What changed in this filing

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Item 1. Financial Statements

2024-11-06 compared with 2024-08-07 · 135 added, 114 removed, 546 unchanged (31% of the section changed)

3 unchanged sentences

Dollars in thousands, except per share amounts

Three Months Ended Six Months Ended

June 28, 2024 June 30, 2023 June 28, 2024 June 30, 2023

Three Months Ended Nine Months Ended

September 27, 2024 September 29, 2023 September 27, 2024 September 29, 2023

Net sales $ 505,222 $ 417,524 $ 1,546,648 $ 1,252,177

11 unchanged sentences

Net loss from continuing operations ( 33,505 ) ( 19,451 ) ( 123,790 ) ( 56,907 )

(Loss) income from discontinued operations, net of taxes ( 68 ) 4,797 ( 68 ) 4,485

Income from discontinued operations, net of taxes 2,243 16,611 2,175 21,096

Net loss ( 31,262 ) ( 2,840 ) ( 121,615 ) ( 35,811 )

9 unchanged sentences

Dollars in thousands

Three Months Ended Six Months Ended

June 28, 2024 June 30, 2023 June 28, 2024 June 30, 2023

Three Months Ended Nine Months Ended

September 27, 2024 September 29, 2023 September 27, 2024 September 29, 2023

Net loss $ ( 31,262 ) $ ( 2,840 ) $ ( 121,615 ) $ ( 35,811 )

9 unchanged sentences

Other comprehensive income (loss) 21,879 ( 15,069 ) ( 30,038 ) 495

Comprehensive income (loss) ( 29,881 ) ( 4,833 ) ( 142,270 ) ( 17,407 )

Comprehensive loss ( 9,383 ) ( 17,909 ) ( 151,653 ) ( 35,316 )

comprehensive income (loss) attributable to noncontrolling interest 359 ( 12 ) 574 394

Comprehensive income (loss) attributable to Enovis Corporation $ ( 29,990 ) $ ( 5,023 ) $ ( 142,485 ) $ ( 17,813 )

Comprehensive loss attributable to Enovis Corporation $ ( 9,742 ) $ ( 17,897 ) $ ( 152,227 ) $ ( 35,710 )

See Notes to Condensed Consolidated Financial Statements.

2 unchanged sentences

Dollars in thousands, except share amounts

June 28, 2024 December 31, 2023

September 27, 2024 December 31, 2023

CURRENT ASSETS:

24 unchanged sentences

133,333,333 shares authorized;

54,866,360 and 54,597,142 shares issued and outstanding as of June 28, 2024 and December 31, 2023, respectively

55,866,099 and 54,597,142 shares issued and outstanding as of September 27, 2024 and December 31, 2023, respectively

Additional paid-in capital 2,964,997 2,900,747

23 unchanged sentences

Balance at June 28, 2024 54,866,360 55 2,911,254 451,835 ( 76,730 ) 2,524 3,288,938

Net income (loss) — — — ( 31,521 ) 259 ( 31,262 )

Other comprehensive loss, net of tax of $( 16,933 )

— — — — 21,779 100 21,879

Common stock issued for acquisition 971,343 1 45,574 45,575

Common stock-based award activity 28,396 — 8,169 — — — 8,169

Balance at September 27, 2024 55,866,099 56 2,964,997 420,314 ( 54,951 ) 2,883 3,333,299

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

11 unchanged sentences

Balance at June 30, 2023 54,534,111 55 2,944,094 542,387 ( 37,898 ) 2,122 3,450,760

Net income (loss) — — — ( 2,880 ) — 40 ( 2,840 )

Other comprehensive income, net of tax of $ 934

— — — — ( 15,017 ) ( 52 ) ( 15,069 )

Common stock-based award activity 30,886 — 8,881 — — — 8,881

Balance at September 29, 2023 54,564,997 $ 55 $ 2,952,975 $ 539,507 $ ( 52,915 ) $ 2,110 $ 3,441,732

See Notes to Condensed Consolidated Financial Statements.

