for Vontier Corporation and the Guarantor Subsidiaries on a combined basis and after the elimination of (a) intercompany transactions and balances between Vontier Corporation and the Guarantor Subsidiaries and (b) equity in earnings from and investments in the Non-Guarantor Subsidiaries.
Summarized Results of Operations Data ($ in millions)
Nine Months Ended
September 26, 2025
Net sales (a)
$ 1,182.2
Operating profit (b)
403.3
Net income (c)
$ 271.4
(a)Includes intercompany sales of $27.2 million.
(b)Includes intercompany operating profit of $16.0 million.
(c)Includes intercompany pretax income of $18.1 million.
Summarized Balance Sheet Data ($ in millions)
September 26, 2025
Assets
Current assets $ 498.7
Intercompany receivables 2,404.1
Noncurrent assets 647.7
Total assets $ 3,550.5
Liabilities
Current liabilities $ 846.0
Intercompany payables 274.9
Noncurrent liabilities 1,640.6
Total liabilities $ 2,761.5
CRITICAL ACCOUNTING ESTIMATES
There were no material changes to the Company's critical accounting estimates described in the Company's 2024 Annual Report on Form 10-K.
Vontier Corporation published this content on October 30, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on October 30, 2025 at 17:56 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]