ENOV 10-K & 10-Q changes, risk factors and insider trading

Acquisitions have formed a significant part of our growth strategy in the past and are expected to continue to do so.strategy. If we are unable to identify suitable acquisition candidates, complete any proposed acquisitions or successfully integrate the businesses we acquire, our growth strategy may not succeed and we may not realize the anticipated benefits of our acquisitions.

We intend to seek strategic acquisition opportunities both to expand into new markets and to enhance our position in our existing markets. However, our ability to do so will depend on a number of steps, including our ability to: obtain debt or equity financing that we may need to complete proposed acquisitions; identify suitable acquisition candidates; negotiate appropriate acquisition terms; complete the proposed acquisitions; and integrate the acquired business into our existing operations. If we fail to achieve any of these steps, our growth strategy may not be successful. For example, we completed the acquisition of Lima. Ifif the Lima Acquisition is not successfully integrated into our existing operations, our business and financial results may be adversely affected.

Further, we are required to assess the effectiveness of the internal control over financial reporting for companies we acquire pursuant to the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley Act”). We may elect the one year scope exception provided by the Exchange Act and the applicable SEC rules and regulations concerning business combinations as we did for the Lima acquisition, but we can notcannot avoid the requirements. In order to comply with the Sarbanes-Oxley Act, we will need to implement or enhance internal control over financial reporting at any company we acquire, and we may identify control deficiencies that require remediation as part of our evaluation and testing of internal controls. Companies we acquire may not have had previous public reporting obligations and therefore may not have instituted or evaluated internal controls in the context of the Sarbanes-Oxley Act. Any failure to implement and maintain effective internal control over financial reporting could result in material weaknesses or significant deficiencies in our internal controls, and could result in a material misstatement of our financial statements or otherwise cause us to fail to meet our financial reporting obligations, which could have an adverse effect on our results of operations, financial condition, and business.

We may require additional capital to finance our operating needs and to finance our growth, including acquisitions.growth. If the terms on which the additional capital is available are unsatisfactory, if the additional capital is not available at all or if we are not able to fully access credit under our Credit Agreement, we may not be able to pursue our growth strategy.

Any further impairment in the value of our intangible assets, including Goodwill, would negatively affect our operating results and total capitalization.

Our Totaltotal assets reflect substantial intangible assets, primarily Goodwill. The Goodwill results from our acquisitions, representing the excess of cost over the fair value of the net assets we have acquired. We assess 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, in order to determine whether there has been impairment in the value of our Goodwill. ForIn the quarter ended December 31, 2025, we recognized a non-cash Goodwill impairment charge associated with a sustained decrease in our publicly quoted share price and market capitalization relative to the carrying value of our reporting units of $501.0 million as of December 31, 2025 ($157.6 million for the P&R reporting unit and $343.4 million for the Recon reporting unit). Previously, for the quarter ended October 3, 2025, we identified an impairment indicator associated with a sustained decrease in our publicly quoted share price and market capitalization, relative to the carrying value of our reporting units. As a result, we performed an interim quantitative assessment of Goodwill and recognized a non-cash Goodwill impairment charge of $540.8 million as of October 3, 2025 ($222.3 million for the P&R reporting unit and $318.6 million for the Recon reporting unit). Additionally, in connection with our annual assessment for the year ended December 31, 2024, we recognized a non-cash Goodwill impairment charge of $645$645.0 million ($330$315.0 million for the ReconstructiveP&R reporting unit and $315$330.0 million for the Prevention & RecoveryRecon reporting unit) as part of our annual Goodwill impairment testing.. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies—Goodwill and Intangible Assets.”

If future operating performance at either of our reporting units were to fall significantly below current levels, if competing or alternative technologies emerge, if market conditions for an acquired business decline, or if there is a further sustained decrease in our publicly reported stock price and market capitalization, among other things, we could incur, under current applicable accounting rules, additional non-cash charges to operating earnings for Goodwill impairment, which could be material and may adversely affect our reported earnings.earnings and may impact our ability to designate our Swiss-Franc cross-currency swaps as net investment hedges.