2 unchanged sentences

Dollars in thousands

Six Months Ended

June 28, 2024 June 30, 2023

Nine Months Ended

September 27, 2024 September 29, 2023

Cash flows from operating activities:

Net loss $ ( 121,615 ) $ ( 35,811 )

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

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

Depreciation and amortization 210,394 160,493

4 unchanged sentences

Loss on currency hedges 11,123 —

Deferred income tax expense (benefit) ( 19,412 ) ( 107 )

Deferred income tax benefit ( 29,472 ) ( 20,612 )

Loss on sale of property, plant and equipment ( 2,116 ) ( 14,832 )

4 unchanged sentences

Other operating assets and liabilities ( 10,706 ) ( 1,717 )

Net cash provided by (used in) operating activities ( 28,383 ) 35,560

Net cash provided by operating activities 25,174 66,573

Cash flows from investing activities:

Purchases of property, plant and equipment and intangibles ( 127,522 ) ( 94,279 )

Proceeds from sale of property, plant and equipment — 42,571

Payments for acquisitions, net of cash received, and investments ( 765,422 ) ( 131,387 )

31 unchanged sentences

Actual results may differ from those estimates.

During the three months ended September 27, 2024, due to a decrease in the share price of our common stock and market capitalization, the Company identified a possible impairment indicator as of September 27, 2024 and determined it was appropriate to perform interim quantitative assessments of Goodwill for the Reconstructive and Prevention & Recovery reporting units.

Based on these assessments, no impairment was identified.

Recently Issued Accounting Pronouncements

The Company has not adopted any new accounting standards during the six months ended June 28, 2024.

The Company has not adopted any new accounting standards during the nine months ended September 27, 2024.

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.

2 unchanged sentences

On January 3, 2024, the Company acquired LimaCorporate S.p.A.

(“Lima”), a privately held global orthopedic company, at an enterprise value of € 800 million (the “Lima Acquisition”), consisting of (i) approximately € 700 million in cash consideration, which includes the repayment at closing of certain indebtedness of Lima and (ii) 1,942,686 shares of common stock of Enovis, par value $ 0.001 per share (the “Contingent Acquisition Shares”), which is based upon a € 100 million value divided by the thirty-day volume weighted average price of Enovis common stock as of the close of business on September 21, 2023.

The Contingent Acquisition Shares are expected to be issued in two equal tranches within six and twelve months of the acquisition date upon non-occurrence of certain future events, in each case subject to certain adjustments and conditions as provided for in the purchase agreement.

(“Lima”), a privately held global orthopedic company, at an enterprise value of € 800 million (the “Lima Acquisition”), consisting of (i) approximately € 700 million in cash consideration, which includes the repayment at closing of certain indebtedness of Lima and (ii) 1,942,686 shares of common stock of Enovis, par value $ 0.001 per share (the “Contingent Acquisition Shares”), based upon a € 100 million value divided by the thirty-day volume weighted average price of Enovis common stock as of the close of business on September 21, 2023.

The Contingent Acquisition Shares are issuable in two equal tranches within six and twelve months of the acquisition date upon non-occurrence of certain future events, in each case subject to certain adjustments and conditions as provided for in the purchase agreement.

The first tranche of 971,343 Contingent Acquisition Shares was issued to the seller on July 16, 2024.

The Company currently expects the second tranche of Contingent Acquisition Shares to be issued in the first quarter of 2025.

The cash paid for acquisition was $ 757.7 million, net of acquired cash.

The fair value of the Contingent Acquisition Shares at closing was $ 107.9 million based on the Enovis share price at the close of business on January 3, 2024.

The Contingent Acquisition Shares liability, recorded in Accrued liabilities, will be adjusted to fair value each reporting period with the adjustment reflected in Other income (expense), net in the Condensed Consolidated Statement of Operations.

Subsequent to the end of the second quarter of 2024, the first tranche of the Contingent Acquisition Shares of 971,343 shares were issued to the seller on July 16, 2024.

Lima operates in the reconstructive space of patient care, providing tailored hardware and digital innovation to advance a global standard of care and positive patient outcomes.

Lima has approximately 1,000 employees across more than 15 locations around the world.

The acquisition extends the Company’s current footprint to emerging and growing markets, expands its product lines, and strengthens its global innovation platform.

