Vontier VNT Form 10-Q filing Q3 FY2024

Item 1. Financial Statements (unaudited)

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

VONTIER CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS

(in millions, except per share amounts)

See the accompanying Notes to the Consolidated Condensed Financial Statements.

VONTIER CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME

(in millions, except per share amounts)

(unaudited)

See the accompanying Notes to the Consolidated Condensed Financial Statements.

VONTIER CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN EQUITY

(in millions, except per share amounts)

(unaudited)

See the accompanying Notes to the Consolidated Condensed Financial Statements.

VONTIER CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN EQUITY (continued)

(in millions, except per share amounts)

(unaudited)

See the accompanying Notes to the Consolidated Condensed Financial Statements.

VONTIER CORPORATION AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(in millions)

(unaudited)

See the accompanying Notes to the Consolidated Condensed Financial Statements.

VONTIER CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

(unaudited)

NOTE 1. BUSINESS OVERVIEW AND BASIS OF PRESENTATION

Nature of Business

Vontier Corporation (“Vontier” or the “Company”) is a global industrial technology company uniting productivity, automation and multi-energy technologies to meet the needs of a rapidly evolving, more connected mobility ecosystem. The Company operates through three reportable segments which align to the Company’s three operating segments: (i) Mobility Technologies, which provides digitally enabled equipment and solutions to support efficient operations across the mobility ecosystem, including point-of-sale and payment systems, workflow automation solutions, telematics, data analytics, software platform for electric vehicle charging networks, and integrated solutions for alternative fuel dispensing; (ii) Repair Solutions, which manufactures and distributes aftermarket vehicle repair tools, toolboxes, automotive diagnostic equipment and software through a network of mobile franchisees; and (iii) Environmental & Fueling Solutions, which provides environmental and fueling hardware and software, and aftermarket solutions for global fueling infrastructure. The Company’s Global Traffic Technologies and Coats businesses, which were divested during April 2023 and January 2024, respectively, are presented in Other for periods prior to the divestitures.

Basis of Presentation and Unaudited Interim Financial Information

The accompanying Consolidated Condensed Financial Statements present the Company’s historical financial position, results of operations, changes in equity and cash flows in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and are unaudited.

The interim Consolidated Condensed Financial Statements include the accounts of Vontier and its subsidiaries. All intercompany balances and transactions have been eliminated upon consolidation. The Consolidated Condensed Financial Statements also reflect the impact of noncontrolling interests. Noncontrolling interests do not have a significant impact on the Company’s consolidated results of operations, therefore, net earnings and net earnings per share attributable to noncontrolling interests are not presented separately in the Company’s Consolidated Condensed Statements of Earnings and Comprehensive Income. Net earnings attributable to noncontrolling interests have been reflected in selling, general and administrative expenses (“SG&A”) and were insignificant in all periods presented.

In the opinion of the Company’s management, all adjustments of a normal recurring nature necessary for a fair presentation have been reflected. Certain financial information that is normally included in annual financial statements prepared in accordance with GAAP, but that is not required for interim reporting purposes, has been omitted. The accompanying interim Consolidated Condensed Financial Statements and the related notes should be read in conjunction with the Company’s Consolidated Financial Statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Annual Report on Form 10-K”).

Foreign Currency Translation and Transactions

Exchange rate adjustments resulting from foreign currency transactions are recognized in Net earnings, whereas effects resulting from the translation of financial statements are reflected as a component of Accumulated other comprehensive income within equity. Assets and liabilities of subsidiaries operating outside the United States with a functional currency other than U.S. dollars are translated into U.S. dollars using period-end exchange rates and income statement accounts are translated at weighted average exchange rates. Net foreign currency transaction gains or losses were not material in any of the periods presented.

Reclassifications

Certain prior year amounts have been reclassified to conform to the current year presentation.

Recently Issued Accounting Standards Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”), which requires consistent categories and greater disaggregation of information in the rate reconciliation and disaggregation of income taxes paid by jurisdiction. ASU 2023-09 is effective for the Company’s annual financial statements for the year ended December 31, 2025, with early adoption permitted. Prospective application is required, with retrospective application permitted. The Company is currently assessing the impact ASU 2023-09 will have on its consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which enhances segment disclosures primarily by requiring disclosure of significant segment expenses. ASU 2023-07 is effective for the Company’s annual financial statements for the year ended December 31, 2024, and for its interim financial statements beginning with the first fiscal quarter of the year ended December 31, 2025, with early adoption permitted. Retrospective application is required. Adoption of the ASU will expand the Company’s segment disclosures, and will have no impact on its results of operations, cash flows or financial condition.

NOTE 2. FINANCING AND TRADE RECEIVABLES

The Company’s financing receivables are comprised of commercial purchase security agreements originated between the Company’s franchisees and technicians or independent shop owners that are assumed by the Company (“PSAs”) and commercial loans to the Company’s franchisees (“Franchisee Notes”) in the Repair Solutions segment. Financing receivables are generally secured by the underlying tools and equipment financed.

PSAs are installment sales contracts originated between the franchisee and technicians or independent shop owners which enable these customers to purchase tools and equipment on an extended-term payment plan. PSA payment terms are generally up to five years. Upon origination, the Company assumes the PSA by crediting the franchisee’s trade accounts receivable. As a result, originations of PSAs are non-cash transactions. The Company records PSAs at amortized cost.

Franchisee Notes have payment terms of up to 10 years and include financing to fund business startup costs including: (i) installment loans to franchisees used generally to finance inventory, equipment, and franchise fees; and (ii) lines of credit to finance working capital, including additional purchases of inventory.

Revenues associated with the Company’s interest income related to financing receivables are recognized to approximate a constant effective yield over the contract term. Accrued interest is included in Accounts receivable, less allowance for credit losses on the Consolidated Condensed Balance Sheets and was insignificant as of September 27, 2024 and December 31, 2023.

Product sales to franchisees and the related financing income is included in Cash flows from operating activities in the accompanying Consolidated Condensed Statements of Cash Flows.

The components of financing receivables with payments due in less than twelve months that are presented in Accounts receivable, less allowance for credit losses on the Consolidated Condensed Balance Sheets were as follows:

The components of Long-term financing receivables, less allowance for credit losses, which consists of financing receivables with payments due beyond one year, were as follows:

As of September 27, 2024 and December 31, 2023, the net unamortized discount on our financing receivables was $18.6 million and $17.6 million, respectively.

