Enovis (NYSE: ENOV) grows revenue, narrows loss in latest quarter
Enovis Corporation reported higher sales and returned to operating profitability for the three and six months ended July 3, 2026. Net sales were $582,782 (Dollars in thousands) for the quarter and $1,171,933 (Dollars in thousands) year to date, up from $564,545 and $1,123,379 (Dollars in thousands) a year earlier. Operating income reached $17,413 (Dollars in thousands) for the quarter and $23,943 (Dollars in thousands) year to date, compared with operating losses in the prior periods. Higher income tax expense produced small net losses attributable to Enovis of $1,190 and $9,954 (Dollars in thousands), versus $36,739 and $92,705 (Dollars in thousands).
Prevention & Recovery revenue was broadly flat, while Reconstructive grew in both U.S. and international markets. Total Adjusted EBITDA rose to $104,321 and $207,888 (Dollars in thousands), with margins of 17.9% and 17.7%. Currency movements increased net sales by 1.0% for the quarter and 2.6% year to date. The effective tax rate exceeded 21% due to valuation allowances on U.S. deferred tax assets, non‑deductible expenses and U.S. taxation of international operations.
Operating activities generated $98,983 (Dollars in thousands) of cash in the first half, largely funding capital expenditures of $96,699 (Dollars in thousands). Cash and cash equivalents were $12,563 (Dollars in thousands), with total debt of $1,284,508 (In thousands), including a $670,559 term loan and $453,407 (In thousands) of senior unsecured convertible notes; $942 million remained available under the revolving credit facility. The company was in compliance with its credit agreement covenants and uses cross‑currency swaps and forward contracts to manage foreign exchange exposure.
Positive
- None.
Negative
- None.
Key Figures
Net sales, Q2 2026: $582,782 (Dollars in thousands)
Operating income, Q2 2026: 17,413 (Dollars in thousands)
Net loss attributable to Enovis, Q2 2026: (1,190) (Dollars in thousands)
+5 more
8 metrics
Net sales, Q2 2026
$582,782 (Dollars in thousands)
Three months ended July 3, 2026 consolidated net sales
Operating income, Q2 2026
17,413 (Dollars in thousands)
Three months ended July 3, 2026 operating income
Net loss attributable to Enovis, Q2 2026
(1,190) (Dollars in thousands)
Three months ended July 3, 2026 net loss attributable to Enovis Corporation
Adjusted EBITDA, Q2 2026
104,321 (Dollars in thousands)
Three months ended July 3, 2026 total Adjusted EBITDA (non-GAAP)
Net cash from operating activities, H1 2026
98,983 (Dollars in thousands)
Six months ended July 3, 2026 cash flows from operating activities
Total debt, July 3, 2026
1,284,508 (In thousands)
Total debt including term loan, convertible notes, and revolver
Cash and cash equivalents, July 3, 2026
12,563 (In thousands)
Period-end cash balance on Condensed Consolidated Balance Sheet
Revolver availability, July 3, 2026
$942 million
Unused capacity under the Enovis Credit Agreement revolving facility
Key Terms
Adjusted EBITDA, valuation allowance, cross-currency swap, fair value hedge, +2 more
6 terms
Adjusted EBITDA financial
"Adjusted EBITDA excludes the effect of Other (income) expense, net, non-operating"
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
valuation allowance financial
"due to an increase in valuation allowance on U.S. deferred tax assets"
A valuation allowance is a reserve set aside to reduce the value of certain assets on a company's financial records when there is uncertainty about whether they will generate the expected benefits. It acts like a caution sign, indicating that some assets might not be fully recoverable or worth their recorded amount. This matters to investors because it provides a more realistic picture of a company's financial health and potential risks.
cross-currency swap financial
"The Company has cross-currency swap agreements to hedge its net investment"
A cross-currency swap is a contract where two parties exchange loan payments in different currencies — typically swapping both principal and interest at the start and end — so each party effectively borrows in the other’s currency. For investors, these swaps matter because they change a company’s actual currency exposure and borrowing costs, affecting cash flow predictability, balance-sheet risk and the way foreign earnings translate into reported results, similar to rearranging which currency a loan is paid in.
fair value hedge financial
"The February 2026 forwards were designated and qualified as fair value hedges"
A fair value hedge is a risk-management technique where a company uses a financial contract to offset changes in the market value of a specific asset or liability, like locking in a price to protect against losses. Investors care because gains or losses from both the hedge and the hedged item flow through reported earnings together, which can reduce or reveal volatility in profit and the balance sheet value of holdings — much like insurance that smooths out the ups and downs of an owned item.
purchase of royalty interest financial
"entered into agreements to buyout the economic interest in future royalty payments"
Accrued restructuring liability financial
"A summary of the activity in the Company’s restructuring liability included in Accrued liabilities"
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FAQ
How did Enovis (ENOV) perform financially in Q2 2026?
Enovis delivered higher revenue but remained slightly loss-making. Q2 net sales were $582,782 (Dollars in thousands), with operating income of $17,413 (Dollars in thousands). Net loss attributable to Enovis narrowed sharply to $1,190 (Dollars in thousands), or $(0.02) per share, from $36,739 thousand a year earlier.
What were Enovis (ENOV)'s segment results for Q2 2026?
Prevention & Recovery net sales were $288,248 (Dollars in thousands), essentially flat year over year, while Reconstructive rose to $294,534 (Dollars in thousands). Segment Adjusted EBITDA was $50,327 for Prevention & Recovery and $53,994 (Dollars in thousands) for Reconstructive, both improving from the prior-year quarter.
What is Enovis (ENOV)'s cash flow and liquidity position as of July 3, 2026?
For the first half of 2026, Enovis generated $98,983 (Dollars in thousands) of cash from operating activities. Cash and cash equivalents were $12,563 (Dollars in thousands). Total debt stood at $1,284,508 (In thousands), and the company had $942 million of unused capacity under its revolving credit facility.
How leveraged is Enovis (ENOV) and what are its key debt terms?
Enovis reported total debt of $1,284,508 (In thousands), including a $670,559 (In thousands) term loan and $453,407 (In thousands) of senior unsecured convertible notes. The credit agreement matures in 2030, carried a 5.19% weighted-average interest rate, and the company was in covenant compliance.
How did Enovis (ENOV)'s Adjusted EBITDA trend in Q2 and H1 2026?
Adjusted EBITDA increased year over year. Q2 Adjusted EBITDA was $104,321 (Dollars in thousands) with a 17.9% margin, up from $91,153 thousand and 16.2%. For the first half, Adjusted EBITDA reached $207,888 (Dollars in thousands), versus $178,205 thousand, with margin improving to 17.7%.
What major hedging and derivative positions does Enovis (ENOV) hold?
Enovis uses derivatives mainly for foreign exchange risk management. As of July 3, 2026, it held cross-currency swaps with designated notional amounts of about CHF 1.1 billion and $1.4 billion, plus additional undesignated swaps and forward currency contracts, supporting its international operations.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
| FORM | |||||
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended July 3, 2026
OR
| 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: 001-34045
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||
| (Address of principal executive offices) | (Zip Code) | ||||||||||
| (Registrant’s telephone number, including area code) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
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 and posted 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.
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 ☑
As of July 31, 2026, there were 57,669,494 shares of the registrant’s common stock, par value $.001 per share, outstanding.
TABLE OF CONTENTS
| Page | |||||
| PART I - FINANCIAL INFORMATION | |||||
| Item 1. Financial Statements | 2 | ||||
| Condensed Consolidated Statements of Operations | 2 | ||||
| Condensed Consolidated Statements of Comprehensive Income (Loss) | 3 | ||||
| Condensed Consolidated Balance Sheets | 4 | ||||
| Condensed Consolidated Statements of Equity | 5 | ||||
| Condensed Consolidated Statements of Cash Flows | 6 | ||||
| Notes to Condensed Consolidated Financial Statements | 7 | ||||
| Note 1. General | 7 | ||||
| Note 2. Recently Issued Accounting Pronouncements | 7 | ||||
| Note 3. Acquisitions, Investments, and Divestitures | 8 | ||||
Note 4. Revenue | 9 | ||||
Note 5. Net Loss Per Share from Continuing Operations | 10 | ||||
Note 6. Income Taxes | 10 | ||||
Note 7. Equity | 11 | ||||
Note 8. Inventories, Net | 13 | ||||
Note 9. Debt | 13 | ||||
Note 10. Accrued Liabilities | 15 | ||||
Note 11. Financial Instruments and Fair Value Measurements | 15 | ||||
Note 12. Commitments and Contingencies | 19 | ||||
Note 13. Segment Information | 19 | ||||
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 24 | ||||
| Item 3. Quantitative and Qualitative Disclosures About Market Risk | 40 | ||||
| Item 4. Controls and Procedures | 42 | ||||
| PART II - OTHER INFORMATION | |||||
| Item 1. Legal Proceedings | 43 | ||||
| Item 1A. Risk Factors | 43 | ||||
| Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 43 | ||||
| Item 3. Defaults Upon Senior Securities | 43 | ||||
| Item 4. Mine Safety Disclosures | 43 | ||||
| Item 5. Other Information | 43 | ||||
| Item 6. Exhibits | 44 | ||||
| SIGNATURES | 45 | ||||
1
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
ENOVIS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Dollars in thousands, except per share amounts
(Unaudited)
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| July 3, 2026 | July 4, 2025 | July 3, 2026 | July 4, 2025 | ||||||||||||||||||||
| Net sales | $ | $ | $ | $ | |||||||||||||||||||
| Cost of sales | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Selling, general and administrative expense | |||||||||||||||||||||||
| Research and development expense | |||||||||||||||||||||||
| Amortization of acquired intangibles | |||||||||||||||||||||||
| Purchase of royalty interest | |||||||||||||||||||||||
| Restructuring charges | |||||||||||||||||||||||
| Operating income (loss) | ( | ( | |||||||||||||||||||||
| Interest expense, net | |||||||||||||||||||||||
| Other (income) expense, net | ( | ( | |||||||||||||||||||||
| Income (loss) from continuing operations before income taxes | ( | ( | |||||||||||||||||||||
| Income tax expense | |||||||||||||||||||||||
| Net loss from continuing operations | ( | ( | ( | ( | |||||||||||||||||||
| Loss from discontinued operations, net of taxes | ( | ( | ( | ||||||||||||||||||||
| Net loss | ( | ( | ( | ( | |||||||||||||||||||
| Less: net income attributable to noncontrolling interest from continuing operations - net of taxes | |||||||||||||||||||||||
| Net loss attributable to Enovis Corporation | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Net income (loss) per share - basic and diluted | |||||||||||||||||||||||
| Continuing operations | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Consolidated operations | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
See Notes to Condensed Consolidated Financial Statements.
2
ENOVIS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Dollars in thousands
(Unaudited)
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
| July 3, 2026 | July 4, 2025 | July 3, 2026 | July 4, 2025 | |||||||||||||||||||||||
| Net loss | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
| Other comprehensive income (loss): | ||||||||||||||||||||||||||
| Foreign currency translation | ( | ( | ||||||||||||||||||||||||
Unrealized gain (loss) on hedging activities, net of tax expense (benefit) of $ | ( | ( | ||||||||||||||||||||||||
| Amounts reclassified from Accumulated other comprehensive income (loss): | ||||||||||||||||||||||||||
Amortization of pension net actuarial loss, net of tax expense (benefit) of $ | ( | ( | ( | ( | ||||||||||||||||||||||
Reclassification of hedging gain (loss), net of tax expense (benefit) of $ | ( | ( | ||||||||||||||||||||||||
| Other comprehensive income (loss) | ( | ( | ( | |||||||||||||||||||||||
| Comprehensive loss | ( | ( | ( | ( | ||||||||||||||||||||||
| Less: comprehensive income (loss) attributable to noncontrolling interest | ( | ( | ||||||||||||||||||||||||
| Comprehensive loss attributable to Enovis Corporation | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
See Notes to Condensed Consolidated Financial Statements.
3
ENOVIS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
Dollars in thousands, except share amounts
(Unaudited)
| July 3, 2026 | December 31, 2025 | ||||||||||
| ASSETS | |||||||||||
| CURRENT ASSETS: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
Trade receivables, less allowance for credit losses of $ | |||||||||||
| Inventories, net | |||||||||||
| Prepaid expenses | |||||||||||
| Other current assets | |||||||||||
| Total current assets | |||||||||||
| Property, plant and equipment, net | |||||||||||
| Goodwill | |||||||||||
| Intangible assets, net | |||||||||||
| Lease asset - right of use | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES AND EQUITY | |||||||||||
| CURRENT LIABILITIES: | |||||||||||
| Current portion of long-term debt | $ | $ | |||||||||
| Accounts payable | |||||||||||
| Accrued liabilities | |||||||||||
| Total current liabilities | |||||||||||
| Long-term debt, less current portion | |||||||||||
| Non-current lease liability | |||||||||||
| Other liabilities | |||||||||||
| Total liabilities | |||||||||||
| Equity: | |||||||||||
Common stock, $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Accumulated deficit | ( | ( | |||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
| Total Enovis Corporation equity | |||||||||||
| Noncontrolling interest | |||||||||||
| Total equity | |||||||||||
| Total liabilities and equity | $ | $ | |||||||||
See Notes to Condensed Consolidated Financial Statements.
4
ENOVIS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
Dollars in thousands, except share amounts
(Unaudited)
| Common Stock | Additional Paid-In Capital | (Accumulated Deficit) Retained Earnings | Accumulated Other Comprehensive Loss | Noncontrolling Interest | Total | ||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||
| Net income (loss) | — | — | — | ( | — | ( | |||||||||||||||||||||||
Other comprehensive income (loss), net of tax expense of $ | — | — | — | — | ( | — | ( | ||||||||||||||||||||||
| Payments of tax withholding for stock-based awards | — | — | ( | — | — | — | ( | ||||||||||||||||||||||
| Common stock-based award activity | — | — | — | ||||||||||||||||||||||||||
| Balance at April 3, 2026 | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||
| Net income (loss) | — | — | — | ( | — | ( | |||||||||||||||||||||||
| Distributions to noncontrolling owners | — | — | — | — | — | ( | ( | ||||||||||||||||||||||
Other comprehensive income (loss), net of tax expense of $ | — | — | — | — | ( | ( | ( | ||||||||||||||||||||||
| Payments of tax withholding for stock-based awards | — | — | ( | — | — | — | ( | ||||||||||||||||||||||
| Common stock-based award activity | — | — | |||||||||||||||||||||||||||
| Balance at July 3, 2026 | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||
| Common Stock | Additional Paid-In Capital | (Accumulated Deficit) Retained Earnings | Accumulated Other Comprehensive Loss | Noncontrolling Interest | Total | ||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||
| Net income (loss) | — | — | — | ( | — | ( | |||||||||||||||||||||||
Other comprehensive income, net of tax benefit of $( | — | — | — | — | |||||||||||||||||||||||||
| Common stock issued for acquisition | — | — | — | ||||||||||||||||||||||||||
| Payments of tax withholding for stock-based awards | — | — | ( | — | — | — | ( | ||||||||||||||||||||||
| Common stock-based award activity | — | — | — | ||||||||||||||||||||||||||
| Balance at April 4, 2025 | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||
| Net income (loss) | — | — | — | ( | — | ( | |||||||||||||||||||||||
Other comprehensive loss, net of tax benefit of $ | — | — | — | — | ( | ( | |||||||||||||||||||||||
| Common stock-based award activity | — | — | — | ||||||||||||||||||||||||||
| Balance at July 4, 2025 | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||
See Notes to Condensed Consolidated Financial Statements.