Risks relating to contagious diseases, terrorist activity, man-made or natural disasters and war couldhave reduceadversely impacted, and may, either alone or in combination with other risks, in the demand for our products andfuture have an adverse effect on our results of operations, financial condition, and business.

The spread or fear of spread of contagious diseases, terrorist activity, man-made or natural disasters, actual or threatened war, political unrest, civil strife and other geopolitical uncertainty could havecause a similardecline effectin onthe demand for our products, which may adversely affect our financial conditioncondition, growth strategy and operating performance. In addition, pandemics and public health emergencies, and government measures in response to such emergencies, have in the past and could in the future result in additional challenges for our business, including disruptions or delays to our growthsupply strategy.chain and distribution channels, cost inflation, and healthcare provider staffing shortages. Any one or more of these events may reduce the overall demand for our products which could adversely affect our results of operations, financial condition, and business

We are exposed to fluctuations in currency exchange rates. During the year ended December 31, 2024,2025, approximately 41%42% of our sales were derived from operations outside the United States, which percentage is expected to continue to increase as a result of the Lima Acquisition. Large fluctuations in the rate of exchange between foreign currencies and the U.S. dollar could have a material adverse effect on our business, financial condition and results of operations. Changes in the currency exchange rates may impact our financial results positively or negatively in one period and not another, which may make it difficult to compare our operating results from different periods.

In the normal course of our business, we are exposed to market risks related to the availability of and price fluctuations in the purchase of raw materials, energy and commodities used in the manufacturing of our products. The availability and prices for raw materials, energy and commodities are subject to volatility and are influenced by worldwide economic conditions, including the current rising inflationary pressure. They are also influenced by import duties and tariffs speculative action, world supply and demand balances, inventory levels, availability of substitute materials, currency exchange rates, anticipated or perceived shortages, geopolitical tensions, government trade practices and regulations and other factors. For example, the introduction of new tariffs or trade restrictions, such as the tariffs announced by the new U.S. administration in February 2025restrictions and any retaliatory trade measures could also increase the cost of or impair sourcing flexibility for raw materials and other inputs used in the manufacturing of our products. Further, the labor market for skilled manufacturing remains tight and our labor costs have increased as a result. Energy, commodity, raw material energy,material, labor and other cost inflation has impacted and could continue to impact our results of operations, financial condition and cash flows.

In the EU, our notified body issues the certificates that allow CE marking for the sale of our products. To continue to place products on the market in the EU and United Kingdom after expiry of our existing notified body certificate[(s]), we will need to apply for their certification under the MDR and UK MDR.Medical Device Regulations. We may not be able to continue to place our devices on the market in the EU and/or United Kingdom for any current use if we cannot obtain certification for their current use under the MDR or under the UK MDRMedical 2002Device Regulations when required, if we are unable to do so before the current certificates for our products expire, or if our technical documentation does not meet the new (and more stringent) requirements under the MDR.MDR or under the UK Medical Device Regulations.

Changes in international trade policy can alsocould have a substantial adverse effect on our business, results of operations, financial position and cash flows. Steps taken by governments to implement local content requirements or apply or consider applying additional or new tariffs on imports or exports have the potential to disrupt existing supply chains, impose additional costs on our business, and could lead to other countries attempting to retaliate by imposing tariffs, which would make our products more expensive for customers, and, in turn, could make our products less competitive.

For example, theThe U.S. government has recently signaled its intention to changeshifted U.S. trade policy,policy includingunder potentiallythe current administration, renegotiating or terminating existing trade agreements and leveragingimposing tariffs.or Inthreatening Februaryto 2025, the U.S. government imposed additionalimpose tariffs on importsimported goods from ChinaCanada, China, Mexico and announcedmany andother subsequentlycountries. pausedIn implementationresponse, ofcertain tariffscountries onhave importsimposed fromor Mexicothreatened (andto Canada).impose retaliatory tariffs. These additional tariffs, rapid changes in government policies toward tariffs and trade, as well as the adoption or prospect of adoption by governments of “buy national” policies or retaliation by another government against such tariffs or policies have introduced significant uncertainty into the market and may affect the prices of and demand for the Company’s products, and, in turn, could adversely affect our business, results of operations, financial position and cash flows to the extent that we are unable to mitigate the impacts of such tariffs.