Credit score and distributor tenure are the primary indicators of credit quality for the Company’s financing receivables. The amortized cost basis and current period gross write-offs of PSAs and Franchisee Notes by origination year as of and for the nine months ended September 27, 2024, is as follows:

Past Due

PSAs are considered past due when a contractual payment has not been made. If a customer is making payments on its account, interest will continue to accrue. The table below sets forth the aging of the Company’s PSA balances as of:

Franchisee Notes are considered past due when payments have not been made for 21 days after the due date. Past due Franchisee Notes (where the franchisee had not yet separated) were insignificant as of September 27, 2024 and December 31, 2023.

Uncollectable Status

PSAs are deemed uncollectable and written off when they are both contractually delinquent and no payment has been received for 180 days.

Franchisee Notes are deemed uncollectable and written off after a distributor separates and no payments have been received for one year.

The Company stops accruing interest and other fees associated with financing receivables when (i) a customer is placed in uncollectable status and repossession efforts have begun; (ii) upon receipt of notification of bankruptcy; (iii) upon notification of the death of a customer; or (iv) other instances in which management concludes collectability is not reasonably assured.

Allowance for Credit Losses Related to Financing Receivables

The Company calculates the allowance for credit losses considering several factors, including the aging of its financing receivables, historical credit loss and portfolio delinquency experience and current economic conditions. The Company also evaluates financing receivables with identified exposures, such as customer defaults, bankruptcy or other events that make it unlikely it will recover the amounts owed to it. In calculating such reserves, the Company evaluates expected cash flows, including estimated proceeds from disposition of collateral, and calculates an estimate of the potential loss and the probability of loss. When a loss is considered probable on an individual financing receivable, a specific reserve is recorded.

The following is a rollforward of the PSAs and Franchisee Notes components of the Company’s allowance for credit losses related to financing receivables as of:

Allowance for Credit Losses Related to Trade Accounts Receivables

The following is a rollforward of the allowance for credit losses related to the Company’s trade accounts receivables, excluding financing receivables, and the Company’s trade accounts receivable cost basis as of:

NOTE 3. INVENTORIES

The classes of inventory as of September 27, 2024 and December 31, 2023 are summarized as follows:

NOTE 4. FINANCING

The Company had the following debt outstanding as of:

The Company’s long-term debt requires, among others, that the Company maintains certain financial covenants, and the Company was in compliance with all of these covenants as of September 27, 2024.

Credit Facilities

Revolving Credit Facility

The Revolving Credit Facility bears interest at a variable rate equal to SOFR plus an 11.4 basis points SOFR adjustment, plus a ratings-based margin which was 117.5 basis points as of September 27, 2024. As of September 27, 2024, there were no borrowings outstanding and $750.0 million of available borrowing capacity under the Revolving Credit Facility.

Three-Year Term Loans Due 2024

The Three-Year Term Loans Due 2024 were to mature on October 28, 2024. The Company was not obligated to make repayments prior to the maturity date but did voluntarily repay the remaining $100.0 million outstanding as of December 31, 2023 during the nine months ended September 27, 2024.

Three-Year Term Loans Due 2025

The Three-Year Term Loans Due 2025 (“Term Loans”), which mature on December 30, 2025, bear interest at a variable rate equal to SOFR plus a 10.0 basis points credit spread adjustment, plus a ratings-based margin which was 125.0 basis points as of September 27, 2024. The interest rate was 6.60% per annum as of September 27, 2024. There was no material difference between the carrying value and the estimated fair value of the debt outstanding as of September 27, 2024.

Senior Unsecured Notes

The Company’s senior unsecured notes (collectively, the “Registered Notes”) consist of the following:

• $500.0 million aggregate principal amount of senior notes due April 1, 2026 bearing interest at the rate of 1.800% per year;
• $500.0 million aggregate principal amount of senior notes due April 1, 2028 bearing interest at the rate of 2.400% per year; and
• $600.0 million aggregate principal amount of senior notes due April 1, 2031 bearing interest at the rate of 2.950% per year.

The estimated fair value of the Registered Notes was $1.5 billion as of September 27, 2024. The fair value of the Registered Notes was determined based upon Level 2 inputs including indicative prices based upon observable market data. The difference between the fair value and the carrying amounts of the Registered Notes may be attributable to changes in market interest rates and/or the Company’s credit ratings subsequent to the incurrence of the borrowing.

Short-term Borrowings

As of September 27, 2024, certain of the Company’s businesses were in a cash overdraft position, and such overdrafts are included in Short-term borrowings and current portion of long-term debt on the Consolidated Condensed Balance Sheets. Additionally, the Company has other short-term borrowing arrangements with various banks to facilitate short-term cash flow requirements in certain countries also included in Short-term borrowings and current portion of long-term debt on the Consolidated Condensed Balance Sheets. Given the nature of the short-term borrowings, the carrying value approximates fair value as of September 27, 2024.

NOTE 5. ACCUMULATED OTHER COMPREHENSIVE INCOME

Foreign currency translation adjustments are generally not adjusted for income taxes as they relate to indefinite investments in non-U.S. subsidiaries.

The changes in Accumulated other comprehensive income by component are summarized below:

NOTE 6. SALES

Contract Assets

In certain circumstances, contract assets are recorded which include unbilled amounts typically resulting from sales under contracts when revenue recognized exceeds the amount billed to the customer, and right to payment is subject to contractual performance obligations rather than subject only to the passage of time. Contract assets were $8.4 million and $6.8 million as of September 27, 2024 and December 31, 2023, respectively, and are included in Prepaid expenses and other current assets in the accompanying Consolidated Condensed Balance Sheets.

Contract Costs

The Company incurs direct incremental costs to obtain and fulfill certain contracts, typically costs associated with assets used by our customers in certain sales arrangements and sales-related commissions. As of September 27, 2024 and December 31, 2023, the Company had $105.9 million and $90.9 million, respectively, in revenue-related capitalized contract costs primarily related to assets used by the Company’s customers in certain software contracts, which are recorded in Prepaid expenses and other current assets, for the current portion, and Other assets, for the noncurrent portion, in the accompanying Consolidated Condensed Balance Sheets.

