filings.toolsItem 1. FINANCIAL STATEMENTS
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Item 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
West Pharmaceutical Services, Inc. and Subsidiaries
(in millions, except per share data)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Net sales | $ | 804.6 | $ | 746.9 | $ | 2,269.1 | $ | 2,144.4 | |||||||||||||||
| Cost of goods and services sold | 510.3 | 482.2 | 1,469.0 | 1,419.5 | |||||||||||||||||||
| Gross profit | 294.3 | 264.7 | 800.1 | 724.9 | |||||||||||||||||||
| Research and development | 17.1 | 15.5 | 52.5 | 50.6 | |||||||||||||||||||
| Selling, general and administrative expenses | 102.7 | 83.5 | 286.6 | 253.2 | |||||||||||||||||||
| Other expense (income) (Note 14) | 6.9 | 4.4 | 32.7 | 10.8 | |||||||||||||||||||
| Operating profit | 167.6 | 161.3 | 428.3 | 410.3 | |||||||||||||||||||
| Interest expense, net | 0.2 | 0.7 | 0.7 | 3.8 | |||||||||||||||||||
| Interest income | (4.7) | (4.6) | (12.4) | (14.8) | |||||||||||||||||||
| Other nonoperating expense (income) | 0.2 | 0.7 | 0.6 | 0.7 | |||||||||||||||||||
| Income before income taxes and equity in net income of affiliated companies | 171.9 | 164.5 | 439.4 | 420.6 | |||||||||||||||||||
| Income tax expense | 34.0 | 32.4 | 88.3 | 70.7 | |||||||||||||||||||
| Equity in net income of affiliated companies | (2.1) | (3.9) | (10.5) | (12.7) | |||||||||||||||||||
| Net income | $ | 140.0 | $ | 136.0 | $ | 361.6 | $ | 362.6 | |||||||||||||||
| Net income per share: | |||||||||||||||||||||||
| Basic | $ | 1.94 | $ | 1.87 | $ | 5.00 | $ | 4.96 | |||||||||||||||
| Diluted | $ | 1.92 | $ | 1.85 | $ | 4.97 | $ | 4.91 | |||||||||||||||
| Weighted average shares outstanding: | |||||||||||||||||||||||
| Basic | 72.2 | 72.8 | 72.3 | 73.1 | |||||||||||||||||||
| Diluted | 72.6 | 73.4 | 72.7 | 73.8 | |||||||||||||||||||
See accompanying notes to condensed consolidated financial statements.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
West Pharmaceutical Services, Inc. and Subsidiaries
(in millions)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Net income | $ | 140.0 | $ | 136.0 | $ | 361.6 | $ | 362.6 | |||||||||||||||
| Other comprehensive (loss) income, net of tax: | |||||||||||||||||||||||
| Foreign currency translation adjustments, net of tax of $0.7 and $(2.5), $(1.4) and $(0.8), respectively | (12.0) | 74.7 | 153.3 | 6.7 | |||||||||||||||||||
| Defined benefit pension and other postretirement plan adjustments, net of tax of $0.0 and $(0.2), $(0.3) and $(0.3), respectively | 0.1 | (0.8) | (1.0) | (1.2) | |||||||||||||||||||
| Net (loss) gain on equity affiliate accumulated other comprehensive income, net of tax of $0.0 and $0.0, $0.0 and $0.0, respectively | (0.1) | 0.2 | 0.1 | — | |||||||||||||||||||
| Net (loss) gain on derivatives, net of tax of $(0.5) and $1.1, $1.2 and $0.7, respectively | (1.6) | 6.5 | 3.4 | 2.0 | |||||||||||||||||||
| Other comprehensive (loss) income, net of tax | (13.6) | 80.6 | 155.8 | 7.5 | |||||||||||||||||||
| Comprehensive income | $ | 126.4 | $ | 216.6 | $ | 517.4 | $ | 370.1 |
See accompanying notes to condensed consolidated financial statements.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
West Pharmaceutical Services, Inc. and Subsidiaries
| (in millions, except per share data) | September 30, 2025 | December 31, 2024 | |||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 628.5 | $ | 484.6 | |||||||
| Accounts receivable, net | 625.0 | 552.5 | |||||||||
| Inventories | 438.0 | 377.0 | |||||||||
| Other current assets | 131.8 | 124.0 | |||||||||
| Total current assets | 1,823.3 | 1,538.1 | |||||||||
| Property, plant and equipment | 3,232.9 | 2,985.8 | |||||||||
| Less: accumulated depreciation and amortization | 1,492.3 | 1,404.2 | |||||||||
| Property, plant and equipment, net | 1,740.6 | 1,581.6 | |||||||||
| Operating lease right-of-use assets | 97.8 | 104.5 | |||||||||
| Investments in affiliated companies | 220.9 | 202.1 | |||||||||
| Goodwill | 110.6 | 106.0 | |||||||||
| Intangible assets, net | 8.9 | 10.8 | |||||||||
| Deferred income taxes | 27.9 | 26.0 | |||||||||
| Other noncurrent assets | 75.8 | 74.3 | |||||||||
| Total Assets | $ | 4,105.8 | $ | 3,643.4 | |||||||
| LIABILITIES AND EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 255.8 | $ | 239.3 | |||||||
| Accrued salaries, wages and benefits | 111.8 | 73.5 | |||||||||
| Income taxes payable | 33.3 | 31.5 | |||||||||
| Operating lease liabilities | 21.4 | 17.9 | |||||||||
| Other current liabilities | 213.1 | 188.2 | |||||||||
| Total current liabilities | 635.4 | 550.4 | |||||||||
| Long-term debt | 202.7 | 202.6 | |||||||||
| Deferred income taxes | 22.8 | 20.5 | |||||||||
| Pension and other postretirement benefits | 31.1 | 28.2 | |||||||||
| Operating lease liabilities | 73.5 | 81.8 | |||||||||
| Deferred compensation benefits | 13.5 | 15.4 | |||||||||
| Other long-term liabilities | 75.3 | 62.2 | |||||||||
| Total Liabilities | 1,054.3 | 961.1 | |||||||||
| Commitments and contingencies (Note 16) | |||||||||||
| Equity: | |||||||||||
| Preferred stock, 3.0 million shares authorized; 0 shares issued and outstanding | — | — | |||||||||
| Common stock, par value $0.25 per share; 200.0 million shares authorized; shares issued: September 30, 2025 - 75.3 million, December 31, 2024 - 75.3 million; shares outstanding: September 30, 2025 - 71.9 million, December 31, 2024 - 72.3 million | 18.8 | 18.8 | |||||||||
| Capital in excess of par value | — | 22.1 | |||||||||
| Retained earnings | 4,262.4 | 3,956.6 | |||||||||
| Accumulated other comprehensive loss | (102.3) | (258.1) | |||||||||
| Treasury stock, at cost (September 30, 2025 - 3.4 million shares, December 31, 2024 - 3.0 million shares) | (1,127.4) | (1,057.1) | |||||||||
| Total Equity | 3,051.5 | 2,682.3 | |||||||||
| Total Liabilities and Equity | $ | 4,105.8 | $ | 3,643.4 |
See accompanying notes to condensed consolidated financial statements.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
West Pharmaceutical Services, Inc. and Subsidiaries
(in millions)
| Nine Months Ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | 361.6 | $ | 362.6 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation | 122.2 | 112.0 | |||||||||
| Amortization | 2.2 | 2.7 | |||||||||
| Stock-based compensation | 17.1 | 14.4 | |||||||||
| Non-cash restructuring charges | 2.5 | — | |||||||||
| Asset impairments | 4.4 | 1.9 | |||||||||
| Other non-cash items, net | (4.4) | (9.7) | |||||||||
| Changes in assets and liabilities | (1.9) | (20.6) | |||||||||
| Net cash provided by operating activities | 503.7 | 463.3 | |||||||||
| Cash flows from investing activities: | |||||||||||
| Capital expenditures | (209.8) | (272.1) | |||||||||
| Other, net | — | (1.8) | |||||||||
| Net cash used in investing activities | (209.8) | (273.9) | |||||||||
| Cash flows from financing activities: | |||||||||||
| Borrowings of long-term debt | — | 164.7 | |||||||||
| Repayments of long-term debt | — | (169.0) | |||||||||
| Principal repayments on finance leases | (0.8) | (23.2) | |||||||||
| Excise tax payments | (4.2) | — | |||||||||
| Dividend payments | (45.4) | (43.8) | |||||||||
| Proceeds from stock-based compensation awards | 8.2 | 24.0 | |||||||||
| Employee stock purchase plan contributions | 5.4 | 5.6 | |||||||||
| Shares purchased under share repurchase programs | (134.0) | (506.5) | |||||||||
| Shares repurchased for employee tax withholdings | (2.6) | (5.5) | |||||||||
| Net cash used in financing activities | (173.4) | (553.7) | |||||||||
| Effect of exchange rates on cash | 23.4 | 1.3 | |||||||||
| Net increase (decrease) in cash and cash equivalents | 143.9 | (363.0) | |||||||||
| Cash, including cash equivalents at beginning of period | 484.6 | 853.9 | |||||||||
| Cash, including cash equivalents at end of period | $ | 628.5 | $ | 490.9 | |||||||
| Supplemental cash flow information: | |||||||||||
| Accrued capital expenditures | $ | 38.1 | $ | 50.3 |
See accompanying notes to condensed consolidated financial statements.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Note 1: Basis of Presentation
Basis of Presentation: The condensed consolidated financial statements included in this report are unaudited and have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“U.S. GAAP”) for interim financial reporting and U.S. Securities and Exchange Commission (“SEC”) regulations. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. In the opinion of management, these financial statements include all adjustments, which are of a normal recurring nature, necessary for a fair statement of the financial position, results of operations, cash flows and the change in equity for the periods presented. The condensed consolidated financial statements for the three and nine months ended September 30, 2025, should be read in conjunction with the consolidated financial statements and notes thereto of West Pharmaceutical Services, Inc. and its majority-owned subsidiaries (which may be referred to as “West”, the “Company”, “we”, “us” or “our”) appearing in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Annual Report”). The results of operations for any interim period are not necessarily indicative of results for the full year.