5
ENOVIS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Dollars in thousands
(Unaudited)
| Six Months Ended | |||||||||||
| July 3, 2026 | July 4, 2025 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net loss | $ | ( | $ | ( | |||||||
| Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| Stock-based compensation expense | |||||||||||
| Non-cash interest expense | |||||||||||
| Fair value loss on contingent acquisition shares | |||||||||||
| Deferred income tax benefit | ( | ( | |||||||||
| Loss on sale of property, plant and equipment | |||||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Trade receivables, net | ( | ( | |||||||||
| Inventories, net | ( | ( | |||||||||
| Accounts payable | |||||||||||
| Other operating assets and liabilities | |||||||||||
| Net cash provided by operating activities | |||||||||||
| Cash flows from investing activities: | |||||||||||
| Purchases of property, plant and equipment and intangibles | ( | ( | |||||||||
| Payments for acquisitions, net of cash received, and investments | ( | ( | |||||||||
| Cash received upon settlement of derivatives | |||||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| Cash flows from financing activities: | |||||||||||
| Repayments of borrowings under term credit facility | ( | ( | |||||||||
| Proceeds from borrowings on revolving credit facilities and other | |||||||||||
| Repayments of borrowings on revolving credit facilities and other | ( | ( | |||||||||
| Payments of tax withholding for stock-based awards | ( | ( | |||||||||
| Proceeds from issuance of common stock, net | |||||||||||
| Deferred consideration payments and other | ( | ( | |||||||||
| Net cash provided by (used in) financing activities | ( | ||||||||||
| Effect of foreign exchange rates on Cash and cash equivalents | ( | ||||||||||
| Decrease in Cash and cash equivalents | ( | ( | |||||||||
| Cash and cash equivalents, beginning of period | |||||||||||
| Cash and cash equivalents, end of period | $ | $ | |||||||||
See Notes to Condensed Consolidated Financial Statements.
6
ENOVIS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. General
Enovis Corporation (the “Company” or “Enovis”) is an innovation-driven medical technology growth company dedicated to developing clinically differentiated solutions that generate measurably better patient outcomes and transform workflows. The Company conducts its business through two
2. Recently Issued Accounting Pronouncements
The Company is currently reviewing updated disclosure requirements related to (“ASU”) 2024-03, Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The amendments in this ASU clarify the requirements for certain categories of expenses included in expense line items on the face of the income statement to be disclosed in a disaggregated manner in the notes to the financial statements. In addition, the update requires that the entity disclose both the total amount of selling expenses reported and how it defines selling expenses. Update No. 2024-03 is effective, as clarified by ASU No. 2025-01, for public business entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027.
The Company is currently reviewing updated disclosure requirements related to (“ASU”) 2025-09 — Derivatives and Hedging (Topic 815): Hedge Accounting Improvements. This updates certain aspects of hedge accounting guidance to better reflect an entity’s risk management activities in its financial statements. Update No. 2025-09 is effective for all annual reporting periods beginning after December 15, 2026, and interim periods within those annual reporting periods. The Company is currently evaluating the impact of this ASU on its consolidated financial statement disclosures.
7
ENOVIS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)
3. Acquisitions, Investments, and Divestitures
2025 Acquisitions
In 2025, the Company completed five business combinations and two asset acquisitions of intellectual property for total consideration of $36.9 million, including deferred and estimated contingent consideration. The business combinations include two P&R businesses and three Recon distributors, and the intellectual property asset acquisitions include one in each segment.
For the transactions in P&R completed during the year ended December 31, 2025, the Company (i) paid a total of $7.8 million, net of cash received, and recorded estimated contingent consideration for future expected payments of $1.9 million for the acquisition of two businesses, and (ii) paid a total of $6.5 million in cash and recorded a $8.3 million liability for deferred payments for an asset acquisition of intellectual property. The transactions added complementary product offerings to the P&R segment.
For the transactions in Recon completed during the year ended December 31, 2025, the Company (i) paid a total of $9.7 million, net of cash received, plus subsequent contingent consideration payments of approximately $1.0 million for three business combinations of distributors, and (ii) paid $1.5 million in cash for an asset acquisition of intellectual property. The transactions expanded distribution partners for the Company’s surgical implant products in Europe and added a complementary surgical product technology.
The business combination acquisitions are accounted for under the acquisition method of accounting, and accordingly, the Consolidated Financial Statements include the financial position and results of operations from the acquisition dates. The Company recorded approximately $20.7 million in definite-lived intangible assets associated with the business combination acquisitions. The accounting for these business combinations has been finalized, and the assets and liabilities acquired are no longer subject to adjustment. The intellectual property acquisitions are accounted for as asset acquisitions. The Company also recorded an additional $16.3 million in definite-lived intangible assets associated with its asset acquisitions.
2025 Divestiture
On October 7, 2025, the Company completed the divestiture of the Dr. Comfort Footcare Solutions product line of the Company’s P&R segment to Promus Equity Partners in an asset transaction that included inventory, machinery and equipment, and intangible assets for consideration of up to $60.0 million in cash, consisting of an upfront payment of $45.0 million and up to $15.0 million payable in the future upon the achievement of certain milestones (the “Dr. Comfort Divestiture”). The intangibles included all trademarks and technology of Dr. Comfort as well as U.S. customer relationships. The Dr. Comfort Divestiture does not represent a strategic shift that has a major effect on the Company’s operations and financial results and is therefore not presented as a discontinued operation.
Investments
As of July 3, 2026, the balance of investments held by the Company without readily determinable fair values was $23.7 million. The majority of these investments are carried at cost less impairments, if any, plus adjustments for fair value indicators from observable price changes in orderly transactions for the identical or similar investment of the same issuer. There have been no One investment is accounted for under the equity method of accounting and is recorded at the initial investment amount, adjusted each period for the Company’s share of the income or loss.
8
ENOVIS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)
4. Revenue
The Company provides orthopedic solutions, including products and services spanning the full continuum of patient care, from injury prevention to rehabilitation. While the Company’s sales are primarily derived from three sales channels including dealers and distributors, insurance, and direct to consumers and hospitals, substantially all of the Company’s revenue is recognized at a point in time. The Company disaggregates its revenue into the following geographic/product type groups within its segments:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| July 3, 2026 | July 4, 2025 | July 3, 2026 | July 4, 2025 | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Prevention & Recovery: | |||||||||||||||||||||||
| U.S. Bracing & Support | $ | $ | $ | $ | |||||||||||||||||||
U.S. Other P&R (1) | |||||||||||||||||||||||
| International P&R | |||||||||||||||||||||||
| Total Prevention & Recovery | |||||||||||||||||||||||
| Reconstructive: | |||||||||||||||||||||||
| U.S. Recon | |||||||||||||||||||||||
| International Recon | |||||||||||||||||||||||
| Total Reconstructive | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
(1) The three and six months ended July 4, 2025 include $14.4 million and $27.2 million, respectively, of sales from the October 2025 divestiture of the Company’s Dr. Comfort Footcare Solutions product line.
Given the nature of its businesses, the Company does not generally have unsatisfied performance obligations with an original contract duration of greater than one year.
The nature of the Company’s contracts gives rise to certain types of variable consideration, including rebates, implicit price concessions, and other discounts. The Company includes estimated amounts of variable consideration in the transaction price to the extent that it is probable there will not be a significant reversal of revenue.
Allowance for Credit Losses
The Company’s estimate of current expected credit losses on trade receivables considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. In calculating and applying its current expected credit losses, the Company disaggregates trade receivables into business segments due to risk characteristics unique to each segment given the individual lines of business and market. The business segments are further disaggregated based on either geography or product type. The Company uses a loss rate methodology in calculating its current expected credit losses, considering historical write-offs over a defined lookback period in deriving a historical loss rate. The expected credit loss model considers current conditions and reasonable and supportable forecasts for current and projected macroeconomic factors.
A summary of the activity in the Company’s allowance for credit losses included within Trade receivables in the Condensed Consolidated Balance Sheets is as follows:
| Six Months Ended July 3, 2026 | ||||||||||||||||||||||||||||||||||||||
| Balance at Beginning of Period | Charged to Expense, net | Write-Offs, Deductions, and Other, net | Foreign Currency Translation | Balance at End of Period | ||||||||||||||||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||||||||||||||||
| Allowance for Credit Losses | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||
9
ENOVIS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)
5. Net Income (Loss) Per Share from Continuing Operations
Net income (loss) per share from continuing operations was computed using the treasury stock method as follows:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| July 3, 2026 | July 4, 2025 | July 3, 2026 | July 4, 2025 | ||||||||||||||||||||
| (In thousands, except share and per share data) | |||||||||||||||||||||||
| Computation of Net income (loss) per share from continuing operations - basic: | |||||||||||||||||||||||
Net income (loss) from continuing operations attributable to Enovis Corporation(1) | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Weighted-average shares of Common stock outstanding – basic | |||||||||||||||||||||||
Net income (loss) per share from continuing operations – basic | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Computation of Net income (loss) per share from continuing operations - diluted: | |||||||||||||||||||||||
Net income (loss) from continuing operations attributable to Enovis Corporation(1) | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Weighted-average shares of Common stock outstanding – basic | |||||||||||||||||||||||
| Net effect of potentially dilutive securities - stock options and restricted stock units | |||||||||||||||||||||||
Weighted-average shares of Common stock outstanding – diluted | |||||||||||||||||||||||
Net income (loss) per share from continuing operations – diluted | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
(1) Net income (loss) from continuing operations attributable to Enovis Corporation for the respective periods is calculated using Net income (loss) from continuing operations less net income attributable to noncontrolling interest from continuing operations - net of taxes.
The following table presents the potentially dilutive shares of Common stock from stock-based compensation awards excluded from the calculation of Weighted-average shares of Common stock outstanding – diluted as inclusion would be anti-dilutive in Net income (loss) per share (“Anti-dilutive shares”):
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| July 3, 2026 | July 4, 2025 | July 3, 2026 | July 4, 2025 | ||||||||||||||||||||
| Anti-dilutive shares | |||||||||||||||||||||||
10
ENOVIS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)
6. Income Taxes
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| July 3, 2026 | July 4, 2025 | July 3, 2026 | July 4, 2025 | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Income (loss) from continuing operations before income taxes | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Income tax expense | $ | $ | $ | $ | |||||||||||||||||||
The effective tax rate for the three and six months ended July 3, 2026 was higher than the 2026 federal statutory rate of 21%, primarily due to an increase in valuation allowance on U.S. deferred tax assets, non-deductible expenses and U.S. taxation on international operations. This was partially offset by tax credits for research and development and non-U.S. income taxed at lower rates.
The effective tax rate for the three and six months ended July 4, 2025 differs from the 2025 U.S. federal statutory rate of 21%, primarily due to an increase in valuation allowance on U.S. deferred tax assets, which had a significant impact on the effective tax rate. Additionally, non-deductible expenses and U.S. taxation on international operations also contributed to the rate difference. This was partially offset by tax credits for research and development and non-U.S. income taxed at lower rates.
11
ENOVIS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)
7. Equity
Share Repurchase Program
In 2018, the Company’s Board of Directors authorized the repurchase of shares of the Company’s Common stock from time-to-time on the open market or in privately negotiated transactions. No repurchases of the Company’s Common stock have been made under this plan since the third quarter of 2018. As of July 3, 2026, the remaining stock repurchase authorization provided by the Board of Directors was $100 million. The timing, amount and method of shares repurchased is determined by management based on its evaluation of market conditions and other factors. There is no term associated with the remaining repurchase authorization.
Accumulated Other Comprehensive Income (Loss)
The following tables present the changes in the balances of each component of Accumulated other comprehensive income (loss) including reclassifications out of Accumulated other comprehensive loss for the six months ended July 3, 2026 and July 4, 2025. All amounts are presented net of tax and noncontrolling interest, if any.
Accumulated Other Comprehensive Loss Components | |||||||||||||||||||||||
| Net Unrecognized Pension Benefit Cost | Foreign Currency Translation Adjustment | Unrealized Gain (Loss) on Hedging Activities | Total | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Balance at January 1, 2026 | $ | $ | $ | ( | $ | ( | |||||||||||||||||
| Other comprehensive income (loss) before reclassifications: | |||||||||||||||||||||||
| Foreign currency translation adjustment | ( | ( | ( | ||||||||||||||||||||
| Gain on hedge activity | |||||||||||||||||||||||
| Other comprehensive income (loss) before reclassifications | ( | ( | ( | ||||||||||||||||||||
| Amounts reclassified from Accumulated other comprehensive income (loss) | ( | ( | ( | ||||||||||||||||||||
| Net Other comprehensive income (loss) | ( | ( | ( | ||||||||||||||||||||
| Balance at July 3, 2026 | $ | $ | $ | ( | $ | ( | |||||||||||||||||
| Accumulated Other Comprehensive Loss Components | |||||||||||||||||||||||||||||
Net Unrecognized Pension Benefit Cost | Foreign Currency Translation Adjustment | Unrealized Loss on Hedging Activities | Total | ||||||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||||||||
| Balance at January 1, 2025 | $ | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||
| Other comprehensive income (loss) before reclassifications: | |||||||||||||||||||||||||||||
| Net actuarial gain | — | — | |||||||||||||||||||||||||||
| Foreign currency translation adjustment | |||||||||||||||||||||||||||||
| Loss on hedge activity | ( | ( | |||||||||||||||||||||||||||
| Other comprehensive income (loss) before reclassifications | ( | ||||||||||||||||||||||||||||
| Amounts reclassified from Accumulated other comprehensive income (loss) | ( | ||||||||||||||||||||||||||||
| Net Other comprehensive income (loss) | ( | ||||||||||||||||||||||||||||
| Balance at July 4, 2025 | $ | $ | $ | ( | $ | ( | |||||||||||||||||||||||
12
ENOVIS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)
8. Inventories, Net
Inventories, net consisted of the following:
| July 3, 2026 | December 31, 2025 | ||||||||||
| (In thousands) | |||||||||||
| Raw materials | $ | $ | |||||||||
| Work in process | |||||||||||
| Finished goods | |||||||||||
| Less: Allowance for excess, slow-moving and obsolete inventory | ( | ( | |||||||||
| $ | $ | ||||||||||
9. Debt
Long-term debt consisted of the following:
| July 3, 2026 | December 31, 2025 | ||||||||||
| (In thousands) | |||||||||||
| Term loan | $ | $ | |||||||||
| Senior unsecured convertible notes | |||||||||||
| Revolving credit facilities and other | |||||||||||
| Total debt | |||||||||||
| Less: current portion | ( | ( | |||||||||
| Long-term debt | $ | $ | |||||||||
Term Loan and Revolving Credit Facility
The Company’s credit agreement, which was amended December 8, 2025, consists of a $1.1 billion revolving credit facility (the “Revolver”) with a December 8, 2030 maturity date and a term loan facility with an initial aggregate principal amount of $700 million (the “Term Loan”) (collectively, the “Enovis Credit Agreement”). The Revolver contains a $50 million swing line loan sub-facility. All facilities under the Enovis Credit Agreement (including the Term Loan) are guaranteed and secured by certain personal property of the Company and certain of its subsidiaries, subject to limitations and exclusions.
The Enovis Credit Agreement contains customary covenants limiting the ability of the Company and its subsidiaries to, among other things, incur debt or liens, merge or consolidate with others, dispose of assets, make investments, or pay dividends. There are also restrictions on repayments of junior financing and amendments to junior financing documents. In addition, the Enovis Credit Agreement contains financial covenants requiring the Company to maintain (i) a maximum senior secured leverage ratio of not more than 3.50 :1.00 and (ii) a minimum interest coverage ratio of 3.00 :1.00. The Enovis Credit Agreement contains various events of default (including failure to comply with the covenants under the Enovis Credit Agreement and related agreements), and upon an event of default the lenders may, subject to various customary cure rights, require the immediate payment of all amounts outstanding under the Enovis Credit Agreement. As of July 3, 2026, the Company was in compliance with the covenants under the Enovis Credit Agreement.