Contract Liabilities

The Company’s contract liabilities consist of deferred revenue generally related to customer deposits, post contract support (“PCS”) and extended warranty sales. In these arrangements, the Company generally receives up-front payment and recognizes revenue over the support term of the contracts where applicable. Deferred revenue is classified as current or noncurrent based on the timing of when revenue is expected to be recognized and is included in Accrued expenses and other current liabilities and Other long-term liabilities, respectively, in the accompanying Consolidated Condensed Balance Sheets.

The Company’s contract liabilities consisted of the following:

During the three and nine months ended September 27, 2024, the Company recognized $15.6 million and $92.1 million of revenue related to the Company’s contract liabilities at December 31, 2023, respectively. The change in contract liabilities from December 31, 2023 to September 27, 2024 was primarily due to the timing of cash receipts and sales of PCS and extended warranty services.

Remaining Performance Obligations

Remaining performance obligations represent the transaction price allocated to performance obligations which are unsatisfied as of the end of the period. The Company has excluded performance obligations with an original expected duration of one year or less and amounts for variable consideration allocated to wholly-unsatisfied performance obligations. Remaining performance obligations as of September 27, 2024 were $480.6 million, the majority of which are related to software-as-a-service and extended warranty and service contracts. The Company expects approximately 65 percent of the remaining performance obligations will be fulfilled within the next two years, 80 percent within the next three years, and 90 percent within four years.

Disaggregation of Revenue

Revenue from contracts with customers is disaggregated by sales of products and services and geographic location for each of our reportable segments, as it best depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors.

Disaggregation of revenue was as follows for the three months ended September 27, 2024:

(a) Includes total sales in the United States of $510.0 million.

Disaggregation of revenue was as follows for the three months ended September 29, 2023:

(a) Includes total sales in the United States of $543.1 million.

Disaggregation of revenue was as follows for the nine months ended September 27, 2024:

(a) Includes total sales in the United States of $1,525.4 million.

Disaggregation of revenue was as follows for the nine months ended September 29, 2023:

(a) Includes total sales in the United States of $1,613.4 million.

NOTE 7. INCOME TAXES

The Company’s effective tax rate for the three and nine months ended September 27, 2024 was 18.3% and 18.6%, respectively, as compared to 24.4% and 24.6% for the three and nine months ended September 29, 2023, respectively. The decrease in the effective tax rate for the three months ended September 27, 2024 as compared to the comparable period in the prior year was primarily due to a favorable change in uncertain tax position reserves during the three months ended September 27, 2024. The decrease in the effective tax rate for the nine months ended September 27, 2024 as compared to the comparable period in the prior year was primarily due to the favorable tax impacts of the divestiture of the Coats business and a favorable change in uncertain tax position reserves during the nine months ended September 27, 2024 and the unfavorable tax impacts of the divestiture of the Global Traffic Technologies business during the nine months ended September 29, 2023.

The Company’s effective tax rate for the three and nine months ended September 27, 2024 differs from the U.S. federal statutory rate of 21% primarily due to the effect of state taxes, tax credits, changes in uncertain tax position reserves and the impact of the divestiture of the Coats business. The Company’s effective tax rate for the three and nine months ended September 29, 2023 differs from the U.S. federal statutory rate of 21% primarily due to the effect of state taxes and foreign taxable earnings at a rate different from the U.S. federal statutory rate.

NOTE 8. SEGMENT INFORMATION

Segment operating profit is used as a performance metric by the chief operating decision maker (“CODM”) in determining how to allocate resources and assess performance. Segment operating profit represents total segment sales less operating costs attributable to the segment, which does not include unallocated corporate costs and other operating costs not allocated to the reportable segments as part of the CODM’s assessment of reportable segment operating performance, including stock-based compensation expense, amortization of acquisition-related intangible assets, restructuring costs, transaction- and deal-related costs, and other costs not indicative of the segment’s core operating performance. As part of the CODM’s assessment of the Repair Solutions segment, a capital charge based on the segment’s financing receivables portfolio is assessed by Corporate (the “Repair Solutions Capital Charge”). The unallocated corporate and other operating costs are presented in Corporate & other unallocated costs in the reconciliation to earnings before income taxes below.

Intersegment sales primarily result from solutions developed by the Mobility Technologies segment that are integrated into products sold by the Environmental & Fueling Solutions segment. Intersegment sales are recorded at cost plus a margin which is intended to reflect the contribution made by the Mobility Technologies segment. Segment operating profit includes the operating profit from intersegment sales. Intersegment sales for the three and nine months ended September 29, 2023 are not significant and have been eliminated in the segments’ results.

The Company’s CODM does not review any information regarding total assets on a segment basis.

Segment results for the periods indicated were as follows:

(a) Includes intersegment sales of $9.4 million and $14.2 million for the three and nine months ended September 27, 2024, respectively.

(b) Includes interest income related to financing receivables of $19.2 million, $19.7 million, $57.7 million and $58.5 million for the three and nine months ended September 27, 2024 and September 29, 2023, respectively.

(c) Includes the Repair Solutions Capital Charge of $11.1 million, $10.5 million, $32.9 million and $31.0 million for the three and nine months ended September 27, 2024 and September 29, 2023, respectively.

(d) Includes amortization of acquisition-related intangible assets.

NOTE 9. LITIGATION AND CONTINGENCIES

Warranty

Estimated warranty costs are generally accrued at the time of sale. In general, manufactured products are warrantied against defects in material and workmanship when properly used for their intended purpose, installed correctly and appropriately maintained. Warranty period terms depend on the nature of the product and range from 90 days up to the life of the product. The amount of the accrued warranty liability is determined based on historical information such as past experience, product failure rates or number of units repaired, estimated cost of material and labor, and in certain instances, estimated property damage. The accrued warranty liability is reviewed on a quarterly basis and may be adjusted as additional information regarding expected warranty costs becomes known.

The following is a rollforward of the accrued warranty liability:

Litigation and Other Contingencies

The Company is involved in legal proceedings from time to time in the ordinary course of its business. Although the outcome of such matters is uncertain, management believes that these legal proceedings will not have a material adverse effect on the financial condition or results of future operations of the Company.

In accordance with accounting guidance, the Company records a liability in the Consolidated Condensed Financial Statements for loss contingencies when a loss is known or considered probable and the amount can be reasonably estimated. If the reasonable estimate of a known or probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is accrued. If a loss does not meet the known or probable level but is reasonably possible and a loss or range of loss can be reasonably estimated, the estimated loss or range of loss is disclosed.

