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WILDLIGHT, Fla.--(BUSINESS WIRE)--Rayonier Inc. (NYSE:RYN) today reported second quarter net income attributable to Rayonier of $19.1 million, or $0.06 per diluted share, on revenues of $396.5 million. This compares to net income attributable to Rayonier of $408.7 million, or $2.63 per diluted share, on revenues of $106.5 million in the prior year quarter.

The second quarter results included $10.2 million of costs (net of tax) related to the merger with PotlatchDeltic1 and timber write-offs resulting from a casualty event2 of $2.3 million. Excluding these items and adjusting for pro forma net income adjustments attributable to noncontrolling interests,3 second quarter pro forma net income4 was $31.5 million, or $0.10 per diluted share. This compares to pro forma net income4 of $9.6 million, or $0.06 per diluted share, in the prior year period.

The following table summarizes results for the current quarter and the comparable prior year period. Consolidated results for the second quarter of 2026 include PotlatchDeltic’s operations for the entire period, while the prior year quarter reflects Rayonier’s results on a standalone basis.

Three Months Ended

(millions of dollars, except earnings per diluted share (EPS))

June 30, 2026

June 30, 2025

$

EPS

$

EPS

Revenues

$396.5

$106.5

Net income attributable to Rayonier

$19.1

$0.06

$408.7

$2.63

Pro forma items net of tax:

Costs related to the merger with PotlatchDeltic1

10.2

0.03

—

—

Timber write-offs resulting from casualty events2

2.3

0.01

—

—

Gain on sale of discontinued operations5

—

—

(404.4

)

(2.56

)

Loss from operations of discontinued operations6

—

—

0.6

—

Pro forma net income adjustments attributable to noncontrolling interests3

(0.1

)

—

4.8

—

Pro forma net income4

$31.5

$0.10

$9.6

$0.06

Second quarter operating income was $34.6 million versus operating income of $14.5 million in the prior year period. Second quarter operating income included $10.4 million of costs related to the merger with PotlatchDeltic1 and timber write-offs resulting from a casualty event2 of $2.3 million. Excluding these items, pro forma operating income4 was $47.2 million versus $14.5 million in the prior year period. Second quarter Adjusted EBITDA4 was $123.7 million versus $44.9 million in the prior year period.

The following table summarizes operating income, pro forma operating income,4 and Adjusted EBITDA4 for the current quarter and the comparable prior-year period.

Three Months Ended June 30,

Operating Income

Pro forma Operating Income4

Adjusted EBITDA4

(millions of dollars)

2026

2025

2026

2025

2026

2025

Southern Timber

$8.1

$12.6

$10.4

$12.6

$52.6

$28.4

Northwest Timber

12.6

1.5

12.6

1.5

26.3

6.8

Wood Products

15.1

—

15.1

—

25.0

—

Real Estate

28.3

9.8

28.3

9.8

38.3

18.6

Corporate and Other

(28.7

)

(9.3

)

(18.3

)

(9.3

)

(17.7

)

(8.9

)

Intersegment Eliminations7

(0.8

)

—

(0.8

)

—

(0.8

)

—

Total

$34.6

$14.5

$47.2

$14.5

$123.7

$44.9

Year-to-date cash provided by operating activities was $145.2 million versus $88.7 million in the prior year period. Year-to-date cash available for distribution (CAD)4 was $177.1 million, which increased $130.5 million versus the prior year period primarily due to higher Adjusted EBITDA4 ($145.9 million) and higher cash interest received (net) ($5.2 million), partially offset by higher capital expenditures ($20.4 million).

“Our second quarter results reflected solid performance across all of our business segments, as well as a full quarter of contributions from the legacy PotlatchDeltic businesses, resulting in total Adjusted EBITDA of $123.7 million,” said Mark McHugh, President and Chief Executive Officer. “We maintained a strong focus on operational execution during the quarter, while continuing to make significant progress on our integration priorities and positioning the combined company to realize the strategic and financial benefits of the merger. We also deployed capital opportunistically during the quarter, repurchasing $72 million of our common stock, which reflects our commitment to disciplined capital allocation and long-term value creation for our shareholders.”

“In our Southern Timber segment, Adjusted EBITDA increased 85% versus the prior year quarter to $52.6 million, driven primarily by the contribution of approximately 1.5 million tons of harvest volume from the legacy PotlatchDeltic timberlands. In our Northwest Timber segment, Adjusted EBITDA of $26.3 million was nearly four times higher than the prior year quarter, primarily due to 364,000 tons of incremental harvest volume from the PotlatchDeltic timberlands as well as higher indexed sawlog prices in Idaho.”

“In our Wood Products segment, Adjusted EBITDA totaled $25.0 million, as lumber price realizations strengthened throughout the quarter and reached their highest level in nearly four years. Additionally, we delivered shipment volumes in line with our targets amid a challenging transportation environment.”

“In our Real Estate segment, Adjusted EBITDA totaled $38.3 million—above the high-end of our prior quarterly guidance—reflecting strong execution and continued momentum across our real estate categories.”

Southern Timber

Second quarter sales of $107.6 million increased $54.3 million, or 102%, versus the prior year period. Harvest volumes increased 110% to 3.35 million tons versus 1.60 million tons in the prior year period, primarily driven by 1.5 million tons of incremental volume from the PotlatchDeltic timberlands. Average delivered pine sawtimber prices decreased to $44.46 per ton versus $47.87 per ton in the prior year period, largely due to changes in geographic mix from the expanded Southern Timber footprint, coupled with modestly softer market conditions. Average delivered pine pulpwood prices decreased to $30.20 per ton versus $37.35 per ton in the prior year period, reflecting geographic mix impacts associated with the expanded footprint, along with generally weaker pulpwood market conditions. Weighted-average prices on stumpage sales (including hardwood) decreased to $15.37 per ton versus $19.08 per ton in the prior year period. Operating income of $8.1 million decreased $4.5 million versus the prior year period due to higher depletion expense ($9.4 million), lower prices ($5.8 million), higher costs ($3.0 million) and a timber write-off resulting from a casualty event ($2.3 million),2 partially offset by higher volumes ($8.8 million) and higher non-timber income ($7.2 million).

Second quarter Adjusted EBITDA4 of $52.6 million was 85%, or $24.2 million, above the prior year period.

Northwest Timber

Second quarter sales of $66.0 million increased $42.2 million, or 177%, versus the prior year period. Harvest volumes increased 133% to 578,000 tons versus 248,000 tons in the prior year period, driven by 364,000 tons of incremental volume from the legacy PotlatchDeltic timberlands. Average delivered prices for sawtimber increased to $119.66 per ton versus $96.17 per ton in the prior year period, primarily reflecting geographic mix due to the addition of Idaho sawtimber (most of which is indexed to lumber prices), which more than offset modestly lower prices in the Pacific Northwest. Average delivered pulpwood prices increased to $38.78 per ton versus $31.52 per ton in the prior year period, primarily due to geographic mix impacts from the addition of the legacy PotlatchDeltic timberlands. Operating income of $12.6 million increased $11.1 million versus the prior year period due to higher prices ($10.7 million), higher volumes ($8.5 million) and higher non-timber income ($0.7 million), partially offset by higher costs ($7.3 million) and higher depletion expense ($1.5 million).

Second quarter Adjusted EBITDA4 of $26.3 million was $19.5 million above the prior year period.

Wood Products

Second quarter sales totaled $196.2 million, consisting of $158.6 million of lumber sales and $37.5 million of plywood, residual, and other sales. Lumber pricing increased steadily throughout the second quarter as import duties, mill curtailments, and trucking shortages constricted supply. Lumber shipments totaled 314 MMBF, with average lumber price realizations of $505 per thousand board feet.

Second quarter operating income and Adjusted EBITDA4 were $15.1 million and $25.0 million, respectively.

Real Estate

Second quarter sales of $53.7 million increased $24.2 million versus the prior year period, while operating income of $28.3 million increased $18.5 million versus the prior year period. Sales and operating income increased primarily due to higher acres sold (7,500 acres sold versus 3,263 acres sold in the prior year period), partially offset by lower weighted-average prices ($6,290 per acre versus $8,340 per acre in the prior year period).

Improved Development sales of $6.4 million included $2.3 million from the Chenal Valley development project in Little Rock, Arkansas, $2.1 million from the Heartwood development project south of Savannah, Georgia, $1.0 million from the Wildlight development project north of Jacksonville, Florida, and $1.0 million from the sale of a 0.5-acre commercial-use parcel in Kitsap County, Washington.

Rural sales of $40.7 million consisted of 7,490 acres at an average price of $5,439 per acre, including a 459-acre sale to a solar developer for $10,100 per acre. This compares to prior year period sales of $15.7 million, which consisted of 2,926 acres at an average price of $5,376 per acre.

Second quarter Adjusted EBITDA4 of $38.3 million increased $19.7 million versus the prior year period.

Other Items

Second quarter corporate and other operating expenses of $28.7 million increased $19.4 million versus the prior year period, primarily reflecting the larger scale of the combined company and $10.4 million of costs related to the merger with PotlatchDeltic.1

Second quarter interest expense of $16.9 million increased $10.4 million versus the prior year period, primarily due to incremental debt assumed in the merger with PotlatchDeltic. Second quarter interest income of $4.9 million increased $2.5 million versus the prior year period, primarily due to a higher cash balance following the sale of the Company’s New Zealand joint venture interest in the second quarter of 2025.

Second quarter income tax expense of $2.9 million was primarily driven by income generated from the Company’s Wood Products and Real Estate development businesses.

Share Repurchases

During the second quarter, the Company repurchased approximately 3.5 million shares at an average price of $20.95 per share, or $72.4 million in total. As of June 30, 2026, the Company had $126.0 million remaining on its current share repurchase authorization.

Outlook

Consistent with the initial 2026 financial guidance we provided in February, the following full-year metrics reflect a pro rata contribution from legacy PotlatchDeltic operations for January 31, 2026 through December 31, 2026.

Southern Timber: In our Southern Timber segment, we expect to achieve full-year harvest volumes of 12.2 to 12.5 million tons, with anticipated harvest volumes of 3.1 to 3.3 million tons in the third quarter. We expect regional sawtimber and pulpwood prices to remain relatively stable for the third quarter compared to the second quarter. However, full-year and quarterly average pine prices for the combined company’s Southern Timber segment are expected to be lower than the standalone prices for Rayonier in the prior year based on the geographic mix of the combined company. Northwest Timber: In our Northwest Timber segment, we expect to achieve full-year harvest volumes of 2.0 to 2.2 million tons, with anticipated harvest volumes of approximately 600,000 tons in the third quarter. We expect overall sawtimber prices to be modestly higher in the third quarter compared to the second quarter, primarily due to higher indexed sawlog prices on a portion of the volume coming from our Idaho timberlands. We also continue to expect that full-year 2026 average log pricing for the combined company’s Northwest Timber segment will be higher than the standalone pricing for Rayonier in the prior year. Wood Products: In our Wood Products segment, we continue to expect lumber shipments to total approximately 1.1 billion board feet for the 11 months of contribution in 2026. We further expect lumber shipments in the third quarter of approximately 320 to 330 million board feet. We continue to be encouraged by the improvement in lumber prices, which has been driven largely by more favorable supply/demand dynamics in addition to broader transportation constraints. As of July month-end, our average quarter-to-date lumber price realization was modestly higher than our average price realization in the second quarter. Real Estate: We are pleased by the continued momentum in our Real Estate segment and maintain a strong pipeline of rural and improved development land sales for the balance of the year. Based on our current transaction pipeline and sales closed quarter-to-date, we expect an Adjusted EBITDA contribution in the third quarter of $25 to $35 million. For the full year, we continue to expect an Adjusted EBITDA contribution from our Real Estate segment of $180 to $200 million. Conference Call

A conference call and live audio webcast will be held on Thursday, August 6, 2026 at 10:00 AM (ET) to discuss these results. Supplemental materials and access to the conference call and live audio webcast will be available at www.rayonier.com. A replay of the webcast will be archived on the Company’s website and available shortly after the call.

