What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-07 compared with 2025-11-06 · 143 added, 223 removed, 262 unchanged (58% of the section changed)

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The following discussion of the financial condition and results of operations of Enovis Corporation (“Enovis,” “the Company,” “we,” “our,” and “us”) should be read in conjunction with the Condensed Consolidated Financial Statements and related footnotes included in Part I.

“Financial Statements” of this Quarterly Report on Form 10-Q for the quarterly period ended October 3, 2025 (this “Form 10-Q”) and the Consolidated Financial Statements and related footnotes included in Part II.

“Financial Statements” of this Quarterly Report on Form 10-Q for the quarterly period ended April 3, 2026 (this “Form 10-Q”) and the Consolidated Financial Statements and related footnotes included in Part II.

“Financial Statements and Supplementary Data” of our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Form 10-K”) filed with the Securities and Exchange Commission (the “SEC”) on February 26, 2026.

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Statements other than statements of historical fact are statements that could be deemed forward-looking statements, including statements regarding:

the Company’s January 2024 acquisition of LimaCorporate S.p.A.

(the “Lima Acquisition”);

the Company’s acquisition (the “Lima Acquisition”) and integration of LimaCorporate S.p.A.

the im pact of public health emergencies and global pandemics;

disruptions in the global economy caused by escalating geopolitical tensions including in connection with the ongoing conflicts between Russia and the Ukraine and in the Middle East;

macroe conomic conditions, including the impact of increasing inflationary pressures;

changes in government trade policies, including the implementation of tariffs;

supply chain disruptions;

increasing energy costs and availability concerns, particularly in the European market;

projections of revenue, profit margins, expenses, tax provisions and tax rates, earnings or losses from operations, impact of foreign exchange rates, cash flows, synergies or other financial items;

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These forward-looking statements are subject to a number of risks and uncertainties and actual results could differ materially due to numerous factors, including but not limited to the following:

• the effects of the Lima Acquisition on the Company’s and the Recon segment’s combined operations, including any effects on relationships with customers, suppliers and other third parties;

• an inability to identify, finance, acquire and successfully integrate suitable acquisition candidates;

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• risks associated with the clinical trial process;

• failure to comply with governmental regulations for products for which we obtain clearance or approval;

• our exposure to product liability claims;

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• changes in the general economy;

• the impact of the current shutdown of the U.S.

• the impact of a shutdown of the U.S.

government or any future shutdowns;

• disruptions in the global economy caused by escalating geopolitical tensions, including in connection with Russia’s invasion of Ukraine;

• disruptions in the global economy caused by the ongoing conflicts between Russia and Ukraine and in the Middle East;

• the loss of key members of our leadership team, or the inability to attract, develop, engage, and retain qualified employees;

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

• 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, North Africa, and Asia.

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Items Affecting Comparability of Reported Results

The comparability of our operating results for the nine months ended October 3, 2025 compared to the prior periods in 2024 was affected by additional calendar days due to the prior year nine-month period ending on September 27, 2024.

Additionally, the comparability of our operating results for the nine months ended October 3, 2025 and nine months ended September 27, 2024 is affected by the following additional significant items:

The comparability of our operating results for the three months ended April 3, 2026 to the prior periods in 2025 is affected by fewer days as compared to the three months ended April 4, 2025.

Additionally, the comparability of our operating results for the three months ended April 3, 2026 and three months ended April 4, 2025 is affected by the following additional significant items:

Strategic Acquisitions and Divestiture

We complement our organic growth plans with strategic acquisitions.

Acquisitions can significantly affect our reported results.

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

We complement our organic growth plans with strategic acquisitions and in certain cases strategic divestitures.

Acquisitions and divestitures significantly affect our reported results.

On October 7, 2025, we completed the sale of our Dr.

Comfort Footcare Solutions U.S.

operations of our P&R segment to Promus Equity Partners in an asset deal, with an effective date of October 4th, 2025.

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

In the nine months ended October 3, 2025, the Company completed seven transactions for $37.7 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.

Three transactions are in the P&R segment and four are in the Recon segment.

See Note 3, “Acquisitions, Investments and Divestitures” in our Notes to Condensed Consolidated Financial Statements included in this Form 10-Q for additional information regarding these transactions.

On January 3, 2024, the Company 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 includes 1,942,686 contingently issuable 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”), which issuance was dependent on the non-occurrence of certain future events and was settled within one year of the acquisition closing.

The Contingent Acquisition Shares were issuable in two equal tranches.

The first tranche of 971,343 Contingent Acquisition Shares was issued to the sellers on July 16, 2024 and the second tranche was issued on January 15, 2025.

This acquisition expanded and complements our current product offerings internationally within our Recon segment.

Comfort Divestiture does not represent a strategic shift that has a major effect on the Company’s operations and financial results and is therefore not presented as a discontinued operation.

Additionally, the Company completed seven transactions in 2025 for $36.9 million total purchase consideration, including deferred consideration and estimated contingent consideration which includes the acquisition of three distributors, two businesses, and two purchases of intellectual property.

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

Foreign Currency Fluctuations

During the three and nine months ended October 3, 2025, approximately 40% and 42%, respectively, of our sales were derived from operations outside the United States, the majority of which are in Europe, with the remaining portion primarily in the Asia-Pacific region.

During the three months ended April 3, 2026, approximately 46% of our sales were derived from operations outside the United States, the majority of which are in Europe, with the remaining portion primarily in the Asia-Pacific region.

Accordingly, we can be affected by market demand, economic and political factors in countries in Europe and the Asia-Pacific region, and significant movements in foreign exchange rates.

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

For the three months ended October 3, 2025 compared to the three months ended September 27, 2024, fluctuations in foreign currencies increased Net sales by 1.9%, increased Gross profit by approximately 1.8%, and increased operating expense by approximately 1.6%.

