UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 10-Q

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☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September 30, 2023~~March 31, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission file number: 001-38912

Avantor, Inc.

(Exact name of registrant as specified in its charter)


Delaware			82-2758923
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

Radnor Corporate Center, Building One, Suite 200

100 Matsonford Road

Radnor, Pennsylvania 19087

(Address of principal executive offices) (zip code)

(610) 386-1700

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Exchange on which registered

Common stock, $0.01 par value

AVTR

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. ☒ Large Accelerated Filer ☐ Accelerated Filer ☐ Non-accelerated Filer ☐ Smaller reporting company ☐ Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

On ~~October 23, 2023, 676,386,215~~April 22, 2024, 679,266,323 shares of common stock, $0.01 par value per share, were outstanding.

Avantor, Inc. and subsidiaries

Form 10-Q for the quarterly period ended ~~September 30, 2023~~March 31, 2024

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Glossary


			Description
we, us, our			Avantor, Inc. and its subsidiaries

Adjusted EBITDA			our earnings or loss before interest, taxes, depreciation, amortization and certain other adjustments
~~AMEA~~Adjusted Operating Income			~~Asia, Middle-East~~our earnings or loss before interest, taxes, amortization and ~~Africa~~certain other adjustments
Annual Report			our annual report on Form 10-K for the year ended December 31, ~~2022~~2023
AOCI			accumulated other comprehensive income or loss

~~COVID-19~~			~~Coronavirus disease of 2019~~
~~double-digit~~			~~greater than 10%~~
EURIBOR			the basic rate of interest used in lending between banks on the European Union interbank market
FASB			the Financial Accounting Standards Board of the United States
GAAP			United States generally accepted accounting principles

~~high single-digit~~			~~7 - 9%~~
~~LIBOR~~			~~the basic rate of interest used in lending between banks on the London interbank market~~
long-term			period other than short-term
~~low single-digit~~			~~1 - 3%~~
M&A			Mergers and Acquisitions
~~MCPS~~			~~6.250% Series A Mandatory Convertible Preferred Stock~~
~~mid single-digit~~			~~4 - 6%~~
OCI			other comprehensive income or loss

Ritter			Ritter GmbH and affiliates, a company we acquired in June 2021
RSU			restricted stock ~~unit~~units represent awards that will vest annually and awards that contain performance and market conditions
SEC			the United States Securities and Exchange Commission
SG&A expenses			selling, general and administrative expenses
SOFR			secured overnight financing rate
~~Specialty procurement~~			~~product sales related to customer procurement services~~
VWR			VWR Corporation and its subsidiaries, a company we acquired in November 2017

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Cautionary factors regarding forward-looking statements

This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and are subject to the safe harbor created thereby under the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this report are forward-looking statements. Forward-looking statements discuss our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. These statements may be preceded by, followed by or include the words “aim,” “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “likely,” “outlook,” “plan,” “potential,” “projection,” “prospects,” “continue,” “goal,” “objective,” “opportunity,” “near-term,” “long-term,” “assumption,” “project,” “guidance,” “target,” “trend,” “seek,” “can,” “could,” “may,” “should,” “would,” “will,” the negatives thereof and other words and terms of similar meaning.

Forward-looking statements are inherently subject to risks, uncertainties and assumptions; they are not guarantees of performance. You should not place undue reliance on these statements. We have based these forward-looking statements on our current expectations and projections about future events. Although we believe that our assumptions made in connection with the forward-looking statements are reasonable, we cannot assure you that the assumptions and expectations will prove to be correct.

You should understand that the following important factors, in addition to those discussed under Part I, Item 1A “Risk Factors” in our Annual Report, as such risk factors may be updated from time to time in our periodic filings with the SEC and in this report, could affect our future results and could cause those results or other outcomes to differ materially from those expressed or implied in our forward-looking statements:

•disruptions to our operations;

•competition from other industry providers;

•our ability to implement our strategies for improving growth ~~strategy;~~and optimizing costs;

•our ability to anticipate and respond to changing industry trends;

•adverse trends in consumer, business, and government spending;

•our dependence on sole or limited sources for some essential materials and components;

•our ability to successfully value and integrate acquired businesses;

•our products’ satisfaction of applicable quality criteria, specifications and performance standards;

•our ability to maintain our relationships with key customers;

•our ability to maintain ~~consistent purchase volumes under purchase~~our relationships with distributors;

•our ability to maintain our customer base and our expected volume of customer orders;

•our ability to maintain and develop relationships with drug manufacturers and contract manufacturing organizations;

iii

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•the impact of new laws, regulations, or other industry standards;

~~iii~~

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•changes in the interest rate environment that increase interest on our borrowings;

•adverse impacts from currency exchange rates or currency controls imposed by any government in major areas where we operate or otherwise;

•our ability to implement and improve processing systems and prevent a compromise of our information ~~systems;~~systems or personal data;

•our ability to protect our intellectual property and avoid third-party infringement claims;

•exposure to product liability and other claims in the ordinary course of business;

•our ability to develop new products responsive to the markets we serve;

•supply chain constraints and the availability of raw materials;

•our ability to source certain of our products from certain suppliers;

•our ability to contain costs in an inflationary environment;

•our ability to avoid negative outcomes related to the use of chemicals;

•our ability to maintain highly skilled employees;

•our ability to maintain a competitive workforce;

•adverse impact of impairment charges on our goodwill and other intangible assets;

•currency fluctuations and uncertainties related to doing business outside the United States;

•our ability to obtain and maintain required regulatory clearances or approvals, which may constrain the commercialization of submitted products;

•our ability to comply with environmental, health and safety laws and regulations, or the impact of any liability or obligation imposed under such laws or regulations;

•our indebtedness, which could adversely affect our financial condition ~~and~~or prevent us from fulfilling our debt or contractual obligations;

•our ability to generate sufficient cash flows or access sufficient additional capital to meet our debt obligations or to fund our other liquidity needs; and

•our ability to maintain an ~~adequate~~effective system of internal control over financial reporting.

All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements. In addition, all forward-looking statements speak only as of the date of this report. We undertake no obligations to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise other than as required under the federal securities laws.

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PART I — FINANCIAL INFORMATION

Item 1. Financial statements

Avantor, Inc. and subsidiaries

Index to unaudited condensed consolidated financial statements


			Page
Unaudited condensed consolidated balance sheets			2
Unaudited condensed consolidated statements of operations			3
Unaudited condensed consolidated statements of comprehensive income or loss			4
Unaudited condensed consolidated statements of stockholders’ equity			5
Unaudited condensed consolidated statements of cash flows			76
Notes to unaudited condensed consolidated financial statements			87

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Avantor, Inc. and subsidiaries

Unaudited condensed consolidated balance sheets


(in millions)	(in millions)	September 30, 2023		December 31, 2022		(in millions)	March 31, 2024	December 31, 2023
Assets	Assets
Current assets:	Current assets:
Current assets:
Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	236.9	$	372.9
Accounts receivable, net of allowances of $33.5 and $28.2		1,150.3		1,218.4
Cash and cash equivalents
Cash and cash equivalents
Accounts receivable, net of allowances of $37.7 and $35.0
Inventory	Inventory	850.3		913.5
Other current assets	Other current assets	147.3		153.1
Total current assets	Total current assets	2,384.8		2,657.9
Property, plant and equipment, net of accumulated depreciation of $579.7 and $518.4		698.3		727.0
Other intangible assets, net (see note 6)		3,788.1		4,133.3
Goodwill		5,637.7		5,652.6
Property, plant and equipment, net of accumulated depreciation and impairment charges of $635.4 and $616.9
Other intangible assets, net (see note 7)
Goodwill, net of accumulated impairment losses of $38.8 and $38.8
Other assets	Other assets	289.2		293.5
Total assets	Total assets	$	12,798.1	$	13,464.3
Liabilities and stockholders’ equity	Liabilities and stockholders’ equity
Current liabilities:	Current liabilities:
Current liabilities:
Current liabilities:
Current portion of debt
Current portion of debt
Current portion of debt	Current portion of debt	$	335.6	$	364.2
Accounts payable	Accounts payable	655.8		758.2
Employee-related liabilities	Employee-related liabilities	120.0		122.4
Accrued interest	Accrued interest	39.6		49.9
Other current liabilities	Other current liabilities	337.1		364.1
Total current liabilities	Total current liabilities	1,488.1		1,658.8
Debt, net of current portion	Debt, net of current portion	5,290.5		5,923.3
Deferred income tax liabilities	Deferred income tax liabilities	648.8		731.4
Other liabilities	Other liabilities	271.3		295.4
Total liabilities	Total liabilities	7,698.7		8,608.9
Commitments and contingencies (see note 7)
Commitments and contingencies (see note 8)						Commitments and contingencies (see note 8)
Stockholders’ equity:	Stockholders’ equity:

Common stock including paid-in capital, 676.3 and 674.3 shares issued and outstanding		3,817.5		3,785.3
Common stock including paid-in capital, 679.2 and 676.6 shares issued and outstanding

Common stock including paid-in capital, 679.2 and 676.6 shares issued and outstanding

Common stock including paid-in capital, 679.2 and 676.6 shares issued and outstanding
Accumulated earnings	Accumulated earnings	1,393.0		1,170.4
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(111.1)		(100.3)
Total stockholders’ equity	Total stockholders’ equity	5,099.4		4,855.4
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	12,798.1	$	13,464.3

See accompanying notes to the unaudited condensed consolidated financial statements.

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Avantor, Inc. and subsidiaries

Unaudited condensed consolidated statements of operations


(in millions, except per share data)	(in millions, except per share data)	Three months ended September 30,				Nine months ended September 30,
		2023		2022		2023		2022
(in millions, except per share data)

2024
2024
Net sales
Net sales
Net sales	Net sales	$	1,720.2	$	1,856.5	$	5,244.4	$	5,717.4
Cost of sales	Cost of sales	1,141.6		1,205.8		3,451.0		3,729.1
Cost of sales
Cost of sales
Gross profit
Gross profit
Gross profit	Gross profit	578.6		650.7		1,793.4		1,988.3
Selling, general and administrative expenses	Selling, general and administrative expenses	368.4		374.9		1,119.5		1,109.9
Impairment charges		—		—		160.8		—
Selling, general and administrative expenses
Selling, general and administrative expenses

Operating income	Operating income	210.2		275.8		513.1		878.4
Interest expense		(72.4)		(67.3)		(219.5)		(196.0)

Operating income

Operating income
Interest expense, net
Interest expense, net
Interest expense, net
Loss on extinguishment of debt
Loss on extinguishment of debt
Loss on extinguishment of debt	Loss on extinguishment of debt	(2.0)		(2.9)		(5.9)		(10.8)
Other income, net	Other income, net	0.7		2.7		3.3		4.8
Other income, net
Other income, net
Income before income taxes
Income before income taxes
Income before income taxes	Income before income taxes	136.5		208.3		291.0		676.4
Income tax expense	Income tax expense	(28.1)		(41.3)		(68.4)		(131.6)
Income tax expense
Income tax expense
Net income	Net income	108.4		167.0		222.6		544.8
Accumulation of yield on preferred stock		—		—		—		(24.2)
Net income available to common stockholders		$	108.4	$	167.0	$	222.6	$	520.6
Net income
Net income

Earnings per share:

Earnings per share:

Earnings per share:	Earnings per share:
Basic	Basic	$	0.16	$	0.25	$	0.33	$	0.81
Basic
Basic
Diluted
Diluted
Diluted	Diluted	$	0.16	$	0.25	$	0.33	$	0.80
Weighted average shares outstanding:	Weighted average shares outstanding:
Weighted average shares outstanding:
Weighted average shares outstanding:
Basic
Basic
Basic	Basic	676.0		674.1		675.4		643.0
Diluted	Diluted	678.5		679.3		678.1		680.4
Diluted
Diluted

See accompanying notes to the unaudited condensed consolidated financial statements.

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Avantor, Inc. and subsidiaries

Unaudited condensed consolidated statements of comprehensive income or loss
(in millions) Three months ended September 30, Nine months ended September 30,
2023 2022 2023 2022
Net income $ 108.4 $ 167.0 $ 222.6 $ 544.8
Other comprehensive loss:
Foreign currency translation — unrealized loss (30.4) (62.1) (4.8) (160.1)
Derivative instruments:

Unrealized gain 8.0 20.7 24.7 27.7
Reclassification of (gain) loss into earnings (8.4) 0.2 (22.5) (1.1)
Activity related to defined benefit plans (0.9) (0.1) (6.6) 4.4
Other comprehensive loss before income taxes (31.7) (41.3) (9.2) (129.1)
Income tax effect (7.5) (22.2) (1.6) (39.5)
Other comprehensive loss (39.2) (63.5) (10.8) (168.6)
Comprehensive income $ 69.2 $ 103.5 $ 211.8 $ 376.2


(in millions)	Three months ended March 31,
	2024		2023
Net income	$	60.4	$	121.5
Other comprehensive (loss) income:
Foreign currency translation — unrealized (loss) gain	(22.0)		16.9
Derivative instruments:
Unrealized gain (loss)	9.8		(0.1)
Reclassification of gain into earnings	(8.5)		(6.5)
Activity related to defined benefit plans	(0.2)		(4.9)
Other comprehensive (loss) income before income taxes	(20.9)		5.4
Income tax effect	(7.1)		5.2
Other comprehensive (loss) income	(28.0)		10.6
Comprehensive income	$	32.4	$	132.1

See accompanying notes to the unaudited condensed consolidated financial statements.

