What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-06 compared with 2026-05-07 · 188 added, 84 removed, 321 unchanged (46% 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 April 3, 2026 (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 July 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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Items Affecting Comparability of Reported Results

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:

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

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

Strategic Acquisitions and Divestiture

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

Acquisitions and divestitures significantly affect our reported results.

Acquisitions and divestitures can significantly affect our reported results.

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

Comfort Footcare Solutions U.S.

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

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

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

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Foreign Currency Fluctuations

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.

During the three and six months ended July 3, 2026, approximately 44% and 45% of our sales, respectively, were derived from operations outside the United States, the majority of which are in Europe, with the remaining portion primarily in the Asia-Pacific region.

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

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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 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%.

For the three months ended July 3, 2026 compared to the three months ended July 4, 2025, fluctuations in foreign currencies increased Net sales by 1.0%, increased Gross profit by approximately 0.6%, and increased operating expenses by approximately 0.9%.

For the six months ended July 3, 2026 compared to the six months ended July 4, 2025, fluctuations in foreign currencies increased Net sales by 2.6%, increased Gross profit by approximately 2.2%, and increased operating expenses by approximately 2.4%.

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

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Interest expense, net;

Restructuring and other charges;

Restructuring;

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

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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.

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

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

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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 to Adjusted EBITDA, for the three months ended April 3, 2026 and April 4, 2025, respectively.

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

Three Months Ended

April 3, 2026 April 4, 2025

July 3, 2026 July 4, 2025

P&R Recon Total P&R Recon Total

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Loss from discontinued operations, net of taxes — 0.1

Income tax expense (benefit) 9.0 (1.8)

Income tax expense 8.5 10.8

Other (income) expense, net 1.9 (0.4)

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(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.

(2) 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) $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.

(3) Restructuring charges reflect costs associated with the Company’s restructuring programs to reduce the structural costs of the Company.

For further information, see Note 10, “Accrued Liabilities - Accrued Restructuring Liability.

” Includes expenses of $0.3 million classified as Cost of sales on the Company’s Condensed Consolidated Statements of Operations for the three months ended July 4, 2025.

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

(4) MDR and other costs includes (i) $0.4 million for the three months ended July 3, 2026 and $2.8 million for the three months ended July 4, 2025, respectively, in non-recurring costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with the medical device reporting regulations and other requirements of the new medical device regulations in the European Union for devices which were introduced to the market prior to the regulation and (ii) $0.3 million for the three months ended July 3, 2026 and $0.4 million for the three months ended July 4, 2025, respectively, of expenses to resolve certain infrequent, non-recurring regulatory or other legal matters.

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

(5) Strategic transaction costs includes:

(i) $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);

(i) $4.7 million for the three months ended July 3, 2026 and $7.8 million for the three months ended July 4, 2025 related to non-recurring integration costs associated with the Lima Acquisition, which includes (a) payroll and retention costs for roles eliminated in connection with the integration of our recent acquisition of Lima where a legal notice period was required prior to the employee’s separation from the Company, or integration-related daily activities not related to former roles performed by an employee during their legal notice period and prior to their separation from the Company (in each case, such costs relate solely to roles eliminated in connection with the integration of the Lima acquisition, and are non-recurring and not part of our normal business operations);

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

and (c) integration related costs associated with sales agent and distributor network rationalization, including contract termination and retention expenses, supply chain and portfolio integration, and quality management system consolidation, (ii) $3.4 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.

and (c) integration related costs associated with sales agent and distributor network rationalization, including contract termination and retention expenses, supply chain and portfolio integration, and quality management system consolidation, (ii) $(3.5) million for the three months ended July 3, 2026 and $5.4 million for the three months ended July 4, 2025 , including a $5.7 million non-cash gain upon the reversal of a portion of a contingent consideration liability (See Note 11, “Financial Instruments and Fair Value Measurements” for additional information), partially offset by non-recurring (non-Lima) acquisition integration costs and other non-recurring project costs for global ERP rationalization and shared service center start-up, and (iii) $0.2 million for the three months ended July 3, 2026 and $0.3 million for the three months ended July 4, 2025, respectively, related to the Separation of our former fabrication technology business.

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

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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.

(7) In conjunction with our Form 10-Q filing for the three months ended April 3, 2026, we revised our definition of Adjusted EBITDA to no longer adjust for inventory step-up charges.