Complimentary copies of Rayonier press releases and other financial documents are also available by calling (904) 357-9100.

About Rayonier

Rayonier is a land resources real estate investment trust (REIT) with a portfolio comprising over four million acres in the U.S. South and U.S. Northwest. The company is focused on managing its timberlands on a sustainable basis while optimizing its overall portfolio value by delivering land to its highest and best use. Rayonier also operates six sawmills, an industrial-grade plywood mill, residential and commercial real estate developments, and a rural land sales program. Rayonier is committed to corporate responsibility, third-party forest certification, and supporting climate change mitigation through its land-based solutions business.

More information is available at www.rayonier.com.

Forward-Looking Statements - Certain statements in this press release regarding anticipated financial outcomes including Rayonier’s earnings guidance, if any, business and market conditions, outlook, expected dividend rate, acquisition and disposition activity, including the ability to realize the intended benefits of our recent merger with PotlatchDeltic Corporation, expected harvest schedules, timberland acquisitions and dispositions, the anticipated benefits of Rayonier’s business strategies, including the recent sale of the entities holding Rayonier’s interest in the New Zealand joint venture and the anticipated use of proceeds from such sale, and other similar statements relating to Rayonier’s future events, developments or financial or operational performance or results, are “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward-looking statements are identified by the use of words such as “may,” “will,” “should,” “expect,” “estimate,” “believe,” “intend,” “project,” “anticipate,” “long-term,” “looking ahead” and other similar language. However, the absence of these or similar words or expressions does not mean that a statement is not forward-looking. While management believes that these forward-looking statements are reasonable when made, forward-looking statements are not guarantees of future performance or events and undue reliance should not be placed on these statements.

The following important factors, among others, could cause actual results or events to differ materially from those expressed in forward-looking statements that may have been made in this document: our ability to obtain the intended benefits of our merger with PotlatchDeltic Corporation, including future financial and operating results; the cyclical and competitive nature of the industries in which we operate; fluctuations in demand for, or supply of, our forest products and real estate offerings, including any further downturn in the housing market; entry of new competitors into our markets; changes in production and production capacity in the forest products industry; unanticipated manufacturing disruptions or inefficiencies in our supply chain and/or operations; fires at our manufacturing facilities; changes in policy regarding governmental timber sales; changes in global economic conditions and geopolitical tensions, including the war in Ukraine and elevated tensions in the Middle East; business disruptions arising from government shutdowns, public health crises and outbreaks of communicable diseases; the uncertainties of potential impacts of climate-related initiatives; the cost and availability of third-party logging and trucking services; the geographic concentration of a significant portion of our timberland; our ability to identify, finance and complete timberland acquisitions and/or to complete dispositions; changes in timberland values; changes in environmental laws and regulations regarding timber harvesting, delineation of wetlands, endangered species and development of real estate generally, that may restrict or adversely impact our ability to conduct our business, or increase the cost of doing so; adverse weather conditions, natural disasters and other catastrophic events such as hurricanes, wind storms and wildfires; the lengthy, uncertain and costly process associated with the ownership, entitlement and development of real estate, especially in Florida and Washington, including changes in law, policy and political factors beyond our control; the availability and cost of financing for real estate development and mortgage loans; changes in tariffs, taxes or treaties relating to the import and export of our products, our customers’ products or those of our and our customers’ competitors; changes in key management and personnel; and our ability to meet all necessary legal requirements to continue to qualify as a real estate investment trust (“REIT”) and changes in tax laws that could adversely affect beneficial tax treatment.

For additional factors that could impact future results, please see Item 1A - Risk Factors in the Company’s most recent Annual Report on Form 10-K and similar discussion included in other reports that we subsequently file with the Securities and Exchange Commission (the “SEC”). Forward-looking statements are only as of the date they are made, and the Company undertakes no duty to update its forward-looking statements except as required by law. You are advised, however, to review any further disclosures we make on related subjects in our subsequent reports filed with the SEC.

Non-GAAP Financial Measures - To supplement Rayonier’s financial statements presented in accordance with generally accepted accounting principles in the United States (“GAAP”), Rayonier uses certain non-GAAP measures, including “cash available for distribution,” “pro forma operating income (loss),” “pro forma net income,” and “Adjusted EBITDA,” which are defined and further explained in this communication. Reconciliation of such measures to the nearest GAAP measures can also be found in this communication. Rayonier’s definitions of these non-GAAP measures may differ from similarly titled measures used by others. These non-GAAP measures should be considered supplemental to, and not a substitute for, financial information prepared in accordance with GAAP.

RAYONIER INC. AND SUBSIDIARIES

CONDENSED STATEMENTS OF CONSOLIDATED INCOME

June 30, 2026 (unaudited)

(millions of dollars, except per share information)

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

June 30,

June 30,

2026

2026

2025

2026

2025

  SALES

$396.5

$276.8

$106.5

$673.3

$189.5

Costs and Expenses

Cost of sales

(320.8

)

(230.3

)

(74.9

)

(551.2

)

(139.9

)

Selling and general expenses

(30.8

)

(21.8

)

(16.9

)

(52.4

)

(33.6

)

Other operating expense, net

(10.3

)

(70.4

)

(0.2

)

(80.7

)

(1.4

)

OPERATING INCOME (LOSS)

34.6

(45.7

)

14.5

(11.0

)

14.6

Interest expense, net

(16.9

)

(14.3

)

(6.5

)

(31.3

)

(12.9

)

Interest income

4.9

7.2

2.3

12.0

5.2

Other miscellaneous (expense) income, net

(0.5

)

0.9

(0.5

)

0.4

(2.4

)

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

22.1

(51.9

)

9.8

(29.9

)

4.5

Income tax (expense) benefit

(2.9

)

39.4

—

36.6

(0.3

)

INCOME (LOSS) FROM CONTINUING OPERATIONS

19.2

(12.5

)

9.8

6.7

4.2

(Loss) income from operations of discontinued operations, net of tax

—

—

(0.6

)

—

1.9

Gain on sale of discontinued operations

—

—

404.4

—

404.4

INCOME FROM DISCONTINUED OPERATIONS

—

—

403.8

—

406.3

NET INCOME (LOSS)

19.2

(12.5

)

413.6

6.7

410.5

Less: Net (income) loss attributable to noncontrolling interests in the Operating Partnership

(0.1

)

0.1

(5.5

)

—

(5.4

)

Less: Net loss attributable to noncontrolling interests in consolidated affiliates

—

—

0.6

—

0.2

NET INCOME (LOSS) ATTRIBUTABLE TO RAYONIER INC.

$19.1

($12.4

)

$408.7

$6.7

$405.3

EARNINGS (LOSS) PER COMMON SHARE

BASIC EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO RAYONIER INC.

Continuing Operations

$0.06

($0.05

)

$0.06

$0.02

$0.03

Discontinued Operations

—

—

$2.57

—

$2.59

Net Income (Loss)

$0.06

($0.05

)

$2.63

$0.02

$2.62

DILUTED EARNINGS (LOSS) PER SHARE ATTRIBUTABLE TO RAYONIER INC.

Continuing Operations

$0.06

($0.05

)

$0.06

$0.02

$0.03

Discontinued Operations

—

—

$2.56

—

$2.57

Net Income (Loss)

$0.06

($0.05

)

$2.63

$0.02

$2.60

Pro forma net income per share (a)

$0.10

$0.07

$0.06

$0.18

$0.04

Weighted Average Common Shares used for determining

Basic EPS

300,735,729

255,954,391

155,536,320

278,468,765

154,612,221

Diluted EPS (b)

302,924,904

255,954,391

157,727,916

280,648,358

158,142,596

RAYONIER INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

June 30, 2026 (unaudited)

(millions of dollars)

June 30,

December 31,

2026

2025

  Assets

Cash and cash equivalents

$411.8

$842.9

Inventory

125.3

6.8

Assets held for sale

59.1

5.4

Other current assets

85.0

28.6

Timber and timberlands, net of depletion and amortization

5,791.1

2,299.5

Higher and better use timberlands and real estate development investments

188.4

126.1

Property, plant and equipment

611.7

39.4

Less - accumulated depreciation

(39.1

)

(20.9

)

Net property, plant and equipment

572.6

18.5

Restricted cash, non-current

10.5

0.5

Operating lease right-of-use assets

23.9

16.3

Other assets

196.0

60.1

$7,463.7

$3,404.7

Liabilities, Noncontrolling Interests in the Operating Partnership and Shareholders’ Equity

Current maturities of long-term debt

—

200.0

Other current liabilities

191.2

71.3

Long-term debt

1,855.3

845.3

Pension and other postretirement benefits, non-current

60.2

1.4

Other non-current liabilities

106.3

36.5

Noncontrolling interests in the Operating Partnership

38.5

40.5

Total shareholders’ equity

5,212.2

2,209.7

$7,463.7

$3,404.7

  B

RAYONIER INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

June 30, 2026 (unaudited)

(millions of dollars, except share information)

Common Shares

Retained

Earnings

Accumulated

Other

Comprehensive

Income

Shareholders’

Equity

Shares

Amount

  Balance, January 1, 2026

161,425,616

$1,904.3

$280.9

$24.5

$2,209.7

Net loss

—

—

(12.5

)

—

(12.5

)

Net loss attributable to noncontrolling interests in the Operating Partnership

—

—

0.1

—

0.1

Dividends ($0.26 per share)

—

—

(81.1

)

—

(81.1

)

Issuance of common shares associated with the merger with PotlatchDeltic, net of equity issuance costs of $0.9 million

140,872,342

3,202.6

—

—

3,202.6

Replacement equity awards granted in connection with the merger with PotlatchDeltic — precombination service portion

—

25.0

—

—

25.0

Issuance of common shares under incentive stock plans

903,045

—

—

—

—

Stock-based incentive compensation

—

15.4

—

—

15.4

Repurchase of common shares made under repurchase program

(1,480,753

)

—

(31.1

)

—

(31.1

)

Other (a)

(44,927

)

(0.8

)

(0.1

)

2.2

1.3

Balance, March 31, 2026

301,675,323

$5,146.5

$156.2

$26.7

$5,329.4

Net income

—

—

19.2

—

19.2

Net income attributable to noncontrolling interests in the Operating Partnership

—

—

(0.1

)

—

(0.1

)

Dividends ($0.26 per share)

—

—

(77.9

)

—

(77.9

)

Issuance of common shares under incentive stock plans

490,627

—

—

—

—

Stock-based incentive compensation

—

5.9

—

—

5.9

Repurchase of common shares made under repurchase program

(3,455,482

)

—

(72.4

)

—

(72.4

)

Adjustment of noncontrolling interests in the Operating Partnership

—

—

0.1

—

0.1

Other (a)

(103,290

)

(2.2

)

(0.1

)

10.3

8.0

Balance, June 30, 2026

298,607,178

$5,150.2

$25.0

$37.0

$5,212.2

  Common Shares

Retained

Earnings

Accumulated

Other

Comprehensive

Income (Loss)

Noncontrolling

Interests in

Consolidated

Affiliates

Shareholders’

Equity

Shares

Amount

  Balance, January 1, 2025

148,536,643

$1,522.5

$257.2

($10.4

)

$11.2

$1,780.5

Loss from continuing operations

—

—

(5.6

)

—

—

(5.6

)

Income from discontinued operations

—

—

2.1

—

0.4

2.5

Net loss attributable to noncontrolling interests in the Operating Partnership

—

—

0.1

—

—

0.1

Dividends ($0.2725 per share)

—

—

(42.7

)

—

—

(42.7

)

Issuance of common shares from special

dividend (b)

7,560,983

200.4

—

—

—

200.4

Issuance of common shares under incentive stock plans

5,566

—

—

—

—

—

Stock-based incentive compensation

—

2.3

—

—

—

2.3

Repurchase of common shares made under repurchase program

(95,000

)

—

(2.6

)

—

—

(2.6

)

Adjustment of noncontrolling interests in the Operating Partnership

—

—

(4.3

)

—

—

(4.3

)

Other (a)

(420

)