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Avantor, Inc. and subsidiaries

Unaudited condensed consolidated statements of stockholders’ equity


(in millions)	(in millions)				Stockholders’ equity
			Common stock including paid-in capital			Accumulated earnings		AOCI		Total
					Shares							Amount		(in millions)				Stockholders’ equity
Balance at June 30, 2023					675.7	$	3,798.6	$	1,284.6	$	(71.9)	$	5,011.3
		Common stock including paid-in capital													Common stock including paid-in capital				Accumulated earnings	AOCI	Total
				Shares												Shares	(in millions)					Shares	Amount
Balance at December 31, 2023
Comprehensive income (loss)	Comprehensive income (loss)				—	—		108.4		(39.2)		69.2
Stock-based compensation expense	Stock-based compensation expense				—	9.7		—		—		9.7

Stock option exercises and other common stock transactions	Stock option exercises and other common stock transactions				0.6	9.2		—		—		9.2
Stock option exercises and other common stock transactions
Stock option exercises and other common stock transactions

Balance at September 30, 2023					676.3	$	3,817.5	$	1,393.0	$	(111.1)	$	5,099.4
Balance at March 31, 2024
Balance at March 31, 2024
Balance at March 31, 2024

Balance at June 30, 2022					673.9	$	3,756.1	$	861.7	$	(148.3)	$	4,469.5
Comprehensive income (loss)					—	—		167.0		(63.5)		103.5
Balance at December 31, 2022
Balance at December 31, 2022
Balance at December 31, 2022
Comprehensive income

Stock-based compensation expense
Stock-based compensation expense
Stock-based compensation expense	Stock-based compensation expense				—	13.7		—		—		13.7

Stock option exercises and other common stock transactions	Stock option exercises and other common stock transactions				0.3	4.7		—		—		4.7
Stock option exercises and other common stock transactions
Stock option exercises and other common stock transactions

Balance at September 30, 2022					674.2	$	3,774.5	$	1,028.7	$	(211.8)	$	4,591.4
Balance at March 31, 2023
Balance at March 31, 2023
Balance at March 31, 2023

See accompanying notes to the unaudited condensed consolidated financial statements.

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Avantor, Inc. and subsidiaries

Unaudited condensed consolidated statements of ~~stockholders’ equity (continued)~~

(in millions) Stockholders’ equity
MCPS including paid-in capital Common stock including paid-in capital Accumulated earnings (deficit) AOCI Total
Shares Amount Shares Amount
Balance at December 31, 2022 — $ — 674.3 $ 3,785.3 $ 1,170.4 $ (100.3) $ 4,855.4
Comprehensive income (loss) — — — — 222.6 (10.8) 211.8
Stock-based compensation expense — — — 31.6 — — 31.6
Stock option exercises and other common stock transactions — — 2.0 0.6 — — 0.6
Balance at September 30, 2023 — $ — 676.3 $ 3,817.5 $ 1,393.0 $ (111.1) $ 5,099.4
Balance at December 31, 2021 20.7 $ 1,003.7 609.7 $ 2,752.6 $ 483.9 $ (43.2) $ 4,197.0
Comprehensive income (loss) — — — — 544.8 (168.6) 376.2
Stock-based compensation expense — — — 39.1 — — 39.1
Accumulation of yield on preferred stock — — — (24.2) — — (24.2)
Stock option exercises and other common stock transactions — — 1.6 3.3 — — 3.3
Conversion of MCPS into Common stock (20.7) (1,003.7) 62.9 1,003.7 — — —
Balance at September 30, 2022 — $ — 674.2 $ 3,774.5 $ 1,028.7 $ (211.8) $ 4,591.4

cash flows


(in millions)	Three months ended March 31,
	2024		2023
Cash flows from operating activities:
Net income	$	60.4	$	121.5
Reconciling adjustments:
Depreciation and amortization	99.6		101.1

Stock-based compensation expense	12.7		12.7
Provision for accounts receivable and inventory	24.0		12.5
Deferred income tax benefit	(17.9)		(26.4)
Amortization of deferred financing costs	3.0		3.4
Loss on extinguishment of debt	2.5		2.3
Foreign currency remeasurement loss	5.3		1.8
Changes in assets and liabilities:
Accounts receivable	2.7		(52.2)
Inventory	(11.0)		7.1
Accounts payable	(43.6)		0.6
Accrued interest	(9.5)		(10.5)
Other assets and liabilities	9.3		44.1
Other	4.1		1.5
Net cash provided by operating activities	141.6		219.5
Cash flows from investing activities:
Capital expenditures	(34.7)		(28.0)


Other	0.5		0.7
Net cash used in investing activities	(34.2)		(27.3)
Cash flows from financing activities:
Debt borrowings	41.2		—
Debt repayments	(210.3)		(269.5)



Proceeds received from exercise of stock options	45.5		2.6
Shares repurchased to satisfy employee tax obligations for vested stock-based awards	(6.6)		(8.1)
Net cash used in financing activities	(130.2)		(275.0)
Effect of currency rate changes on cash and cash equivalents	(5.7)		4.8
Net change in cash, cash equivalents and restricted cash	(28.5)		(78.0)
Cash, cash equivalents and restricted cash, beginning of period	287.7		396.9
Cash, cash equivalents and restricted cash, end of period	$	259.2	$	318.9

See accompanying notes to the unaudited condensed consolidated financial statements.

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~~Avantor, Inc. and subsidiaries~~

~~Unaudited condensed consolidated statements of cash flows~~
(in millions) Nine months ended September 30,
2023 2022
Cash flows from operating activities:
Net income $ 222.6 $ 544.8
Reconciling adjustments:
Depreciation and amortization 301.7 304.8
Impairment charges 160.8 —
Stock-based compensation expense 31.7 35.8
Provision for accounts receivable and inventory 62.5 43.9
Deferred income tax benefit (94.1) (61.8)
Amortization of deferred financing costs 9.9 12.1
Loss on extinguishment of debt 5.9 10.8
Foreign currency remeasurement (gain) loss (3.1) 4.9
Changes in assets and liabilities:
Accounts receivable 55.1 (99.0)
Inventory 9.1 (114.1)
Accounts payable (95.8) 65.1
Accrued interest (10.3) (11.2)
Other assets and liabilities (38.5) (98.0)
Other, net 0.9 (0.1)
Net cash provided by operating activities 618.4 638.0
Cash flows from investing activities:
Capital expenditures (95.8) (99.8)
Cash paid for acquisitions, net of cash acquired — (20.2)
Cash proceeds from settlement of cross currency swap — 42.5
Other 2.1 1.0
Net cash used in investing activities (93.7) (76.5)
Cash flows from financing activities:
Debt borrowings — 245.0
Debt repayments (657.9) (783.0)
Payments of debt refinancing fees and premiums (2.3) —
Payments of dividends on preferred stock — (32.4)
Proceeds received from exercise of stock options 14.1 16.4
Shares repurchased to satisfy employee tax obligations for vested stock-based awards (13.5) (13.1)
Net cash used in financing activities (659.6) (567.1)
Effect of currency rate changes on cash (1.3) (33.7)
Net change in cash, cash equivalents and restricted cash (136.2) (39.3)
Cash, cash equivalents and restricted cash, beginning of period 396.9 327.1
Cash, cash equivalents and restricted cash, end of period $ 260.7 $ 287.8

~~See accompanying notes to the unaudited condensed consolidated financial statements.~~

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Avantor, Inc. and subsidiaries

Notes to unaudited condensed consolidated financial statements

1. Nature of operations and presentation of financial statements

We are a global manufacturer and distributor that provides products and services to customers in the biopharmaceutical, healthcare, education & government and advanced technologies & applied materials industries.

Basis of presentation

The accompanying condensed consolidated financial statements have been prepared pursuant to SEC regulations whereby certain information normally included in GAAP financial statements has been condensed or omitted. The financial information presented herein reflects all adjustments (consisting only of normal, recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented. The results for interim periods are not necessarily indicative of the results to be expected for the full year.

We believe that the disclosures included herein are adequate to make the information presented not misleading in any material respect when read in conjunction with the audited consolidated financial statements and notes thereto included in our Annual Report. Those audited consolidated financial statements include a summary of our significant accounting policies.

Principles of consolidation

All intercompany balances and transactions have been eliminated from the financial statements.

Use of estimates

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported throughout the financial statements. Actual results could differ from those estimates.

~~Asset impairment - Ritter~~Segment Reporting

~~The Company’s long-lived assets include property, plant~~Effective January 1, 2024, we changed our operating model and ~~equipment, finite-lived intangible assets~~reporting segment structure from three reportable segments to two reportable segments: Laboratory Solutions and ~~certain~~Bioscience Production. This structure aligns with how our Chief Executive Officer, who is our chief operating decision maker, measures segment operating performance and allocates resources across our operating segments.

2. New accounting standards and climate change related update by SEC

Segment Reporting

In November 2023, the FASB issued Accounting Standards Update 2023-07, Improvements to Reportable Segment Disclosures, which amends the existing segment reporting guidance (ASC Topic 280) to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount for other ~~assets. For impairment testing purposes, long-lived assets may be grouped with working capital~~segment items by reportable segment and ~~other types~~a description of assets or liabilities if they generate cash flows on a combined basis. We evaluate long-lived assets or asset groups for impairment whenever events or changes in circumstances indicate a potential inability to recover their carrying amounts. The test to determine if long-lived assets or asset groups are impaired first compares their carrying values to their estimated undiscounted future cash flows. Ifits composition, the ~~carrying values exceed~~title and position of the ~~estimated undiscounted cash flows, an impairment charge is calculated as the amount that the carrying values exceed their fair values.~~

~~Persistently high customer inventory in the end markets served by Ritter~~chief operating decision maker and an ~~overall slowdown in research activity has caused Ritter’s revenue to decline compared to prior expectations. Due to these sustained declines, in~~explanation of how the ~~second quarter of 2023, we performed an impairment test of~~chief operating decision maker uses the Ritter asset group, which resulted in a fair value that was lower than its carrying value. As a result, we recorded impairment charges of $106.4 million on Ritter’s finite-lived intangible assets and $54.4 million onreported

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~~Ritter’s property, plant & equipment~~measure(s) of segment profit or loss in ~~the unaudited condensed consolidated statements of operations. These charges impact our Europe reportable segment.~~assessing segment performance and deciding how to allocate resources.

~~Our impairment test was performed as of June 30,~~The amendments in this update are effective for fiscal years beginning after December 15, 2023, and ~~utilized~~interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. We are currently evaluating the impact of our ~~latest estimates~~pending adoption of ~~Ritter’s projected cash flows, including revenues, gross margin, SG&A expenses, capital expenditures~~this standard on our financial statement disclosures.

Income Taxes

In December 2023, the FASB issued Accounting Standards Update 2023-09, Improvements to ~~maintain~~Income Tax Disclosures, which amends the ~~acquired assets,~~existing income taxes guidance (ASC Topic 740) to require additional disclosures surrounding annual rate reconciliation, income taxes paid and ~~investments~~other income tax related disclosures.

The amendments in ~~debt free net working capital, as well as current market assumptions~~this update are effective for annual periods beginning after December 15, 2024. Early adoption is permitted. We are currently evaluating the impact of our pending adoption of this standard on our financial statement disclosures.

Other

There were no new accounting standards that we expect to have a material impact on our financial position or results of operations upon adoption.

Adoption of rules to enhance and standardize climate-related disclosures for Investors

On March 6, 2024, the SEC adopted final rules to require registrants to disclose certain climate-related information in registration statements and annual reports.

On April 4, 2024, the SEC issued an order staying the final rules pending completion of judicial review of the petitions challenging the final rules. The order does not amend the compliance dates contemplated by the final rules, which are applicable to the Company for fiscal years beginning with the Company’s annual report on Form 10-K for the ~~discount rate.~~fiscal year ended December 31, 2025. We are currently evaluating the impact of our pending adoption of these requirements on our financial statement disclosures.

~~We did not identify any events or changes in circumstances that would indicate a potential inability to recover the carrying value of the Ritter asset group as of September 30, 2023.~~

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3. Earnings per share

The following table presents the reconciliation of basic and diluted earnings per share for the three ~~and nine~~ months ended ~~September 30, 2023:~~March 31, 2024:


(in millions, except per share data)	(in millions, except per share data)	Three months ended September 30, 2023					Nine months ended September 30, 2023
		Earnings (numerator)		Weighted average shares outstanding (denominator)	Earnings per share		Earnings (numerator)		Weighted average shares outstanding (denominator)	Earnings per share
(in millions, except per share data)

Earnings (numerator)
Earnings (numerator)
Basic	Basic	$	108.4	676.0	$	0.16	$	222.6	675.4	$	0.33
Basic
Basic
Dilutive effect of stock-based awards
Dilutive effect of stock-based awards
Dilutive effect of stock-based awards	Dilutive effect of stock-based awards	—		2.5			—		2.7

Diluted	Diluted	$	108.4	678.5	$	0.16	$	222.6	678.1	$	0.33

Diluted

Diluted

The following table presents the reconciliation of basic and diluted earnings per share for the three ~~and nine~~ months ended ~~September 30, 2022:~~March 31, 2023:


(in millions, except per share data)	(in millions, except per share data)	Three months ended September 30, 2022						Nine months ended September 30, 2022
		Earnings (numerator)		Weighted average shares outstanding (denominator)		Earnings per share		Earnings (numerator)		Weighted average shares outstanding (denominator)	Earnings per share
(in millions, except per share data)

Earnings (numerator)
Earnings (numerator)
Basic
Basic
Basic	Basic	$	167.0	674.1		$	0.25	$	520.6	643.0	$	0.81
Dilutive effect of stock-based awards	Dilutive effect of stock-based awards	—		5.2				—		6.8
Dilutive impact of MCPS		—		—				$	24.2	30.6
Dilutive effect of stock-based awards
Dilutive effect of stock-based awards

Diluted	Diluted	$	167.0	$	679.3	$	0.25	$	544.8	680.4	$	0.80

Diluted

Diluted

3.4. Segment financial information

~~We report three geographic segments based on customer location: Americas, Europe~~As described in note 1, effective January 1, 2024, we changed our operating model and ~~AMEA. Each~~reporting segment ~~manufactures~~structure into two reportable business segments: Laboratory Solutions and ~~distributes solutions for the biopharmaceutical, healthcare, education & government and advanced technologies & applied materials industries.~~Bioscience Production. Corporate costs are managed on a standalone basis, ~~and not~~certain of which are allocated to our reportable segments.