The Term Loan extended to the Company under the Enovis Credit Agreement was funded on December 8, 2025. A portion of the incremental borrowings under the Term Loan were used to repay the outstanding principal balance under the Revolver of approximately $335 million. The Term Loan requires quarterly principal repayments at 1.25 % of the initial aggregate principal amount, which is $8.8 million each quarter, and matures on December 8, 2030.
As of July 3, 2026, the weighted-average interest rate of borrowings under the Enovis Credit Agreement was 5.19 % excluding accretion of deferred financing fees, and there was $942 million available on the Revolver.
13
ENOVIS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)
Convertible Notes and Capped Calls
The Company has $460 million aggregate principal senior unsecured convertible notes that were issued in October 2023 via a private placement pursuant to Rule 144A (the “2028 Notes”). The 2028 Notes have an interest rate of 3.875 %, payable semiannually in arrears on April 15 and October 15 of each year, beginning April 15, 2024 and will mature on October 15, 2028 unless earlier repurchased, redeemed, or converted. The effective interest rate on the 2028 Notes is 4.6 %. For the six months ended July 3, 2026, the interest expense on the 2028 Notes was $10.4 million, including $9.0 million based upon the coupon rate and $1.4 million from accretion of the discount.
Holders may convert their 2028 Notes in multiples of $1,000 principal amount prior to the close of business April 15, 2028 under the following circumstances: (i) during any calendar quarter commencing after the calendar quarter ending on December 31, 2023 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130 % of the conversion price on each applicable trading day; (ii) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the “trading price” per $1,000 principal amount of 2028 Notes, as determined following a request by a holder of 2028 Notes in accordance with the procedures described in the 2028 Note indenture, for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day; (iii) if the Company calls any or all of the 2028 Notes for redemption, at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; or (iv) upon the occurrence of specified corporate events as described in the indenture governing the 2028 Notes.
In addition, holders may convert their 2028 Notes, in multiples of $1,000 principal amount, at their option at any time beginning on or after April 15, 2028 until the close of business on the second scheduled trading day immediately preceding the maturity date, regardless of the foregoing circumstances. The conversion rate is 17.1474 shares of common stock per $1,000 principal amount of 2028 Notes (equivalent to an initial conversion price of approximately $58.32 per share of common stock), subject to adjustment upon the occurrence of certain specified events as set forth in the indenture governing the 2028 Notes. Upon conversion, the Company will pay cash up to the aggregate principal amount of the 2028 Notes to be converted and pay or deliver, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock, at its election, in respect of the remainder. There have been no redemptions or conversions of the 2028 Notes.
The Company also entered into privately negotiated capped call transactions in October 2023 with certain of the initial purchasers of the 2028 Notes. The capped call transactions are intended generally to mitigate potential dilution to the Company’s common stock upon conversion of any Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted notes, as the case may be, with such reduction and/or offset subject to a cap. If, however, the market price per share of common stock exceeds $89.72 , the initial cap price of the capped call transactions, there would be a dilutive effect and/or no offset of any cash payments, in each case, attributable to the amount by which the market price of the common stock exceeds the cap price.
Other Indebtedness
In addition to the debt agreements discussed above, the Company is party to overdraft facilities with a borrowing capacity of $30.0 million, of which $2.4 million was drawn and $27.6 million was available as of July 3, 2026. Total letters of credit and surety bonds of $48.4 million were outstanding as of July 3, 2026.
Deferred Financing Fees
As of July 3, 2026, the Company has $5.0 million in deferred financing fees included in Other assets related to the Revolver and $9.8 million of original issue discount fees and other issuance costs included as a reduction of Long-term debt related to the Term Loan and the 2028 Notes.
14
ENOVIS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)
10. Accrued Liabilities
Accrued liabilities in the Condensed Consolidated Balance Sheets consisted of the following:
| July 3, 2026 | December 31, 2025 | ||||||||||
| (In thousands) | |||||||||||
| Accrued compensation and related benefits | $ | $ | |||||||||
| Accrued taxes | |||||||||||
| Derivative liability – current portion | |||||||||||
| Accrued third-party commissions | |||||||||||
| Lease liability – current portion | |||||||||||
| Accrued rebates | |||||||||||
| Accrued professional fees | |||||||||||
| Accrued interest | |||||||||||
| Deferred and contingent consideration – current portion | |||||||||||
| Customer advances and billings in excess of costs incurred | |||||||||||
| Accrued restructuring liability | |||||||||||
| Accrued freight | |||||||||||
| Accrued royalties | |||||||||||
| Purchase of royalty interest – current portion | |||||||||||
| Warranty liability | |||||||||||
| Other | |||||||||||
| $ | $ | ||||||||||
Accrued Restructuring Liability
The Company’s restructuring programs include a series of actions to reduce the structural costs of the Company. A summary of the activity in the Company’s restructuring liability included in Accrued liabilities in the Condensed Consolidated Balance Sheets is as follows:
| Six Months Ended July 3, 2026 | |||||||||||||||||||||||||||||||||||
| Balance at Beginning of Period | Provisions | Payments | Foreign Currency Translation | Balance at End of Period | |||||||||||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||||||||||||||
| Restructuring charges: | |||||||||||||||||||||||||||||||||||
Termination benefits(1) | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
Facility closure costs and other(2) | ( | ||||||||||||||||||||||||||||||||||
Total (3) | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||
(1) Includes severance and other termination benefits, including outplacement services.
(2) Includes the cost of relocating associates, relocating equipment, lease termination expense and other costs in connection with the closure and optimization of office sites, shared service centers, and manufacturing facilities.
(3) For the six months ended July 3, 2026, $5.3 million and $2.3 million of the Company’s total provisions were related to the P&R and Recon segments, respectively.
15
ENOVIS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)
11. Financial Instruments and Fair Value Measurements
The Company utilizes fair value measurement guidance prescribed by accounting standards to value its financial instruments. The guidance establishes a fair value hierarchy based on the inputs used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows:
Level One: Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets.
Level Two: Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
Level Three: Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.
The carrying values of financial instruments, including trade receivables, other receivables and accounts payable, approximate their fair values due to their short-term maturities. The carrying value of the outstanding balances under the Enovis Credit Agreement, which bears a variable interest rate indexed to the Secured Overnight Financing Rate (SOFR), approximates fair value as it reprices when market interest rates change. Based on current interest rates for similar types of borrowings, the estimated fair value of the Company’s total debt, including the Senior unsecured convertible notes, the Term Loan, and the Revolver, was $1.3 billion and $1.3 billion as of July 3, 2026 and December 31, 2025, respectively. The estimated fair value, a Level Two valuation in the fair value hierarchy, may not represent actual values of the financial instruments that could be realized as of the balance sheet date or that will be realized in the future.
As of July 3, 2026, the Company held $4.9 million in Level Three liabilities arising from contingent consideration related to acquisitions that may settle in cash. The fair value of the contingent consideration liabilities is determined using unobservable inputs and the inputs vary based on the nature of the purchase agreements. These inputs can include the estimated amount and timing of projected cash flows, the risk-adjusted discount rate used to present value the projected cash flows, and the probability of the acquired company attaining certain targets stated within the purchase agreements. A change in these unobservable inputs to a different amount might result in a significantly higher or lower fair value measurement at the reporting date due to the nature of uncertainty inherent to the estimates.
The gross range of outcomes for contingent consideration arrangements that have a fixed limit on the maximum payout is $1.4 million to $4.9 million. The one contingent consideration arrangement that previously had no limit was settled and amended to a fixed limit as of July 3, 2026 and no other unlimited arrangements exist. In the second quarter of 2026, the Company settled contingent consideration related to the 2022 acquisition of Kico Knee Innovation Company Pty Limited and made a payment of $5.7 million. The settlement also resulted in a $5.7 million non-cash gain upon the reversal of a portion of the contingent consideration liability.
There were no transfers in or out of Level One, Two or Three during the six months ended July 3, 2026.
| Total Contingent Consideration Rollforward | |||||||||||||||||||||||||||||||||||||||||
| Beginning Balance | Additions | Charges / (Gain) | Interest | Payments | Foreign Exchange | Ending Balance | |||||||||||||||||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||||||||||||||||||||
| Contingent Consideration - Level Three | $ | $ | $ | ( | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||
Purchase of royalty interest liability
In the first and second quarters of 2025, the Company entered into agreements to buyout the economic interest in future royalty payments in connection with the termination of certain legacy product development agreements related to certain of the Company’s U.S. Reconstructive products. The aggregate gross buyout amount under such agreements is $56.5 million, payable over nine years. The Company recorded charges to the Condensed Consolidated Statements of Operations of $45.8 million in the year ended December 31, 2025, representing the discounted liability upon entering the agreements. As of July 3, 2026, the
16
ENOVIS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)
outstanding discounted liability under these agreements due within the next twelve months is $4.3 million, which is recorded in Accrued liabilities, and the non-current portion is $31.1 million, which is recorded in Other liabilities on the Condensed Consolidated Balance Sheet. In the six months ended July 3, 2026 and July 4, 2025, the Company made payments of $4.3 million and $2.9 million, respectively, which are reflected in Cash flows from operating activities in the Condensed Consolidated Statements of Cash Flows.
Deferred Compensation Plans
The Company maintains deferred compensation plans for the benefit of certain employees and non-executive officers. As of July 3, 2026 and December 31, 2025 the fair value of these plans were $21.5 million and $19.9 million, respectively. These plans are deemed to be Level Two within the fair value hierarchy.
Forward Currency Contracts
The Company’s objective in using forward currency contracts is to add stability to the Company’s earnings and to protect the U.S. Dollar value of forecasted transactions. To accomplish this objective, the Company entered into forward currency contract agreements between the U.S. Dollar and the Mexican Peso as part of its risk management strategy. At December 31, 2025, the Company’s Mexican Peso forward currency contracts were fully settled and there were no notional amounts outstanding as of July 3, 2026. These forward currency contract agreements were designated and qualified as cash flow hedges.
The gain or loss on a derivative instrument designated as a cash flow hedge is recorded in Unrealized gain (loss) on hedging activities, net of tax within the Company’s unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) until the underlying third-party transaction occurs. When the underlying third-party transaction occurs, the Company recognizes the gain or loss in earnings within Cost of Sales in its unaudited Condensed Consolidated Statements of Operations. The contracts are recorded at fair value and deemed to be Level Two in the fair value hierarchy.
During the three and six months ended July 3, 2026, the Company recognized a gain of $0.3 million and $1.3 million, respectively, in Cost of Sales on its Condensed Consolidated Statements of Operations related to its forward currency contracts designated as cash flow hedges that previously settled in the fourth quarter of 2025. At July 4, 2025, the Company’s forward currency contracts had a Mexican Peso notional amount of approximately $506.0 million and a U.S. Dollar aggregate notional amount of $24.7 million. During the three and six months ended July 4, 2025, the Company recognized a realized loss of $0.3 million and $1.5 million, respectively, in Cost of Sales on its Condensed Consolidated Statements of Operations related to its forward currency contracts designated as cash flow hedges.
The Company also entered into forward currency contracts on February 19, 2026 for the purpose of managing its exposure to currency exchange rate risk arising from intercompany loan balances between foreign-denominated subsidiaries (the “February 2026 forwards”). The February 2026 forwards were designated and qualified as fair value hedges and matured on July 2, 2026. During the three and six months ended July 3, 2026, the Company recognized a net gain of $5.0 million and $12.7 million, respectively, in Selling, general, and administrative expense on its Consolidated Statements of Operations related to the effect of exchange rate movements on its forward currency contract derivatives.
The Company entered into new forward currency contracts during the second quarter of 2026 for the purpose of managing its exposure to currency exchange rate risk arising from intercompany loan balances between foreign-denominated subsidiaries. As of July 3, 2026, the outstanding forward currency contracts, which mature on April 15, 2027, have notional amounts of $150.1 million to purchase U.S. Dollars and sell Euros and $153.0 million to purchase U.S. Dollars and sell Swiss Francs. These contracts were designated and qualified as fair value hedges as of July 3, 2026.
Cross-currency Swap Contracts
The Company has cross-currency swap agreements to hedge its net investment in its Swiss Franc-denominated legal entity and its subsidiaries against adverse movements in exchange rates between the U.S. Dollar and the Swiss Franc. Certain of these cross-currency swap agreements are designated and qualified as net investment hedges. As of July 3, 2026, the designated cross-currency swap agreements had an aggregate Swiss Franc notional amount of approximately CHF 1.1 billion and an aggregate U.S. Dollar notional amount of $1.4 billion. The remaining cross-currency swap agreements were not designated as hedging instruments and had an aggregate Swiss Franc notional amount of CHF 81.4 million and an aggregate U.S. Dollar notional amount of $101.3 million as of July 3, 2026. Both the designated and undesignated cross-currency swap agreements are recorded at fair value and deemed to be Level Two in the fair value hierarchy.
17
ENOVIS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)
Cross-currency swaps involve the receipt of functional-currency fixed-rate amounts from a counterparty in exchange for the Company making foreign-currency fixed-rate payments over the life of the agreement. For derivatives designated as net investment hedges, the change in fair value attributable to foreign currency exchange rate movements are recorded in Accumulated other comprehensive loss within the Condensed Consolidated Balance Sheet and reported as part of the foreign currency translation adjustment in the Condensed Consolidated Statements of Comprehensive Income (Loss). Amounts recorded in Accumulated other comprehensive income (loss) are reclassified out of Accumulated other comprehensive income (loss) into earnings only upon the sale or substantial liquidation of the hedged net investment.
The Company recognized interest income on its designated cross-currency swap agreements of $10.5 million and $20.5 million for the three and six months ended July 3, 2026 and $12.0 million and $24.3 million for three and six months ended July 4, 2025, respectively, which is included within Interest expense, net in the Condensed Consolidated Statements of Operations, consistent with the accounting for designated derivative instruments.
As of January 1, 2026, three cross-currency swap agreements previously designated as net investment hedges, with an aggregate Swiss Franc notional amount of CHF 273.0 million were dedesignated. The dedesignation resulted from the aggregate notional amount of designated cross-currency swaps exceeding the Company’s net investment in its Swiss Franc-denominated legal entity and its subsidiaries due to the prior-year goodwill impairment charges.
In February 2026, the Company partially reduced the excess of the cross-currency swap notional amount relative to the hedge of net investment through a legal entity restructuring. As of April 4, 2026 two of the undesignated agreements were able to be re-designated as net investment hedges, with an aggregate Swiss Franc notional amount of CHF136.5 million.
For the cross-currency swap agreements that are not designated as net investment hedges, changes in fair value are recognized in non-operating Other income (expense), net in the Consolidated Statement of Operations. For the three and six months ended July 3, 2026, the Company recognized a mark-to-market fair value loss of $2.2 million and $1.9 million, respectively, and received $1.4 million and $3.7 million cash interest benefit related to its undesignated cross-currency swap agreements, which are both presented within Other income (expense), net in the Consolidated Statement of Operations, consistent with the accounting for undesignated derivative instruments.
In January 2025, cross-currency swap agreements designated as net investment hedges with an aggregate Swiss Franc notional amount of CHF 272 million were de-designated and settled for a $1.6 million cash inflow reflected within investing activities in the Consolidated Statements of Cash Flows. The $2.5 million gain on settlement is reported in the Condensed Consolidated Balance Sheet as part of Accumulated other comprehensive income (loss) and in the Company’s Condensed Consolidated Statements of Comprehensive Income (Loss) as part of the foreign currency translation adjustment. The Company contemporaneously entered into new cross-currency swap agreements for the same Swiss Franc notional amount and designated them as a hedge of its net investment in its Swiss Franc-denominated subsidiaries.