—

—

(3.9

)

(1.4

)

(5.3

)

Balance, March 31, 2025

156,007,772

$1,725.2

$204.2

($14.3

)

$10.2

$1,925.3

Income from continuing operations

—

—

9.8

—

—

9.8

Income (loss) from discontinued operations

—

—

404.4

—

(0.6

)

403.8

Net income attributable to noncontrolling interests in the Operating Partnership

—

—

(5.5

)

—

—

(5.5

)

Deconsolidation of discontinued operations

—

—

—

29.1

(10.8

)

18.3

Dividends ($0.2725 per share)

—

—

(42.4

)

—

—

(42.4

)

Issuance of common shares under incentive stock plans

315,017

—

—

—

—

—

Stock-based incentive compensation

—

3.6

—

—

—

3.6

Repurchase of common shares made under repurchase program

(1,472,928

)

—

(34.9

)

—

—

(34.9

)

Adjustment of noncontrolling interests in the Operating Partnership

—

—

9.5

—

—

9.5

Other (a)

(88,629

)

(2.4

)

—

15.9

1.2

14.7

Balance, June 30, 2025

154,761,232

$1,726.4

$545.1

$30.7

—

$2,302.2

RAYONIER INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

June 30, 2026 (unaudited)

(millions of dollars)

Six Months Ended June 30,

2026

2025

  Cash provided by operating activities:

Net income

$6.7

$410.5

Depreciation, depletion and amortization from continuing operations

126.6

46.9

Depreciation, depletion and amortization from discontinued operations

—

9.1

Non-cash cost of land and improved development

18.0

9.3

Timber write-offs resulting from casualty events

2.3

—

Stock-based incentive compensation expense

21.3

5.9

Deferred income taxes

(37.1

)

(2.6

)

Gain on sale of discontinued operations

—

(404.4

)

Other items to reconcile net income to cash provided by operating activities

26.0

9.0

Changes in working capital and other assets and liabilities

(18.6

)

5.0

145.2

88.7

Cash (used for) provided by investing activities:

Capital expenditures from continuing operations

(42.8

)

(22.4

)

Capital expenditures from discontinued operations

—

(7.1

)

Real estate development investments

(9.6

)

(8.2

)

Net cash consideration for merger with PotlatchDeltic

(24.8

)

—

Interest received under swaps with other-than-insignificant financing element

10.4

—

Net proceeds on sale of discontinued operations (a)

—

687.6

Net proceeds on sale of property, plant and equipment

—

4.1

Other

(2.5

)

4.3

(69.3

)

658.3

Cash used for financing activities:

Repayment of debt

(227.5

)

—

Dividends paid (b)

(159.1

)

(153.3

)

Distributions to noncontrolling interests in the Operating Partnership (c)

(0.9

)

(2.0

)

Equity issuance costs

(0.9

)

—

Payments made under finance leases

(2.1

)

—

Repurchase of common shares made under repurchase program

(103.5

)

(37.6

)

Distributions to noncontrolling interests in consolidated affiliates

—

(3.1

)

Other

(3.0

)

(2.6

)

(497.0

)

(198.6

)

Effect of exchange rate changes on cash and restricted cash

—

1.3

Cash, cash equivalents and restricted cash:

Change in cash, cash equivalents and restricted cash

(421.1

)

549.7

Balance from continuing operations, beginning of year

843.4

323.1

Balance from discontinued operations, beginning of year

—

20.1

Total Balance, beginning of year

843.4

343.2

Balance from continuing operations, end of period

422.3

892.9

Balance from discontinued operations, end of period

—

—

Total Balance, end of period

$422.3

$892.9

RAYONIER INC. AND SUBSIDIARIES

BUSINESS SEGMENT SALES, OPERATING INCOME (LOSS),

PRO FORMA OPERATING INCOME AND ADJUSTED EBITDA

June 30, 2026 (unaudited)

(millions of dollars)

Three Months Ended

Six Months Ended

June 30,

March 31,

June 30,

June 30,

June 30,

2026

2026

2025

2026

2025

  Sales

Southern Timber

$107.6

$88.7

$53.3

$196.3

$104.3

Northwest Timber

66.0

32.1

23.8

98.1

45.6

Wood Products

196.2

108.5

—

304.6

—

Real Estate

53.7

59.8

29.4

113.4

39.6

Intersegment Eliminations (a)

(26.9

)

(12.2

)

—

(39.2

)

—

Sales

$396.5

$276.8

$106.5

$673.3

$189.5

Operating income (loss)

Southern Timber

$8.1

$12.4

$12.6

$20.5

$22.7

Northwest Timber

12.6

(0.4

)

1.5

12.1

1.8

Wood Products

15.1

(1.0

)

—

14.1

—

Real Estate

28.3

27.4

9.8

55.6

8.8

Corporate and Other

(28.7

)

(82.8

)

(9.3

)

(111.4

)

(18.7

)

Intersegment Eliminations (a)

(0.8

)

(1.2

)

—

(2.0

)

—

Operating income (loss)

$34.6

($45.7

)

$14.5

($11.0

)

$14.6

Pro forma operating income (loss) (b)

Southern Timber

$10.4

$12.4

$12.6

$22.8

$22.7

Northwest Timber

12.6

(0.4

)

1.5

12.1

1.8

Wood Products

15.1

0.1

—

15.3

—

Real Estate

28.3

27.4

9.8

55.6

8.8

Corporate and Other

(18.3

)

(12.3

)

(9.3

)

(30.7

)

(17.6

)

Intersegment Eliminations (a)

(0.8

)

(1.2

)

—

(2.0

)

—

Pro forma operating income

$47.2

$25.9

$14.5

$73.2

$15.7

Adjusted EBITDA (b)

Southern Timber

$52.6

$45.5

$28.4

$98.1

$55.4

Northwest Timber

26.3

8.6

6.8

34.9

12.7

Wood Products

25.0

6.8

—

31.8

—

Real Estate

38.3

46.2

18.6

84.5

20.6

Corporate and Other

(17.7

)

(11.8

)

(8.9

)

(29.5

)

(16.8

)

Intersegment Eliminations (a)

(0.8

)

(1.2

)

—

(2.0

)

—

Adjusted EBITDA

$123.7

$94.1

$44.9

$217.8

$71.9

RAYONIER INC. AND SUBSIDIARIES

RECONCILIATION OF NON-GAAP MEASURES

June 30, 2026 (unaudited)

(millions of dollars, except per share information)

LIQUIDITY MEASURES:

Six Months Ended

June 30,

June 30,

2026

2025

  Cash Provided by Operating Activities

$145.2

$88.7

Working capital and other balance sheet changes

(6.1

)

(10.7

)

Costs related to the merger with PotlatchDeltic (a)

80.8

—

Capital expenditures

(42.8

)

(22.4

)

Cash provided by operating activities from discontinued operations

—

(8.9

)

Cash Available for Distribution (b)

$177.1

$46.7

Net Income

$6.7

$410.5

Interest, net and miscellaneous expense

19.2

7.7

Income tax (benefit) expense (c)

(36.6

)

0.3

Depreciation, depletion and amortization

126.6

46.9

Non-cash cost of land and improved development

18.0

9.3

Non-operating (income) expense (d)

(0.4

)

2.4

Costs related to the merger with PotlatchDeltic (a)

80.8

—

Timber write-offs resulting from casualty events (e)

2.3

—

Inventory purchase price adjustment in cost of sales (f)

1.2

—

Restructuring charges (g)

—

1.1

Income from operations of discontinued operations, net of tax (h)

—

(1.9

)

Gain on sale of discontinued operations (i)

—

(404.4

)

Adjusted EBITDA (j)

$217.8

$71.9

Cash interest received (paid), net (k)

2.6

(2.6

)

Cash taxes paid

(0.5

)

(0.3

)

Capital expenditures

(42.8

)

(22.4

)

Cash Available for Distribution (b)

$177.1

$46.7

Cash Available for Distribution (b)

$177.1

$46.7

Real estate development investments

(9.6

)

(8.2

)

Cash Available for Distribution after real estate development investments

$167.6

$38.5

  PRO FORMA NET INCOME (l):

Three Months Ended

Six Months Ended

June 30, 2026

March 31, 2026

June 30, 2025

June 30, 2026

June 30, 2025

$

Per

Diluted

Share

$

Per

Diluted

Share

$

Per

Diluted

Share

$

Per

Diluted

Share

$

Per

Diluted

Share

  Net Income (Loss) Attributable to Rayonier Inc.

$19.1

$0.06

($12.4

)

($0.05

)

$408.7

$2.63

$6.7

$0.02

$405.3

$2.60

Pro Forma items net of tax:

Costs related to the merger with PotlatchDeltic (a)

10.2

0.03

69.5

0.27

—

—

79.7

0.28

—

—

Timber write-offs resulting from casualty events (e)

2.3

0.01

—

—

—

—

2.3

0.01

—

—

Inventory purchase price adjustment in cost of sales (f)

—

—

0.9

—

—

—

0.9

—

—

—

Tax benefit from valuation allowance release (m)

—

—

(40.3

)

(0.16

)

—

—

(40.3

)

(0.14

)

—

—

Loss (income) from operations of discontinued operations (h)

—

—

—

—

0.6

—

—

—

(1.9

)

(0.01

)

Gain on sale of discontinued operations (i)

—

—

—

—

(404.4

)

(2.56

)

—

—

(404.4

)

(2.56

)

Restructuring charges (g)

—

—

—

—

—

—

—

—

1.1

0.01

Net cost on legal settlements (n)

—

—

—

—

—

—

—

—

1.7

0.01

Pro forma net income (loss) adjustments attributable to noncontrolling interests (o)

(0.1

)

—

(0.2

)

—

4.8

—

(0.3

)

—

5.1

—

Pro Forma Net Income

$31.5

$0.10

$17.4

$0.07

$9.6

$0.06

$48.9

$0.18

$6.9

$0.04

  PRO FORMA OPERATING INCOME (LOSS) AND ADJUSTED EBITDA (p) (j):

Three Months Ended

Southern

Timber

Northwest

Timber

Wood

Products

Real

Estate

Corporate

and

Other

Intersegment

Eliminations

Total

  June 30, 2026

Operating income

$8.1

$12.6

$15.1

$28.3

($28.7

)

($0.8

)

$34.6

Costs related to the merger with PotlatchDeltic (a)

—

—

—

—

10.4

—

10.4

Timber write-offs resulting from casualty events (e)

2.3

—

—

—

—

—

2.3

Pro forma operating income

$10.4

$12.6

$15.1

$28.3

($18.3

)

($0.8

)

$47.2

Depreciation, depletion and amortization

42.2

13.8

9.9

3.9

0.6

—

70.4

Non-cash cost of land and improved development

—

—

—

6.0

—

—

6.0

Adjusted EBITDA

$52.6

$26.3

$25.0

$38.3

($17.7

)

($0.8

)

$123.7

March 31, 2026

Operating income (loss)

$12.4

($0.4

)

($1.0

)

$27.4

($82.8

)

($1.2

)

($45.7

)

Costs related to the merger with PotlatchDeltic (a)

—

—

—

—

70.4

—

70.4

Inventory purchase price adjustment in cost of sales (f)

—

—

1.2

—

—

—

1.2

Pro forma operating income (loss)

$12.4

($0.4

)

$0.1

$27.4

($12.3

)

($1.2

)

$25.9

Depreciation, depletion and amortization

33.1

9.0

6.7

6.9

0.6

—

56.2

Non-cash cost of land and improved development

—

—

—

12.0

—

—

12.0

Adjusted EBITDA

$45.5

$8.6

$6.8

$46.2

($11.8

)

($1.2

)

$94.1

June 30, 2025

Operating income

$12.6

$1.5

—

$9.8

($9.3

)

—

$14.5

Depreciation, depletion and amortization

15.8

5.4

—

1.9

0.4

—

23.4

Non-cash cost of land and improved development

—

—

—

6.9

—

—

6.9

Adjusted EBITDA

$28.4

$6.8

—

$18.6

($8.9

)