For the nine months ended October 3, 2025 compared to the nine months ended September 27, 2024, fluctuations in foreign currencies increased Net sales by 0.9%, increased Gross profit by approximately 1.1%, and increased operating expenses by approximately 0.7%.

For the three months ended April 3, 2026 compared to the three months ended April 4, 2025, fluctuations in foreign currencies increased Net sales by 4.2%, increased Gross profit by approximately 3.8%, and increased operating expenses by approximately 3.9%.

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

General economic conditions and other factors may, however, impact future seasonal variations.

Additionally, our fourth quarter of 2025 will have fewer calendar days due to the third quarter closing on October 3, 2025 in the current year compared to September 27, 2024 in the prior year.

Non-GAAP Measures

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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 the effect of Loss from discontinued operations, net of taxes;

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

Income tax expense (benefit);

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non-operating (gain) loss on investments;

debt extinguishment charges;

Interest expense, net;

Restructuring charges;

Restructuring and other charges;

Medical Device Regulation (“MDR”) fees and other costs;

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strategic purchase of economic interest on future royalty payments;

goodwill impairment charges;

and fair value charges on acquired inventory.

and goodwill impairment charges.

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

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

For the three months ended April 3, 2026, we revised our definition of Adjusted EBITDA to no longer adjust for inventory step-up charges.

Adjusted EBITDA in prior periods has been revised to reflect this change for consistency of presentation.

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.

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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 table sets forth a reconciliation of net loss, the most directly comparable financial statement measure, to Adjusted EBITDA, for the three and nine months ended October 3, 2025 and September 27, 2024, respectively.

The following table sets forth a reconciliation of net loss to Adjusted EBITDA, for the three months ended April 3, 2026 and April 4, 2025, respectively.

Three Months Ended

October 3, 2025 September 27, 2024

P&R Recon Total P&R Recon Total

(Dollars in millions)

Net Loss (GAAP) (1)

$ (570.9) $ (31.3)

Net Loss margin (GAAP) (104.0) % (6.2) %

Loss from discontinued operations, net of taxes — (2.2)

Income tax expense (benefit) 4.0 (9.1)

Other (income) expense, net (0.4) (0.2)

Interest expense, net 8.8 11.1

Operating income (loss) (GAAP) $ (225.6) $ (332.9) (558.5) $ 2.4 $ (34.1) (31.7)

Operating income (loss) margin (GAAP) (77.5) % (129.0) % (101.7) % 0.9 % (14.8) % (6.3) %

Adjusted to add (deduct):

Restructuring charges (2)(3)

0.5 2.9 3.4 3.3 4.5 7.8

MDR and other costs (3)(4)

2.4 — 2.4 2.7 2.6 5.3

Strategic transaction costs (3)(5)

2.5 13.2 15.7 1.7 19.7 21.4

Stock-based compensation (3)

4.2 4.7 9.0 4.8 3.1 7.8

Depreciation and other amortization 5.0 25.7 30.7 4.5 23.9 28.4

Amortization of acquired intangibles 23.4 20.3 43.7 23.3 19.5 42.8

Goodwill impairment charge 229.9 318.6 548.4 — — —

Inventory step-up — — — — 8.4 8.4

Adjusted EBITDA (non-GAAP) $ 42.3 $ 52.5 $ 94.8 $ 42.8 $ 47.4 $ 90.2

Adjusted EBITDA margin (non-GAAP) 14.5 % 20.4 % 17.3 % 15.6 % 20.5 % 17.9 %

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

(2) Restructuring charges include $1.5 million expense classified as Cost of sales on the Company’s Condensed Consolidated Statements of Operations for the three months ended October 3, 2025, and there were $2.7 million similar charges for the three months ended September 27, 2024.

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

(4) MDR and other costs includes (i) $2.1 million for the three months ended October 3, 2025 and $3.5 million for the three months ended September 27, 2024, respectively, in non-recurring costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with the medical device reporting regulations and other requirements of the new medical device regulations in the European Union for devices which were introduced to the market prior to the regulation and (ii) $0.4 million for the three months ended October 3, 2025 and $1.8 million for the three months ended September 27, 2024, respectively, of expenses to resolve certain infrequent, non-recurring regulatory or other legal matters.

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

(5) Strategic transaction costs includes:

(i) $9.2 million for the three months ended October 3, 2025 and $17.5 million for the three months ended September 27, 2024 related to non-recurring integration costs associated with the Lima Acquisition, which includes payroll and retention costs for roles to be eliminated or that are dedicated to integration activities, professional and consulting fees specifically incurred to consummate the acquisition and advise and facilitate on post-acquisition integration matters including legal entity consolidation, costs associated with rebranding and marketing acquired business under Enovis name, such as marketing materials, trade show redesign costs and product labeling, and integration related costs associated with sales agent and distributor network rationalization, including contract termination and retention expenses, supply chain and portfolio integration, and quality management system consolidation, (ii) $6.1 million for the three months ended October 3, 2025 and $2.6 million three months ended September 27, 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) $0.4 million for the three months ended October 3, 2025 and $1.3 million for the three months ended September 27, 2024, respectively, related to the Separation of our former fabrication technology business.

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

Nine Months Ended

October 3, 2025 September 27, 2024

April 3, 2026 April 4, 2025

P&R Recon Total P&R Recon Total

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Amortization of acquired intangibles 20.9 21.0 41.9 22.8 19.0 41.8

Goodwill impairment charge 229.9 318.6 548.5 — — —

Purchase of royalty interest (6)

Inventory step-up — 18.1 18.1 — 37.4 37.4

— — — — 35.8 35.8

Adjusted EBITDA (non-GAAP) (7)

$ 31.1 $ 72.5 $ 103.6 $ 30.9 $ 56.2 $ 87.1

Adjusted EBITDA margin (non-GAAP) (7)

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

(2) Restructuring charges include $1.7 million expense classified as Cost of sales on the Company’s Condensed Consolidated Statements of Operations for the nine months ended October 3, 2025, and there were $2.7 million similar charges for the nine months ended September 27, 2024.