In the EU, we must notify our EU notified body of significant changes to products or to our quality assurance systems affecting those products. For devices covered by CE Certificates of Conformity issued under the EU MDD, no significant changes in design or intended purpose are allowed. If changes are anticipated, new certificates must be obtained under the MDR. Further notification may be required under the UK Medical Device Regulations Obtaining new clearances and approvals can be a time-consuming process, and delays in obtaining required future clearances or approvals would adversely affect our ability to introduce new or enhanced products in a timely manner, which could harm our future growth.

We also are required to comply with strict post-marketing obligations for our CE marked medical devices in the EU.EU and United Kingdom. The MDR providesand UK Medical Device Regulations provide various requirements relating to post-market surveillance and vigilance, including the obligation for manufacturers to implement a post-market surveillance system, in a manner proportionate to the risk class and appropriate for the type of device. Once a device is on the EEAmarket market,in the EU and/or United Kingdom, manufacturers must comply with certain vigilance requirements, such as reporting serious incidents and fielding safety corrective actions. Noncompliance could lead to penalties and a suspension or withdrawal of our CE Certificate of Conformity.

Initiating and completing clinical trials necessary to support any future PMAs, or additional safety and efficacy data beyond that typically required for a 510(k) clearance for our possible future product candidates, will be time-consuming and expensive and the outcome uncertain. Moreover, the results of early clinical trials are not necessarily predictive of future results, and any product we advance into clinical trials may not have favorable results in later clinical trials. The results of preclinical studies and clinical trials of our products conducted to date and ongoing or future studies and trials of our current, planned, or future products may not be predictive of the results of later clinical trials, and interim results of a clinical trial do not necessarily predict final results. In addition, the initiation and completion of any of clinical studies may be prevented, delayed, or halted for numerous reasons. We may experience delays in our ongoing clinical trials for a number of reasons, which could adversely affect the costs, timing or successful completion of our clinical trials.

Our failure to comply with U.S. federal, state and foreign governmental regulations, including in the EU,EU and United Kingdom, could lead to the issuance of warning letters or untitled letters, the imposition of injunctions, suspensions or loss of regulatory clearance, certificates or approvals, product recalls, termination of distribution, product seizures, civil penalties, and in extreme cases, criminal sanctions or closure of manufacturing facilities.

Any product for which we obtain clearance or approval, and the manufacturing processes, post-market surveillance, post-approval clinical data and promotional activities for such product will be subject to continued regulatory review, oversight, requirements, and periodic inspections by the FDA and other domestic and foreign regulatory bodies. In particular, we and our suppliers are required to comply with FDA’s QSR and other regulations enforced outside the United States that cover the manufacture of our products and the methods and documentation of the design, testing, production, control, quality assurance, labeling, packaging, storage and shipping of medical devices. Regulatory bodies, such as the FDA, enforce the QSR and other regulations through periodic inspections. The failure by us or one of our suppliers to comply with applicable statutes and regulations administered by the FDA and other regulatory bodies, or the failure to timely and adequately respond to any adverse inspectional observations or product safety issues, could result in, among other things, any of the enforcement actions discussed in “Regulatory Environment – Medical Device Regulation” in Part I, Item 1. These enforcement actions include, for the EU, the suspension or withdrawal of CE Certificate of Conformity in the EU and the refusal or delay in CE certification and CE marking or new products or modified products. Further, any impact on CE certification or marking in the EU could adversely impact our ability to market our products in the United Kingdom. If any of these actions were to occur, it would harm our reputation and cause our product sales and profitability to suffer and may prevent us from generating revenue.