—

$44.9

  PRO FORMA OPERATING INCOME AND ADJUSTED EBITDA (p) (j):

Six Months Ended

Southern

Timber

Northwest

Timber

Wood

Products

Real

Estate

Corporate

and

Other

Intersegment

Eliminations

Total

  June 30, 2026

Operating income (loss)

$20.5

$12.1

$14.1

$55.6

($111.4

)

($2.0

)

($11.0

)

Costs related to the merger with PotlatchDeltic (a)

—

—

—

—

80.8

—

80.8

Timber write-offs resulting from casualty events (e)

2.3

—

—

—

—

—

2.3

Inventory purchase price adjustment in cost of sales (f)

—

—

1.2

—

—

—

1.2

Pro forma operating income

$22.8

$12.1

$15.3

$55.6

($30.7

)

($2.0

)

$73.2

Depreciation, depletion and amortization

75.3

22.8

16.6

10.8

1.2

—

126.6

Non-cash cost of land and improved development

—

—

—

18.0

—

—

18.0

Adjusted EBITDA

$98.1

$34.9

$31.8

$84.5

($29.5

)

($2.0

)

$217.8

June 30, 2025

Operating income

$22.7

$1.8

—

$8.8

($18.7

)

—

$14.6

Restructuring charges (g)

—

—

—

—

1.1

—

1.1

Pro forma operating income

$22.7

$1.8

—

$8.8

($17.6

)

—

$15.7

Depreciation, depletion and amortization

32.7

11.0

—

2.4

0.8

—

46.9

Non-cash cost of land and improved development

—

—

—

9.3

—

—

9.3

Adjusted EBITDA

$55.4

$12.7

—

$20.6

($16.8

)

—

$71.9

(a)

“Costs related to the merger with PotlatchDeltic” include professional services fees, employee-related costs, accelerated stock-based compensation, and other integration-related costs incurred in connection with the merger, which closed on January 30, 2026.

(b)

“Cash Available for Distribution” (CAD) is defined as cash provided by operating activities adjusted for capital spending (excluding timberland acquisitions and real estate development investments) and working capital and other balance sheet changes. CAD is a non-GAAP measure of cash generated during a period that is available for common share dividends, distributions to Operating Partnership unitholders, common share repurchases, debt reduction, timberland acquisitions and real estate development investments. CAD is not necessarily indicative of the CAD that may be generated in future periods.

(c)

The six months ended June 30, 2026 includes a $40.3 million tax benefit from the release of a valuation allowance.

(d)

The six months ended June 30, 2025 includes $1.7 million of net costs associated with legal settlements.

(e)

“Timber write-offs resulting from casualty events” includes the write-off of merchantable and pre-merchantable timber volume damaged by casualty events that cannot be salvaged.

(f)

“Inventory purchase price adjustment in cost of sales” reflects a non-cash, one-time charge reflecting the excess of fair value over PotlatchDeltic’s historical cost on acquired finished goods inventory sold post-closing.

(g)

“Restructuring charges” include severance costs related to workforce optimization initiatives.

(h)

“Income (loss) from operations of discontinued operations, net of tax” includes income (loss) generated by the Company’s New Zealand joint venture interest, which was classified as discontinued operations prior to its June 30, 2025 disposition.

(i)

“Gain on sale of discontinued operations" reflects the net gain recognized on the sale of the Company’s New Zealand joint venture interest.

(j)

“Adjusted EBITDA” is defined as earnings before interest, taxes, depreciation, depletion, amortization, the non-cash cost of land and improved development, non-operating (income) expense, costs related to the merger with PotlatchDeltic, timber write-offs resulting from casualty events, an inventory purchase price adjustment in cost of sales, income (loss) from operations of discontinued operations, gain on sale of discontinued operations, restructuring charges and Large Dispositions. Adjusted EBITDA is a non-GAAP measure that management uses to make strategic decisions about the business and that investors can use to evaluate the operational performance of the assets under management. It excludes specific items that management believes are not indicative of the Company’s ongoing operating results.

(k)

“Cash interest received (paid), net” includes patronage refunds received of $15.4 million and $7.9 million during the six months ended June 30, 2026 and June 30, 2025, respectively. In addition, cash interest received (paid), net includes cash interest received of $11.9 million and $5.2 million during the six months ended June 30, 2026 and June 30, 2025, respectively.

(l)

“Pro forma net income” is defined as net income (loss) attributable to Rayonier Inc. adjusted for its proportionate share of costs related to the merger with PotlatchDeltic, timber write-offs resulting from casualty events, an inventory purchase price adjustment in cost of sales, a tax benefit from valuation allowance release, income (loss) from operations of discontinued operations (net of tax), gain on sale of discontinued operations, net costs associated with legal settlements, restructuring charges and Large Dispositions. Rayonier believes that this non-GAAP financial measure provides investors with useful information to evaluate our core business operations because it excludes specific items that are not indicative of the Company’s ongoing operating results.

(m)

“Tax benefit from valuation allowance release" reflects a non-cash release of Rayonier's pre-existing valuation allowance, triggered by deferred tax liabilities recognized in the PotlatchDeltic purchase price allocation.

(n)

“Net cost on legal settlements” reflects the net loss from litigation regarding insurance claims.

(o)

“Pro forma net income (loss) adjustments attributable to noncontrolling interests” are the proportionate share of pro forma items that are attributable to noncontrolling interests.

(p)

“Pro forma operating income (loss)” is defined as operating income (loss) adjusted for costs related to the merger with PotlatchDeltic, timber write-offs resulting from casualty events, an inventory purchase price adjustment in cost of sales, restructuring charges and Large Dispositions. Rayonier believes that this non-GAAP financial measure provides investors with useful information to evaluate our core business operations because it excludes specific items that are not indicative of the Company’s ongoing operating results.

  F

, /PRNewswire/ -- Envista Holdings Corporation (NYSE: NVST) today announced results for the quarter ended July 3, 2026.

"We built on our fast start in Q1 with continued good performance in Q2," said Paul Keel, CEO. "We delivered growth across both our reporting segments and all major geographies. Our focus on operational excellence, underpinned by the Envista Business System, contributed to further margin expansion. Based on our strong first-half performance and continued momentum, we are raising our full year outlook for core sales growth, adjusted EBITDA, and adjusted EPS. We are well-positioned to deliver another year of progress and performance."

Second Quarter Financial Highlights

Sales were $731 million, with core sales growth of 5.0% over the second quarter of 2025. GAAP diluted EPS of $0.33 and adjusted diluted EPS of $0.41 (+58% year-on-year) GAAP Net Income of $54 million and adjusted EBITDA of $108 million (+28% year-on-year), with an adjusted EBITDA margin of 14.7% (+230 bps year-on-year) Second Quarter Business Highlights

Growth: In the context of macro uncertainty, both reporting segments delivered positive growth, with 3.1% core growth in Specialty Products & Technologies and 8.5% core growth in Equipment and Consumables. Operations: Ongoing contributions from the Envista Business System (EBS) supporting 70 bps of adjusted gross margin and 230 bps of adjusted EBITDA margin expansion. People: Continued to advance our high-performing, continuous improvement culture through numerous customer, employee, and charitable events around the world. Net Income, EBITDA, and EPS (in millions, except per share amounts):

Three Months Ended

Six Months Ended

July 3, 2026

June 27, 2025

July 3, 2026

June 27, 2025

GAAP Net Income

$                   54

$                   26

$                   92

$                   44

Adjusted Net Income

$                   67

$                   44

$                 126

$                   85

Adjusted EBITDA

$                 108

$                   84

$                 207

$                 163

GAAP Diluted Earnings Per Share

$                0.33

$                0.16

$                0.56

$                0.26

Adjusted Diluted Earnings Per Share

$                0.41

$                0.26

$                0.77

$                0.50

Cash Flow:

Operating cash flow for the second quarter of 2026 was $119 million and free cash flow was $105 million, compared to $89 million and $76 million in the second quarter of 2025, respectively. 

Share Repurchases:

During the quarter ended July 3, 2026, we repurchased 2.4 million shares for approximately $59 million. At the end of the quarter, we had approximately $283 million remaining repurchase capacity under our stock repurchase program.

Outlook:

We are updating our guidance for the full year 2026:

Current 2026 Guidance

Prior 2026 Guidance

Core Sales Growth

3.5% to 4.5%

2% to 4%

Adjusted EBITDA Growth

11% to 14%

7% to 13%

Adjusted Diluted Earnings Per Share

$1.50 to $1.55

$1.35 to $1.45

Free Cash Flow Conversion

~100%

~100%

Please note, we do not provide forward-looking estimates on a GAAP basis as certain information is not available and cannot be reasonably estimated.

We will discuss our quarterly results and provide details on our outlook for 2026 during an investor conference call on August 5, 2026, starting at 2:00 P.M. PT. The call and an accompanying slide presentation will be webcast on the "Investors" section of our website, www.envistaco.com, under the subheading "Events & Presentations." A replay of the webcast will be available in the same section of our website shortly after the conclusion of the presentation and will remain available until the next quarterly earnings call.

The conference call can be accessed by dialing 800-836-8184 within the U.S. or +1 646-357-8785 outside the U.S. a few minutes before 2:00 PM PT and referencing conference ID #73468.  A replay of the conference call will be available shortly after the conclusion of the call. You can access the replay dial-in information on the "Investors" section of our website under the subheading "Events & Presentations." Presentation materials relating to our results have been posted to the "Investors" section of our website under the subheading "Quarterly Earnings".

ABOUT ENVISTA

Envista is a global leader in the dental industry, uniting more than 30 trusted brands—including DEXIS, Kerr, Nobel Biocare, and Ormco—under one mission: partnering with dental professionals to improve patients' lives. With a heritage of category-defining innovation, our brands have shaped modern dentistry: Nobel Biocare introduced the first dental implant, Ormco is a pioneer in both traditional and digital orthodontics, DEXIS has long been at the forefront of 2D, 3D and intraoral imaging, and Kerr has supported clinicians for over 135 years. Our high-performing culture is underpinned by our CIRCLe Values and the Envista Business System. Guided by these, we deliver a comprehensive portfolio of technologies, consumables, and services that empower clinicians to provide confident, efficient care—today and for the future. Learn more at http://envistaco.com. 

NON-GAAP MEASURES

All "Adjusted" amounts including core sales growth and free cash flow are non-GAAP items. Calculations of these measures, the reasons why we believe these measures provide useful information to investors, a reconciliation of these measures to the most directly comparable GAAP measures, and other information relating to these non-GAAP measures are included in the attached supplemental schedules. We do not reconcile forward looking non-GAAP measures to the comparable GAAP measures because of the inherent difficulty in predicting and estimating the future impact and timing of currency translation, acquisitions, discontinued products, and any other potential adjustments which would be reflected in any forecasted GAAP measure.