Note 2: New Accounting Standards
Recently Adopted Standards
In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (“ASU") No. 2023-07, Segment Reporting, which expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses and enhancement of interim disclosure requirements. This guidance is effective for fiscal years beginning after December 15, 2023 and interim periods beginning after December 15, 2024. The Company has adopted and implemented the applicable disclosure requirements within this report and the 2024 Annual Report.
Standards Issued Not Yet Adopted
In December 2023, the FASB issued guidance that seeks to enhance income tax disclosures to provide information to better assess how an entity's operations and related tax risks affect its tax rate and prospects for future cash flows. Within the income tax rate reconciliation, the amendment requires disclosure of additional categories and greater detail about individual reconciling items over a specified threshold. It also requires information pertaining to taxes paid to be disaggregated for federal, state, and foreign taxes and further disaggregated for specific jurisdictions over a specified threshold. This guidance is effective for fiscal years beginning after December 15, 2024. We are currently evaluating the impact of this guidance on our financial statements and disclosures, but we do not expect the adoption to have a material impact on the consolidated financial statements other than the expanded footnote disclosure.
In November 2024, the FASB issued guidance that seeks to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions. The amendments require that at each interim and annual reporting period an entity: (1) disclose the amounts of purchases of inventory, employee compensation, depreciation, and intangible asset amortization included in each of the Company's relevant expense captions; (2) include certain amounts that are already required to be disclosed under current U.S. GAAP in the same disclosure as the other disaggregation requirements; (3) disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively; and (4) disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. This guidance is effective for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact of this guidance on our financial statements and disclosures.
Note 3: Revenue
Our revenue results from the sale of goods or services and reflects the consideration to which we expect to be entitled in exchange for those goods or services. We record revenue based on a five-step model, in accordance with Accounting Standards Codification (“ASC”) 606. Following the identification of a contract with a customer, we identify the performance obligations (goods or services) in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract, and recognize the revenue when (or as) we satisfy the performance obligations by transferring the promised goods or services to our customers. A good or service is transferred when (or as) the customer obtains control of that good or service.
The following table presents the approximate percentage of our net sales by market group:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Biologics | 41 % | 40 % | 39 % | 38 % | |||||||||||||||||||
| Generics | 17 % | 18 % | 17 % | 17 % | |||||||||||||||||||
| Pharma | 22 % | 23 % | 25 % | 25 % | |||||||||||||||||||
| Contract-Manufactured Products | 20 % | 19 % | 19 % | 20 % | |||||||||||||||||||
| 100 % | 100 % | 100 % | 100 % |
The following table presents the approximate percentage of our net sales by product category:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| High-Value Product ("HVP") Components | 48 % | 45 % | 47 % | 46 % | |||||||||||||||||||
| High-Value Product ("HVP") Delivery Devices | 12 % | 16 % | 13 % | 12 % | |||||||||||||||||||
| Standard Packaging | 20 % | 20 % | 21 % | 22 % | |||||||||||||||||||
| Contract-Manufactured Products | 20 % | 19 % | 19 % | 20 % | |||||||||||||||||||
| 100 % | 100 % | 100 % | 100 % |
The following table presents the approximate percentage of our net sales by geographic location:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Americas | 47 % | 48 % | 47 % | 44 % | |||||||||||||||||||
| Europe, Middle East, Africa | 45 % | 44 % | 45 % | 47 % | |||||||||||||||||||
| Asia Pacific | 8 % | 8 % | 8 % | 9 % | |||||||||||||||||||
| 100 % | 100 % | 100 % | 100 % |
Contract Assets and Liabilities
The following table summarizes our contract assets and liabilities:
| ($ in millions) | |||||
| Contract assets, December 31, 2024 | $ | 23.3 | |||
| Contract assets, September 30, 2025 | 27.5 | ||||
| Change in contract assets - increase (decrease) | $ | 4.2 | |||
| Deferred income, December 31, 2024 | $ | (53.2) | |||
| Deferred income, September 30, 2025 | (47.3) | ||||
| Change in deferred income - decrease (increase) | $ | 5.9 |
Contract assets are included within other current assets and deferred income is included within other current liabilities and other long-term liabilities. During the nine months ended September 30, 2025, $39.3 million of revenue was recognized that was included in deferred income at the beginning of the year.
As of September 30, 2025, performance obligations expected to be satisfied beyond one year were $4.3 million. The remaining $43.0 million of performance obligations are expected to be satisfied within one year or less.
Note 4: Net Income Per Share
The following table reconciles the shares used in the calculation of basic net income per share to those used for diluted net income per share:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| ($ in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Net income | $ | 140.0 | $ | 136.0 | $ | 361.6 | $ | 362.6 | |||||||||||||||
| Weighted average common shares outstanding | 72.2 | 72.8 | 72.3 | 73.1 | |||||||||||||||||||
| Dilutive effect of equity awards, based on the treasury stock method | 0.4 | 0.6 | 0.4 | 0.7 | |||||||||||||||||||
| Weighted average shares assuming dilution | 72.6 | 73.4 | 72.7 | 73.8 |
During the three months ended September 30, 2025 and 2024, there were 0.4 million and 0.3 million shares, respectively, from stock-based compensation plans not included in the computation of diluted net income per share because their impact was antidilutive. There were 0.4 million and 0.3 million antidilutive shares outstanding during the nine months ended September 30, 2025 and 2024, respectively.
In February 2023, the Board of Directors approved a share repurchase program under which the Company was able repurchase up to $1.0 billion in shares of common stock. This program was completed during January 2025.
In December 2024, the Board of Directors approved a share repurchase program under which the Company was able to repurchase up to 550,000 shares of common stock on the open market or in privately-negotiated transactions. The number of shares to be repurchased and the timing of such transactions depended on a variety of factors, including market conditions. This program was completed during April 2025. The Company did not repurchase any shares during the three months ended September 30, 2025.