11.4 % 22.9 % 17.6 % 11.3 % 19.6 % 15.6 %

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

(2) Restructuring charges includes immaterial expenses classified as Cost of sales on the Company’s Condensed Consolidated Statements of Operations for the three months ended April 4, 2025.

There were no similar charges for the three months ended April 3, 2026.

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

(4) MDR and other costs includes (i) $7.6 million for the nine months ended October 3, 2025 and $12.3 million for the nine months ended September 27, 2024, respectively, in non-recurring costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with the medical device reporting regulations and other requirements of the new medical device regulations in the European Union for devices which were introduced to the market prior to the regulation and (ii) $1.4 million for the nine months ended October 3, 2025 and $2.4 million for the nine months ended September 27, 2024, respectively, of expenses to resolve certain infrequent, non-recurring regulatory or other legal matters.

(4) MDR and other costs includes (i) $0.8 million for the three months ended April 3, 2026 and $2.5 million for the three months ended April 4, 2025, respectively, in non-recurring costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with the medical device reporting regulations and other requirements of the new medical device regulations in the European Union for devices which were introduced to the market prior to the regulation and (ii) $0.4 million for the three months ended April 3, 2026 and $0.7 million for the three months ended April 4, 2025, respectively, of expenses to resolve certain infrequent, non-recurring regulatory or other legal matters.

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

(5) Strategic transaction costs includes:

(i) $28.1 million for the nine months ended October 3, 2025 and $55.1 million for the nine months ended September 27, 2024, respectively, related to non-recurring integration costs associated with the Lima Acquisition, which includes payroll and retention costs for roles to be eliminated or that are dedicated to integration activities, professional and consulting fees specifically incurred to consummate the acquisition and advise and facilitate on post-acquisition integration matters including legal entity consolidation, costs associated with rebranding and marketing acquired business under Enovis name, such as marketing materials, trade show redesign costs and product labeling, and integration related costs associated with sales agent and distributor network rationalization, including contract termination and retention expenses, supply chain and portfolio integration, and quality management system consolidation, (ii) $11.8 million for the nine months ended October 3, 2025 and $5.7 million for the nine months ended September 27, 2024, respectively, of non-recurring (non-Lima) acquisition integration costs and other costs associated with non-recurring projects, including global ERP rationalization and establishment of a new shared service center, and (iii) $1.3 million for the nine months ended October 3, 2025 and $4.2 million for the nine months ended September 27, 2024, respectively, related to the Separation of our former fabrication technology business.

(i) $7.4 million for the three months ended April 3, 2026 and $8.7 million for the three months ended April 4, 2025 related to non-recurring integration costs associated with the Lima Acquisition, which includes (a) payroll and retention costs for roles eliminated in connection with the integration of our recent acquisition of Lima where a legal notice period was required prior to the employee’s separation from the Company, or integration-related daily activities not related to former roles performed by an employee during their legal notice period and prior to their separation from the Company (in each case, such costs relate solely to roles eliminated in connection with the integration of the Lima acquisition, and are non-recurring and not part of our normal business operations);

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

and (c) integration related costs associated with sales agent and distributor network rationalization, including contract termination and retention expenses, supply chain and portfolio integration, and quality management system consolidation, (ii) $3.4 million for the three months ended April 3, 2026 and $2.9 million for the three months ended April 4, 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) $0.2 million for the three months ended April 3, 2026 and $0.5 million for the three months ended April 4, 2025, respectively, related to the Separation of our former fabrication technology business.

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

(6) Purchase of royalty interest represents the one-time, up-front expense incurred by the Company to acquire the economic rights to future royalties under product development agreements in connection with the termination of such agreements as part of a strategic shift to a new product development model.

The Company believes that excluding the impact of such expense enhances comparability between periods, provides investors with a clear and meaningful view of our underlying business trends and aligns with how management evaluates the ongoing business performance.

(7) For the three months ended April 3, 2026, we revised our definition of Adjusted EBITDA to no longer adjust for inventory step-up charges.

Adjusted EBITDA in prior periods has been revised to reflect this change for consistency of presentation.

Accordingly, the following non-GAAP measures for the three months ended April 4, 2025 as presented in our Form 10-Q for the period ended April 4, 2025 have been revised to reflect the removal of a $12.1 million adjustment for inventory step-up in connection with acquired businesses:

Adjusted EBITDA for our Recon segment has been revised from $68.3 million to $56.2 million, Total Adjusted EBITDA has been revised from $99.2 million to $87.1 million, Adjusted EBITDA margin for our Recon segment has been revised from 23.9% to 19.6%, and Total Adjusted EBITDA margin has been revised from 17.7% to 15.6%.

Total Company

The following table summarizes our Net sales for the three and nine months ended October 3, 2025 and September 27, 2024, respectively.

As noted in the Items Affecting Comparability of Reported Results section above, the nine months ended October 3, 2025 include the impact of additional calendar days due to the prior year nine-month period ending on September 27, 2024.

Three Months Ended Nine Months Ended

Net Sales Change % Net Sales Change %

The following table presents the components of change for the three months ended April 3, 2026 compared with the prior period.

As noted in the Items Affecting Comparability of Reported Results section above, the three months ended April 3, 2026 include the impact of fewer days as compared to the three months ended April 4, 2025.

Three Months Ended

Net Sales Change %

(In millions)

For the three and nine months ended September 27, 2024 $ 505.2 $ 1,546.6

For the three months ended April 4, 2025 $ 558.8

Components of Change:

Existing Businesses (1)

33.0 6.5 % 113.1 7.3 %

Acquisitions (2)

1.1 0.2 % 2.8 0.2 %

Divestitures (3)

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Foreign Currency Translation (4)

9.6 1.9 % 14.1 0.9 %

43.7 8.7 % 125.7 8.1 %

For the three and nine months ended October 3, 2025 $ 548.9 $ 1,672.3

(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.