Gross liabilities associated with known and future expected asbestos claims and projected insurance recoveries were as follows as of:

Guarantees

As of September 27, 2024 and December 31, 2023, the Company had guarantees consisting primarily of outstanding standby letters of credit, bank guarantees, and performance and bid bonds of approximately $80.8 million and $79.2 million, respectively. These guarantees have been provided in connection with certain arrangements with vendors, customers, financing counterparties, and governmental entities to secure the Company’s obligations and/or performance requirements related to specific transactions.

NOTE 10. FAIR VALUE MEASUREMENTS

Below is a summary of financial assets and liabilities that are measured at fair value on a recurring basis as of:

Contingent Consideration

The fair value of the contingent consideration liabilities relates to payments to previous owners of acquired companies contingent on the achievement of certain revenue targets. The Company records a liability for contingent consideration in the purchase price for acquisitions at fair value on the acquisition date, and remeasures the liability at each reporting date, based on the Company’s estimate of the expected probability of achievement of the contingency targets. This estimate is based on significant unobservable inputs and represents a Level 3 measurement within the fair value hierarchy.

Nonrecurring Fair Value Measurements

Certain assets and liabilities are carried on the accompanying Consolidated Condensed Balance Sheets at cost and are not remeasured to fair value on a recurring basis. These assets include finite-lived intangible assets, which are tested for impairment when a triggering event occurs, and goodwill and identifiable indefinite-lived intangible assets, which are tested for impairment at least annually as of the first day of the fourth quarter or more frequently if events and circumstances indicate that the asset may not be recoverable.

As of September 27, 2024, assets carried on the balance sheet and not remeasured to fair value on a recurring basis included $1.7 billion of goodwill and $508.6 million of identifiable intangible assets, net.

NOTE 11. CAPITAL STOCK AND EARNINGS PER SHARE

Earnings Per Share

Basic earnings per share is calculated by dividing net earnings by the weighted average number of shares of common stock outstanding. Diluted earnings per share is calculated by adjusting weighted average common shares outstanding for the dilutive effect of the assumed issuance of shares under stock-based compensation plans, determined using the treasury-stock method, except where the inclusion of such shares would have an anti-dilutive impact.

Information related to the calculation of net earnings per share of common stock is summarized as follows:

Share Repurchase Program

On May 24, 2022, the Company’s Board of Directors approved a replenishment of the Company’s previously approved share repurchase program announced in May 2021, bringing the total amount authorized for future share repurchases to $500.0 million. Under the share repurchase program, the Company may purchase shares of common stock from time to time in open market transactions, privately negotiated transactions, accelerated share repurchase programs, or by combinations of such methods, any of which may use prearranged trading plans that are designed to meet the requirements of Rule 10b5-1(c) of the Securities Exchange Act of 1934. The timing of any repurchases and the actual number of shares repurchased will depend on a variety of factors, including the Company’s stock price, corporate and regulatory requirements, restrictions under the Company’s debt obligations and other market and economic conditions. The share repurchase program may be suspended or discontinued at any time and has no expiration date.

During the three months ended September 27, 2024, the Company entered into an accelerated share repurchase (“ASR”) agreement with a third-party institution, whereupon the Company made a prepayment of $100.0 million. The ASR agreement settled during the three months ended September 27, 2024. The Company received 3.0 million of the Company’s shares at an average price per share of $33.84 under the ASR.

During the three months ended September 27, 2024, the Company also repurchased 0.1 million of the Company’s shares through open market transactions for $4.8 million, at an average price per share of $36.22. During the nine months ended September 27, 2024, the Company repurchased 1.6 million of the Company’s shares through open market transactions for $64.6 million, at an average price per share of $38.07.

As of September 27, 2024, the Company has remaining authorization to repurchase $189.8 million of its common stock under the share repurchase program.

NOTE 12. DIVESTITURES

On January 8, 2024, the Company completed the sale of Coats for $72.4 million. As a result of the transaction, the Company recognized a gain of $37.2 million during the nine months ended September 27, 2024, which is presented in Gain on sale of business in the Consolidated Condensed Statements of Earnings and Comprehensive Income. There is a transition services agreement (the “TSA”) in place between the Company and Coats which sets forth the terms and conditions pursuant to which the Company will provide certain services to Coats. Receipts related to the TSA were insignificant for the three and nine months ended September 27, 2024. The operations of Coats did not meet the criteria to be presented as discontinued operations.

NOTE 13. SUBSEQUENT EVENTS

In October 2024, the Company repurchased 0.7 million of the Company’s shares through open market transactions for $23.6 million.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is designed to provide a reader of our financial statements with a narrative from the perspective of management and is intended to help the reader understand the results of operations and financial condition of the Company. Our MD&A should be read in conjunction with our MD&A and Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (the “2023 Annual Report on Form 10-K”) and our Consolidated Condensed Financial Statements as of and for the three and nine months ended September 27, 2024 included in this Form 10-Q.

conference calls, materials delivered to shareholders and other communications, are “forward-looking statements” within the meaning of the United States federal securities laws.

OVERVIEW

General

Vontier is a global industrial technology company uniting productivity, automation and multi-energy technologies to meet the needs of a rapidly evolving, more connected mobility ecosystem. Leveraging leading market positions, decades of domain expertise and unparalleled portfolio breadth, Vontier enables the way the world moves, delivering smart, safe and sustainable solutions to our customers and the planet. Vontier has a culture of continuous improvement and innovation built upon the foundation of the Vontier Business System and embraced by colleagues worldwide.

We operate through three reportable segments which align to our three operating segments: (i) Mobility Technologies, which provides digitally enabled equipment and solutions to support efficient operations across the mobility ecosystem, including point-of-sale and payment systems, workflow automation solutions, telematics, data analytics, software platform for electric vehicle charging networks, and integrated solutions for alternative fuel dispensing; (ii) Repair Solutions, which manufactures and distributes aftermarket vehicle repair tools, toolboxes, automotive diagnostic equipment and software through a network of mobile franchisees; and (iii) Environmental & Fueling Solutions, which provides environmental and fueling hardware and software, and aftermarket solutions for global fueling infrastructure. Our Global Traffic Technologies and Coats businesses, which were divested during April 2023 and January 2024, respectively, are presented in Other for periods prior to the divestitures.