As explained in greater detail in “ Regulatory Environment” in Part I, Item 1, the sales of our medical device products depend largely on whether there is coverage and adequate reimbursement by government healthcare programs, such as Medicare and Medicaid, and by private payors. Surgeons, hospitals, physical therapists and other healthcare providers may not use, purchase or prescribe our products and patients may not purchase these products if these third-party payors do not provide satisfactory coverage of, and reimbursement for, the costs of our medical device products or the procedures involving the use of such products. Reduced reimbursement rates will also lower our margins on product sales and could adversely impact the profitability and viability of the affected products.

Our information technology infrastructure and information are vulnerable to service interruptions, data corruption, cyber-based attacks, or network security breaches, which could result in the disruption of operations or the loss of data confidentiality.breaches.

Our information technology networks and systems are subject to security threats and sophisticated cyber-based attacks, including, but not limited to, denial-of-service attacks, hacking, “phishing” attacks, computer viruses, ransomware, malware, software-based misconfigurations, “bugs” and other security vulnerabilities, employee or insider error, malfeasance, social engineering, or physical breaches, that can cause deliberate or unintentional damage, destruction or misuse, manipulation, denial of access to or disclosure of confidential or important information by our employees, suppliers or third-party service providers. Additionally, advanced persistent attempts to gain unauthorized access or deny access to, or otherwise disrupt, our systems and those of third-party service providers and business partners we rely on are increasing in sophistication and frequency. We have experienced, and expect to continue to confront, efforts by hackers and other third parties to gain unauthorized access or deny access to, or otherwise disrupt, our information technology systems and networks. AnyFor suchexample, in 2025, a well-known, third-party cloud service provider experienced a cybersecurity incident that impacted many companies, including us, and compromised certain business and personal information records that has required us to investigate, remediate and ultimately issue relevant notifications. While to date we have not experienced any material cybersecurity incidents, future attacks and incidents could have a material adverse effect on our business, financial condition, results of operations or liquidity. We can provide no assurance that our cybersecurity risk management program and processes will be fully implemented, complied with or effective to protect or mitigate risks to our systems, networks and data or in effectively resolving such risks when they materialize. Cyberattacks are expected to accelerate on a global basis in frequency and magnitude as threat actors are becoming increasingly sophisticated in using techniques and tools, including artificial intelligence, that circumvent security controls, evade detection and remove forensic evidence. As a result, we may be unable to detect, investigate, remediate or recover from future attacks or incidents. A failure of or breach in information technology security of our own systems, or those of our third-party vendors or partners, could expose us and our employees, customers, dealers and suppliers to risks of misuse of information or systems, the compromise of confidential information, manipulation and destruction of data, defective products, production downtimes and operations disruptions. Any of these events in turn could adversely affect our reputation, competitive position, including loss of customers and revenue, business, results of operations and liquidity. In addition, such breaches in security could result in litigation, regulatory action and potential liability, including liability under federal or state laws that protect the privacy of personal information, such as HIPAA, as well as the costs and operational consequences of implementing further data protection measures.

We could incur significant liability if the separation and distribution of ESAB Corporation is determined to be a taxable transaction.

We have received (i) a private letter ruling from the IRS and (ii) an opinion from outside tax counsel regarding the qualification of the separation and distribution of ESAB Corporation (“ESAB”) as a transaction that is described in Sections 355(a) and 368(a)(1)(D) of the Internal Revenue Code. The private letter ruling and opinion each relies on certain facts, assumptions, representations and undertakings from ESAB and us regarding the past and future conduct of the companies’ respective businesses and other matters. If any of these facts, assumptions, representations or undertakings are incorrect or not satisfied, we may not be able to rely on the private letter ruling or opinion of tax counsel. In addition, the private letter ruling does not address all the requirements for determining whether the separation and distribution qualify under Sections 355(a) and 368(a)(1)(D) of the Internal Revenue Code, and the opinion, which addresses all such requirements, relies on the private letter ruling as to matters covered by the ruling and will not be binding on the IRS or the courts. Notwithstanding the private letter ruling or the opinion of tax counsel we have received, the IRS could determine on audit that the separation and distribution are taxable if it determines that any of these facts, assumptions, representations or undertakings are not correct or have been violated or if it disagrees with the conclusions not addressed in the ruling. If the separation and distribution of ESAB are determined to be taxable for U.S. federal income tax purposes, our stockholders that received the distribution and are subject to U.S. federal income tax and we could be subject to significant U.S. federal income tax liabilities.