For the three months ended April 3 , 2026 $ 589.2

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

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

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

The increase in Net sales during the three months ended October 3, 2025 compared to the prior year period was primarily attributable to an increase in sales from existing businesses across both of our segments and favorable foreign currency translation.

The increase in Net sales during the nine months ended October 3, 2025 compared to the prior year period was primarily attributable to an increase in sales from existing businesses across both of our segments, additional calendar days due to the prior year nine-month period ending on September 27, 2024, and favorable foreign currency translation, partially offset by a $4.3 million decrease in sales from the 2024 divestiture of our hosiery business in P&R.

Existing business sales in Recon increased $21.2 million and $74.1 million during the three and nine months ended October 3, 2025, respectively, due to higher sales volumes compared to the prior year period, driven by broad market strength.

Existing business sales in Recon for the nine months ended October 3, 2025 was also impacted by the additional calendar days due to the prior year nine-month period ending on September 27, 2024.

Existing business sales in P&R increased $11.8 million and $39.0 million during the three and nine months ended October 3, 2025, respectively, due to higher sales volumes compared to the prior year period.

Existing business sales in P&R for the nine months ended October 3, 2025 was also impacted by additional calendar days due to the prior year nine-month period ending on September 27, 2024.

The increase in Net sales during the three months ended April 3, 2026 compared to the prior year period was primarily attributable to an increase in sales from existing businesses across both of our segments and favorable foreign currency translation offset by fewer calendar days compared to the prior year period and a $12.7 million decrease in sales from the October 2025 divestiture of our Dr.

Comfort Footcare Solutions product line in our P&R segment.

Existing business sales in Recon increased $15.8 million the three months ended April 3, 2026, due to higher sales volumes compared to the prior year period driven by broad market strength, offset by fewer calendar days compared to the prior year period.

Existing business sales in P&R increased $2.6 million during the three months ended April 3, 2026, respectively, due to higher sales volumes compared to the prior year period, offset by fewer calendar days compared to the prior year period.

The weakening of the U.S.

dollar relative to other currencies resulted in $9.6 million and $14.1 million favorable foreign currency translation impacts during the three and nine months ended October 3, 2025, respectively.

dollar relative to other currencies resulted in $23.4 million favorable foreign currency translation impacts during the three months ended April 3, 2026.

Operating Results

The following table summarizes our results of continuing operations for the current year and prior year periods.

Three Months Ended Nine Months Ended

October 3, 2025 September 27, 2024 October 3, 2025 September 27, 2024

Three Months Ended

April 3, 2026 April 4, 2025

(Dollars in millions)

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Research and development expense $ 31.5 $ 28.5

Operating loss $ (558.5) $ (31.7) $ (622.1) $ (111.0)

Operating loss margin (101.7) % (6.3) % (37.2) % (7.2) %

Operating income (loss) $ 6.5 $ (46.8)

Operating income (loss) margin 1.1 % (8.4) %

Net loss from continuing operations (GAAP) $ (8.4) $ (55.6)

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Adjusted EBITDA (non-GAAP) (1)

$ 103.6 $ 87.1

Adjusted EBITDA margin (non-GAAP) (1)

17.6 % 15.5 %

Items excluded from Adjusted EBITDA:

Restructuring charges (2)

$ 3.4 $ 7.8 $ 8.2 $ 25.3

MDR and other costs $ 1.2 $ 3.2

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Amortization of acquired intangibles $ 41.9 $ 41.8

Goodwill impairment charge $ 548.4 $ — $ 548.5 $ —

Purchase of royalty interest (3)

Inventory step-up $ — $ 8.4 $ 18.1 $ 37.4

Interest expense, net $ 9.2 $ 9.2

Other expense (income), net $ (0.4) $ (0.2) $ 0.5 $ (9.8)

Other (income) expense, net $ (3.3) $ 1.4

Income tax expense (benefit) $ 9.0 $ (1.8)

(1) Restructuring charges include $1.5 million and $1.7 million expense classified as Cost of sales on the Company’s Condensed Consolidated Statements of Operations for the three and nine months ended October 3, 2025, respectively, and there were $2.7 million similar charges for the three and nine months ended September 27, 2024 .

Three Months Ended October 3, 2025 Compared to Prior Year

Gross profit increased $42.5 million, or 14.8%, in the three months ended October 3, 2025 compared with the prior year period due to a $30.1 million increase in our Recon segment and a $12.4 million increase in our P&R segment.

The Gross profit increase was attributable to growth in sales volume, improved mix of higher margin products sales, and the decrease of $8.4 million in inventory fair value step-up amortization charges.

Gross profit margin increased by 320 basis points due to the decrease in inventory fair value step-up amortization charges and supply chain productivity, partially offset by impact of tariffs.

Selling, general and administrative expense increased $13.7 million in the three months ended October 3, 2025 compared to the prior year period, primarily due to a $9.2 million increase in commissions on increased sales and increased investment in the business in selling, general and administrative costs of $10.3 million, offset by a $5.7 million decrease in strategic transactions costs driven by a reduction in acquisition integration costs.

(1) For the three months ended April 3, 2026, we revised our definition of Adjusted EBITDA to no longer adjust for inventory step-up charges.

Adjusted EBITDA in prior periods has been revised to reflect this change for consistency of presentation.

Accordingly, Adjusted EBITDA for the three months ended April 4, 2025 has been revised from $99.2 million, as presented in our Form 10-Q for the period ended April 4, 2025, to $87.1 million, reflecting the removal of a $12.1 million adjustment for inventory step-up in connection with acquired businesses, resulting in a corresponding reduction to Adjusted EBITDA margin for the three months ended April 4, 2025 from 17.7%, as presented in our Form 10-Q for the period ended April 4, 2025, to 15.6%.