FORWARD-LOOKING STATEMENTS

Certain statements in this press release are "forward-looking" statements within the meaning of the federal securities laws. There are a number of important factors that could cause actual results, developments and business decisions to differ materially from those suggested or indicated by such forward-looking statements and you should not place undue reliance on any such forward-looking statements. These factors include, among other things, the conditions in the U.S. and global economy, the impact of inflation and increasing interest rates, slower economic growth or recession, international economic, political, legal, compliance and business factors, the markets served by us and the financial markets, the impact of our debt obligations on our operations and liquidity, developments and uncertainties in trade policies and regulations including tariffs or other impositions on imported goods, contractions or growth rates and cyclicality of markets we serve, risks relating to product manufacturing, commodity costs and surcharges, our ability to adjust purchases and manufacturing capacity to reflect market conditions, reliance on sole or limited sources of supply, disruptions relating to war (including supply chain disruptions), terrorism, climate change, widespread protests and civil unrest, man-made and natural disasters, public health issues and other events, security breaches or other disruptions of our information technology systems or violations of data privacy laws, security breaches or other disruptions affecting our external information technology contractors, vendors or other service providers, our growing use of artificial intelligence systems to automate processes and analyze data, fluctuations in inventory of our distributors and customers, loss of a key distributor, our relationships with and the performance of our channel partners, competition, our ability to develop and successfully market new products and services, our ability to attract, develop and retain our key personnel, the potential for improper conduct by our employees, agents or business partners, our compliance with applicable laws and regulations (including regulations relating to medical devices and the health care industry), the results of our clinical trials and perceptions thereof, penalties associated with any off-label marketing of our products, modifications to our products that require new marketing clearances or authorizations, our ability to effectively address cost reductions and other changes in the health care industry, our ability to successfully identify and consummate appropriate acquisitions and strategic investments, our ability to integrate the businesses we acquire and achieve the anticipated benefits of such acquisitions, contingent liabilities relating to acquisitions, investments and divestitures, our ability to adequately protect our intellectual property, the impact of our restructuring activities on our ability to grow, risks relating to impairment charges for our goodwill and intangible assets, changes in accounting standards and subjective assumptions, estimates and judgment by management, currency exchange rates, changes in tax laws applicable to multinational companies, litigation and other contingent liabilities including intellectual property and environmental, health and safety matters, risks relating to product, service or software defects, the impact of regulation on demand for our products and services, and labor matters. Additional information regarding the factors that may cause actual results to differ materially from these forward-looking statements is available in our SEC filings, including our Annual Report on Form 10-K for fiscal year 2025 and our Quarterly reports on Form 10-Q. These forward-looking statements speak only as of the date of this press release and 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.

CONTACT
Jim Gustafson
Vice President, Investor Relations
Envista Holdings Corporation
200 S. Kraemer Blvd., Building E
Brea, CA 92821
[email protected]

ENVISTA HOLDINGS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
($ and shares in millions, except per share amounts)

Three Months Ended

Six Months Ended

July 3, 2026

June 27, 2025

July 3, 2026

June 27, 2025

Sales

$           730.5

$           682.1

$         1,436.0

$          1,299.0

Cost of sales

323.5

312.2

638.9

593.1

Gross profit

407.0

369.9

797.1

705.9

Operating expenses:

Selling, general and administrative

296.3

295.3

593.9

567.0

Research and development

30.4

28.3

60.4

53.6

Operating profit

80.3

46.3

142.8

85.3

Nonoperating (expense) income:

Other income (expense), net

2.8

2.4

(0.1)

1.7

Interest expense, net

(8.7)

(8.0)

(16.1)

(17.3)

Income before income taxes

74.4

40.7

126.6

69.7

Income tax expense

20.7

14.3

34.2

25.3

Net income

$             53.7

$             26.4

$             92.4

$             44.4

Earnings per share:

Earnings - basic

$             0.33

$             0.16

$             0.57

$             0.26

Earnings - diluted

$             0.33

$             0.16

$             0.56

$             0.26

Average common stock and common equivalent
shares outstanding:

Basic

161.9

169.0

162.9

170.7

Diluted

164.1

169.9

165.3

171.7

ENVISTA HOLDINGS CORPORATION 
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
($ in millions, except share amounts)

As of

July 3, 2026

December 31, 2025

ASSETS

Current assets:

Cash and cash equivalents

$           1,125.6

$        1,211.7

     Trade accounts receivable, less allowance for credit losses of $21.8 and $22.5,
      respectively

436.9

429.6

Inventories, net

290.9

288.1

Prepaid expenses and other current assets

104.6

97.2

Total current assets

1,958.0

2,026.6

Property, plant and equipment, net

295.7

296.8

Operating lease right-of-use assets

146.2

142.1

Other long-term assets

230.4

228.1

Goodwill

2,353.5

2,358.2

Other intangible assets, net

613.3

627.2

Total assets

$           5,597.1

$        5,679.0

LIABILITIES AND EQUITY

Current liabilities:

Trade accounts payable

190.2

191.6

Accrued expenses and other liabilities

578.6

622.0

Operating lease liabilities

38.5

39.0

Total current liabilities

807.3

852.6

Operating lease liabilities

113.2

110.4

Other long-term liabilities

164.0

161.4

Long-term debt

1,436.3

1,448.3

Commitments and contingencies

Stockholders' equity:

Preferred stock, $0.01 par value, 15.0 million shares authorized; no shares issued
or outstanding at July 3, 2026 and December 31, 2025

—

—

Common stock, $0.01 par value, 500.0 million shares authorized; 176.4 million
shares issued and 160.6 million shares outstanding at July 3, 2026; 175.4 million
shares issued and 163.8 million shares outstanding at December 31, 2025

1.8

1.8

Treasury stock at cost; 15.8 million shares and 11.6 million shares at July 3, 2026
and December 31, 2025, respectively

(333.7)

(224.5)

Additional paid-in capital

3,906.1

3,882.6

Accumulated deficit

(348.0)

(440.4)

Accumulated other comprehensive loss

(149.9)

(113.2)

Total stockholders' equity

3,076.3

3,106.3

Total liabilities and stockholders' equity

$           5,597.1

$        5,679.0

ENVISTA HOLDINGS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
($ in millions)

Six Months Ended

July 3, 2026

June 27, 2025

Cash flows from operating activities:

Net income

$              92.4

$              44.4

Noncash items:

Depreciation

20.8

19.9

Amortization

36.2

37.8

Allowance for credit losses

5.8

4.0

Stock-based compensation expense

19.7

16.8

Gain on investments in rabbi trust, net

(1.9)

(1.6)

Loss on equity investments

2.0

—

(Gain) loss on sale of property, plant and equipment

(2.7)

0.3

Restructuring charges

0.9

0.2

Fixed assets impairments and other charges

0.9

1.4

Non-cash operating lease costs

18.5

17.2

Amortization of debt discount and issuance costs

2.0

2.2

 Deferred income taxes

—

(0.9)

Change in trade accounts receivable

(14.5)

(37.2)

Change in inventories

(0.9)

(23.5)

Change in trade accounts payable

0.1

(10.0)

Change in prepaid expenses and other assets

(7.3)

(4.3)

Change in accrued expenses and other liabilities

(32.4)

44.5

Change in operating lease liabilities

(23.7)

(22.2)

Net cash provided by operating activities

115.9

89.0

Cash flows from investing activities:

Payments for additions to property, plant and equipment

(27.4)

(18.2)

Purchases of investments held in rabbi trust

(3.7)

(1.0)

Proceeds from sale of investments held in rabbi trust

1.5

0.9

Proceeds from sales of property, plant and equipment

0.9

0.5

Acquisitions, net of cash acquired

(54.4)

—

All other investing activities, net

(0.1)

(8.1)

Net cash used in investing activities

(83.2)

(25.9)

Cash flows from financing activities:

Proceeds from stock option exercises

4.0

1.5

Cash paid for treasury stock under the stock repurchase program

(103.0)

(100.3)

Treasury stock purchases related to tax withholding on equity awards

(6.9)

(4.3)

Principal paid related to exchange of convertible notes due 2025

—

(116.3)

Proceeds from revolving line of credit

—

115.4

All other financing activities

(0.4)

—

Net cash used in financing activities

(106.3)

(104.0)

Effect of exchange rate changes on cash and cash equivalents

(12.5)

82.4

Net change in cash and cash equivalents

(86.1)

41.5

Beginning balance of cash and cash equivalents

1,211.7

1,069.1

Ending balance of cash and cash equivalents

$          1,125.6

$           1,110.6

ENVISTA HOLDINGS CORPORATION
SUMMARY OF FINANCIAL METRICS (Unaudited)
($ in millions, except per share amounts)

GAAP

Three Months Ended

Six Months Ended

July 3, 2026

June 27, 2025

July 3, 2026

June 27, 2025

Gross Profit

$            407.0

$           369.9

$        797.1

$         705.9

Operating Profit

$              80.3

$             46.3

$        142.8

$           85.3

Net Income

$              53.7

$             26.4

$          92.4

$           44.4

Diluted Earnings Per Share

$              0.33

$             0.16

$          0.56

$           0.26

Operating Cash Flow

$            119.2

$             88.7

$        115.9

$           89.0

NON-GAAP *

Three Months Ended

Six Months Ended

July 3, 2026

June 27, 2025

July 3, 2026

June 27, 2025

Adjusted Gross Profit

$            402.2

$           371.2

$        795.8

$        709.5

Adjusted Operating Profit

$              94.5

$             71.1

$        183.9

$        141.7

Adjusted Net Income

$              66.5

$             43.7

$        126.5

$          85.2

Adjusted Diluted EPS

$              0.41

$             0.26

$          0.77

$          0.50

Adjusted EBITDA

$            107.7

$             84.3

$        206.6

$        163.3

Free Cash Flow

$            105.1

$             76.4

$          89.4

$          71.3

*

For information on non-GAAP measures see "Reconciliation of GAAP to Non-GAAP Financial Measures" below. Also see the accompanying "Notes to Reconciliation of GAAP to Non-GAAP Financial Measures."

ENVISTA HOLDINGS CORPORATION
SEGMENT INFORMATION (Unaudited)
($ in millions)

Three Months Ended

Six Months Ended

July 3, 2026

June 27, 2025

July 3, 2026

June 27, 2025

Sales

Specialty Products & Technologies

$           471.0

$           445.1

$        928.8

$        845.4

Equipment & Consumables

259.5

237.0

507.2

453.6

Total

$           730.5

$           682.1

$      1,436.0

$      1,299.0

Operating Profit (Loss)

Specialty Products & Technologies

$             60.1

$             45.3

$        106.6

$          82.9

Equipment & Consumables

45.9

36.1

92.7

68.0

Other

(25.7)

(35.1)

(56.5)

(65.6)

Total

$             80.3

$             46.3

$        142.8

$          85.3

Operating Margins

Specialty Products & Technologies

12.8 %

10.2 %

11.5 %

9.8 %

Equipment & Consumables

17.7 %

15.2 %

18.3 %

15.0 %

Total

11.0 %

6.8 %

9.9 %

6.6 %

ENVISTA HOLDINGS CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (UNAUDITED)
($ and shares in millions, except per share amounts)

Adjusted Gross Profit and Adjusted Gross Margin

Three Months Ended

Six Months Ended

July 3, 2026

June 27, 2025

July 3, 2026

June 27, 2025

Gross Profit

$         407.0

$         369.9

$         797.1

$        705.9

Restructuring costs and asset impairments A

7.3

0.3

10.4

2.2

Fair value adjustment of acquisition-related
inventory B

0.5

1.0

0.9

1.4

    Tariff refunds C

(12.6)

—

(12.6)

—

Adjusted Gross Profit

$         402.2

$         371.2

$         795.8

$        709.5

Gross Margin (Gross Profit / Sales)

55.7 %

54.2 %

55.5 %

54.3 %

Adjusted Gross Margin (Adjusted Gross Profit / Sales)

55.1 %

54.4 %

55.4 %

54.6 %

Adjusted Operating Profit

Three Months Ended

Six Months Ended

July 3, 2026

June 27, 2025

July 3, 2026

June 27, 2025

Consolidated

Operating Profit

$          80.3

$          46.3

$         142.8

$          85.3

Amortization of acquisition-related and other
intangible assets

17.4

19.0

36.2

37.8

Restructuring costs and asset impairments A

8.9

4.7

16.3

16.1

Fair value adjustment of acquisition-related
inventory B

0.5

1.0

0.9

1.4

    Tariff refunds C

(12.6)

—

(12.6)

—

Litigation settlement D

—

—

—

0.8

Acquisition-related expenses E

—

0.1

0.3

0.3

Adjusted Operating Profit

$          94.5

$          71.1

$         183.9

$         141.7

Adjusted Operating Profit as a % of Sales

12.9 %

10.4 %

12.8 %

10.9 %

Specialty Products & Technologies

Operating Profit

$          60.1

$          45.3

$         106.6

$          82.9

Amortization of acquisition-related and other
intangible assets

15.3

14.8

30.9

29.4

Restructuring costs and asset impairments A

6.1

0.1

10.5

4.3

    Tariff refunds C

(12.2)

—

(12.2)