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

Accordingly, the following non-GAAP measures for the three months ended 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:

Accordingly, the following non-GAAP measures for the three months ended July 4, 2025 as presented in our Form 10-Q for the period ended July 4, 2025 have been revised to reflect the removal of a $6.0 million adjustment for inventory step-up in connection with acquired businesses:

Adjusted EBITDA for our Recon segment has been revised from $50.4 million to $44.4 million, Total Adjusted EBITDA has been revised from $97.2 million to $91.2 million, Adjusted EBITDA margin for our Recon segment has been revised from 18.4% to 16.2%, and Total Adjusted EBITDA margin has been revised from 17.2% to 16.2%.

Total Company

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 %

Six Months Ended

July 3, 2026 July 4, 2025

P&R Recon Total P&R Recon Total

(Dollars in millions)

Net Loss (GAAP) (1)

$ (9.5) $ (92.3)

Net Loss margin (GAAP) (0.8) % (8.2) %

Loss from discontinued operations, net of taxes — 0.2

Income tax expense 17.5 9.0

Other (income) expense, net (1.4) 1.0

Interest expense, net 17.2 18.5

Operating income (loss) (GAAP) $ 10.6 $ 13.4 23.9 $ 2.4 $ (65.9) (63.6)

Operating income (loss) margin (GAAP) 1.9 % 2.2 % 2.0 % 0.4 % (11.8) % (5.7) %

Adjusted to add (deduct):

Restructuring charges (2)(3)

5.3 2.3 7.6 3.5 1.3 4.8

MDR and other costs (2)(4)

0.9 1.0 1.9 2.8 3.6 6.5

Strategic transaction costs (2)(5)

4.7 7.7 12.4 4.1 21.4 25.5

Stock-based compensation (2)

8.1 9.6 17.7 9.8 6.3 16.1

Depreciation and other amortization 10.2 50.7 60.9 8.9 49.4 58.3

Amortization of acquired intangibles 41.7 41.8 83.5 46.1 38.7 84.8

Purchase of royalty interest (6)

— — — — 45.8 45.8

Adjusted EBITDA (non-GAAP) (7)

$ 81.4 $ 126.5 $ 207.9 $ 77.6 $ 100.6 $ 178.2

Adjusted EBITDA margin (non-GAAP) (7)

14.5 % 20.7 % 17.7 % 13.8 % 18.0 % 15.9 %

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

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

(3) Restructuring charges reflect costs associated with the Company’s restructuring programs to reduce the structural costs of the Company.

For further information, see Note 10, “Accrued Liabilities - Accrued Restructuring Liability.

” Includes expenses of $0.3 million classified as Cost of sales on the Company’s Condensed Consolidated Statements of Operations for the six months ended July 4, 2025.

There were no similar charges for the six months ended July 3, 2026.

(4) MDR and other costs includes (i) $1.2 million for the six months ended July 3, 2026 and $5.4 million for the six months ended July 4, 2025, respectively, in non-recurring costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with the medical device reporting regulations and other requirements of the new medical device regulations in the European Union for devices which were introduced to the market prior to the regulation and (ii) $0.7 million for the six months ended July 3, 2026 and $1.1 million for the six months ended July 4, 2025, respectively, of expenses to resolve certain infrequent, non-recurring regulatory or other legal matters.

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

(5) Strategic transaction costs includes:

(i) $11.7 million for the six months ended July 3, 2026 and $16.5 million for the six months ended July 4, 2025, respectively, related to non-recurring integration costs associated with the Lima Acquisition, which includes payroll and retention costs for roles to be eliminated or that are dedicated to integration activities, professional and consulting fees specifically incurred to consummate the acquisition and advise and facilitate on post-acquisition integration matters including legal entity consolidation, costs associated with rebranding and marketing acquired business under Enovis name, such as marketing materials, trade show redesign costs and product labeling, and integration related costs associated with sales agent and distributor network rationalization, including contract termination and retention expenses, supply chain and portfolio integration, and quality management system consolidation, (ii) $0.3 million for the six months ended July 3, 2026 and $8.2 million for the six months ended July 4, 2025, respectively, of non-recurring (non-Lima) acquisition integration costs and other costs associated with non-recurring projects, including global ERP rationalization and establishment of a new shared service center, and (iii) $0.4 million for the six months ended July 3, 2026 and $0.8 million for the six months ended July 4, 2025, respectively, related to the Separation of our former fabrication technology business.

