What changed in this filing

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Item 1. Financial Statements

2022-05-10 compared with 2021-11-04 · 243 added, 321 removed, 370 unchanged (60% of the section changed)

Financial Statements

COLFAX CORPORATION

ENOVIS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Dollars in thousands, except per share amounts

Three Months Ended Nine Months Ended

October 1, 2021 October 2, 2020 October 1, 2021 October 2, 2020

Three Months Ended

April 1, 2022 April 2, 2021

Net sales $ 1,023,368 $ 879,211

4 unchanged sentences

Operating income 53,118 61,307

Pension settlement gain — — ( 11,208 ) —

Interest expense, net 15,099 25,660

Debt extinguishment charges — — 29,870 —

Income from continuing operations before income taxes 38,019 35,647

4 unchanged sentences

income attributable to noncontrolling interest, net of taxes 1,233 1,166

Net income attributable to Colfax Corporation $ 25,848 $ 13,406 $ 73,564 $ 9,413

Net income attributable to Enovis Corporation $ 15,068 $ 19,074

Net income (loss) per share - basic

7 unchanged sentences

See Notes to Condensed Consolidated Financial Statements.

COLFAX CORPORATION

ENOVIS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Dollars in thousands

Three Months Ended Nine Months Ended

October 1, 2021 October 2, 2020 October 1, 2021 October 2, 2020

Three Months Ended

April 1, 2022 April 2, 2021

Net income $ 16,301 $ 20,240

2 unchanged sentences

( 53,461 ) ( 53,181 )

Unrealized gain (loss) on hedging activities, net of tax expense (benefit) of $ 2,203 , $( 4,344 ), $ 5,709 and $( 4,448 )

6,424 ( 12,076 ) 16,655 ( 12,700 )

Unrealized gain on hedging activities, net of tax expense of $ 2,711 and $ 4,243

Amounts reclassified from Accumulated other comprehensive loss:

Amortization of pension and other post-retirement net actuarial gain, net of tax expense of $ 199 and $ 317

1,093 1,152 3,193 2,814

Other comprehensive income (loss) ( 49,659 ) 40,686 ( 81,725 ) ( 59,202 )

Comprehensive income (loss) ( 22,802 ) 54,881 ( 4,926 ) ( 47,546 )

Other comprehensive loss ( 43,804 ) ( 39,745 )

Comprehensive loss ( 27,503 ) ( 19,505 )

comprehensive income attributable to noncontrolling interest 895 1,042

Comprehensive income (loss) attributable to Colfax Corporation $ ( 24,175 ) $ 52,894 $ ( 6,972 ) $ ( 48,738 )

Comprehensive loss attributable to Enovis Corporation $ ( 28,398 ) $ ( 20,547 )

See Notes to Condensed Consolidated Financial Statements.

COLFAX CORPORATION

ENOVIS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

Dollars in thousands, except share amounts

October 1, 2021 December 31, 2020

April 1, 2022 December 31, 2021

CURRENT ASSETS:

24 unchanged sentences

133,333,333 shares authorized;

154,781,842 and 118,496,687 shares issued and outstanding as of October 1, 2021 and December 31, 2020, respectively

54,030,880 and 52,083,078 shares issued and outstanding as of April 1, 2022 and December 31, 2021, respectively

Additional paid-in capital 4,555,369 4,544,315

1 unchanged sentence

Accumulated other comprehensive loss ( 559,479 ) ( 516,013 )

Total Colfax Corporation equity 4,586,541 3,543,387

Total Enovis Corporation equity 4,600,036 4,617,378

Noncontrolling interest 44,009 44,055

2 unchanged sentences

See Notes to Condensed Consolidated Financial Statements.

COLFAX CORPORATION

ENOVIS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

8 unchanged sentences

Conversion of tangible equity units into common stock 1,691,845 2 ( 2 ) — — — —

Common stock repurchases ( 21,082 ) — ( 971 ) — — — ( 971 )

Common stock offering, net of issuance costs 16,100,000 16 711,305 — — — 711,321

Common stock-based award activity 255,957 — 11,056 — — — 11,056

Balance at April 1, 2022 54,030,880 $ 54 $ 4,555,369 $ 604,092 $ ( 559,479 ) $ 44,009 $ 4,644,045

Net income — — — 28,642 — 1,060 29,702

Other comprehensive income (loss), net of tax of $ 473

— — — — 9,108 ( 1,429 ) 7,679

Conversion of tangible equity units into common stock 6,174,000 6 ( 6 ) — — — —

Common stock repurchases ( 710 ) — ( 32 ) — — — ( 32 )

Common stock-based award activity 571,025 1 23,541 — — — 23,542

Balance at July 2, 2021 142,341,646 142 4,225,248 565,083 ( 482,619 ) 44,106 4,351,960

Net income — — — 25,848 — 1,009 26,857

Distributions to noncontrolling owners — — — — — ( 1,496 ) ( 1,496 )

Other comprehensive income (loss), net of tax of $ 4,478

— — — — ( 50,023 ) 364 ( 49,659 )

Conversion of tangible equity units into common stock 5,537,100 6 ( 6 ) — — — —

Common stock issued for acquisition, net of issuance costs

6,544,522 7 285,674 — — — 285,681

Common stock-based award activity 358,574 — 17,181 — — — 17,181

Balance at October 1, 2021 154,781,842 $ 155 $ 4,528,097 $ 590,931 $ ( 532,642 ) $ 43,983 $ 4,630,524

See Notes to Condensed Consolidated Financial Statements.

COLFAX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

Dollars in thousands, except share amounts

Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Noncontrolling Interest Total

1 unchanged sentence

Balance at December 31, 2020 39,498,896 $ 40 $ 3,478,086 $ 517,367 $ ( 452,106 ) $ 44,487 $ 3,587,874

Cumulative effect of accounting change — — — ( 4,818 ) — — ( 4,818 )

Net income — — — 19,074 — 1,166 20,240

2 unchanged sentences

— — — — ( 39,621 ) ( 124 ) ( 39,745 )

Conversion of tangible equity units into common stock 114,804 — — — — — —

Common stock offering, net of issuance costs 5,366,666 5 711,316 — — — 711,321

Common stock-based award activity 218,744 — 12,433 — — — 12,433

Balance at April 2, 2021 45,199,110 $ 45 $ 4,201,835 $ 536,441 $ ( 491,727 ) $ 44,475 $ 4,291,069

Net income (loss) — — — ( 8,474 ) — 427 ( 8,047 )

Distributions to noncontrolling owners — — — — — ( 3,734 ) ( 3,734 )

Other comprehensive income, net of tax of $( 3,917 )

— — — — 60,658 344 61,002

Common stock-based award activity 61,608 — 8,591 — — — 8,591

Balance at July 3, 2020 118,389,013 118 3,462,532 470,749 ( 581,484 ) 43,661 3,395,576

Net income — — — 13,406 — 789 14,195

Distributions to noncontrolling owners — — — — — ( 625 ) ( 625 )

Other comprehensive income, net of tax of $( 3,756 )

— — — — 39,488 1,198 40,686

Common stock-based award activity 68,166 — 7,637 — — — 7,637

Balance at October 2, 2020 118,457,179 $ 118 $ 3,470,169 $ 484,155 $ ( 541,996 ) $ 45,023 $ 3,457,469

See Notes to Condensed Consolidated Financial Statements.