Our business, financial condition and results of operations could be adversely affected by disruptions in the global economy caused by geopolitical uncertainty, political instability, and conflicts, such as the ongoingarmed conflictconflicts between Russia and Ukraine.Ukraine and in the Middle East.

The global economy has been negatively impacted by the militaryarmed conflicts in the Middle East and between Russia and Ukraine. The armed conflict in the Middle East has created volatility in the global capital markets and is expected to have further global economic consequences. Furthermore, in connection with the armed conflict between Russia and Ukraine. Furthermore,Ukraine, governments in the United States, United Kingdom and European Union have each imposed export controls on certain products and financial and economic sanctions on certain industry sectors and parties in Russia, and Russia has imposed counter-sanctions in response. Although we have no direct operations in the Middle East or in Russia or Ukraine or government-imposed sanctions on our products currently, we could experience the impact of sanctions in the future and/or shortages in materials, increased costs for raw material and other supply chain issues due in part to the negative impact ofthese theand Russia-Ukraineother militaryarmed conflictconflicts on the global economy. Further escalation of geopolitical tensions related to thethese militaryarmed conflict,conflicts, including increased trade barriers or restrictions on global trade, which could affect Russia’s allies and other countries, such as China, could result in, among other things, cyberattacks, additional supply disruptions, lower consumer demand and changes to foreign exchange rates and financial markets, any of which may adversely affect our business and supply chain.

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

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

The following discussion of Results of Operations addresses the comparison of the periods presented. Our management evaluates the operating results of each of its reportable segments based upon Net sales,sales and Adjusted EBITDA, Comparable Sales, and Comparable Sales Growth rateEBITDA as defined in the “Non-GAAP Measures” section.

Strategic Acquisitions and Divestiture

We complement our organic growth plans with strategic acquisitions and other investments. Acquisitions can significantly affect our reported results, and so we also report the change in our Net sales onbetween aperiods Comparableboth Salesfrom basisExisting businesses and presentAcquired abusinesses. ComparableThe Saleschange Growthin rateNet sales due to provideacquisitions information onfor the operatingyears performanceended December 31, 2025 and 2024 presented in this filing represents the incremental sales in comparison to the portion of the prior period during which we did not own the business. ComparableBusiness Salesacquisitions of a distributor may not add incremental sales in Acquired businesses because we may have had existing business sales through the distributor and Comparablethe Salesacquisition Growth rate are defined inbrings the “Non-GAAPbusiness Measures”into sectionEnovis below.under a direct sales model and reduces operating costs.

On January 3, 2024, we acquired Lima, a privately held global orthopedic company focused on restoring motion through digital innovation and customized hardware for total fair value consideration of $865.6 million, net of acquired cash. The fair value total consideration included 1,942,686 shares of Enovis common stock, as determined based upon a €100 million value divided by the thirty-day volume weighted average price of Enovis common stock as of the close of business on September 21, 2023 (the “Contingent Acquisition Shares”). The Contingent Acquisition Shares were issuable in two equal tranches within six and twelve months of the acquisition date upon the non-occurrence of certain future events, in each case subject to certain adjustments and conditions as provided for in the purchase agreement.. The first tranche of 971,343 Contingent Acquisition Shares was issued to the seller on July 16, 2024 and the second tranche of Contingent Acquisition Shares was issued on January 15, 2025. This acquisition expands and complements our current product offerings internationally within our Recon segment.

