NYSE: WTS

Advances in smart, connected, and software-enabled technologies have enabled companies to enhance products with sensing, connectivity, and data-driven insights. We are advancing our digital strategy through continued investment in internal digital capabilities and selective acquisitions. These investments include scalable system architecture, enhanced digital tools, customer-facing platforms and the development of new smart and connected products. Our strategy is focused on three core dimensions: connect, control, and conserve. We continue to introduce solutions that connect customers to intelligent systems, enable improved system control and performance, and support the conservation of critical resources by increasing efficiency, reliability, and safety. In 2024, we launched Nexa, an intelligent water management solution for buildings that integrate sensing technologies, smart and connected equipment, and software. In

2025, we expanded the range of our equipment portfolio that is integrated into Nexa, strengthening its unique value proposition of combining industry leading equipment solutions, with a cloud-based SaaS platform to provide actionable visibility into building water systems, supporting improved operational oversight, water risk management, and customer sustainability objectives.

We continue to focus on sustainability by taking steps to reduce the negative impact our operations have on the environment while generating economic value, and we manufacture and sell solutions, products and technologies that enable our customers to reduce their negative impact on the environment. As a leading global water technology company, we address some of the world’s most important sustainability priorities: the conservation, control and safe use of water. In 2024, we completed Life Cycle Assessments (“LCAs”) for all products manufactured at our largest production facility and foundry in Franklin, New Hampshire, covering many of our most impactful product lines. This initiative enabled the creation of 30 Environmental Product Declarations (“EPDs”) for our top-selling products, containing third-party verified documentation of environmental footprint of our products following strict global standards, enabling transparency and sustainability comparisons. We also have the ability to create EPDs for any product produced at our facility in Franklin. In 2025, we expanded this effort globally. BLÜCHER in Denmark now offers EPDs for its drains, channels and piping products, and we also have EPDs for underfloor heating manifolds manufactured in Landau, Germany, providing customers with vital environmental transparency data. Looking ahead, we have a defined timeline to complete EPDs for a significant number of major product lines throughout a number of our European locations by the end of 2026. These actions reflect our commitment to advancing product sustainability and delivering credible, third-party verified environmental information to our customers worldwide.

Our strategy is anchored by a commitment to connect our customers to smart systems, control those systems for optimal performance, and conserve critical water and other resources by increasing operability, efficiency, and safety. Operationally, we have reduced our global water consumption and greenhouse gas emissions, improved our safety performance, continued to foster an engaging work environment, and maintained robust ethics and compliance programs so that we do business with integrity and in accordance with high ethical standards.

We intend to generate incremental growth by targeting select acquisitions both in our core markets and in new complementary markets. We have completed 17 acquisitions since 2016. Our acquisition strategy focuses on businesses that manufacture preferred brand name products that address our themes of safety and regulation, energy efficiency and water conservation. We target businesses that will provide us with one or more of the following: an entry into new markets, improved channel access, unique and/or proprietary technologies, advanced production capabilities or complementary solution offerings. In the last three years, we have completed eight strategic and complementary acquisitions that expanded our addressable market and are intended to enable value creation through greater scale and growth opportunities.

We are committed to reducing our manufacturing and operating costs using Lean methodologies to drive improvement across all key processes. We have a number of manufacturing facilities in lower-cost regions, including a contract manufacturing facility in Mexico and manufacturing facilities in China, Bulgaria and Tunisia. In recent years, we have announced global restructuring plans which reduced our manufacturing and distribution footprint in order to reduce our costs and to realize incremental operating efficiencies.

Additionally, a majority of our manufacturing facilities are ISO 9001 certified by an accredited third party certification body to ISO standards.

The majority of our sales are for products that have been approved under regulatory standards incorporated into state and municipal plumbing, heating, building and fire protection codes in the Americas, Europe and certain countries within APMEA. We have consistently advocated for the development and enforcement of plumbing codes and are committed to providing products to meet these standards.

Products and Solutions

We have a broad range of products and solutions in terms of design distinction, size and configuration. We classify our many products and solutions into four global categories. These categories are:

● Residential and commercial flow control and protection—includes products and solutions typically sold into plumbing and hot water applications such as backflow preventers, water pressure regulators, temperature and pressure relief valves, thermostatic mixing valves, leak detection and protection products, commercial washroom solutions, hydration solutions and emergency safety products and equipment. Many of our flow control and protection products are now smart and connected enabled, warning of leaks, floods, freezing temperatures and other hazards with alerts to Building Management Systems (“BMS”) and/or personal devices giving our customers greater insight into their water management and the ability to shut off the water supply to avoid waste and mitigate damage. Residential & commercial flow control and protection products accounted for approximately 61%, 60% and 56% of our total net sales in 2025, 2024 and 2023, respectively.