(2) Restructuring charges includes immaterial expenses classified as Cost of sales on the Company’s Condensed Consolidated Statements of Operations for the three months ended April 4, 2025.

There were no similar charges for the three months ended April 3, 2026.

(3) Purchase of royalty interest represents the one-time, up-front expense incurred by the Company to acquire the economic rights to future royalties under product development agreements in connection with the termination of such agreements as part of a strategic shift to a new product development model.

Three Months Ended April 3, 2026 Compared to Prior Year

Gross profit increased $33.3 million, or 10.0%, in the three months ended April 3, 2026 compared with the prior year period due to a $30.8 million increase in our Recon segment and a $2.5 million net increase in our P&R segment, net of a decrease from the Dr.

Comfort divestiture.

The Gross profit increase was attributable to growth in sales volume, improved mix of higher margin products sales, and the decrease of $12.1 million in inventory fair value step-up amortization charges, partially offset by a decrease in gross profit from the October 2025 divestiture of our Dr.

Comfort Footcare Solutions product line.

Gross profit margin increased by 260 basis points due to the decrease in inventory fair value step-up amortization charges, product mix, and supply chain productivity, partially offset by the impact of tariffs.

Selling, general and administrative expense increased $13.8 million in the three months ended April 3, 2026 compared to the prior year period, primarily due to a $4.6 million increase in commissions on increased sales, increased investment in the business in selling, general and administrative costs of $7.7 million, and a $1.1 million increase in strategic transaction costs driven by acquisition integration costs.

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

Amortization of acquired intangibles increased compared to the prior year period due to the additional business, distributor, and intellectual property acquisitions in 2025.

The goodwill impairment charge recorded during the three months ended October 3, 2025 was predominantly driven by an impairment indicator associated with a sustained decrease in the Enovis publicly quoted share price and market capitalization, relative to the carrying value of our reporting units.

In estimating the fair values of the reporting units for the interim quantitative impairment test of Goodwill, we increased the weighted average cost of capital and reduced market multiples to the low end of acceptable ranges in order to align each reporting unit’s fair value model with the Enovis overall market capitalization.

Interest expense, net decreased in the three months ended October 3, 2025 compared to the prior year period due the lower interest rates in the current year compared to the prior year period.

The effective tax rate for Net loss from continuing operations during the three months ended October 3, 2025 was (0.7)%, which differs from the U.S.

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

Interest expense, net was flat in the three months ended April 3, 2026 compared to the prior year period due to $2.6 million of interest income from our cross-currency swaps on undesignated derivatives now being presented in Other (income) expense, net in the first quarter of 2026 offset by the lower interest rates in the current year compared to the prior year period.

The effective tax rate for Net loss from continuing operations during the three months ended April 3, 2026 was 1,426.7%, which differs from the 2026 U.S.

federal statutory tax rate of 21%, primarily due to an increase in valuation allowance on U.S.

deferred tax assets, non-deductible expenses, and U.S.

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income taxed at lower rates.

The effective tax rate for the three months ended September 27, 2024 was 21.4% which was higher than the 2024 U.S.

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.

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

taxation on international operations.

Net loss and Net loss from continuing operations increased in the three months ended October 3, 2025 compared with the prior year period, primarily due to the aforementioned Goodwill impairment charge, the increases in selling, general, and administrative expense and research and development costs, partially offset by the increase in Gross Profit and lower interest expense, net.

Adjusted EBITDA increased due to improved scale of aforementioned gross profit growth over a more stable fixed base of selling, general, and administrative expenses.

Adjusted EBITDA margin decreased due to the timing of the aforementioned increased investment in the business in selling, general and administrative costs and net impact of new tariffs.

Nine Months Ended October 3, 2025 Compared to Prior Year

Gross profit increased $122.6 million in the nine months ended October 3, 2025 compared with the prior year period due to a $84.7 million increase in our Recon segment and a $37.9 million increase in our P&R segment.

The Gross profit increase was attributable growth in sales volume, improved mix of higher margin products sales, and the decrease of $19.3 million in inventory fair value step-up amortization charges.

Gross profit margin increased by 300 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 $30.1 million in the nine months ended October 3, 2025 compared to the prior year period, primarily due to a $26.8 million increase in commissions on increased sales and increased investment in selling, general and administrative costs of $27.1 million offset by a $23.8 million decrease in strategic transaction costs driven by higher transaction costs in 2024 and a reduction in acquisition integration costs.

Amortization of acquired intangibles increased compared to the prior year period due to the additional business, distributor, and intellectual property acquisitions in 2025.

The goodwill impairment charge recorded during the nine months ended October 3, 2025 was predominantly driven by an impairment indicator associated with a sustained decrease in the Enovis publicly quoted share price and market capitalization, relative to the carrying value of our reporting units.

In estimating the fair values of the reporting units for the interim quantitative impairment test of Goodwill, we increased the weighted average cost of capital and reduced market multiples to the

low end of acceptable ranges in order to align each reporting unit’s fair value model with the Enovis overall market capitalization.

Purchase of royalty interest increased in the first half of 2025 as we completed strategic purchases of economic interest on future royalty payments in our intellectual property (“royalty interest”) 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.

Interest expense, net decreased in the nine months ended October 3, 2025 compared to the prior year period due to a $16.3 million 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 expense (income), net was an expense in the nine months ended October 3, 2025 compared to the prior year period due to the $21.7 million decrease in the fair value gain on the Contingent Acquisition Shares, which reached final settlement on January 15, 2025, partially offset by an $11.1 million decrease in the prior year 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 in January 3, 2024.

The effective tax rate for Net loss from continuing operations during the nine months ended October 3, 2025 was (2.0)%, which differs 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, non-deductible expenses, and U.S.