Outlook

We expect core sales growth for the year ended December 31, 2024 to be lower than our longer-term growth expectations due to softening in certain of our end markets as further discussed below in “Results of Operations”. Our outlook is subject to various assumptions and risks, including but not limited to the resilience and durability of the economies of the United States and other critical regions, ongoing challenges with global logistics and supply chain including the availability of electronic components, the impact of international conflicts, including Russia-Ukraine and conflicts in the Middle East, market conditions in key end product segments, and the impact of energy disruption in Europe. Additional uncertainties are identified in “Information Relating to Forward-Looking Statements” above and in “Risk Factors” in our 2023 Annual Report on Form 10-K.

We continue to monitor the macroeconomic and geopolitical conditions which may impact our business, including monetary and fiscal policies, changes in the banking system, international trade and relations between the U.S., China and other nations, and investment and taxation policy initiatives being considered in the United States and by the Organization for Economic Co-operation and Development (the “OECD”). We also continue to monitor the Russia-Ukraine conflict and conflicts in the Middle East and the impact on our business and operations. As of the filing date of this report, we do not believe they are material.

RESULTS OF OPERATIONS

Comparison of Results of Operations

(a) Excluding amortization of acquisition-related intangible assets.

Sales

The components of our consolidated sales growth were as follows for the periods indicated:

Sales for each of our segments were as follows for the periods indicated:

Mobility Technologies

The components of sales growth for our Mobility Technologies segment were as follows for the periods indicated:

Total sales within our Mobility Technologies segment increased 3.9% during the three months ended September 27, 2024, as compared to the comparable period in 2023, driven by a 4.2% increase in core sales, partially offset by a 0.3% decrease due to the impact of currency translation. The increase in core sales was primarily due to solid demand for our convenience store payment and enterprise productivity solutions, partially offset by lower demand for our car wash solutions.

Total sales within our Mobility Technologies segment increased 0.7% during the nine months ended September 27, 2024, as compared to the comparable period in 2023, driven by a 1.9% increase in core sales, partially offset by a 1.2% decrease due to the impact of currency translation. The increase in core sales was primarily due to solid demand for our convenience store payment and enterprise productivity solutions, partially offset by lower demand for our car wash solutions.

Repair Solutions

The components of sales growth for our Repair Solutions segment were as follows for the periods indicated:

Total sales and core sales within our Repair Solutions segment decreased 5.1% during the three months ended September 27, 2024, as compared to the comparable period in 2023, primarily due to a decrease in the specialty tools, tool storage and power tools product categories driven by macroeconomic impacts on service technicians’ discretionary spending.

Total sales and core sales within our Repair Solutions segment decreased 2.9% during the nine months ended September 27, 2024, as compared to the comparable period in 2023, primarily due to a decrease in the power tools, hardline and tool storage product categories driven by macroeconomic impacts on service technicians’ discretionary spending, partially offset by an increase in the diagnostics product category.

Environmental & Fueling Solutions

The components of sales growth for our Environmental & Fueling Solutions segment were as follows for the periods indicated:

Total sales within our Environmental & Fueling Solutions segment increased 5.5% during the three months ended September 27, 2024, as compared to the comparable period in 2023, driven primarily by a 8.5% increase in core sales, partially offset by a 2.3% decrease due to the impact of recently exited businesses and product lines and a 0.7% decrease due to the impact of currency translation. The increase in core sales was primarily due to strong demand for dispenser systems, aftermarket products and environmental solutions.

Total sales within our Environmental & Fueling Solutions segment increased 0.8% during the nine months ended September 27, 2024, as compared to the comparable period in 2023, driven primarily by a 4.2% increase in core sales, partially offset by a 2.7% decrease due to the impact of recently exited businesses and product lines and a 0.7% decrease due to the impact of currency translation. The increase in core sales was driven by higher demand for aftermarket products and environmental solutions.

Cost of Sales

Cost of sales, excluding amortization of acquisition-related intangible assets, decreased $10.6 million, or 2.6%, for the three months ended September 27, 2024, as compared to the comparable period in 2023, primarily due to the impact of recently divested and exited businesses and product lines partially offset by an increase in cost of sales from core sales growth that have been partially mitigated through cost optimization.

Cost of sales, excluding amortization of acquisition-related intangible assets, decreased $105.6 million, or 8.5%, for the nine months ended September 27, 2024, as compared to the comparable period in 2023, primarily due to the impact of recently divested and exited businesses and product lines and cost optimization.

Operating Costs and Other Expenses

SG&A Expenses

SG&A expenses decreased $0.2 million, or 0.1%, during the three months ended September 27, 2024, as compared to the comparable period in 2023, and as a percentage of sales, increased 40 basis points during the same period, primarily due to the impact of recently divested and exited businesses and product lines, partially offset by the impact of reserve-related adjustments to the Repair Solutions receivables portfolio and inflationary pressures that have been partially mitigated through cost optimization.

SG&A expenses decreased $2.9 million, or 0.6%, during the nine months ended September 27, 2024, as compared to the comparable period in 2023, and as a percentage of sales, increased 80 basis points during the same period, primarily due to the impact of recently divested and exited businesses and product lines and restructuring savings, partially offset by the impact of reserve-related adjustments to the Repair Solutions receivables portfolio and inflationary pressures that have been partially mitigated through cost optimization.

R&D Expenses

R&D expenses increased $6.6 million, or 16.9%, during the three months ended September 27, 2024, as compared to the comparable period in 2023, primarily due to continued growth investments in our Mobility Technologies segment. R&D expenses as a percentage of sales increased 100 basis points during the three months ended September 27, 2024, as compared to the comparable period in 2023.

R&D expenses increased $14.9 million, or 12.4%, during the nine months ended September 27, 2024, as compared to the comparable period in 2023, primarily due to continued growth investments in our Mobility Technologies segment. R&D expenses as a percentage of sales increased 90 basis points during the nine months ended September 27, 2024, as compared to the comparable period in 2023.

Amortization of Acquisition-Related Intangible Assets

Amortization of acquisition-related intangible assets decreased $0.1 million, or 0.5%, during the three months ended September 27, 2024, as compared to the comparable period in 2023 and as a percentage of sales, increased 10 basis points during the same period.

Amortization of acquisition-related intangible assets decreased $1.1 million, or 1.8%, during the nine months ended September 27, 2024, as compared to the comparable period in 2023 and as a percentage of sales, increased 10 basis points during the same period.