COLFAX CORPORATION

ENOVIS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Dollars in thousands

Nine Months Ended

October 1, 2021 October 2, 2020

Three Months Ended

April 1, 2022 April 2, 2021

Cash flows from operating activities:

Net income $ 16,301 $ 20,240

Adjustments to reconcile net income to net cash provided by operating activities:

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

Depreciation, amortization and other impairment charges 66,026 62,785

1 unchanged sentence

Non-cash interest expense 978 1,537

Deferred income tax benefit ( 5,904 ) ( 30,946 )

(Gain) loss on sale of property, plant and equipment ( 1,483 ) 523

Loss on debt extinguishment 29,870 —

Deferred income tax expense (benefit) 2,232 ( 3,614 )

Loss on sale of property, plant and equipment 352 257

Changes in operating assets and liabilities:

3 unchanged sentences

Other operating assets and liabilities ( 43,362 ) ( 15,379 )

Net cash provided by operating activities 259,883 173,133

Net cash (used in) provided by operating activities ( 14,423 ) 84,382

Cash flows from investing activities:

Purchases of property, plant and equipment ( 73,595 ) ( 81,583 )

Purchases of property, plant and equipment and intangibles ( 24,089 ) ( 24,537 )

Proceeds from sale of property, plant and equipment 2,746 —

2 unchanged sentences

Cash flows from financing activities:

Payments under term credit facility — ( 40,000 )

Proceeds from borrowings on revolving credit facilities and other — 179,367

Repayments of borrowings on revolving credit facilities and other ( 7,428 ) ( 185,643 )

Repayments of borrowings on senior notes ( 700,000 ) —

Payment of debt issuance costs — ( 4,560 )

Proceeds from issuance of common stock, net 1,199 716,632

Payment of debt extinguishment costs ( 24,375 ) —

Deferred consideration payments and other ( 4,590 ) ( 2,704 )

Net cash provided by (used in) financing activities 111,837 ( 125,578 )

Net cash (used in) provided by financing activities ( 10,819 ) 707,652

Effect of foreign exchange rates on Cash and cash equivalents and Restricted Cash 2,542 ( 1,438 )

Increase (decrease) in Cash and cash equivalents and Restricted cash 76,413 ( 43,209 )

(Decrease) increase in Cash and cash equivalents and Restricted cash ( 57,866 ) 662,584

Cash and cash equivalents and Restricted Cash, beginning of period 719,370 101,069

Cash and cash equivalents, end of period $ 661,504 $ 763,653

Supplemental disclosures of non-cash investing and financing activities:

Common stock issued for acquisition, net of issuance costs $ 285,681 $ —

See Notes to Condensed Consolidated Financial Statements.

COLFAX CORPORATION

ENOVIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Colfax Corporation (the “Company” or “Colfax”) is a leading diversified technology company that provides fabrication technology and medical device products and services to customers around the world, principally under the ESAB and DJO brands.

The Company conducts its operations through two operating segments, “Fabrication Technology”, which incorporates the operations of ESAB and its related brands, and “Medical Technology”, which incorporates the operations of DJO and its related brands.

On March 4, 2021, the Company announced its intention to separate its fabrication technology and specialty medical technology businesses into two differentiated, independent, and publicly traded companies.

The current Colfax entity will retain the specialty medical technology business under a new name, while the fabrication technology business will operate independently under the existing ESAB brand name.

The separation is intended to be structured in a tax-free manner and is targeted to be completed in the first quarter of 2022.

The assets, liabilities, revenues and expenses of the fabrication technology businesses are included in continuing operations of the Company in the accompanying Condensed Consolidated Financial Statements.

Enovis Corporation (the “Company” or “Enovis”) was previously Colfax Corporation (“Colfax”) until its separation into two differentiated, independent, and publicly traded companies on April 4, 2022, as discussed further below.

Colfax was a leading diversified technology company that provided fabrication technology and medical device products and services to customers around the world, principally under the ESAB and DJO brands.

The Company conducted its operations through two operating segments, “Fabrication Technology”, which incorporated the operations of ESAB and its related brands, and “Medical Technology”, which incorporated the operations of DJO and its related brands.

On April 4, 2022 (the “Distribution Date”), the Company completed the separation of its fabrication technology business (the “Separation”) through a tax-free, pro-rata distribution of 90 % of the outstanding common stock of ESAB Corporation (“ESAB Corp”) to Colfax stockholders.

To affect the Separation, Colfax distributed to its stockholders one share of ESAB Corp common stock for every three shares of Colfax common stock held at the close of business on March 22, 2022, with the Company retaining 10 % of the shares of ESAB Corp common stock immediately following the Separation.

The Company intends to divest its 10 % retained shares in ESAB Corp in a tax-efficient exchange for its outstanding debt no later than 12 months after the Distribution Date.

Upon completion of the Separation, Colfax, which retained the Company’s specialty medical technology business, changed its name to Enovis Corporation.

On April 5, 2022, the Company began trading under the stock symbol “ENOV” on the New York Stock Exchange.

For further information on the Separation, refer to Note 15, “Subsequent Events”.

In connection with the Separation, ESAB Corp issued $ 1.2 billion of new debt securities, the proceeds from which were used to fund a $ 1.2 billion cash distribution to Enovis upon Separation.

The distribution proceeds were used by Enovis in conjunction with $ 450 million of borrowings on a term loan under the new Enovis credit facility, as discussed below, and $ 52.3 million of cash on hand to repay $ 1.4 billion of outstanding debt and accrued interest on its Credit Facility, $ 302.8 million of outstanding debt and accrued interest on its 2026 Notes, as well as a redemption premium at 103.188 % of the principal amount of the 2026 Notes, and other fees and expenses due at closing.

Additionally, on April 7, 2022, the Company also completed the redemption of its Euro Senior Notes representing all of its outstanding € 350 million principal 3.250 % Senior Notes due 2025 at a redemption price of 100.813 % of the principal amount.

For further information on the Separation, refer to Note 15, “Subsequent Events”.

Immediately following the Separation, the Company effected a one-for-three reverse stock split of all issued and outstanding shares of Enovis common stock.

As a result of the reverse stock split, all share and per share figures contained in the accompanying Condensed Consolidated Financial Statements have been retroactively restated as if the reverse stock split occurred at the beginning of the periods presented.

Since the disposition occurred in the second quarter of 2022, Enovis will classify its fabrication technology business as a discontinued operation in its historical financial statements beginning in the second quarter of 2022.

The assets, liabilities, revenues and expenses of the fabrication technology businesses are included in continuing operations in the accompanying Condensed Consolidated Financial Statements.

The Condensed Consolidated Financial Statements included in this quarterly report have been prepared by the Company in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements.

8 unchanged sentences

Actual results may differ from those estimates.

ENOVIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

In the normal course of business, the Company incurs research and development costs related to new product development which are expensed as incurred and included in Selling, general and administrative expense on the Company’s Condensed Consolidated Statements of Operations.

Research and development costs were $ 20.2 million and $ 61.4 million during the three and nine months ended October 1, 2021, respectively, and $ 16.8 million and $ 49.4 million during the three and nine months ended October 2, 2020, respectively.

On April 24, 2021, the Company used the proceeds from its March 2021 equity offering to redeem all $ 600 million of its 2024 senior notes and $ 100 million of outstanding principal on its 2026 senior notes.

The Company paid an early redemption premium of $ 24.4 million and recorded a loss on the extinguishment of debt of $ 29.9 million.

Additionally, a pension settlement gain of $ 11.2 million was recognized in the second quarter of 2021 when the independent trustees of a company pension plan agreed to merge that plan with another company pension plan and contribute its surplus assets.

The results of operations for the three and nine months ended October 1, 2021 are not necessarily indicative of the results of operations that may be achieved for the full year.

Quarterly results are affected by seasonal variations in the Company’s businesses, and European operations typically experience a slowdown during the July, August and December holiday seasons.

Medical Technology sales typically peak in the fourth quarter.

Research and development costs were $ 24.4 million and $ 19.9 million during the three months ended April 1, 2022 and April 2, 2021, respectively.

The results of operations for the three months ended April 1, 2022 are not necessarily indicative of the results of operations that may be achieved for the full year.

Quarterly results are affected by seasonal variations in the Company’s businesses as Medical Technology sales typically peak in the fourth quarter.

General economic conditions may, however, impact future seasonal variations.

1 unchanged sentence

On March 11, 2020, due to worldwide spread of the virus, the World Health Organization characterized COVID-19 as a pandemic.

The COVID-19 global pandemic has resulted in a widespread health crisis, and the resulting impact on governments, businesses and individuals and

COLFAX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

actions taken by them in response to the situation have resulted in widespread economic disruptions, significantly affecting broader economies, financial markets, and overall demand for the Company’s products.

While these impacts have lessened in 2021 due to broadening access to COVID-19 vaccines and gradual relaxing of some government-mandated restrictions, the surge of COVID-19 variant viruses in the third quarter of 2021 has led to the reinstatement of restrictions in certain jurisdictions, slowing the overall economic recovery.

The COVID-19 global pandemic has resulted in a widespread health crisis, and the resulting impact on governments, businesses and individuals and actions taken by them in response to the situation have resulted in widespread economic disruptions, significantly affecting broader economies, financial markets, and overall demand for the Company’s products.

These impacts lessened in 2021 due to broadening access to COVID-19 vaccines and gradual relaxing of some government-mandated restrictions.

However, a surge of COVID-19 cases due to the emergence of certain COVID-19 variants in the third quarter of 2021 led to the reinstatement of restrictions in certain jurisdictions, slowing the overall economic recovery.

Some of these restrictions have been lifted as of the end of the first quarter of 2022.