The following table presents the effect of the Company’s designated hedging instruments on Accumulated other comprehensive income (loss) for the three and six months ended July 3, 2026 and July 4, 2025:
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||||||
| July 3, 2026 | July 4, 2025 | July 3, 2026 | July 4, 2025 | |||||||||||||||||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||||||||||||||||||||
| Gain (loss) on cross-currency swaps | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||||||||
| Gain (loss) on forward currency contracts | ( | ( | ||||||||||||||||||||||||||||||||||||
| $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||||||
18
ENOVIS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)
The following table presents the fair value of the Company’s derivative financial instruments as well as their classification on the Condensed Consolidated Balance Sheets as of July 3, 2026 and December 31, 2025:
| (In thousands) | Location on Unaudited Consolidated Balance Sheets (1) | July 3, 2026 | December 31, 2025 | ||||||||||||||
| Derivative Assets | |||||||||||||||||
| Designated Hedging Instruments | |||||||||||||||||
| Forward currency contracts | Other current assets | $ | $ | ||||||||||||||
| Cross-currency swaps | Other current assets | ||||||||||||||||
| Non-Designated Hedging Instruments | |||||||||||||||||
| Cross-currency swaps | Other current assets | $ | $ | ||||||||||||||
| Total Derivative Assets | $ | $ | |||||||||||||||
| Derivative Liabilities | |||||||||||||||||
| Designated Hedging Instruments | |||||||||||||||||
| Forward currency contracts | Accrued liabilities | $ | $ | ||||||||||||||
| Cross-currency swaps | Accrued liabilities | ||||||||||||||||
| Cross-currency swaps | Other long-term liabilities | ||||||||||||||||
| $ | $ | ||||||||||||||||
| Non-Designated Hedging Instruments | |||||||||||||||||
| Cross-currency swaps | Other long-term liabilities | $ | $ | ||||||||||||||
| Total Derivative Liabilities | $ | $ | |||||||||||||||
(1) The Company classifies derivative assets and liabilities as current when the settlement date of the contract is one year or less.
12. Commitments and Contingencies
The Company is involved in various pending legal, regulatory, and other proceedings arising out of the ordinary course of the Company’s business. None of these proceedings are expected to have a material adverse effect on the financial condition, results of operations or cash flow of the Company. With respect to these proceedings, management of the Company believes that either it will prevail, has adequate insurance coverage or has established appropriate accruals to cover potential liabilities. Legal costs related to proceedings or claims are recorded as incurred. Other costs that management estimates may be paid related to the claims are accrued when the liability is considered probable and the amount can be reasonably estimated. There can be no assurance, however, as to the ultimate outcome of any of these matters, and if all or substantially all of these proceedings were to be determined adverse to the Company, there could be a material adverse effect on the financial condition, results of operations or cash flow of the Company.
For further description of the Company’s litigation and contingencies, reference is made to Note 18, “Commitments and Contingencies” in the Notes to Consolidated Financial Statements in the Company’s 2025 Form 10-K.
19
ENOVIS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)
13. Segment Information
The Company conducts its continuing operations through the Prevention & Recovery and Reconstructive operating segments, which also represent the Company’s reportable segments.
▪P&R - a leader in orthopedic solutions and recovery sciences, providing devices, software, and services across the patient care continuum from injury prevention to rehabilitation after surgery, injury, or from degenerative disease.
•Recon - an innovation market-leader positioned in the fast-growing surgical implant business, offering a comprehensive suite of reconstructive joint products for the hip, knee, shoulder, elbow, foot, ankle, and finger, and surgical productivity tools.
The Company’s management, including the chief operating decision maker, evaluates the operating results of each of its reportable segments based upon Net sales and Adjusted EBITDA. Net sales represents revenue from external customers. There are no revenues from transactions between our segments reported in our segment measures of profitability. There are certain costs incurred centrally which are allocated to the segments generally using the proportionate share of net sales. Adjusted EBITDA excludes the effect of Other (income) expense, net, non-operating (gain) loss on investments, debt extinguishment charges, interest expense, net, restructuring charges, Medical Device Regulation (MDR) and other costs, strategic transaction costs, stock-based compensation, depreciation and other amortization, acquisition-related intangible asset amortization, purchase of royalty interest, and goodwill impairment charges from the results of the Company’s operating segments.
For the three and six months ended July 3, 2026, we revised our definition of Adjusted EBITDA to no longer adjust for inventory step-up charges. Adjusted EBITDA in prior periods has been revised to reflect this change for consistency of presentation.
The chief operating decision maker is a group, which includes both the Company’s Chief Executive Officer and Chief Financial Officer. The chief operating decision maker uses Adjusted EBITDA because this measure assists our management in comparing operating performance over time because certain items are not normal recurring charges necessary to operate our business, and these items may obscure underlying business trends and make comparisons of long-term performance difficult, as they are of a nature and/or size that occur with inconsistent frequency or relate to discrete restructuring plans and other initiatives that are fundamentally different from our ongoing productivity improvements. The chief operating decision maker utilizes Adjusted EBITDA to assess segment performance, incorporating it into the annual budgeting process and monthly comparisons of actual results to budget and updated forecasts. This analysis supports decisions regarding the allocation of capital and personnel to the segments.
20
ENOVIS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)
The Company’s segment results were as follows:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| July 3, 2026 | July 4, 2025 | July 3, 2026 | July 4, 2025 | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Prevention & Recovery: | |||||||||||||||||||||||
| Net sales | $ | $ | $ | $ | |||||||||||||||||||
| Segment cost of sales | |||||||||||||||||||||||
| Segment research and development | |||||||||||||||||||||||
| Segment operating expense | |||||||||||||||||||||||
| Total segment expenses | |||||||||||||||||||||||
| Add: Depreciation | |||||||||||||||||||||||
| Adjusted EBITDA (non-GAAP) | $ | $ | $ | $ | |||||||||||||||||||
| Reconstructive: | |||||||||||||||||||||||
| Net sales | $ | $ | $ | $ | |||||||||||||||||||
| Segment cost of sales | |||||||||||||||||||||||
| Segment research and development | |||||||||||||||||||||||
| Segment operating expense | |||||||||||||||||||||||
| Total segment expenses | |||||||||||||||||||||||
| Add: Depreciation | |||||||||||||||||||||||
Adjusted EBITDA (non-GAAP)(1) | $ | $ | $ | $ | |||||||||||||||||||
| Total: | |||||||||||||||||||||||
| Net Sales | $ | $ | $ | $ | |||||||||||||||||||
Adjusted EBITDA (non-GAAP) (1) | $ | $ | $ | $ | |||||||||||||||||||
(1) In conjunction with our Form 10-Q filing for the three months ended April 3, 2026, we revised our definition of Adjusted EBITDA to no longer adjust for inventory step-up charges. Adjusted EBITDA in prior periods has been revised to reflect this change for consistency of presentation. Accordingly, Adjusted EBITDA for the three and six months ended July 4, 2025 has been revised from $97.2 million and $196.3 million, as presented in our Form 10-Q for the period ended July 4, 2025, to $91.2 million and $178.2 million, respectively, reflecting the removal of a $6.0 million and $18.1 million adjustment for inventory step-up in connection with acquired businesses. Adjusted EBITDA for our Recon segment for the three and six months ended July 4, 2025 has also been revised from $50.4 million and $118.7 million , as presented in our Form 10-Q for the period ended July 4, 2025, to $44.4 million and $100.6 million, respectively, reflecting the removal of the same $6.0 million and $18.1 million adjustment for inventory step-up in connection with acquired businesses from the prior period.
21
ENOVIS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)
The following is a reconciliation of Net Loss to Adjusted EBITDA:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| July 3, 2026 | July 4, 2025 | July 3, 2026 | July 4, 2025 | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Net Loss (GAAP) | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Loss from discontinued operations, net of taxes | |||||||||||||||||||||||
| Income tax expense (benefit) | |||||||||||||||||||||||
Restructuring charges(1) | |||||||||||||||||||||||
MDR and other costs (2) | |||||||||||||||||||||||
Strategic transaction costs (3) | |||||||||||||||||||||||
| Stock-based compensation | |||||||||||||||||||||||
| Depreciation and other amortization | |||||||||||||||||||||||
| Amortization of acquired intangibles | |||||||||||||||||||||||
Purchase of royalty interest (5) | |||||||||||||||||||||||
| Interest expense, net | |||||||||||||||||||||||
Other (income) expense, net (4) | ( | ( | |||||||||||||||||||||
Adjusted EBITDA (non-GAAP) (6) | $ | $ | $ | $ | |||||||||||||||||||
(1) Restructuring charges reflect costs associated with the Company’s restructuring programs to reduce the structural costs of the Company. For further information, see Note 10, “Accrued Liabilities - Accrued Restructuring Liability.” Includes expenses of $0.2 million and $0.3 million classified as Cost of sales on the Company’s Condensed Consolidated Statements of Operations for the three and six months ended July 4, 2025, respectively. There were no similar charges for the three and six months ended July 3, 2026.
(2) MDR and other costs includes (i) $0.4 million and $1.2 million for the three and six months ended July 3, 2026 and $2.8 million and $5.4 million for the three and six months ended July 4, 2025, respectively, in non-recurring costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with the medical device reporting regulations and other requirements of the new medical device regulations in the European Union for devices which were introduced to the market prior to the regulation and (ii) $0.3 million and $0.7 million for the three and six months ended July 3, 2026 and $0.4 million and $1.1 million for the three and six months ended July 4, 2025, respectively, of expenses to resolve certain infrequent, non-recurring regulatory or other legal matters. These costs are classified as Selling, general and administrative expense on our Condensed Consolidated Statements of Operations.
(3) Strategic transaction costs includes: (i) $4.7 million and $11.7 million for the three and six months ended July 3, 2026 and $7.8 million and $16.5 million for the three and six months ended July 4, 2025, respectively, related to non-recurring integration costs associated with the Lima Acquisition which includes (a) payroll and retention costs for roles eliminated in connection with the integration of our recent acquisition of Lima where a legal notice period was required prior to the employee’s separation from the Company, or integration-related daily activities not related to former roles performed by an employee during their legal notice period and prior to their separation from the Company. In each case, such costs relate solely to roles eliminated in connection with the integration of the Lima acquisition, and are non-recurring and not part of our normal business operations; (b) professional and consulting fees specifically incurred to consummate the acquisition and advise and facilitate on post-acquisition integration matters including legal entity consolidation, costs associated with rebranding and marketing acquired business under Enovis name, such as marketing materials, trade show redesign costs and product labeling; and (c) integration related costs associated with sales agent and distributor network rationalization, including contract termination and retention expenses, supply chain and portfolio integration, and quality management system consolidation, (ii) $(3.5 ) million and $0.3 million for the three and six months ended July 3, 2026 and $5.4 million and $8.2 million for the three and six months ended July 4, 2025, including a $5.7 0.2 million and $0.4 million for the three and six months ended July 3, 2026 and $0.3 million and $0.8 million for the three and six months ended July 4, 2025, respectively, related to the Separation of our former fabrication technology business. These costs are classified as Selling, general and administrative expense on our Condensed Consolidated Statements of Operations.
(4) Includes the fair value gain adjustment for non-designated cross-currency swaps in 2026. Includes the final fair value loss adjustment for the Contingent Acquisition Shares issued in the first quarter of 2025.
(5) Purchase of royalty interest represents the one-time, up-front expense incurred by the Company to acquire the economic rights to future royalties under product development agreements in connection with the termination of such agreements as part of a strategic shift to a new product development model. The Company believes that excluding the impact of such expense enhances comparability between periods, provides investors with a clear and meaningful view of our underlying business trends and aligns with how management evaluates the ongoing business performance.
(6) In conjunction with our Form 10-Q filing for the three months ended April 3, 2026, we revised our definition of Adjusted EBITDA to no longer adjust for inventory step-up charges. Adjusted EBITDA in prior periods has been revised to reflect this change for consistency of presentation. Accordingly, Adjusted EBITDA for the three and six months ended July 4, 2025 has been revised from $97.2 million and $196.3 million, respectively, as presented in our Form 10-Q for the period ended July 4, 2025, to $91.2 million and $178.2 million, reflecting the removal of a $6.0 million and $18.1 million, respectively, adjustment for inventory step-up in connection with acquired businesses.
22
ENOVIS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)
The Company’s total assets and capital expenditures by segment were as follows:
| July 3, 2026 | December 31, 2025 | ||||||||||
| (In thousands) | |||||||||||
Total assets (1): | |||||||||||
| Prevention & Recovery | $ | $ | |||||||||
| Reconstructive | |||||||||||
| Total | $ | $ | |||||||||
(1) Includes allocation of certain centrally managed assets, including cash and cash equivalents.
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| July 3, 2026 | July 4, 2025 | July 3, 2026 | July 4, 2025 | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
Capital expenditures (2): | |||||||||||||||||||||||
| Prevention & Recovery | $ | $ | $ | $ | |||||||||||||||||||
| Reconstructive | |||||||||||||||||||||||
| Total capital expenditures | $ | $ | $ | $ | |||||||||||||||||||
(2) Includes allocation of capital expenditures from certain corporate/centrally managed functions.