Operating Profit

Operating profit decreased $11.1 million, or 7.8%, during the three months ended September 27, 2024, as compared to the comparable period in 2023, and operating profit margins decreased 110 basis points during the same period.

Operating profit decreased $9.3 million, or 2.3%, during the nine months ended September 27, 2024, as compared to the comparable period in 2023, and operating profit margins increased 40 basis points during the same period.

Segment operating profit is used as a performance metric by the CODM in determining how to allocate resources and assess performance. Segment operating profit represents total segment sales less operating costs attributable to the segment, which does not include unallocated corporate costs and other operating costs not allocated to the reportable segments as part of the CODM’s assessment of reportable segment operating performance, including stock-based compensation expense, amortization of acquisition-related intangible assets, restructuring costs, transaction- and deal-related costs, and other costs not indicative of the segment’s core operating performance. As part of the CODM’s assessment of the Repair Solutions segment, a capital charge based on the segment’s financing receivables portfolio is assessed by Corporate. Refer to Note 8. Segment Information to the Consolidated Condensed Financial Statements for additional information.

Segment operating profit, operating profit and related margins were as follows for the periods indicated:

(a) Margin for Corporate & other unallocated costs is presented as a percentage of total sales. Corporate & other unallocated costs includes amortization of acquisition-related intangible assets.

Mobility Technologies

Segment operating profit for our Mobility Technologies segment decreased $4.8 million, or 9.3%, during the three months ended September 27, 2024, as compared to the comparable period in 2023, and segment operating profit margin decreased 270 basis points during the same period. The decrease in segment operating profit margin was primarily due to an increase in R&D and unfavorable mix.

Segment operating profit for our Mobility Technologies segment decreased $8.6 million, or 6.0%, during the nine months ended September 27, 2024, as compared to the comparable period in 2023, and segment operating profit margin decreased 130 basis points during the same period. The decrease in segment operating profit margin was primarily due to an increase in R&D and unfavorable mix.

Repair Solutions

Segment operating profit for our Repair Solutions segment decreased $10.7 million, or 24.7%, during the three months ended September 27, 2024, as compared to the comparable period in 2023, and segment operating profit margin decreased 560 basis points during the same period. The decrease in segment operating profit margin was primarily due to the impact of unfavorable mix, reserve-related adjustments to the receivables portfolio and a decrease in volume.

Segment operating profit for our Repair Solutions segment decreased $22.8 million, or 17.2%, during the nine months ended September 27, 2024, as compared to the comparable period in 2023, and segment operating profit margin decreased 390 basis points during the same period. The decrease in segment operating profit margin was primarily due to the impact of reserve-related adjustments to the receivables portfolio, unfavorable mix and a decrease in volume.

Environmental & Fueling Solutions

Segment operating profit for our Environmental & Fueling Solutions segment increased $7.3 million, or 7.6%, during the three months ended September 27, 2024, as compared to the comparable period in 2023, and segment operating profit margin increased 50 basis points during the same period. The increase in segment operating profit margin was primarily due to price-cost benefits and cost optimization.

Segment operating profit for our Environmental & Fueling Solutions segment increased $18.0 million, or 6.6%, during the nine months ended September 27, 2024, as compared to the comparable period in 2023, and segment operating profit margin increased 160 basis points during the same period. The increase in segment operating profit margin was primarily due to price-cost benefits and cost optimization.

Corporate & Other Unallocated Costs

Corporate & other unallocated costs increased $0.7 million, or 1.4%, during the three months ended September 27, 2024, as compared to the comparable period in 2023, primarily due to inflationary pressures that have been partially mitigated through cost optimization. Corporate & other unallocated costs as a percentage of total sales increased 20 basis points during the three months ended September 27, 2024, as compared to the comparable period in 2023.

Corporate & other unallocated costs decreased $12.7 million, or 8.0%, during the nine months ended September 27, 2024, as compared to the comparable period in 2023, primarily due to a decrease in costs associated with restructuring activities and transaction and deal-related costs, partially offset by inflationary pressures that have been partially mitigated through cost optimization. Corporate & other unallocated costs as a percentage of total sales decreased 30 basis points during the nine months ended September 27, 2024, as compared to the comparable period in 2023.

NON-GAAP FINANCIAL MEASURES

Core Sales

We define core sales as total sales excluding (i) sales from acquired and certain divested businesses; (ii) the impact of currency translation; and (iii) certain other items.

• References to sales attributable to acquisitions or acquired businesses refer to GAAP sales from acquired businesses recorded prior to the first anniversary of the acquisition less the amount of sales attributable to certain divested or exited businesses or product lines not considered discontinued operations.
• The portion of sales attributable to the impact of currency translation is calculated as the difference between (a) the period-to-period change in sales (excluding sales from acquired businesses) and (b) the period-to-period change in sales, including foreign operations, (excluding sales from acquired businesses) after applying the current period foreign exchange rates to the prior year period.
• The portion of sales attributable to other items is calculated as the impact of those items which are not directly correlated to core sales which do not have an impact on the current or comparable period.

Core sales should be considered in addition to, and not as a replacement for or superior to, total sales, and may not be comparable to similarly titled measures reported by other companies.

Management believes that reporting the non-GAAP financial measure of core sales provides useful information to investors by helping identify underlying growth trends in our business and facilitating easier comparisons of our sales performance with our performance in prior and future periods and to our peers. We exclude the effect of acquisitions and certain divestiture-related items because the nature, size and number of such transactions can vary dramatically from period to period and between us and our peers. We exclude the effect of currency translation and certain other items from core sales because these items are either not under management’s control or relate to items not directly correlated to core sales. Management believes the exclusion of these items from core sales may facilitate assessment of underlying business trends and may assist in comparisons of long-term performance.

INTEREST COSTS

Interest expense, net was $18.9 million during the three months ended September 27, 2024, as compared to $22.8 million for the comparable period in 2023, a decrease of $3.9 million, driven primarily by a decrease in our outstanding debt obligations.

Interest expense, net was $56.2 million during the nine months ended September 27, 2024, as compared to $70.7 million for the comparable period in 2023, a decrease of $14.5 million, driven primarily by a decrease in our outstanding debt obligations and an increase in interest income between periods.

For a discussion of our outstanding indebtedness, refer to Note 4. Financing to the Consolidated Condensed Financial Statements.