The COVID-19 outbreak has caused increased uncertainty in estimates and assumptions affecting the reported amounts of assets and liabilities in the Condensed Consolidated Financial Statements as the extent and period of recovery from the COVID-19 outbreak and related economic disruption are difficult to forecast.

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Recently Issued Accounting Pronouncements

Accounting Guidance Implemented in 2021

Standard Description Effective Date

ASU 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Topic 715-20):

Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans The ASU modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans.

The adoption of this ASU did not have a material impact on the Company’s Condensed Consolidated Financial Statements.

January 1, 2021

ASU 2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes The ASU eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences.

It also clarifies and simplifies other aspects of accounting for income taxes.

The Company adopted this ASU as of January 1, 2021 on a prospective basis, and the adoption did not have a material impact on the Company’s Condensed Consolidated Financial Statements.

January 1, 2021

The Company has not adopted any new accounting standards during the three months ended April 1, 2022.

There are no recently issued accounting pronouncements that are expected to have a material effect on the Company’s financial position, results of operations or cash flows.

Discontinued Operations

The Company retained certain asbestos-related contingencies and insurance coverages from divested businesses for which it did not retain an interest in the ongoing operations subject to the contingencies.

In conjunction with the Separation, all asbestos-related contingencies and insurance coverages from its industrial businesses were transferred fully to ESAB Corp.

The Company has classified asbestos-related selling, general and administrative activity in its Condensed Consolidated Statements of Operations as part of Loss from discontinued operations, net of taxes.

Asbestos-related costs, net of taxes were $ 1.1 million and $ 3.5 million during the three and nine months ended October 1, 2021, respectively, and $ 2.0 million and $ 4.8 million during the three and nine months ended October 2, 2020, respectively .

Asbestos-related costs, net of taxes were $ 2.5 million and $ 0.9 million during the three months ended April 1, 2022 and April 2, 2021, respectively.

See Note 13, “Commitments and Contingencies” for further information.

The Company also recorded Loss from discontinued operations, net of taxes of $ 0.2 million and $ 6.8 million during the three and nine months ended October 1, 2021, respectively, and $ 0.6 million and $ 6.2 million during the three and nine months ended October 2, 2020, respectively, related to its divested air and gas handling business, including a settlement executed in the first quarter of 2021, as well as certain professional, legal, and consulting fees in 2020.

Cash used in operating activities related to discontinued operations for the nine months ended October 1, 2021 and October 2, 2020 was $ 7.2 million and $ 18.4 million, respectively.

The Company completed one acquisition in its Fabrication Technology segment and five acquisitions in its Medical Technology segment during the nine months ended October 1, 2021 for net cash consideration of $ 208.1 million and equity consideration of $ 285.7 million.

The acquisitions are accounted for under the acquisition method of accounting, and accordingly, the Condensed Consolidated Financial Statements include the financial position and results of operations from the respective acquisition date.

The Condensed Consolidated Balance Sheet as of October 1, 2021 reflects our preliminary estimates of fair value and are subject to adjustment.

The Company also made two investments in medical technology

COLFAX CORPORATION

The Company also recorded Loss from discontinued operations, net of taxes of $ 0.6 million and $ 6.6 million during the three months ended April 1, 2022 and April 2, 2021, respectively, related to its divested air and gas handling business, including a settlement executed in the first quarter of 2021.

Cash used in operating activities related to discontinued operations for the three months ended April 1, 2022 and April 2, 2021 was $ 5.8 million and $ 7.3 million, respectively.

Acquisitions and Investments

The Medical Technology segment completed three transactions during the three months ended April 1, 2022 for $ 13.8 million, one of which is carried at cost as the investment does not have a readily determinable fair value, while the other two are accounted for as asset purchases.

The three investments broaden the platform’s product offering and distribution network.

During the three months ended April 2, 2021, the Company completed one acquisition in its Fabrication Technology segment and two acquisitions in its Medical Technology segment for aggregate net cash consideration of $ 88.7 million.

ENOVIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

businesses during the nine months ended October 1, 2021 for a total of $ 14.8 million.

acquisitions are accounted for under the acquisition method of accounting, and accordingly, the Condensed Consolidated Financial Statements include the financial position and results of operations from the respective acquisition date.

The Medical Technology segment’s acquisitions in the first quarter of 2021 included Trilliant Surgical (“Trilliant”), a national provider of foot and ankle orthopedic implants, which was acquired for net cash consideration of $ 79.6 million.

The purchase accounting for all acquisitions made in the first quarter of 2021 has been completed.

The Company also made two investments in medical technology businesses during the three months ended April 2, 2021 for a total of $ 14.8 million.

Both investments are carried at cost, as they do not have a readily determinable fair value.

In the first quarter of 2021, the Medical Technology segment acquired Trilliant Surgical (“Trilliant”), a national provider of foot and ankle orthopedic implants.

The product technologies of Trilliant support the Medical Technology segment’s focused expansion into the adjacent foot and ankle market.

Trilliant has a broad product portfolio that covers the full universe of foot reconstructive and fixation procedures, and includes the novel Arsenal Foot Plating System, designed for greater flexibility and speed of implant placement.

In the second quarter of 2021, the Medical Technology segment acquired MedShape, Inc.

(“MedShape”), a provider of innovative surgical solutions for foot and ankle surgeons using its patented superelastic nickel titanium (NiTiNOL) and shape memory polymer technologies.

This acquisition further expands the Company's foot and ankle platform.

These two acquisitions were completed for total consideration, net of cash received, of $ 205.4 million, subject to certain adjustments.

Net working capital and intangible assets acquired represent 8 % and 46 % of the total consideration exchanged for these two acquisitions, respectively, with the residual amount primarily attributable to Goodwill.

These amounts, as well as useful lives of the intangible assets, deferred taxes, and property, plant and equipment, are determined based upon certain valuations and studies that have yet to be finalized.

The Goodwill acquired in the Trilliant acquisition is deductible for income tax purposes.

The estimated proforma annual revenues of these two acquisitions are approximately 1 % of Colfax’s consolidated revenues.

In the third quarter of 2021, the Medical Technology segment acquired Mathys AG Bettlach (“Mathys”) for total acquisition equity consideration of $ 285.7 million of Colfax Common stock, which included cash acquired of $ 14.7 million.

Mathys, a Switzerland-based company, develops and distributes innovative products for artificial joint replacement, synthetic bone graft solutions, and sports medicine.

The acquisition expands the Medical Technology segment’s reconstructive product portfolio with Mathys’ complimentary surgical solutions and broadens its international customer base.

The following table summarizes the Company’s best initial estimate of the aggregate fair value of the assets acquired and liabilities assumed at the date of the Mathys acquisition.

These amounts, including inventories, deferred taxes, intangible assets, useful lives of the intangible assets, and property, plant and equipment, are determined based upon certain valuations and studies that have yet to be finalized.

Accordingly, the assets acquired and liabilities assumed, as detailed below, are subject to adjustment once the detailed analyses are completed, which could be material.

None of the Goodwill recognized is expected to be deductible for income tax purposes.

July 28, 2021

(In thousands)

Trade receivables

Property, plant and equipment

Intangible assets

Accounts payable

Other assets and liabilities, net

Consideration, net of cash acquired

The Company’s Fabrication Technology segment formulates, develops, manufactures and supplies consumable products and equipment for use in cutting, joining and automated welding, as well as gas control equipment.

During the year ended December 31, 2021, the Company completed one acquisition in its Fabrication Technology segment and five acquisitions in its Medical Technology segment for aggregate net cash consideration of $ 206.5 million and equity consideration of $ 285.7 million.

The purchase accounting for the Mathys AG Bettlach acquisition which was completed in the third quarter of 2021 has yet to be finalized.

For further information on prior year acquisitions and investments, refer to Note 5.

“Acquisitions” in the Notes to the Consolidated Financial Statements in the Company’s 2021 Form 10-K.

There have been no material changes to purchase accounting estimates for the prior year acquisitions since the issuance of the Company’s 2021 Form 10-K .

The Company’s Fabrication Technology segment develops, manufactures and supplies consumable welding and cutting products and equipment, as well as gas control equipment.

Substantially all revenue from the Fabrication Technology business is recognized at a point in time.

The Company disaggregates its Fabrication Technology revenue into the following product groups:

COLFAX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Three Months Ended Nine Months Ended

October 1, 2021 October 2, 2020 October 1, 2021 October 2, 2020

Three Months Ended

April 1, 2022 April 2, 2021

(In thousands)

2 unchanged sentences

Total $ 647,911 $ 568,128

Contracts with customers in the consumables product grouping generally have a shorter fulfillment period than equipment contracts.