23
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion of the financial condition and results of operations of Enovis Corporation (“Enovis,” “the Company,” “we,” “our,” and “us”) should be read in conjunction with the Condensed Consolidated Financial Statements and related footnotes included in Part I. Item 1. “Financial Statements” of this Quarterly Report on Form 10-Q for the quarterly period ended July 3, 2026 (this “Form 10-Q”) and the Consolidated Financial Statements and related footnotes included in Part II. Item 8. “Financial Statements and Supplementary Data” of our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Form 10-K”) filed with the Securities and Exchange Commission (the “SEC”) on February 26, 2026.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements contained in this Form 10-Q that are not historical facts are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 21E of the Exchange Act. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date this Form 10-Q is filed with the SEC. Statements other than statements of historical fact are statements that could be deemed forward-looking statements, including statements regarding: the Company’s acquisition (the “Lima Acquisition”) and integration of LimaCorporate S.p.A. (“Lima”); the impact of public health emergencies and global pandemics; disruptions in the global economy caused by escalating geopolitical tensions including in connection with the ongoing conflicts between Russia and the Ukraine and in the Middle East; macroeconomic conditions, including the impact of increasing inflationary pressures; changes in government trade policies, including the implementation of tariffs; supply chain disruptions; increasing energy costs and availability concerns, particularly in the European market; projections of revenue, profit margins, expenses, tax provisions and tax rates, earnings or losses from operations, impact of foreign exchange rates, cash flows, synergies or other financial items; plans, strategies and objectives of management for future operations including statements relating to potential acquisitions, compensation plans or purchase commitments; developments, performance, industry or market rankings relating to products or services; future macroeconomic conditions or performance, including the impact of inflationary pressures; changes in government trade policies, including the implementation of tariffs; the outcome of outstanding claims or legal proceedings; potential gains and recoveries of costs; assumptions underlying any of the foregoing; and any other statements that address activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the future. Forward-looking statements may be characterized by terminology such as “believe,” “anticipate,” “should,” “would,” “could,” “intend,” “plan,” “will,” “expect,” “estimate,” “project,” “positioned,” “strategy,” “targets,” “aims,” “seeks,” “sees,” and similar expressions. These statements are based on assumptions and assessments made by our management as of the filing of this Form 10-Q in light of their experience and perception of historical trends, current conditions, expected future developments and other factors we believe to be appropriate. These forward-looking statements are subject to a number of risks and uncertainties and actual results could differ materially due to numerous factors, including but not limited to the following:
•an inability to identify, finance, acquire and successfully integrate suitable acquisition candidates;
•the availability of additional capital and our inability to pursue our growth strategy without it;
•our indebtedness and our debt agreements, which contain restrictions that may limit our flexibility in operating our business;
•our restructuring activities, which may subject us to additional uncertainty in our operating results;
•any impairment in the value of our intangible assets or goodwill, because of a sustained decline in, including but not limited to, operating performance at one or more our business units or the market price of our common stock;
•a material disruption at any of our manufacturing facilities;
•any failure to maintain, protect and defend our intellectual property rights;
•the effects of contagious diseases, public health emergencies, terrorist activity, man-made or natural disasters and war;
•significant movements in foreign currency exchange rates;
24
•the availability of raw materials, as well as parts and components used in our products, as well as the impact of raw material, energy and labor price fluctuations and supply shortages;
•the competitive environment in which we operate;
•changes in our tax rates or exposure to additional income tax liabilities;
•our reliance on a variety of distribution methods to market and sell our medical device products;
•extensive government regulation and oversight of our products, including the requirement to obtain and maintain regulatory approvals and clearances;
•tariffs and other trade measures;
•safety issues or recalls of our products;
•failure to comply with federal and state regulations related to the manufacture of our products;
•improper marketing or promotion of our products;
•impacts of potential legislative or regulatory reforms on our business;
•risks associated with the clinical trial process;
•our exposure to product liability claims;
•our inability to obtain coverage and adequate levels of reimbursement from third-party payors for our medical device products;
•audits or denials of claims by government officials;
•federal and state health reform and cost control efforts;
•our failure or the failure of our employees or third parties with which we have relationships to comply with healthcare laws and regulations;
•our relationships with leading surgeons and our ability to comply with enhanced disclosure requirements regarding payments to physicians;
•actual or perceived failures to comply with applicable data protection, privacy and security laws, regulations, standards and other requirements;
•service interruptions, data corruption, cyber-based attacks or network security breaches affecting our information technology infrastructure;
•non-compliance with anti-bribery laws, export control regulations, economic sanctions or other trade laws;
•non-compliance with non-U.S. laws, regulations and policies;
•if the completed spin-off of ESAB Corporation (“ESAB”) into an independent publicly traded company (the “Separation”) and/or certain related transactions do not qualify as transactions that are generally tax-free for U.S. federal income tax purposes, we and our stockholders could be subject to significant tax liabilities;
•potential indemnification liabilities to ESAB pursuant to the Separation and distribution agreement and other related agreements;
25
•changes in the general economy;
•the impact of a shutdown of the U.S. government or any future shutdowns;
•disruptions in the global economy caused by the ongoing conflicts between Russia and Ukraine and in the Middle East;
•the loss of key members of our leadership team, or the inability to attract, develop, engage, and retain qualified employees; and
•other risks and factors listed in Part II, Item 1A. “Risk Factors” in this Form 10-Q and Part 1, Item 1A. “Risk Factors” in Part I of our 2025 Form 10-K.
Any such forward-looking statements are not guarantees of future performance and actual results, developments and business decisions may differ materially from those envisaged by such forward-looking statements. We do not assume any obligation and do not intend to update any forward-looking statement, except as required by law. See “Risk Factors” in this Form 10-Q and our 2025 Form 10-K for a further discussion regarding some of the reasons that actual results may be materially different from those that we anticipate.
26
Overview
Please see Part I, Item 1. “Business” in our 2025 Form 10-K for a discussion of the Company’s objectives and methodologies for delivering shareholder value.
Enovis conducts its operations through two operating segments: Prevention & Recovery (“P&R”) and Reconstructive (“Recon”).
•P&R - a leader in orthopedic solutions, providing devices, software, and services across the patient care continuum from injury prevention to rehabilitation after surgery or injury, or from degenerative disease.
•Recon - an innovation market-leader positioned in the fast-growing surgical implant business, offering a comprehensive suite of reconstructive joint products for the hip, knee, shoulder, elbow, foot, ankle, and finger along with surgical productivity tools.
We have a global footprint, with production facilities in North America, Europe, North Africa, and Asia. We serve a global customer base across multiple markets through a combination of direct sales and third-party distribution channels. Our customer base is highly diversified in the medical market.
Our business management system, Enovis Growth Excellence (“EGX”), is integral to our operations. EGX includes our values and behaviors, a comprehensive set of tools, and repeatable, teachable processes that we use to drive continuous improvement and create superior value for our customers, shareholders, and associates. We believe that our management team’s access to, and experience in, the application of the EGX methodology is one of our primary competitive strengths.
Results of Operations
The following discussion of Results of Operations addresses the comparison of the periods presented. Our management evaluates the operating results of each of its reportable segments based upon Net sales and Adjusted EBITDA as defined in the “Non-GAAP Measures” section below.
Items Affecting Comparability of Reported Results
The comparability of our operating results for the six months ended July 3, 2026 to the prior periods in 2025 is affected by fewer days as compared to the six months ended July 4, 2025.
Additionally, the comparability of our operating results for the six months ended July 3, 2026 and six months ended July 4, 2025 is affected by the following additional significant items:
Strategic Acquisitions and Divestiture
We complement our organic growth plans with strategic acquisitions and in certain cases strategic divestitures. Acquisitions and divestitures can significantly affect our reported results.
On October 7, 2025, we completed the sale of our Dr. Comfort Footcare Solutions U.S. operations of our P&R segment to Promus Equity Partners in an asset deal, with an effective date of October 4, 2025. The sale includes inventory, machinery and equipment, and intangible assets for consideration of up to $60 million in cash, consisting of an upfront payment of $45 million and up to $15 million payable in the future upon the achievement of certain milestones. The Dr. Comfort Divestiture does not represent a strategic shift that has a major effect on the Company’s operations and financial results and is therefore not presented as a discontinued operation.
Additionally, the Company completed seven transactions in 2025 for $36.9 million total purchase consideration, including deferred consideration and estimated contingent consideration which includes the acquisition of three distributors, two businesses, and two purchases of intellectual property. Of these transactions, three were in the P&R segment and four were in the Recon segment.
27
Foreign Currency Fluctuations
During the three and six months ended July 3, 2026, approximately 44% and 45% of our sales, respectively, were derived from operations outside the United States, the majority of which are in Europe, with the remaining portion primarily in the Asia-Pacific region. Accordingly, we can be affected by market demand, economic and political factors in countries in Europe and the Asia-Pacific region, and significant movements in foreign exchange rates. Our ability to grow and our financial performance will be affected by our ability to address challenges and opportunities that are a consequence of expanding our global operations through our recent acquisitions, including efficiently utilizing our international sales channels, manufacturing and distribution capabilities, participating in the expansion of market opportunities, successfully completing global acquisitions and engineering innovative new product applications to create better patient outcomes.
The majority of our Net sales derived from operations outside the United States are denominated in currencies other than the U.S. Dollar. Similar portions of our manufacturing and employee costs are also outside the United States and denominated in currencies other than the U.S. Dollar. Changes in foreign exchange rates can impact our results of operations and are quantified when significant. For the three months ended July 3, 2026 compared to the three months ended July 4, 2025, fluctuations in foreign currencies increased Net sales by 1.0%, increased Gross profit by approximately 0.6%, and increased operating expenses by approximately 0.9%. For the six months ended July 3, 2026 compared to the six months ended July 4, 2025, fluctuations in foreign currencies increased Net sales by 2.6%, increased Gross profit by approximately 2.2%, and increased operating expenses by approximately 2.4%.
Seasonality
Sales in our P&R and Recon segments typically peak in the fourth quarter. General economic conditions and other factors may, however, impact future seasonal variations.
Non-GAAP Measures
Adjusted EBITDA
Adjusted EBITDA and Adjusted EBITDA margin, which are non-GAAP performance measures, are included in this report because they are key metrics used by our management to assess our operating performance.
Adjusted EBITDA excludes from Net income (loss) the effect of Income (loss) from discontinued operations, net of taxes; Income tax expense (benefit); Other (income) expense, net; non-operating (gain) loss on investments; Interest expense, net; Restructuring; Medical Device Regulation (“MDR”) fees and other costs; strategic transaction costs; stock-based compensation; depreciation and other amortization; acquisition-related intangible asset amortization; strategic purchase of economic interest on future royalty payments; and goodwill impairment charges. We also present Adjusted EBITDA and Adjusted EBITDA margin by operating segment, which are subject to the same adjustments. Operating income (loss), adjusted EBITDA and Adjusted EBITDA margins at the operating segment level also include allocations of certain central function expenses not directly attributable to either operating segment.
For the three and six months ended July 3, 2026, we revised our definition of Adjusted EBITDA to no longer adjust for inventory step-up charges. Adjusted EBITDA in prior periods has been revised to reflect this change for consistency of presentation.
Adjusted EBITDA assists our management in comparing operating performance over time because certain items may obscure underlying business trends and make comparisons of long-term performance difficult, as they are of a nature and/or size that occur with inconsistent frequency or relate to discrete restructuring plans and other initiatives that are fundamentally different from our ongoing productivity improvements.
Our management also believes that presenting these measures allows investors to view our performance using the same measures that we use in evaluating our financial and business performance and trends.
Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information calculated in accordance with GAAP or prepared in accordance with Regulation S-X. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures.
28
The following table sets forth a reconciliation of net loss to Adjusted EBITDA, for the three and six months ended July 3, 2026 and July 4, 2025, respectively.
| Three Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||
| July 3, 2026 | July 4, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||
| P&R | Recon | Total | P&R | Recon | Total | ||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
Net Loss (GAAP) (1) | $ | (1.0) | $ | (36.5) | |||||||||||||||||||||||||||||||||||||||||||
| Net Loss margin (GAAP) | (0.2) | % | (6.5) | % | |||||||||||||||||||||||||||||||||||||||||||
| Loss from discontinued operations, net of taxes | — | 0.1 | |||||||||||||||||||||||||||||||||||||||||||||
| Income tax expense | 8.5 | 10.8 | |||||||||||||||||||||||||||||||||||||||||||||
| Other (income) expense, net | 1.9 | (0.4) | |||||||||||||||||||||||||||||||||||||||||||||
| Interest expense, net | 8.0 | 9.3 | |||||||||||||||||||||||||||||||||||||||||||||
| Operating income (loss) (GAAP) | $ | 15.1 | $ | 2.3 | 17.4 | $ | 9.3 | $ | (26.1) | (16.8) | |||||||||||||||||||||||||||||||||||||
| Operating income (loss) margin (GAAP) | 5.2 | % | 0.8 | % | 3.0 | % | 3.2 | % | (9.5) | % | (3.0) | % | |||||||||||||||||||||||||||||||||||
| Adjusted to add (deduct): | |||||||||||||||||||||||||||||||||||||||||||||||
Restructuring charges (2)(3) | 3.9 | 0.9 | 4.9 | 0.7 | 0.3 | 0.9 | |||||||||||||||||||||||||||||||||||||||||
MDR and other costs (2)(4) | 0.3 | 0.5 | 0.7 | 1.4 | 1.8 | 3.3 | |||||||||||||||||||||||||||||||||||||||||
Strategic transaction costs (2)(5) | 1.1 | 0.3 | 1.4 | 2.1 | 11.4 | 13.5 | |||||||||||||||||||||||||||||||||||||||||
Stock-based compensation (2) | 4.0 | 4.9 | 8.9 | 5.2 | 3.4 | 8.7 | |||||||||||||||||||||||||||||||||||||||||
| Depreciation and other amortization | 5.1 | 24.3 | 29.5 | 4.7 | 23.9 | 28.6 | |||||||||||||||||||||||||||||||||||||||||
| Amortization of acquired intangibles | 20.7 | 20.8 | 41.6 | 23.3 | 19.7 | 43.0 | |||||||||||||||||||||||||||||||||||||||||
Purchase of royalty interest (6) | — | — | — | — | 10.0 | 10.0 | |||||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA (non-GAAP) (7) | $ | 50.3 | $ | 54.0 | $ | 104.3 | $ | 46.7 | $ | 44.4 | $ | 91.2 | |||||||||||||||||||||||||||||||||||
Adjusted EBITDA margin (non-GAAP) (7) | 17.5 | % | 18.3 | % | 17.9 | % | 16.1 | % | 16.2 | % | 16.2 | % | |||||||||||||||||||||||||||||||||||
(1) Non-operating components of Net income (loss) are not allocated to the segments.
(2) Certain amounts are allocated to the segments as a percentage of revenue as the costs are not discrete to either segment.
(3) Restructuring charges reflect costs associated with the Company’s restructuring programs to reduce the structural costs of the Company. For further information, see Note 10, “Accrued Liabilities - Accrued Restructuring Liability.” Includes expenses of $0.3 million classified as Cost of sales on the Company’s Condensed Consolidated Statements of Operations for the three months ended July 4, 2025. There were no similar charges for the three months ended July 3, 2026.
(4) MDR and other costs includes (i) $0.4 million for the three months ended July 3, 2026 and $2.8 million for the three months ended July 4, 2025, respectively, in non-recurring costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with the medical device reporting regulations and other requirements of the new medical device regulations in the European Union for devices which were introduced to the market prior to the regulation and (ii) $0.3 million for the three months ended July 3, 2026 and $0.4 million for the three months ended July 4, 2025, respectively, of expenses to resolve certain infrequent, non-recurring regulatory or other legal matters. These costs are classified as Selling, general and administrative expense on our Condensed Consolidated Statements of Operations.
(5) Strategic transaction costs includes: (i) $4.7 million for the three months ended July 3, 2026 and $7.8 million for the three months ended July 4, 2025 related to non-recurring integration costs associated with the Lima Acquisition, which includes (a) payroll and retention costs for roles eliminated in connection with the integration of our recent acquisition of Lima where a legal notice period was required prior to the employee’s separation from the Company, or integration-related daily activities not related to former roles performed by an employee during their legal notice period and prior to their separation from the Company (in each case, such costs relate solely to roles eliminated in connection with the integration of the Lima acquisition, and are non-recurring and not part of our normal business operations); (b) professional and consulting fees specifically incurred to consummate the acquisition and advise and facilitate on post-acquisition integration matters including legal entity consolidation, costs associated with rebranding and marketing acquired business under Enovis name, such as marketing materials, trade show redesign costs and product labeling; and (c) integration related costs associated with sales agent and distributor network rationalization, including contract termination and retention expenses, supply chain and portfolio integration, and quality management system consolidation, (ii) $(3.5) million for the three months ended July 3, 2026 and $5.4 million for the three months ended July 4, 2025 , including a $5.7 million non-cash gain upon the reversal of a portion of a contingent consideration liability (See Note 11, “Financial Instruments and Fair Value Measurements” for additional information), partially offset by non-recurring (non-Lima) acquisition integration costs and other non-recurring project costs for global ERP rationalization and shared service center start-up, and (iii) $0.2 million for the three months ended July 3, 2026 and $0.3 million for the three months ended July 4, 2025, respectively, related to the Separation of our former fabrication technology business. These costs are classified as Selling, general and administrative expense on our Condensed Consolidated Statements of Operations.
(6) Purchase of royalty interest represents the one-time, up-front expense incurred by the Company to acquire the economic rights to future royalties under product development agreements in connection with the termination of such agreements as part of a strategic shift to a new product development model. The Company believes that excluding the impact of such expense enhances comparability between periods, provides investors with a clear and meaningful view of our underlying business trends and aligns with how management evaluates the ongoing business performance.