The below table summarizes the details of the Company's repurchases of common stock under these programs:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2024 | 2025 | 2024 | |||||||||||||||||||||
| Shares repurchased | 170,771 | 552,593 | 1,409,786 | ||||||||||||||||||||
| Total cost of repurchases ($ in millions) | $ | 52.4 | $ | 134.0 | $ | 506.5 | |||||||||||||||||
| Average price per repurchased share | $ | 306.34 | $ | 242.55 | $ | 359.24 |
Note 5: Inventories
Inventories are valued at the lower of cost (on a first-in, first-out basis) or net realizable value. Inventory balances were as follows:
| ($ in millions) | September 30, 2025 | December 31, 2024 | |||||||||
| Raw materials | $ | 183.0 | $ | 166.9 | |||||||
| Work in process | 97.6 | 65.2 | |||||||||
| Finished goods | 157.4 | 144.9 | |||||||||
| $ | 438.0 | $ | 377.0 |
Note 6: Leases
A lease exists when a contract conveys to the customer the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. The definition of a lease embodies two conditions: 1) there is an identified asset in the contract that is land or a depreciable asset (i.e., property, plant, and equipment); and 2) the customer has the right to control the use of the identified asset. Lease payments included in the measurement of the lease right-of-use assets and lease liabilities are comprised of fixed payments (including in-substance fixed payments), variable payments that depend on an index or rate, and the exercise price of a lessee option to purchase the underlying asset if the lessee is reasonably certain to exercise.
The components of lease expense were as follows:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| ($ in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Operating lease cost | $ | 6.9 | $ | 6.4 | $ | 20.3 | $ | 18.1 | |||||||||||||||
| Finance lease - amortization of right-of-use (ROU) assets | 0.5 | 0.3 | 1.2 | 0.6 | |||||||||||||||||||
| Finance lease - interest on lease liabilities | — | 0.1 | 0.1 | 0.1 | |||||||||||||||||||
| Short-term lease cost | 1.0 | 0.8 | 2.5 | 1.9 | |||||||||||||||||||
| Variable lease cost | 2.9 | 2.5 | 8.3 | 6.3 | |||||||||||||||||||
| Total lease cost | $ | 11.3 | $ | 10.1 | $ | 32.4 | $ | 27.0 |
The following table summarizes the finance lease amounts in the condensed consolidated balance sheets:
| September 30, | December 31, | ||||||||||||||||||||||
| ($ in millions) | Balance Sheet Classification | 2025 | 2024 | ||||||||||||||||||||
| ROU assets, net | Other noncurrent assets | $ | 35.2 | $ | 29.7 | ||||||||||||||||||
| Lease liabilities (current) | Other current liabilities | $ | 1.5 | $ | 0.9 | ||||||||||||||||||
| Lease liabilities (noncurrent) | Other long-term liabilities | $ | 3.9 | $ | 2.1 | ||||||||||||||||||
Supplemental cash flow information related to leases were as follows:
| Nine Months Ended September 30, | |||||||||||||||||||||||
| ($ in millions) | 2025 | 2024 | |||||||||||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||||||||||||||
| Operating cash flows from operating leases | $ | 19.6 | $ | 26.3 | |||||||||||||||||||
| Operating cash flows from finance leases | $ | 0.1 | $ | — | |||||||||||||||||||
| Financing cash flows from finance leases | $ | 0.8 | $ | 23.2 | |||||||||||||||||||
| Right-of-use assets obtained in exchange for new lease liabilities: | |||||||||||||||||||||||
| Operating leases | $ | 9.9 | $ | 36.8 | |||||||||||||||||||
| Finance leases | $ | 2.9 | $ | 24.3 |
As of September 30, 2025 and December 31, 2024, the weighted average remaining lease term for operating leases was 6.1 years and 8.3 years, respectively. As of September 30, 2025 and December 31, 2024, the weighted average remaining lease term for finance leases was 4.6 years and 6.3 years, respectively.
As of September 30, 2025 and December 31, 2024, the weighted average discount rate for operating leases was 4.00% and 3.99%, respectively. As of September 30, 2025 and December 31, 2024, the weighted average discount rate for finance leases was 4.16% and 4.80%, respectively.
Maturities of the Company's lease liabilities as of September 30, 2025 were as follows:
| ($ in millions) | |||||||||||||||||||||||||||||||||||
| Year | Operating Leases | Finance Leases | |||||||||||||||||||||||||||||||||
| 2025 (remaining period as of September 30, 2025) | $ | 6.5 | $ | 0.4 | |||||||||||||||||||||||||||||||
| 2026 | 25.4 | 1.5 | |||||||||||||||||||||||||||||||||
| 2027 | 18.4 | 1.5 | |||||||||||||||||||||||||||||||||
| 2028 | 16.6 | 1.1 | |||||||||||||||||||||||||||||||||
| 2029 | 12.7 | 0.5 | |||||||||||||||||||||||||||||||||
| Thereafter | 27.3 | 0.9 | |||||||||||||||||||||||||||||||||
| 106.9 | 5.9 | ||||||||||||||||||||||||||||||||||
| Less: imputed lease interest | (12.0) | (0.5) | |||||||||||||||||||||||||||||||||
| Total lease liabilities | $ | 94.9 | $ | 5.4 |
Note 7: Affiliated Companies
The following table summarizes the aggregate carrying amounts of our investments in affiliated companies that are accounted for under the equity method and our investments in affiliated companies that are not accounted for under the equity method:
| September 30, | December 31, | ||||||||||
| ($ in millions) | 2025 | 2024 | |||||||||
| Aggregate carrying value of investments in affiliated companies: | |||||||||||
| Equity method affiliates | $ | 213.6 | $ | 194.9 | |||||||
| Non-equity method affiliates | 7.3 | 7.2 | |||||||||
| Total investments in affiliated companies | $ | 220.9 | $ | 202.1 |
We have elected to record non-equity method investments, for which fair value was not readily determinable, at cost, less impairment, adjusted for subsequent observable price changes. We test these investments for impairment whenever circumstances indicate that the carrying value of the investments may not be recoverable.
The following table summarizes the amounts due to and from affiliates in the condensed consolidated balance sheets:
| September 30, | December 31, | |||||||||||||
| ($ in millions) | 2025 | 2024 | ||||||||||||
| Payables due to affiliates | $ | 19.8 | $ | 18.7 | ||||||||||
| Receivables due from affiliates | $ | 1.2 | $ | 2.5 |
The following table summarizes the Company's affiliate transactions:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| ($ in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Purchases from (and payments to) affiliates | $ | 25.2 | $ | 30.1 | $ | 83.1 | $ | 83.6 | |||||||||||||||
| Sales to affiliates | $ | 3.4 | $ | 3.5 | $ | 9.4 | $ | 10.7 |
The majority of the purchase transactions listed above relate to a distributorship agreement with Daikyo Seiko, Ltd. ("Daikyo") that allows the Company to purchase and re-sell Daikyo products.
Note 8: Debt
The following table summarizes our long-term debt obligations, net of unamortized debt issuance costs and current maturities. The interest rates shown in parentheses are as of September 30, 2025.
| ($ in millions) | September 30, 2025 | December 31, 2024 | |||||||||
| Term Loan, due July 2, 2027 (5.35%) | $ | 130.0 | $ | 130.0 | |||||||
| Series C notes, due July 5, 2027 (4.02%) | 73.0 | 73.0 | |||||||||
| 203.0 | 203.0 | ||||||||||
| Less: unamortized debt issuance costs for Term Loan and Series Notes | 0.3 | 0.4 | |||||||||
| Total debt | 202.7 | 202.6 | |||||||||
| Less: current portion of long-term debt | — | — | |||||||||
| Long-term debt, net | $ | 202.7 | $ | 202.6 |
Term Loan
At September 30, 2025, the Company had $130.0 million in borrowings under the Term Loan which were classified as long-term. Please refer to Note 9, Derivative Financial Instruments, for a discussion of the foreign currency hedge associated with the Term Loan.
Multi-Currency Revolving Credit Facility
At September 30, 2025, the borrowing capacity available under our $500.0 million multi-currency revolving credit facility, including outstanding letters of credit of $2.3 million, was $497.7 million.
Pursuant to the financial covenants in our debt agreements, we are required to maintain established interest coverage ratios and to not exceed established leverage ratios. In addition, the agreements contain other customary covenants, none of which we consider restrictive to our operations. At September 30, 2025, we were in compliance with all of our debt covenants.