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

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

product development model.

(7) In conjunction with our Form 10-Q filing for the three months ended April 3, 2026, we revised our definition of Adjusted EBITDA to no longer adjust for inventory step-up charges.

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

Accordingly, the following non-GAAP measures for the six months ended July 4, 2025 as presented in our Form 10-Q for the period ended July 4, 2025 have been revised to reflect the removal of a $18.1 million adjustment for inventory step-up in connection with acquired businesses:

Adjusted EBITDA for our Recon segment has been revised from $118.7 million to $100.6 million, Total Adjusted EBITDA has been revised from $196.3 million to $178.2 million, Adjusted EBITDA margin for our Recon segment has been revised from 21.2% to 18.0%, and Total Adjusted EBITDA margin has been revised from 17.5% to 15.9%.

Total Company - Net Sales

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

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

Three Months Ended Six Months Ended

Net Sales Change % Net Sales Change %

(In millions)

For the three months ended April 4, 2025 $ 558.8

For the period ended July 4, 2025 $ 564.5 $ 1,123.4

Components of Change:

Existing Businesses (1)

27.3 4.8 % 45.6 4.1 %

Acquisitions (2)

— — % 1.3 0.1 %

Divestitures (3)

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Foreign Currency Translation (4)

For the three months ended April 3 , 2026 $ 589.2

5.4 1.0 % 28.8 2.6 %

18.3 3.2 % 48.5 4.3 %

For the period ended July 3 , 2026 $ 582.8 $ 1,171.9

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

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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 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.

The increase in Net sales during the three months ended July 3, 2026 compared to the prior year period was primarily attributable to an increase in sales from existing businesses across both of our segments and favorable foreign currency translation offset by a $14.4 million decrease in sales from the October 2025 divestiture of our Dr.

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

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 increase in Net sales during the six months ended July 3, 2026 compared to the prior year period was primarily attributable to an increase in sales from existing businesses across both of our segments and favorable foreign currency translation offset by fewer sales days compared to the prior year period and a $27.2 million decrease in sales from the October 2025 divestiture of our Dr.

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

Existing business sales in Recon increased $17.2 million and $33.0 million during the three and six months ended July 3, 2026, respectively, due to higher sales volumes compared to the prior year period driven by broad market strength, offset by fewer calendar days in the first quarter of 2026 compared to the prior year period.

Existing business sales in P&R increased $10.0 million and $12.6 million during the three and six months ended July 3, 2026, respectively, due to higher sales volumes compared to the prior year period, offset by fewer calendar days in the first quarter of 2026 compared to the prior year period.

The weakening of the U.S.

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

dollar relative to other currencies resulted in $5.4 million and $28.8 million favorable foreign currency translation impacts during the three and six months ended July 3, 2026, respectively.

Operating Results

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

Three Months Ended

April 3, 2026 April 4, 2025

Three Months Ended Six Months Ended

July 3, 2026 July 4, 2025 July 3, 2026 July 4, 2025

(Dollars in millions)

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Restructuring charges (2)

$ 4.9 $ 0.9 $ 7.6 $ 4.8

MDR and other costs $ 0.7 $ 3.3 $ 1.9 $ 6.5

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Purchase of royalty interest (3)

$ — $ 10.0 $ — $ 45.8

Interest expense, net $ 8.0 $ 9.3 $ 17.2 $ 18.5

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Income tax expense (benefit) $ 8.5 $ 10.8 $ 17.5 $ 9.0

(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.

(1) In conjunction with our Form 10-Q filing for the three months ended April 3, 2026, we revised our definition of Adjusted EBITDA to no longer adjust for inventory step-up charges.

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

Accordingly, Adjusted EBITDA for the three 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.

Accordingly, Adjusted EBITDA for the three and six months ended July 4, 2025 has been revised from $97.2 million and $196.3 million, as presented in our Form 10-Q for the period ended July 4, 2025, to $91.2 million and $178.2 million, respectively, reflecting the removal of a $6.0 million and $18.1 million adjustment for inventory step-up in connection with acquired businesses resulting in a corresponding reduction to Adjusted EBITDA margin for the three and six months ended July 4, 2025 from 17.2% and 17.5%, as presented in our Form 10-Q for the period ended July 4, 2025, to 16.2% and 15.9%, respectively.

(2) Restructuring charges reflect costs associated with the Company’s restructuring programs to reduce the structural costs of the Company.