During the year ended December 31, 2023, we completed one business combination and two asset acquisitions in Recon.our Recon segment. On June 28, 2023, we acquired Novastep, a leading player in Minimally Invasive Surgery (MIS) foot and ankle solutions for total consideration of $96.9 million. The Novastep best-in-class MIS bunion system serves a rapidly growing portion of the global bunion segment. On July 20, 2023, we completed the asset acquisition of SEAL, developers of a broad line of external fixation products for total consideration of $28.2 million. These two acquisitions are valuable additions serving to enhance the offerings under our foot & ankle product lines. On October 5, 2023, we acquired 100% interest in Precision AI, a developer of surgical planning software. This asset acquisition complements our current product offerings with advanced surgical planning software. The software has capabilities to be used for shoulder reconstruction and there is opportunity to expand this to additional anatomies.

The majority of our Net sales derived from operations outside the U.S. are denominated in currencies other than the U.S. dollar. Similar portions of our manufacturing and employee costs are also outside the U.S. and denominated in currencies other than the U.S. dollar. Changes in foreign exchange rates can impact our results of operations and are quantified when significant. For the year ended December 31, 20242025 compared to 2023,2024, fluctuations in foreign currencies increased Net sales by 0.1%,1.4%, had an immaterial1.5% impact on Gross profit, and increased operating expenses by approximately 0.1%.1.1%.

Our principal raw materials and components areinclude foam ethylene vinyl acetate,ethylene-vinyl-acetate copolymer forused in our bracing and vascular products inwithin P&RR, and cobaltcobalt-chromium chromiumalloys, alloy, stainless steelstainless-steel alloys, titanium alloyalloys, and ultra high molecular weightultra-high-molecular-weight polyethylene used in Recon.our Recon products. Prices for raw materials, energycomponents, energy, and commodities are subject to volatility and are influenced by worldwide economic conditions. Input costAlthough inflation historically has not been a material factor to our input costs and gross margin;margins, however,inflationary inflation effectspressures have increased since 2021 and are expected to continuepersist to remain elevated for at leastin the near term. In response, we have beenenacted enactingand tacticalmay price increasescontinue to certainenact products,targeted mainlypricing inactions, primarily within P&R.R, Althoughto help offset higher input costs. While we seek to proactively manage inflation risk, future changes in componentraw material and raw materialcomponent costs may adversely impact our earnings or our margins. Prices for raw materials, energycomponents, energy, and commodities are also influenced by import duties and tariffs, world supply and demand balances, inventory levels, availability of substitute materials, currency exchange rates, anticipated or perceived shortages, geopolitical tensions, government trade practices and regulationsregulations, and other factors. Specifically, tariffs, such as the tariffs announced by the U.S. government in Februaryearly 2025,2025 have increased input costs and may continue to increase the cost ofcosts and impair sourcing flexibility for raw materials, component parts and supplies, and further trade restrictions, retaliatory trade measures, or additional tariffs implemented could result in higher input costs to our products.

Adjusted EBITDA; Comparable Sales

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

Adjusted EBITDA excludes from Net income (loss) from continuing operations the effect of Income (loss) from discontinued operations, net of taxes; Income tax expense (benefit); Other income,income (expense), net; non-operating (gain) loss on investments; debt extinguishment charges; interest expense, net; restructuring and other charges; Medical Device Regulation (“MDR”) fees and other costs; strategic transaction costs; stock-based compensation; depreciation and other amortization; acquisition-related intangible asset amortization; insurancestrategic settlementpurchase (gain)of losseconomic interest on future royalty payments; goodwill impairment charges; and fairinventory value charges on acquired inventory.step-up. We also present Adjusted EBITDA and Adjusted EBITDA margin by operating segment, which are subject to the same adjustments. Operating income (loss), adjusted EBITDA and adjusted EBITDA margins at the operating segment level also include allocations of certain central function expenses not directly attributable to either operating segment. Adjusted EBITDA assists our management in comparing operating performance over time because certain items may obscure underlying business trends and make comparisons of long-term performance difficult, as they are of a nature and/or size that occur with inconsistent frequency or relate to discrete restructuring plans and other initiatives that are fundamentally different from our ongoing productivity improvements.

Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information calculated in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures. The following tables set forth a reconciliation of net loss from continuing operations, the most directly comparable financial statement measure, to Adjusted EBITDA for the years ended December 31, 2024,2025, 20232024 and 2022.2023.