Note 9: Derivative Financial Instruments
Our ongoing business operations expose us to various risks, such as fluctuating interest rates, foreign currency exchange rates and increasing commodity prices. To manage these market risks, we periodically enter into derivative financial instruments, such as interest rate swaps, options and foreign exchange contracts for periods consistent with, and for notional amounts equal to or less than, the related underlying exposures. We do not purchase or hold any derivative financial instruments for investment or trading purposes. All derivatives are recorded in our condensed consolidated balance sheet at fair value.
Foreign Exchange Rate Risk
We have entered into forward exchange contracts, designated as fair value hedges, to manage our exposure to fluctuating foreign exchange rates on cross-currency intercompany loans. As of both September 30, 2025 and December 31, 2024, the notional amounts of these forward exchange contracts were Singapore Dollar (“SGD”) 421.9 million and $13.4 million. We have also entered into forward exchange contracts, designated as fair value hedges, to manage our exposure to fluctuating foreign exchange rates on cross-currency intercompany demand notes which were executed at various times throughout 2023 and 2024. As of September 30, 2025, the total notional amounts of these forward exchange contracts were Euro ("EUR") 118.3 million and $47.1 million. As of December 31, 2024, the total notional amounts of these forward exchange contracts were EUR 145.3 million and $47.1 million
In addition, we have entered into several foreign currency contracts, designated as cash flow hedges, for periods of up to eighteen months, intended to hedge the currency risk associated with a portion of our forecasted transactions denominated in foreign currencies. As of September 30, 2025, we had outstanding foreign currency contracts to purchase and sell certain pairs of currencies, as follows:
| (in millions) | Sell | ||||||||||||||||||||||
| Currency | Purchase | USD | EUR | SGD | |||||||||||||||||||
| EUR | 28.4 | 32.5 | — | — | |||||||||||||||||||
| JPY | 5,388.2 | 25.0 | 10.3 | 1.2 | |||||||||||||||||||
| SGD | 35.4 | 16.9 | 9.3 | — |
In December 2019, we entered into a cross-currency swap for $90 million, which we designated as a hedge of our net investment in Daikyo. The cross-currency swap had an original maturity date of December 31, 2024, but was extinguished in July 2024. In July 2024, we entered into a new cross-currency swap for $130 million, which we designated as a hedge of our net investment in Daikyo. As of September 30, 2025, the notional amount of the cross-currency swap is ¥17.0 billion ($130.0 million) and the swap termination date is July 2, 2027. Under the cross-currency swap, we receive fixed USD interest rate payments in return for paying fixed JPY interest rate payments.
Additionally, we will periodically enter into forward exchange contracts to mitigate our exposure to fluctuating foreign exchange rates on assets and liabilities, other than the intercompany loans and demand notes referenced above, which are denominated in foreign currencies. The Company has elected not to designate these forward contracts in hedging relationships, and any change in the value of the contracts is recognized in income.
Commodity Price Risk
Many of our proprietary products are made from synthetic elastomers, which are derived from the petroleum refining process. We purchase the majority of our elastomers via long-term supply contracts, some of which contain clauses that provide for surcharges related to fluctuations in crude oil prices. The following economic hedges did not qualify for hedge accounting treatment since they did not meet the highly effective requirement at inception.
We regularly purchase call options on crude oil to mitigate our exposure to such oil-based surcharges and protect operating cash flows with regard to a portion of our forecasted elastomer purchases. As of September 30, 2025, we had outstanding contracts to purchase 184,895 barrels of crude oil from September 2025 to March 2027, at a weighted-average strike price of $76.26 per barrel.
Effects of Derivative Instruments on Financial Position and Results of Operations
Please refer to Note 10, Fair Value Measurements, for the balance sheet location and fair values of our derivative instruments as of September 30, 2025 and December 31, 2024.
The following table summarizes the effects of derivative instruments designated as fair value hedges on the condensed consolidated statements of income:
| Amount of Gain (Loss) Recognized in Income for the | Amount of Gain (Loss) Recognized in Income for the | ||||||||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | Location on Statement of Income | |||||||||||||||||||||||||||
| ($ in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||
| Fair Value Hedges: | |||||||||||||||||||||||||||||
| Hedged item (intercompany loan) | $ | 3.9 | $ | (16.6) | $ | 7.3 | $ | (6.2) | Other expense (income) | ||||||||||||||||||||
| Derivative designated as hedging instrument | (3.9) | 16.6 | (7.3) | 6.2 | Other expense (income) | ||||||||||||||||||||||||
| Amount excluded from effectiveness testing | (0.4) | (1.8) | (1.3) | (5.3) | Other expense (income) | ||||||||||||||||||||||||
| Total | $ | (0.4) | $ | (1.8) | $ | (1.3) | $ | (5.3) |
We recognize in earnings the initial value of forward point components for hedges of intercompany loans on a straight-line basis over the life of the fair value hedge. The value of forward point components for hedges of intercompany demand notes is recognized currently in earnings using a market approach. The expense recognized in earnings, pre-tax, for forward point components for the three and nine months ended September 30, 2025 was $0.4 million and $1.3 million, respectively. The expense recognized in earnings, pre-tax, for forward point components for the three and nine months ended September 30, 2024 was $1.8 million and $5.3 million, respectively.
The following tables summarize the effects of derivative instruments designated as fair value, cash flow, and net investment hedges on other comprehensive income (“OCI”) and earnings, net of tax:
| Amount of Gain (Loss) Recognized in OCI for the | Amount of (Gain) Loss Reclassified from Accumulated OCI into Income for the | Location of (Gain) Loss Reclassified from Accumulated OCI into Income | |||||||||||||||||||||||||||
| Three Months Ended September 30, | Three Months Ended September 30, | ||||||||||||||||||||||||||||
| ($ in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||
| Fair Value Hedges: | |||||||||||||||||||||||||||||
| Foreign currency hedge contracts | $ | 0.2 | $ | 0.5 | $ | — | $ | — | Other expense (income) | ||||||||||||||||||||
| Total | $ | 0.2 | $ | 0.5 | $ | — | $ | — | |||||||||||||||||||||
| Cash Flow Hedges: | |||||||||||||||||||||||||||||
| Foreign currency hedge contracts | $ | 0.8 | $ | 0.2 | $ | 0.3 | $ | — | Net sales | ||||||||||||||||||||
| Foreign currency hedge contracts | (2.5) | 5.3 | (0.5) | 0.5 | Cost of goods and services sold | ||||||||||||||||||||||||
| Forward treasury locks | — | — | 0.1 | — | Interest expense | ||||||||||||||||||||||||
| Total | $ | (1.7) | $ | 5.5 | $ | (0.1) | $ | 0.5 | |||||||||||||||||||||
| Net Investment Hedges: | |||||||||||||||||||||||||||||
| Cross-currency swap | $ | 2.4 | $ | (8.1) | $ | — | $ | — | Other expense (income) | ||||||||||||||||||||
| Total | $ | 2.4 | $ | (8.1) | $ | — | $ | — |
| Amount of Gain (Loss) Recognized in OCI for the | Amount of (Gain) Loss Reclassified from Accumulated OCI into Income for the | Location of (Gain) Loss Reclassified from Accumulated OCI into Income | |||||||||||||||||||||||||||
| Nine Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
| ($ in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||
| Fair Value Hedges: | |||||||||||||||||||||||||||||
| Foreign currency hedge contracts | $ | 1.0 | $ | 0.7 | $ | — | $ | (0.7) | Other expense (income) | ||||||||||||||||||||
| Total | $ | 1.0 | $ | 0.7 | $ | — | $ | (0.7) | |||||||||||||||||||||
| Cash Flow Hedges: | |||||||||||||||||||||||||||||
| Foreign currency hedge contracts | $ | (1.8) | $ | 0.3 | $ | 0.4 | $ | (0.2) | Net sales | ||||||||||||||||||||
| Foreign currency hedge contracts | 4.0 | (1.3) | (0.3) | 3.1 | Cost of goods and services sold | ||||||||||||||||||||||||
| Forward treasury locks | — | — | 0.1 | 0.1 | Interest expense | ||||||||||||||||||||||||
| Total | $ | 2.2 | $ | (1.0) | $ | 0.2 | $ | 3.0 | |||||||||||||||||||||
| Net Investment Hedges: | |||||||||||||||||||||||||||||
| Cross-currency swap | $ | (3.8) | $ | 0.3 | $ | — | $ | — | Other expense (income) | ||||||||||||||||||||
| Total | $ | (3.8) | $ | 0.3 | $ | — | $ | — |
Refer to the above table which summarizes the effects of derivative instruments designated as fair value hedges within the other expense (income) line in our condensed consolidated statements of income for the three and nine months ended September 30, 2025 and September 30, 2024.