—

Adjusted Operating Profit

$          69.3

$          60.2

$         135.8

$         116.6

Adjusted Operating Profit as a % of Sales

14.7 %

13.5 %

14.6 %

13.8 %

Equipment & Consumables

Operating Profit

$          45.9

$          36.1

$          92.7

$          68.0

Amortization of acquisition-related and other
intangible assets

2.1

4.2

5.3

8.4

Restructuring costs and asset impairments A

4.2

1.2

6.2

3.5

    Tariff refunds C

(0.4)

—

(0.4)

—

Litigation settlement D

—

—

—

0.8

Adjusted Operating Profit

$          51.8

$          41.5

$         103.8

$          80.7

Adjusted Operating Profit as a % of Sales

20.0 %

17.5 %

20.5 %

17.8 %

See the accompanying Notes to Reconciliation of GAAP to Non-GAAP Financial Measures

Adjusted Net Income

Three Months Ended

Six Months Ended

July 3, 2026

June 27, 2025

July 3, 2026

June 27, 2025

Net Income

$            53.7

$            26.4

$            92.4

$            44.4

Amortization of acquisition-related and other
intangible assets

17.4

19.0

36.2

37.8

Restructuring costs and asset impairments A

8.9

4.7

16.3

16.1

Fair value adjustment of acquisition-related
inventory B

0.5

1.0

0.9

1.4

    Tariff refunds C

(12.6)

—

(12.6)

—

Litigation settlement D

—

—

—

0.8

Acquisition-related expenses E

—

0.1

0.3

0.3

Loss on equity investments F

—

—

2.0

—

Tax effect of adjustments reflected above G

(2.8)

(6.2)

(10.6)

(15.0)

Discrete tax adjustments and other tax-related
adjustments H

1.4

(1.3)

1.6

(0.6)

Adjusted Net Income

$            66.5

$            43.7

$           126.5

$            85.2

Adjusted Diluted Earnings Per Share

Three Months Ended

Six Months Ended

July 3, 2026

June 27, 2025

July 3, 2026

June 27, 2025

Diluted Earnings Per Share

$            0.33

$            0.16

$            0.56

$            0.26

Amortization of acquisition-related and other
intangible assets

0.11

0.11

0.22

0.22

Restructuring costs and asset impairments A

0.05

0.03

0.10

0.09

Fair value adjustment of acquisition-related
inventory B

—

0.01

0.01

0.01

    Tariff refunds C

(0.08)

—

(0.08)

—

Litigation settlement D

—

—

—

0.01

Acquisition-related expenses E

—

—

—

—

Loss on equity investments F

—

—

0.01

—

Tax effect of adjustments reflected above G

(0.01)

(0.04)

(0.06)

(0.09)

Discrete tax adjustments and other tax-related
adjustments H

0.01

(0.01)

0.01

—

Adjusted Diluted Earnings Per Share

$            0.41

$            0.26

$            0.77

$            0.50

Adjusted EBITDA

Three Months Ended

Six Months Ended

July 3, 2026

June 27, 2025

July 3, 2026

June 27, 2025

Net Income

$          53.7

$          26.4

$          92.4

$          44.4

Interest expense, net

8.7

8.0

16.1

17.3

Income tax expense

20.7

14.3

34.2

25.3

Depreciation

10.4

10.8

20.8

19.9

Amortization of acquisition-related and other
intangible assets

17.4

19.0

36.2

37.8

Restructuring costs and asset impairments A

8.9

4.7

16.3

16.1

Fair value adjustment of acquisition-related
inventory B

0.5

1.0

0.9

1.4

    Tariff refunds C

(12.6)

—

(12.6)

—

Litigation settlement D

—

—

—

0.8

Acquisition-related expenses E

—

0.1

0.3

0.3

Loss on equity investments F

—

—

2.0

—

Adjusted EBITDA

$         107.7

$          84.3

$         206.6

$         163.3

Adjusted EBITDA as a % of Sales

14.7 %

12.4 %

14.4 %

12.6 %

See the accompanying Notes to Reconciliation of GAAP to Non-GAAP Financial Measures

Core Sales Growth 1

Consolidated

% Change Three Month
Period Ended July 3, 2026 vs.
Comparable 2025 Period

% Change Six Month Period
Ended July 3, 2026 vs.
Comparable 2025 Period

Total sales growth

7.1 %

10.5 %

Plus the impact of:

Acquisitions

(0.5) %

(0.6) %

Currency exchange rates

(1.6) %

(2.8) %

Core Sales Growth

5.0 %

7.1 %

Specialty Products & Technologies

Total sales growth

5.8 %

9.9 %

Plus the impact of:

Acquisitions

(0.8) %

(0.9) %

Currency exchange rates

(1.9) %

(3.4) %

Core Sales Growth

3.1 %

5.6 %

Equipment & Consumables

Total sales growth

9.5 %

11.8 %

Plus the impact of:

Currency exchange rates

(1.0) %

(1.9) %

Core Sales Growth

8.5 %

9.9 %

1

We use the term "core sales" to refer to GAAP revenue excluding  (1) sales from acquired businesses recorded prior to the first anniversary of the acquisition ("acquisitions"), (2) sales from discontinued products and (3) the impact of currency translation. Sales from discontinued products includes major brands or products that Envista has made the decision to discontinue as part of a portfolio restructuring. Discontinued brands or products consist of those which Envista (1) is no longer manufacturing, (2) is no longer investing in the research or development of, and (3) expects to discontinue all significant sales within one year from the decision date to discontinue. The portion of sales attributable to discontinued brands or products is calculated as the net decline of the applicable discontinued brand or product from period-to-period. The portion of GAAP revenue attributable to currency exchange rates is calculated as the difference between (a) the period-to-period change in sales and (b) the period-to-period change in sales after applying current period foreign exchange rates to the prior year period. We use the term "core sales growth" to refer to the measure of comparing current period core sales with the corresponding period of the prior year.During the first quarter of 2026, we updated our methodology for how we calculate changes in the sales price from period to period. Changes in sales prices are now calculated by comparing the current quarter sales prices to the full year sales price average from the prior year as it better reflects pricing trends over time.

Reconciliation of Operating Cash Flows to Free Cash Flow

Three Months Ended

Six Months Ended

July 3, 2026

June 27, 2025

July 3, 2026

June 27, 2025

Net operating cash (used in) provided by
operating activities

$         119.2

$          88.7

$         115.9

$          89.0

Less: payments for additions to property, plant
and equipment (capital expenditures)

(14.9)

(12.3)

(27.4)

(18.2)

Plus: proceeds from sales of property, plant
and equipment

0.8

—

0.9

0.5

Free Cash Flow (FCF)

$         105.1

$          76.4

$          89.4

$          71.3

FCF to Adjusted Net Income Conversion Ratio

158.0 %

174.8 %

70.7 %

83.7 %

See the accompanying Notes to Reconciliation of GAAP to Non-GAAP Financial Measures

ENVISTA HOLDINGS CORPORATION
NOTES TO RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (UNAUDITED)

A We exclude impairment of certain long-lived assets, executive transition costs, and cost incurred pursuant to discrete restructuring plans. 

B Represents the fair value adjustment related to inventory acquired in connection with acquisitions.

C Represents the U.S. Supreme Court's ruling to refund tariffs imposed under the International Emergency Economic Powers Act.

D Represents the settlement of certain litigation matters.

E Represents acquisition-related transaction expenses and integration costs with respect to business combinations.

F Represents losses on equity investments.

G This line item represents the aggregate tax effect of all pretax adjustments reflected in the preceding line items of the table using each adjustment's applicable tax rate, including the effect of interim tax accounting requirements of Accounting Standards Codification Topic 740 Income Taxes.

H Discrete tax matters primarily relate to excess tax benefits from stock-based compensation, changes in estimates associated with prior period uncertain tax positions and audit settlements, tax benefits resulting from a change in law, and changes in determination of realization of certain deferred tax assets.

Statement Regarding Non-GAAP Measures

Each of the non-GAAP measures set forth above should be considered in addition to, and not as a replacement for or superior to, the comparable GAAP measure, and may not be comparable to similarly titled measures reported by other companies. Management believes that these measures provide useful information to investors by offering additional ways of viewing Envista Holdings Corporation's ("Envista" or the "Company") results that, when reconciled to the corresponding GAAP measure, help our investors to:

with respect to Core Sales, identify underlying growth trends in Envista's business and compare Envista's revenue performance with prior and future periods and to Envista's peers; with respect to Adjusted Gross Profit, Adjusted Operating Profit, Adjusted Net Income, Adjusted Diluted Earnings Per Share and Adjusted EBITDA, understand the long-term profitability trends of Envista's business and compare Envista's profitability to prior and future periods and to Envista's peers; with respect to Adjusted EBITDA, help investors understand operational factors associated with Envista's financial performance because it excludes the following from consideration:  interest, taxes, depreciation, amortization, and infrequent or unusual losses or gains such as goodwill impairment charges or nonrecurring and restructuring charges. Management uses Adjusted EBITDA, as a supplemental measure for assessing operating performance in conjunction with related GAAP amounts.  In addition, Adjusted EBITDA is used in connection with operating decisions, strategic planning, annual budgeting, evaluating Company performance and comparing operating results with historical periods and with industry peer companies; and with respect to Free Cash Flow (the "FCF Measure"), understand Envista's ability to generate cash without external financings, in order to invest and grow its business through acquisitions and other strategic opportunities. A limitation of free cash flow is that it does not take into account the Company's debt service requirements and other non-discretionary expenditures, and as a result the entire Free Cash Flow amount is not necessarily available for discretionary expenditures. Management uses these non-GAAP measures to evaluate the Company's operating and financial performance.

The items excluded from the non-GAAP measures set forth above have been excluded for the following reasons:

With respect to Adjusted Gross Profit, Adjusted Operating Profit, Adjusted Net Income, Adjusted Diluted Earnings Per Share and Adjusted EBITDA: We exclude amortization of acquisition-related and other intangible assets because the amount and timing of such charges are significantly impacted by the timing, size, number and nature of the acquisitions we consummate. While we have a history of significant acquisition activity, we do not acquire businesses on a predictable cycle, and the amount of an acquisition's purchase price allocated to intangible assets and related amortization term are unique to each acquisition and can vary significantly from acquisition to acquisition.  Exclusion of this amortization expense facilitates more consistent comparisons of operating results over time between our newly acquired and long-held businesses, and with both acquisitive and non-acquisitive peer companies.  We believe, however, that it is important for investors to understand that such intangible assets contribute to revenue generation and that intangible asset amortization related to past acquisitions will recur in future periods until such intangible assets have been fully amortized. With respect to the other items excluded from Adjusted Gross Profit, Adjusted Net Income, Adjusted Operating Profit, Adjusted Diluted Earnings Per Share and Adjusted EBITDA, we exclude these items because they are of a nature and/or size that occur with inconsistent frequency, occur for reasons that may be unrelated to Envista's commercial performance during the period and/or we believe that such items may obscure underlying business trends and make comparisons of long-term performance difficult. With respect to core sales, we exclude (1) the effect of acquisitions and divested product lines because the timing, size, number and nature of such transactions can vary significantly from period-to-period and between us and our peers, which we believe may obscure underlying business trends and make comparisons of long-term performance difficult, (2) sales from discontinued products because discontinued products do not have a continuing contribution to operations and management believes that excluding such items provides investors with a means of evaluating our on-going operations and facilitates comparisons to our peers, and (3) the impact of currency translation because it is not under management's control, is subject to volatility and can obscure underlying business trends. With respect to the FCF Measure, we adjust for payments for additions to property, plant and equipment (net of the proceeds from capital disposals) to arrive at the amount of operating cash flow for the period that remains after accounting for the Company's capital expenditure requirements. SOURCE Envista Holdings Corporation

NORTH ANDOVER, Mass.--(BUSINESS WIRE)--Watts Water Technologies, Inc. (NYSE: WTS) – through its subsidiaries, one of the world’s leading manufacturers and providers of plumbing, heating and water quality products and solutions – today announced results for the second quarter of 2026.