For further information, see Note 10, “Accrued Liabilities - Accrued Restructuring Liability.

” Includes expenses of $0.2 million and $0.3 million classified as Cost of sales on the Company’s Condensed Consolidated Statements of Operations for the three and six months ended July 4, 2025, respectively.

There were no similar charges for the three and six months ended July 3, 2026.

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

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.

Three Months Ended July 3, 2026 Compared to Prior Year

Gross profit increased $24.6 million, or 7.3%, in the three months ended July 3, 2026 compared with the prior year period due to a $19.6 million increase in our Recon segment and a $5.0 million net increase in our P&R segment, net of a decrease from the Dr.

Comfort divestiture.

The Gross profit increase was attributable to growth in sales volume, improved mix of higher margin 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.

The Gross profit increase was attributable to growth in sales volume, improved mix of higher margin product sales, the decrease of $6.0 million in inventory fair value step-up amortization charges, a net benefit of tariffs driven by tariff refunds, partially offset by a decrease in gross profit from the October 2025 divestiture of our Dr.

Comfort Footcare Solutions product line and inflationary pressures.

We recorded a net tariff benefit of $4.0 million in the three months ended July 3, 2026, driven by the receipt of $7.7 million in 2025 tariff refunds.

Gross profit margin increased by 230 basis points due to the decrease in inventory fair value step-up amortization charges, net benefit from tariffs, product mix, and operational productivity, partially offset by inflationary pressures.

Selling, general and administrative expense decreased $3.4 million in the three months ended July 3, 2026 compared to the prior year period, primarily due to a $12.1 million decrease in strategic transaction costs driven by a $5.7 million gain recognized upon settlement of the 2022 KICo Knee Innovation Company Pty Limited acquisition contingent consideration and a reduction in acquisition integration costs, offset by a $7.5 million increase in commissions on increased sales and an increased investment in the business in selling, general and administrative costs of $1.2 million.

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

Interest expense, net 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.

Interest expense, net decreased in the three months ended July 3, 2026 compared to the prior year period due to lower interest rates and lower debt balances in the current year compared to the prior year period, partially offset by a decrease in interest income of $1.4 million from our undesignated cross-currency swap derivatives which are presented in Other (income) expense, net.

The effective tax rate for Net income from continuing operations during the three months ended July 3, 2026 differs from the 2026 U.S.

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

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income taxed at lower rates.

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.

The effective tax rate for Net loss from continuing operations during the three months ended July 4, 2025 differs from the 2025 U.S.

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

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

taxation on international operations.

1 unchanged sentence

income taxed at lower rates.

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.

Net loss and Net loss from continuing operations decreased in the three months ended July 3, 2026 compared with the prior year period, primarily due to an increase in Gross Profit which was partially aided by the decrease in inventory step-up and the decrease in Purchase of royalty interest.

Six Months Ended July 3, 2026 Compared to Prior Year

Gross profit increased $57.8 million in the six months ended July 3, 2026 compared with the prior year period due to a $50.4 million increase in our Recon segment and a $7.4 million increase in our P&R segment, net of a decrease from the Dr.

Comfort divestiture.

The Gross profit increase was attributable to growth in sales volume, improved mix of higher margin product sales, and a decrease of $18.1 million in inventory fair value step-up amortization charges.

We recorded a net tariff expense of $1.7 million in the six months ended July 3, 2026, which was net of $7.7 million in 2025 tariff refunds.

Gross profit margin increased by 240 basis points due to improved product mix, a decrease in inventory fair value step-up amortization charges, and supply chain productivity.

Selling, general and administrative expense increased $10.4 million in the six months ended July 3, 2026 compared to the prior year period, primarily due to a $12.1 million increase in commissions on increased sales and increased investment in selling, general and administrative costs of $11.5 million, offset by a reduction in acquisition integration costs and a $13.1 million decrease in strategic transaction costs driven by a $5.7 million gain recognized upon settlement of the 2022 KICo Knee Innovation Company Pty Limited acquisition contingent consideration.

Interest expense, net decreased in the six months ended July 3, 2026 compared to the prior year period due to lower interest rates and lower debt balances in the current year compared to the prior year, partially offset by a decrease in interest income of $3.7 million from our undesignated cross-currency swap derivatives which are presented in Other (income) expense, net.

The effective tax rate for Net income from continuing operations during the six months ended July 3, 2026 was higher than the 2026 U.S.