The following table summarizes the effects of derivative instruments designated as cash flow and net investment hedges by line item in the condensed consolidated statements of income:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| ($ in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Net sales | $ | 0.3 | $ | — | $ | 0.4 | $ | (0.2) | |||||||||||||||
| Cost of goods and services sold | $ | (0.5) | $ | 0.5 | $ | (0.3) | $ | 3.1 | |||||||||||||||
| Interest expense | $ | 0.1 | $ | — | $ | 0.1 | $ | 0.1 | |||||||||||||||
The following table summarizes the effects of derivative instruments not designated as hedges on the condensed consolidated statements of income:
| Amount of Gain (Loss) Recognized in Income for the | Amount of Gain (Loss) Recognized in Income for the | ||||||||||||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | Location on Statement of Income | |||||||||||||||||||||||||||
| ($ in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||||||||
| Commodity call options | $ | (0.1) | $ | (0.5) | $ | (0.5) | $ | (0.6) | Other expense (income) | ||||||||||||||||||||
| Currency Forwards | 0.3 | (3.2) | 1.2 | (2.7) | Other expense (income) | ||||||||||||||||||||||||
| Total | $ | 0.2 | $ | (3.7) | $ | 0.7 | $ | (3.3) |
For the three and nine months ended September 30, 2025 and 2024, there was no material ineffectiveness related to these hedges.
Note 10: Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The following fair value hierarchy classifies the inputs to valuation techniques used to measure fair value into one of three levels:
-
Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities.
-
Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
-
Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.
The following tables present the assets and liabilities recorded at fair value on a recurring basis:
| Balance at | Basis of Fair Value Measurements | ||||||||||||||||||||||
| ($ in millions) | September 30, 2025 | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Deferred compensation assets | $ | 10.0 | $ | 10.0 | $ | — | $ | — | |||||||||||||||
| Money market funds | 176.8 | 176.8 | — | — | |||||||||||||||||||
| Time deposits | 45.7 | — | 45.7 | — | |||||||||||||||||||
| Foreign currency contracts | 11.9 | — | 11.9 | — | |||||||||||||||||||
| Cross-currency swap | 18.3 | — | 18.3 | — | |||||||||||||||||||
| Commodity call options | 0.4 | — | 0.4 | — | |||||||||||||||||||
| $ | 263.1 | $ | 186.8 | $ | 76.3 | $ | — | ||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Contingent consideration | $ | 2.8 | $ | — | $ | — | $ | 2.8 | |||||||||||||||
| Deferred compensation liabilities | 10.1 | 10.1 | — | — | |||||||||||||||||||
| Foreign currency contracts | 27.0 | — | 27.0 | — | |||||||||||||||||||
| $ | 39.9 | $ | 10.1 | $ | 27.0 | $ | 2.8 |
| Balance at | Basis of Fair Value Measurements | ||||||||||||||||||||||
| ($ in millions) | December 31, 2024 | Level 1 | Level 2 | Level 3 | |||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Deferred compensation assets | $ | 11.1 | $ | 11.1 | $ | — | $ | — | |||||||||||||||
| Money market funds | 117.6 | 117.6 | — | — | |||||||||||||||||||
| Time deposits | 71.3 | — | 71.3 | — | |||||||||||||||||||
| Foreign currency contracts | 17.3 | — | 17.3 | — | |||||||||||||||||||
| Cross-currency swap | 23.6 | — | 23.6 | — | |||||||||||||||||||
| Commodity call options | 0.3 | — | 0.3 | — | |||||||||||||||||||
| $ | 241.2 | $ | 128.7 | $ | 112.5 | $ | — | ||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Contingent consideration | $ | 3.0 | $ | — | $ | — | $ | 3.0 | |||||||||||||||
| Deferred compensation liabilities | 11.2 | 11.2 | — | — | |||||||||||||||||||
| Foreign currency contracts | 18.3 | — | 18.3 | — | |||||||||||||||||||
| $ | 32.5 | $ | 11.2 | $ | 18.3 | $ | 3.0 |
Deferred compensation assets are included within other noncurrent assets and are valued using a market approach based on quoted market prices in an active market. Money market funds are included within cash and cash equivalents and are valued based on quoted market prices in active markets, with no valuation adjustment. Time deposits are included within cash and cash equivalents and are valued using relevant observable market inputs including quoted prices for similar assets and interest rate curves. The fair value of our foreign currency contracts, included within other current and other noncurrent assets, as well as other current and other long-term liabilities, is valued using an income approach based on quoted forward foreign exchange rates and spot rates at the reporting date. The fair value of the cross-currency swap, included within other noncurrent assets, is valued using a market approach. Please refer to Note 9, Derivative Financial Instruments, for further discussion of our derivatives. The fair value of our commodity call options, included within other current and other noncurrent assets, is valued using a market approach. The fair value of the contingent consideration liability, within current and long-term liabilities, related to the SmartDose® technology platform (the “SmartDose® contingent consideration”) was initially determined using a probability-weighted income approach, and is revalued at each reporting date or more frequently if circumstances dictate. Changes in the fair value of this obligation are recorded as income or expense within other expense (income) in our condensed consolidated statements of income. The fair value of deferred compensation liabilities is based on quoted prices of the underlying employees’ investment selections and is included within other long-term liabilities.
Other Financial Instruments
We believe that the carrying amounts of our cash and accounts receivable approximate their fair values due to their near-term maturities.
The estimated fair value of long-term debt is based on quoted market prices for debt issuances with similar terms and maturities and is classified as Level 2 within the fair value hierarchy. At September 30, 2025, the estimated fair value of long-term debt was $202.1 million compared to a carrying amount of $202.7 million. At December 31, 2024, the estimated fair value of long-term debt was $200.5 million and the carrying amount was $202.6 million. As of September 30, 2025 and December 31, 2024, all debt is long-term.
Note 11: Accumulated Other Comprehensive Loss
The following table presents the changes in the components of accumulated other comprehensive income ("AOCI") (loss), net of tax, for the nine months ended September 30, 2025:
| ($ in millions) | Derivatives | Change in equity affiliate investment AOCI | Defined benefit pension and other postretirement plans | Foreign currency translation | Total | ||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | (2.5) | $ | 2.5 | $ | (9.8) | $ | (248.3) | $ | (258.1) | |||||||||||||||||||
| Other comprehensive income (loss) before reclassifications | 3.2 | 0.1 | (0.6) | 153.3 | 156.0 | ||||||||||||||||||||||||
| Amounts reclassified out from accumulated other comprehensive income (loss) | 0.2 | — | (0.4) | — | (0.2) | ||||||||||||||||||||||||
| Other comprehensive income (loss), net of tax | 3.4 | 0.1 | (1.0) | 153.3 | 155.8 | ||||||||||||||||||||||||
| Balance, September 30, 2025 | $ | 0.9 | $ | 2.6 | $ | (10.8) | $ | (95.0) | $ | (102.3) |
The following table presents the changes in the components of accumulated other comprehensive income ("AOCI") (loss), net of tax, for the nine months ended September 30, 2024:
| ($ in millions) | Derivatives | Change in equity affiliate investment AOCI | Defined benefit pension and other postretirement plans | Foreign currency translation | Total | ||||||||||||||||||||||||
| Balance, December 31, 2023 | $ | — | $ | 2.3 | $ | (10.1) | $ | (136.0) | $ | (143.8) | |||||||||||||||||||
| Other comprehensive income (loss) before reclassifications | (0.3) | — | (0.6) | 6.7 | 5.8 | ||||||||||||||||||||||||
| Amounts reclassified out from accumulated other comprehensive income (loss) | 2.3 | — | (0.6) | — | 1.7 | ||||||||||||||||||||||||
| Other comprehensive income (loss), net of tax | 2.0 | — | (1.2) | 6.7 | 7.5 | ||||||||||||||||||||||||
| Balance, September 30, 2024 | $ | 2.0 | $ | 2.3 | $ | (11.3) | $ | (129.3) | $ | (136.3) |
A summary of the reclassifications out from accumulated other comprehensive loss is presented in the following table:
| ($ in millions) | Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||||
| Detail of components | 2025 | 2024 | 2025 | 2024 | Location on Statement of Income | |||||||||||||||||||||||||||
| (Losses) gains on derivatives: | ||||||||||||||||||||||||||||||||
| Foreign currency contracts | $ | (0.4) | $ | — | $ | (0.5) | $ | 0.2 | Net sales | |||||||||||||||||||||||
| Foreign currency contracts | 0.5 | (0.7) | 0.2 | (4.1) | Cost of goods and services sold | |||||||||||||||||||||||||||
| Foreign currency contracts | — | — | — | 1.0 | Other expense (income) | |||||||||||||||||||||||||||
| Forward treasury locks | — | — | (0.1) | (0.1) | Interest expense | |||||||||||||||||||||||||||
| Total before tax | 0.1 | (0.7) | (0.4) | (3.0) | ||||||||||||||||||||||||||||
| Tax benefit | — | 0.2 | 0.2 | 0.7 | ||||||||||||||||||||||||||||
| Net of tax | $ | 0.1 | $ | (0.5) | $ | (0.2) | $ | (2.3) | ||||||||||||||||||||||||
| Amortization of defined benefit pension and other postretirement plans: | ||||||||||||||||||||||||||||||||
| Actuarial gains | $ | 0.2 | $ | 0.3 | $ | 0.5 | $ | 0.8 | (a) | |||||||||||||||||||||||
| Total before tax | 0.2 | 0.3 | 0.5 | 0.8 | ||||||||||||||||||||||||||||
| Tax expense | — | (0.1) | (0.1) | (0.2) | ||||||||||||||||||||||||||||
| Net of tax | $ | 0.2 | $ | 0.2 | $ | 0.4 | $ | 0.6 | ||||||||||||||||||||||||
| Total reclassifications for the period, net of tax | $ | 0.3 | $ | (0.3) | $ | 0.2 | $ | (1.7) |
(a) This component is included in the computation of net periodic benefit cost.