Chief Executive Officer Robert J. Pagano Jr. said, “We delivered another strong quarter, achieving record sales, operating income and EPS, with double-digit organic growth. These results reflect the strength of our diversified portfolio, disciplined execution, and our ability to capture long-term growth opportunities. Building on our first half performance, we are increasing our full year 2026 sales and margin outlook. While the trade and geopolitical environments remain dynamic, our teams continue to execute well and remain focused on serving our customers. Through continued investments in innovation, digital capabilities and the One Watts Performance System, we are enhancing our competitive position and expanding opportunities for profitable growth across our portfolio. This includes attractive markets such as data centers, where our differentiated capabilities continue to drive strong customer demand and where we see significant opportunity ahead. Supported by our healthy balance sheet, consistent cash generation and disciplined capital allocation, we believe we are well positioned to continue delivering value for our customers and shareholders. I would like to thank the Watts team for their commitment and dedication, which continue to drive our success.”

A summary of second quarter financial results is as follows:

Second Quarter Ended

June 28,

June 29,

(In millions, except per share information)

2026

2025

% Change

Net sales

$

763.2

$

643.7

19

%

Organic sales growth % (1)

12

%

Operating income

$

154.0

$

135.3

14

%

Operating margin %

20.2

%

21.0

%

(80)

bps

Adjusted operating income (1)

$

160.0

$

139.1

15

%

Adjusted operating margin % (1)

21.0

%

21.6

%

(60)

bps

Diluted earnings per share

$

3.53

$

3.01

17

%

Special items (1)

0.13

0.08

Adjusted diluted earnings per share (1)

$

3.66

$

3.09

18

%

Second Quarter Financial Highlights
Second quarter 2026 performance compared to second quarter 2025

Sales of $763 million increased 19% on a reported basis and 12% on an organic basis, primarily due to favorable price realization and higher volume driven by data center growth. Acquisition sales within the Americas and APMEA contributed $34 million, or 5%, to reported sales growth. Favorable foreign exchange contributed $7 million, or 1%, to reported sales growth.

Operating margin decreased 80 basis points on a reported basis, and 60 basis points on an adjusted basis. Operating and adjusted operating margin decreased primarily due to acquisition dilution, inflation and tariffs, and the difficult comparison against the one-time tariff-related price/cost benefit in the prior year, partly offset by favorable price realization, sales volume leverage, and productivity. Operating margin was also unfavorably impacted by an increase in restructuring charges.

Regional Performance

Americas
Sales of $585 million increased 17% on a reported basis and 12% on an organic basis, primarily due to favorable price realization and higher volume driven by data center growth. Acquisition sales contributed $28 million, or 6%, to reported sales growth.

Segment margin decreased 150 basis points primarily due to acquisition dilution, inflation and tariffs, and the difficult comparison against the one-time tariff-related price/cost benefit in the prior year, partly offset by favorable price realization, sales volume leverage, and productivity.

Europe
Sales of $125 million increased 12% on a reported basis and 9% on an organic basis, primarily due to higher volumes and favorable price realization. Favorable foreign exchange contributed 3% to reported sales growth.

Segment margin increased 160 basis points primarily due to favorable price realization, sales volume leverage, and productivity, which more than offset higher inflation.

APMEA
Sales of $54 million increased 57% on a reported basis and 31% on an organic basis. Organic growth was primarily due to higher volume driven by data center growth in China partly offset by a decline in the Middle East. Acquisition sales contributed $6 million, or 17%, and favorable foreign exchange contributed 9% to reported sales growth.

Segment margin increased 100 basis points primarily due to favorable price realization and acquisition accretion, which more than offset inflation and cost headwinds from the Middle East conflict.

Cash Flow and Capital Allocation

For the first six months of 2026, operating cash flow was $121 million and net capital expenditure was $23 million, resulting in free cash flow of $98 million. In the comparable period last year, operating cash flow was $125 million and net capital expenditure was $20 million, resulting in free cash flow of $105 million. Free cash flow declined due to higher working capital levels and increased capital expenditures, which more than offset higher net income. Working capital increases were due to higher accounts receivable attributable to higher net sales, higher inventory due to incremental tariffs and strategic inventory investments to support expected end-market demand. Sequential increases in free cash flow are expected in the second half of 2026 as we monetize working capital with the seasonality of the business.

The Company repurchased approximately 13,000 shares of Class A common stock at a cost of $4.1 million during the second quarter of 2026. Approximately $121 million remains available under the stock repurchase program authorized in 2023. There is no expiration date for this program.

Full Year 2026 Outlook

The Company is increasing its full year sales and organic sales growth outlook as well as its operating margin and adjusted operating margin outlook. Sales growth is expected to range from up 14% to up 17% on a reported basis and up 8% to up 11% on an organic basis. Full year operating margin is expected to be between 19.4% and 20.0%, or up 100 basis points to up 160 basis points, and adjusted operating margin is expected to be between 19.8% and 20.4%, or up 20 basis points to up 80 basis points. The full year outlook assumes no change in the level of impact resulting from the Middle East conflict and incorporates the estimated impact of tariffs in place or announced as of August 4, 2026. The full year outlook does not include the impact of tariff refunds, and any tariff refunds received in future periods will be treated as non-recurring special items and therefore will not be included in our adjusted results.

Further 2026 planning assumptions are included in the second quarter earnings materials posted in the Investor Relations section of our website at www.watts.com.

For a reconciliation of GAAP to non-GAAP items and a statement regarding the usefulness of these measures to investors and management in evaluating our operating performance, please see the tables attached to this press release.

Watts Water Technologies, Inc. will hold a live webcast of its conference call to discuss second quarter 2026 results on Thursday, August 6, 2026 at 9:00 a.m. EDT. This press release and the live webcast can be accessed by visiting the Investor Relations section of the Company's website at www.watts.com. Following the webcast, the call recording will be available at the same address until August 5, 2027.

Watts Water Technologies, Inc., through its subsidiaries, is a world leader in the manufacturing of innovative products to control the efficiency, safety, and quality of water within residential, commercial, and institutional applications. Watts’ expertise in a wide variety of water technologies enables us to be a comprehensive supplier to the water industry.

This press release includes “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995, including statements relating to expected full year 2026 financial results, including sales and organic sales growth, operating margin and adjusted operating margin, improvements in free cash flow in the second half of 2026, our strategy, investments, our ability to target and capitalize on growing markets, including our data center initiative, the impact of tariffs and any tariff refunds received as a result of the invalidation of tariffs imposed under the International Emergency Economic Powers Act, the benefits from and integration of acquisitions, our ability to manage uncertainty and current market conditions, including the fluid trade environment, future dividends, long-term growth and shareholder value creation. These forward-looking statements reflect our current views about future events. You should not rely on forward-looking statements because our actual results may differ materially from those predicted as a result of a number of potential risks and uncertainties. These potential risks and uncertainties include, but are not limited to: the continued growth of our customers’ markets; the imposition of or changes to tariff rates and related impacts to our business and the broader market; the effectiveness, timing and expected savings associated with our cost-cutting actions, restructuring and initiatives; integration of acquired businesses in a timely and cost-effective manner, retention of supplier and customer relationships and key employees, and the ability to achieve synergies and cost savings in the amounts and within the timeframes currently anticipated; current economic and financial conditions, which can affect the housing and construction markets where our products are sold, manufactured and marketed; shortages in and pricing of raw materials and supplies; our ability to compete effectively; changes in variable interest rates on our borrowings; inflation; failure to expand our markets through acquisitions; failure to successfully develop and introduce new product offerings or enhancements to existing products; failure to manufacture products that meet required performance and safety standards; foreign exchange rate fluctuations; cyclicality of industries where we market our products, such as plumbing and heating wholesalers and home improvement retailers; environmental compliance costs; product liability risks and costs; changes in the status of current litigation; the impacts and duration of the Middle East conflict, the war in Ukraine and other global crises; supply chain and logistical disruptions or labor shortages and workforce disruptions that could negatively affect our supply chain, manufacturing, distribution, or other business processes; and other risks and uncertainties discussed under the heading “Item 1A. Risk Factors” and in Note 17 of the Notes to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission (“SEC”). We undertake no duty to update the information contained in this press release, except as required by law.

WATTS WATER TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in millions, except per share information)

(Unaudited)

Second Quarter Ended

Six Months Ended

June 28,

June 29,

June 28,

June 29,

2026

2025

2026

2025

Net sales

$

763.2

$

643.7

$

1,440.4

$

1,201.7

Cost of goods sold

389.1

317.8

740.1

603.3

GROSS PROFIT

374.1

325.9

700.3

598.4

Selling, general and administrative expenses

214.5

187.2

407.5

354.7

Restructuring

5.6

3.4

5.8

20.7

OPERATING INCOME

154.0

135.3

287.0

223.0

Other (income) expense:

Interest income

(1.7

)

(2.3

)

(3.4

)

(4.6

)

Interest expense

2.2

2.7

4.8

5.4

Other (income) expense, net

(0.2

)

0.2

0.5

0.6

Total other expense

0.3

0.6

1.9

1.4

INCOME BEFORE INCOME TAXES

153.7

134.7

285.1

221.6

Provision for income taxes

35.4

33.8

67.2

46.7

NET INCOME

$

118.3

$

100.9

$

217.9

$

174.9

BASIC EPS

NET INCOME PER SHARE

$

3.53

$

3.01

$

6.50

$

5.22

Weighted average number of shares

33.5

33.5

33.5

33.5

DILUTED EPS

NET INCOME PER SHARE

$

3.53

$

3.01

$

6.50

$

5.22

Weighted average number of shares

33.5

33.5

33.5

33.5

Dividends declared per share

$

0.63

$

0.52

$

1.15

$

0.95

WATTS WATER TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Amounts in millions, except share information)

(Unaudited)

June 28,

December 31,

2026

2025

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$

347.9

$

405.5

Trade accounts receivable, less reserve allowances of $16.9 million at June 28, 2026 and $12.5 million at December 31, 2025

404.4

294.0

Inventories, net:

Raw materials

206.4

190.8

Work in process

23.1

28.5

Finished goods

317.0

305.0

Total Inventories

546.5

524.3

Prepaid expenses and other current assets

66.8

62.3

Total Current Assets

1,365.6

1,286.1

PROPERTY, PLANT AND EQUIPMENT:

Property, plant and equipment, at cost

779.5

777.1

Accumulated depreciation

(484.0

)

(480.0

)

Property, plant and equipment, net

295.5

297.1

OTHER ASSETS:

Goodwill

858.4

859.0

Intangible assets, net

280.6

294.6

Deferred income taxes

18.3

17.9

Other, net

133.1

126.5

TOTAL ASSETS

$

2,951.5

$

2,881.2

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES:

Accounts payable

$

182.1

$

182.2

Accrued expenses and other liabilities

248.5

234.7

Accrued compensation and benefits

82.7

95.5

Total Current Liabilities

513.3

512.4

LONG-TERM DEBT

108.0

197.7

DEFERRED INCOME TAXES

37.0

36.5

OTHER NONCURRENT LIABILITIES

103.8

106.9

STOCKHOLDERS’ EQUITY:

Preferred Stock, $0.10 par value; 5,000,000 shares authorized; no shares issued or outstanding

—

—

Class A common stock, $0.10 par value; 120,000,000 shares authorized; 1 vote per share; issued and outstanding, 27,466,829 shares at June 28, 2026 and 27,426,533 shares at December 31, 2025

2.7

2.7

Class B common stock, $0.10 par value; 25,000,000 shares authorized; 10 votes per share; issued and outstanding, 5,916,290 shares at June 28, 2026 and December 31, 2025

0.6

0.6

Additional paid-in capital

736.9

720.6

Retained earnings

1,589.4

1,431.3

Accumulated other comprehensive loss

(140.2

)

(127.5

)

Total Stockholders’ Equity

2,189.4

2,027.7

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$

2,951.5

$

2,881.2

WATTS WATER TECHNOLOGIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in millions)

(Unaudited)