The effective tax rate for the three months ended April 4, 2025 was 3.1%, which differs from the 2025 U.S.

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.

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income taxed at lower rates.

The effective tax rate for Net income from continuing operations during the nine months ended September 27, 2024 was 17.0%, which was lower than the 2024 U.S.

federal statutory tax 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.

Net loss and Net loss from continuing operations increased in the nine months ended October 3, 2025 compared with the prior year period, primarily due to the aforementioned Goodwill impairment charge, the decrease in Other income, net and the increase in Purchase of royalty interest, partially offset by the increase in Gross Profit and lower interest expense, net.

Adjusted EBITDA and Adjusted EBITDA margin increased due to improved scale of aforementioned gross profit growth over a more stable fixed base of selling, general, and administrative expenses.

Net loss and Net loss from continuing operations decreased in the three months ended April 3, 2026 compared with the prior year period, primarily due to the decrease in Purchase of royalty interest and increase in Gross Profit which was partially aided by the decrease in inventory step-up, offset by increases in both selling, general, and administrative expense and research and development costs.

Adjusted EBITDA and Adjusted EBITDA margin increased due to improved scale of aforementioned gross profit growth over a more stable fixed base of selling, general, and administrative expenses, partially offset by a net impact of changes in tariffs, which were predominantly enacted after the first quarter of 2025.

Business Segments

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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 results for our Prevention & Recovery segment:

Three Months Ended Nine Months Ended

October 3, 2025 September 27, 2024 October 3, 2025 September 27, 2024

Three Months Ended

April 3, 2026 April 4, 2025

(Dollars in millions)

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Amortization of acquired intangibles $ 20.9 $ 22.8

Goodwill impairment charge $ 229.9 $ — $ 229.9 $ —

Restructuring charges $ 1.4 $ 2.9

Operating income (loss) (GAAP) $ (225.6) $ 2.4 $ (223.2) $ (9.0)

Operating income (loss) margin (GAAP) (77.5) % 0.9 % (26.1) % (1.1) %

Operating loss (GAAP) $ (4.6) $ (6.9)

Operating loss margin (GAAP) (1.7) % (2.5) %

Adjusted EBITDA (non-GAAP) $ 31.1 $ 30.9

Adjusted EBITDA margin (non-GAAP) 11.4 % 11.3 %

Three Months Ended October 3, 2025 Compared to Prior Year

Net sales increased $16.7 million, or 6.1%, in the three months ended October 3, 2025 compared with the prior year period, driven by strong existing business volume growth and favorable foreign currency translation of 1.4%.

Gross profit increased $12.4 million and Gross profit margin increased by 120 basis points, primarily due to an improved mix of higher margin product sales, partially offset by the impact of tariffs.

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 $229.9 million, slightly offset by operating leverage with the aforementioned higher gross profit exceeding the aforementioned increase in Selling, general and administrative expenses.

Adjusted EBITDA and Adjusted EBITDA margin decreased slightly 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, partially offset by the increase in gross profit and improved mix of higher margin product sales.

Nine Months Ended October 3, 2025 Compared to Prior Year

Net sales increased $43.1 million, or 5.3%, compared with the prior year period, driven by solid existing business volume growth and additional calendar days due to the prior year nine-month period ending on September 27, 2024, partially offset by a $4.3 million decrease from divesting the compression hosiery business in April 2024.

Gross profit increased $37.8 million and Gross profit margin increased by 180 basis points primarily due to mix of higher margin products sales and supply chain productivity.

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

Adjusted EBITDA and Adjusted EBITDA margin increased slightly compared with the prior year period due to the aforementioned improved product mix, supply chain productivity, and operating leverage.

Three Months Ended April 3, 2026 Compared to Prior Year

Net sales decreased $0.6 million, or 0.2%, in the three months ended April 3, 2026 compared with the prior year period.

Sales from existing businesses increased 1.0%.

This was driven by volume growth, partially offset by a headwind due to fewer sales days compared to the prior year period.

Additionally, the net effect of acquisition and divestiture activity caused a 4.2% decrease in sales primarily due to the Dr.

Comfort divestiture.

Lastly, foreign currency translations caused a 3.0% favorable increase in net sales during the period.

Gross profit increased $2.5 million, net of a decrease from the Dr.

Comfort divestiture, and Gross profit margin increased by 100 basis points, primarily due to volume growth and an improved mix of higher margin product sales, partially offset by the net impact of tariffs.

Selling, general and administrative expenses increased slightly as a percentage of net sales while Research and development expense decreased slightly due to the timing of projects and central costs allocated to Recon.

Operating loss and Operating loss margin decreased slightly due to the aforementioned higher gross profit.

Adjusted EBITDA and Adjusted EBITDA margin increased slightly due to the increase in gross profit and improved mix of higher margin product sales, partially offset by the timing of the aforementioned net increase in operating expenses and the aforementioned net impact of tariffs.

Reconstructive

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The following table summarizes the selected financial results for our Reconstructive segment:

Three Months Ended Nine Months Ended

October 3, 2025 September 27, 2024 October 3, 2025 September 27, 2024

Three Months Ended

April 3, 2026 April 4, 2025

(Dollars in millions)

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Amortization of acquired intangibles $ 21.0 $ 19.0

Goodwill impairment charge $ 318.6 $ — $ 318.6 $ —

Purchase of royalty interest $ — $ 35.8

Restructuring charges $ 1.3 $ 1.0

Operating loss (GAAP) $ (332.9) $ (34.1) $ (398.9) $ (102.0)

Operating loss margin (GAAP) (129.0) % (14.8) % (48.8) % (13.9) %

Operating income (loss) (GAAP) $ 11.1 $ (39.9)

Operating income (loss) margin (GAAP) 3.5 % (13.9) %

Adjusted EBITDA (non-GAAP) (1)

$ 72.5 $ 56.2

Adjusted EBITDA margin (non-GAAP) (1)

Three Months Ended October 3, 2025 Compared to Prior Year

Net sales increased by $27.0 million, or 11.7%, in the three months ended October 3, 2025, due to strong sales volumes and favorable foreign currency translation of 2.5%.