Note 12: Shareholders’ Equity
The following table presents the changes in shareholders’ equity for the nine months ended September 30, 2025:
| Common Shares Issued | Common Stock | Capital in Excess of Par Value | Number of Treasury Shares | Treasury Stock | Retained earnings | Accumulated other comprehensive loss | Total | ||||||||||||||||||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | 75.3 | $ | 18.8 | $ | 22.1 | 3.0 | $ | (1,057.1) | $ | 3,956.6 | $ | (258.1) | $ | 2,682.3 | |||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | 89.8 | — | 89.8 | |||||||||||||||||||||||||||||||||||||||
| Activity related to stock-based compensation | — | — | (20.3) | (0.1) | 27.4 | — | — | 7.1 | |||||||||||||||||||||||||||||||||||||||
| Shares purchased under share repurchase program | — | — | — | 0.6 | (133.5) | — | — | (133.5) | |||||||||||||||||||||||||||||||||||||||
| Dividends declared ($0.21 per share) | — | — | — | — | — | (15.2) | — | (15.2) | |||||||||||||||||||||||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | — | — | — | 52.6 | 52.6 | |||||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2025 | 75.3 | $ | 18.8 | $ | 1.8 | 3.5 | $ | (1,163.2) | $ | 4,031.2 | $ | (205.5) | $ | 2,683.1 | |||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | 131.8 | — | 131.8 | |||||||||||||||||||||||||||||||||||||||
| Activity related to stock-based compensation | — | — | (1.8) | (0.1) | 23.5 | (8.8) | — | 12.9 | |||||||||||||||||||||||||||||||||||||||
| Shares purchased under share repurchase program | — | — | — | — | (0.5) | — | — | (0.5) | |||||||||||||||||||||||||||||||||||||||
| Dividends declared ($0.21 per share) | — | — | — | — | — | (15.0) | — | (15.0) | |||||||||||||||||||||||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | — | — | — | 116.8 | 116.8 | |||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2025 | 75.3 | $ | 18.8 | $ | — | 3.4 | $ | (1,140.2) | $ | 4,139.2 | $ | (88.7) | $ | 2,929.1 | |||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | 140.0 | — | 140.0 | |||||||||||||||||||||||||||||||||||||||
| Activity related to stock-based compensation | — | — | — | — | 12.8 | (1.0) | — | 11.8 | |||||||||||||||||||||||||||||||||||||||
| Dividends declared ($0.22 per share) | — | — | — | — | — | (15.8) | — | (15.8) | |||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss, net of tax | — | — | — | — | — | — | (13.6) | (13.6) | |||||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2025 | 75.3 | $ | 18.8 | $ | — | 3.4 | $ | (1,127.4) | $ | 4,262.4 | $ | (102.3) | $ | 3,051.5 |
The following table presents the changes in shareholders’ equity for the nine months ended September 30, 2024:
| Common Shares Issued | Common Stock | Capital in Excess of Par Value | Number of Treasury Shares | Treasury Stock | Retained earnings | Accumulated other comprehensive loss | Total | ||||||||||||||||||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2023 | 75.3 | $ | 18.8 | $ | 120.2 | 1.8 | $ | (637.6) | $ | 3,523.4 | $ | (143.8) | $ | 2,881.0 | |||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | 115.3 | — | 115.3 | |||||||||||||||||||||||||||||||||||||||
| Activity related to stock-based compensation | — | — | (65.0) | (0.2) | 79.4 | — | — | 14.4 | |||||||||||||||||||||||||||||||||||||||
| Shares purchased under share repurchase program | — | — | — | 0.7 | (267.0) | — | — | (267.0) | |||||||||||||||||||||||||||||||||||||||
| Dividends declared ($0.20 per share) | — | — | — | — | — | (14.6) | — | (14.6) | |||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss, net of tax | — | — | — | — | — | — | (48.5) | (48.5) | |||||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2024 | 75.3 | $ | 18.8 | $ | 55.2 | 2.3 | $ | (825.2) | $ | 3,624.1 | $ | (192.3) | $ | 2,680.6 | |||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | 111.3 | — | 111.3 | |||||||||||||||||||||||||||||||||||||||
| Activity related to stock-based compensation | — | — | (21.7) | (0.1) | 32.8 | — | — | 11.1 | |||||||||||||||||||||||||||||||||||||||
| Shares purchased under share repurchase program | — | — | — | 0.5 | (187.1) | — | — | (187.1) | |||||||||||||||||||||||||||||||||||||||
| Dividends declared ($0.20 per share) | — | — | — | — | — | (14.5) | — | (14.5) | |||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss, net of tax | — | — | — | — | — | — | (24.6) | (24.6) | |||||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2024 | 75.3 | $ | 18.8 | $ | 33.5 | 2.7 | $ | (979.5) | $ | 3,720.9 | $ | (216.9) | $ | 2,576.8 | |||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | 136.0 | — | 136.0 | |||||||||||||||||||||||||||||||||||||||
| Activity related to stock-based compensation | — | — | (10.2) | (0.1) | 21.3 | — | — | 11.1 | |||||||||||||||||||||||||||||||||||||||
| Shares purchased under share repurchase program | — | — | — | 0.2 | (52.4) | — | — | (52.4) | |||||||||||||||||||||||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | — | — | — | 80.6 | 80.6 | |||||||||||||||||||||||||||||||||||||||
| Balance, September 30, 2024 | 75.3 | $ | 18.8 | $ | 23.3 | 2.8 | $ | (1,010.6) | $ | 3,856.9 | $ | (136.3) | $ | 2,752.1 |
Note 13: Stock-Based Compensation
The West Pharmaceutical Services, Inc. 2016 Omnibus Incentive Compensation Plan (the “2016 Plan”) provides for the granting of stock options, stock appreciation rights ("SARs"), restricted stock awards and performance awards to employees and non-employee directors. A committee of the Board of Directors determines the terms and conditions of awards to be granted. Vesting requirements vary by award. In March 2025, the Board of Directors approved, and our stockholders subsequently approved in May 2025, an amendment to the 2016 Plan ("the Amended and Restated 2016 Plan"), which, among other things, added 2.0 million shares of common stock to the maximum number of shares of common stock as to which awards may be granted. Following the approval of the Amended and Restated 2016 Plan, all stock options or SARs that are not forfeited or cancelled will reduce the number of shares available for issuance under the Amended and Restated 2016 Plan by one share for each share subject to the award. Awards issued following the amendment that are payable in common stock (other than stock options or SARs) will reduce the total number of shares available for grant under the Amended and Restated 2016 Plan by an amount equal to 2.0 times the number of shares subject to the award. The reduction was previously equal to 2.5 times the number of shares subject to the award under the 2016 Plan. At September 30, 2025, there were approximately 3.0 million shares remaining in the Amended and Restated 2016 Plan for future grants.