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

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

taxation on international operations.

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

income taxed at lower rates.

The effective tax rate for Net loss from continuing operations during the six months ended July 4, 2025 differs from the 2025 U.S.

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

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

taxation on international operations.

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

income taxed at lower rates.

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

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

Business Segments

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The following table summarizes selected financial results for our Prevention & Recovery segment:

Three Months Ended

April 3, 2026 April 4, 2025

Three Months Ended Six Months Ended

July 3, 2026 July 4, 2025 July 3, 2026 July 4, 2025

(Dollars in millions)

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Restructuring charges $ 3.9 $ 0.7 $ 5.3 $ 3.5

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

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

Operating income (GAAP) $ 15.1 $ 9.3 $ 10.6 $ 2.4

Operating income margin (GAAP) 5.2 % 3.2 % 1.9 % 0.4 %

Adjusted EBITDA (non-GAAP) $ 50.3 $ 46.7 $ 81.4 $ 77.6

Adjusted EBITDA margin (non-GAAP) 17.5 % 16.1 % 14.5 % 13.8 %

Three Months Ended 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.

Three Months Ended July 3, 2026 Compared to Prior Year

Net sales decreased $2.4 million, or 0.8%, in the three months ended July 3, 2026 compared with the prior year period.

Sales from existing businesses increased 3.5% driven by volume growth in the U.S.

Additionally, the net effect of acquisition and divestiture activity caused a 5.0% decrease in sales primarily due to the Dr.

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Gross profit increased $5.0 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.

Comfort divestiture, due to volume growth and a net benefit from tariffs driven by refunds which primarily related to our P&R segment.

Gross profit margin increased by 220 basis points, primarily due to an improved mix of higher margin product sales and a net benefit from tariffs.

Selling, general and administrative expenses was mostly flat but increased as a percentage of net sales primarily due to an increase in commissions expense on product mix.

Research and development expense decreased mostly due to the timing of projects.

Operating income and Operating income margin increased slightly due to the aforementioned higher gross profit.

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

Six Months Ended July 3, 2026 Compared to Prior Year

Net sales decreased $2.9 million, or 0.5%, compared with the prior year period.

Sales from existing businesses increased 2.2%.

This was driven by volume growth, partially offset by a headwind due to fewer sales days in the first quarter of 2026 compared to the prior year period.

Additionally, the net effect of acquisition and divestiture activity caused a 4.8% decrease in sales primarily due to the Dr.

Comfort divestiture.

Lastly, foreign currency translations resulted in a 1.8% increase in net sales during the period.

Gross profit increased $7.4 million and Gross profit margin increased by 160 basis points primarily due to volume growth, a mix of higher margin product sales, and supply chain productivity.

Selling, general and administrative expenses increased slightly and as a percentage of sales from an increase in commissions expense on product mix and an increased investment in the business in selling, general and administrative costs.

Research and development expense decreased due to the timing of projects.

Operating income and Operating income margin increased slightly due to the aforementioned higher gross profit.

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

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

Three Months Ended

April 3, 2026 April 4, 2025

Three Months Ended Six Months Ended

July 3, 2026 July 4, 2025 July 3, 2026 July 4, 2025

(Dollars in millions)

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18.3 % 16.2 % 20.7 % 18.0 %

(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.

(1) In conjunction with our Form 10-Q filing for the three months ended April 3, 2026, we revised our definition of Adjusted EBITDA to no longer adjust for inventory step-up charges.

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

Accordingly, Adjusted EBITDA for our Recon segment for the three 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.

Accordingly, Adjusted EBITDA for our Recon segment for the three and six months ended July 4, 2025 has also been revised from $50.4 million and $118.7 million , as presented in our Form 10-Q for the period ended July 4, 2025, to $44.4 million and $100.6 million, respectively, reflecting the removal of the same $6.0 million and $18.1 million adjustment for inventory step-up in connection with acquired businesses, resulting in a corresponding reduction to Adjusted EBITDA margin for the three and six months ended July 4, 2025 from 18.4% and 21.2%, as presented in our Form 10-Q for the period ended July 4, 2025, to 16.2% and 18.0%, respectively.

Three Months Ended July 3, 2026 Compared to Prior Year

Net sales increased by $20.5 million, or 7.5%, in the three months ended July 3, 2026 compared with the prior year period.

Net sales from existing businesses increased by 6.3%, driven by volume growth.