In connection with this change, our chief operating decision maker changed the measure used to evaluate segment profitability from Adjusted EBITDA to Adjusted Operating Income. All disclosures relating to segment profitability, including those for comparative periods, have been revised as a result of this change.

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The following table presents information by reportable segment:
(in millions) Three months ended September 30, Nine months ended September 30,
2023 2022 2023 2022
Net sales:
Americas $ 1,019.2 $ 1,123.2 $ 3,076.8 $ 3,423.2
Europe 579.8 595.1 1,816.9 1,899.3
AMEA 121.2 138.2 350.7 394.9
Total $ 1,720.2 $ 1,856.5 $ 5,244.4 $ 5,717.4
Adjusted EBITDA:
Americas $ 223.8 $ 262.3 $ 711.4 $ 846.3
Europe 102.9 130.3 335.8 393.0
AMEA 33.8 35.7 93.7 101.1
Corporate (42.7) (44.3) (133.9) (129.2)
Total $ 317.8 $ 384.0 $ 1,007.0 $ 1,211.2


(in millions)	Three months ended March 31,
	2024		2023
Net sales:
Laboratory Solutions	$	1,157.1	$	1,203.0
Bioscience Production	522.7		577.3
Total	$	1,679.8	$	1,780.3
Adjusted Operating Income:
Laboratory Solutions	$	148.2	$	172.2
Bioscience Production	126.9		167.5
Corporate	(16.7)		(16.6)
Total	$	258.4	$	323.1

The amounts above exclude inter-segment activity because it is not material. All of the net sales for each segment are from external customers.

The following table presents the reconciliation of ~~Adjusted EBITDA from~~ net income, the nearest measurement under ~~GAAP:~~GAAP, to Adjusted Operating Income :
(in millions) Three months ended September 30, Nine months ended September 30,
2023 2022 2023 2022
Net income $ 108.4 $ 167.0 $ 222.6 $ 544.8
Interest expense 72.4 67.3 219.5 196.0
Income tax expense 28.1 41.3 68.4 131.6
Depreciation and amortization 98.0 100.6 301.7 304.8
Loss on extinguishment of debt 2.0 2.9 5.9 10.8
Net foreign currency gain from financing activities (0.5) (1.2) (2.3) (0.2)
Other stock-based compensation expense (benefit) 0.1 (1.6) 0.1 (3.3)
Integration-related expenses1
0.2 6.4 8.3 13.6
Purchase accounting adjustments2
— — — 9.4
Restructuring and severance charges3
6.1 1.3 18.0 3.7
Reserve for certain legal matters4
3.0 — 4.0 —
Impairment charges5
— — 160.8 —
Adjusted EBITDA $ 317.8 $ 384.0 $ 1,007.0 $ 1,211.2


(in millions)	Three months ended March 31,
	2024		2023
Net income	$	60.4	$	121.5
Interest expense, net	64.3		73.7
Income tax expense	20.2		34.3
Loss on extinguishment of debt	2.5		2.3
Other income, net	(1.1)		(0.6)
Operating income	146.3		231.2
Amortization	75.3		78.4
Other stock-based compensation expense	0.3		0.1
Integration-related expenses1	—		8.7
Restructuring and severance charges2	23.2		4.7


Transformation expenses3	13.3		—
Adjusted Operating Income	$	258.4	$	323.1

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normal operations of our business. Integration expenses are incurred over a pre-defined integration period specific to each acquisition.

2.Represents the non-cash reduction of contingent consideration related to the Ritter acquisition and the amortization of the purchase accounting adjustment to record inventory acquired from Masterflex at fair value.

3.Reflects the incremental expenses incurred in the period related to restructuring initiatives to increase profitability and productivity. ~~Typical costs~~Costs included in this caption are specific to employee severance, site-related

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exit costs, and contract termination costs. The expenses recognized in 2024 represent costs incurred to achieve the Company’s publicly-announced cost transformation initiative.

4.3.Represents ~~charges and legal costs in connection~~incremental expenses directly associated with ~~certain litigation and other contingencies that are unrelated~~the Company’s publicly-announced cost transformation initiative, primarily related to ~~our core operations and not reflective~~the cost of ~~on-going business and operating results.~~

5.~~As described in note 1.~~external advisors.

The following table presents net sales by product ~~line:~~category:
(in millions) Three months ended September 30, Nine months ended September 30,
2023 2022 2023 2022
Proprietary materials & consumables $ 629.0 $ 727.4 $ 1,920.4 $ 2,216.7
Third party materials & consumables 632.8 665.7 1,929.0 2,078.4
Services & specialty procurement 238.6 225.1 712.4 692.3
Equipment & instrumentation 219.8 238.3 682.6 730.0
Total $ 1,720.2 $ 1,856.5 $ 5,244.4 $ 5,717.4


(in millions)	Three months ended March 31,
	2024		2023
Proprietary	$	883.5	$	952.2
Third-party	796.3		828.1
Total	$	1,679.8	$	1,780.3

4.5. Supplemental disclosures of cash flow information

The following ~~tables present~~table presents supplemental disclosures of cash flow information:


(in millions)	(in millions)	September 30, 2023		December 31, 2022		(in millions)	March 31, 2024	December 31, 2023
Cash and cash equivalents	Cash and cash equivalents	$	236.9	$	372.9
Restricted cash classified as other assets	Restricted cash classified as other assets	23.8		24.0
Total	Total	$	260.7	$	396.9

At ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, amounts included in restricted cash primarily represent funds held in escrow to satisfy a long-term retention incentive related to the acquisition of Ritter.

(in millions) Nine months ended September 30,
2023 2022
Cash flows from operating activities:
Cash paid for income taxes, net $ 195.3 $ 182.3
Cash paid for interest, net, excluding financing leases 214.2 187.0
Cash paid for interest on finance leases 3.8 3.8
Cash paid under operating leases 32.4 32.2
Cash flows from financing activities:
Cash paid under finance leases 3.8 3.5


(in millions)	Three months ended March 31,
	2024		2023
Cash flows from operating activities:
Cash paid for income taxes, net	$	17.1	$	13.6
Cash paid for interest, net, excluding financing leases	69.2		79.5
Cash paid for interest on finance leases	1.3		1.2
Cash paid under operating leases	11.2		10.4
Cash flows from financing activities:
Cash paid under finance leases	1.4		1.2

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5.6. Inventory

The following table presents the components of inventory:
(in millions) September 30, 2023 December 31, 2022
Merchandise inventory $ 516.7 $ 556.1
Finished goods 96.8 117.1
Raw materials 173.8 181.2
Work in process 63.0 59.1
Total $ 850.3 $ 913.5


(in millions)	March 31, 2024		December 31, 2023
Merchandise inventory	$	465.0	$	503.5
Finished goods	105.0		91.0
Raw materials	166.1		167.2
Work in process	74.5		66.4
Total	$	810.6	$	828.1

6. 7. Goodwill and other intangible assets

Goodwill

As described in note 1, we reorganized our segment reporting structure effective January 1, 2024. The segment reporting reorganization also resulted in a change to our reporting units for the purpose of goodwill impairment testing. Our new reporting units are Manufactured Products, Buy Sell Production, NuSil, Buy Sell Lab, Proprietary Lab and Services. As a result of the reorganization, our goodwill was reassigned to the new reporting units making up our Laboratory Solutions and Bioscience Production reporting segments.

We have reassigned goodwill as of January 1, 2024 to align to our new segment structure by using a relative fair value approach. We tested goodwill for impairment immediately before and after the realignment; no impairment was identified.

The following table presents goodwill by our reportable segments, on the effective date of the change:


	Laboratory Solutions		Bioscience Production		Total
Goodwill, gross	$	3,842.0	$	1,913.5	$	5,755.5
Accumulated impairment losses	(18.4)		(20.4)		(38.8)
Goodwill, net	$	3,823.6	$	1,893.1	$	5,716.7

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Other intangible assets

The following table presents the components of other intangible assets:


(in millions)	(in millions)	September 30, 2023						December 31, 2022						(in millions)	March 31, 2024			December 31, 2023
		Gross value		Accumulated amortization and impairment1		Carrying value		Gross value		Accumulated amortization and impairment1		Carrying value			Gross value	Accumulated amortization and impairment1	Carrying value		Gross value	Accumulated amortization and impairment1	Carrying value
Customer relationships	Customer relationships	$	4,793.6	$	1,579.8	$	3,213.8	$	4,806.4	$	1,333.5	$	3,472.9
Trade names	Trade names	353.6		218.5		135.1		354.4		205.1		149.3
Other	Other	629.9		283.0		346.9		630.9		212.1		418.8
Total finite-lived	Total finite-lived	$	5,777.1	$	2,081.3	3,695.8		$	5,791.7	$	1,750.7	4,041.0
Indefinite-lived	Indefinite-lived					92.3						92.3
Total	Total					$	3,788.1					$	4,133.3

━━━━━━━━━

1.As of ~~September 30,~~March 31, 2024 and December 31, 2023, accumulated impairment losses on Customer relationships were $65.9 million and on Other were $40.5 million totaling $106.4 million. ~~As of December 31, 2022, there were no accumulated impairment losses.~~

7.8. Commitments and contingencies

Our business involves commitments and contingencies related to compliance with environmental laws and regulations, the manufacture and sale of products and litigation. The ultimate resolution of contingencies is subject to significant uncertainty, and it is reasonably possible that contingencies could be decided unfavorably against us.

Environmental laws and regulations

Our environmental liabilities are subject to changing governmental policy and regulations, discovery of unknown conditions, judicial proceedings, method and extent of remediation, existence of other potentially responsible parties and future changes in technology. We believe that known and unknown environmental matters, if not resolved favorably, could have a material effect on our financial position, liquidity and profitability. Matters to be disclosed are as follows:

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The New Jersey Department of Environmental Protection has ordered us to remediate groundwater conditions near our plant in Phillipsburg, New Jersey. At ~~September 30, 2023,~~March 31, 2024, our accrued obligation under this order is $2.4 million, which is calculated based on expected cash payments discounted at rates ranging from ~~4.5%~~4.2% to ~~5.5%~~5.1% between ~~2023~~2024 and ~~2045.~~2046. The undiscounted amount of that obligation is $3.8 million. We are indemnified against any losses incurred in this matter as stipulated through the agreement and guaranty referenced in our Annual Report.

In 2016, we assessed the environmental condition of our chemical manufacturing site in Gliwice, Poland. Our assessment revealed specific types of soil and groundwater contamination throughout the site. We are also monitoring the condition of a closed landfill on that site. These matters are not covered by our indemnification arrangement because they relate to an operation we subsequently acquired. At ~~September 30, 2023,~~March 31, 2024, our balance sheet includes a liability of ~~$1.0~~$1.1 million for remediation and monitoring costs. That liability is estimated primarily on discounted expected remediation payments and is not materially different from its undiscounted amount.

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Manufacture and sale of products

Our business involves risk of product liability, patent infringement and other claims in the ordinary course of business arising from the products that we produce ourselves or obtain from our suppliers, as well as from the services we provide. Our exposure to such claims may increase to the extent that we expand our manufacturing operations or service offerings.

We maintain insurance policies to protect us against these risks, including product liability insurance. In many cases the suppliers of products we distribute have indemnified us against such claims. Our insurance coverage or indemnification agreements with suppliers may not be adequate in all pending or any future cases brought against us. Furthermore, our ability to recover under any insurance or indemnification arrangements is subject to the financial viability of our insurers, our suppliers and our suppliers’ insurers, as well as legal enforcement under the local laws governing the arrangements.

We have entered into indemnification agreements with customers of our self-manufactured products to protect them from liabilities and losses arising from our negligence, willful misconduct or sale of defective products. To date, we have not incurred material costs to defend lawsuits or settle claims related to these indemnification provisions.

Litigation

At ~~September 30, 2023,~~March 31, 2024, there was no outstanding litigation that we believe would result in material losses if decided against us, and we do not believe that there are any unasserted matters that are reasonably possible to result in a material loss.