The value included as Goodwill for this acquisition is reflective of these expected benefits in conjunction with anticipated synergies as the Company uses its integration experience effectively to

The Contingent Acquisition Shares liability, recorded in Accrued liabilities, is adjusted to fair value each reporting period with the adjustment reflected in Other income (expense), net in the Condensed Consolidated Statement of Operations.

ENOVIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

drive further operating improvement, margin expansion, and long-term growth.

Lima operates in the reconstructive space of patient care, providing tailored hardware and digital innovation to advance a global standard of care and positive patient outcomes.

Lima has approximately 1,000 employees across more than 15 locations around the world.

The Lima Acquisition extends the Company’s current footprint to emerging and growing markets, expands its product lines, and strengthens its global innovation platform.

The value included as Goodwill for the Lima acquisition is reflective of these expected benefits in conjunction with anticipated synergies as the Company uses its integration experience effectively to drive further operating improvement, margin expansion, and long-term growth.

Enovis uses its experience and EGX business management system, a comprehensive set of tools and repeatable, teachable processes, to integrate acquisitions and create superior value for its customers, shareholders and associates.

3 unchanged sentences

These amounts are presented in accordance with GAAP, consistent with the Company’s accounting policies.

Three Months Ended Six Months Ended

June 28, 2024 June 30, 2023 June 28, 2024 June 30, 2023

Three Months Ended Nine Months Ended

September 27, 2024 September 29, 2023 September 27, 2024 September 29, 2023

(In thousands)

18 unchanged sentences

Acquisition consideration paid, net of acquired cash $ 757,707

The following summarizes the preliminary values of the Intangible assets acquired, excluding Goodwill, as of June 28, 2024:

ENOVIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following summarizes the preliminary values of the Intangible assets acquired, excluding Goodwill, as of September 27, 2024:

Intangible Asset Weighted Average Amortization Period

(In thousands) (Years)

Trademarks $ 50,000 20

2 unchanged sentences

Total Intangible Assets $ 363,000

During the three and six months ended June 28, 2024, the Company’s Condensed Consolidated Statements of Operations included $ 83.5 million and $ 169.3 million, of net sales and $ 15.6 million and $ 12.0 million of net loss, respectively, associated with the acquired Lima legal entities.

ENOVIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

During the three and nine months ended September 27, 2024, the Company’s Condensed Consolidated Statements of Operations included $ 68.4 million and $ 237.6 million, of net sales and $ 4.0 million and $ 15.9 million of net loss, respectively, associated with the acquired Lima legal entities.

2023 Acquisitions

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The acquisition complements the Company’s current product offerings in its Recon segment with advanced planning software for shoulder surgery and opportunity to expand to additional anatomies.

On the acquisition date, the Company paid $ 17.6 million, net of cash received and agreed to make contingent payments of approximately $ 12.0 million upon the successful completion of three milestones within one year of the acquisition date.

The milestones are based on FDA approvals and user validation testing of the software.

In December 2023, the first milestone was achieved and the Company paid $ 4.2 million to the seller.

In August 2024, the second milestone was achieved and the Company paid $ 4.2 million to the seller.

The third milestone completion date was extended into the first quarter of 2025.

As of September 27, 2024, the total intangible asset recorded for this acquisition is $ 33.5 million.

The remaining contingent amount is held in escrow by Enovis as restricted cash and presented in Other current assets in the Condensed Consolidated Balance Sheet.

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Restricted cash is recorded as a component of Other current assets on the Condensed Consolidated Balance Sheets.

The balance in restricted cash as of June 28, 2024 and December 31, 2023 is related to the acquisition of Precision AI which closed in the fourth quarter of 2023 and will be released to the seller within one year of the acquisition date upon completion of certain milestones.

The balance in restricted cash as of

ENOVIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

September 27, 2024 and December 31, 2023 is related to the acquisition of Precision AI which closed in the fourth quarter of 2023 and will be released to the seller within one year of the acquisition date upon completion of certain milestones.

The following table summarizes the Company’s cash, cash equivalents and restricted cash:

June 28, 2024 December 31, 2023

September 27, 2024 December 31, 2023

(In thousands)

4 unchanged sentences

$ 39,798 $ 44,832

ENOVIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

As of June 28, 2024, the balance of investments held by the Company without readily determinable fair values was $ 20.4 million.