29
(7) In conjunction with our Form 10-Q filing for the three months ended April 3, 2026, we revised our definition of Adjusted EBITDA to no longer adjust for inventory step-up charges. Adjusted EBITDA in prior periods has been revised to reflect this change for consistency of presentation. Accordingly, the following non-GAAP measures for the three months ended July 4, 2025 as presented in our Form 10-Q for the period ended July 4, 2025 have been revised to reflect the removal of a $6.0 million adjustment for inventory step-up in connection with acquired businesses: Adjusted EBITDA for our Recon segment has been revised from $50.4 million to $44.4 million, Total Adjusted EBITDA has been revised from $97.2 million to $91.2 million, Adjusted EBITDA margin for our Recon segment has been revised from 18.4% to 16.2%, and Total Adjusted EBITDA margin has been revised from 17.2% to 16.2%.
| Six Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||
| July 3, 2026 | July 4, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||
| P&R | Recon | Total | P&R | Recon | Total | ||||||||||||||||||||||||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
Net Loss (GAAP) (1) | $ | (9.5) | $ | (92.3) | |||||||||||||||||||||||||||||||||||||||||||
| Net Loss margin (GAAP) | (0.8) | % | (8.2) | % | |||||||||||||||||||||||||||||||||||||||||||
| Loss from discontinued operations, net of taxes | — | 0.2 | |||||||||||||||||||||||||||||||||||||||||||||
| Income tax expense | 17.5 | 9.0 | |||||||||||||||||||||||||||||||||||||||||||||
| Other (income) expense, net | (1.4) | 1.0 | |||||||||||||||||||||||||||||||||||||||||||||
| Interest expense, net | 17.2 | 18.5 | |||||||||||||||||||||||||||||||||||||||||||||
| Operating income (loss) (GAAP) | $ | 10.6 | $ | 13.4 | 23.9 | $ | 2.4 | $ | (65.9) | (63.6) | |||||||||||||||||||||||||||||||||||||
| Operating income (loss) margin (GAAP) | 1.9 | % | 2.2 | % | 2.0 | % | 0.4 | % | (11.8) | % | (5.7) | % | |||||||||||||||||||||||||||||||||||
| Adjusted to add (deduct): | |||||||||||||||||||||||||||||||||||||||||||||||
Restructuring charges (2)(3) | 5.3 | 2.3 | 7.6 | 3.5 | 1.3 | 4.8 | |||||||||||||||||||||||||||||||||||||||||
MDR and other costs (2)(4) | 0.9 | 1.0 | 1.9 | 2.8 | 3.6 | 6.5 | |||||||||||||||||||||||||||||||||||||||||
Strategic transaction costs (2)(5) | 4.7 | 7.7 | 12.4 | 4.1 | 21.4 | 25.5 | |||||||||||||||||||||||||||||||||||||||||
Stock-based compensation (2) | 8.1 | 9.6 | 17.7 | 9.8 | 6.3 | 16.1 | |||||||||||||||||||||||||||||||||||||||||
| Depreciation and other amortization | 10.2 | 50.7 | 60.9 | 8.9 | 49.4 | 58.3 | |||||||||||||||||||||||||||||||||||||||||
| Amortization of acquired intangibles | 41.7 | 41.8 | 83.5 | 46.1 | 38.7 | 84.8 | |||||||||||||||||||||||||||||||||||||||||
Purchase of royalty interest (6) | — | — | — | — | 45.8 | 45.8 | |||||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA (non-GAAP) (7) | $ | 81.4 | $ | 126.5 | $ | 207.9 | $ | 77.6 | $ | 100.6 | $ | 178.2 | |||||||||||||||||||||||||||||||||||
Adjusted EBITDA margin (non-GAAP) (7) | 14.5 | % | 20.7 | % | 17.7 | % | 13.8 | % | 18.0 | % | 15.9 | % | |||||||||||||||||||||||||||||||||||
(1) Non-operating components of Net loss are not allocated to the segments.
(2) Certain amounts are allocated to the segments as a percentage of revenue as the costs are not discrete to either segment.
(3) Restructuring charges reflect costs associated with the Company’s restructuring programs to reduce the structural costs of the Company. For further information, see Note 10, “Accrued Liabilities - Accrued Restructuring Liability.” Includes expenses of $0.3 million classified as Cost of sales on the Company’s Condensed Consolidated Statements of Operations for the six months ended July 4, 2025. There were no similar charges for the six months ended July 3, 2026.
(4) MDR and other costs includes (i) $1.2 million for the six months ended July 3, 2026 and $5.4 million for the six months ended July 4, 2025, respectively, in non-recurring costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with the medical device reporting regulations and other requirements of the new medical device regulations in the European Union for devices which were introduced to the market prior to the regulation and (ii) $0.7 million for the six months ended July 3, 2026 and $1.1 million for the six months ended July 4, 2025, respectively, of expenses to resolve certain infrequent, non-recurring regulatory or other legal matters. These costs are classified as Selling, general and administrative expense on our Condensed Consolidated Statements of Operations.
(5) Strategic transaction costs includes: (i) $11.7 million for the six months ended July 3, 2026 and $16.5 million for the six months ended July 4, 2025, respectively, related to non-recurring integration costs associated with the Lima Acquisition, which includes payroll and retention costs for roles to be eliminated or that are dedicated to integration activities, professional and consulting fees specifically incurred to consummate the acquisition and advise and facilitate on post-acquisition integration matters including legal entity consolidation, costs associated with rebranding and marketing acquired business under Enovis name, such as marketing materials, trade show redesign costs and product labeling, and integration related costs associated with sales agent and distributor network rationalization, including contract termination and retention expenses, supply chain and portfolio integration, and quality management system consolidation, (ii) $0.3 million for the six months ended July 3, 2026 and $8.2 million for the six months ended July 4, 2025, respectively, of non-recurring (non-Lima) acquisition integration costs and other costs associated with non-recurring projects, including global ERP rationalization and establishment of a new shared service center, and (iii) $0.4 million for the six months ended July 3, 2026 and $0.8 million for the six months ended July 4, 2025, respectively, related to the Separation of our former fabrication technology business. These costs are classified as Selling, general and administrative expense on our Condensed Consolidated Statements of Operations.
(6) Purchase of royalty interest represents the one-time, up-front expense incurred by the Company to acquire the economic rights to future royalties under product development agreements in connection with the termination of such agreements as part of a strategic shift to a new
30
product development model. The Company believes that excluding the impact of such expense enhances comparability between periods, provides investors with a clear and meaningful view of our underlying business trends and aligns with how management evaluates the ongoing business performance.
(7) In conjunction with our Form 10-Q filing for the three months ended April 3, 2026, we revised our definition of Adjusted EBITDA to no longer adjust for inventory step-up charges. Adjusted EBITDA in prior periods has been revised to reflect this change for consistency of presentation. Accordingly, the following non-GAAP measures for the six months ended July 4, 2025 as presented in our Form 10-Q for the period ended July 4, 2025 have been revised to reflect the removal of a $18.1 million adjustment for inventory step-up in connection with acquired businesses: Adjusted EBITDA for our Recon segment has been revised from $118.7 million to $100.6 million, Total Adjusted EBITDA has been revised from $196.3 million to $178.2 million, Adjusted EBITDA margin for our Recon segment has been revised from 21.2% to 18.0%, and Total Adjusted EBITDA margin has been revised from 17.5% to 15.9%.
Total Company - Net Sales
The following table presents the components of change for the three and six months ended July 3, 2026 compared with the prior period. As noted in the Items Affecting Comparability of Reported Results section above, the six months ended July 3, 2026 include the impact of fewer days as compared to the six months ended July 4, 2025.
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| Net Sales | Change % | Net Sales | Change % | ||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||
| For the period ended July 4, 2025 | $ | 564.5 | $ | 1,123.4 | |||||||||||||||||||
| Components of Change: | |||||||||||||||||||||||
Existing Businesses(1) | 27.3 | 4.8 | % | 45.6 | 4.1 | % | |||||||||||||||||
Acquisitions(2) | — | — | % | 1.3 | 0.1 | % | |||||||||||||||||
Divestitures(3) | (14.4) | (2.6) | % | (27.2) | (2.4) | % | |||||||||||||||||
Foreign Currency Translation(4) | 5.4 | 1.0 | % | 28.8 | 2.6 | % | |||||||||||||||||
| 18.3 | 3.2 | % | 48.5 | 4.3 | % | ||||||||||||||||||
| For the period ended July 3 , 2026 | $ | 582.8 | $ | 1,171.9 | |||||||||||||||||||
(1) Excludes the impact of foreign exchange rate fluctuations and acquisitions/divestitures, thus providing a measure of change due to factors such as price, product mix and volume.
(2) Represents the incremental sales as a result of acquisitions of businesses for twelve months from the acquisition date. Excludes (i) acquisitions of former distribution partners as such transactions primarily represent a shift from a third-party distribution model to a direct sales model, and (ii) acquisitions of intellectual property as such transactions involve the purchase of technologies that have not been commercialized.
(3) Represents the decrease in sales as a result of divestitures of businesses for twelve months from the divestiture date.
(4) Represents the difference between prior year sales valued at the actual prior year foreign exchange rates and prior year sales valued at current year foreign exchange rates.
The increase in Net sales during the three months ended July 3, 2026 compared to the prior year period was primarily attributable to an increase in sales from existing businesses across both of our segments and favorable foreign currency translation offset by a $14.4 million decrease in sales from the October 2025 divestiture of our Dr. Comfort Footcare Solutions product line in our P&R segment.
The increase in Net sales during the six months ended July 3, 2026 compared to the prior year period was primarily attributable to an increase in sales from existing businesses across both of our segments and favorable foreign currency translation offset by fewer sales days compared to the prior year period and a $27.2 million decrease in sales from the October 2025 divestiture of our Dr. Comfort Footcare Solutions product line in our P&R segment.
Existing business sales in Recon increased $17.2 million and $33.0 million during the three and six months ended July 3, 2026, respectively, due to higher sales volumes compared to the prior year period driven by broad market strength, offset by fewer calendar days in the first quarter of 2026 compared to the prior year period.
Existing business sales in P&R increased $10.0 million and $12.6 million during the three and six months ended July 3, 2026, respectively, due to higher sales volumes compared to the prior year period, offset by fewer calendar days in the first quarter of 2026 compared to the prior year period.
The weakening of the U.S. dollar relative to other currencies resulted in $5.4 million and $28.8 million favorable foreign currency translation impacts during the three and six months ended July 3, 2026, respectively.
31
Operating Results
The following table summarizes our results of continuing operations for the current year and prior year periods.
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| July 3, 2026 | July 4, 2025 | July 3, 2026 | July 4, 2025 | ||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||
| Gross profit | $ | 359.2 | $ | 334.7 | $ | 724.7 | $ | 666.9 | |||||||||||||||
| Gross profit margin | 61.6 | % | 59.3 | % | 61.8 | % | 59.4 | % | |||||||||||||||
| Selling, general and administrative expense | $ | 263.7 | $ | 267.1 | $ | 546.5 | $ | 536.1 | |||||||||||||||
| Research and development expense | $ | 31.7 | $ | 30.7 | $ | 63.2 | $ | 59.2 | |||||||||||||||
| Operating income (loss) | $ | 17.4 | $ | (16.8) | $ | 23.9 | $ | (63.6) | |||||||||||||||
| Operating income (loss) margin | 3.0 | % | (3.0) | % | 2.0 | % | (5.7) | % | |||||||||||||||
| Net loss from continuing operations (GAAP) | $ | (1.0) | $ | (36.5) | $ | (9.4) | $ | (92.0) | |||||||||||||||
| Net loss from continuing operations margin (GAAP) | (0.2) | % | (6.5) | % | (0.8) | % | (8.2) | % | |||||||||||||||
| Net loss (GAAP) | $ | (1.0) | $ | (36.5) | $ | (9.5) | $ | (92.3) | |||||||||||||||
| Net loss margin (GAAP) | (0.2) | % | (6.5) | % | (0.8) | % | (8.2) | % | |||||||||||||||
Adjusted EBITDA (non-GAAP) (1) | $ | 104.3 | $ | 91.2 | $ | 207.9 | $ | 178.2 | |||||||||||||||
Adjusted EBITDA margin (non-GAAP) (1) | 17.9 | % | 16.2 | % | 17.7 | % | 15.9 | % | |||||||||||||||
| Items excluded from Adjusted EBITDA: | |||||||||||||||||||||||
Restructuring charges(2) | $ | 4.9 | $ | 0.9 | $ | 7.6 | $ | 4.8 | |||||||||||||||
| MDR and other costs | $ | 0.7 | $ | 3.3 | $ | 1.9 | $ | 6.5 | |||||||||||||||
| Strategic transaction costs | $ | 1.4 | $ | 13.5 | $ | 12.4 | $ | 25.5 | |||||||||||||||
| Stock-based compensation | $ | 8.9 | $ | 8.7 | $ | 17.7 | $ | 16.1 | |||||||||||||||
| Depreciation and other amortization | $ | 29.5 | $ | 28.6 | $ | 60.9 | $ | 58.3 | |||||||||||||||
| Amortization of acquired intangibles | $ | 41.6 | $ | 43.0 | $ | 83.5 | $ | 84.8 | |||||||||||||||
Purchase of royalty interest (3) | $ | — | $ | 10.0 | $ | — | $ | 45.8 | |||||||||||||||
| Interest expense, net | $ | 8.0 | $ | 9.3 | $ | 17.2 | $ | 18.5 | |||||||||||||||
| Other (income) expense, net | $ | 1.9 | $ | (0.4) | $ | (1.4) | $ | 1.0 | |||||||||||||||
| Income tax expense (benefit) | $ | 8.5 | $ | 10.8 | $ | 17.5 | $ | 9.0 | |||||||||||||||
(1) In conjunction with our Form 10-Q filing for the three months ended April 3, 2026, we revised our definition of Adjusted EBITDA to no longer adjust for inventory step-up charges. Adjusted EBITDA in prior periods has been revised to reflect this change for consistency of presentation. Accordingly, Adjusted EBITDA for the three and six months ended July 4, 2025 has been revised from $97.2 million and $196.3 million, as presented in our Form 10-Q for the period ended July 4, 2025, to $91.2 million and $178.2 million, respectively, reflecting the removal of a $6.0 million and $18.1 million adjustment for inventory step-up in connection with acquired businesses resulting in a corresponding reduction to Adjusted EBITDA margin for the three and six months ended July 4, 2025 from 17.2% and 17.5%, as presented in our Form 10-Q for the period ended July 4, 2025, to 16.2% and 15.9%, respectively.
(2) Restructuring charges reflect costs associated with the Company’s restructuring programs to reduce the structural costs of the Company. For further information, see Note 10, “Accrued Liabilities - Accrued Restructuring Liability.” Includes expenses of $0.2 million and $0.3 million classified as Cost of sales on the Company’s Condensed Consolidated Statements of Operations for the three and six months ended July 4, 2025, respectively. There were no similar charges for the three and six months ended July 3, 2026.
(3) Purchase of royalty interest represents the one-time, up-front expense incurred by the Company to acquire the economic rights to future royalties under product development agreements in connection with the termination of such agreements as part of a strategic shift to a new product development model. The Company believes that excluding the impact of such expense enhances comparability between periods, provides investors with a clear and meaningful view of our underlying business trends and aligns with how management evaluates the ongoing business performance.