● Heating, ventilation and air conditioning (“HVAC”) and gas—includes commercial, institutional and industrial high-efficiency boilers, water heaters and heating solutions, hydronic and electric heating systems for under-floor radiant applications, custom heat and hot water solutions, hydronic pump groups for boiler manufacturers and alternative energy control packages, and flexible stainless steel connectors for natural and liquid propane gas in commercial food service and residential applications. Most of our HVAC products and solutions feature advanced controls enabling customers to easily connect to the BMS for better monitoring, control and operation. HVAC & gas products and solutions accounted for approximately 23%, 24% and 29% of our total net sales in 2025, 2024 and 2023, respectively.

● Drainage and water re-use—includes drainage products and engineered rainwater harvesting solutions for commercial, industrial, marine and residential applications, including connected roof drain systems. Drainage & water re-use products and solutions accounted for approximately 11%, 11% and 10% of our total net sales in 2025, 2024 and 2023, respectively.

● Water quality—includes point-of-use, point-of-entry, closed loop, cooling tower, and other water applications used for water filtration, monitoring, conditioning and scale prevention systems for commercial, marine, light industrial and residential applications. Water quality products and solutions accounted for approximately 5% of our total net sales in 2025, 2024 and 2023.

Commercial and Operational Excellence

We strive to invest in product innovation that meets the wants and needs of our customers. Our focus is on differentiated products and solutions that will provide greater opportunities to distinguish ourselves in the marketplace. Our goal is to be a solutions provider, not merely a components supplier. We refer to this customer-facing mindset as commercial excellence, and we are continually looking for strategic opportunities to invest or divest, where necessary, in order to meet those objectives. In conjunction with this customer-centric focus, we continually review our operations to ensure we can efficiently and effectively produce and deliver products to customers. We are also striving to simplify our administrative operations to drive further efficiencies. We call this aspect of our business operational excellence. In 2024, we initiated a multi-year implementation of the SAP Enterprise Resource Planning (“ERP”) system across our Americas and APMEA regions to consolidate business systems, enhance productivity, and support our smart and connected strategy. The new ERP platform is designed to enable commercial and operational excellence by providing a modern, standardized, and connected experience for our teams. In 2025, we successfully implemented the system at one manufacturing and one distribution location in the Americas, establishing a blueprint for future deployments. This achievement sets the foundation for a strategic rollout roadmap in 2026 and beyond, focused on scaling implementations across key facilities to drive efficiency, improve data visibility, and strengthen operational performance globally.

Customers and Markets

We sell our products and solutions to plumbing, heating and mechanical wholesale distributors and dealers, original equipment manufacturers (“OEMs”), specialty product distributors, and major do-it-yourself (“DIY”) and retail chains.

Wholesalers. Approximately 66%, 66% and 62% of our net sales in 2025, 2024 and 2023, respectively, were to wholesale distributors for commercial and residential applications.

OEMs. Approximately 10%, 11% and 15% of our net sales in 2025, 2024 and 2023, respectively, were to OEMs. In the Americas, our typical OEM customers are water heater manufacturers and equipment and water systems manufacturers needing flow control devices and other products. Our sales to OEMs in Europe are primarily to boiler manufacturers and radiant system manufacturers. Our sales to OEMs in APMEA are primarily to water heaters, air conditioning, and appliance manufacturers.

Specialty. Approximately 21%, 19% and 19% of our net sales in 2025, 2024 and 2023, respectively, were through our specialty channel. The specialty channel primarily includes sales related to high-efficiency boilers and water heaters, water filtration and conditioning products and solutions, specialty floor and tile products, food service products and leak detection products.

DIY Chains. Approximately 3%, 4%, and 4% of our net sales in each of 2025, 2024 and 2023, respectively, were to DIY chains. The DIY channel primarily includes sales related to valves and a portion of our water quality products.

In 2025, 2024 and 2023, no customer accounted for more than 10% of our total net sales. Our top ten customers accounted for $570.3 million, or 23.4%, of our total net sales in 2025; $512.0 million, or 22.7%, of our total net sales in 2024; and $440.4 million, or 21.4%, of our total net sales in 2023. Thousands of other customers constituted the balance of our net sales in each of those years.