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8.9. Debt

The following table presents information about our debt:


(dollars in millions)	(dollars in millions)	September 30, 2023				December 31, 2022		(dollars in millions)	March 31, 2024	December 31, 2023
		Interest terms	Rate	Amount
Receivables facility	Receivables facility	SOFR1 plus 0.80%	6.22%	$	297.7	$	327.2
Receivables facility
Receivables facility
Senior secured credit facilities:	Senior secured credit facilities:

Euro term loans B-4

Euro term loans B-4

Euro term loans B-4	Euro term loans B-4	EURIBOR plus 2.50%	6.36%	625.6		636.7
Euro term loans B-5	Euro term loans B-5	EURIBOR plus 2.00%	5.86%	336.0		342.0

U.S. dollar term loans B-5
U.S. dollar term loans B-5
U.S. dollar term loans B-5	U.S. dollar term loans B-5	SOFR1 plus 2.25%	7.67%	872.7		1,488.3
2.625% secured notes	2.625% secured notes	fixed rate	2.625%	687.6		694.5
3.875% unsecured notes	3.875% unsecured notes	fixed rate	3.875%	800.0		800.0
3.875% unsecured notes	3.875% unsecured notes	fixed rate	3.875%	423.1		427.3
4.625% unsecured notes	4.625% unsecured notes	fixed rate	4.625%	1,550.0		1,550.0
Finance lease liabilities	Finance lease liabilities			67.9		68.9
Other	Other			12.1		14.2
Total debt, gross	Total debt, gross			5,672.7		6,349.1
Less: unamortized deferred financing costs	Less: unamortized deferred financing costs			(46.6)		(61.6)
Total debt	Total debt			$	5,626.1	$	6,287.5
Classification on balance sheets:	Classification on balance sheets:
Current portion of debt	Current portion of debt			$	335.6	$	364.2
Current portion of debt
Current portion of debt
Debt, net of current portion	Debt, net of current portion			5,290.5		5,923.3

━━━━━━━━━

1.SOFR includes credit spread adjustment.

Interest expense, net includes interest income of $17.9 million and $14.5 million for the three months ended March 31, 2024 and March 31, 2023, respectively. The interest income primarily relates to income on our interest rate swaps and cross currency swaps. Refer to note 14 to the unaudited consolidated financial statements for more information.

Credit facilities

The following table presents availability under our credit facilities:


(in millions)	(in millions)	September 30, 2023						(in millions)	March 31, 2024
		Receivables facility		Revolving credit facility		Total			Receivables facility	Revolving credit facility	Total
Capacity	Capacity	$	325.8	$	975.0	$	1,300.8
Undrawn letters of credit outstanding	Undrawn letters of credit outstanding	(15.4)		—		(15.4)
Outstanding borrowings	Outstanding borrowings	(297.7)		—		(297.7)
Unused availability	Unused availability	$	12.7	$	975.0	$	987.7

Capacity under the receivables facility is calculated as the lower of eligible borrowing base or facility limit of $400.0 million. Eligible borrowing base is determined as total available accounts receivable less

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ineligible accounts receivable and other adjustments. At ~~September 30, 2023,~~March 31, 2024, total available accounts receivable under the receivables facility were ~~$576.2~~$538.3 million.

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In June 2023, we amended the revolving credit facility to increase its funding limit up to $975.0 million and extended the term to June 29, 2028. We capitalized $2.3 million of fees in connection with this transaction.

~~In June 2023, the Company entered into an Amendment to the Receivables Purchase Agreement to increase the Delinquency Ratio cap from 13.0% to 16.0%.~~

Senior secured credit facilities

On April 2, 2024, we amended the credit agreement to reprice the U.S. Dollar term loan under our senior secured credit facilities. Pursuant to the agreement, the interest rate applicable to the U.S. Dollar term loan reduced from SOFR plus a spread of 2.25% per annum to SOFR plus a spread of 2.00% per annum. The principal amount of U.S. Dollar term loan outstanding immediately prior to the amendment and the outstanding principal amount of U.S. Dollar term loan immediately following the amendment each totaled $772.4 million. The final stated maturity of the U.S. Dollar term loan remains November 6, 2027. The costs to complete the amendment were not material.

During the quarter ended ~~September 30, 2023,~~March 31, 2024, we made prepayments of ~~$210.0~~$10.0 million on our U.S. dollar term loan B-5 that matures on November ~~8, 2027.~~6, 2027 and prepayments of $190.6 million on our Euro term loan B-4 that matures on June 10, 2028. In connection with ~~this prepayment,~~these prepayments, we expensed ~~$2.0~~$2.5 million of previously unamortized deferred financing costs as a loss on extinguishment of debt. We also amended our U.S. dollar term loan B-5 from LIBOR based floating rate interest to SOFR based floating rate interest during the second quarter of 2023. This amendment was done in accordance with Accounting Standards Codification (ASC) 848 and had no impact on the financial statements. The Company is applying optional expedients and exceptions to certain contract modifications and hedging relationships as permitted under ASU 2020-04 and 2022-06.

Debt covenants

Our debt agreements include representations and covenants that we consider usual and customary, and our receivables facility and senior secured credit facilities include a financial covenant that becomes applicable for periods in which we have drawn more than 35% of our revolving credit facility under the senior secured credit facilities. In this circumstance, we are not permitted to have combined borrowings on our senior secured credit facilities and secured notes in excess of a pro forma net leverage ratio, as defined in our credit agreements. As we had not drawn more than 35% of our revolving credit facility in this period, this covenant was not applicable at ~~September 30, 2023.~~March 31, 2024.

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9.10. Accumulated other comprehensive income or loss

The following table presents changes in the components of AOCI:


(in millions)	(in millions)	Foreign currency translation		Derivative instruments		Defined benefit plans		Total		(in millions)	Foreign currency translation	Derivative instruments	Defined benefit plans	Total
Balance at June 30, 2023		$	(100.4)	$	21.9	$	6.6	$	(71.9)
Balance at December 31, 2023
Unrealized (loss) gain	Unrealized (loss) gain	(30.4)		8.0		(0.9)		(23.3)
Reclassification of gain into earnings	Reclassification of gain into earnings	—		(8.4)		—		(8.4)
Change due to income taxes	Change due to income taxes	(7.9)		0.1		0.3		(7.5)
Balance at September 30, 2023		$	(138.7)	$	21.6	$	6.0	$	(111.1)

Balance at June 30, 2022		$	(132.5)	$	4.7	$	(20.5)	$	(148.3)
Unrealized (loss) gain		(62.1)		20.7		—		(41.4)
Reclassification of loss (gain) into earnings		—		0.2		(0.1)		0.1
Change due to income taxes		(17.4)		(5.0)		0.2		(22.2)
Balance at September 30, 2022		$	(212.0)	$	20.6	$	(20.4)	$	(211.8)
Balance at March 31, 2024

Balance at December 31, 2022	Balance at December 31, 2022	$	(131.3)	$	19.9	$	11.1	$	(100.3)
Unrealized (loss) gain		(4.8)		24.7		(6.6)		13.3
Balance at December 31, 2022
Balance at December 31, 2022
Unrealized gain (loss)
Reclassification of gain into earnings	Reclassification of gain into earnings	—		(22.5)		—		(22.5)
Change due to income taxes	Change due to income taxes	(2.6)		(0.5)		1.5		(1.6)
Balance at September 30, 2023		$	(138.7)	$	21.6	$	6.0	$	(111.1)
Balance at March 31, 2023

Balance at December 31, 2021		$	(19.2)	$	0.4	$	(24.4)	$	(43.2)
Unrealized (loss) gain		(160.1)		27.7		4.6		(127.8)
Reclassification of gain into earnings		—		(1.1)		(0.2)		(1.3)
Change due to income taxes		(32.7)		(6.4)		(0.4)		(39.5)
Balance at September 30, 2022		$	(212.0)	$	20.6	$	(20.4)	$	(211.8)

The reclassifications ~~and income tax~~ effects shown above were immaterial to the financial statements and were made to either cost of sales, or SG&A ~~expenses~~expense or interest expense depending upon the nature of the underlying transaction. The income tax effects in the three ~~and nine~~ months ended ~~September 30, 2023~~March 31, 2024 on foreign currency translation were due to our net investment hedge and cross-currency swap discussed in note ~~13.~~

14.

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~~10.~~11. Stock-based compensation

The following table presents the components of stock-based compensation expense:


(in millions)	(in millions)	Classification	Three months ended September 30,				Nine months ended September 30,
			2023		2022		2023		2022
(in millions)

		2024
		2024
Stock options
Stock options
Stock options	Stock options	Equity	$	3.0	$	4.1	$	10.2	$	12.1
RSUs	RSUs	Equity	6.5		9.3		20.7		26.0
RSUs
RSUs
Other
Other
Other	Other	Both	0.3		(1.3)		0.8		(2.3)
Total	Total		$	9.8	$	12.1	$	31.7	$	35.8
Total
Total
Award classification:
Award classification:
Award classification:	Award classification:
Equity	Equity		$	9.7	$	13.7	$	31.6	$	39.1
Equity
Equity
Liability	Liability		0.1		(1.6)		0.1		(3.3)
Liability
Liability

At ~~September 30, 2023,~~March 31, 2024, unvested awards under our plans have remaining stock-based compensation expense of ~~$91.9~~$116.4 million to be recognized over a weighted average period of 1.9 years.

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Stock options

The following table presents information about outstanding stock options:


(options and intrinsic value in millions)	(options and intrinsic value in millions)	Number of options	Weighted average exercise price per option		Aggregate intrinsic value		Weighted average remaining term	(options and intrinsic value in millions)	Number of options		Weighted average exercise price per option			Aggregate intrinsic value				Weighted average remaining term
Balance at December 31, 2022		16.1	$	20.90
Balance at December 31, 2023
Granted
Granted
Granted	Granted	2.1	23.53
Exercised	Exercised	(0.7)	15.41
Exercised
Exercised
Forfeited	Forfeited	(0.7)	24.83
Balance at September 30, 2023		16.8	21.29		$	36.5	5.8 years
Forfeited
Forfeited
Balance at March 31, 2024
Balance at March 31, 2024
Balance at March 31, 2024									14.7		$	21.34		$	70.8			5.5 years
Expected to vest	Expected to vest	3.9	24.83		2.3		8.5 years	Expected to vest	3.1	25.11		25.11	5.2			5.2	8.9 years		8.9 years
Vested	Vested	12.9	20.22		34.2		4.9 years	Vested	11.6	20.34		20.34	65.6			65.6	4.7 years		4.7 years

During the ~~nine~~three months ended ~~September 30, 2023,~~March 31, 2024, we granted stock options that have a contractual life of ten years and will vest annually over ~~four~~three years, subject to the recipient continuously providing service to us through such date.

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RSUs

The following table presents information about unvested RSUs:

(awards in millions)

Number of awards

Weighted average grant date fair value per award

(awards in millions)

Number of awards

Weighted average grant date fair value per award

Balance at December 31, 2022

4.2

24.29

Balance at December 31, 2023

Granted

2.1

26.21

Vested

(1.7)

18.80

Forfeited

(0.5)

29.12

Balance at September 30, 2023

4.1

26.69

Balance at March 31, 2024

During the ~~nine~~three months ended ~~September 30, 2023,~~March 31, 2024, we granted RSUs that will vest annually over three ~~to four~~ years, subject to the recipient continuously providing service to us throughout the vesting period. Certain of those awards contain performance and market conditions that impact the number of shares that will ultimately vest. We recorded expense on ~~these~~such awards of ~~$1.7~~$2.1 million and ~~$2.9~~$2.3 million for the three months ended ~~September 30,~~March 31, 2024 and March 31, 2023, ~~and September 30, 2022, respectively, and $3.5 million and $7.9 million for the nine months ended September 30, 2023 and September 30, 2022,~~ respectively.

~~11.~~

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12. Other income or expense, net

The following table presents the components of other income or expense, net:


(in millions)	(in millions)	Three months ended September 30,				Nine months ended September 30,
		2023		2022		2023		2022
(in millions)

2024
2024
Net foreign currency gain from financing activities
Net foreign currency gain from financing activities
Net foreign currency gain from financing activities	Net foreign currency gain from financing activities	$	0.5	$	1.2	$	2.3	$	0.2
Income related to defined benefit plans	Income related to defined benefit plans	0.3		1.4		1.0		4.4
Other		(0.1)		0.1		—		0.2
Income related to defined benefit plans
Income related to defined benefit plans

Other income, net	Other income, net	$	0.7	$	2.7	$	3.3	$	4.8

Other income, net

Other income, net

~~12.~~13. Income taxes

The following table presents the relationship between income tax expense and income before income taxes:


(in millions)	(in millions)	Three months ended September 30,						Nine months ended September 30,
		2023			2022			2023			2022
(in millions)

2024
2024
Income before income taxes
Income before income taxes
Income before income taxes	Income before income taxes	$	136.5		$	208.3		$	291.0		$	676.4
Income tax expense	Income tax expense	(28.1)			(41.3)			(68.4)			(131.6)
Income tax expense
Income tax expense
Effective income tax rate	Effective income tax rate	20.6		%	19.8		%	23.5		%	19.5		%
Effective income tax rate
Effective income tax rate

Income tax expense in the quarter is based upon the estimated income for the full year. The composition of the income in different countries and adjustments, if any, in the applicable quarterly periods influences our expense.

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The relationship between pre-tax income and income tax expense is affected by the impact of losses for which we cannot claim a tax benefit, non-deductible expenses, and other items that increase tax expense without a relationship to income, such as withholding taxes and changes with respect to uncertain tax positions.