The Company’s Medical Technology segment provides products and services spanning the orthopedic continuum of patient care, from injury prevention to rehabilitation.

The consumables product grouping generally has less production complexity and shorter production cycles than equipment products.

The Company’s Medical Technology segment provides orthopedic solutions, including products and services spanning the full continuum of patient care, from injury prevention to rehabilitation.

While the Company’s Medical Technology sales are primarily derived from three sales channels including dealers and distributors, insurance, and direct to consumers and hospitals, substantially all its revenue is recognized at a point in time.

The Company disaggregates its Medical Technology revenue into the following product groups:

Three Months Ended Nine Months Ended

October 1, 2021 October 2, 2020 October 1, 2021 October 2, 2020

Three Months Ended

April 1, 2022 April 2, 2021

(In thousands)

Prevention & Recovery $ 244,835 $ 235,238

$ 260,001 $ 242,591 $ 765,207 $ 626,227

Reconstructive 130,622 75,845

Total $ 375,457 $ 311,083

(1) For the periods presented, the Prevention & Recovery product group includes bone growth stimulation products, which were previously classified as part of the Reconstructive product group.

Given the nature of the Fabrication Technology and Medical Technology businesses, the total amount of unsatisfied performance obligations with an original contract duration of greater than one year as of October 1, 2021 is immaterial.

ENOVIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The nature of the Company’s contracts gives rise to certain types of variable consideration, including rebates, implicit price concessions, and other discounts.

2 unchanged sentences

As of December 31, 2021 and 2020, total contract liabilities were $ 31.5 million and $ 36.6 million, respectively.

During the three and nine months ended October 1, 2021, revenue recognized that was included in the contract liability balance at the beginning of the year was $ 6.3 million and $ 25.7 million, respectively.

During the three and nine months ended October 2, 2020, revenue recognized that was included in the contract liability balance at the beginning of the year was $ 4.5 million and $ 13.2 million, respectively.

As of October 1, 2021 and October 2, 2020, total contract liabilities were $ 30.7 million and $ 30.4 million, respectively, and were included in Accrued liabilities on the Company’s Condensed Consolidated Balance Sheets.

The contract liabilities as of October 1, 2021 and December 31, 2020 included $ 7.2 million and $ 11.8 million, respectively, of certain one-time advance payments in the Medical Technology business.

During the three months ended April 1, 2022 and April 2, 2021, revenue recognized that was included in the contract liability balance at the beginning of the year was $ 12.8 million and $ 14.3 million, respectively.

As of April 1, 2022 and April 2, 2021, total contract liabilities were $ 31.4 million and $ 40.0 million, respectively, and were included in Accrued liabilities on the Company’s Condensed Consolidated Balance Sheets.

The contract liabilities as of April 1, 2022 and December 31, 2021 included $ 2.0 million and $ 4.9 million, respectively, of certain one-time advance payments in the Medical Technology business.

Allowance for Credit Losses

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The expected credit loss model further considers current conditions and reasonable and supportable forecasts using an adjustment for current and projected macroeconomic factors.

COLFAX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Management identified appropriate macroeconomic indicators based on tangible correlation to historical losses considering the location and risks associated with the Company.

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:

Nine Months Ended October 1, 2021

of Period Charged to Expense, net Write-Offs and Deductions Foreign

Three Months Ended April 1, 2022

of Period Charged to Expense, net Write-Offs, Deductions and Other, net Foreign

Translation Balance at

3 unchanged sentences

Net income per share from continuing operations was computed as follows:

Three Months Ended Nine Months Ended

October 1, 2021 October 2, 2020 October 1, 2021 October 2, 2020

Three Months Ended

April 1, 2022 April 2, 2021

(In thousands, except share and per share data)

Computation of Net income per share from continuing operations - basic:

Net income from continuing operations attributable to Colfax Corporation (1)

Net income from continuing operations attributable to Enovis Corporation (1)

$ 18,126 $ 26,564

4 unchanged sentences

Computation of Net income per share from continuing operations - diluted:

Net income from continuing operations attributable to Colfax Corporation (1)

Net income from continuing operations attributable to Enovis Corporation (1)

$ 18,126 $ 26,564

6 unchanged sentences

$ 0.33 $ 0.56

(1) Net income from continuing operations attributable to Colfax Corporation for the respective periods is calculated using Net income from continuing operations less the income attributable to noncontrolling interest, net of taxes, of $ 1.0 million and $ 3.2 million for the three and nine months ended October 1, 2021, respectively, and $ 0.8 million and $ 2.2 million for the three and nine months ended October 2, 2020, respectively.

For all periods presented, the weighted-average shares of Common stock outstanding - basic includes the impact of 18.4 million shares related to the issuance of Colfax’s tangible equity units.

During the three and nine months ended October 1, 2021, conversions of the Company’s tangible equity units resulted in the issuance of approximately 5.6 million and 12.1 million shares of Colfax common stock, respectively.

All issuances of Colfax common stock related to the tangible equity units were converted at the minimum settlement rate 4.0000 shares of common stock for each purchase contract as a result of the Company’s share price.

The issued shares are included in the Common stock issued and outstanding as of October 1, 2021.

For the nine months ended October 2, 2020, the weighted-average shares of Common stock outstanding - diluted includes the

COLFAX CORPORATION

(1) Net income from continuing operations attributable to Enovis Corporation for the respective periods is calculated using Net income from continuing operations less the income attributable to noncontrolling interest, net of taxes, of $ 1.2 million for the three months ended April 1, 2022 and April 2, 2021.

ENOVIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

impact of an additional 1.2 million potentially issuable dilutive shares related to Colfax’s tangible equity units as a result of the Company’s share price in March 2020.

As a result of the reverse stock split, all share and per share figures contained in the Condensed Consolidated Financial Statements have been retroactively restated as if the reverse stock split occurred at the beginning of the periods presented.

For all periods presented, the weighted-average shares of Common stock outstanding - basic includes the impact of the shares related to the issuance of the tangible equity units.

During the three months ended April 1, 2022, conversions of the Company’s tangible equity units resulted in the issuance of approximately 1.7 million shares of Company common stock.

All issuances of Company common stock related to the tangible equity units were converted at the minimum settlement rate of 1.33 shares of common stock for each purchase contract as a result of the Company’s share price.

The issued shares are included in the Common stock issued and outstanding as of April 1, 2022.

See Note 8, “Equity” for details.

The weighted-average computation of the dilutive effect of potentially issuable shares of Common stock under the treasury stock method for the three and nine months ended October 1, 2021 excludes 0.8 million and 1.3 million, respectively, of outstanding stock-based compensation awards as their inclusion would be anti-dilutive.

The weighted-average computation of the dilutive effect of potentially issuable shares of Common stock under the treasury stock method for the three and nine months ended October 2, 2020 excludes 2.8 million and 4.2 million, respectively, of outstanding stock-based compensation awards as their inclusion would be anti-dilutive.

COLFAX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

During the three and nine months ended October 1, 2021, Income from continuing operations before income taxes was $ 50.5 million and $ 125.6 million, respectively, while income tax expense was $ 22.3 million and $ 38.4 million, respectively.

The effective tax rates were 44.3 % and 30.6 % for the three and nine months ended October 1, 2021, respectively, which both differed from the 2021 U.S.

federal statutory rate of 21% mainly due to withholding taxes, U.S.

tax on international operations, and other non-deductible expenses offset in part by the effective settlements on uncertain tax positions, a benefit from U.S.

state tax losses, and U.S.

The effective tax rate for the three months ended October 1, 2021 was primarily impacted by the relative unfavorable increase in U.S.

tax on international operations due to lower U.S.

forecasted income and increased taxable foreign exchange gains as compared to the three months ended July 2, 2021 and nine months ended October 1, 2021.

During the three and nine months ended October 2, 2020, Income from continuing operations before income taxes was $ 36.4 million and $ 25.2 million, respectively, while income tax expense was $ 19.5 million and $ 2.6 million, respectively.

The effective tax rates were 53.7 % and 10.5 % for the three and nine months ended October 2, 2020, respectively.

The effective tax rate for the three months ended October 2, 2020 differed from the 2020 U.S.

federal statutory rate of 21% mainly due to the net impact of additional U.S.

tax on international operations, withholding taxes, and certain non-deductible expenses.

These unfavorable impacts were partially offset by the impact of U.S.

tax credits, benefit from U.S.

state tax losses, and the realization of tax benefits associated with effective settlements on uncertain tax positions.