Marketing and Sales

For product sales in the Americas, we rely primarily on commissioned manufacturers’ representatives to market our product lines, some of which maintain a consigned inventory of our products. These representatives sell primarily to plumbing and heating wholesalers and contractors or supply DIY stores. Our specialty channel products in the Americas are sold through independent representatives, dealers and distributors. We also sell products directly to wholesalers, OEMs and private label accounts primarily in Europe and APMEA, and, to a lesser extent, in the Americas.

We aim to inform and educate our channel partners, installers and end-use customers on how to maximize our product solutions. We do so through a variety of traditional and digital marketing avenues, including social media, trade shows, and advertising. We pride ourselves in providing industry leading product education through four distinct training vehicles: Online Courses, on-location Lunch and Learns, Live and Virtual Instructor Led Training, and Continuing Education Units (CEUs) for designers.

Manufacturing

We have integrated and automated manufacturing capabilities, including a state-of-the-art foundry dedicated exclusively to the production of products that qualify as “lead-free” under the U.S. Safe Drinking Water Act; and machining capabilities, plastic extrusion, and injection molding and assembly operations. Our foundry operations include metal pouring systems, automatic core making, and brass and bronze die-castings. Our machining operations feature computer-controlled machine tools, high-speed chucking machines with robotics, robotic assembly capability, laser-cutting technology, and automatic screw machines for machining bronze, brass and steel components. Our heating and hot water product manufacturing capabilities include all phases of light and heavy gauge metal fabrication, incorporating the latest technology for welding and brazing, as well as laser cutting; automated and robotic applications; and metal finishing, which includes chemical passivation of stainless steel. We have invested in recent years to expand our manufacturing capabilities and to adopt the most efficient and productive equipment. We are committed to maintaining our manufacturing equipment at a level consistent with current technology in order to maintain high levels of quality and manufacturing efficiencies. In 2025, we continued to invest in our systems, our manufacturing facilities and our commercial and operational excellence initiatives.

Capital expenditures and depreciation for each of the last three years were as follows:

Years Ended December 31,

​ ​ ​

2025

​ ​ ​

2024

​ ​ ​

(in millions)

Capital expenditures

$

45.7

$

35.3

$

29.7

Depreciation

$

36.2

$

34.6

$

30.1

Purchased Raw Materials and Components

Our products are made using various purchased components and raw materials, including primarily bronze, brass, cast iron, stainless steel, steel, and plastic. Substantially all these materials are sourced from external suppliers. The commodity markets have experienced tremendous volatility over the past several years, particularly with respect to copper and stainless steel, and we have experienced high inflationary pressures in these markets. Tariffs impact the total cost of our products and the components and raw materials that go into manufacturing them. The tariffs imposed in 2025 on foreign imports to the United States, particularly from Canada, China and Mexico, have increased the costs of our products and could adversely impact the gross margin we earn on our products. Because we internationally source a significant number of raw materials and components, several months of raw materials and work in process are moving through our supply chain at any point in time. We cannot predict whether component costs or commodity costs, including copper and stainless steel, will significantly increase or decrease in the future. If component costs or commodity costs increase in the future and we cannot reduce or eliminate the effect of the cost increases by reducing production costs or implementing price increases, our profit margins could decrease. If component costs or commodity costs were to decline, we may experience pressure from customers to reduce our selling prices. The timing of any price reductions and decreases in commodity costs may not align. As a result, our margins could be affected.

With limited exceptions, we have multiple suppliers for our components and raw materials. Although we believe that our strategic partnerships with key suppliers are strong, an interruption in supply from any one supplier could potentially affect our short-term ability to meet immediate demands while alternate sources of supply continue to be qualified. We regularly review our suppliers to evaluate their capabilities and to ensure that they continue to align with our needs. If a supplier is unable to meet our demands, we believe that in most cases our inventory positions of components and raw materials will allow for sufficient time to identify and obtain the necessary commodities and other raw materials from alternative pre-qualified secondary sources. We believe that the nature of the components and raw materials used in our business are such that multiple sources are generally available in the global market. Our current supply chain continues to leverage countries in Asia. The occurrence of natural disasters, public health crises such as pandemics or epidemics, political crises such as war, terrorism or political instability, or other events that result in widespread business or supply chain disruptions or the imposition of tariffs that make it more costly or cost prohibitive to source raw materials from countries in Asia could have a material adverse effect on our ability to obtain necessary components and raw materials at times, and our business and operating results could suffer. Alternative sources for raw materials may not be readily available or available at reasonable cost.

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