The change in the effective tax rate for the three ~~and nine~~ months ended ~~September 30, 2023~~March 31, 2024 when compared to the three ~~and nine~~ months ended ~~September 30, 2022,~~March 31, 2023, is primarily due to ~~the establishment of new~~ valuation allowances against deferred tax assets not expected to be ~~realized as a result of an impairment recognized in the second quarter of 2023, as well as the impact of a partial limitation on the tax deduction of executive compensation expense.~~realized.

~~13.~~14. Derivative and hedging activities

Hedging instruments:

We engage in hedging activities to reduce our exposure to foreign currency exchange rates and interest rates. Our hedging activities are designed to manage specific risks according to our strategies, as summarized below, which may change from time to time. Our hedging activities consist of the following:

•Economic hedges — We are exposed to changes in foreign currency exchange rates on certain of our euro-denominated term loans and notes that move inversely from our portfolio of euro-denominated intercompany loans. The currency effects for these non-derivative instruments are recorded through earnings in the period of change and substantially offset one another;

•Other hedging activities — Certain of our subsidiaries hedge short-term foreign currency denominated business transactions, external debt and intercompany financing transactions using

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foreign currency forward contracts. These activities were not material to our consolidated financial statements.

Cash flow hedges of interest rate risk

In April of 2023, the Company executed a $100.0 million interest rate swap to convert SOFR based floating rate interest to fixed rate interest. The transaction is intended to mitigate our exposure to fluctuations in interest rates and will terminate on October 27, 2025. In addition, in April of 2023, we amended our $750.0 million interest rate swap from LIBOR based floating rate interest to SOFR based floating rate interest. This amendment was done in accordance with ASC 848 and had no impact on the financial statements. The Company is applying optional expedients and exceptions to certain contract modifications and hedging relationships as permitted under ASU 2020-04 and 2022-06.

Our objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. 

For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in AOCI and subsequently reclassified into interest expense in the same period(s) during which the hedged transaction affects earnings. Amounts reported in AOCI related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. During the next twelve months, the Company estimates that an additional ~~$20.3~~$17.0 million will be reclassified as a reduction to interest expense.

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As of ~~September 30, 2023,~~March 31, 2024, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:

(dollars in millions)

Interest rate derivative

Number of instruments

Notional

Interest rate swaps

850.0

Effect of cash flow hedge accounting on AOCI

The table below presents the effect of cash flow hedge accounting on AOCI for the three ~~and nine~~ months ended ~~September 30, 2023~~March 31, 2024 and ~~September 30, 2022.~~March 31, 2023.


(in millions)	(in millions)

(in millions)

(in millions)
Hedging relationships	Hedging relationships		Amount of gain or (loss) recognized in OCI on Derivative								Location of gain or (loss) reclassified from AOCI into income	Amount of gain or (loss) reclassified from AOCI into income
Hedging relationships
Hedging relationships																				Amount of gain or (loss) recognized in OCI on Derivative	Location of gain or (loss) reclassified from AOCI into income	Amount of gain or (loss) reclassified from AOCI into income
		Three months ended March 31,
			2024
			2024
			2024
			Three months ended September 30,				Nine months ended September 30,					Three months ended September 30,				Nine months ended September 30,
Interest rate products
			2023		2022		2023		2022			2023		2022		2023		2022
Interest rate products

Interest rate products	Interest rate products		4.9		19.4		15.0		22.0		Interest income (expense)	5.2		(1.1)		12.7		(3.6)

Total	Total		$	4.9	$	19.4	$	15.0	$	22.0		$	5.2	$	(1.1)	$	12.7	$	(3.6)

Total

Total

Effect of cash flow hedge accounting on the income statement

The table below presents the effect of our derivative financial instruments on the statement of operations for the three ~~and nine~~ months ended ~~September 30, 2023~~March 31, 2024 and ~~September 30, 2022.~~March 31, 2023.

Three months ended September 30, Nine months ended September 30,
2023 2022 2023 2022
(in millions) Interest income (expense) Interest income (expense) Interest income (expense) Interest income (expense)
Total amounts of line items presented in the statements of operations where the effects of cash flow hedges are recorded $ (72.4) $ (67.3) $ (219.5) $ (196.0)
Amount of gain (loss) reclassified from AOCI into income $ 5.2 $ (1.1) $ 12.7 $ (3.6)

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	Three months ended March 31,
	2024		2023
(in millions)	Interest expense, net			Interest expense, net
Total amounts of line items presented in the statements of operations where the effects of cash flow hedges are recorded	$	(64.3)		$	(73.7)



Amount of gain reclassified from AOCI into income	$	5.3		$	3.1

Net investment hedges

We are exposed to fluctuations in foreign exchange rates on investments we hold in foreign entities, specifically our net investment in Avantor Holdings B.V., a EUR-functional-currency consolidated subsidiary, against the risk of changes in the EUR-USD exchange rate.

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For derivatives designated as net investment hedges, the gain or loss on the derivative is reported in AOCI as part of the cumulative translation adjustment. Amounts are reclassified out of AOCI into earnings when the hedged net investment is either sold or substantially liquidated.

As of ~~September 30, 2023,~~March 31, 2024, we had the following outstanding foreign currency derivatives that were used to hedge ~~its~~ net investments in foreign operations:


(value in millions)
Foreign currency derivative	Number of instruments	Notional sold		Notional purchased
Cross-currency swaps	1	€	732.1	$	750.0

Effect of net investment hedges on AOCI and the income statement

The table below presents the effect of our net investment hedges on AOCI and the statement of operations for the three ~~and nine~~ months ended ~~September 30, 2023~~March 31, 2024 and ~~September 30, 2022.~~March 31, 2023.



(in millions)
Hedging relationships	Amount of gain or (loss) recognized in OCI on Derivative				Location of gain or (loss) recognized in income on Derivative (amount excluded from effectiveness testing)	Amount of gain or (loss) recognized in income on Derivative (amount excluded from effectiveness testing)
	Three months ended March 31,					Three months ended March 31,
	2024		2023				2024		2023

Cross currency swaps	$	20.9	$	(7.2)		Interest expense, net	$	3.2	$	3.2
Total	$	20.9	$	(7.2)			$	3.2	$	3.2

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(in millions)
Hedging relationships Amount of gain or (loss) recognized in OCI on Derivative Location of gain or (loss) recognized in income on Derivative (amount excluded from effectiveness testing) Amount of gain or (loss) recognized in income on Derivative (amount excluded from effectiveness testing)
September 30, September 30,
2023 2022 2023 2022
Three months ended:
Cross currency swaps $ 22.8 $ 48.6 Interest income $ 3.2 $ 3.3
Total $ 22.8 $ 48.6 $ 3.2 $ 3.3
Nine months ended:
Cross currency swaps $ 9.6 $ 79.4 Interest income $ 9.5 $ 6.4
Total $ 9.6 $ 79.4 $ 9.5 $ 6.4

The Company did not reclassify any other deferred gains or losses related to cash flow hedges from accumulated other comprehensive income (loss) to earnings for the three ~~and nine~~ months ended ~~September 30, 2023~~March 31, 2024 and ~~September 30, 2022.~~March 31, 2023.

The table below presents the fair value of our derivative financial instruments as well as their classification on the Balance Sheet as of ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022:~~2023:

Derivative assets

Derivative liabilities

September 30, 2023

December 31, 2022

September 30, 2023

December 31, 2022

Derivative assets

Derivative liabilities

March 31, 2024

December 31, 2023

March 31, 2024

December 31, 2023

(in millions)

Balance sheet location

Fair value

Balance sheet location

Fair value

Balance sheet location

Fair value

Balance sheet location

Fair value

(in millions)

Balance sheet location

Fair value

Balance sheet location

Fair value

Balance sheet location

Fair value

Balance sheet location

Fair value

Derivatives designated as hedging instruments:

Interest rate products

Other current assets

28.5

Other current assets

26.2

Other current liabilities

—

Other current liabilities

—

Interest rate products

Foreign exchange products

Other current assets

—

Other current assets

—

Other current liabilities

(21.3)

Other current liabilities

(21.4)

Total

28.5

26.2

(21.3)

(21.4)

Non-derivative financial instruments which are designated as hedging instruments:

We designated all of our outstanding €400.0 million 3.875% senior unsecured notes, issued on July 17, 2020, and maturing on July 15, 2028, as a hedge of our net investment in certain of our European operations. For instruments that are designated and qualify as net investment hedges, the foreign currency

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transactional gains or losses are reported as a component of AOCI. The gains or losses would be reclassified into earnings upon a liquidation event or deconsolidation of a hedged foreign subsidiary.

Net investment hedge effectiveness is assessed based upon the change in the spot rate of the foreign currency denominated debt. The critical terms of the foreign currency notes match the portion of the net investments designated as being hedged. At ~~September 30, 2023,~~March 31, 2024, the net investment hedge was equal to the designated portion of the European operations and was considered to be perfectly effective.

The accumulated ~~(gain)~~gain related to the foreign currency denominated debt designated as net investment hedges classified in the foreign currency translation adjustment component of AOCI was ~~$(28.5)~~$20.0 million and ~~$(24.3)~~$9.3 million as of ~~September 30, 2023~~March 31, 2024 and December 31, ~~2022,~~2023, respectively.

The amount of ~~gain~~(gain) loss related to the foreign currency denominated debt designated as net investment hedges classified in the foreign currency translation adjustment component of other comprehensive

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income or loss for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2024 and March 31, 2023 ~~and September 30, 2022~~ are presented below:


(in millions)	(in millions)	Three months ended September 30,				Nine months ended September 30,
		2023		2022		2023		2022
(in millions)

2024
2024
Net investment hedges	Net investment hedges	$	(13.5)	$	(27.1)	$	(4.2)	$	(63.3)
Net investment hedges
Net investment hedges

~~14.~~15. Financial instruments and fair value measurements

Our financial instruments include cash and cash equivalents, accounts receivable, accounts payable and debt.

Certain financial and nonfinancial assets and liabilities are measured at fair value on a nonrecurring basis and are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment. As discussed in note 1, during the second quarter of 2023, property, plant and equipment, customer relationships and developed technology related to the Ritter asset group were deemed to be impaired and their carrying values were reduced to estimated fair values of $25.9 million, $31.4 million and $19.3 million, respectively. This was the result of an impairment charge of $160.8 million. The Company estimates the fair value of the Ritter asset group using Level 3 inputs, which included a discounted cash flow analysis.

Assets and liabilities for which fair value is only disclosed

The carrying amount of cash and cash equivalents was the same as its fair value and is a Level 1 measurement. The carrying amounts for trade accounts receivable and accounts payable approximated fair value due to their short-term nature and are Level 2 measurements.

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The following table presents the gross amounts, which exclude unamortized deferred financing costs, and the fair values of debt instruments:


(in millions)	(in millions)	September 30, 2023				December 31, 2022				(in millions)	March 31, 2024		December 31, 2023
		Gross amount		Fair value		Gross amount		Fair value			Gross amount	Fair value		Gross amount	Fair value
Receivables facility	Receivables facility	$	297.7	$	297.7	$	327.2	$	327.2
Senior secured credit facilities:	Senior secured credit facilities:

Euro term loans B-4	Euro term loans B-4	625.6		626.4		636.7		627.5

Euro term loans B-4

Euro term loans B-4
Euro term loans B-5	Euro term loans B-5	336.0		338.2		342.0		340.7

U.S. dollar term loans B-5
U.S. dollar term loans B-5
U.S. dollar term loans B-5	U.S. dollar term loans B-5	872.7		873.3		1,488.3		1,485.5
2.625% secured notes	2.625% secured notes	687.6		658.9		694.5		658.5
3.875% unsecured notes	3.875% unsecured notes	800.0		689.4		800.0		672.0
3.875% unsecured notes	3.875% unsecured notes	423.1		390.1		427.3		396.5
4.625 % unsecured notes	4.625 % unsecured notes	1,550.0		1,413.1		1,550.0		1,407.6
Finance lease liabilities	Finance lease liabilities	67.9		67.9		68.9		68.9
Other	Other	12.1		12.1		14.2		14.2
Total	Total	$	5,672.7	$	5,367.1	$	6,349.1	$	5,998.6

The fair values of debt instruments are based on standard pricing models that take into account the present value of future cash flows, and in some cases private trading data, which are level 2 measurements.

Item 2. Management’s discussion and analysis of financial condition and results of operations

This discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results may differ materially from those contained in or implied by any forward-looking statements. See “Cautionary factors regarding forward-looking statements.”

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Basis of presentation

This discussion should be read in conjunction with the accompanying condensed consolidated financial statements and notes. Pursuant to SEC rules for reports covering interim periods, we have prepared this discussion and analysis to enable you to assess material changes in our financial condition and results of operations since December 31, ~~2022,~~2023, the date of our Annual Report. Therefore, we encourage you to read this discussion and analysis in conjunction with the Annual Report.

Overview

During the three months ended ~~September 30, 2023,~~March 31, 2024, we recorded net sales of ~~$1,720.2~~$1,679.8 million, net income of ~~$108.4~~$60.4 million, Adjusted EBITDA of $283.0 million and Adjusted ~~EBITDA~~Operating Income of ~~$317.8~~$258.4 million. Net sales decreased by ~~7.3%~~5.6%, which included a ~~9.6%~~6.3% decline in organic sales compared to the same period in ~~2022.~~2023. See “Reconciliations of non-GAAP measures” for ~~a reconciliation~~reconciliations of net income to Adjusted EBITDA and Adjusted Operating Income, and net income margin to Adjusted EBITDA margin and Adjusted Operating Income margin. See “Results of operations” for a reconciliation of net sales growth (decline) to organic net sales growth (decline).