32
Three Months Ended July 3, 2026 Compared to Prior Year
Gross profit increased $24.6 million, or 7.3%, in the three months ended July 3, 2026 compared with the prior year period due to a $19.6 million increase in our Recon segment and a $5.0 million net increase in our P&R segment, net of a decrease from the Dr. Comfort divestiture. The Gross profit increase was attributable to growth in sales volume, improved mix of higher margin product sales, the decrease of $6.0 million in inventory fair value step-up amortization charges, a net benefit of tariffs driven by tariff refunds, partially offset by a decrease in gross profit from the October 2025 divestiture of our Dr. Comfort Footcare Solutions product line and inflationary pressures. We recorded a net tariff benefit of $4.0 million in the three months ended July 3, 2026, driven by the receipt of $7.7 million in 2025 tariff refunds. Gross profit margin increased by 230 basis points due to the decrease in inventory fair value step-up amortization charges, net benefit from tariffs, product mix, and operational productivity, partially offset by inflationary pressures.
Selling, general and administrative expense decreased $3.4 million in the three months ended July 3, 2026 compared to the prior year period, primarily due to a $12.1 million decrease in strategic transaction costs driven by a $5.7 million gain recognized upon settlement of the 2022 KICo Knee Innovation Company Pty Limited acquisition contingent consideration and a reduction in acquisition integration costs, offset by a $7.5 million increase in commissions on increased sales and an increased investment in the business in selling, general and administrative costs of $1.2 million.
Research and development costs increased compared to the prior year period from increased spending within recently acquired businesses in our Recon segment, which is investing in surgical productivity solutions and computer-assisted surgery technologies.
Interest expense, net decreased in the three months ended July 3, 2026 compared to the prior year period due to lower interest rates and lower debt balances in the current year compared to the prior year period, partially offset by a decrease in interest income of $1.4 million from our undesignated cross-currency swap derivatives which are presented in Other (income) expense, net.
The effective tax rate for Net income from continuing operations during the three months ended July 3, 2026 differs from the 2026 U.S. federal statutory tax rate of 21%, primarily due to an increase in valuation allowance on U.S. deferred tax assets, non-deductible expenses, and U.S. taxation on international operations. This was partially offset by tax credits for research and development and non-U.S. income taxed at lower rates. The effective tax rate for Net loss from continuing operations during the three months ended July 4, 2025 differs from the 2025 U.S. federal statutory rate of 21%, primarily due to an increase in valuation allowance on U.S. deferred tax assets, non-deductible expenses, and U.S. taxation on international operations. This was partially offset by tax credits for research and development and non-U.S. income taxed at lower rates.
Net loss and Net loss from continuing operations decreased in the three months ended July 3, 2026 compared with the prior year period, primarily due to an increase in Gross Profit which was partially aided by the decrease in inventory step-up and the decrease in Purchase of royalty interest. Adjusted EBITDA and Adjusted EBITDA margin increased due to improved scale of aforementioned gross profit growth over a more stable fixed base of selling, general, and administrative expenses and net benefit from tariffs.
Six Months Ended July 3, 2026 Compared to Prior Year
Gross profit increased $57.8 million in the six months ended July 3, 2026 compared with the prior year period due to a $50.4 million increase in our Recon segment and a $7.4 million increase in our P&R segment, net of a decrease from the Dr. Comfort divestiture. The Gross profit increase was attributable to growth in sales volume, improved mix of higher margin product sales, and a decrease of $18.1 million in inventory fair value step-up amortization charges. We recorded a net tariff expense of $1.7 million in the six months ended July 3, 2026, which was net of $7.7 million in 2025 tariff refunds. Gross profit margin increased by 240 basis points due to improved product mix, a decrease in inventory fair value step-up amortization charges, and supply chain productivity.
Selling, general and administrative expense increased $10.4 million in the six months ended July 3, 2026 compared to the prior year period, primarily due to a $12.1 million increase in commissions on increased sales and increased investment in selling, general and administrative costs of $11.5 million, offset by a reduction in acquisition integration costs and a $13.1 million decrease in strategic transaction costs driven by a $5.7 million gain recognized upon settlement of the 2022 KICo Knee Innovation Company Pty Limited acquisition contingent consideration.
33
Research and development costs increased compared to the prior year period from increased spending within recently acquired businesses in our Recon segment, which is investing in surgical productivity solutions and computer-assisted surgery technologies.
Interest expense, net decreased in the six months ended July 3, 2026 compared to the prior year period due to lower interest rates and lower debt balances in the current year compared to the prior year, partially offset by a decrease in interest income of $3.7 million from our undesignated cross-currency swap derivatives which are presented in Other (income) expense, net.
The effective tax rate for Net income from continuing operations during the six months ended July 3, 2026 was higher than the 2026 U.S. federal statutory tax rate of 21%, primarily due to an increase in valuation allowance on U.S. deferred tax assets, non-deductible expenses, and U.S. taxation on international operations. This was partially offset by tax credits for research and development and non-U.S. income taxed at lower rates. The effective tax rate for Net loss from continuing operations during the six months ended July 4, 2025 differs from the 2025 U.S. federal statutory tax rate of 21%, primarily due to an increase in valuation allowance on U.S. deferred tax assets, non-deductible expenses and U.S. taxation on international operations. This was partially offset by tax credits for research and development and non-U.S. income taxed at lower rates.
Net loss and Net loss from continuing operations decreased in the six months ended July 3, 2026 compared with the prior year period, primarily due to the increase in Gross Profit, which was partially aided by the decrease in inventory step-up, and the decrease in Purchase of royalty interest, partially offset by the aforementioned increases in selling, general, and administrative expense and research and development costs. Adjusted EBITDA and Adjusted EBITDA margin increased due to improved scale of aforementioned gross profit growth over a more stable fixed base of selling, general, and administrative expenses.
Business Segments
As discussed further above, we report results in two reportable segments: P&R and Recon. Operating loss, Adjusted EBITDA, and Adjusted EBITDA margins at the operating segment level also include allocations of certain central function expenses not directly attributable to either operating segment. See Item 2. “Non-GAAP Measures” for a further discussion and reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures.
Prevention & Recovery
Enovis Prevention & Recovery develops, manufactures, and distributes rigid bracing products, orthopedic soft goods, vascular systems, and compression garments, and hot and cold therapy products and offers robust recovery sciences products in the clinical rehabilitation and sports medicine markets such as bone growth stimulators and electrical stimulators used for pain management. Our Prevention & Recovery products are marketed under several brand names, most notably Donjoy, Aircast, and Chattanooga, to orthopedic specialists, primary care physicians, pain management specialists, physical therapists, podiatrists, chiropractors, athletic trainers, and other healthcare professionals who treat patients with a variety of treatment needs including musculoskeletal conditions resulting from degenerative diseases, deformities, traumatic events and sports-related injuries. Many of our medical devices and related accessories are used by athletes and other patients for injury prevention and at-home physical therapy treatments. We reach a diverse customer base through multiple distribution channels, including independent distributors, direct salespeople, and direct to patients.
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The following table summarizes selected financial results for our Prevention & Recovery segment:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| July 3, 2026 | July 4, 2025 | July 3, 2026 | July 4, 2025 | ||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||
| Net sales | $ | 288.2 | $ | 290.6 | $ | 560.3 | $ | 563.2 | |||||||||||||||
| Gross profit | $ | 164.2 | $ | 159.2 | $ | 310.4 | $ | 303.0 | |||||||||||||||
| Gross profit margin | 57.0 | % | 54.8 | % | 55.4 | % | 53.8 | % | |||||||||||||||
| Selling, general and administrative expenses | $ | 116.6 | $ | 116.3 | $ | 237.4 | $ | 232.1 | |||||||||||||||
| Research and development expense | $ | 7.7 | $ | 9.7 | $ | 15.5 | $ | 18.9 | |||||||||||||||
| Amortization of acquired intangibles | $ | 20.7 | $ | 23.3 | $ | 41.7 | $ | 46.1 | |||||||||||||||
| Restructuring charges | $ | 3.9 | $ | 0.7 | $ | 5.3 | $ | 3.5 | |||||||||||||||
| Operating income (GAAP) | $ | 15.1 | $ | 9.3 | $ | 10.6 | $ | 2.4 | |||||||||||||||
| Operating income margin (GAAP) | 5.2 | % | 3.2 | % | 1.9 | % | 0.4 | % | |||||||||||||||
| Adjusted EBITDA (non-GAAP) | $ | 50.3 | $ | 46.7 | $ | 81.4 | $ | 77.6 | |||||||||||||||
| Adjusted EBITDA margin (non-GAAP) | 17.5 | % | 16.1 | % | 14.5 | % | 13.8 | % | |||||||||||||||
Three Months Ended July 3, 2026 Compared to Prior Year
Net sales decreased $2.4 million, or 0.8%, in the three months ended July 3, 2026 compared with the prior year period. Sales from existing businesses increased 3.5% driven by volume growth in the U.S. market. Additionally, the net effect of acquisition and divestiture activity caused a 5.0% decrease in sales primarily due to the Dr. Comfort divestiture. Lastly, foreign currency translations caused a 0.7% favorable increase in net sales during the period. Gross profit increased $5.0 million, net of a decrease from the Dr. Comfort divestiture, due to volume growth and a net benefit from tariffs driven by refunds which primarily related to our P&R segment. Gross profit margin increased by 220 basis points, primarily due to an improved mix of higher margin product sales and a net benefit from tariffs.
Selling, general and administrative expenses was mostly flat but increased as a percentage of net sales primarily due to an increase in commissions expense on product mix. Research and development expense decreased mostly due to the timing of projects. Operating income and Operating income margin increased slightly due to the aforementioned higher gross profit. Adjusted EBITDA and Adjusted EBITDA margin increased slightly due to the increase in gross profit and improved mix of higher margin product sales, and the aforementioned tariff impacts, partially offset by the timing of the aforementioned net increase in operating expenses.
Six Months Ended July 3, 2026 Compared to Prior Year
Net sales decreased $2.9 million, or 0.5%, compared with the prior year period. Sales from existing businesses increased 2.2%. This was driven by volume growth, partially offset by a headwind due to fewer sales days in the first quarter of 2026 compared to the prior year period. Additionally, the net effect of acquisition and divestiture activity caused a 4.8% decrease in sales primarily due to the Dr. Comfort divestiture. Lastly, foreign currency translations resulted in a 1.8% increase in net sales during the period. Gross profit increased $7.4 million and Gross profit margin increased by 160 basis points primarily due to volume growth, a mix of higher margin product sales, and supply chain productivity.
Selling, general and administrative expenses increased slightly and as a percentage of sales from an increase in commissions expense on product mix and an increased investment in the business in selling, general and administrative costs. Research and development expense decreased due to the timing of projects. Operating income and Operating income margin increased slightly due to the aforementioned higher gross profit. Adjusted EBITDA and Adjusted EBITDA margin increased slightly due to the increase in gross profit and improved mix of higher margin product sales, partially offset by the timing of the aforementioned net increase in operating expenses and the aforementioned net impact of tariffs.
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Reconstructive
Enovis Reconstructive is a global medical technology business focused on developing, manufacturing, marketing, and distributing innovative surgical solutions that restore mobility and improve patient outcomes. Our portfolio includes a broad range of differentiated implants, instrumentation, and enabling technologies used in elective and non-elective joint replacement, limb reconstruction, and foot & ankle procedures.
We serve orthopedic surgeons and healthcare systems worldwide with products for shoulder, hip, knee, and extremity reconstruction and fixation, including both primary and revision procedures. Our offerings are supported by proprietary surgical techniques, surgeon education, and digital tools that enhance preoperative planning, intraoperative precision, and postoperative recovery.
Our strategy is focused on accelerating growth through innovation, expanding market presence in both established and emerging markets, and delivering exceptional clinical and economic value to our customers. Backed by a strong commitment to research and development, surgeon collaboration, and commercial execution, Enovis Reconstructive is positioned as a leading partner in advancing the future of reconstructive surgery.
The following table summarizes the selected financial results for our Reconstructive segment:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| July 3, 2026 | July 4, 2025 | July 3, 2026 | July 4, 2025 | ||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||
| Net sales | $ | 294.5 | $ | 274.0 | $ | 611.7 | $ | 560.2 | |||||||||||||||
| Gross profit | $ | 195.1 | $ | 175.5 | $ | 414.3 | $ | 363.9 | |||||||||||||||
| Gross profit margin | 66.2 | % | 64.1 | % | 67.7 | % | 65.0 | % | |||||||||||||||
| Selling, general and administrative expenses | $ | 147.1 | $ | 150.7 | $ | 309.1 | $ | 304.0 | |||||||||||||||
| Research and development expense | $ | 24.0 | $ | 21.0 | $ | 47.8 | $ | 40.3 | |||||||||||||||
| Amortization of acquired intangibles | $ | 20.8 | $ | 19.7 | $ | 41.8 | $ | 38.7 | |||||||||||||||
| Purchase of royalty interest | $ | — | $ | 10.0 | $ | — | $ | 45.8 | |||||||||||||||
| Restructuring charges | $ | 0.9 | $ | 0.3 | $ | 2.3 | $ | 1.3 | |||||||||||||||
| Operating income (loss) (GAAP) | $ | 2.3 | $ | (26.1) | $ | 13.4 | $ | (65.9) | |||||||||||||||
| Operating income (loss) margin (GAAP) | 0.8 | % | (9.5) | % | 2.2 | % | (11.8) | % | |||||||||||||||
Adjusted EBITDA (non-GAAP)(1) | $ | 54.0 | $ | 44.4 | $ | 126.5 | $ | 100.6 | |||||||||||||||
Adjusted EBITDA margin (non-GAAP)(1) | 18.3 | % | 16.2 | % | 20.7 | % | 18.0 | % | |||||||||||||||
(1) In conjunction with our Form 10-Q filing for the three months ended April 3, 2026, we revised our definition of Adjusted EBITDA to no longer adjust for inventory step-up charges. Adjusted EBITDA in prior periods has been revised to reflect this change for consistency of presentation. Accordingly, Adjusted EBITDA for our Recon segment for the three and six months ended July 4, 2025 has also been revised from $50.4 million and $118.7 million , as presented in our Form 10-Q for the period ended July 4, 2025, to $44.4 million and $100.6 million, respectively, reflecting the removal of the same $6.0 million and $18.1 million adjustment for inventory step-up in connection with acquired businesses, resulting in a corresponding reduction to Adjusted EBITDA margin for the three and six months ended July 4, 2025 from 18.4% and 21.2%, as presented in our Form 10-Q for the period ended July 4, 2025, to 16.2% and 18.0%, respectively.
Three Months Ended July 3, 2026 Compared to Prior Year
Net sales increased by $20.5 million, or 7.5%, in the three months ended July 3, 2026 compared with the prior year period. Net sales from existing businesses increased by 6.3%, driven by volume growth. Additionally, foreign currency translations caused a 1.2% favorable increase in net sales during the period. Gross profit and Gross profit margin increased over the same period, primarily due to higher net sales, improved operating leverage, and a decrease of $6.0 million in inventory fair value step-up amortization charges.
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Selling, general and administrative expenses decreased by $3.6 million over the same period primarily due to a decrease in strategic integration costs from the Lima acquisition and to a lesser extent lower MDR & other costs, partially offset by an increase in commissions driven by higher sales and increases in existing business investments to support growth. Research and development expense increased compared to the prior year period due to an increase in new product development projects and activities and spending within our recently acquired businesses, which are investing in surgical productivity solutions and computer-assisted surgery technologies.
Operating income increased primarily due to the decrease in Purchase of royalty interest and inventory fair value step-up amortization charges, the aforementioned gross profit increases and a $11.1 million decrease in strategic transaction costs including the integration and transaction costs for the Lima Acquisition. Adjusted EBITDA increased primarily due to the aforementioned sales growth and gross profit increase, driven by higher net sales and a decrease of $6.0 million in inventory fair value step-up amortization charges.