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

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

Interest expense, net increased $37.4by $37.3 million during 2024 in comparison to 2023 due to an increase in debt to finance the Lima Acquisition.

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. Item 1. “Financial Statements” of this Quarterly Report on Form 10-Q for the quarterly period ended AprilJuly 3, 2026 (this “Form 10-Q”) and the Consolidated Financial Statements and related footnotes included in Part II. Item 8. “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.

The comparability of our operating results for the threesix months ended AprilJuly 3, 2026 to the prior periods in 2025 is affected by fewer days as compared to the threesix months ended AprilJuly 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:

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

During the three and six months ended AprilJuly 3, 2026, approximately 46%44% and 45% of our salessales, 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. Our ability to grow and our financial performance will be affected by our ability to address challenges and opportunities that are a consequence of expanding our global operations through our recent acquisitions, including efficiently utilizing our international sales channels, manufacturing and distribution capabilities, participating in the expansion of market opportunities, successfully completing global acquisitions and engineering innovative new product applications to create better patient outcomes.

The majority of our Net sales derived from operations outside the United States are denominated in currencies other than the U.S. Dollar. Similar portions of our manufacturing and employee costs are also outside the United States and denominated in currencies other than the U.S. Dollar. Changes in foreign exchange rates can impact our results of operations and are quantified when significant. For the three months ended AprilJuly 3, 2026 compared to the three months ended AprilJuly 4, 2025, fluctuations in foreign currencies increased Net sales by 4.2%,1.0%, increased Gross profit by approximately 3.8%,0.6%, and increased operating expenses by approximately 3.9%.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%.

Adjusted EBITDA excludes from Net income (loss) the effect of Income (loss) from discontinued operations, net of taxes; Income tax expense (benefit); Other (income) expense, net; non-operating (gain) loss on investments; Interest expense, net; Restructuring and other charges; Medical Device Regulation (“MDR”) fees and other costs; strategic transaction costs; stock-based compensation; depreciation and other amortization; acquisition-related intangible asset amortization; strategic purchase of economic interest on future royalty payments; 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 and six months ended AprilJuly 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.

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

(4) MDR and other costs includes (i) $0.8$0.4 million for the three months ended AprilJuly 3, 2026 and $2.5$2.8 million for the three months ended AprilJuly 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 April 3, 2026 and $0.7 million for the three months ended AprilJuly 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$4.7 million for the three months ended AprilJuly 3, 2026 and $8.7$7.8 million for the three months ended AprilJuly 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) $3.4$(3.5) million for the three months ended AprilJuly 3, 2026 and $2.9$5.4 million for the three months ended AprilJuly 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 associated with non-recurring projects, includingfor global ERP rationalization and establishment of a new shared service center,center start-up, and (iii) $0.2 million for the three months ended AprilJuly 3, 2026 and $0.5$0.3 million for the three months ended AprilJuly 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.

(7) ForIn 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 AprilJuly 4, 2025 as presented in our Form 10-Q for the period ended AprilJuly 4, 2025 have been revised to reflect the removal of a $12.1$6.0 million adjustment for inventory step-up in connection with acquired businesses: Adjusted EBITDA for our Recon segment has been revised from $68.3$50.4 million to $56.2$44.4 million, Total Adjusted EBITDA has been revised from $99.2$97.2 million to $87.1$91.2 million, Adjusted EBITDA margin for our Recon segment has been revised from 23.9%18.4% to 19.6%,16.2%, and Total Adjusted EBITDA margin has been revised from 17.7%17.2% to 15.6%.16.2%.

Total Company - Net Sales

The following table presents the components of change for the three and six months ended AprilJuly 3, 2026 compared with the prior period. As noted in the Items Affecting Comparability of Reported Results section above, the threesix months ended AprilJuly 3, 2026 include the impact of fewer days as compared to the threesix months ended AprilJuly 4, 2025.

The increase in Net sales during the three months ended AprilJuly 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$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$17.2 million and $33.0 million during the three and six months ended AprilJuly 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 $2.6$10.0 million and $12.6 million during the three and six months ended AprilJuly 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$5.4 million and $28.8 million favorable foreign currency translation impacts during the three and six months ended AprilJuly 3, 2026.2026, respectively.