Segment Change

Effective January 1, 2024, we changed our operating model and reporting segment structure from three

reportable segments to two reportable segments, Laboratory Solutions and Bioscience Production. This structure aligns with how our Chief Executive Officer, who is our chief operating decision maker, intends to measure segment operating performance and allocate resources across our operating segments. This reportable segment change has no impact on our consolidated operating results.

In connection with the operating model and reporting structure change, our chief operating decision

maker changed the measure used to evaluate segment profitability from Adjusted EBITDA to Adjusted Operating Income. All disclosures relating to segment profitability, including those for comparative periods, have been revised as a result of this change.

Factors and current trends affecting our business and results of operations

The following updates the factors and current trends disclosed in the Annual Report. These updates ~~could~~may affect our performance and financial condition in future periods.

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Our ~~results were~~business continues to be impacted by the ~~continuing effects of~~transition from the global coronavirus pandemic

Customer demand and required inventory levels continue to normalize in the transition from the COVID-19 ~~pandemic, which has impacted our results for the three months ended September 30, 2023.~~pandemic. For a discussion of ~~the impact of the COVID-19 pandemic~~this trend and associated economic disruptions, and the actual operational and financial impacts that we experienced through December 31, ~~2022,~~2023, see “Part II—Item 7—Management's discussion and analysis of financial condition and results of operations” in the Annual Report. For additional discussion of the potential impact of the COVID-19 pandemic and associated economic disruptions on our results, see “The COVID-19 pandemic has adversely impacted, and continues to pose risks to, our business, operating results, cash flows and/or financial condition, the nature and extent of which could be material.” included in “Part I—Item 1A—Risk factors” in the Annual Report.

We have been impacted by supply chain constraints and inflationary pressures

We have experienced inventory fluctuations and build up at customers as a result of global supply chain disruptions and have experienced inflationary pressures across all of our cost categories. While we have implemented pricing and productivity measures to combat these pressures, they may continue to adversely impact our results.

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Fluctuations in foreign currency rates impact our results

Our consolidated results of operations are comprised of many different functional currencies that translate into our U.S. Dollar reporting currency. The movement of the U.S. Dollar against those functional currencies, particularly the Euro, has caused significant variability in our results and may continue to do so in the future.

Key indicators of performance and financial condition

To evaluate our performance, we monitor a number of key ~~indicators including~~indicators. As appropriate, we supplement our results of operations determined in accordance with U.S. generally accepted accounting principles (“GAAP”) with certain non-GAAP financial measurements that we believe are useful to investors, creditors and others in assessing our performance. These ~~measurements~~measures should not be considered in isolation or as a substitute for reported GAAP results because they may include or exclude certain items as compared to similar GAAP-based ~~measurements,~~measures, and such ~~measurements~~measures may not be comparable to ~~similarly-titled measurements~~similarly titled measures reported by other companies. Rather, these ~~measurements~~measures should be considered as an additional way of viewing aspects of our operations that provide a more complete understanding of our business.

The key indicators that we monitor are as follows:

•Net sales, gross margin, operating income, ~~and~~ operating income margin, net income or loss and net income or loss margin. These measures are discussed in the section entitled “Results of operations”;

•Organic net sales growth, which is a non-GAAP measure discussed in the section entitled “Results of operations.” Organic net sales growth (decline) eliminates from our reported net sales change the ~~impact~~impacts of revenues from any acquired businesses that have been owned for less than one year and changes in foreign currency exchange rates. We believe that this measurement is useful to investors as a way to measure and evaluate our underlying commercial operating performance consistently across our segments and the periods presented. This measurement is used by our management for the same reason. Reconciliations to the change in reported net sales, the most directly comparable GAAP financial measure, are included in the section entitled “Results of operations”;

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•Adjusted EBITDA and Adjusted EBITDA margin,, which are non-GAAP measures discussed in the section entitled “Results of operations.” Adjusted EBITDA is ~~used by investors to measure and evaluate~~ our ~~operating performance exclusive of~~net income or loss adjusted for the following items: (i) interest expense, (ii) income tax expense, (iii) amortization of acquired intangible assets, (iv) depreciation ~~amortization~~expense, (v) losses on extinguishment of debt, (vi) charges associated with the impairment of certain assets, (vii) and certain other adjustments. Adjusted EBITDA margin is Adjusted EBITDA divided by net sales as determined under GAAP. We believe that these measurements are useful as a way to analyze the underlying trends in our business consistently across the periods presented. These measurements are used by our management for the same reason. A reconciliation of net income or loss and net income or loss margin, the most directly comparable GAAP financial measures, to Adjusted EBITDA and Adjusted EBITDA margin, respectively, are included in the section entitled “Reconciliations of non-GAAP measures”;

•Adjusted Operating Income and Adjusted Operating Income margin, which are non-GAAP measures discussed in the section entitled “Results of operations.” Adjusted operating income is our net income or loss adjusted for the following items: (i) interest expense, (ii) income tax expense, (iii) amortization of acquired intangible assets, (iv) losses on extinguishment of debt, (v) charges associated with the impairment of certain assets, (vi) and certain other adjustments. This

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measurement is our segment reporting profitability measure under generally accepted accounting principles. Adjusted Operating Income margin is Adjusted Operating Income divided by net sales as determined under GAAP. We believe that these measurements are useful to investors as a way to analyze the underlying trends in our business consistently across the periods presented. ~~This measurement is~~These measurements are used by our management for the same reason. A reconciliation of net income or loss and net income or loss margin, the most directly comparable GAAP financial ~~measure,~~measures, to Adjusted ~~EBITDA is~~Operating Income and Adjusted Operating Income margin, respectively, are included in the section entitled “Reconciliations of non-GAAP measures”;

•Cash flows from operating activities, which we discuss in the section entitled “Liquidity and capital resources—Historical cash flows”;

•Free cash flow, which is a non-GAAP measure, is equal to our cash flows from operating activities, plus acquisition-related costs paid in the period, less capital expenditures. We believe that this measurement is useful to investors as it provides a view on the Company’s ability to generate cash for use in financing or investing activities. This measurement is used by management for the same reason. A reconciliation of cash flows from operating activities, the most directly comparable GAAP financial measure, to free cash flow, is included in the section entitled “Liquidity and capital resources—Historical cash flows.”

Results of operations

We present results of operations in the same way that we manage our business, evaluate our performance and allocate our resources. We also provide discussion of net sales and Adjusted ~~EBITDA~~Operating Income by ~~geographic segment based on customer location: Americas, Europe~~segment: Laboratory Solutions and ~~AMEA.~~Bioscience Production. Corporate costs are managed on a standalone basis, ~~and not~~certain of which are allocated to our reportable segments.

Executive summary


(dollars in millions)	(dollars in millions)	Three months ended September 30,						Change		(dollars in millions)	Three months ended March 31,				Change
		2023			2022
Net sales	Net sales	$	1,720.2		$	1,856.5		$	(136.3)
Net sales
Net sales
Gross margin	Gross margin	33.6		%	35.0		%	(140) bps		Gross margin	34.0	%	35.1	%		(110) bps
Operating income	Operating income	$	210.2		$	275.8		$	(65.6)
Operating income margin										Operating income margin	8.7	%	13.0	%		(430) bps
Net income	Net income	108.4			167.0			(58.6)
Net income margin										Net income margin	3.6	%	6.8	%		(320) bps
Adjusted EBITDA	Adjusted EBITDA	317.8			384.0			(66.2)
Adjusted EBITDA margin	Adjusted EBITDA margin	18.5		%	20.7		%	(220) bps		Adjusted EBITDA margin	16.8	%	19.4	%		(260) bps
Adjusted Operating Income
Adjusted Operating Income margin										Adjusted Operating Income margin	15.4	%	18.1	%		(270) bps

The ~~third~~first quarter net sales decline was driven by decreases in ~~all three regions~~both segments primarily due to ~~declines in~~reduced customer ~~demand, the impact of customer destocking, and COVID-19 related headwinds.~~demand. Unfavorable product mix ~~and inflationary factors~~ contributed to contraction in gross margin. Softness in sales ~~volumes along with~~volume and unfavorable product mix drove Adjusted EBITDA and Adjusted Operating Income margin contraction.

Table of ~~contents~~content s

Net Sales

Three months ended
(in millions) Three months ended September 30, Reconciliation of net sales growth (decline) to organic net sales growth (decline)
Net sales growth (decline) Foreign currency impact Organic net sales growth (decline)
2023 2022
Americas $ 1,019.2 $ 1,123.2 $ (104.0) $ 1.0 $ (105.0)
Europe 579.8 595.1 (15.3) 41.1 (56.4)
AMEA 121.2 138.2 (17.0) — (17.0)
Total $ 1,720.2 $ 1,856.5 $ (136.3) $ 42.1 $ (178.4)


(in millions)	Three months ended March 31,				Reconciliation of net sales growth (decline) to organic net sales growth (decline)
					Net sales growth (decline)		Foreign currency impact		Organic net sales growth (decline)
	2024		2023
Laboratory Solutions	$	1,157.1	$	1,203.0	$	(45.9)	$	9.0	$	(54.9)
Bioscience Production	522.7		577.3		(54.6)		3.0		(57.6)
Total	$	1,679.8	$	1,780.3	$	(100.5)	$	12.0	$	(112.5)

Net sales decreased ~~$136.3~~$100.5 million or ~~7.3%~~5.6%, which included ~~$42.1~~$12.0 million or ~~2.3%~~0.7% of favorable foreign currency impact. Organic net sales decreased by ~~$178.4~~$112.5 million or ~~9.6% (declining 7.9% when excluding the impact of sales of COVID-19-related products in both periods, referred to herein as COVID-19 related headwinds or tailwinds)~~6.3%.

In the ~~Americas,~~Laboratory Solutions segment, net sales decreased ~~$104.0~~$45.9 million or ~~9.3%~~3.8%, which included ~~$1.0~~$9.0 million or ~~0.1%~~0.7% of favorable foreign currency impact. Organic net sales decreased $54.9 million or 4.5%. Sales decline was primarily driven by decreased demand in biopharma and healthcare end markets.

In the Bioscience Production segment, net sales decreased $54.6 million or 9.5%, which included $3.0 million or 0.5% of favorable foreign currency impact. Organic net sales decreased by ~~$105.0~~$57.6 million or ~~9.4% (7.9% excluding COVID-19 headwinds)~~10.0%. ~~Additional information on organic net sales by end market (with approximate percentage of total organic net sales for the region) is as follows:~~

•~~Biopharma (55%)~~ — Sales ~~declined double-digits, primarily due to reduced customer demand, as well as the roll-off of COVID-19 revenues for vaccines, in addition to destocking of lab products and single-use solutions.~~

•~~Healthcare(10%)~~ — Sales increased low single-digits primarily due to growth in our formulated silicones offering for medical implants, partially offset by destocking and demand softness in consumables offerings to customers in this end market.

•~~Education and government (15%)~~ ~~— Sales increased low single-digits primarily due to continued strong growth to higher education customers, partially offset by weaker demand from K-12 and government customers.~~

•~~Advanced technologies & applied materials (20%)~~ ~~— Sales decreased double-digits driven by softness in the demand for our semiconductor and electronic device offerings.~~

In Europe, net sales decreased $15.3 million or 2.6%, which included $41.1 million or 6.9% of favorable foreign currency impact. Organic net sales decreased $56.4 million or 9.5% (8.6% excluding COVID-19 headwinds). Additional information on organic net sales by end market (with approximate percentage of total organic net sales for the region) is as follows:

•~~Biopharma (50%)~~ ~~— Sales declined double-digits, primarily due to reduced customer demand and destocking of lab consumables and single-use solutions as well as the roll-off of COVID-19 revenues for vaccines.~~

•~~Healthcare~~ ~~(10%) — Sales declined double-digits primarily due to reduced customer demand and destocking of lab consumables.~~

~~Table of contents~~

•~~Education & government (10%)~~ ~~— Sales were flat driven by improved activity in academia and government labs offset by destocking of lab consumables.~~

•~~Advanced technologies & applied materials (30%)~~ ~~— Sales decreased low single-digits~~decline was primarily driven by ~~reduced customer~~decreased demand in biopharma and ~~destocking of lab consumables.~~healthcare end markets.

In AMEA, net sales decreased $17.0 million or 12.3%. There was no material foreign currency impact to net sales. Organic net sales decreased $17.0 million or 12.3% (5.4% excluding COVID-19 headwinds). Additional information on organic net sales by end market (with approximate percentage of total organic net sales for the region) is as follows:

•~~Biopharma (45%)— Sales decreased low single-digits due to the roll-off of COVID-19 revenues associated with vaccine production.~~

•~~Advanced technologies & applied materials (45%)~~ ~~— Sales declined double-digits primarily driven by softness in our proprietary offerings into the semiconductor industry.~~

~~Nine months ended~~
(in millions) Nine months ended September 30, Reconciliation of net sales growth (decline) to organic net sales growth (decline)
Net sales growth (decline) Foreign currency impact Organic net sales growth (decline)
2023 2022
Americas $ 3,076.8 $ 3,423.2 $ (346.4) $ (3.7) $ (342.7)
Europe 1,816.9 1,899.3 (82.4) 19.4 (101.8)
AMEA 350.7 394.9 (44.2) (8.0) (36.2)
Total $ 5,244.4 $ 5,717.4 $ (473.0) $ 7.7 $ (480.7)

Net sales decreased $473.0 million or 8.3%, which included $7.7 million or 0.1% of favorable foreign currency impact. Organic decline in net sales was $480.7 million or 8.4% (5.3% excluding COVID-19 headwinds).