The effective tax rate for the nine months ended October 2, 2020 differed from the 2020 U.S.

federal statutory rate of 21%, mainly due to the net impact of U.S.

tax credits and benefits from U.S.

state tax losses, a discrete tax benefit associated with the filing of timely elected changes to U.S.

Federal tax returns to credit rather than to deduct foreign taxes, the impact of an enacted law change in India, and the realization of tax benefits associated with effective settlements on uncertain tax positions.

These favorable impacts were partially offset by the impact of additional U.S.

tax on international operations, withholding taxes, and certain non-deductible expenses.

In conjunction with the filing of the timely elected changes to credit rather than to deduct foreign taxes, the Company obtained additional foreign tax credit carryforwards.

The Company evaluated all positive and negative evidence in determining the realizability of these deferred tax assets and based on such evidence, concluded a full valuation allowance was needed.

COLFAX CORPORATION

The weighted-average computation of the dilutive effect of potentially issuable shares of Common stock under the treasury stock method for the three months ended April 1, 2022 and April 2, 2021 excludes 0.5 million of outstanding stock-based compensation awards as their inclusion would be anti-dilutive.

During the three months ended April 1, 2022, Income from continuing operations before income taxes was $ 38.0 million, while income tax expense was $ 18.7 million.

The effective tax rate was 49.1 % for the three months ended April 1, 2022.

The effective tax rate for the three months ended April 1, 2022 differed from the 2021 U.S.

federal statutory rate of 21% mainly due to withholding taxes, taxable foreign exchange gains, U.S.

taxation of international operations, other non-deductible expenses, and various items expensed discretely to the quarter.

During the three months ended April 2, 2021, Income from continuing operations before income taxes was $ 35.6 million, while income tax expense was $ 7.9 million.

The effective tax rate was 22.2 % for the three months ended April 2, 2021.

The effective tax rate for the three months ended April 2, 2021 differed from the 2021 U.S.

federal statutory rate of 21% mainly due to withholding taxes, taxable foreign exchange gains and other non-deductible expenses partially offset by the benefit of U.S.

ENOVIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

On March 19, 2021, the Company completed the underwritten public offering of 16.1 million shares of Colfax Common stock at a price to the public of $ 46.00 per share, resulting in net proceeds of approximately $ 711.3 million, after deducting offering expenses and underwriters’ discount and commissions.

On July 28, 2021, the Company issued 6.5 million shares of Colfax Common stock to the former shareholders of Mathys for acquisition consideration of $ 285.7 million.

Share Repurchase Program

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No repurchases of the Company’s Common stock have been made under this plan since the third quarter of 2018.

As of October 1, 2021, the remaining stock repurchase authorization provided by the Board of Directors was $ 100 million.

As of April 1, 2022, 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.

1 unchanged sentence

Accumulated Other Comprehensive Loss

The following tables present the changes in the balances of each component of Accumulated other comprehensive loss including reclassifications out of Accumulated other comprehensive loss for the nine months ended October 1, 2021 and October 2, 2020.

The following tables present the changes in the balances of each component of Accumulated other comprehensive loss including reclassifications out of Accumulated other comprehensive loss for the three months ended April 1, 2022 and April 2, 2021.

All amounts are net of tax and noncontrolling interest, if any.

2 unchanged sentences

(In thousands)

Balance at December 31, 2020 $ ( 112,783 ) $ ( 360,977 ) $ 21,654 $ ( 452,106 )

Balance at January 1, 2022 $ ( 85,559 ) $ ( 475,125 ) $ 44,671 $ ( 516,013 )

Other comprehensive income (loss) before reclassifications:

Foreign currency translation adjustment 470 ( 38,333 ) — ( 37,863 )

Gain on long-term intra-entity foreign currency transactions — 25,933 — 25,933

Loss on long-term intra-entity foreign currency transactions — ( 15,260 ) ( 15,260 )

Gain on net investment hedges — — 9,028 9,028

2 unchanged sentences

Net Other comprehensive income (loss) 1,099 ( 53,593 ) 9,028 ( 43,466 )

Balance at October 1, 2021 $ ( 108,501 ) $ ( 459,868 ) $ 35,727 $ ( 532,642 )

COLFAX CORPORATION

Balance at April 1, 2022 $ ( 84,460 ) $ ( 528,718 ) $ 53,699 $ ( 559,479 )

ENOVIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

2 unchanged sentences

(In thousands)

Balance at December 31, 2019 $ ( 106,500 ) $ ( 421,889 ) $ 44,544 $ ( 483,845 )

Balance at January 1, 2021 $ ( 112,783 ) $ ( 360,977 ) $ 21,654 $ ( 452,106 )

Other comprehensive income (loss) before reclassifications:

Foreign currency translation adjustment 709 ( 82,663 ) ( 2,201 ) ( 84,155 )

Loss on long-term intra-entity foreign currency transactions — ( 18,023 ) — ( 18,023 )

Loss on net investment hedges — — ( 12,700 ) ( 12,700 )

Gain on long-term intra-entity foreign currency transactions — 31,098 — 31,098

Gain on net investment hedges — — 12,381 12,381

Other comprehensive income (loss) before reclassifications 709 ( 51,565 ) 10,180 ( 40,676 )

1 unchanged sentence

Net Other comprehensive income (loss) 1,764 ( 51,565 ) 10,180 ( 39,621 )

Balance at October 2, 2020 $ ( 104,075 ) $ ( 471,659 ) $ 33,738 $ ( 541,996 )

Tangible equity unit (“TEU”) offering

On January 11, 2019, the Company issued 4.6 million TEUs at the stated amount of $ 100 per unit.

Balance at April 2, 2021 $ ( 111,019 ) $ ( 412,542 ) $ 31,834 $ ( 491,727 )

Tangible equity unit offering

On January 11, 2019, the Company issued 4.6 million in Tangible Equity Units (“TEUs”) at the stated amount of $ 100 per unit.

Net cash of $ 447.7 million was received upon closing.

A portion of the proceeds from the issuance of the TEUs were allocated initially to equity (the “TEU prepaid stock purchase contracts”) and debt (the “TEU amortizing notes”) based on the relative fair value of the respective components of each TEU.

See Note 10, “Debt” for further information regarding the TEU amortizing notes.

TEU prepaid stock purchase contracts

Unless previously settled at the holder’s option, for each TEU prepaid stock purchase contract the Company will deliver to holders on January 15, 2022 (subject to postponement in certain limited circumstances, the “mandatory settlement date”) a number of shares of common stock.

The number of shares of common stock issuable upon settlement of each purchase contract (the “settlement rate”) will be determined using the arithmetic average of the volume average weighted price for the 20 consecutive trading days beginning on, and including, the 21st scheduled trading day immediately preceding January 15, 2022 (“the Applicable Market Value”) with reference to the following settlement rates:

• if the Applicable Market Value of the common stock is greater than the threshold appreciation price of $ 25.00 , the holder will receive 4.0000 shares of common stock for each purchase contract;

• if the Applicable Market Value of the common stock is greater than or equal to the reference price of $ 20.81 , but less than or equal to the threshold appreciation price of $ 25.00 , the holder will receive a number of shares of common stock for each purchase contract having a value, based on the Applicable Market Value, equal to $ 100 ;

• if the Applicable Market Value of the common stock is less than the reference price of $ 20.81 , the holder will receive 4.8054 shares of common stock for each purchase contract.

Earnings per share impact of TEU prepaid stock purchase contracts

Unless the TEU prepaid stock purchase contracts are redeemed by the Company or settled earlier at the unit holder’s option, they are mandatorily convertible into shares of Colfax common stock at not less than 4.0000 shares per purchase contract or more than 4.8054 shares per purchase contract on January 15, 2022.

This corresponds to not less than 18.4 million shares and not more than 22.1 million shares at the maximum.

The 18.4 million minimum shares are included in the calculation of weighted-average shares of Common stock outstanding - basic.

The difference between the minimum and maximum shares represents potentially dilutive securities.

The Company includes them in its calculation of weighted-average shares of Common stock outstanding - diluted on a pro rata basis to the extent the effect is not anti-dilutive and the average Applicable Market Value is higher than the reference price but is less than the threshold appreciation price.

During the three and nine months ended October 1, 2021, 1.4 million and 3.0 million TEU prepaid stock purchase contracts were settled at the holder’s option

COLFAX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

into approximately 5.6 million and 12.1 million shares of Colfax common stock, respectively, at a conversion rate of 4.0 shares per contract.