During the nine months ended September 30, 2025, the Company granted 77,029 stock options at a weighted average exercise price of $218.98 per share based on the grant-date fair value of our stock to employees under the 2016 Plan. The weighted average grant date fair value of options granted was $93.40 per share as determined by the Black-Scholes option valuation model using the following weighted average assumptions: a risk-free interest rate of 4.3%; expected life of 6.5 years based on prior experience; stock volatility of 36.2% based on historical data; and a dividend yield of 0.4%. Stock option expense is recognized over the vesting period, net of forfeitures.
During the nine months ended September 30, 2025, the Company granted 59,106 stock-settled performance share unit (“PSU”) awards at a weighted average grant-date fair value of $215.98 per share to eligible employees. These awards are earned based on the Company’s performance against pre-established targets, including annual growth rate of revenue and return on invested capital, over a specified performance period. Depending on the achievement of the targets, recipients of stock-settled PSU awards are entitled to receive a certain number of shares of common stock. Shares earned under PSU awards may vary from 0% to 200% of an employee’s targeted award. The fair value of stock-settled PSU awards is based on the market price of our stock at the grant date and is recognized as expense over the performance period, adjusted for estimated target outcomes and net of forfeitures.
During the nine months ended September 30, 2025, the Company granted 62,127 stock-settled restricted share unit (“RSU”) awards at a weighted average grant-date fair value of $219.90 per share to eligible employees. These awards are earned over a specified performance period. The fair value of stock-settled RSU awards is based on the market price of our stock at the grant date and is recognized as expense over the vesting period, net of forfeitures.
Stock-based compensation expense was $8.4 million and $17.1 million for the three and nine months ended September 30, 2025, respectively. For the three and nine months ended September 30, 2024, stock-based compensation expense was $5.1 million and $14.4 million, respectively.
Note 14: Other Expense (Income)
Other expense (income) consists of:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| ($ in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Restructuring and related charges | $ | 0.9 | $ | (2.5) | $ | 17.5 | $ | (2.5) | |||||||||||||||
| Contingent consideration | 2.7 | 1.2 | 7.3 | 3.2 | |||||||||||||||||||
| Foreign exchange transaction losses | 2.7 | 4.1 | 5.6 | 7.3 | |||||||||||||||||||
| Asset impairments | 0.3 | 1.0 | 1.4 | 1.9 | |||||||||||||||||||
| Other items | 0.3 | 0.6 | 0.9 | 0.9 | |||||||||||||||||||
| Total other expense (income) | $ | 6.9 | $ | 4.4 | $ | 32.7 | $ | 10.8 |
Restructuring and Related Charges
In January 2025, the Company approved a restructuring plan to adjust our operating cost base to better respond to the macroeconomic factors influencing our business. These changes are expected to be implemented over a period of approximately twenty-four to thirty-six months from the date of approval. The plan is expected to require restructuring and related charges of approximately $30 million to $32 million, with annualized savings in the range of $35 million to $40 million. The following table presents activity related to our restructuring obligations related to our 2025 restructuring plan:
| ($ in millions) | Severance and benefits | Asset-related charges | Total | ||||||||||||||||||||
| Balance, December 31, 2024 | $ | — | $ | — | $ | — | |||||||||||||||||
| Charges (Credits) | 15.0 | 2.5 | 17.5 | ||||||||||||||||||||
| Cash payments | (7.6) | — | (7.6) | ||||||||||||||||||||
| Non-cash asset write downs | — | (2.5) | (2.5) | ||||||||||||||||||||
| Balance, September 30, 2025 | $ | 7.4 | $ | — | $ | 7.4 |
Contingent Consideration
Contingent consideration represents changes in the fair value of the SmartDose® contingent consideration. Please refer to Note 10, Fair Value Measurements, for additional details.
Note 15: Income Taxes
The tax provision for interim periods is determined using the estimated annual effective consolidated tax rate, based on the current estimate of full-year earnings before taxes, adjusted for the impact of discrete quarterly items.
The provision for income taxes was $34.0 million and $32.4 million for the three months ended September 30, 2025 and 2024, respectively, and the effective tax rate was 19.8% and 19.7%, respectively.
The provision for income taxes was $88.3 million and $70.7 million for the nine months ended September 30, 2025 and 2024, respectively, and the effective tax rate was 20.1% and 16.8%, respectively. The increase in the effective tax rate is primarily due to a decrease in the tax benefit related to stock-based compensation in the nine months ended September 30, 2025 as compared to the same period in 2024.
The Company continues to address the change in tax laws enacted pursuant to the Organization for Economic Cooperation and Development (OECD)’s 15% global minimum tax initiative (Pillar 2). The 2025 forecasted impact of Pillar 2 is not expected to be material to the Company.
On July 4, 2025, the One Big Beautiful Bill Act was signed into law in the U.S. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The impact to the Company’s income tax expense and effective tax rate for the three and nine months ended September 30, 2025 associated with this legislation is not material.
Note 16: Commitments and Contingencies
From time to time, we are involved in various proceedings, lawsuits, disputes and claims arising in the ordinary course of the Company’s business, whether that be matters involving commercial operations, product liability, intellectual property or employment actions, including class action lawsuits. We accrue for loss contingencies when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated based on circumstances and assumptions existing at the time. Unless otherwise disclosed below, while the outcome of such claims cannot be predicted with certainty, we believe their ultimate resolution is not expected to have a material adverse effect on our business, financial condition, results of operations or liquidity. However, if an unfavorable ruling were to occur in any specific case, a material impact on the results of operations could be possible for that period.
Securities Class Action
On May 5, 2025, New England Teamsters Pension Fund filed a class action against us and certain of our current and former officers in the United States District Court for the Eastern District of Pennsylvania, purportedly on behalf of a class of the Company’s investors who purchased or otherwise acquired the Company’s common stock between February 16, 2023 and February 12, 2025. On July 23, 2025, the court appointed lead plaintiffs in the action. On October 15, 2025, the lead plaintiffs filed an amended complaint. The complaint alleges violations of Sections 10(b), 20(a) and 20A of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder in connection with 1) various public statements made by the Company and certain current and former officers regarding its business, operations and prospects and 2) certain current and former officers' transactions in the Company's stock. The action seeks unspecified damages, costs and expenses, including attorneys’ fees. The defendants intend to vigorously defend against such allegations. Given the nature of the case, including that the proceedings are in their early stages, the Company is unable to predict the ultimate outcome of the case or estimate the range of potential loss, if any.
There have been no significant changes to commitments and contingencies since December 31, 2024.
Note 17: Segment Information
Our business operations are organized into two reportable segments, Proprietary Products and Contract-Manufactured Products. Our Proprietary Products reportable segment offers proprietary packaging, containment solutions and drug delivery products, along with analytical lab services and other integrated services and solutions, primarily to biologic, generic and pharmaceutical drug customers. Our Contract-Manufactured Products reportable segment serves as a fully integrated business, focused on the design, manufacture, and automated assembly of complex devices, primarily for pharmaceutical, diagnostic, and medical device customers.
The Chief Operating Decision Maker ("CODM") is the Chief Executive Officer. The CODM evaluates the performance of our segments based upon, among other things, segment net sales and segment operating profit. Segment operating profit excludes general corporate costs, which include executive and director compensation, stock-based compensation, certain pension and other retirement benefit costs, and other corporate facilities and administrative expenses not allocated to the segments. Also excluded are items that the CODM considers not representative of ongoing operations. Such items are referred to as other unallocated items and generally include restructuring and related charges, certain asset impairments and other specifically-identified income or expense items. The segment operating profit metric is what the CODM uses in evaluating our results of operations and the financial measure that provides a valuable insight into our overall performance and financial position. The CODM considers budget-to-actual variances and variances against prior years within segment operating profit when making decisions about allocating resources to the segments.