Six Months Ended July 3, 2026 Compared to Prior Year
Net sales increased by $51.5 million, or 9.2%, due to strong sales volumes, favorable foreign currency translation of 3.3%, partially offset by a headwind due to fewer sales days compared to the prior year period. Gross profit and Gross profit margin increased $50.4 million in the six months ended July 3, 2026 compared to the prior year period, primarily due to higher net sales, improved operating leverage and a decrease of $18.1 million in inventory fair value step-up amortization charges.
Selling, general and administrative expenses increased by $5.1 million over the same period primarily due to an increase in commissions driven by higher sales and increases in existing business investments to support growth, offset by a decrease in Lima Acquisition integration costs. Research and development expense increased compared to the prior year period due to an increase in new product development projects and activities and spending within our recently acquired businesses, which are investing in surgical productivity solutions and computer-assisted surgery technologies.
Operating income increased, primarily due to the decrease in Purchase of royalty interest and inventory fair value step-up amortization charges, the aforementioned gross profit increases and a $13.7 million decrease in strategic transaction costs including the integration and transaction costs for the Lima Acquisition. Adjusted EBITDA increased primarily due to the aforementioned sales growth and gross profit increase, driven by higher net sales and a decrease of $18.1 million in inventory fair value step-up amortization charges.
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Liquidity and Capital Resources
Overview
We finance our long-term capital and working capital requirements through a combination of cash flows from operating activities, various borrowings, and the issuances of equity. We expect that our primary ongoing requirements for cash will be for working capital, capital expenditures, interest and principal repayments on our debt, strategic initiatives, restructuring outflows and other non-routine costs, and funding of acquisitions. We believe we could raise additional funds in the form of debt or equity if it were determined to be appropriate for strategic acquisitions or other corporate purposes. We believe that our sources of liquidity are adequate to fund our operations for the next twelve months.
Equity Capital
In 2018, our Board of Directors authorized the repurchase of our common stock from time-to-time on the open market or in privately negotiated transactions. No stock repurchases have been made under this plan since the third quarter of 2018. As of July 3, 2026, the remaining stock repurchase authorization provided by our Board of Directors was $100 million. The timing, amount, and method of shares repurchased is determined by management based on its evaluation of market conditions and other factors. There is no term associated with the remaining repurchase authorization.
Term Loan and Revolving Credit Facility
Our credit agreement, which was amended December 8, 2025, consists of a $1.1 billion revolving credit facility (the “Revolver”) with a December 8, 2030 maturity date and a term loan facility with an initial aggregate principal amount of $700 million (the “Term Loan”) (collectively, the “Enovis Credit Agreement”). The Term Loan requires quarterly principal repayments at 1.25% of the initial aggregate principal amount, which is $8.75 million each quarter, and matures on December 8, 2030. The Revolver contains a $50 million swing line loan sub-facility. All facilities under the Enovis Credit Agreement (including the Term Loan) are secured by certain personal property of the Company and certain of its subsidiaries, subject to limitations and exclusions. As of July 3, 2026, there was $942 million available on the Revolver.
The Enovis Credit Agreement contains customary covenants limiting our ability to, among other things, incur debt or liens, merge or consolidate with others, dispose of assets, make investments, or pay dividends. There are also restrictions on repayments of junior financing and amendments to junior financing documents. In addition, the Enovis Credit Agreement contains financial covenants requiring us to maintain (i) a maximum senior secured leverage ratio of not more than 3.50:1.00 and (ii) a minimum interest coverage ratio of 3.00:1.00. The Enovis Credit Agreement contains various events of default (including failure to comply with the covenants under the Enovis Credit Agreement and related agreements) and upon an event of default the lenders may, subject to various customary cure rights, require the immediate payment of all amounts outstanding under the Enovis Credit Agreement.
Convertible Notes and Capped Calls
Our $460 million aggregate principal senior unsecured convertible notes were issued in October 2023 via a private placement pursuant to Rule 144A (the “2028 Notes”). The 2028 Notes have an interest rate of 3.875%, payable semiannually in arrears on April 15 and October 15 of each year, beginning April 15, 2024. The 2028 Notes will mature on October 15, 2028 unless earlier repurchased, redeemed, or converted.
We also have privately negotiated capped call transactions entered into at the same time as and with certain of the initial purchasers of the 2028 Notes. The capped call transactions are intended generally to mitigate potential dilution to our common stock upon conversion of any 2028 Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted 2028 Notes, as the case may be, with such reduction and/or offset subject to a cap.
Other Indebtedness
In addition, we are party to overdraft facilities with a borrowing capacity of $30.0 million, of which $2.4 million was drawn and $27.6 million was available as of July 3, 2026. Total letters of credit and surety bonds of $48.4 million were outstanding as of July 3, 2026.
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Cash Flows
As of July 3, 2026, we had $12.6 million of Cash and cash equivalents, a decrease of $23.8 million from the $36.4 million balance as of December 31, 2025. The following table summarizes the change in cash and cash equivalents during the periods indicated:
| Six Months Ended | |||||||||||||||||||||||
| July 3, 2026 | July 4, 2025 | ||||||||||||||||||||||
| (Dollars in millions) | |||||||||||||||||||||||
| Net cash provided by operating activities | $ | 99.0 | $ | 46.2 | |||||||||||||||||||
| Purchases of property, plant and equipment and intangibles | (96.7) | (87.6) | |||||||||||||||||||||
| Payments for acquisitions, net of cash received, and investments | (1.4) | (24.3) | |||||||||||||||||||||
Other investing | — | 1.7 | |||||||||||||||||||||
| Net cash used in investing activities | (98.1) | (110.3) | |||||||||||||||||||||
| Net borrowings of debt | (15.0) | 62.0 | |||||||||||||||||||||
| Other financing | (9.5) | (4.6) | |||||||||||||||||||||
| Net cash provided by (used in) financing activities | (24.5) | 57.4 | |||||||||||||||||||||
| Effect of foreign exchange rates on Cash and cash equivalents | (0.2) | 2.6 | |||||||||||||||||||||
| Decrease in Cash and cash equivalents | $ | (23.8) | $ | (4.1) | |||||||||||||||||||
Cash flows from operating activities can fluctuate significantly from period-to-period due to changes in working capital and the timing of payments for items such as restructuring and strategic transaction costs. Strategic transaction costs primarily relate to integration costs of acquired businesses such as the Lima Acquisition. Cash flows provided by operating activities increased $52.8 million year-over-year. This improvement was primarily due to the increase in gross profit, lower strategic transaction costs of $13.1 million, lower interest paid of $1.6 million, lower EU MDR & other costs of $4.7 million and improvement of accounts receivable collections offset by the timing of payables resulting in an increase of $16.8 million in cash related to working capital.
Cash used in investing activities during the six months ended July 3, 2026 was $98.1 million compared to $110.3 million in the prior year period, primarily as a result of increases in capital spending driven by implant instruments that support sales growth in Recon, offset by less payments for acquisitions in 2026 compared to 2025.
Cash flows used by financing activities during the six months ended July 3, 2026 include $15.0 million of net debt repayments. Cash flows provided by financing activities for the six months ended July 4, 2025 include net debt borrowings of $62.0 million primarily used for bolt-on acquisitions, capital expenditures and operational needs.
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Critical Accounting Policies and Estimates
The methods, estimates and judgments that we use in applying our critical accounting policies have a significant impact on our results of operations and financial position. We evaluate our estimates and judgments on an ongoing basis. Our estimates are based upon our historical experience, our evaluation of business and macroeconomic trends and information from other outside sources, as appropriate. Our experience and assumptions form the basis for our judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may vary from what our management anticipates, and different assumptions or estimates about the future could have a material impact on our results of operations and financial position.
There have been no significant additions or changes to the methods, estimates and judgments included in “Item 7A. Management’s Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies” in our 2025 Form 10-K.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risk from changes in short-term interest rates, foreign currency exchange rates and commodity prices that could impact our results of operations and financial condition. We address our exposure to these risks through our normal operating and financing activities. We do not enter into derivative contracts for speculative purposes.
Interest Rate Risk
We are subject to exposure from changes in short-term interest rates related to interest payments on our borrowing arrangements. A significant amount of our borrowings as of July 3, 2026 are variable-rate facilities based on the Secured Overnight Financing Rate (SOFR). In order to mitigate our interest rate risk, we may enter into interest rate swap or collar agreements. A hypothetical increase in interest rates of 1% during the three and six months ended July 3, 2026 would have increased interest expense for our variable rate-based debt under the Enovis Credit Agreement by approximately $2.2 million and $4.3 million, respectively.
Exchange Rate Risk
We are exposed to movements in the exchange rates of various currencies against the U.S. Dollar and against the currencies of other countries in which we manufacture and sell products and services. During the three and six months ended July 3, 2026, approximately 44% and 45% of our sales, respectively, were derived from operations outside the United States. We have manufacturing operations in certain foreign countries including Mexico, Switzerland, Italy, Germany, Tunisia, and China. Sales are more highly weighted toward the U.S. Dollar and Euro than other currencies. We also have significant contractual obligations in U.S. Dollars that are met with cash flows in other currencies as well as U.S. Dollars. To better match revenue and expense, as well as cash needs from contractual liabilities, we enter into currency swaps and forward contracts from time to time.
We face exchange rate risk from our investments in subsidiaries owned and operated in foreign countries. Our cross-currency swap agreements hedge our net investment in our Swiss Franc-denominated subsidiaries against adverse movements in exchange rates between the U.S. Dollar and the Swiss Franc. Certain of these cross-currency swap agreements are designated and qualify as net investment hedges of our Swiss Franc net asset position. The effect of a change in currency exchange rates on our investment in Swiss Franc subsidiaries, offset by the unrealized gain or loss on the cross-currency swap investment hedges, is reflected in the Accumulated other comprehensive loss component of Equity. Certain of these cross-currency swap agreements are not designated as net investment hedges, and changes in fair value are recognized in non-operating Other income (expense), net in the Consolidated Statement of Operations. The dedesignation of these agreements as of January 1, 2026 resulted from the aggregate notional amount of designated cross-currency swaps exceeding the Company’s net investment in its Swiss Franc-denominated legal entity and its subsidiaries due to the prior-year goodwill impairment charges. In the first quarter of 2026, the Company increased its net investment in our Swiss Franc-denominated legal entity and its subsidiaries through the contribution of certain legal entities. However, a portion of our cross-currency swap agreements remain undesignated. In the event the Company is unable to designate the remaining undesignated cross-currency swap agreements as
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net investment hedges during 2026, changes in fair value will continue to be recognized in non-operating Other income (expense), net until such time as hedge designation is achieved.
We face exchange rate risk from intercompany transactions between affiliates. Costs incurred and sales recorded by subsidiaries operating outside of the United States are translated into U.S. Dollars using exchange rates effective during the respective period. As a result, we are exposed to movements in the exchange rates of various currencies against the U.S. Dollar. Similarly, tax costs may increase or decrease as local currencies strengthen or weaken against the U.S. Dollar.
We face exchange rate risk arising from intercompany loan balances between foreign-denominated and/or foreign and U.S. subsidiaries. Our forward currency contracts that we entered into in the first quarter of 2026 with notional amounts of $130.2 million to purchase Euros and sell Swiss Francs and $282.3 million to purchase U.S. dollars and sell Euros matured on July 2, 2026, resulting in a gain of $12.7 million in conjunction with the timing of the settlement of certain intercompany loan balances between our subsidiaries. Concurrent with the forward settlements, we entered into new forward currency contracts with notional amounts of $153.0 million to purchase U.S. dollar and sell Swiss Francs and $150.1 million to purchase U.S. dollars and sell Euros, which both mature on April 15, 2027, to hedge our exposure to currency exchange rate risk arising from new intercompany loan balances between our subsidiaries. These new forward currency contract agreements were designated and qualified as fair value hedges as of July 3, 2026. The gain or loss on derivative instruments designated as fair value hedges of currency exchange rate risk related to intercompany loan balances is recorded in Selling, general and administrative expense in the Condensed Consolidated Statements of Operations. This presentation is consistent with and offsets the recognition of foreign currency gains and losses resulting from the remeasurement of the hedged intercompany loan balances denominated in currencies other than their functional currencies.
Commodity Price Risk
We are exposed to changes in the prices of raw materials used in our production processes. In order to manage commodity price risk, we periodically enter into fixed price contracts directly with suppliers.
See Note 11, “Financial Instruments and Fair Value Measurements” in our Notes to Condensed Consolidated Financial Statements included in this Form 10-Q for additional information regarding our derivative instruments.
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Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) under the Exchange Act, as of July 3, 2026. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this Form 10-Q, our disclosure controls and procedures were effective in providing reasonable assurance that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.
Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f)) identified in connection with the evaluation required by Rule 13a-15(d) of the Exchange Act that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Discussion of legal proceedings is incorporated by reference to Note 12, “Commitments and Contingencies,” in the Notes to Condensed Consolidated Financial Statements included in Part I. Item 1. “Financial Statements” of this Form 10-Q.
Item 1A. Risk Factors
An investment in our common stock involves a high degree of risk. You should carefully consider the risks set forth in “Part I. Item 1A. Risk Factors” of our 2025 Form 10-K and the other information set forth in this Form 10-Q, and the additional information in the other reports we file with the SEC before making an investment decision. If any of the risks contained in those reports actually occur, our business, results of operation, financial condition, and liquidity could be harmed, the value of our securities could decline, and you could lose all or part of your investment. Except as set forth below, there have been no material changes in the risk factors set forth in “Part I. Item 1A. Risk Factors” in our 2025 Form 10-K.
Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
None.
Item 5. Other Information
During the six months ended July 3, 2026, none of our directors or officers adopted terminated
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Item 6. Exhibits
| Exhibit No. | Exhibit Description | ||||
3.01.1* | Amended and Restated Certificate of Incorporation. | ||||
3.01.2** | Certificate of Amendment to Amended and Restated Certificate of Incorporation | ||||
3.01.3*** | Certificate of Amendment to Amended and Restated Certificate of Incorporation | ||||
3.02**** | Amended and Restated Bylaws of Enovis Corporation. | ||||
31.01 | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||||
31.02 | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||||
32.01 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||||
32.02 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||||
| 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. | ||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. | ||||
| 101.CAL | Inline XBRL Extension Calculation Linkbase Document. | ||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | ||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | ||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | ||||
| 104 | Cover Page Interactive Data File - The cover page from this Quarterly Report on Form 10-Q for the quarter ended July 3, 2026 is formatted in Inline XBRL (included as Exhibit 101). | ||||
* | Incorporated by reference to Exhibit 3.01 to Enovis (formerly Colfax) Corporation’s Form 8-K (File No. 001-34045) as filed with the SEC on January 30, 2012. | ||||
** | Incorporated by reference to Exhibit 3.1 to Enovis Corporation’s Form 8-K (File No. 001-34045) as filed with the SEC on April 8, 2022. | ||||
*** | Incorporated by reference to Exhibit 3.1 to Enovis Corporation’s Form 8-K (File No. 001-34045) as filed with the SEC on May 22, 2024. | ||||
**** | Incorporated by reference to Exhibit 3.1 to Enovis Corporation’s Form 8-K (File No. 001-34045) as filed with the SEC on December 15, 2022. | ||||
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SIGNATURES
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.
Registrant: Enovis Corporation
By:
/s/ Damien McDonald | Chief Executive Officer and Director | |||||||||||||
Damien McDonald | (Principal Executive Officer) | August 6, 2026 | ||||||||||||
| /s/ Phillip B. Berry | Senior Vice President and Chief Financial Officer | |||||||||||||
| Phillip B. Berry | (Principal Financial Officer) | August 6, 2026 | ||||||||||||
| /s/ John Kleckner | Vice President, Controller and Chief Accounting Officer | |||||||||||||
| John Kleckner | (Principal Accounting Officer) | August 6, 2026 | ||||||||||||
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