The gross proceeds and deferred finance costs from the issuance of the TEUs were allocated 84.4 % to equity (the “TEU prepaid stock purchase contracts”) and 15.6 % to debt (the “TEU amortizing notes”) based on the relative fair value of the respective components of each TEU.

See Note 10, “Debt” for additional information on the TEU amortizing notes.

The TEU prepaid stock purchase contracts were mandatorily converted into shares of Company common stock on January 15, 2022, unless previously settled at the holder’s option.

All the TEU prepaid stock purchase contracts converted at the minimum settlement rate.

Approximately 1.3 million and 0.1 million TEU prepaid stock purchase contracts were settled into approximately 1.7 million and 0.1 million shares of Company common stock as adjusted for the reverse split, during the three months ended April 1, 2022 and April 2, 2021, respectively.

Since the 4.6 million TEU prepaid stock purchase contracts were mandatorily convertible into shares of Company common stock at the minimum settlement rate or greater, 6.1 million shares, as adjusted for the reverse split, are included in basic net income per share calculations for all periods presented.

See Note 6, “Net Income Per Share from Continuing Operations” for additional information.

Inventories, Net

Inventories, net consisted of the following:

October 1, 2021 December 31, 2020

April 1, 2022 December 31, 2021

(In thousands)

3 unchanged sentences

936,150 851,582

LIFO reserve 797 1,129

allowance for excess, slow-moving and obsolete inventory ( 84,133 ) ( 76,416 )

$ 852,814 $ 776,295

The valuation of LIFO inventories is made at the end of the year based on inventory levels and costs at the time.

At April 1, 2022 and December 31, 2021, approximately 17.4 % and 18.3 % of total inventories, respectively, were valued using the LIFO method.

ENOVIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Long-term debt consisted of the following:

October 1, 2021 December 31, 2020

April 1, 2022 December 31, 2021

(In thousands)

1 unchanged sentence

Euro senior notes 383,997 395,552

2024 and 2026 notes 297,780 991,319

2026 notes 298,034 297,906

TEU amortizing notes — 6,501

3 unchanged sentences

Long-term debt $ 1,647,870 $ 2,078,679

Subsequent Event Debt Redemptions

In conjunction with the Separation which occurred on April 4, 2022, the Company repaid its Term loan and Revolver (each as defined below) and entered into a new credit agreement with its banking partners.

Additionally, on March 7, 2022, the Company announced a conditional redemption of its 3.25 % Euro Senior Notes due 2025 and its 6.375 % Senior Notes due 2026.

The Euro Senior Notes and 2026 Notes were redeemed on April 7, 2022 after the completion of the Separation.

In accordance with the redemption notices and subsequent redemption of the debt described above, $ 421.3 million has been reclassified from long-term debt to current maturities.

The amount reflects the debt retired that was not refinanced on a long-term basis.

Refer to Note 15, “Subsequent Events” for further detail of ongoing financing arrangements.

Term Loan and Revolving Credit Facility

The Company’s credit agreement (the “Credit Facility”) by and among the Company, as the borrower, certain U.S.

subsidiaries of the Company, as guarantors, each of the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent, Citizens Bank, N.A., as syndication agent, and the co-documentation agents named therein consists of a $ 975 million revolving credit facility (the “Revolver”) and a Term A-1 loan with an initial aggregate principal amount of $ 825 million (the “Term Loan”), each with a maturity date of December 6, 2024.

The Revolver contains a $ 50 million swing line loan sub-facility.

The Company’s credit agreement (the “Credit Facility”), which was legally extinguished in conjunction with the Separation on April 4, 2022, consisted of a $ 975 million revolving credit facility (the “Revolver”) and a Term A-1 loan with an initial aggregate principal amount of $ 825 million (the “Term Loan”), each with a maturity date of December 6, 2024.

The Revolver contained a $ 50 million swing line loan sub-facility.

subsidiaries of the Company guarantee the obligations under the Credit Facility.

The Credit Facility contains customary covenants limiting the ability of Colfax and its subsidiaries to, among other things, incur debt or liens, merge or consolidate with others, dispose of assets, make investments or pay dividends.

In addition, the Credit Facility contains financial covenants requiring Colfax to maintain (subject to certain exceptions) (i) a maximum total leverage ratio, calculated as the ratio of Consolidated Net Debt (as defined in the Credit Facility) to EBITDA (as defined in the Credit Facility) of 4.50 :1.00 for the quarter ending September 30, 2021, 4.25 :1.00 for the quarters ending December 31, 2021 and March 31, 2022, 4.00 :1.00 for the quarters ending June 30, 2022 and September 30, 2022, and 3.50 :1.00 as of December 31, 2022 and for each fiscal quarter ending thereafter, and (ii) a minimum interest coverage ratio of 3.00 :1.00 for the quarters ending September 30, 2021 and thereafter.

The Credit Facility also includes a “springing” collateral provision (based upon the Gross Leverage Ratio as defined in the Credit Facility) which requires the obligations under the Credit Facility to be secured by substantially all personal property of Colfax and its U.S.

subsidiaries and the equity of its first tier foreign subsidiaries, subject to customary exceptions, in the event Colfax’s gross leverage ratio under the Credit Facility is greater than 5.00 :1.00 as of the last day of any fiscal quarter.

The Credit Facility contains various events of default (including failure to comply with the covenants under the Credit Facility 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 Term Loan and the Revolver.

As of October 1, 2021, the Company was in compliance with the covenants under the Credit Facility.

COLFAX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

As of October 1, 2021, the weighted-average interest rate of borrowings under the Credit Facility was 1.59 %, excluding accretion of original issue discount and deferred financing fees, and there was $ 850 million available on the Revolver.

The Credit Facility contained customary covenants limiting the ability of the Company to, among other things, incur debt or liens, merge or consolidate with others, dispose of assets, make investments or pay dividends.

In addition, the Credit Facility contained maximum total leverage ratio and minimum interest coverage ratio financial covenants.

For further description of the Company’s financial covenants as of April 1, 2022, refer to Note 13, “Debt” in the Notes to the Consolidated Financial Statements in the Company’s 2021 Form 10-K.

As of April 1, 2022, the Company was in compliance with the covenants under the Credit Facility.

As of April 1, 2022, the weighted-average interest rate of borrowings under the Credit Facility was 1.74 %, excluding accretion of original issue discount and deferred financing fees, and there was $ 375 million available on the Revolver.

Euro Senior Notes

The Company has senior unsecured notes with an aggregate principal amount of € 350 million (the “Euro Notes”).

The Euro Notes are due in April 2025, have an interest rate of 3.25 % and are guaranteed by certain of our domestic subsidiaries (the “Guarantees”).

The Euro Notes and the Guarantees have not been, and will not be, registered under the Securities Act of 1933, as amended, or the securities laws of any other jurisdiction.

The Company had senior unsecured notes with an aggregate principal amount of € 350 million due in May 2025, with an interest rate of 3.25 % (the “Euro Senior Notes”).

The Euro Senior Notes were redeemed on April 7, 2022 after the completion of the Separation.

TEU Amortizing Notes

Each TEU amortizing note has an initial principal amount of $ 15.6099 , bears interest at a rate of 6.50 % per annum, and has equal quarterly cash installments of $ 1.4375 per TEU amortizing note with a final installment payment date of January 15, 2022.

The quarterly cash installment constitutes a payment of interest and a partial repayment of principal.

The Company paid $ 18.6 million and $ 17.4 million of principal on the TEU amortizing notes in the nine months ended October 1, 2021 and October 2, 2020, respectively.

The TEU amortizing notes are the direct, unsecured and unsubordinated obligations of the Company and rank equally with all of the existing and future other unsecured and unsubordinated indebtedness of the Company.

For more information on the TEUs, refer to Note 8, “Equity.”

2024 Notes and 2026 Notes

The Company had senior notes with an initial aggregate principal amount of $ 600 million (the “2024 Notes”), which were due on February 15, 2024 and had an interest rate of 6.0 %.

The Company has senior notes with an aggregate initial principal amount of $ 400 million (the “2026 Notes”), which are due on February 15, 2026 and have an interest rate of 6.375 %.

The 2026 Notes are guaranteed by certain domestic subsidiaries of the Company.

On April 24, 2021, the Company redeemed all $ 600 million outstanding principal amount of its 2024 Notes and $ 100 million of the outstanding principal amount of its 2026 Notes for $ 724.4 million.

The 2024 Notes were redeemed at a redemption price of 103.000 % of their principal amount and the 2026 Notes were redeemed at a redemption price of 106.375 % of their principal amount, plus, in each case, accrued and unpaid interest through the date of redemption.