22.9 % 19.6 %

(1) For the three months ended April 3, 2026, we revised our definition of Adjusted EBITDA to no longer adjust for inventory step-up charges.

Adjusted EBITDA in prior periods has been revised to reflect this change for consistency of presentation.

Accordingly, Adjusted EBITDA for our Recon segment for the three months ended April 4, 2025 has been revised from $68.3 million, as presented in our Form 10-Q for the period ended April 4, 2025, to $56.2 million, reflecting the removal of a $12.1 million adjustment for inventory step-up in connection with acquired businesses, resulting in a corresponding reduction to Adjusted EBITDA margin for our Recon segment for the three months ended April 4, 2025 from 23.9%, as presented in our Form 10-Q for the period ended April 4, 2025, to 19.6%.

Three Months Ended April 3, 2026 Compared to Prior Year

Net sales increased by $30.8 million, or 10.8%, in the three months ended April 3, 2026 compared with the prior year period.

Net sales from existing businesses increased by 5.5%.

This was driven by strong volume growth, partially offset by a headwind due to fewer sales days compared to the prior year period.

Additionally, foreign currency translations caused a 5.3% favorable increase in net sales during the period.

Gross profit increased over the same period, primarily due to higher net sales and a decrease of $12.1 million in inventory fair value step-up amortization charges.

Selling, general and administrative expenses increased by $1.4 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 partially offset by a decrease in Lima Acquisition integration costs.

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

Operating loss increased, primarily due to the Goodwill impairment charge of $318.6 million, slightly offset by the aforementioned gross profit increases and a $6.5 million decrease in strategic transaction costs including the integration and transaction costs for the Lima Acquisition.

Adjusted EBITDA increased primarily due to the aforementioned sales growth and gross profit increase.

Nine Months Ended October 3, 2025 Compared to Prior Year

Net sales increased by $82.6 million, or 11.2%, due to strong sales volumes, favorable foreign currency translation of 1.1%, and additional calendar days due to the prior year nine-month period ending on September 27, 2024.

Gross profit increased $84.7 million in the nine months ended October 3, 2025 compared to the prior year period, primarily due to higher net sales, improved operating leverage and a decrease of $19.3 million in inventory fair value step-up amortization charges.

Selling, general and administrative expenses increased by $0.7 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.

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 the Goodwill impairment charge of $318.6 million and the $45.8 million purchase of royalty interest, slight offset by the $26.7 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.

Selling, general and administrative expenses increased by $8.8 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.

Research and development expense increased compared to the prior year period due to an increase in new product development projects and

activities and spending within our recently acquired businesses, which are investing in surgical productivity solutions and computer-assisted surgery technologies.

Operating income increased primarily due to the decrease in Purchase of royalty interest and inventory fair value step-up amortization charges, the aforementioned gross profit increases and a $2.6 million decrease in strategic transaction costs including the integration and transaction costs for the Lima Acquisition.

Adjusted EBITDA increased primarily due to the aforementioned sales growth and gross profit increase, driven by higher net sales and a decrease of $12.1 million in inventory fair value step-up amortization charges.

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 and other non-routine costs, and interest and principal repayments on our debt.

We expect that our primary ongoing requirements for cash will be for working capital, funding of acquisitions, capital expenditures, strategic initiatives, restructuring outflows and other non-routine costs, and interest and principal repayments on our debt.

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

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

As of October 3, 2025, the remaining stock repurchase authorization provided by our Board of Directors was $100 million.

As of April 3, 2026, the remaining stock repurchase authorization provided by our Board of Directors was $100 million.

The timing, amount, and method of shares repurchased is determined by management based on its evaluation of market conditions and other factors.

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Term Loan and Revolving Credit Facility

Our credit agreement (the “Enovis Credit Agreement”) consists of a $900 million revolving credit facility (the “Revolver”) with an April 4, 2027 maturity date and a term loan with an aggregate principal amount of $400 million, which was funded on January 3, 2024, the date the Lima Acquisition was consummated.

The term loan requires quarterly principal repayments at 1.25% of the initial aggregate principal amount, which is $5 million each quarter, and matures on April 4, 2027 (the “2024 Term Loan”).

Our credit agreement, which was amended December 8, 2025, consists of a $1.1 billion revolving credit facility (the “Revolver”) with a December 8, 2030 maturity date and a term loan facility with an initial aggregate principal amount of $700 million (the “Term Loan”) (collectively, the “Enovis Credit Agreement”).

The Term Loan requires quarterly principal repayments at 1.25% of the initial aggregate principal amount, which is $8.75 million each quarter, and matures on December 8, 2030.

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

All facilities under the Enovis Credit Agreement (including the 2024 Term Loan Facility) are secured by certain personal property of the Company and certain of its subsidiaries, subject to limitations and exclusions.

As of October 3, 2025, there was $355 million available on the Re volver.

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

All facilities under the Enovis Credit Agreement (including the Term Loan) are secured by certain personal property of the Company and certain of its subsidiaries, subject to limitations and exclusions.

As of April 3, 2026, there was $906 million available on the Re volver.

The Enovis Credit Agreement contains customary covenants limiting our ability to, among other things, incur debt or liens, merge or consolidate with others, dispose of assets, make investments, or pay dividends.

There are also restrictions on repayments of junior financing and amendments to junior financing documents.

In addition, the Enovis Credit Agreement contains financial covenants requiring 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 Revolver.

In addition, the Enovis Credit Agreement contains financial covenants requiring us to maintain (i) a maximum senior secured leverage ratio of not more than 3.50:1.00 and (ii) a minimum interest coverage ratio of 3.00:1:00.