In the Americas, net sales decreased $346.4 million or 10.1%, which included $3.7 million or 0.1% of unfavorable foreign currency impact. Organic decline in net sales was $342.7 million or 10.0% (6.8% excluding COVID-19 headwinds) for reasons similar to the three month period, in addition to the roll-off of COVID-19 testing and PPE revenues.

In Europe, net sales decreased $82.4 million or 4.3%, which included $19.4 million or 1.0% of favorable foreign currency impact. Organic decline in net sales was $101.8 million or 5.3% (2.9% excluding COVID-19 headwinds) for reasons similar to the three month period, in addition to the roll-off of COVID-19 testing.

In AMEA, net sales decreased $44.2 million or 11.2%, which included $8.0 million or 2.0% of unfavorable foreign currency impact. Organic decline in net sales was $36.2 million or 9.2% (4.4% excluding COVID-19 headwinds) for reasons similar to the three month period.

~~Table of contents~~

Gross margin


		Three months ended September 30,				Change	Nine months ended September 30,				Change
		2023		2022			2023		2022
		Three months ended March 31,

		Three months ended March 31,

2024
2024
Gross margin	Gross margin	33.6	%	35.0	%	(140) bps	34.2	%	34.8	%	(60) bps
Gross margin
Gross margin

Three ~~and nine~~ months ended

Gross margin for the three ~~and nine~~ months ended ~~September 30, 2023~~March 31, 2024 contracted by ~~140~~110 basis points ~~and 60 basis points, respectively,~~ resulting primarily from unfavorable product ~~mix and the impact of inflationary pressures, partially offset by lower distribution costs.~~mix.

Operating income


(in millions)	(in millions)	Three months ended September 30,				Change		Nine months ended September 30,				Change
		2023		2022				2023		2022
(in millions)

2024
2024
Gross profit	Gross profit	$	578.6	$	650.7	$	(72.1)	$	1,793.4	$	1,988.3	$	(194.9)
Operating expenses (excluding impairment charges)		368.4		374.9		(6.5)		1,119.5		1,109.9		9.6
Impairment charges		—		—		—		160.8		—		160.8
Gross profit
Gross profit
Operating expenses
Operating expenses
Operating expenses

Operating income	Operating income	$	210.2	$	275.8	$	(65.6)	$	513.1	$	878.4	$	(365.3)

Operating income

Operating income

Three months ended

Operating income decreased primarily from lower gross profit, as previously discussed ~~partially offset by lower operating expenses driven by lower accruals related to incentive compensation.~~

~~Nine months ended~~

~~Operating income decreased primarily from lower gross profit, as previously discussed, as well as~~and higher operating expenses driven by ~~asset impairment~~restructuring and severance charges, ~~recorded in the second quarter of 2023, the accrual of a long-term retention incentive, inflation~~transformation expenses and ~~investments made to grow the business, partially offset by lower accruals related to incentive compensation.~~inflationary pressures on salary expenses.

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Net income


(in millions)	(in millions)	Three months ended September 30,				Change		Nine months ended September 30,				Change
		2023		2022				2023		2022
(in millions)

2024
2024
Operating income	Operating income	$	210.2	$	275.8	$	(65.6)	$	513.1	$	878.4	$	(365.3)
Interest expense		(72.4)		(67.3)		(5.1)		(219.5)		(196.0)		(23.5)
Operating income
Operating income
Interest expense, net
Interest expense, net
Interest expense, net
Loss on extinguishment of debt
Loss on extinguishment of debt
Loss on extinguishment of debt	Loss on extinguishment of debt	(2.0)		(2.9)		0.9		(5.9)		(10.8)		4.9
Other income, net	Other income, net	0.7		2.7		(2.0)		3.3		4.8		(1.5)
Other income, net
Other income, net
Income tax expense
Income tax expense
Income tax expense	Income tax expense	(28.1)		(41.3)		13.2		(68.4)		(131.6)		63.2
Net income	Net income	$	108.4	$	167.0	$	(58.6)	$	222.6	$	544.8	$	(322.2)
Net income
Net income

Three ~~and nine~~ months ended

Net income decreased primarily due to lower operating income, as previously discussed, ~~as well as higher interest expense from rising interest rates on our variable-rate term loans,~~ partially offset by ~~loss~~lower interest expense on account of debt repayments made over the ~~extinguishment of our debt resulting from lower optional prepayments of our term loans~~last twelve months and by lower income tax expense due to lower income before income taxes.

Adjusted EBITDA and Adjusted EBITDA margin

For a reconciliation of Adjusted EBITDA and Adjusted EBITDA margin to ~~Net~~net income and net income margin, respectively, the most directly comparable ~~measure~~measures under GAAP, see “Reconciliations of non-GAAP financial measures.”

(dollars in millions) Three months ended September 30, Change Nine months ended September 30, Change
2023 2022 2023 2022
Adjusted EBITDA:
Americas $ 223.8 $ 262.3 $ (38.5) $ 711.4 $ 846.3 $ (134.9)
Europe 102.9 130.3 (27.4) 335.8 393.0 (57.2)
AMEA 33.8 35.7 (1.9) 93.7 101.1 (7.4)
Corporate (42.7) (44.3) 1.6 (133.9) (129.2) (4.7)
Total $ 317.8 $ 384.0 $ (66.2) $ 1,007.0 $ 1,211.2 $ (204.2)
Adjusted EBITDA margin 18.5 % 20.7 % (220) bps 19.2 % 21.2 % (200) bps


(dollars in millions)	Three months ended March 31,				Change
	2024		2023
Adjusted EBITDA	283.0		346.2		(63.2)





Adjusted EBITDA margin	16.8	%	19.4	%	(260) bps

Three months ended

Adjusted EBITDA decreased ~~$66.2~~by $63.2 million or ~~17.2%~~18.3%, which included a favorable foreign currency translation impact of ~~$7.1 million.~~$1.0 million or 0.3%.The remaining decline was $64.2 million or 18.6% primarily driven by lower sales volume and unfavorable product mix.

Table of content s

Adjusted Operating Income and Adjusted Operating Income margin

For a reconciliation of Adjusted Operating Income and Adjusted Operating Income margin to net income and net income margin, respectively, the most directly comparable measures under GAAP, see “Reconciliations of non-GAAP financial measures.”


(dollars in millions)	Three months ended March 31,						Change
	2024			2023
Adjusted Operating Income:
Laboratory Solutions	$	148.2		$	172.2		$	(24.0)
Bioscience Production	126.9			167.5			(40.6)
Corporate	(16.7)			(16.6)			(0.1)
Total	$	258.4		$	323.1		$	(64.7)

Adjusted Operating Income margin	15.4		%	18.1		%	(270) bps

Adjusted Operating Income decreased $64.7 million or 20.0%, which included a favorable foreign currency translation impact of $0.9 million or 0.3%. The remaining decline was ~~$73.3~~$65.6 million or ~~19.0%~~20.3% which is further discussed below.

In the ~~Americas,~~Laboratory Solutions segment, Adjusted ~~EBITDA~~Operating Income declined ~~$38.5~~$24.0 million or ~~14.7%~~13.9%, or ~~14.8%~~13.7% when adjusted for unfavorable foreign currency translation impact. The decrease was due to lower sales volume.

In the Bioscience Production segment, Adjusted Operating Income declined $40.6 million or 24.2%, or 24.3% when adjusted for favorable foreign currency translation impact. The decrease was driven primarily by lower sales ~~volumes, unfavorable manufacturing variances and product mix, partially offset by reduced operating expenses and lower distribution costs.~~

~~Table of contents~~

In Europe, Adjusted EBITDA declined $27.4 million or 21.0%, or 26.4% when adjusted for favorable foreign currency translation impact. The decrease was driven by sales volume contraction and unfavorable product mix, partially offset by reduced operating expenses, distribution costs and favorable manufacturing variances.

In AMEA, Adjusted EBITDA declined $1.9 million or 5.3%. There was no material foreign currency translation impact to Adjusted EBITDA. The decrease was driven by lower sales volume and inflationary pressures, partially offset by lower operating expenses and distribution costs.

volume.

In Corporate, Adjusted ~~EBITDA increased $1.6~~Operating Income decreased $0.1 million or ~~3.6% reflecting continued cost containment across the corporate functions.~~

~~Nine months ended~~

~~Adjusted EBITDA decreased $204.2 million or 16.9%~~0.6%, ~~which included an unfavorable foreign currency translation impact of $1.7 million or 0.1%. The remaining decline was $202.5 million or 16.8% which is further discussed below.~~

In the Americas, Adjusted EBITDA declined $134.9 million or 15.9%, or 15.8% when adjusted for unfavorable foreign currency translation impact. Lower gross profit from sales volume decline and unfavorable product mix was partially offset by commercial excellence and lower distribution costs.

~~In Europe, Adjusted EBITDA declined $57.2 million or 14.6%, or 15.0% when adjusted for favorable foreign currency translation impact~~ due to ~~lower gross profit from sales volume decline and unfavorable product mix, partially offset by commercial excellence.~~

In AMEA, Adjusted EBITDA declined $7.4 million or 7.3%, or 5.3% when adjusted for unfavorable foreign currency translation impact due to lower gross profit from sales volume decline and inflationary pressures, partially offset by lower distribution costs.

~~In Corporate, Adjusted EBITDA declined $4.7 million or 3.6% reflecting investments in our workforce made over the course of 2022 and into 2023.~~immaterial offsetting factors.

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Reconciliations of non-GAAP financial measures

The following table presents the reconciliation of net income and net income margin to Adjusted ~~EBITDA:~~EBITDA and Adjusted EBITDA margin, respectively:
(in millions) Three months ended September 30, Nine months ended September 30,
2023 2022 2023 2022
Net income $ 108.4 $ 167.0 $ 222.6 $ 544.8
Interest expense 72.4 67.3 219.5 196.0
Income tax expense 28.1 41.3 68.4 131.6
Depreciation and amortization 98.0 100.6 301.7 304.8
Loss on extinguishment of debt 2.0 2.9 5.9 10.8
Net foreign currency gain from financing activities (0.5) (1.2) (2.3) (0.2)
Other stock-based compensation expense (benefit) 0.1 (1.6) 0.1 (3.3)
Integration-related expenses1
0.2 6.4 8.3 13.6
Purchase accounting adjustments2
— — — 9.4
Restructuring and severance charges3
6.1 1.3 18.0 3.7
Reserve for certain legal matters4
3.0 — 4.0 —
Impairment charges5
— — 160.8 —
Adjusted EBITDA $ 317.8 $ 384.0 $ 1,007.0 $ 1,211.2


(dollars in millions)	Three months ended March 31,
	2024				2023
	$		%		$		%
Net income	$	60.4	3.6	%	$	121.5	6.8	%
Interest expense, net	64.3		3.8	%	73.7		4.1	%
Income tax expense	20.2		1.2	%	34.3		2.0	%
Depreciation and amortization	99.6		5.9	%	101.1		5.6	%
Loss on extinguishment of debt	2.5		0.1	%	2.3		0.1	%
Net foreign currency gain from financing activities	(0.8)		—	%	(0.2)		—	%
Other stock-based compensation expense	0.3		—	%	0.1		—	%

Integration-related expenses1	—		—	%	8.7		0.5	%

Restructuring and severance charges2	23.2		1.4	%	4.7		0.3	%


Transformation expenses3	13.3		0.8	%	—		—	%

Adjusted EBITDA	$	283.0	16.8	%	$	346.2	19.4	%

━━━━━━━━━

1.Represents ~~non-recurring~~ direct costs incurred with third parties and the accrual of a long-term retention incentive to integrate acquired companies. These expenses represent incremental costs and are unrelated to normal operations of our business. Integration expenses are incurred over a pre-defined integration period specific to each acquisition.

2.Reflects the incremental expenses incurred in the period related to restructuring initiatives to increase profitability and productivity. Costs included in this caption are specific to employee severance, site-related exit costs, and contract termination costs. The expenses recognized in 2024 represent costs incurred to achieve the Company’s publicly-announced cost transformation initiative.

3.Represents incremental expenses directly associated with the ~~non-cash reduction of contingent consideration~~Company’s publicly-announced cost transformation initiative, primarily related to the ~~Ritter acquisition~~cost of external advisors.

Table of content s

The following table presents the reconciliation of net income and net income margin to Adjusted Operating Income and Adjusted Operating Income margin, respectively:


(dollars in millions)	Three months ended March 31,
	2024				2023
	$		%		$		%
Net income	$	60.4	3.6	%	$	121.5	6.8	%
Interest expense, net	64.3		3.8	%	73.7		4.1	%
Income tax expense	20.2		1.2	%	34.3		2.0	%
Loss on extinguishment of debt	2.5		0.1	%	2.3		0.1	%
Other income, net	(1.1)		—	%	(0.6)		—	%
Operating income	146.3		8.7	%	231.2		13.0	%
Amortization	75.3		4.5	%	78.4		4.3	%
Other stock-based compensation expense	0.3		—	%	0.1		—	%
Integration-related expenses1	—		—	%	8.7		0.5	%
Restructuring and severance charges2	23.2		1.4	%	4.7		0.3	%


Transformation expenses3	13.3		0.8	%	—		—	%
Adjusted Operating Income	$	258.4	15.4	%	$	323.1	18.1	%

━━━━━━━━━

1.Represents direct costs incurred with third parties and the ~~amortization~~accrual of ~~the purchase accounting adjustment~~a long-term retention incentive to ~~record inventory~~integrate acquired ~~from Masterflex at fair value.~~companies. These expenses represent incremental costs and are unrelated to normal operations of our business. Integration expenses are incurred over a pre-defined integration period specific to each acquisition.