As of September 27, 2024, the balance of investments held by the Company without readily determinable fair values was $ 20.4 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.

4 unchanged sentences

The Company disaggregates its revenue into the following geographic/product type groups within its segments:

Three Months Ended Six Months Ended

June 28, 2024 June 30, 2023 June 28, 2024 June 30, 2023

Three Months Ended Nine Months Ended

September 27, 2024 September 29, 2023 September 27, 2024 September 29, 2023

(In thousands)

14 unchanged sentences

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.

In calculating and applying its current expected

ENOVIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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.

1 unchanged sentence

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

ENOVIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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 June 28, 2024

Nine Months Ended September 27, 2024

of Period Charged to Expense, net Write-Offs, Deductions, net Other Activity, net (1)

5 unchanged sentences

Net income (loss) per share from continuing operations was computed using the treasury stock method as follows:

Three Months Ended Six Months Ended

June 28, 2024 June 30, 2023 June 28, 2024 June 30, 2023

Three Months Ended Nine Months Ended

September 27, 2024 September 29, 2023 September 27, 2024 September 29, 2023

(In thousands, except share and per share data)

18 unchanged sentences

The following weighted average computations of potentially dilutive shares of Common stock from stock-based compensation awards were 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:

Three Months Ended Six Months Ended

June 28, 2024 June 30, 2023 June 28, 2024 June 30, 2023

Three Months Ended Nine Months Ended

September 27, 2024 September 29, 2023 September 27, 2024 September 29, 2023

Weighted average computation of potentially dilutive shares of Common stock excluded from diluted computation, as inclusion would be anti-dilutive

1,720,628 1,073,464 1,311,385 1,127,227

In conjunction with the Lima Acquisition, the Company agreed to a contingent issuance of 1,942,686 Contingent Acquisition Shares.

The Contingent Acquisition Shares are currently expected to be issued within one year from the completion of the Lima Acquisition upon the non-occurrence of certain future events, in each case subject to certain adjustments and conditions as provided for in the purchase agreement.

The Contingent Acquisition Shares are only to be included in the weighted-average calculation of basic shares when there are no circumstances the shares would not be issued.

The Contingent Acquisition Shares are only to be included in the weighted-average calculation of diluted shares when the conditions are satisfied.

As such, the shares have been excluded from the calculation of basic and diluted weighted-average shares, respectively.

Subsequent to the end of the second quarter of 2024, the first tranche of the Contingent Acquisition Shares of

ENOVIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

971,343 shares were issued to the seller on July 16, 2024.

The first tranche shares will be incorporated into the weighted-average shares of common stock outstanding — basic in the third quarter of 2024.

Three Months Ended Six Months Ended

June 28, 2024 June 30, 2023 June 28, 2024 June 30, 2023

In conjunction with the Lima Acquisition, the Company agreed to a contingent issuance of 1,942,686 Contingent Acquisition Shares in two equal tranches within six and twelve months from the completion of the Lima Acquisition upon the non-occurrence of certain future events, in each case subject to certain adjustments and conditions as provided for in the purchase agreement.

The first tranche of 971,343 Contingent Acquisition Shares was issued to the seller on July 16, 2024.

The Company currently expects the second tranche of Contingent Acquisition Shares to be issued in the first quarter of 2025.

The Contingent Acquisition Shares are only to be included in the weighted-average calculation of basic shares when there are no circumstances the shares would not be issued.

The Contingent Acquisition Shares are only to be included in the weighted-average calculation of diluted shares when the conditions are satisfied.

As such, the shares associated with the second tranche have been excluded from the calculation of basic and diluted weighted-average shares, respectively.

Three Months Ended Nine Months Ended

September 27, 2024 September 29, 2023 September 27, 2024 September 29, 2023

(In thousands)

3 unchanged sentences

21.4 % 23.7 % 17.0 % 23.9 %

The effective tax rate for the three months ended June 28, 2024 was higher than the 2024 federal statutory rate of 21%, primarily due to tax credits for research and development, non-U.S.

income taxed at lower rates and non-taxable fair value gain on contingent acquisition shares.

The effective tax rate for the three months ended September 27, 2024 was higher than the 2024 federal statutory rate of 21%, primarily due to tax credits for research and development, non-U.S.

income taxed at lower rates, non-taxable fair value gain on the Contingent Acquisition Shares, and release of uncertain tax positions.

This was partially offset by an increase in valuation allowance on interest limitation carryforwards, non-deductible expenses, and U.S.

taxation on international operations.

The effective tax rate for the six months ended June 28, 2024 was lower than the 2024 federal statutory rate of 21%, primarily due to an increase in valuation allowance on interest limitation carryforwards, non-deductible expenses and U.S.

The effective tax rate for the nine months ended September 27, 2024 was lower than the 2024 federal statutory rate of 21%, primarily due to an increase in valuation allowance on interest limitation carryforwards, non-deductible expenses, and U.S.

taxation on international operations.

This was partially offset by tax credits for research and development, non-U.S.

income taxed at lower rates and non-taxable fair value gain on contingent acquisition shares.

The effective tax rate for the three and six months ended June 30, 2023 was higher than the 2023 U.S.

income taxed at lower rates, and non-taxable fair value gain on the Contingent Acquisition Shares.

The effective tax rate for the three and nine months ended September 29, 2023 was higher than the 2023 U.S.

federal statutory rate of 21%, primarily due to non-U.S.

8 unchanged sentences

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

As of June 28, 2024, the remaining stock repurchase authorization provided by the Board of Directors was $ 100 million.

As of September 27, 2024, 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 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 June 28, 2024 and June 30, 2023.

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

5 unchanged sentences

Foreign currency translation adjustment 3 6,931 — 6,934

Gain on hedges — — 18,207 18,207

Loss on hedge activity — — ( 36,006 ) ( 36,006 )

Other comprehensive income (loss) before reclassifications 3 6,931 ( 36,006 ) ( 29,072 )

1 unchanged sentence

Net Other comprehensive income (loss) ( 101 ) 6,931 ( 36,900 ) ( 30,070 )

Balance at June 28, 2024 $ 4,610 $ ( 71,316 ) $ ( 10,024 ) $ ( 76,730 )

Balance at September 27, 2024 $ 4,907 $ 4,915 $ ( 64,773 ) $ ( 54,951 )

Accumulated Other Comprehensive Loss Components

5 unchanged sentences

Foreign currency translation adjustment 108 3,750 — 3,858

Loss on net investment hedges — — ( 5,449 ) ( 5,449 )

Loss on hedge activity — — ( 2,290 ) ( 2,290 )

Other comprehensive income (loss) before reclassifications 108 3,750 ( 2,290 ) 1,568

1 unchanged sentence

Net Other comprehensive income (loss) ( 1,113 ) 3,750 ( 2,122 ) 515

Balance at June 30, 2023 $ 11,708 $ ( 44,157 ) $ ( 5,449 ) $ ( 37,898 )

Balance at September 29, 2023 $ 11,094 $ ( 61,887 ) $ ( 2,122 ) $ ( 52,915 )

ENOVIS CORPORATION

2 unchanged sentences

Inventories, net consisted of the following:

June 28, 2024 December 31, 2023

September 27, 2024 December 31, 2023

(In thousands)

6 unchanged sentences

Long-term debt consisted of the following:

June 28, 2024 December 31, 2023

September 27, 2024 December 31, 2023

(In thousands)

11 unchanged sentences

The Enovis Credit Agreement, as amended, 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 senior secured leverage ratio of not more than 3.75 :1.00 stepping down to 3.50 :1.00 for the fiscal quarter ending June 30, 2024 and thereafter, and (ii) a minimum interest coverage ratio of 3.00 :1:00.

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 for the fiscal quarter ending June 30, 2024 and thereafter, 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 June 28, 2024, the Company was in compliance with the covenants under the Enovis Credit Agreement.

As of June 28, 2024, the weighted-average interest rate of borrowings under the Enovis Credit Agreement was 7.19 % excluding accretion of deferred financing fees, and there was $ 385 million available on the Revolver.

As of September 27, 2024, the Company was in compliance with the covenants under the Enovis Credit Agreement.

As of September 27, 2024, the weighted-average interest rate of borrowings under the Enovis Credit Agreement was 7.16 % excluding accretion of deferred financing fees, and there was $ 385 million available on the Revolver.

Financing for Lima Acquisitio n

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The effective interest rate on the 2028 Notes is 4.6 %.

For the six months ended June 28, 2024, the interest expense on the 2028 Notes was $ 10.1 million, including $ 8.7 million based upon the coupon rate and $ 1.4 million from accretion of the discount.

For the nine months ended September 27, 2024, the interest expense on the 2028 Notes was $ 15.1 million, including $ 13.2 million based upon the coupon rate and $ 1.9 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:

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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 has been no redemptions or conversions of the 2028 Notes.

On October 24, 2023, the Company also entered into privately negotiated capped call transactions with certain of the initial purchasers of the 2028 Notes and paid $ 62 million to the counterparties.

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In addition to the d ebt agreements discussed above, the Company is party to overdraft facilities with a borrowing capacity of $ 30.0 million.

Total letters of credit and surety bonds of $ 34.1 million were outstanding as of June 28, 2024 .

Total letters of credit and surety bonds of $ 24.6 million were outstanding as of September 27, 2024 .

Deferred Financing Fees

The Compa ny has $ 2.7 million in deferred financing fees included in Other assets as of September 27, 2024.

As of September 27, 2024, the Company has $ 14.7 million of original issue discount fees and other issuance costs included as a reduction of Long-term debt related to the 2024 Term Loan and the 2028 Notes.

ENOVIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Deferred Financing Fees

The Compa ny has $ 2.9 million in deferred financing fees included in Other assets as of June 28, 2024.

As of June 28, 2024, the Company has $ 15.7 million of original issue discount fees and other issuance costs included as a reduction of Long-term debt related to the 2024 Term Loan and the 2028 Notes.

Accrued Liabilities

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

June 28, 2024 December 31, 2023

September 27, 2024 December 31, 2023

(In thousands)

Contingent consideration - current portion $ 95,354 $ 5,972

Accrued compensation and related benefits $ 87,257 $ 70,979

Contingent consideration - current portion 50,601 5,972

Accrued third-party commissions 34,338 28,539

Lease liability - current portion 21,547 21,568

Derivative liability - current portion 21,150 278

Accrued taxes 18,455 14,384

1 unchanged sentence

Accrued professional fees 9,602 13,037

Accrued royalties 6,704 6,944

Accrued freight 5,258 3,909

Accrued interest 8,859 3,765

Derivative liability – current portion 3,892 278

Accrued freight 6,817 3,909

Customer advances and billings in excess of costs incurred 5,869 2,953

Accrued royalties 5,828 6,944

Warranty liability 2,657 2,959

5 unchanged sentences

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 June 28, 2024

Nine Months Ended September 27, 2024

Balance at Beginning of Period Provisions Payments Foreign Currency Translation Balance at End of Period

8 unchanged sentences

Total Provisions (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 facilities, site cost structures, and product lines.

(3) For the six months ended June 28, 2024, $ 9.5 million and $ 8.0 million of the Company’s total provisions were related to the P&R and Recon segments, respectively.The non-cash charges was an impairment of assets associated with divesting a minor product line in P&R.

(1) Includes severance and other termination benefits, including outplacement services, primarily related to employees in the Recon segment following the Lima Acquisition.

(2) Includes the cost of relocating associates, relocating equipment, lease termination expense and other costs in connection with the closure and optimization of P&R office sites, shared service centers, and our manufacturing sites in Tunisia and Tijuana.

(3) For the nine months ended September 27, 2024, $ 12.5 million and $ 10.1 million of the Company’s total provisions were related to the P&R and Recon segments, respectively.

The non-cash charges was an impairment of assets associated with divesting a minor product line in P&R.

ENOVIS CORPORATION

11 unchanged sentences

The carrying value of the Company’s term loan and revolving credit facility debt, 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 2024 Term Loan, and the Revolver, was $ 1,385.2 million and $ 573.2 million as of June 28, 2024 and December 31, 2023, respectively.

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 2024 Term Loan, and the Revolver, was $ 1.4 billion and $ 573.2 million as of September 27, 2024 and December 31, 2023, 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 June 28, 2024, the Company held $ 20.5 million in Level Three liabilities arising from contingent consideration related to acquisitions that may settle in cash.

As of September 27, 2024, the Company held $ 21.3 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.

1 unchanged sentence

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.

During the six months ended June 28, 2024, the Company recorded a net $ 5.5 million reduction in contingent consideration primarily due to $ 6.3 million in settlements of revenue-based contingent consideration arrangements.

During the nine months ended September 27, 2024, the Company recorded a net $ 4.7 million reduction in contingent consideration primarily due to $ 6.3 million in settlements of revenue-based contingent consideration arrangements.

The gross range of outcomes for contingent consideration arrangements that have a fixed limit on the maximum payout is zero to $ 7.5 million.

4 unchanged sentences

The Contingent Acquisition Shares liability, recorded in Accrued liabilities, is adjusted to fair value each reporting period with the adjustments reflected in Other income (expense), net in the Condensed Consolidated Statement of Operations.

The adjustments were gains of $ 33.5 million and $ 20.1 million for the three and six months ended June 28, 2024, respectively.

The adjustments were a loss of $ 0.1 million and a gain of $ 19.9 million for the three and nine months ended September 27, 2024, respectively.

The fair value of the Contingent Acquisition Shares liability is Level One in the fair value hierarchy as it is determined using the quoted market prices.

Subsequent to the end of the second quarter of 2024, the first tranche of the Contingent Acquisition Shares of 971,343 shares were issued to the seller on July 16, 2024.

There were no transfers in or out of Level One, Two or Three during the six months ended June 28, 2024.

The first tranche of 971,343 Contingent Acquisition Shares was issued to the seller on July 16, 2024.

The Company currently expects the second tranche of Contingent Acquisition Shares to be issued in the first quarter of 2025.

There were no transfers in or out of Level One, Two or Three during the nine months ended September 27, 2024.

ENOVIS CORPORATION

8 unchanged sentences

The Company maintains deferred compensation plans for the benefit of certain employees and non-executive officers.

As of June 28, 2024 and December 31, 2023 the fair value of these plans were $ 16.5 million and $ 14.4 million, respectively.

As of September 27, 2024 and December 31, 2023 the fair value of these plans were $ 17.0 million and $ 14.4 million, respectively.

These plans are deemed to be Level Two within the fair value hierarchy.

8 unchanged sentences

The contracts are recorded at fair value and deemed to be Level Two in the fair value hierarchy.

At June 28, 2024, the Company’s forward currency contracts have a Mexican Peso notional amount of approximately $ 420.0 million and a U.S.

At September 27, 2024, the Company’s forward currency contracts have a Mexican Peso notional amount of approximately $ 210.0 million and a U.S.

Dollar aggregate notional amount of $ 12.0 million.

During the three and six months ended June 28, 2024, the Company recognized a realized gain of $ 0.3 million and $ 0.5 million, respectively on its Condensed Consolidated Statements of Operations related to its forward currency contracts designated as cash flow hedges.

There was nothing recognized in the second quarter of 2023 as the Mexican Peso forward currency program was established in July 2023.

During the three and nine months ended September 27, 2024, the Company recognized a realized loss of $ 0.1 million and a realized gain of $ 0.4 million, respectively on its Condensed Consolidated Statements of Operations related to its forward currency contracts designated as cash flow hedges.

At September 29, 2023, the Company’s forward currency contracts have a Mexican Peso notional amount of approximately $ 1.05 billion and a U.S.

Dollar aggregate notional amount of $ 59.9 million.

During the three and nine months ended September 29, 2023, the Company recognized a realized gain of $ 0.2 million on its Condensed Consolidated Statements of Operations related to its forward currency contracts designated as cash flow hedges.

Net Investment Hedges

6 unchanged sentences

The $ 0.7 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.

On April 8, 2024 and April 12, 2024 the Company entered into additional cross-currency swap agreements to hedge its net investment in its Swiss Franc-denominated subsidiaries against adverse movements in exchange rates between the U.S.

On April 8, 2024, April 12, 2024, and July 2, 2024, the Company entered into additional cross-currency swap agreements to hedge its net investment in its Swiss Franc-denominated subsidiaries against adverse movements in exchange rates between the U.S.

Dollar and the Swiss Franc.

These swap agreements are designated and qualify as net investment hedges.

These contracts have a Swiss Franc notional amount of approximately ₣ 590 million and a U.S.

Dollar aggregate notional amount of $ 650 million at June 28, 2024.

These contracts have a Swiss Franc notional amount of approximately ₣ 1.22 billion and a U.S.

Dollar aggregate notional amount of $ 1.35 billion as of September 27, 2024.

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 gain or loss on the derivative 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

For derivatives designated as net

ENOVIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Income (Loss) as part of the foreign currency translation adjustment.

investment hedges, the gain or loss on the derivative is reported in the Condensed Consolidated Balance Sheet as part of Accumulated other comprehensive loss and in the Company’s Condensed Consolidated Statements of Comprehensive Income (Loss) as part of the foreign currency translation adjustment.

Amounts are reclassified out of Accumulated other comprehensive income (loss) into earnings when the hedged net investment is either sold or substantially liquidated.

During the three and six months ended June 28, 2024, the Company received interest income on its cross-currency swap derivatives of $ 5.7 million and $ 8.3 million which is included within Interest expense, net in the Condensed Consolidated Statements of Operations.

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 June 28, 2024 and 2023:

Three Months Ended Six Months Ended

June 28, 2024 June 30, 2023 June 28, 2024 June 30, 2023

During the three and nine months ended September 27, 2024, the Company received interest income on its cross-currency swap derivatives of $ 11.7 million and $ 19.9 million which is included within Interest expense, net in the Condensed Consolidated Statements of Operations.

The following table presents the effect of the Company’s designated hedging instruments on Accumulated other comprehensive income (loss) for the three and nine months ended September 27, 2024 and September 29, 2023:

Three Months Ended Nine Months Ended

September 27, 2024 September 29, 2023 September 27, 2024 September 29, 2023

(In thousands)

Gain (loss) on cross-currency swaps $ ( 71,329 ) $ 5,991 $ ( 45,904 ) $ ( 1,199 )

$ ( 5,965 ) $ ( 7,189 ) $ 25,426 $ ( 7,189 )

Gain (loss) on forward currency contracts ( 343 ) ( 1,654 ) ( 2,285 ) ( 1,654 )

5 unchanged sentences

From inception of the forward contracts on October 4, 2023 through the closing of the Lima Acquisition on January 3, 2024, the foreign currency forward contracts settled in an overall realized gain position of $ 13.4 million.

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 June 28, 2024 and December 31, 2023:

(In thousands) Location on Unaudited Consolidated Balance Sheets (1)

June 28, 2024 December 31, 2023

September 27, 2024 December 31, 2023

Derivative Assets

31 unchanged sentences

The Company’s segment results were as follows:

Three Months Ended Six Months Ended

June 28, 2024 June 30, 2023 June 28, 2024 June 30, 2023

Three Months Ended Nine Months Ended

September 27, 2024 September 29, 2023 September 27, 2024 September 29, 2023

(In thousands)

7 unchanged sentences

(1) The following is a reconciliation of Income (loss) from continuing operations before income taxes to Adjusted EBITDA:

Three Months Ended Six Months Ended

June 28, 2024 June 30, 2023 June 28, 2024 June 30, 2023

Three Months Ended Nine Months Ended

September 27, 2024 September 29, 2023 September 27, 2024 September 29, 2023

(In thousands)

14 unchanged sentences

Adjusted EBITDA (non-GAAP) $ 90,203 $ 65,386 $ 263,651 $ 187,480

(1) Restructuring and other charges includes $ — million and $ 0.3 million of expense classified as Cost of sales on the Company’s Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2023 .

(1) Restructuring and other charges includes $ 2.7 million and $ 2.7 million, of expense classified as Cost of sales on the Company’s Condensed Consolidated Statements of Operations for the three and nine months ended September 27, 2024, respectively.

Restructuring and other charges includes $ — million and $ 0.3 million, of expense classified as Cost of sales on the Company’s Condensed Consolidated Statements of Operations for the three and nine months ended September 29, 2023, respectively.

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

3 unchanged sentences

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