In the second quarter of 2021, a net loss on the early extinguishment of debt of $ 29.9 million was recorded and included $ 24.4 million of call premium on the retired debt.

The Company had 6.50 % TEU amortizing notes at an initial principal amount of $ 15.6099 per note with equal quarterly cash installments of $ 1.4375 per note representing a payment of interest and partial payment of principal.

The final installment payment was made on January 15, 2022.

The Company paid $ 6.5 million and $ 6.1 million of principal on the TEU amortizing notes in the three months ended April 1, 2022 and April 2, 2021, respectively.

ENOVIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Company had senior notes with a remaining principal amount of $ 300 million (the “2026 Notes”), which were due on February 15, 2026 and had an interest rate of 6.375 %.

The 2026 Notes were redeemed on April 7, 2022 after the completion of the Separation.

Other Indebtedness

In addition to the debt agreements discussed above, the Company is party to various bilateral credit facilities with a borrowing capacity of $ 168.2 million.

As of October 1, 2021, there were no outstanding borrowings under these facilities.

As of April 1, 2022, there were no outstanding borrowings under these facilities.

Subsequent to the end of the first quarter of 2022, the bilateral credit facilities are no longer available to Enovis due to the completion of the Separation as they relate to ESAB Corp or expired.

The Company is party to letter of credit facilities with an aggregate capacity of $ 211.9 million.

Total letters of credit of $ 34.6 million were outstanding as of October 1, 2021.

Total letters of credit of $ 40.2 million were outstanding as of April 1, 2022.

Subsequent to the end of the first quarter of 2022, substantially all of the letter of credit facilities are no longer available to Enovis due to the completion of the Separation as they relate to ESAB Corp.

Deferred Financing Fees

In total, deferred financing fees related to the Company’s debt activities were $ 13.3 million as of October 1, 2021, which will be charged to Interest expense, net, primarily using the effective interest method, over the life of the applicable debt agreements.

COLFAX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

In total, the Company had deferred financing fees, including the original issue discount, of $ 11.3 million included in its Condensed Consolidated Balance Sheet as of April 1, 2022, which would be charged to Interest expense, net, primarily using the effective interest method, over the life of the applicable debt agreements.

In conjunction with the Separation and debt redemptions in the second quarter of 2022, the Company expects a net loss on the early extinguishment of debt of approximately $ 17 million, including approximately $ 13 million of redemption premiums on the retired debt instruments and $ 4 million of noncash write-offs of original issue discount and deferred financing fees on the Euro Senior Notes and Senior Notes.

The Company also expects additional charges of approximately $ 7 million in conjunction with entering into the new Enovis Credit Facility and the extinguishment of the prior Credit Facility, which is subject to finalization.

Accrued Liabilities

Accrued liabilities in the Condensed Consolidated Balance Sheets consisted of the following:

October 1, 2021 December 31, 2020

April 1, 2022 December 31, 2021

(In thousands)

2 unchanged sentences

Accrued asbestos-related liability 34,494 30,572

Warranty liability - current portion 17,594 15,543

Warranty liability 19,331 17,457

Accrued restructuring liability - current portion 9,546 10,221

5 unchanged sentences

$ 490,050 $ 511,097

ENOVIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Warranty Liability

The activity in the Company’s warranty liability consisted of the following:

Nine Months Ended

October 1, 2021 October 2, 2020

Three Months Ended

April 1, 2022 April 2, 2021

(In thousands)

6 unchanged sentences

Warranty liability, end of period $ 19,331 $ 15,799

$ 18,305 $ 14,991

(1) As of October 1, 2021, $ 17.6 million of the Company’s Warranty liability was included in Accrued expenses, whereas $ 0.7 million of the Company’s Warranty liability was included in Other liabilities on the Company’s Condensed Consolidated Balance Sheet.

COLFAX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Accrued Restructuring Liability

1 unchanged sentence

A summary of the activity in the Company’s restructuring liability included in Accrued liabilities and Other liabilities in the Condensed Consolidated Balance Sheets is as follows:

Nine Months Ended October 1, 2021

Three Months Ended April 1, 2022

Balance at Beginning of Period Provisions Payments Foreign Currency Translation Balance at End of Period (3)

4 unchanged sentences

$ 7,818 $ 452 $ ( 1,861 ) $ ( 26 ) $ 6,383

Facility closure costs (2)

Facility closure costs and other (2)

291 4,815 ( 4,796 ) ( 1 ) 309

8 unchanged sentences

Non-cash charges (2)

Total Colfax Corporation:

Total restructuring liability activity $ 10,937 7,938 $ ( 9,137 ) $ ( 36 ) $ 9,702

1 unchanged sentence

(1) Includes severance and other termination benefits, including outplacement services.

(2) Includes the cost of relocating associates, relocating equipment and lease termination expense in connection with the closure of facilities.

(3) As of October 1, 2021, $ 7.8 million of the Company’s restructuring liability was included in Accrued liabilities, whereas less than $ 0.2 million of the Company’s restructuring liability was included in Other liabilities.

COLFAX CORPORATION

(2) Includes the cost of relocating associates, relocating equipment, lease termination expense and other costs in connection with the closure and optimization of facilities, site cost structures, and product lines.

The Medical Technology segment charges include $ 0.5 million of expense classified as Cost of sales on the Company’s Condensed Consolidated Statements of Operations for the three months ended April 1, 2022.

(3) As of April 1, 2022, $ 9.5 million and $ 0.2 million of the Company’s restructuring liability was included in Accrued liabilities and Other liabilities, respectively.

ENOVIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Financial Instruments and Fair Value Measurements

The carrying values of financial instruments, including Trade receivables and Accounts payable, approximate their fair values due to their short-term maturities.

The $ 1.6 billion and $ 2.3 billion estimated fair value of the Company’s debt as of October 1, 2021 and December 31, 2020, respectively, was based on current interest rates for similar types of borrowings and is in Level Two of the fair value hierarchy.

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 estimated fair value of the Company’s debt, which was $ 2.1 billion as of both April 1, 2022 and December 31, 2021, was based on current interest rates for similar types of borrowings and is in Level Two of the fair value hierarchy.

The estimated fair values 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.

A summary of the Company’s assets and liabilities that are measured at fair value for each fair value hierarchy level for the periods presented is as follows:

October 1, 2021

April 1, 2022

(In thousands)

15 unchanged sentences

$ — $ 14,257 $ — $ 14,257

There were no transfers in or out of Level One, Two or Three during the nine months ended October 1, 2021.

COLFAX CORPORATION

There were no transfers in or out of Level One, Two or Three during the three months ended April 1, 2022.

ENOVIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Foreign Currency Contracts

As of October 1, 2021 and December 31, 2020, the Company had foreign currency contracts related to purchases and sales with notional values of $ 310.6 million and $ 250.4 million, respectively.

As of April 1, 2022 and December 31, 2021, the Company had foreign currency contracts related to purchases and sales with notional values of $ 203.6 million and $ 273.2 million, respectively.

The Company recognized the following in its Condensed Consolidated Financial Statements related to its derivative instruments:

Three Months Ended Nine Months Ended

October 1, 2021 October 2, 2020 October 1, 2021 October 2, 2020

Three Months Ended

April 1, 2022 April 2, 2021

(In thousands)

7 unchanged sentences

(1) The unrealized gain (loss) on net investment hedges is attributable to the change in valuation of Euro denominated debt.

Restricted Cash

Financial instruments also include Restricted cash.

Cash and cash equivalents that are restricted as to withdrawal or use under the terms of certain contractual agreements are excluded from Cash and cash equivalents in the Condensed Consolidated Balance Sheets.

The Restricted cash as of December 31, 2020 was related to an acquisition which closed in the first quarter of 2021 and was recorded as a component of Other current assets on the Condensed Consolidated Balance Sheets.

The following table summarizes the Company’s Cash and cash equivalents and Restricted cash:

October 1, 2021 December 31, 2020

(In thousands)

Cash and cash equivalents $ 177,482 $ 97,068

Restricted cash — 4,001

Cash and cash equivalents and Restricted cash $ 177,482 $ 101,069

Commitments and Contingencies

1 unchanged sentence

Since the Company did not retain an interest in the ongoing operations of its divested businesses, the retained asbestos-related activity has been classified in its Condensed Consolidated Statements of Operations as a component of Loss from discontinued operations, net of taxes.

COLFAX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

In conjunction with the Separation, all asbestos-related contingencies and insurance coverages from the divested industrial businesses were transferred fully to ESAB Corp.