3.2.Reflects the incremental expenses incurred in the period related to restructuring initiatives to increase profitability and productivity. ~~Typical costs~~Costs included in this caption are specific to employee severance, site-related exit costs, and contract termination costs. The expenses recognized in 2024 represent costs incurred to achieve the Company’s publicly-announced cost transformation initiative.

5.~~As described in note 1 to our unaudited condensed consolidated financial statements.~~external advisors.

Liquidity and capital resources

We fund short-term cash requirements primarily from operating cash flows and credit facilities. Most of our long-term financing is from indebtedness. For the three ~~and nine~~ months ended ~~September 30, 2023,~~March 31, 2024, we generated ~~$230.7 million and $618.4~~$141.6 million of cash from operating activities, ended the quarter with ~~$236.9~~$234.9 million of cash and cash equivalents and our availability under our credit facilities was ~~$987.7~~$1,018.4 million. We have no debt repayments due in the next twelve months other than required term loan payments of ~~$32.8~~$18.6 million considering the effect of repricing of the U.S. Dollar term loan as described in note 9 to our unaudited consolidated financial statements and receivables facility borrowing of ~~$297.7~~$262.2 million.

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Liquidity

The following table presents our primary sources of liquidity:


(in millions)	(in millions)	September 30, 2023						(in millions)	March 31, 2024
		Receivables facility		Revolving credit facility		Total			Receivables facility	Revolving credit facility	Total
Unused availability under credit facilities:	Unused availability under credit facilities:
Capacity
Capacity
Capacity	Capacity	$	325.8	$	975.0	$	1,300.8
Undrawn letters of credit outstanding	Undrawn letters of credit outstanding	(15.4)		—		(15.4)
Outstanding borrowings	Outstanding borrowings	(297.7)		—		(297.7)
Unused availability	Unused availability	$	12.7	$	975.0	$	987.7
Cash and cash equivalents	Cash and cash equivalents					236.9
Total liquidity	Total liquidity					$	1,224.6

Some of our credit line availability depends upon maintaining a sufficient borrowing base of eligible accounts receivable. We believe that we have sufficient capital resources to meet our liquidity needs.

At ~~September 30, 2023, $215.6~~March 31, 2024, $222.7 million or ~~91.0%~~94.8% of our ~~$236.9~~$234.9 million in cash and cash equivalents was held by our non-U.S. subsidiaries and may be subject to certain taxes upon repatriation, primarily where foreign withholding taxes apply.

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Historical cash flows

The following table presents a summary of cash provided by (used in) various activities:


(in millions)	(in millions)	Nine months ended September 30,				Change		(in millions)	Three months ended March 31,	Change
		2023		2022
Operating activities:	Operating activities:
Operating activities:
Operating activities:
Net income
Net income
Net income	Net income	$	222.6	$	544.8	(322.2)
Non-cash items1	Non-cash items1	475.3		350.5		124.8
Working capital changes2	Working capital changes2	(10.0)		(155.1)		145.1
All other	All other	(69.5)		(102.2)		32.7
Total	Total	$	618.4	$	638.0	$	(19.6)
Investing activities	Investing activities	$	(93.7)	$	(76.5)	$	(17.2)
Cash paid for acquisitions, net of cash acquired		—		(20.2)		20.2

Capital expenditures	Capital expenditures	(95.8)		(99.8)		4.0
Cash proceeds from settlement of cross currency swap		—		42.5		(42.5)
Capital expenditures
Capital expenditures

Financing activities	Financing activities	(659.6)		(567.1)		(92.5)
Financing activities
Financing activities

━━━━━━━━━

1.Consists of typical non-cash charges including depreciation and amortization, ~~impairments,~~ stock based compensation expense, deferred income tax expense and others.

2.Includes changes to our accounts receivable, inventory, contract assets and accounts payable.

Cash flows from operating activities provided ~~$19.6~~$77.9 million less cash in ~~2023~~2024 primarily due to lower ~~net~~ income ~~partially offset by improved working capital and lower payments for incentive compensation payments for fiscal year 2022 company performance.~~before income taxes.

Investing activities used ~~$17.2~~$6.9 million more cash in ~~2023.~~2024. The change was primarily attributable to ~~the absence of cross currency swap settlement and acquisition activity in 2023 which provided a net cash inflow of $22.3 million in 2022, partially offset by a reduction~~an increase in capital expenditures compared to the prior year.

Financing activities used ~~$92.5~~$144.8 million ~~more~~less cash in ~~2023~~2024 primarily due to the net ~~repayments~~borrowings made on the receivables facility in ~~2023~~2024 compared to having net ~~borrowings~~repayments in ~~2022. This was partially offset by lower repayments on our term loans~~2023 and higher proceeds received from stock options exercises in ~~2023~~2024 compared to the prior year.

~~Table of contents~~

Free cash flow


(in millions)	(in millions)	Nine months ended September 30,				Change		(in millions)	Three months ended March 31,	Change
		2023		2022
Net cash provided by operating activities	Net cash provided by operating activities	$	618.4	$	638.0	$	(19.6)
Net cash provided by operating activities
Net cash provided by operating activities

Capital expenditures	Capital expenditures	(95.8)		(99.8)		4.0
Capital expenditures
Capital expenditures
Free cash flow	Free cash flow	$	522.6	$	538.2	$	(15.6)

Free cash flow was ~~$15.6~~$84.6 million lower in ~~2023~~2024 primarily due to ~~the changes in cash flows from operating activities noted above, partially offset by slight reduction~~lower income before income taxes and an increase in capital spending across the Company in ~~2023.~~2024 as noted above.

Table of content s

Indebtedness

For information about our indebtedness, refer to the section entitled “Liquidity” and note 89 to our unaudited condensed consolidated financial statements included in Part I, Item 1 — “Financial statements.”

~~New accounting standards~~

~~There were no new accounting standards that we expect to have a material impact on our financial position or results of operations upon adoption.~~

Item 3. Quantitative and qualitative disclosures about market risk

~~There have been no significant changes to the~~Quantitative and qualitative disclosures about market risk ~~included~~appear in ~~our~~Item 7A in the Company’s 2023 Annual Report. There were no material changes during the quarter ended March 31, 2024 to this information as reported in the Company’s 2023 Annual Report.

Item 4. Controls and procedures

Management’s evaluation of disclosure controls and procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), as of the end of the period covered by this report. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of ~~September 30, 2023,~~March 31, 2024, the design and operation of our disclosure controls and procedures were effective to accomplish their objectives at the reasonable assurance level.

Changes in internal control over financial reporting

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) during the fiscal quarter ended ~~September 30, 2023,~~March 31, 2024, that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

PART II — OTHER INFORMATION

~~Table of contents~~

Item 1. Legal proceedings

For additional information regarding legal proceedings and matters, see note 78 to our unaudited condensed consolidated financial statements included in Part I, Item 1 — “Financial Statements,” which information is incorporated into this item by reference.

Item 1A. Risk factors

For information regarding factors that could affect the Company's results of operations, financial condition and liquidity, see the risk factors discussed in Part I, Item 1A “Risk Factors” in our Annual Report. There have been no material changes to the risk factors disclosed in Part I—Item 1A of the Annual Report.

Item 2. Unregistered sales of equity securities and use of proceeds

None.

Table of content s

Item 3. Defaults upon senior securities

None.

Item 4. Mine safety disclosures

Not applicable.

Item 5. Other information

~~None.~~Securities Trading Plans of Directors and Executive Officers

Our directors and officers (as defined in Exchange Act Rule 16a-1(f)) may from time to time enter into plans or other arrangements for the purchase or sale of our shares that are intended to satisfy the affirmative defense conditions of Rule 10b5–1(c) of the Exchange Act. During the quarter ended March 31, 2024, the following plans or arrangements were adopted:

On March 7, 2024, Christophe Couturier, Executive Vice President, AMEA adopted a Rule 10b5-1 trading plan (a “Plan”) pursuant to which he may sell up to (i) 265,605 shares of the Company's common stock through the exercise of stock options and (ii) 20,000 shares of the Company’s common stock, in each case, in amounts and at prices as determined in accordance with the plan terms. The Plan will terminate on the earlier of April 30, 2025, or the execution of all trades contemplated by the Plan.

On March 8, 2024, James Bramwell, Executive Vice President, Sales and Customer Excellence, adopted a Plan pursuant to which he may sell up to (i) 207,415 shares of the Company's common stock through the exercise of stock options and (ii) 43,867 shares of the Company’s common stock, in each case, in amounts and at prices as determined in accordance with the plan terms. The Plan will terminate on the earlier of March 14, 2025, or the execution of all trades contemplated by the Plan.

No other directors or officers, as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, of the Company adopted or terminated (i) a Rule 10b5-1 trading arrangement, as defined in Item 408(a) under Regulation S-K of the Securities Act of 1933, or (ii) a non-Rule 10b5-1 trading arrangement, as defined in Item 408(c) under Regulation S-K of the Securities Act of 1933, during the three months ended March 31, 2024.

3635

Table of ~~contents~~content s

Item 6. Exhibits

Location of exhibits

Exhibit no.

Exhibit description

Form

Exhibit no.

Filling date

10.1

8-K

10.1

4/5/2024

10.2^

Consulting Agreement dated April 3 , 2024 by and between VWR International, LLC and BrophyBio, LLC

10.3^

Scientific Advisory Board Consulting Agreement dated April 3 , 2024, by and between Avantor, Inc. and Gerard Brophy

10.4^

Amended and Restated Employment Letter Agreement, dated April 2, 2019, between Jim Bramwell and VWR International, LLC

10.5^

Employment Letter Agreement, dated April 11 , 2023, between Randy Stone and VWR Management Services, LLC

31.1

Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2

Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Table of content s

Location of exhibits

~~Exhibit no.~~

~~Exhibit description~~

~~Form~~

~~Exhibit no.~~

~~Filling date~~

~~10.1~~

Amendment No. 4 dated as of September 19, 2023 to the Receivables Purchase Agreement, dated as of March 27, 2020 (as amended by Amendment No.1 to Receivables Purchase Agreement, dated as of December 21, 2021, Amendment No.2 to Receivables Purchase Agreement, dated as of October 25, 2022 and Amendment No. 3 to Receivables Purchase Agreement, dated as of June 14, 2023), among Avantor Receivables Funding, LLC, VWR International, LLC, Avantor Funding, Inc., as performance guarantor, PNC Bank, National Association, as administrator, LC Bank, Related Committed Purchaser and Purchaser Agent, and Wells Fargo Bank, National Association, as Related Committed Purchaser, Purchaser Agent and LC Participant

~~31.1~~

~~Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002~~

~~31.2~~

~~Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002~~

32.1

Certification of Principal Executive Officer pursuant to 18 U.S.C. 1350 (Section 906 of the Sarbanes-Oxley Act of 2002)

32.2

Certification of Principal Financial Officer pursuant to 18 U.S.C. 1350 (Section 906 of the Sarbanes-Oxley Act of 2002)

101

XBRL exhibits

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

━━━━━━━━━

* Filled herewith

** Furnished herewith

^ Indicates management contract or compensatory plan, contract or arrangement.

Table of ~~contents~~content s

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	Avantor, Inc.

Date: ~~October 27, 2023~~April 26, 2024	By:	/s/ Steven Eck
		Name:	Steven Eck
		Title:	Senior Vice President, Chief Accounting Officer (Principal Accounting Officer)


(in millions)	Stockholders’ equity
	MCPS including paid-in capital			Common stock including paid-in capital			Accumulated earnings (deficit)		AOCI		Total
	Shares	Amount		Shares	Amount
Balance at December 31, 2022	—	$	—	674.3	$	3,785.3	$	1,170.4	$	(100.3)	$	4,855.4
Comprehensive income (loss)	—	—		—	—		222.6		(10.8)		211.8
Stock-based compensation expense	—	—		—	31.6		—		—		31.6

Stock option exercises and other common stock transactions	—	—		2.0	0.6		—		—		0.6

Balance at September 30, 2023	—	$	—	676.3	$	3,817.5	$	1,393.0	$	(111.1)	$	5,099.4

Balance at December 31, 2021	20.7	$	1,003.7	609.7	$	2,752.6	$	483.9	$	(43.2)	$	4,197.0

Comprehensive income (loss)	—	—		—	—		544.8		(168.6)		376.2

Stock-based compensation expense	—	—		—	39.1		—		—		39.1
Accumulation of yield on preferred stock	—	—		—	(24.2)		—		—		(24.2)
Stock option exercises and other common stock transactions	—	—		1.6	3.3		—		—		3.3
Conversion of MCPS into Common stock	(20.7)	(1,003.7)		62.9	1,003.7		—		—		—
Balance at September 30, 2022	—	$	—	674.2	$	3,774.5	$	1,028.7	$	(211.8)	$	4,591.4