INCOME TAXES

Effective Tax Rate

Our effective tax rate for the three and nine months ended September 27, 2024 was 18.3% and 18.6%, respectively, as compared to 24.4% and 24.6% for the three and nine months ended September 29, 2023, respectively. The decrease in the effective tax rate for the three months ended September 27, 2024 as compared to the comparable period in the prior year was primarily due to a favorable change in uncertain tax position reserves during the three months ended September 27, 2024. The decrease in the effective tax rate for the nine months ended September 27, 2024 as compared to the comparable period in the prior year was primarily due to the favorable tax impacts of the divestiture of the Coats business and a favorable change in uncertain tax position reserves during the nine months ended September 27, 2024 and the unfavorable tax impacts of the divestiture of the Global Traffic Technologies business during the nine months ended September 29, 2023.

Pillar Two

The OECD agreed among over 130 countries on the Pillar Two proposals which establish a global minimum effective tax rate of 15% for multinational groups with annual global revenue exceeding €750 million. Many countries continue to announce changes in their tax laws and regulations based on the Pillar Two proposals, including the European Union (“EU”) Member States which unanimously adopted the EU Pillar Two Directive, providing for a minimum effective tax rate of 15%. EU Member States are required to enact the EU Pillar Two Directive into their national laws by December 31, 2023, with effective dates of January 1, 2024 and January 1, 2025, respectively, for different aspects of the EU Pillar Two Directive. We do not expect the EU Pillar Two Directive to have a significant impact on our financial statements.

COMPREHENSIVE INCOME

Comprehensive income increased by $52.4 million during the three months ended September 27, 2024, as compared to the comparable period in 2023. Comprehensive income for the three months ended September 27, 2024 includes favorable foreign currency translation adjustments of $29.1 million while comprehensive income for the three months ended September 29, 2023 includes unfavorable foreign currency translation adjustments of $22.1 million.

Comprehensive income increased by $64.3 million during the nine months ended September 27, 2024, as compared to the comparable period in 2023. Comprehensive income for the nine months ended September 27, 2024 includes a gain on the sale of the Company’s Coats business of $37.2 million and favorable foreign currency translation adjustments of $2.1 million while comprehensive income for the nine months ended September 29, 2023 includes a gain on the sale of the Company’s Global Traffic Technologies business of $34.4 million and unfavorable foreign currency translation adjustments of $34.2 million.

Refer to Note 12. Divestitures to the Consolidated Condensed Financial Statements for additional information on the divestiture of our Coats business.

LIQUIDITY AND CAPITAL RESOURCES

We assess our liquidity in terms of our ability to generate cash to fund our operating, investing and financing activities. As of September 27, 2024, we held $330.9 million of cash and cash equivalents and had $750.0 million of borrowing capacity under our revolving credit facility. We generate substantial cash from operating activities and believe that our operating cash flow and other sources of liquidity will be sufficient to allow us to continue to support working capital needs, capital expenditures, pay interest and service debt, pay taxes and any related interest or penalties, fund our restructuring activities and pension plans as required, invest in existing businesses, consummate strategic acquisitions, manage our capital structure on a short and long-term basis and support other business needs or objectives. We also have purchase obligations which consist of agreements to purchase goods or services that are enforceable and legally binding on us and that specify all significant terms, including fixed or minimum quantities to be purchased, fixed, minimum or variable price provisions and the approximate timing of the transaction. As of September 27, 2024, we believe that we have sufficient liquidity to satisfy our cash needs.

Our long-term debt requires, among others, that we maintain certain financial covenants, and we were in compliance with all of these covenants as of September 27, 2024.

2024 Financing and Capital Transactions

During the nine months ended September 27, 2024, we completed the following financing and capital transactions:

• Voluntarily repaid $100.0 million of the Three-Year Term Loans Due 2024;
• Repurchased 3.0 million shares for $100.0 million through an accelerated share repurchase (“ASR”) agreement;
• Repurchased 1.6 million shares for $64.6 million in the open market.

Refer to Note 4. Financing to the Consolidated Condensed Financial Statements for more information related to our long-term indebtedness and Note 11. Capital Stock and Earnings per Share to the Consolidated Condensed Financial Statements for more information related to our share repurchases.

Overview of Cash Flows and Liquidity

Following is an overview of our cash flows and liquidity:

Operating Activities

Cash flows from operating activities can fluctuate significantly from period to period as working capital needs and the timing of payments for income taxes, restructuring activities and other items impact reported cash flows.

Cash flows from operating activities were $259.4 million during the nine months ended September 27, 2024, a decrease of $30.7 million, as compared to the comparable period in 2023. The year-over-year change in operating cash flows was primarily attributable to the following factors:

• The aggregate of accounts receivable and long-term financing receivables used $46.2 million of operating cash flows during the nine months ended September 27, 2024 compared to using $33.6 million in the comparable period of 2023. The amount of cash flow generated from or used by accounts receivable depends upon how effectively we manage the cash conversion cycle and can be significantly impacted by the timing of collections in a period. Additionally, when we originate certain financing receivables, we assume the financing receivable by decreasing the franchisee’s trade accounts receivable. As a result, originations of certain financing receivables are non-cash transactions.
• The aggregate of other operating assets and liabilities used $69.3 million during the nine months ended September 27, 2024 compared to using $16.8 million in the comparable period of 2023. This change is due primarily to working capital needs and the timing of accruals and payments and tax-related amounts.

Investing Activities

Net cash provided by investing activities was $5.0 million during the nine months ended September 27, 2024, driven primarily by proceeds from the sale of our Coats business, partially offset by payments for additions to property, plant and equipment. Net cash provided by investing activities was $86.0 million during the nine months ended September 29, 2023, driven primarily by proceeds from the sale of our Global Traffic Technologies business and equity securities, partially offset by payments for additions to property, plant and equipment.

We made capital expenditures of $62.6 million and $43.5 million during the nine months ended September 27, 2024 and September 29, 2023, respectively.

Financing Activities

Net cash used in financing activities was $276.8 million during the nine months ended September 27, 2024, driven primarily by the voluntary repayment of $100.0 million of the Three-Year Term Loans due 2024 and repurchases of the Company’s common stock of $164.6 million. Net cash used in financing activities was $313.3 million during the nine months ended September 29, 2023, driven primarily by the voluntary repayment of $240.0 million of the Three-Year Term Loans due 2024 and repurchases of the Company’s common stock of $61.6 million.