Convertible Notes and Capped Calls

Our $460 million aggregate principal senior unsecured convertible notes were issued in October 2023 via a private placement pursuant to Rule 144A in conjunction with the financing for the Lima Acquisition (the “2028 Notes”).

Our $460 million aggregate principal senior unsecured convertible notes were issued in October 2023 via a private placement pursuant to Rule 144A (the “2028 Notes”).

The 2028 Notes have an interest rate of 3.875%, payable semiannually in arrears on April 15 and October 15 of each year, beginning April 15, 2024.

The 2028 Notes will mature on October 15, 2028 unless earlier repurchased, redeemed, or converted.

We also entered into privately negotiated capped call transactions with certain of the initial purchasers of the 2028 Notes.

We also have privately negotiated capped call transactions entered into at the same time as and with certain of the initial purchasers of the 2028 Notes.

The capped call transactions are intended generally to mitigate potential dilution to our common stock upon conversion of any 2028 Notes and/or offset any cash payments we are required to make in excess of the principal amount of converted 2028 Notes, as the case may be, with such reduction and/or offset subject to a cap.

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In addition, we are party to overdraft facilities with a borrowing capacity of $30.0 million.

Total letters of credit and surety bonds of $47.5 million were outstanding as of October 3, 2025.

As of October 3, 2025, we had $33.6 million of Cash and cash equivalents, a decrease of $14.6 million from the balance as of December 31, 2024 of $48.2 million.

Total letters of credit and surety bonds of $49.6 million were outstanding as of April 3, 2026.

As of April 3, 2026, we had $33.1 million of Cash and cash equivalents, a decrease of $3.3 million from the $36.4 million balance as of December 31, 2025.

The following table summarizes the change in cash and cash equivalents during the periods indicated:

Nine Months Ended

October 3, 2025 September 27, 2024

Three Months Ended

April 3, 2026 April 4, 2025

(Dollars in millions)

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

Strategic transaction costs primarily relates to integration costs of acquired businesses such as the Lima Acquisition.

Strategic transaction costs primarily relate to integration costs of acquired businesses such as the Lima Acquisition.

Cash flows provided by operating activities increased $25.6 million year-over-year.

This improvement was primarily due to the increase in gross profit, lower strategic transaction costs of $23.8 million, lower interest paid of $22.3 million, lower restructuring costs payments of $9.6 million, and lower investment in working capital of $1.3 million, offset by increases in Selling, general and administrative and Research and development expense.

Cash flows used in investing activities during the nine months ended October 3, 2025 were $166.4 million compared to $897.6 million in the prior year period due to six small acquisition transactions during 2025 compared to the Lima Acquisition purchase price of $757.7 million, net of cash received, in the prior year and overall higher capital investments in the current year driven by recent acquisitions, including surgical implant instruments that support sales growth in Recon.

Cash flows provided by financing activities during the nine months ended October 3, 2025 include $25.1 million of net debt borrowings primarily used for the recent acquisition transactions and capital expenditures.

Cash flows provided by financing activities for the nine months ended September 27, 2024 include net debt borrowings of $878.0 million primarily used for the Lima Acquisition and to a lesser extent capital expenditures and operations.

This improvement was primarily due to the increase in gross profit, lower strategic transaction costs of $1.1 million, lower interest paid of $0.5 million, lower EU MDR & other costs of $2.0 million and improvement of accounts receivable collections offset by the timing of payables resulting in an increase of $22.9 million in cash related to working capital.

Cash used in investing activities during the three months ended April 3, 2026 was $53.1 million compared to $60.5 million in the prior year period, primarily as a result of increases in capital spending driven by implant instruments that support sales growth in Recon, offset by less payments for acquisitions in 2026 compared to 2025.

Cash flows provided by financing activities during the three months ended April 3, 2026 include $27.7 million of net debt borrowings primarily used for capital expenditures.

Cash flows provided by financing activities for the three months ended April 4, 2025 include net debt borrowings of $56.6 million primarily used for bolt-on acquisitions, capital expenditures and operational needs.

Critical Accounting Policies and Estimates

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Actual results may vary from what our management anticipates, and different assumptions or estimates about the future could have a material impact on our results of operations and financial position.

Except as noted below, there have been no significant additions or changes to the methods, estimates and judgments included in “Item 7A.

There have been no significant additions or changes to the methods, estimates and judgments included in “Item 7A.

Management’s Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies” in our 2025 Form 10-K.

Goodwill and Intangible Assets

We evaluate the recoverability of Goodwill at the reporting unit level annually or more frequently if an event occurs or circumstances change in the interim that would more likely than not reduce the fair value of the asset below its carrying amount.

For the quarter ending October 3, 2025, 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 an interim quantitative assessment of Goodwill as of the last day of the third quarter of 2025.

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.

Generally, we measure fair value of reporting units by equally weighting a discounted cash flow approach and market valuation approach.

The discounted cash flow models indicate the fair value of the reporting units based on the present value of the cash flows that the reporting units are expected to generate in the future.

Significant estimates in the discounted cash flow models include the weighted average cost of capital, revenue growth rates, long-term rate of growth, profitability of our business, tax rates, and working capital effects.

The market valuation approach indicates the fair value of the business based on a comparison against certain market information.

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

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 October 3, 2025.

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

As a result, the Company recognized a non-cash goodwill impairment charge of $540.8 million ($222.3 million for the Prevention & Recovery reporting unit and $318.6 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 October 3, 2025, after recognition of the impairment charge, we have Goodwill of $1.2 billion ($558 million for the Prevention and Recovery reporting unit and $661 million for the Reconstructive reporting unit) that is subject to at least annual review for impairment.

See Note 8 “Goodwill” in our Notes to Condensed Consolidated Financial Statements included in this Form 10-Q for additional information.

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 2. Management’s Discussion and Analysis