Six Months Ended

June 28,

June 29,

2026

2025

OPERATING ACTIVITIES

Net income

$

217.9

$

174.9

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

Depreciation

19.2

17.9

Amortization of intangibles

11.9

9.9

Amortization of cloud computing arrangements

1.2

0.4

Loss on disposal of long-lived assets

0.2

0.2

Stock-based compensation

13.5

9.5

Deferred income tax

0.5

(6.2

)

Changes in operating assets and liabilities, net of effects from business acquisitions:

Accounts receivable

(114.4

)

(69.3

)

Inventories

(25.0

)

(37.0

)

Prepaid expenses and other assets

(18.4

)

(16.3

)

Accounts payable, accrued expenses and other liabilities

14.2

40.9

Net cash provided by operating activities

120.8

124.9

INVESTING ACTIVITIES

Additions to property, plant and equipment

(22.6

)

(19.8

)

Business acquisitions, net of cash acquired

(1.7

)

(85.7

)

Net cash used in investing activities

(24.3

)

(105.5

)

FINANCING ACTIVITIES

Payments of long-term debt

(90.0

)

—

Payments for withholding taxes on vested awards

(13.1

)

(11.1

)

Payments for finance leases and other

(1.4

)

(1.3

)

Payments to repurchase common stock

(7.9

)

(7.9

)

Dividends

(38.8

)

(32.0

)

Net cash used in financing activities

(151.2

)

(52.3

)

Effect of exchange rate changes on cash and cash equivalents

(2.9

)

15.3

DECREASE IN CASH AND CASH EQUIVALENTS

(57.6

)

(17.6

)

Cash and cash equivalents at beginning of year

405.5

386.9

CASH AND CASH EQUIVALENTS AT END OF PERIOD

$

347.9

$

369.3

Segment Earnings and Non-GAAP Financial Measures

In this press release, segment earnings is our GAAP performance measure used by our chief operating decision-maker (“CODM”) to assess and evaluate segment results. Segment earnings exclude the impact of non-recurring and unusual items, such as restructuring costs and acquisition-related costs. The CODM uses segment earnings for insight into underlying trends comparing past financial performance with current performance by reporting segment on a consistent basis. Segment margin is defined as segment earnings divided by segment revenue.

We refer to non-GAAP financial measures (including adjusted operating income, adjusted operating margin, adjusted net income, adjusted diluted earnings per share, organic sales, organic sales growth, free cash flow, cash conversion rate of free cash flow to net income and net debt to capitalization ratio) and provide a reconciliation of those non-GAAP financial measures to the corresponding financial measures contained in our consolidated financial statements prepared in accordance with GAAP. We believe these financial measures enhance the overall understanding of our historical financial performance and give insight into our future prospects. Adjusted operating income, adjusted operating margin, adjusted net income and adjusted diluted earnings per share eliminate certain expenses incurred and benefits recognized in the periods presented that relate primarily to our global restructuring programs, acquisition-related costs and the related income tax impacts on these items and tax adjustment items (with respect to adjusted net income and adjusted diluted earnings per share only). Management then utilizes these adjusted financial measures to assess the run rate of the Company’s operations against those of comparable periods. Organic sales and organic sales growth are non-GAAP measures of net sales and net sales growth excluding the impacts of foreign exchange, acquisitions and divestitures from period-over-period comparisons. Management believes reporting organic sales and organic sales growth provides useful information to investors, potential investors and others, and allows for a more complete understanding of underlying sales trends by providing sales and sales growth on a consistent basis. Free cash flow, cash conversion rate of free cash flow to net income, and the net debt to capitalization ratio, which are adjusted to exclude certain cash inflows and outlays, and include only certain balance sheet accounts from the comparable GAAP measures, are an indication of our performance in cash flow generation and also provide an indication of the Company's balance sheet leverage relative to other industrial manufacturing companies. These non-GAAP financial measures are among the primary indicators management uses as a basis for evaluating our cash flow generation and our capitalization structure. In addition, free cash flow is used as a criterion to measure and pay certain compensation-based incentives. For these reasons, management believes these non-GAAP financial measures can be useful to investors, potential investors and others. The Company’s non-GAAP financial measures may not be comparable to similarly titled measures reported by other companies. The presentation of this additional information is not meant to be considered in isolation or as a substitute for financial measures prepared in accordance with GAAP.

TABLE 1

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

EXCLUDING THE EFFECT OF ADJUSTMENTS FOR SPECIAL ITEMS

(Amounts in millions, except per share information)

(Unaudited)

CONSOLIDATED RESULTS

      Second Quarter Ended

Six Months Ended

June 28,

June 29,

June 28,

June 29,

2026

2025

2026

2025

      Net sales

$

763.2

  $

643.7

  $

1,440.4

  $

1,201.7

      Operating income

$

154.0

  $

135.3

  $

287.0

  $

223.0

Operating margin %

20.2

%

  21.0

%

  19.9

%

  18.6

%       Adjustments for special items:

      Restructuring

$

5.6

  $

3.4

  $

5.8

  $

20.7

Acquisition-related costs

0.4

  0.4

  3.1

  1.5

Total adjustments for special items

$

6.0

  $

3.8

  $

8.9

  $

22.2

      Adjusted operating income

$

160.0

  $

139.1

  $

295.9

  $

245.2

Adjusted operating margin %

21.0

%

  21.6

%

  20.5

%

  20.4

%       Net income

$

118.3

  $

100.9

  $

217.9

  $

174.9

      Adjustments for special items - tax effected:

      Restructuring

$

4.2

  $

2.5

  $

4.3

  $

15.5

Acquisition-related costs

0.3

  0.3

  2.4

  1.0

Tax adjustment items

—

  —

  —

  (8.3

)

Total adjustments for special items - tax effected

$

4.5

  $

2.8

  $

6.7

  $

8.2

      Adjusted net income

$

122.8

  $

103.7

  $

224.6

  $

183.1

      Diluted earnings per share

$

3.53

  $

3.01

  $

6.50

  $

5.22

Restructuring

0.12

  0.07

  0.13

  0.46

Acquisition-related costs

0.01

  0.01

  0.07

  0.03

Tax adjustment items

—

  —

  —

  (0.25

)

Adjusted diluted earnings per share

$

3.66

  $

3.09

  $

6.70

  $

5.46

TABLE 2

SEGMENT INFORMATION - RECONCILIATION OF SEGMENT EARNINGS TO CONSOLIDATED OPERATING INCOME - GAAP

(Amounts in millions)

(Unaudited)

Second Quarter Ended

June 28, 2026

June 29, 2025

Americas

Europe

APMEA

Total

Americas

Europe

APMEA

Total

Total segment net sales

$

587.0

131.0

86.1

$

804.1

$

500.5

121.6

65.5

$

687.6

Elimination of intersegment sales

(2.0

)

(6.4

)

(32.5

)

(40.9

)

(2.0

)

(10.6

)

(31.3

)

(43.9

)

Net sales from external customers

$

585.0

124.6

53.6

$

763.2

$

498.5

111.0

34.2

$

643.7

Segment earnings

$

150.1

16.6

10.6

$

177.3

$

135.8

13.0

6.5

$

155.3

Segment margin %

25.7%

13.3

% 19.9

% 23.2

% 27.2

% 11.7

% 18.9

%

24.1

% Corporate operating loss

$

(17.3

)

$

(16.2

)

Adjustments for segment special items:

$

(2.3

)

(3.7

)

—

$

(6.0

)

$

(0.4

)

(3.4

)

—

$

(3.8

)

Operating income

$

154.0

$

135.3

Operating margin %

20.2

% 21.0

%

Six Months Ended

June 28, 2026

June 29, 2025

Americas

Europe

APMEA

Total

Americas

Europe

APMEA

Total

Total segment net sales

$

1,104.9

258.6

153.8

$

1,517.3

$

920.8

238.1

121.9

$

1,280.8

Elimination of intersegment sales

(4.8

)

(12.6

)

(59.5

)

(76.9

)

(4.2

)

(18.7

)

(56.2

)

(79.1

)

Net sales from external customers

$

1,100.1

246.0

94.3

$

1,440.4

$

916.6

219.4

65.7

$

1,201.7

Segment earnings

$

274.7

33.2

18.2

$

326.1

$

233.6

28.1

12.0

$

273.7

Segment margin %

25.0

%

13.5

%

19.3

%

22.6

%

25.5

%

12.8

%

18.2

%

22.8

%

Corporate operating loss

$

(30.2

)

$

(28.5

)

Adjustments for segment special items:

$

(4.0

)

(3.8

)

(1.1

)

$

(8.9

)

$

(1.5

)

(20.6

)

(0.1

)

$

(22.2

)

Operating income

$

287.0

$

223.0

Operating margin %

19.9

%

18.6

%

TABLE 3

SEGMENT INFORMATION - RECONCILIATION OF NET SALES TO NON-GAAP ORGANIC SALES

(Amounts in millions)

(Unaudited)

      Second Quarter Ended

Americas

  Europe

  APMEA

  Total

      Net sales June 28, 2026

$

585.0

  $

124.6

  $

53.6

  $

763.2

Net sales June 29, 2025

$

498.5

  $

111.0

  $

34.2

  $

643.7

Dollar change

$

86.5

  $

13.6

  $

19.4

  $

119.5

Net sales % increase

17.4

%

  12.3

%

  56.7

%

  18.6

%

Foreign exchange impact

(0.1

)%

  (3.1

)%

  (8.7

)%

  (1.1

)%

Acquisition impact

(5.7

)%

  —

%

  (17.3

)%

  (5.3

)%

Organic sales % increase

11.6

%

  9.2

%

  30.7

%

  12.2

%

Six Months Ended

Americas

  Europe

  APMEA

  Total

      Net sales June 28, 2026

$

1,100.1

  $

246.0

  $

94.3

  $

1,440.4

Net sales June 29, 2025

916.6

  219.4

  65.7

  1,201.7

Dollar change

$

183.5

  $

26.6

  $

28.6

  $

238.7

Net sales % increase

20.0

%

  12.1

%

  43.5

%

  19.9

%

Foreign exchange impact

(0.1

)%

  (7.2

)%

  (8.0

)%

  (1.8

)%

Acquisition impact

(6.5

)%

  —

%

  (17.9

)%

  (6.0

)%

Organic sales % increase

13.4

%

  4.9

%

  17.6

%

  12.1

%

TABLE 4

RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES TO FREE CASH FLOW

(Amounts in millions)

(Unaudited)

  Six Months Ended

June 28,

June 29,

2026

2025

  Net cash provided by operating activities

$

120.8

  $

124.9

Less: additions to property, plant, and equipment

(22.6

)

  (19.8

)

Free cash flow

$

98.2

  $

105.1

  Net income

$

217.9

  $

174.9

  Cash conversion rate of free cash flow to net income

45.1

%

  60.1

%

TABLE 5

RECONCILIATION OF LONG-TERM DEBT (INCLUDING CURRENT PORTION) TO NET DEBT AND NET DEBT TO CAPITALIZATION RATIO

(Amounts in millions)

(Unaudited)

  June 28,

December 31,

2026

2025

  Current portion of long-term debt

$

—

  $

—

Plus: long-term debt, net of current portion

108.0

  197.7

Less: cash and cash equivalents

(347.9

)

  (405.5

)

Net debt

$

(239.9

)

  $

(207.8

)

  Net debt

$

(239.9

)

  $

(207.8

)

Total stockholders’ equity

2,189.4

  2,027.7

Capitalization

$

1,949.5

  $

1,819.9

  Net debt to capitalization ratio

(12.3

)%

  (11.4

)%

TABLE 6

2026 FULL YEAR OUTLOOK – RECONCILIATION OF NET SALES GROWTH TO ORGANIC SALES GROWTH AND OPERATING MARGIN TO ADJUSTED OPERATING MARGIN

(Unaudited)

Total Watts

Full Year

2026 Outlook

Approximately

Net Sales

Net sales growth

14% to 17%

Forecasted impact of acquisition / FX

(6)%

Organic sales growth

8% to 11%

Operating Margin

Operating margin

19.4% to 20.0%

Forecasted restructuring / other costs

0.4%

Adjusted operating margin

19.8% to 20.4%