Share Repurchase Program

Refer to Note 11. Capital Stock and Earnings per Share to the Consolidated Condensed Financial Statements for a description of the Company’s share repurchase program.

Dividends

We paid regular quarterly cash dividends of $0.025 per share during the nine months ended September 27, 2024. The declaration of future cash dividends is at the discretion of our Board of Directors and will depend upon, among other things, our future earnings, cash flows, capital requirements, financial condition and general business conditions.

Supplemental Guarantor Financial Information

As of September 27, 2024, we had $1.6 billion in aggregate principal amount of the Registered Notes and $600.0 million in aggregate principal amount outstanding of the Term Loans. Our obligations to pay principal and interest on the Registered Notes and Term Loans are fully and unconditionally guaranteed on a joint and several basis on an unsecured, unsubordinated basis by Gilbarco Inc. and Matco Tools Corporation, two of Vontier’s wholly-owned subsidiaries (the “Guarantor Subsidiaries”). Our other subsidiaries do not guarantee any such indebtedness (collectively, the “Non-Guarantor Subsidiaries”). Refer to Note 4. Financing to the Consolidated Condensed Financial Statements for additional information regarding the terms of our Registered Notes and the Term Loans.

The Registered Notes and the guarantees thereof are the Company’s and the Guarantor Subsidiaries’ senior unsecured obligations and:

• rank without preference or priority among themselves and equally in right of payment with our existing and any future unsecured and unsubordinated indebtedness, including, without limitation, indebtedness under our credit agreement;
• are senior in right of payment to any of our existing and future indebtedness that is subordinated to the notes;
• are effectively subordinated to any of our existing and future secured indebtedness to the extent of the assets securing such indebtedness; and
• are structurally subordinated to all existing and any future indebtedness and any other liabilities of our Non-Guarantor Subsidiaries.

The following tables present summarized financial information for Vontier Corporation and the Guarantor Subsidiaries on a combined basis and after the elimination of (a) intercompany transactions and balances between Vontier Corporation and the Guarantor Subsidiaries and (b) equity in earnings from and investments in the Non-Guarantor Subsidiaries.

CRITICAL ACCOUNTING ESTIMATES

There were no material changes to the Company’s critical accounting estimates described in the Company’s 2023 Annual Report on Form 10-K.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Quantitative and qualitative disclosures about market risk appear in “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial Instruments and Risk Management,” in the Company’s 2023 Annual Report on Form 10-K. There were no material changes to this information during the nine months ended September 27, 2024.

ITEM 4. CONTROLS AND PROCEDURES

Our management, with the participation of the President and Chief Executive Officer, and the Senior Vice President and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on such evaluation, the President and Chief Executive Officer, and the Senior Vice President and Chief Financial Officer, have concluded that, as of the end of such period, these disclosure controls and procedures were effective.

There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the most recent completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Vontier is party in the ordinary course of business, and may in the future be involved in, legal proceedings, litigation, claims, and government investigations. Although the results of the legal proceedings, claims, and government investigations in which we are involved cannot be predicted with certainty, we do not believe that the final outcome of these matters is reasonably likely to have a material adverse effect on our business, financial condition, or operating results.

Refer to Note 9. Litigation and Contingencies to the Consolidated Condensed Financial Statements in this Form 10-Q for more information on certain legal proceedings.

ITEM 1A. RISK FACTORS

Information regarding risk factors appears in “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Information Relating to Forward-Looking Statements,” in Part I - Item 2 of this Form 10-Q and in “Risk Factors” in Part I - Item 1A of our 2023 Annual Report on Form 10-K. There were no material changes during the three months ended September 27, 2024 to the risk factors reported in our 2023 Annual Report on Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(a) Not applicable.

(b) Not applicable.

(c) Purchases of Equity Securities by the Issuer

On May 24, 2022, the Company’s Board of Directors approved a replenishment of the Company’s previously approved share repurchase program announced in May 2021, bringing the total amount authorized for future share repurchases to $500.0 million. Under the share repurchase program, the Company may purchase shares of common stock from time to time in open market transactions, privately negotiated transactions, accelerated share repurchase programs, or by combinations of such methods, any of which may use prearranged trading plans that are designed to meet the requirements of Rule 10b5-1(c) of the Securities Exchange Act of 1934. The timing of any repurchases and the actual number of shares repurchased will depend on a variety of factors, including the Company’s stock price, corporate and regulatory requirements, restrictions under the Company’s debt obligations and other market and economic conditions. The share repurchase program may be suspended or discontinued at any time and has no expiration date.

During the three months ended September 27, 2024, the Company entered into an ASR agreement with a third-party institution, whereupon the Company made a prepayment of $100.0 million. The ASR agreement settled during the three months ended September 27, 2024. The Company received 3.0 million of the Company’s shares at an average price per share of $33.84 under the ASR.

The following table sets forth our share repurchase activity for the three months ended September 27, 2024:

(a) The average price paid per share under the ASR agreement included in the table above was determined using the volume-weighted average price of the Company’s common stock over the term of the ASR agreement, less a discount.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

Rule 10b5-1 Trading Plans

During the three months ended September 27, 2024, none of the Company’s directors or executive officers adopted, modified or terminated any contract, instruction or written plan for the purchase or sale of the Company’s securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”

ITEM 6. EXHIBITS

Exhibit Number Exhibit Index Incorporated by Reference (Unless Otherwise Indicated) / Form Incorporated by Reference (Unless Otherwise Indicated) / File No. Incorporated by Reference (Unless Otherwise Indicated) / Exhibit Incorporated by Reference (Unless Otherwise Indicated) / Filing Date

10.1 Vontier Corporation Separation Pay Plan for Officers, Key and Senior Executives* — — Filed herewith 22.1 List of Guarantor Subsidiaries 10-K 001-39483 22.1 February 15, 2024 31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 — — Filed herewith 31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 — — Filed herewith 32.1 Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 — — Filed herewith 32.2 Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 — — Filed herewith 101.INS Inline XBRL Instance Document - the Instance Document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document — — Filed herewith 101.SCH Inline XBRL Taxonomy Schema Document — — Filed herewith 101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document — — Filed herewith 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document — — Filed herewith 101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document — — Filed herewith 101.PRE Inline Taxonomy Extension Presentation Linkbase Document — — Filed herewith (104) Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) — — Filed herewith

*Indicates management contract or compensatory plan, contract or arrangement