The following table presents information about our reportable segments, reconciled to consolidated totals:
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| ($ in millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Net sales: | |||||||||||||||||||||||
| Proprietary Products | $ | 647.5 | $ | 601.4 | $ | 1,830.3 | $ | 1,720.6 | |||||||||||||||
| Contract-Manufactured Products | 157.1 | 145.5 | 438.8 | 423.8 | |||||||||||||||||||
| Consolidated net sales | $ | 804.6 | $ | 746.9 | $ | 2,269.1 | $ | 2,144.4 |
The following tables provide summarized financial information for our two reportable segments and corporate and unallocated:
| ($ in millions) | September 30, 2025 | December 31, 2024 | |||||||||
| Assets | |||||||||||
| Proprietary Products | $ | 2,989.3 | $ | 2,621.1 | |||||||
| Contract-Manufactured Products | 685.9 | 612.2 | |||||||||
| Corporate and Unallocated (1) | 430.6 | 410.1 | |||||||||
| Total consolidated | $ | 4,105.8 | $ | 3,643.4 |
(1) Corporate and unallocated assets primarily include investments in affiliated companies, cash and cash equivalents, property, plant and equipment used in our corporate operations and deferred income taxes.
| ($ in millions) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
| Depreciation and Amortization | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Proprietary Products | $ | 35.1 | $ | 33.8 | $ | 101.5 | $ | 96.8 | |||||||||||||||
| Contract-Manufactured Products | 7.1 | 5.5 | 20.3 | 15.1 | |||||||||||||||||||
| Corporate and Unallocated | 0.8 | 0.9 | 2.6 | 2.8 | |||||||||||||||||||
| Total consolidated | $ | 43.0 | $ | 40.2 | $ | 124.4 | $ | 114.7 |
| ($ in millions) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
| Capital Expenditures | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Proprietary Products | $ | 47.7 | $ | 47.8 | $ | 148.1 | $ | 167.4 | |||||||||||||||
| Contract-Manufactured Products | 13.6 | 30.0 | 57.2 | 96.8 | |||||||||||||||||||
| Corporate and Unallocated | 2.0 | 3.5 | 4.5 | 7.9 | |||||||||||||||||||
| Total consolidated | $ | 63.3 | $ | 81.3 | $ | 209.8 | $ | 272.1 |
The following table provides summarized financial information for our segments:
| Three months ended September 30, 2025 | Three months ended September 30, 2024 | ||||||||||||||||||||||||||||||||||
| ($ in millions) | Proprietary Products | Contract-Manufactured Products | Total | Proprietary Products | Contract-Manufactured Products | Total | |||||||||||||||||||||||||||||
| Net sales | $ | 647.5 | $ | 157.1 | $ | 804.6 | $ | 601.4 | $ | 145.5 | $ | 746.9 | |||||||||||||||||||||||
| Cost of goods and services sold | 383.5 | 126.8 | 365.7 | 116.5 | |||||||||||||||||||||||||||||||
| Research and development | 17.1 | — | 15.5 | — | |||||||||||||||||||||||||||||||
| Selling, general and administrative expenses | 65.6 | 7.5 | 56.6 | 6.7 | |||||||||||||||||||||||||||||||
| Other segment expense (income)(4) | 6.1 | 0.5 | 5.4 | 0.5 | |||||||||||||||||||||||||||||||
| Segment operating profit | $ | 175.2 | $ | 22.3 | $ | 197.5 | $ | 158.2 | $ | 21.8 | $ | 180.0 | |||||||||||||||||||||||
| Reconciliation of profit or loss: | |||||||||||||||||||||||||||||||||||
| Stock-based compensation | (8.4) | (5.1) | |||||||||||||||||||||||||||||||||
| Corporate general costs(1) | (19.0) | (14.3) | |||||||||||||||||||||||||||||||||
| Unallocated items: | |||||||||||||||||||||||||||||||||||
| Restructuring and related charges(2) | (2.5) | 0.9 | |||||||||||||||||||||||||||||||||
| Amortization of acquisition-related intangible assets(3) | — | (0.2) | |||||||||||||||||||||||||||||||||
| Total consolidated operating profit | 167.6 | 161.3 | |||||||||||||||||||||||||||||||||
| Interest (income) expense and other nonoperating expense (income), net | (4.3) | (3.2) | |||||||||||||||||||||||||||||||||
| Income before income taxes and equity in net income of affiliated companies | $ | 171.9 | $ | 164.5 |
| Nine Months Ended September 30, 2025 | Nine months ended September 30, 2024 | ||||||||||||||||||||||||||||||||||
| ($ in millions) | Proprietary Products | Contract-Manufactured Products | Total | Proprietary Products | Contract-Manufactured Products | Total | |||||||||||||||||||||||||||||
| Net sales | $ | 1,830.3 | $ | 438.8 | $ | 2,269.1 | $ | 1,720.6 | $ | 423.8 | $ | 2,144.4 | |||||||||||||||||||||||
| Cost of goods and services sold | 1,107.8 | 361.2 | 1,070.8 | 348.7 | |||||||||||||||||||||||||||||||
| Research and development | 52.5 | — | 50.6 | — | |||||||||||||||||||||||||||||||
| Selling, general and administrative expenses | 187.4 | 22.1 | 173.4 | 19.1 | |||||||||||||||||||||||||||||||
| Other segment expense (income)(4) | 15.1 | 1.9 | 10.3 | (0.1) | |||||||||||||||||||||||||||||||
| Segment operating profit | $ | 467.5 | $ | 53.6 | $ | 521.1 | $ | 415.5 | $ | 56.1 | $ | 471.6 | |||||||||||||||||||||||
| Reconciliation of profit or loss: | |||||||||||||||||||||||||||||||||||
| Stock-based compensation | (17.1) | (14.4) | |||||||||||||||||||||||||||||||||
| Corporate general costs(1) | (53.6) | (47.2) | |||||||||||||||||||||||||||||||||
| Unallocated items: | |||||||||||||||||||||||||||||||||||
| Restructuring and related charges(2) | (21.9) | 0.9 | |||||||||||||||||||||||||||||||||
| Amortization of acquisition-related intangible assets(3) | (0.2) | (0.6) | |||||||||||||||||||||||||||||||||
| Total consolidated operating profit | 428.3 | 410.3 | |||||||||||||||||||||||||||||||||
| Interest (income) expense and other nonoperating expense (income), net | (11.1) | (10.3) | |||||||||||||||||||||||||||||||||
| Income before income taxes and equity in net income of affiliated companies | $ | 439.4 | $ | 420.6 |
(1) Corporate general costs includes executive and director compensation, certain pension and other retirement benefit costs, and other corporate facilities and administrative expenses not allocated to the segments.
(2) During the three and nine months ended September 30, 2025, the Company recorded charges of $2.5 million and $21.9 million, respectively, related to restructuring programs. The Company recorded $0.9 million and $17.5 million in the three and nine months ended September 30, 2025, respectively, of these charges within other expense (income), related to severance and acceleration of depreciation and lease costs in connection with the Company's 2025 restructuring plan. The remaining $1.6 million and $4.4 million, respectively, of expense, recorded within selling, general and administrative expenses, relates to our plan to optimize the legal structure of the Company and its subsidiaries. Restructuring and other charges were a net benefit of $0.9 million for the three and nine months ended September 30, 2024. The net benefit represented the impact of two items, the first of which is a $2.5 million benefit recorded within other expense (income) related to revised severance estimates in connection with the Company's 2022 restructuring plan. This benefit was partially offset by $1.6 million of expense recorded within selling, general and administrative expenses, related to our plan to optimize the legal structure of the Company and its subsidiaries. Please refer to Note 14, Other Expense (Income), for further discussion of this item.
(3) During the three and nine months ended September 30, 2025 and 2024, we recorded $0.0 million and $0.2 million, and $0.2 million and $0.6 million, respectively, of amortization expense within operating profit associated with an intangible asset acquired during the second quarter of 2020.
(4) Other segment expense (income) primarily includes foreign exchange transaction gains and losses, adjustments to contingent consideration and asset impairments attributable to the segments during the three and nine months ended September 30, 2025 and 2024.
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