Asbestos Contingencies

Asbestos-related claims activity since December 31 is as follows:

Nine Months Ended

October 1, 2021 October 2, 2020

Three Months Ended

April 1, 2022 April 2, 2021

(Number of claims)

6 unchanged sentences

(2) Claims resolved include all asbestos claims that have been settled, dismissed or that are in the process of being settled or dismissed based upon agreements or understandings in place with counsel for the claimants.

ENOVIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Company’s Condensed Consolidated Balance Sheets included the following amounts related to asbestos-related litigation:

October 1, 2021 December 31, 2020

April 1, 2022 December 31, 2021

(In thousands)

13 unchanged sentences

General Litigation

The Company is involved in other pending legal proceedings arising out of the ordinary course of the Company’s business.

The Company is involved in various other pending legal proceedings arising out of the ordinary course of the Company’s business.

None of these legal 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 and the litigation and claims described in the preceding paragraphs, management of the Company believes that it will either prevail, has adequate insurance coverage or has established appropriate accruals to cover potential liabilities.

Any costs that management estimates may be paid related to these proceedings or claims are accrued when the liability is considered probable and the amount can be reasonably estimated.

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 legal 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.

COLFAX CORPORATION

ENOVIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

3 unchanged sentences

• Medical Technology - a leader in orthopedic solutions, providing devices, software and services spanning the full continuum of patient care, from injury prevention to joint replacement to rehabilitation.

Certain amounts not allocated to the two reportable segments and intersegment eliminations are reported under the heading “Corporate and other.” The Company’s management evaluates the operating results of each of its reportable segments based upon Net sales and segment operating income (loss), which represents Operating income (loss) before Restructuring and other related charges and European Union Medical Devices Regulation (“MDR”) and other costs.

The Company’s segment results were as follows:

Three Months Ended Nine Months Ended

October 1, 2021 October 2, 2020 October 1, 2021 October 2, 2020

Three Months Ended

April 1, 2022 April 2, 2021

(In thousands)

7 unchanged sentences

$ 64,002 $ 67,106

(1) Following is a reconciliation of Income (loss) from continuing operations before income taxes to segment operating income:

Three Months Ended Nine Months Ended

October 1, 2021 October 2, 2020 October 1, 2021 October 2, 2020

(1) The following is a reconciliation of Income from continuing operations before income taxes to segment operating income:

Three Months Ended

April 1, 2022 April 2, 2021

(In thousands)

Income from continuing operations before income taxes $ 38,019 $ 35,647

Pension settlement gain — — ( 11,208 ) —

Interest expense, net 15,099 25,660

Debt extinguishment charges — — 29,870 —

Restructuring and other related charges (1)

6,457 6,328 15,983 28,514

MDR and other costs (2)

1,902 2,589 5,574 4,489

MDR and related costs (2)

Segment operating income $ 64,002 $ 67,106

(1) Restructuring and other related charges includes $ 2.2 million and $ 4.9 million of expense classified as Cost of sales on the Company’s Condensed Consolidated Statements of Operations for the three and nine months ended October 2, 2020, respectively.

(2) Primarily related to costs specific to compliance with medical device reporting regulations and other requirements of the European Union MDR.

These costs are classified as Selling, general and administrative expense on the Company’s Condensed Consolidated Statements of Operations for all periods presented.

(1) Restructuring and other related charges includes $ 0.5 million of expense classified as Cost of sales on the Company’s Condensed Consolidated Statements of Operations for the three months ended April 1, 2022.

(2) Primarily related to costs specific to compliance with medical device reporting regulations and other requirements of the European Union Medical Devices Regulation.

These costs are classified as Selling, general and administrative expense on our Condensed Consolidated Statements of Operations.

ENOVIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Subsequent Events

As discussed in Note 1, “General”, the Company completed the separation of its fabrication technology business on April 4, 2022 through a tax-free, pro-rata distribution of 90 % of the outstanding common stock of ESAB Corp to the Company’s stockholders.

In connection with the Separation, ESAB Corp and Enovis entered into various agreements to affect the Separation and provide a framework for Enovis’ relationship with ESAB Corp after the Separation, including a separation and distribution agreement, stockholders’ and registration rights agreement, employee matters agreement, tax matters agreement, transition services agreement, ESAB Business Excellence System (“EBS”) license agreement, and intellectual property matters agreement.

These agreements will govern the Separation between Enovis and ESAB Corp of the assets, employees, liabilities and obligations (including its investments, property and employee benefits and tax-related assets and liabilities) of Enovis and its subsidiaries attributable to periods prior to, at and after the Separation and will govern certain relationships between Enovis and ESAB Corp after the Separation.

In connection with the Separation, ESAB Corp issued $ 1.2 billion of new debt securities, the proceeds from which were used to fund a $ 1.2 billion cash distribution to Enovis upon Separation.

Additionally, on April 7, 2022, the Company completed the redemption of its Euro Senior Notes representing all of its outstanding € 350 million principal 3.250 % Senior Notes due 2025 consisting of $ 392.1 million outstanding debt and accrued interest as well as a redemption premium of 100.813 % of the principal amount.

In the second quarter of 2022, the Company expects a net loss on the early extinguishment of debt of approximately $ 17 million, including approximately $ 13 million of redemption premiums on the retired debt instruments and $ 4 million of noncash write-offs of original issue discount and deferred financing fees on the Euro Senior Notes and Senior Notes.

In accordance with the redemption notices and subsequent redemption of the debt described above, $ 421.3 million has been reclassified from long-term debt to current maturities.

The amount reflects the debt retired that was not refinanced on a long-term basis.

The Company retained 10 % of the shares of ESAB Corp common stock as part of the Separation.

The Company intends to divest its 10 % retained shares in ESAB Corp in a tax-efficient exchange for its outstanding debt under the new Enovis credit facility no later than 12 months after the Distribution Date.

The retained stake in ESAB Corp, based on the initial opening share price, is approximately $ 300 million on a fair value basis and will be marked-to-market each reporting period.

Immediately following the Separation, the Company effected a one-for-three reverse stock split of all issued and outstanding shares of Enovis common stock.

On April 4, 2022, the Company entered into a new credit agreement (the “Enovis Credit Agreement”) which replaces the Company’s prior credit agreement and concurrently terminated all indebtedness of the Company outstanding thereunder being repaid on such date with proceeds of the Enovis Credit Agreement and other funds of the Company.

The Enovis Credit Agreement consists of a revolving credit facility that totals $ 900 million in commitments with a maturity date of April 4, 2027 (the “Enovis Revolver”) and a term loan in an aggregate amount of $ 450 million with a maturity date of April 4, 2023 (the “Enovis Term Loan”, and together with the Enovis Revolver, the “Enovis Credit Facilities”).

The Enovis Revolver includes a $ 50 million swingline loan sub-facility.

The Enovis Revolver will be used to provide funds for the Company’s ongoing working capital requirements and for general corporate purposes.

The Enovis Term Loan bears interest, at the election of the Company, at either the base rate (as defined in the Enovis Credit Agreement) or at the term Secured overnight financing rate (“SOFR”) plus an adjustment (as defined in the Enovis Credit Agreement), in each case, plus the applicable interest rate margin.

The Enovis Revolver bears interest, at the election of the Company, at either the base rate or, in the case of loans denominated in dollars, the term SOFR rate plus an adjustment or the daily simple SOFR plus an adjustment, in the case of loans denominated in euros, the adjusted EURIBOR rate and, in the case of loans denominated in sterling, SONIA plus an adjustment (as all such rates are defined in the Enovis Credit Agreement), in each case, plus the applicable interest rate margin.

Initially, the applicable interest rate margin will be 1.500 % or, in the case

ENOVIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

of base rate loans, 0.500 %, and in future quarters it may change based upon the Company’s total leverage ratio (ranging from 1.125 % to 1.750 % or in the case of the base rate margin, 0.125 % to 0.750 %).

Each swing line loan denominated in dollars will bear interest at the base rate plus the applicable interest rate margin.

subsidiaries of the Company have agreed to guarantee the obligations of the Company under the Enovis Credit Agreement.

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.

In addition, the Enovis Credit Agreement contains financial covenants requiring the Company to maintain (i) a maximum total leverage ratio of not more than 4.50 :1.00, with a step-down to, on the date on which the Company and its subsidiaries have transferred any retained shares of ESAB common stock to one or more unaffiliated third parties, 4.00 :1.00, commencing with the fiscal quarter ending June 30, 2023, 3.75 :1.00 and commencing with the fiscal quarter ending June 30, 2024, 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 Term Loan and the Enovis Revolver.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements