What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-02-26 compared with 2025-02-26 · 226 added, 222 removed, 402 unchanged (53% of the section changed)

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Prevention & Recovery (“P&R”) and Reconstructive (“Recon”).

• P&R - a leader in orthopedic solutions, providing devices, software and services across the patient care continuum from injury prevention to rehabilitation after surgery, injury, or from degenerative disease.

• Recon - innovation market-leader positioned in the fast-growing surgical implant business, offering a comprehensive suite of reconstructive joint products for the hip, knee, shoulder, elbow, foot, ankle, and finger and surgical productivity tools.

• P&R - a leader in orthopedic solutions, providing devices, software and services across the patient care continuum from injury prevention to rehabilitation after surgery or injury or from degenerative disease.

We have a global footprint, with production facilities in North America, Europe, Africa, and Asia.

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The following discussion of Results of Operations addresses the comparison of the periods presented.

Our management evaluates the operating results of each of its reportable segments based upon Net sales, Adjusted EBITDA, Comparable Sales, and Comparable Sales Growth rate as defined in the “Non-GAAP Measures” section.

Our management evaluates the operating results of each of its reportable segments based upon Net sales and Adjusted EBITDA as defined in the “Non-GAAP Measures” section.

Items Affecting Comparability of Reported Results

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The comparability of our operating results for the year ended December 31, 2025 to the comparable periods is affected by the following additional significant items:

Strategic Acquisitions

Strategic Acquisitions and Divestiture

We complement our organic growth plans with strategic acquisitions and other investments.

Acquisitions can significantly affect our reported results, and so we also report the Net sales on a Comparable Sales basis and present a Comparable Sales Growth rate to provide information on the operating performance of the business.

Comparable Sales and Comparable Sales Growth rate are defined in the “Non-GAAP Measures” section below.

Acquisitions can significantly affect our reported results, and so we also report the change in our Net sales between periods both from Existing businesses and Acquired businesses.

The change in Net sales due to acquisitions for the years ended December 31, 2025 and 2024 presented in this filing represents the incremental sales in comparison to the portion of the prior period during which we did not own the business.

Business acquisitions of a distributor may not add incremental sales in Acquired businesses because we may have had existing business sales through the distributor and the acquisition brings the business into Enovis under a direct sales model and reduces operating costs.

On October 7, 2025, we completed the sale of our Dr Comfort Footcare Solutions U.S.

operations of our P&R segment to Promus Equity Partners in an asset deal, with an effective date of October 4, 2025 (the “Dr Comfort Divestiture”).

The sale includes inventory, machinery and equipment, and intangible assets for consideration of up to $60 million in cash, consisting of an upfront payment of $45 million and up to $15 million payable in the future upon the achievement of certain milestones.

In the year ended December 31, 2025, the Company completed seven transactions for $36.9 million total purchase consideration, including deferred consideration and estimated contingent consideration which included the acquisition of three distributors, two businesses, and two purchases of intellectual property.

Of these transactions, three were in the P&R segment and four were in the Recon segment.

On January 3, 2024, we acquired Lima, a privately held global orthopedic company focused on restoring motion through digital innovation and customized hardware for total fair value consideration of $865.6 million, net of acquired cash.

The fair value total consideration included 1,942,686 shares of Enovis common stock, as determined 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”).

The Contingent Acquisition Shares were 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 Contingent Acquisition Shares were issuable in two equal tranches within six and twelve months of the acquisition date 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 and the second tranche of Contingent Acquisition Shares was issued on January 15, 2025.

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In 2024, we also completed one asset acquisition in our Reconstructive segment and one business acquisition in our Prevention & Recovery segment for aggregate purchase consideration of $4.0 million.

During the year ended December 31, 2023, we completed one business combination and two asset acquisitions in Recon.

During the year ended December 31, 2023, we completed one business combination and two asset acquisitions in our Recon segment.

On June 28, 2023, we acquired Novastep, a leading player in Minimally Invasive Surgery (MIS) foot and ankle solutions for total consideration of $96.9 million.

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The software has capabilities to be used for shoulder reconstruction and there is opportunity to expand this to additional anatomies.

During the year ended December 31, 2022, the Company completed two business acquisitions for aggregate net cash consideration of $50.5 million.

In the second quarter of 2022, the Company acquired KICo Knee Innovation Company Pty Limited and subsidiaries, an Australian private company doing business as 360 Med Care, which is a medical device distributor that bundles certain computer-assisted surgery and patient experience enhancement programs to add value to the device supply arrangements with surgeons, hospitals, and insurers.

In the third quarter of 2022, the Company acquired a controlling interest in Insight Medical Systems, the flagship product of which is the ARVIS surgical navigation system.

Global Operations

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Changes in foreign exchange rates can impact our results of operations and are quantified when significant.

For the year ended December 31, 2024 compared to 2023, fluctuations in foreign currencies increased Net sales by 0.1%, had an immaterial impact on Gross profit, and increased operating expenses by approximately 0.1%.

The Separation

On April 4, 2022, we completed the Separation through a tax-free, pro-rata distribution of 90% of the outstanding common stock of ESAB to our stockholders.

We initially retained 10% of the shares of ESAB common stock immediately following the Separation.

On November 18, 2022, we completed an exchange with our lenders of 6,003,431 shares of common stock of ESAB, representing all of our retained shares, for $230.5 million in term loan outstanding under our previous credit agreement.

We recorded a gain of $102.7 million on the exchange of the shares representing the excess of fair value, less cost to sell, over our cost basis in the investment.

Once the Separation was completed in the second quarter of 2022, we began classifying the results from the fabrication technology business for the comparable periods presented as a discontinued operation in our financial statements.

Accordingly, the results of our fabrication technology businesses in our financial statements prior to its spin-off as a separate public company are excluded from continuing operations in the accompanying financials for the year ended December 31, 2022.

Please see Part I.

“Risk Factors” in this Form 10-K for further discussion of the Company’s risks relating to the Separation.

For the year ended December 31, 2025 compared to 2024, fluctuations in foreign currencies increased Net sales by 1.4%, had an 1.5% impact on Gross profit, and increased operating expenses by approximately 1.1%.

Sales in P&R and Recon typically peak in the fourth quarter.

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Material Costs

Our principal raw materials and components are foam ethylene vinyl acetate, copolymer for our bracing and vascular products in P&R and cobalt chromium alloy, stainless steel alloys, titanium alloy and ultra high molecular weight polyethylene in Recon.

Prices for raw materials, energy and commodities are subject to volatility and are influenced by worldwide economic conditions.

Input cost inflation historically has not been a material factor to our gross margin;

however, inflation effects have increased since 2021 and are expected to continue to remain elevated for at least the near term.

In response, we have been enacting tactical price increases to certain products, mainly in P&R.

Although we seek to proactively manage inflation risk, future changes in component and raw material costs may adversely impact earnings or our margins.

Prices for raw materials, energy and commodities are also influenced by import duties and tariffs, world supply and demand balances, inventory levels, availability of substitute materials, currency exchange rates, anticipated or perceived shortages, geopolitical tensions, government trade practices and regulations and other factors.

Our principal raw materials include foam ethylene-vinyl-acetate copolymer used in our bracing and vascular products within P&R, and cobalt-chromium alloys, stainless-steel alloys, titanium alloys, and ultra-high-molecular-weight polyethylene used in our Recon products.

Prices for raw materials, components, energy, and commodities are subject to volatility and are influenced by worldwide economic conditions.

Although inflation historically has not been a material factor to our input costs and gross margins, inflationary pressures have increased since 2021 and are expected to persist in the near term.

In response, we have enacted and may continue to enact targeted pricing actions, primarily within P&R, to help offset higher input costs.

While we seek to proactively manage inflation risk, future changes in raw material and component costs may adversely impact our earnings or margins.

Prices for raw materials, components, energy, and commodities are also influenced by import duties and tariffs, world supply and demand balances, inventory levels, availability of substitute materials, currency exchange rates, anticipated or perceived shortages, geopolitical tensions, government trade practices and regulations, and other factors.

Specifically, tariffs, such as the tariffs announced by the U.S.

government in February 2025, may increase the cost of and impair sourcing flexibility for raw materials, component parts and supplies, and further trade restrictions, retaliatory trade measures, or additional tariffs implemented could result in higher input costs to our products.

government in early 2025 have increased input costs and may continue to increase costs and impair sourcing flexibility for raw materials, component parts and supplies, and further trade restrictions, retaliatory trade measures, or additional tariffs implemented could result in higher input costs to our products.

Sales and Cost Mix

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Adjusted EBITDA

Comparable Sales

Adjusted EBITDA and Adjusted EBITDA margin, Comparable Sales, and Comparable Sales Growth rate, which are non-GAAP performance measures, are included in this report because they are key metrics used by our management to assess our operating performance.

Adjusted EBITDA excludes from Net income (loss) from continuing operations the effect of Income tax expense (benefit);

Other income, net;

Adjusted EBITDA and Adjusted EBITDA margin, which are non-GAAP performance measures, are included in this report because they are key metrics used by our management to assess our operating performance.

Adjusted EBITDA excludes from Net income (loss) the effect of Income (loss) from discontinued operations, net of taxes;

Income tax expense (benefit);

Other income (expense), net;

non-operating (gain) loss on investments;

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acquisition-related intangible asset amortization;

insurance settlement (gain) loss;

strategic purchase of economic interest on future royalty payments;

goodwill impairment charges;

and fair value charges on acquired inventory.

and inventory step-up.

We also present Adjusted EBITDA and Adjusted EBITDA margin by operating segment, which are subject to the same adjustments.

Operating income (loss), adjusted EBITDA and adjusted EBITDA margins at the operating segment level also include allocations of certain central function expenses not directly attributable to either operating segment.

Adjusted EBITDA assists our management in comparing operating performance over time because certain items may obscure underlying business trends and make comparisons of long-term performance difficult, as they are of a nature and/or size that occur with inconsistent frequency or relate to discrete restructuring plans and other initiatives that are fundamentally different from our ongoing productivity improvements.

Comparable Sales adjusts net sales for prior periods to include the sales of acquired businesses prior to our ownership from acquisitions that closed in the periods presented and to exclude the sales of certain non-core product lines that were divested or discontinued, as applicable, during the periods presented.

The acquired businesses include Lima, Novastep, and KICo, which are reflected in the Recon segment, and the excluded non-core product lines are comprised of the divested compression hosiery product line in the P&R segment and certain discontinued third-party OEM relationships in the Recon segment.

Comparable Sales Growth rate represents the change in Comparable Sales for the current period from Comparable Sales for the prior year period.

Comparable Sales and Comparable Sales Growth rate assist our management in evaluating operating performance over time because the impact of significant acquisitions and divestitures or discontinuance of certain non-core product lines subsequent to prior periods may obscure underlying business trends and make the evaluation of period-over-period performance difficult.

Comparable Sales and Comparable Sales Growth rate are presented for illustrative purposes only and do not and are not intended to comply with Article 11 of Regulation S-X promulgated by the SEC in respect of proforma financial information, and may differ, including materially, from proforma financial statements presented in accordance therewith.

Adjusted EBITDA assists our management in comparing operating performance over time because certain items are not normal recurring charges necessary to operate our business, and these items may obscure underlying business trends and make comparisons of long-term performance difficult as they are of a nature and/or size that occur with inconsistent frequency or relate to discrete restructuring plans and other initiatives that are fundamentally different from our ongoing productivity improvements.

Our management also believes that presenting these measures allows investors to view our performance using the same measures that we use in evaluating our financial and business performance and trends.

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Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures.

The following tables set forth a reconciliation of net loss from continuing operations, the most directly comparable financial statement measure, to Adjusted EBITDA for the years ended December 31, 2024, 2023 and 2022.

The following tables set forth a reconciliation of net loss to Adjusted EBITDA for the years ended December 31, 2025, 2024 and 2023.

Year Ended December 31, 2025

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(Dollars in millions)

Net loss from continuing operations (GAAP) (1)

Net Loss (GAAP) (1)

Net Loss margin (GAAP) (52.7) %

Loss from discontinued operations, net of taxes 1.9

Income tax expense 22.3

Other income, net (9.9)

Other expense, net 0.4

Interest expense, net 34.8

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MDR and other costs (3)(4)

10.1 9.4 19.5

Strategic transaction costs (3)(5)

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Goodwill impairment charge 387.8 662.0 1,049.8

Purchase of royalty interest — 45.8 45.8

Inventory step-up (6)

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Adjusted EBITDA margin (non-GAAP) 14.3 % 21.6 % 17.9 %

(1) Non-operating components of Net loss from continuing operations are not allocated to the segments.

(1) Non-operating components of Net loss are not allocated to the segments.

(2) Restructuring and other charges includes $5.3 million of expense classified as Cost of sales on the Company’s Consolidated Statements of Operations related to the discontinuation of certain product lines in the P&R and Recon segments .

(3) Certain amounts are allocated to the segments as a percentage of revenue as the costs or gain are not discrete to either segment.

(4) MDR and other costs includes (i) $9.8 million for the year ended December 31, 2025 in non-recurring costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with the medical device reporting regulations and other requirements of the new medical device regulations in the European Union for devices which were introduced to the market prior to the regulation and (ii) $0.6 million for the year ended December 31, 2025 of expenses to resolve certain infrequent, non-recurring regulatory or other legal matters.

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

(5) Strategic transaction costs includes:

(i) $39.4 million for the year ended December 31, 2025 related to non-recurring integration costs associated with the Lima Acquisition, which includes (a) payroll and retention costs for roles eliminated in connection with the integration of our recent acquisition of Lima where a legal notice period was required prior to the employee’s separation from the Company, or integration-related daily activities not related to former roles performed by an employee during their legal notice period and prior to their separation from the Company.

In each case, such costs relate solely to roles eliminated in connection with the integration of the Lima acquisition, and are nonrecurring and not part of our normal business operations;

(b) professional and consulting fees specifically incurred to consummate the acquisition and advise and facilitate on post-acquisition integration matters including legal entity consolidation, costs associated with rebranding and marketing acquired business under Enovis name, such as marketing materials, trade show redesign costs and product labeling;

and (c) integration related costs associated with sales agent and distributor network rationalization, including contract termination and retention expenses, supply chain and portfolio integration, and quality management system consolidation, (ii) $19.5 million for the year ended December 31, 2025 of non-recurring (non-Lima) acquisition integration costs and other costs associated with non-recurring projects, including global ERP rationalization and establishment of a new shared service center, and (iii) $1.5 million for the year ended December 31, 2025 related to the Separation of our former fabrication technology business.

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

(6) Inventory step-up expense represents the incremental expense of inventory sold recognized at its fair value after business combination accounting is applied versus the expense that would have been recognized if sold at its cost to manufacture.

Since only the inventory that existed at the business combination date was stepped-up to fair value, we believe excluding the incremental expense enhances comparability between periods, allowing investors to better understand our business performance and the underlying trends relevant to our ongoing business performance.

Year Ended December 31, 2024

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(Dollars in millions)

Net loss from continuing operations (GAAP) (1)

Income tax benefit (13.3)

Net Loss (GAAP) (1)

Net Loss margin (GAAP) (39.1) %

Income from discontinued operations, net of taxes (2.6)

Income tax expense 4.5

Other income, net (9.9)

Debt extinguishment charges 7.3

Interest expense, net 57.1

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Amortization of acquired intangibles 92.3 73.2 165.5

Goodwill impairment charge 315.0 330.0 645.0

Inventory step-up (6)

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Adjusted EBITDA margin (non-GAAP) 14.5 % 21.5 % 17.9 %

(1) Non-operating components of Net loss from continuing operations are not allocated to the segments.

(2) Restructuring and other charges includes $2.6 million of expense classified as Cost of sales on the Company’s Consolidated Statements of Operations.

(1) Non-operating components of Net loss are not allocated to the segments.

(2) Restructuring and other charges includes $17.9 million of expense classified as Cost of sales on the Company’s Consolidated Statements of Operations related to the discontinuation of certain product lines in the P&R and Recon segments .

(3) Certain amounts are allocated to the segments as a percentage of revenue as the costs or gain are not discrete to either segment.

(4) MDR and other costs includes (i) $16.0 million for the year ended December 31, 2024 in non-recurring costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with the medical device reporting regulations and other requirements of the new medical device regulations in the European Union for devices which were introduced to the market prior to the regulation and (ii) $3.5 million for the year ended December 31, 2024 of expenses to resolve certain infrequent, non-recurring regulatory or other legal matters.

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

(5) Strategic transaction costs includes:

(i) $64.9 million for the year ended December 31, 2024 related to non-recurring integration costs associated with the Lima Acquisition, which includes (a) payroll and retention costs for roles eliminated in connection with the integration of our recent acquisition of Lima where a legal notice period was required prior to the employee’s separation from the Company, or integration-related daily activities not related to former roles performed by an employee during their legal notice period and prior to their separation from the Company.

In each case, such costs relate solely to roles eliminated in connection with the integration of the Lima acquisition, and are nonrecurring and not part of our normal business operations;

and (c) integration related costs associated with sales agent and distributor network rationalization, including contract termination and retention expenses, supply chain and portfolio integration, and quality management system consolidation, (ii) $8.8 million for the year ended December 31, 2024 of non-recurring (non-Lima) acquisition integration costs and other costs associated with non-recurring projects, including global ERP rationalization and establishment of a new shared service center, and (iii) $4.6 million for the year ended December 31, 2024 related to the Separation of our former fabrication technology business.

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

Year Ended December 31, 2023

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(Dollars in millions)

Net loss from continuing operations (GAAP) (1)

Income tax expense 36.1

Net Loss (GAAP) (1)

Net Loss margin (GAAP) (1.9) %

Income from discontinued operations, net of taxes (21.1)

Income tax benefit (13.3)

Other income, net (25.7)

Gain on cost basis investment (8.8)

Gain on investment in ESAB Corporation (102.7)

Debt extinguishment charges 7.3

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Restructuring and other charges (2)(3)

13.5 6.4 20.0

MDR and other costs (3)(4)

14.5 12.9 27.4

Strategic transaction costs (3)(5)

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Amortization of acquired intangibles 93.6 40.0 133.5

Insurance settlement gain (3)

(24.4) (12.3) (36.7)

Inventory step-up (6)

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Adjusted EBITDA margin (non-GAAP) 14.2 % 18.5 % 15.8 %

(1) Non-operating components of Net loss from continuing operations are not allocated to the segments.

(1) Non-operating components of Net loss are not allocated to the segments.

(2) Restructuring and other charges includes $2.6 million of expense classified as Cost of sales on the Company’s Consolidated Statements of Operations.

(3) Certain amounts are allocated to the segments as a percentage of revenue as the costs or gain are not discrete to either segment.

(4) MDR and other costs includes (i) $21.3 million for the year ended December 31, 2023 in non-recurring costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with the medical device reporting regulations and other requirements of the new medical device regulations in the European Union for devices which were introduced to the market prior to the regulation and (ii) $6.1 million for the year ended December 31, 2023 of expenses to resolve certain infrequent, non-recurring regulatory or other legal matters.

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

(5) Strategic transaction costs includes:

(i) $12.2 million for the year ended December 31, 2023 related to transaction costs and non-recurring integration costs associated with the Lima Acquisition, which includes professional and consulting fees specifically incurred to consummate the acquisition and advise and facilitate on post-acquisition integration matters, (ii) $5.5 million for the year ended December 31, 2023 of non-recurring (non-Lima) acquisition integration costs and other costs associated with non-recurring projects, including global ERP rationalization and establishment of a new shared service center, and (iii) $20.6 million for the year ended December 31, 2023 related to the Separation of our former fabrication technology business.

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

Total Company

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The following table presents the components of changes in our consolidated Net sales for the years ended December 31, 2025 and 2024.

Year Ended December 31, Year Ended December 31,

2024 2023 Growth Rate 2024 2023 Growth Rate

GAAP Comparable Sales (1)

(In millions)

Prevention & Recovery:

Bracing & Support $ 469.3 $ 456.1 2.9 % $ 469.3 $ 456.1 2.9 %

Other P&R 270.7 269.8 0.3 % 268.0 260.2 3.0 %

International P&R 357.9 350.8 2.0 % 356.3 345.0 3.3 %

Total Prevention & Recovery 1,098.0 1,076.8 2.0 % 1,093.6 1,061.3 3.0 %

Reconstructive:

Reconstructive $ 505.6 $ 426.4 18.6 % $ 505.6 $ 479.9 5.4 %

International Reconstructive 504.0 204.0 147.1 % 503.6 450.0 11.9 %

Total Reconstructive 1,009.7 630.4 60.2 % 1,009.2 930.0 8.5 %

Total $ 2,107.6 $ 1,707.2 23.5 % $ 2,102.8 $ 1,991.3 5.6 %

(1) Comparable Sales adjusts net sales for prior periods to include the sales of acquired businesses prior to our ownership from acquisitions that closed in the periods presented and to exclude the sales of divested businesses and certain discontinued Recon products lines in conjunction with the Lima Acquisition.

The acquired businesses include Lima and Novastep, which are reflected in the Recon segment, and the excluded non-core product lines are comprised of a divested compression hosiery product line in the P&R segment and certain discontinued third-party OEM relationships in the Recon segment.

(Dollars in millions)

For the year ended December 31, 2023 $ 1,707.2

Components of Change:

Existing Businesses (1)

Acquisitions (2)

Divestitures (3)

(11.7) (0.7) %

Foreign Currency Translation (4)

For the year ended December 31, 2024 $ 2,107.6

Components of Change:

Existing Businesses (1)

Acquisitions (2)

Divestitures (3)

(17.3) (0.8) %

Foreign Currency Translation (4)

For the year ended December 31, 2025 $ 2,248.0

(1) Excludes the impact of foreign exchange rate fluctuations and acquisitions, thus providing a measure of change due to factors such as price, product mix and volume.

(2) Represents the incremental sales as a result of acquisitions of businesses for twelve months from the acquisition date.

Excludes (i) acquisitions of former distribution partners as such transactions primarily represent a shift from a third-party distribution model to a direct sales model, and (ii) acquisitions of intellectual property as such transactions involve the purchase of technologies that have not been commercialized.

(3) Represents the decrease in sales as a result of divestitures of businesses for twelve months from the divestiture date.

(4) Represents the difference between prior year sales valued at the actual prior year foreign exchange rates and prior year sales valued at current year foreign exchange rates.

2025 Compared to 2024

Net sales increased during 2024 as compared to 2023 by $400.4 million, or 23.5%, primarily attributable to an increase in sales from the Lima Acquisition and to a lesser extent the Novastep acquisition and growth in existing businesses.

Recon sales increased by $379.3 million, or 60.2%, of which $338.1 million was attributable to the Lima and Novastep acquisitions.

Recon sales were negatively impacted by a $4.3 million decrease from the discontinuance of certain non-core product lines.

P&R sales increased by $21.2 million, or 2.0%, which was negatively impacted by a $11.1 million decrease from divesting a minor product line.

For the year ended December 31, 2024, U.S.

GAAP basis net sales were $2,107.6 million.

The Comparable Sales were $2,102.8 million for the same period.

The sales attributable to the non-core product lines, which were divested or discontinued, were $4.8 million.

For the year ended December 31, 2023, U.S.

GAAP basis net sales were $1,707.2 million.

The Comparable Sales were $1,991.3 million for the same period.

In 2023, Lima and Novastep would have contributed $308.0 million to Comparable Sales, offset by the impact of the divestiture and discontinuance of certain non-core product lines of $23.9 million.

Comparable Sales Growth for Recon was driven by approximately 8.2% increases in volume and market share gains and favorable foreign currency translation of 0.3%.

Comparable Sales Growth for P&R was driven by approximately 3.0% organic growth in volumes.

The increase in Net Sales during 2025 as compared to 2024 was primarily attributable to an increase in sales from existing businesses across both segments and favorable foreign currency translation, partially offset by a $17.3 million decrease in sales from the October 2025 divestiture of our Dr Comfort Footcare Solutions product line in our P&R segment and the April 2024 divestiture of our hosiery business in our P&R segment.

Existing business sales in Recon increased $83.1 million due to higher sales volumes compared to the prior year period, driven by broad market strength.

Existing business sales in P&R increased $40.4 million due to higher sales volumes compared to the prior year period.

The weakening of the U.S.

Dollar relative to other currencies resulted in $2.8 million, or 0.1%, of favorable foreign currency translation impacts on total net sales for the year ended December 31, 2024 from the prior year.

Year Ended December 31, Year Ended December 31,

2023 2022 Growth Rate 2023 2022 Growth Rate

GAAP Comparable Sales (1)

(In millions)

Prevention & Recovery:

Bracing & Support $ 456.1 $ 437.3 4.3 % $ 456.1 $ 437.3 4.3 %

Other P&R 269.8 255.3 5.7 % 260.2 243.0 7.1 %

International P&R 350.8 335.0 4.7 % 345.0 328.7 4.9 %

Total Prevention & Recovery 1,076.8 1,027.6 4.8 % 1,061.3 1,009.0 5.2 %

Reconstructive:

Reconstructive $ 426.4 $ 370.2 15.2 % $ 479.9 $ 426.0 12.7 %

International Reconstructive 204.0 165.3 23.4 % 450.0 377.3 19.3 %

Total Reconstructive 630.4 535.5 17.7 % 930.0 803.2 15.8 %

Total $ 1,707.2 $ 1,563.1 9.2 % $ 1,991.3 $ 1,812.3 9.9 %

The acquired businesses include Lima, Novastep, and KiCo, which are reflected in the Recon segment, and the excluded non-core product lines are comprised of a divested compression hosiery product line in the P&R segment and certain discontinued third-party OEM relationships in the Recon segment.

dollar relative to other currencies resulted in $30.0 million of favorable foreign currency translation impacts during the year ended December 31, 2025.

2024 Compared to 2023

Net sales increased during 2023 as compared to 2022 primarily due to an increase in sales from existing businesses across both of our segments and to a lesser extent sales from acquired businesses in Recon and favorable foreign currency translation.

Recon sales increased by $94.9 million, or 17.7%, of which $76.7 million was due to significantly higher sales volumes than the prior year across all product lines driven by market outperformance and new product launches.

P&R sales increased $49.2 million, or 4.8%, of which $47.1 million was due to improved sales volumes and inflation-related pricing increases.

Net sales from acquisitions increased during 2023 primarily due to the Novastep and 360 Med Care acquisitions in Recon that closed in 2023 and 2022, respectively.

Lastly, the weakening of the U.S.

dollar relative to other currencies, most notably the Swiss Franc and Euro, caused a $6.1 million favorable currency translation impact.

The increase in Net Sales of $400.4 million for 2024 as compared to 2023 was primarily attributable to an increase in sales from the Lima Acquisition and to a lesser extent the Novastep acquisition in our Recon segment.

Additionally, Net Sales increased due to the increase in sales from existing businesses across both of our segments, partially offset by a decrease from the divestiture of a hosiery product line in our P&R segment.

Net sales increased in Recon by $379.2 million, of which $337.0 million was attributable to the Lima and Novastep acquisitions.

Existing business sales in Recon increased $40.7 million due to increase in volume and market share gains and $1.5 million due to favorable currency translation.

Net Sales increased in P&R by $21.2 million, primarily due to a $32.9 million increase in existing business sales, partially offset by an $11.7 million decrease from the divestiture of a hosiery product line.

Operating Results

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Net loss from continuing operations $ (1,181.7) $ (827.4) $ (53.8)

Net loss from continuing operations margin (GAAP) (39.3) % (3.2) % (2.4) %

Net loss from continuing operations margin (52.6) % (39.3) % (3.2) %

Net loss (GAAP) $ (1,183.6) $ (824.8) $ (32.7)

Net loss margin (GAAP) (52.7) % (39.1) % (1.9) %

Adjusted EBITDA (non-GAAP) $ 403.0 $ 376.5 $ 269.2

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Depreciation and other amortization

$ 120.7 $ 117.3 $ 83.6

Amortization of acquired intangibles $ 173.6 $ 165.5 $ 133.5

Insurance settlement gain $ — $ — $ (36.7)

Goodwill impairment charge $ 1,049.8 $ 645.0 $ —

Purchase of royalty interest $ 45.8 $ — $ —

Inventory step-up $ 18.1 $ 51.7 $ 0.1

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Debt extinguishment charges $ — $ — $ 7.3

Other income net $ (9.9) $ (25.7) $ (2.1)

Other (income) expense, net $ 0.4 $ (9.9) $ (25.7)

Income tax expense (benefit) $ 22.3 $ 4.5 $ (13.3)

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Gross profit increased $164.5 million during 2025 in comparison to 2024 due to a $118.9 million increase in Recon and a $45.6 million increase in P&R.

The Gross profit increase was attributable to growth in sales volume, improved mix of higher-margin product sales, and the decrease of $33.6 million in inventory fair value step-up amortization charges.

Gross profit margin increased by 380 basis points due to improved product mix, supply chain productivity, and the decrease in inventory fair value step-up amortization charges.

Selling, general and administrative expense increased $42.8 million during 2025 in comparison to 2024, primarily due to a $31.8 million increase in commissions on increased sales and increased investment in the business in selling, general and administrative costs of $14.9 million, offset by a $17.9 million decrease in strategic transactions costs driven by a reduction in acquisition integration costs.

Research and development costs also increased compared to the prior year period, primarily due to increased spend within recently acquired businesses in our Recon segment, which is investing in surgical productivity solutions and computer-assisted surgery technologies.

The Goodwill impairment charge of $1,049.8 million was due to the sustained decrease in the Company’s publicly quoted share price and market capitalization and a $7.9 million impairment from the Dr Comfort Divestiture.

Accounting Policies for further discussion regarding the Goodwill impairment charge.

See Note 5 “Acquisitions and Divestitures” for further information regarding the Dr Comfort Divestiture.

Amortization of acquired intangibles also increased compared to the prior year period due to the additional intangible assets added through the 2025 acquisitions.

See Note 5 “Acquisitions and Divestitures” for further information regarding acquired intangibles.

Interest expense, net decreased $22.3 million during 2025 in comparison to 2024 compared to the prior year period due to the increase in interest income on the cross-currency swap derivatives.

This was driven by the increase in the hedging position entered into during the third quarter of 2024.

Other (income) expense, net decreased from a large Other income, net position in 2024 due to a decrease in the gain on the Contingent Acquisition Shares, which reached final settlement on January 15, 2025, partially offset by the decrease in the loss recognized in the first quarter of 2024 on the non-designated forward currency contracts to manage the risk from the Euro-denominated purchase price of the Lima Acquisition which closed on January 3, 2024.

The effective tax rate for Loss from continuing operations before income taxes during 2025 was (1.9)%, which differed from the 2025 U.S.

federal statutory tax rate of 21%, primarily due to non-deductible goodwill impairment charges and an increase in valuation allowance on U.S.

deferred tax assets.

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

income taxed at lower rates.

The effective tax rate for Loss from continuing operations before income taxes during 2024 was (0.5)%, which differed from the 2024 U.S.

federal statutory tax rate of 21% primarily due to a build in valuation allowance on interest limitation carryforwards and non-deductible goodwill impairment charges.

This was offset by tax credits for research and development, the non-taxable gain on shares related to the contingent acquisition liability and non-U.S.

income taxed at lower rates.

Net loss and Net loss from continuing operations increased during 2025 in comparison to 2024, primarily due to the increase in Goodwill impairment charges of $404.8 million, a $45.8 million increase in charges for the Purchase of royalty interest and an $8.1 million increase in amortization of acquired intangibles, partially offset by the aforementioned increase in gross profit, a $48.0 million decrease in restructuring and strategic transactions costs from Lima and other integration activities, and a $22.3 million decrease in interest expense, net.

Adjusted EBITDA increased due to the growth in Recon and improved operating leverage.

2024 Compared to 2023

Gross profit increased $190.0 million during 2024 in comparison to 2023 due to a $179.1 million increase in Recon and a $10.9 million increase in P&R.

The Gross profit increase was attributable to increased sales from the Lima Acquisition, offset by an increase of $51.6 million in inventory fair value step-up amortization charges.

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Amortization of acquired intangibles and Depreciation and other amortization also increased compared to the prior year period due to the Lima Acquisition.

Interest expense, net increased $37.4 million during 2024 in comparison to 2023 due to an increase in debt to finance the Lima Acquisition.

Interest expense, net increased by $37.3 million during 2024 in comparison to 2023 due to an increase in debt to finance the Lima Acquisition.

Other income, net decreased primarily due to the loss in 2024 and the gain in 2023 on the foreign currency forward contract to manage the exposure to currency exchange rate risk related to the Euro-denominated purchase price of Lima, partially offset by the gain on fair value adjustments for the Lima Acquisition Contingent Shares liability.

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income taxed at lower rates.

The effective tax rate for Loss from continuing operations before income taxes during 2023 was 19.8%, which differed from the 2023 U.S.

effective tax rate for 2023 was 19.8% on a loss from continuing operations before income taxes, which was lower than the 2023 U.S.

federal statutory tax rate of 21% mainly due to a build in valuation allowance on interest limitation carryforwards, non-deductible expenses and U.S.

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Adjusted EBITDA and Adjusted EBITDA margin increased due to the Lima Acquisition.

2023 Compared to 2022

Gross profit increased $121.4 million during 2023 in comparison to 2022 due to an $82.1 million increase in Recon and a $39.3 million increase in P&R.

The Gross profit increase was attributable to increased sales in our existing businesses from volume and inflation-related pricing increases, improved operating cost leverage, and the benefit of a decrease of $12.7 million in inventory fair value step-up amortization charges, partially offset by unfavorable foreign currency translation and inflation in supply chain, logistics, and other costs.

Gross profit margin increased due to the aforementioned factors.

Selling, general and administrative expense increased $57.4 million during 2023 in comparison to 2022, primarily due to increased commissions driven by higher sales, investments to support growth, spending on MDR and other costs, and cost inflation, partially offset by cost reduction initiatives and a net decrease in Strategic transactions costs.

Research and development costs also increased compared to the prior year period, primarily due to increased spend within recently acquired businesses in Recon, which are investing in surgical productivity solutions and computer-assisted surgery technologies.

Amortization of acquired intangibles and Depreciation and other amortization also increased compared to the prior year period due to business acquisitions.

Interest expense, net decreased by $4.4 million, primarily due to a reduction in debt balances as a result of the Separation-related debt redemptions at the beginning of the second quarter of 2022, the extinguishment of the outstanding balance of our previous term loan in conjunction with the ESAB investment sale, and interest savings from $7.3 million interest received on the Swiss Franc cross-currency swap agreements.

The effective tax rate for Loss from continuing operations before income taxes during 2023 was 19.8%, which was different than the 2023 U.S.

federal statutory tax rate of 21% primarily due to a build in valuation allowance on interest limitation carryforwards, non-deductible expenses and U.S.

taxation on international operations.

This was offset by a release of uncertain tax positions, tax credits for research and development and non-U.S.

income taxed at lower rates.

The effective tax rate for 2022 was (1,745.8)% on a loss from continuing operations before income taxes, which was lower than the 2022 U.S.

federal statutory tax rate of 21% mainly due to non-taxable unrealized gain on the investment in ESAB and gain on cost basis investment, offset by non-deductible costs related to the tax-free Separation.

Net loss from continuing operations increased $15.6 million during 2023 in comparison to 2022, primarily due to one-time income items in the prior year period, including the Unrealized gain on investment in ESAB Corporation, Gain on cost basis investment, Insurance settlement gain, partially offset by the reduction of debt extinguishment charges and the aforementioned net impact of the Gross profit and Selling, general, and administrative increases as well as the decrease in Interest expense, net and the impact of unfavorable discrete tax items in 2022.

Adjusted EBITDA increased due to organic growth.

EBITDA margin excluding the effects of recent acquisitions and foreign currency pressures increased by approximately 130 basis points.

Our recent acquisitions in Recon were dilutive to the net loss margin from continuing operations and to Adjusted EBITDA margin by approximately 20 basis points and are expected to be accretive to margins in future years.

Business Segments

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Operating loss, adjusted EBITDA and adjusted EBITDA margins at the operating segment level also include allocations of certain central function expenses not directly attributable to either operating segment.

See See Item 7.

“Non-GAAP Measures” for a further discussion and reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures.

We develop, manufacture, and distribute rigid bracing products, orthopedic soft goods, vascular systems and compression garments, and hot and cold therapy products and offer robust recovery sciences products in the clinical rehabilitation and sports medicine markets such as bone growth stimulators and electrical stimulators used for pain management.

P&R products are marketed under several brand names, most notably DJO, to orthopedic specialists, primary care physicians, pain management specialists, physical therapists, podiatrists, chiropractors, athletic trainers, and other healthcare professionals who treat patients with a variety of treatment needs including musculoskeletal conditions resulting from degenerative diseases, deformities, traumatic events and sports-related injuries.

P&R products are marketed under several brand names, most notably DonJoy, Aircast, and Chattanooga, to orthopedic specialists, primary care physicians, pain management specialists, physical therapists, podiatrists, chiropractors, athletic trainers, and other healthcare professionals who treat patients with a variety of treatment needs including musculoskeletal conditions resulting from degenerative diseases, deformities, traumatic events and sports-related injuries.

Many of our medical devices and related accessories are used by athletes and other patients for injury prevention and at-home physical therapy treatments.

We reach a diverse customer base through multiple distribution channels, including independent distributors, direct salespeople, and directly to patients.

We reach a diverse customer base through multiple distribution channels, including independent distributors, direct salespeople, and direct to patients.

The following table summarizes selected financial data for P&R:

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2025 Compared to 2024

Net sales in P&R increased $21.2 million, or 2.0%, compared with the prior year period, which was negatively impacted by a $11.1 million decrease from divesting a minor product line.

Comparable Sales Growth for P&R was driven by approximately 3.0% organic growth in volumes and partially offset by unfavorable foreign currency translation of 0.4%.

Gross profit increased $10.9 million and Gross profit margin remained flat despite a lower mix of higher margin products sales.

Net Sales increased $39.0 million compared with the prior year, driven by solid existing business volume growth, partially offset by a $17.3 million decrease in sales from the October 2025 divestiture of our Dr Comfort Footcare Solutions product line in our P&R segment and the April 2024 divestiture of our hosiery business in our P&R segment.

Gross profit increased $45.6 million due to the same reasons and Gross profit margin increased by 220 basis points primarily due to mix of higher-margin product sales and supply chain productivity.

Selling, general and administrative expenses increased slightly as a percentage of net sales.

Operating loss and Operating loss margin increased due to the Goodwill impairment charge of $387.8 million, offset by operating leverage with the aforementioned higher gross profit exceeding the aforementioned increase in Selling, general and administrative expenses.

Adjusted EBITDA increased due to the increase in gross profit and improved mix of higher-margin product sales and Adjusted EBITDA margin decreased slightly compared with the prior year period due to the timing of the aforementioned increased investment in the business in selling, general and administrative costs and the net impact of new tariffs.

2024 Compared to 2023

Net sales in P&R increased $21.2 million, or 2.0% in the year ended December 31, 2024 compared with the prior year due to solid growth in existing business, partially offset by a $11.1 million decrease from divesting a minor product line and unfavorable foreign translation.

Gross profit increased $10.9 million and Gross profit margin remained flat despite a lower mix of higher-margin product sales.

Selling, general and administrative expense decreased $10.5 million primarily due to reduction of strategic transaction costs and (EU) MDR spending.

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Adjusted EBITDA and Adjusted EBITDA margin increased due to improved operating scale from lower overheads, partially offset by unfavorable foreign currency impacts in a primary manufacturing facility during the year ended December 31, 2024 compared to the prior year.

2023 Compared to 2022

Net sales in P&R increased $49.2 million, or 4.8% in the year ended December 31, 2023 compared with the prior year period, driven by organic growth in existing businesses which was aided by pricing increases to mitigate inflation.

Gross profit increased $39.3 million due to the improved sales, offset by inflation of supply chain, logistics, and other costs and unfavorable foreign currency effects.

Gross profit margin increased 140 basis points due to improved sales mix and inflation-related customer pricing, partially offset by the effect of unfavorable foreign currency in a primary manufacturing facility.

Selling, general and administrative expense increased $3.8 million which included an increase of $30.5 million, or 7%, primarily due to investment to support growth in the business, spending on MDR and other costs, largely offset by a reduction in allocated Strategic transaction costs of $26.7 million which were higher in 2022 due to the Separation.

Operating loss increased due to an insurance settlement gain recorded in the second quarter of 2022, an increase of $13.5 million in amortization of acquired intangibles, and the net increase in the aforementioned selling, general and administrative expenses, partially offset by the higher gross profit.

Adjusted EBITDA and Adjusted EBITDA margin increased due to improved sales mix, partially offset by unfavorable foreign currency impacts in a primary manufacturing facility during the year ended December 31, 2023 compared to the prior year.

We develop, manufacture, and market a wide variety of knee, hip, shoulder, elbow, foot, ankle, and finger implant products and surgical productivity solutions that serve the orthopedic reconstructive joint implant market.

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Restructuring and other charges $ 4.7 $ 12.3 $ 6.4

Purchase of royalty interest $ 45.8 $ — $ —

Goodwill impairment charge $ 662.0 $ 330.0 $ —

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2025 Compared to 2024

Net sales increased in Recon by $379.3 million, or 60%, of which $338.1 million was attributable to the Lima and Novastep acquisitions.

Recon sales were negatively impacted by a $4.3 million decrease from the discontinuance of certain non-core product lines.

Comparable Sales Growth for Recon was driven by approximately 8.2% increase in volume and market share gains and favorable currency translation of 0.3%.

Gro ss profit increased $179.1 million in the year ended December 31, 2024 compared to the prior year period , primarily due to h igher net sales due to the Lima Acquisition, and improved operating leverage, offset by an increase of $51.6 million in inventory fair value step-up amortization charges.

The increase in inventory step-up charges led to a decrease in Gross profit margin.

Selling, general and administrative expense increased by $207.6 million over the same period primarily due to increased Strategic transactions costs associated with Lima integration activities, increased commissions driven by higher sales, a general and administrative expense increase due to the Lima Acquisition, and increases in existing business investments to support growth.

Net sales increased in Recon by $101.4 million, or 10%, due to strong sales volumes and favorable currency translation of 1.8%.

Gross profit increased $118.9 million in the year ended December 31, 2025 primarily due to higher net sales, improved operating leverage and a decrease of $33.6 million in inventory fair value step-up amortization charges.

Selling, general and administrative expense increased by $8.3 million over the same period primarily due to an increase in commissions driven by higher sales and increases in existing business investments to support growth, nearly entirely offset by a decrease in Lima Acquisition integration costs.

Research and development expense increased compared to the prior year period due to an increase in new product development projects and activities and spending within our recently acquired businesses, which are investing in surgical productivity solutions and computer-assisted surgery technologies.

Purchase of royalty interest increased over the same period as we completed strategic purchases to buyout the economic interest in future royalty payments in connection with the termination of certain legacy product development agreements for a fixed price of $56.5 million, which will be paid over nine years.

We accrued a liability and recognized a $45.8 million charge for the net present value of the purchases.

Operating loss increased, primarily due to a Goodwill impairment charge of $662.0 million and the $45.8 million purchase of royalty interest, slightly offset by a $23.2 million decrease in strategic transaction costs including the integration and transaction costs for the Lima Acquisition.

Adjusted EBITDA increased primarily due to increased gross profit from the Lima Acquisition and improved operating cost leverage.

2024 Compared to 2023

Net sales increased for Recon in the year ended December 31, 2024 compared with the prior year, by $379.3 million, or 60%, of which $337.0 million was attributable to the Lima and Novastep acquisitions.

Existing business sales in Recon increased $40.7 million due to increase in volume and market share gains and $1.5 million due to favorable currency translation, partially offset by a $4.3 million decrease from the discontinuance of certain non-core product lines.

Gross profit increased in the year ended December 31, 2024 compared to the prior year, by $179.1 million, primarily due to higher net sales due to the Lima Acquisition, and improved operating leverage, offset by an increase of $51.6 million in inventory fair value step-up amortization charges, which led to a decrease in Gross profit margin.

Selling, general and administrative expense increased by $207.6 million compared with the prior year primarily due to increased Strategic transactions costs associated with Lima integration activities, increased commissions driven by higher sales, a general and administrative expense increase due to the Lima Acquisition, and increases in existing business investments to support growth.

Research and development expense increased compared to the prior year period due to the Lima Acquisition and increased spending within other recently acquired businesses in our Recon segment, which are investing in surgical productivity solutions and computer-assisted surgery technologies.

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Adjusted EBITDA increased primarily due to increased gross profit from the Lima Acquisition and improved operating cost leverage.

2023 Compared to 2022

Net sales increased for Recon in the year ended December 31, 2023 compared with the prior year, by $94.9 million, or 17.7%, primarily due to higher sales volumes driven by broad market strength and market outperformance.

Gross profit increased in the year ended December 31, 2023 compared to the prior year, by $82.1 million, primarily due to increased sales in our existing businesses, improved operating cost leverage, and the benefit of a decrease of $12.7 million in inventory fair value step-up amortization charges, which also led to an increase in Gross profit margin.

Selling, general and administrative expense increased $53.6 million, including an increase of $43.1 million, or 15%, due to the growth in Recon from increased commissions driven by higher sales, investments to support growth, spending on MDR, and cost inflation, as well as a net increase in Strategic transactions costs of $3.9 million from an increase in deal and integration costs for the Lima and Novastep acquisitions offset by a decrease of Separation costs.

Research and development expense increased compared to the prior year period, primarily due to increased spend within recently acquired businesses which are investing in surgical productivity solutions and computer-assisted surgery technologies.

Operating loss decreased primarily due to the aforementioned factors driving organic growth, offset by an insurance settlement gain recorded in the second quarter of 2022 and an increase of $6.2 million in amortization of acquired intangibles.

Adjusted EBITDA increased primarily due to growth in existing businesses and operating leverage, partially offset by inflation of supply chain, logistics, and other costs.

Without the impact of recent acquisitions, Adjusted EBITDA increased 150 basis points compared to prior year.

The recent acquisitions of Novastep and 360 Med Care were dilutive to the margin by approximately 70 basis points but are expected to be accretive to margins in future years.

Liquidity and Capital Resources

We finance our long-term capital and working capital requirements through a combination of cash flows from operating activities, various borrowings and the issuances of equity.

We expect that our primary ongoing requirements for cash will be for working capital, funding of acquisitions, capital expenditures, restructuring cash outflows, and interest and principal repayments on our term loan and amounts drawn on our revolving credit facility.

We expect that our primary ongoing requirements for cash will be for working capital, funding of acquisitions, capital expenditures, strategic initiatives and restructuring cash outflows, and interest and principal repayments on our term loan and amounts drawn on our revolving credit facility.

We believe we could raise additional funds in the form of debt or equity if it was determined to be appropriate for strategic acquisitions or other corporate purposes.

ESAB Separation

We completed the separation of ESAB on April 4, 2022, through a tax-free, pro-rata distribution of 90% of the outstanding common stock of ESAB to our shareholders.

At the time of the Separation, we retained 10% of the shares of ESAB common stock.

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

We used the distribution proceeds in conjunction with $450 million of borrowings on a term loan under our Credit Agreement and $52.3 million of cash on hand to repay $1.4 billion of outstanding debt and accrued interest on our prior credit facility, $302.8 million of outstanding debt and accrued interest on our senior notes due February 15, 2026 (“2026 Notes”), as well as a redemption premium at 103.188% of the principal amount of our 2026 Notes, and other fees and expenses due at closing.

Additionally, on April 7, 2022, we completed the redemption of our senior unsecured notes due April 2025 (“Euro Senior Notes”) representing all of our outstanding €350.0 million principal 3.25% Senior Notes due 2025 at a redemption price of 100.813% of the principal amount and accrued interest for $391.2 million.

See section Enovis Term Loan and Revolving Credit Facility in Note 13, “Debt” in the accompanying Notes to Consolidated Financial Statements for more detail on the new Credit Agreement.

In the second quarter of 2023, we recorded Debt extinguishment charges of $20.1 million, including $12.7 million of redemption premiums on the retired debt instruments and $7.4 million in noncash write-offs of original issue discount and deferred financing fees.

On November 18, 2022, we divested the retained ESAB shares to a lender under the Credit Agreement in a tax-efficient exchange for extinguishing $230.5 million of our outstanding term loan under the Credit Agreement.

Equity Capital

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There is no term associated with the remaining repurchase authorization.

Enovis Term Loan and Revolving Credit Facility

Term Loan and Revolving Credit Facility

On April 4, 2022, we entered into a new credit agreement (the “Credit Agreement”), consisting of a $900 million revolving credit facility (the “Revolver”) with an April 4, 2027 maturity date and a term loan with an initial aggregate principal amount of $450 million (the “2022 Term Loan”) which was fully extinguished during the first quarter of 2023.

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

The agreement was amended on October 23, 2023, in conjunction with the financing of the Lima Acquisition as further discussed below.

On November 18, 2022, the Company completed an exchange with a lender under the Credit Agreement of 6,003,431 shares of common stock of ESAB, representing all of the retained shares in ESAB following the Separation, for $230.5 million of the $450.0 million in Enovis Term Loan that was outstanding at that time under the Credit Agreement, net of cost to sell.

On March 1, 2023, the Company extinguished the remaining outstanding balance on the Enovis Term Loan with borrowings on the Revolver.

The 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

The agreement was amended on October 23, 2023, in conjunction with the financing of the Lima Acquisition and further amended on December 8, 2025 as discussed below.

On November 18, 2022, the Company completed an exchange with a lender under the Credit Agreement of 6,003,431 shares of common stock of ESAB, representing all of the retained shares in ESAB following the Separation, for $230.5 million of the $450.0 million then outstanding under the 2022 Term Loan, net of cost to sell.

On March 1, 2023, the Company extinguished the remaining outstanding balance under the 2022 Term Loan with borrowings on the Revolver.

In addition, the 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.

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On October 23, 2023 the Company entered into an amendment to the Credit Agreement (the “Amendment”).

The Amendment provided for a new term loan commitment in the aggregate amount of $400 million.

The Term Loan Facility extended to the Company under the Amendment was funded on January 3, 2024, the date the Lima Acquisition was consummated.

The Term Loan Facility requires quarterly principal repayments, which is $5 million each quarter, and matures on April 4, 2027 (the “2024 Term Loan”).

The Amendment provided for a new term loan commitment in the aggregate amount of $400 million (the “Term Loan Facility”), which was funded on January 3, 2024, the date the Lima Acquisition was consummated.

Following the Amendment, the Term Loan Facility required quarterly principal repayments of $5 million, and would mature on April 4, 2027.

Pursuant to the Amendment, effective as of January 3, 2024, the date of consummation of the Lima Acquisition, (i) all facilities under the Credit Agreement (including the Term Loan Facility) became secured by certain personal property of the Company and certain of its subsidiaries, subject to limitations and exclusions;

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and (iv) certain additional changes were implemented (including the removal of the guaranty fallaway provision).

As of December 31, 2024, the weighted-average interest rate of borrowings under the Credit Agreement was 6.22%, excluding accretion of original issue discount and deferred financing fees, and there was $397.0 million available on the Revolver.

On December 8, 2025, the Company entered into Amendment No.

3 to the Credit Agreement (the “Third Amendment”).

The Third Amendment increased the borrowing capacity under the Revolver to up to $1.1 billion and increased the loan commitment under the Term Loan Facility to $700 million.

Pursuant to the Third Amendment, the Term Loan Facility requires quarterly principal repayments of $8.75 million.

The Third Amendment also extended the maturity date for all revolving loans and term loans under the Revolver and Term Loan Facility, respectively, to December 8, 2030.

A portion of the incremental borrowings under the Term Loan Facility was used to repay approximately $335 million of the outstanding principal balance under the Revolver.

As of December 31, 2025, $157 million and $688 million was outstanding on the Revolver and Term Loan respectively.

Pursuant to the Third Amendment, the Company must maintain a Senior Secured Leverage Ratio (as defined in the Amended Credit Agreement) of at least 3.50 to 1.00, but provides for a temporary increase in the maximum Senior Secured Leverage Ratio threshold, at the election of the Company and subject to certain conditions, following one or more acquisitions for which the aggregate consideration is $300.0 million or more.

The Third Amendment also increased the maximum amount of unrestricted, unencumbered and freely transferrable cash and cash equivalents that may be applied to offset the amount of indebtedness used in the calculations of the Senior Secured Leverage Ratio and the Total Leverage Ratio (as defined in the Amended Credit Agreement).

Pursuant to the Third Amendment, the amount of indebtedness used in such calculations may be reduced by up to $400 million of the Company’s and its subsidiaries’ unrestricted unencumbered and freely transferrable cash and cash equivalents, compared to $150 million.

Further, the Third Amendment (i) reduced the applicable margin for borrowings if the Total Leverage Ratio (as defined in the Credit Agreement) is less than 1.5 to 1.00 and (ii) modified certain negative covenants to increase the maximum consideration payable for a permitted acquisition from $150 million to $200 million and increased baskets available for additional debt.

As of December 31, 2025, the weighted-average interest rate of borrowings under the Credit Agreement (as amended) was 5.23%, excluding accretion of original issue discount and deferred financing fees, and there was $943.0 million available on the Revolver.

Convertible Notes and Capped Calls

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We believe that our sources of liquidity are adequate to fund our operations for the next twelve months and the foreseeable future.

As of December 31, 2024, we had $48.2 million of Cash and cash equivalents and restricted cash, an increase of $3.3 million from the $44.8 million of Cash and cash equivalents on hand as of December 31, 2023.

As of December 31, 2025, we had $36.4 million of Cash and cash equivalents and restricted cash, a decrease of $11.8 million from the $48.2 million of Cash and cash equivalents on hand as of December 31, 2024.

The following table summarizes the change in Cash and cash equivalents during the periods indicated and includes cash flows related to discontinued operations:

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(Dollars in millions)

Net cash provided by (used in) operating activities 113.5 135.0 (55.9)

Net cash provided by operating activities 217.3 113.5 135.0

Purchases of property, plant and equipment and intangibles (197.4) (180.7) (122.2)

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Payments for acquisitions, net of cash received, and investments (26.9) (769.9) (152.8)

Payment for settlement of derivative (4.8) — —

Proceeds from sale of business, net 43.3 — —

Cash received (paid) for settlement of derivative 1.6 (4.8) —

Net cash used in investing activities (179.4) (955.5) (242.5)

Proceeds from (repayments of) borrowings, net (36.9) 859.2 217.2

Distribution from ESAB Corporation, net — — 1,143.4

Proceeds from issuance of common stock, net 1.3 1.9 1.8

Payment of debt extinguishment costs — — (12.7)

Payment of capped call transactions — — (62.0)

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Cash used in operating activities of discontinued operations for the years ended December 31, 2025, 2024 and 2023 was $0.4 million, $0.1 million, and $2.0 million, respectively.

The 2023 activity includes maintenance and legal costs associated with the sale of a facility related to our discontinued operations.and the 2022 activity relates to fabrication technology business of ESAB Corporate prior to the Separation.

The activity includes maintenance and legal costs associated with previous divested businesses.

See Note 4 “Discontinued Operations" for further information.

Cash flows from operating activities can fluctuate significantly from period to period due to changes in working capital and the timing of payments for items such as restructuring, interest, income taxes and strategic transaction costs.

Changes in significant operating cash flow items are discussed below.

• Operating cash flows used in continuing operations working capital was $73.7 million, $47.7 million, and $116.0 million for the years ended December 31, 2024, 2023 and 2022, respectively.

The working capital used in 2024 is primarily associated with international business growth in Recon following the Lima Acquisition.

The working capital uses in 2023 and 2022 are primarily due to business growth and increases in inventory to insulate for supply chain volatility.

• Operating cash flows used in continuing operations working capital were $42.0 million, $73.7 million, and $47.7 million for the years ended December 31, 2025, 2024 and 2023, respectively.

The working capital used in 2025 is primarily associated with continued international business growth in Recon.

The working capital uses in 2024 is primarily associated with international business growth in Recon following the Lima Acquisition.

The working capital used in 2023 are primarily due to business growth and increases in inventory to insulate for supply chain volatility.

• Cash paid for strategic transaction costs in our continuing operations were $60.4 million, $78.3 million and $38.3 million for the years ended December 31, 2025, 2024 and 2023, respectively.

These costs were primarily related to the acquisition and integration of Lima in 2024 and the Separation in 2022, as well as other business development initiatives and integration costs of recent acquisitions.

These costs were primarily related to the acquisition and integration of Lima , as well as other business development initiatives and integration costs of recent acquisitions in 2025 and 2024.

The costs in 2023 were related to the Separation, business development and integration costs of recent acquisitions.

• Cash paid for interest was $27.4 million, $51.8 million and $16.3 million for the years ended December 31, 2025, 2024 and 2023, respectively.

The decrease in 2025 is primarily due to the increase in interest income on the cross-currency swap derivatives.

This was driven by the increase in the hedging position entered into during the third quarter of 2024.

The increase in 2024 is primary due to the financing for the Lima Acquisition which closed on January 3, 2024.

The decrease in 2023 is primarily a result of the change in our capital structure due to the Separation.

At the time of the Separation, the Company’s total debt of $2.1 billion was repaid and replaced with a $450.0 million term loan that was reduced by $230.5 million in November 2023 in a partial extinguishment through an exchange of ESAB shares.

• During 2025, 2024, and 2023 cash payments of $7.4 million, $21.2 million and $16.2 million, respectively, were made related to our restructuring initiatives.

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Cash flows used in investing activities for 2025, 2024 and 2023 include $26.9 million, $769.9 million, and $152.8 million, respectively, for acquisitions and investments.

Refer to Note 5 “Acquisitions and Investments” in the accompanying Notes to the Consolidated Financial Statements for more information.

Additionally, cash flows used in investing activities in 2024, 2023, and 2022 include $180.7 million, $122.2 million, and $105.5 million, respectively, for purchases of property, plant, equipment, and intangibles.

Included in these amounts is $5.9 million and $35.6 million for 2023, and 2022, respectively, related to discontinued operations.

The $32.6 million proceeds from sale of property, plant and equipment in 2023 is from the sale of a facility related to our discontinued operations.

Cash flows provided by financing activities in 2024 include net debt borrowings of $859.2 million, partially offset by amounts paid for common stock repurchases of $4.8 million and amounts paid for deferred consideration of $8.8 million.

Cash flows used in financing activities in 2023 include net debt borrowings of $217.2 million, partially offset by amounts paid for the capped call transactions of $62.0 million and debt issuance costs of $25.7 million .

Cash flows used in financing activities in 2022 includes $1.6 billion net repayment of borrowings, which included the outstanding debt on our prior credit facility, 2026 Notes and Euro Senior Notes, partially offset by borrowings on a term loan under our credit facility at the time.

The repayments were primarily funded by a $1.2 billion cash distribution from ESAB to us on separation.

Cash flows provided by investing activities for 2025 includes $43.3 million proceeds from the sale of Dr Comfort in October 2025.

Refer to Note 5 “Acquisitions and Divestitures” in the accompanying Notes to the Consolidated Financial Statements for more information.

Additionally, cash flows used in investing activities in 2025, 2024, and 2023 include $197.4 million, $180.7 million, and $122.2 million, respectively, for purchases of property, plant, equipment, and intangibles, which represents overall higher capital investments driven by recent acquisitions, including surgical implant instruments that support sales growth in Recon.

Cash flows used by financing activities in 2025 include net debt paydown of $36.9 million, debt issuance costs of $6.7 million, amounts paid for common stock repurchases of $3.5 million, and deferred payments on acquisitions of $6.6 million.