Additionally, foreign currency translations caused a 1.2% favorable increase in net sales during the period.

Gross profit 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 $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.

Gross profit and Gross profit margin increased over the same period, primarily due to higher net sales, improved operating leverage, and a decrease of $6.0 million in inventory fair value step-up amortization charges.

Selling, general and administrative expenses decreased by $3.6 million over the same period primarily due to a decrease in strategic integration costs from the Lima acquisition and to a lesser extent lower MDR & other costs, partially offset by an increase in commissions driven by higher sales and increases in existing business investments to support growth.

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

Operating income increased primarily due to the decrease in Purchase of royalty interest and inventory fair value step-up amortization charges, the aforementioned gross profit increases and a $11.1 million decrease in strategic transaction costs including the integration and transaction costs for the Lima Acquisition.

Adjusted EBITDA increased primarily due to the aforementioned sales growth and gross profit increase, driven by higher net sales and a decrease of $6.0 million in inventory fair value step-up amortization charges.

Six Months Ended July 3, 2026 Compared to Prior Year

Net sales increased by $51.5 million, or 9.2%, due to strong sales volumes, favorable foreign currency translation of 3.3%, partially offset by a headwind due to fewer sales days compared to the prior year period.

Gross profit and Gross profit margin increased $50.4 million in the six months ended July 3, 2026 compared to the prior year period, primarily due to higher net sales, improved operating leverage and a decrease of $18.1 million in inventory fair value step-up amortization charges.

Selling, general and administrative expenses increased by $5.1 million over the same period primarily due to an increase in commissions driven by higher sales and increases in existing business investments to support growth, offset by a decrease in Lima Acquisition integration costs.

Operating income increased, primarily due to the decrease in Purchase of royalty interest and inventory fair value step-up amortization charges, the aforementioned gross profit increases and a $13.7 million decrease in strategic transaction costs including the integration and transaction costs for the Lima Acquisition.

Adjusted EBITDA increased primarily due to the aforementioned sales growth and gross profit increase, driven by higher net sales and a decrease of $18.1 million in inventory fair value step-up amortization charges.

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, strategic initiatives, restructuring outflows 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, capital expenditures, interest and principal repayments on our debt, strategic initiatives, restructuring outflows and other non-routine costs, and funding of acquisitions.

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

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

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

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

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

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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.

As of July 3, 2026, there was $942 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.

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Other Indebtedness

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

In addition, we are party to overdraft facilities with a borrowing capacity of $30.0 million, of which $2.4 million was drawn and $27.6 million was available as of July 3, 2026.

Total letters of credit and surety bonds of $48.4 million were outstanding as of July 3, 2026.

As of July 3, 2026, we had $12.6 million of Cash and cash equivalents, a decrease of $23.8 million from the $36.4 million balance as of December 31, 2025.

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

Three Months Ended

April 3, 2026 April 4, 2025

Six Months Ended

July 3, 2026 July 4, 2025

(Dollars in millions)

Net cash provided by (used in) operating activities $ 24.0 $ (1.6)

Net cash provided by operating activities $ 99.0 $ 46.2

Purchases of property, plant and equipment and intangibles (96.7) (87.6)

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Other financing (9.5) (4.6)

Net cash provided by financing activities 26.0 51.2

Net cash provided by (used in) financing activities (24.5) 57.4

Effect of foreign exchange rates on Cash and cash equivalents (0.2) 2.6

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This improvement was primarily due to the increase in gross profit, lower strategic transaction costs of $13.1 million, lower interest paid of $1.6 million, lower EU MDR & other costs of $4.7 million and improvement of accounts receivable collections offset by the timing of payables resulting in an increase of $16.8 million in cash related to working capital.

Cash used in investing activities during the 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.

Cash used in investing activities during the six months ended July 3, 2026 was $98.1 million compared to $110.3 million in the prior year period, primarily as a result of increases in capital spending driven by implant instruments that support sales growth in Recon, offset by less payments for acquisitions in 2026 compared to 2025.

Cash flows used by financing activities during the six months ended July 3, 2026 include $15.0 million of net debt repayments.

Cash flows provided by financing activities for the six months ended July 4, 2025 include net debt borrowings of $62.0 million primarily used for bolt-on acquisitions, capital expenditures and operational needs.

Critical Accounting Policies and Estimates

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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-Q

Item 2. Management’s Discussion and Analysis