Cash flows used in financing activities in 2024 include net debt borrowings of $859.2 million, partially offset by amounts paid for common stock repurchases of $4.8 million and deferred payments on acquisitions of $8.8 million.

Cash flows used in financing activities in 2023 includes net debt borrowings of $217.2 million, partially offset by amounts paid for the capped call transactions of $62.0 million and debt issuance costs of $25.7 million.

Our Cash and cash equivalents as of December 31, 2025 include $18.1 million held in jurisdictions outside the U.S.

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As of December 31, 2025, our Revolver, Term Loan, and senior unsecured convertible notes (the “2028 Notes”) had principal amounts outstanding of $157.2 million, $688 million, and $452 million, respectively.

There are no required principal payments due on the Revolver within 12 months and it matures on April 4, 2027.

Our Term Loan requires quarterly principal repayments of $5 million and matures on April 4, 2027.

There are no required principal payments due on the Revolver within 12 months and it matures on December 8, 2030.

Our Term Loan requires quarterly principal repayments of $8.75 million and matures on December 8, 2030.

The 2028 Notes have an interest rate of 3.875%, payable semi annually in arrears on April 15 and October 15 of each year, beginning April 15, 2024, and will mature on October 15, 2028 unless earlier repurchased, redeemed, or converted.

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Purchase Obligations

As of December 31, 2024, the Company had other purchase obligations of $130.6 million, all of which was payable within 12 months.

As of December 31, 2025, the Company had other purchase obligations of $135.1 million, of which $124.4 million is payable within 12 months.

Purchase obligations herein exclude open purchase orders for goods or services that are provided on demand as the timing of which is not certain.

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We engage third-party valuation specialists who review the critical assumptions and calculations of the fair value of acquired intangible assets in connection with our significant acquisitions.

In connection with our acquisition of Novastep during the year ended December 31, 2023, we recognized Goodwill of approximately $44 million and identifiable intangible assets of approximately $52 million.

In connection with our acquisition of Lima during the year ended December 31, 2024, we recognized Goodwill of approximately $320.4 million and identifiable intangible assets of approximately $363.0 million.

Refer to Notes 2, 5 and 9 to the Consolidated Financial Statements for a description of the Company’s policies relating to Goodwill and Intangible Assets.

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If we determine that it is more likely than not for a reporting unit’s fair value to be less than its carrying value, a calculation of the fair value is performed and compared to the carrying value of that reporting unit.

In certain instances, we may elect to forgo the qualitative

assessment and proceed directly to the quantitative impairment test.

In certain instances, we may elect to forgo the qualitative assessment and proceed directly to the quantitative impairment test.

If the carrying value of a reporting unit exceeds its fair value, Goodwill of that reporting unit is impaired and an impairment loss is recorded equal to the excess of the carrying value over its fair value.

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Significant estimates in the market approach model include identifying appropriate market multiples and assessing earnings before interest, income taxes, depreciation and amortization.

For the year ended December 31, 2024, the Company identified an impairment indicator associated with a sustained decrease in the Company’s publicly quoted share price and market capitalization, relative to the carrying value of our reporting units.

Accordingly the Company performed a quantitative assessment of Goodwill as part of our annual goodwill impairment testing on the first day of the fourth quarter of 2024.

For the year ended December 31, 2025, the Company first identified an impairment indicator associated with a continued sustained decrease in the Company’s publicly quoted share price and market capitalization, relative to the carrying value of our reporting units in the third quarter of 2025.

Accordingly the Company performed a quantitative assessment of Goodwill as of the last day of the third quarter of 2025.

We determined the fair values of the reporting units by equally weighting a discounted cash flow approach and market valuation approach.

Determining the fair value of a reporting unit requires the application of judgment and involves the use of significant estimates and assumptions which can be affected by changes in business climate, economic conditions, the competitive environment and other factors.

We base these fair value estimates on assumptions our management believes to be reasonable but which are unpredictable and inherently uncertain.

Based upon the results of the quantitative impairment test, the Company determined the carrying values of each of the Reconstructive and Prevention & Recovery reporting units exceeded their fair values as of the date of our annual impairment test.

In order to align each reporting unit’s fair value model with the Company’s overall market capitalization, the Company reduced long-term cash flow projections and reduced market multiples to the low end of acceptable ranges.

As a result, the Company recognized a non-cash goodwill impairment charge of $645 million ($330 million for the Reconstructive reporting unit and $315 million for the Prevention & Recovery reporting unit).

We base these fair value estimates on assumptions our

management believes to be reasonable but which are unpredictable and inherently uncertain.

Based upon the results of the quantitative impairment test, the Company determined the carrying value of each of the Prevention & Recovery and Reconstructive reporting units exceeded their fair values as of October 3, 2025.

As a result, the Company recognized a non-cash goodwill impairment charge of $540.8 million in the quarter ended October 3, 2025 ($222.3 million for the P&R reporting unit and $318.6 million for the Reconstructive reporting unit).

Based upon a further continued sustained decline in the Company’s publicly quoted share price and market capitalization, relative to the carrying value of our reporting units, the Company performed a quantitative assessment of Goodwill as of the last day of the fourth quarter of 2025.

Based on the results of the quantitative impairment test, the Company determined the carrying value of the Reconstructive and Prevention & Recovery reporting units exceeded their fair values as of December 31, 2025.

In order to align each reporting unit’s fair value model with the Company’s overall market capitalization, the Company reduced long-term cash flow projections, reduced market multiples to the low end of acceptable ranges, and increased the weighted average cost of capital.

As a result, the Company recognized a non-cash goodwill impairment charge of $501.0 million ($157.6 million for the Prevention & Recovery reporting unit and $343.4 million for the Reconstructive reporting unit).

A further sustained decline in our share price and market capitalization, future cash flows, end-markets and/or geographic markets could result in additional impairment charges that could materially affect our financial statements in any given year.

Actual results could differ from our estimates and projections, which would also affect the assessment of impairment.

As of December 31, 2024, after recognition of the $645 million impairment charge, we have Goodwill of $1.7 billion ($925 million for the Reconstructive reporting unit and $768 million for the Prevention and Recovery reporting unit) that is subject to at least annual review for impairment.

See Note 9 “Goodwill and Intangible Assets” in the accompanying Notes to Consolidated Financial Statements for further information.

For the years ended December 31, 2023 and 2022, the Company performed a quantitative assessment of Goodwill for each of the Reconstructive and Prevention & Recovery reporting units as part of our annual impairment testing on the first day of the fourth quarter, both of which indicated no impairment existed.

For the years ended December 31, 2024, the Company recognized a non-cash Goodwill impairment charge of $645.0 million ($315.0 million for the P&R reporting unit and $330.0 million for the Recon reporting unit) in connection with our annual impairment.

As of December 31, 2025, including the charges from the year ended December 31, 2024, the accumulated non-cash goodwill impairment loss is $1.7 billion ($694.8 million for the Prevention and Recovery reporting unit and $992.0 million for the Reconstructive reporting unit).

See Note 9 “Goodwill and Intangible Assets” in the accompanying Notes to Consolidated Financial Statements for the table summarizing the activity in Goodwill.

For the year ended December 31, 2023, the Company performed a quantitative assessment of Goodwill for each of the Reconstructive and Prevention & Recovery reporting units as part of our annual impairment testing on the first day of the fourth quarter, both of which indicated no impairment existed.

We account for income taxes under the asset and liability method, which requires that deferred tax assets and liabilities be recognized using enacted tax rates for the effect of temporary differences between the book and tax bases of recorded assets and liabilities.

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Revenue Recognition

We account for revenue in accordance with Topic 606, “Revenue from Contracts with Customers”.

We recognize revenue when control of promised goods or services is transferred to the customer.

The amount of revenue recognized reflects the consideration to which we expect to be entitled in exchange for transferring the goods or services.

We account for revenue in accordance with Topic 606, “Revenue from Contracts with Customers.” We recognize revenue when control of promised goods or services is transferred to the customer.

The amount of revenue recognized reflects the

consideration to which we expect to be entitled in exchange for transferring the goods or services.

The nature of our contracts gives rise to certain types of variable consideration, including rebates and other discounts.

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Additionally, related to sales of our medical device products and services, we maintain provisions for estimated contractual allowances for reimbursement amounts from certain third-party payors based on negotiated contracts, historical experience for non-contracted payors, and the impact of new contract terms or modifications of existing arrangements with these customers.

We report these allowances as a reduction to Net sales.

We report these allowances as a reduction to Net sales in the same period that the sales are recognized.

We provide a variety of products and services to our customers.

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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-K

Item 7. Management’s Discussion and Analysis