(1) ForIn 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 and six months ended AprilJuly 4, 2025 has been revised from $99.2$97.2 million and $196.3 million, as presented in our Form 10-Q for the period ended AprilJuly 4, 2025, to $87.1$91.2 million and $178.2 million, respectively, reflecting the removal of a $12.1$6.0 million and $18.1 million adjustment for inventory step-up in connection with acquired businesses,businesses resulting in a corresponding reduction to Adjusted EBITDA margin for the three and six months ended AprilJuly 4, 2025 from 17.7%,17.2% and 17.5%, as presented in our Form 10-Q for the period ended AprilJuly 4, 2025, to 15.6%.16.2% and 15.9%, respectively.

(2) Restructuring charges includesreflect immaterialcosts 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 AprilJuly 4, 2025.2025, respectively. There were no similar charges for the three and six months ended AprilJuly 3, 2026.

Three Months Ended AprilJuly 3, 2026 Compared to Prior Year

Gross profit increased $33.3$24.6 million, or 10.0%,7.3%, in the three months ended AprilJuly 3, 2026 compared with the prior year period due to a $30.8$19.6 million increase in our Recon segment and a $2.5$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 productsproduct sales, and the decrease of $12.1$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.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 260230 basis points due to the decrease in inventory fair value step-up amortization charges, net benefit from tariffs, product mix, and supply chainoperational productivity, partially offset by theinflationary impact of tariffs.pressures.

Selling, general and administrative expense increaseddecreased $13.8$3.4 million in the three months ended AprilJuly 3, 2026 compared to the prior year period, primarily due to a $4.6$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,sales and an increased investment in the business in selling, general and administrative costs of $7.7$1.2 million, and a $1.1 million increase in strategic transaction costs driven by acquisition integration costs.million.

The effective tax rate for Net lossincome from continuing operations during the three months ended AprilJuly 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. 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 three months ended AprilJuly 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 interestU.S. limitationdeferred carryforwards,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 three months ended AprilJuly 3, 2026 compared with the prior year period, primarily due to the decrease in Purchase of royalty interest andan increase in Gross Profit which was partially aided by the decrease in inventory step-up,step-up offsetand bythe increasesdecrease in bothPurchase selling,of general,royalty and administrative expense and research and development costs.interest. 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,expenses partially offset by aand net impactbenefit offrom changes in tariffs, which were predominantly enacted after the first quarter of 2025.tariffs.

Three Months Ended AprilJuly 3, 2026 Compared to Prior Year

Net sales decreased $0.6$2.4 million, or 0.2%,0.8%, in the three months ended AprilJuly 3, 2026 compared with the prior year period. Sales from existing businesses increased 1.0%. This was3.5% driven by volume growth,growth partially offset by a headwind due to fewer sales days compared toin the priorU.S. year period.market. Additionally, the net effect of acquisition and divestiture activity caused a 4.2%5.0% decrease in sales primarily due to the Dr. Comfort divestiture. Lastly, foreign currency translations caused a 3.0%0.7% favorable increase in net sales during the period. Gross profit increased $2.5$5.0 million, net of a decrease from the Dr. 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 100220 basis points, primarily due to volume growth and an improved mix of higher margin product sales,sales partiallyand offset by thea net impactbenefit offrom tariffs.

Selling, general and administrative expenses was mostly flat but increased slightly as a percentage of net sales whileprimarily due to an increase in commissions expense on product mix. Research and development expense decreased slightlymostly due to the timing of projects and central costs allocated to Recon.projects. Operating lossincome and Operating lossincome margin decreasedincreased 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 and the aforementioned net impact of tariffs.expenses.

(1) ForIn 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 and six months ended AprilJuly 4, 2025 has also been revised from $68.3$50.4 million,million and $118.7 million , as presented in our Form 10-Q for the period ended AprilJuly 4, 2025, to $56.2$44.4 million and $100.6 million, respectively, reflecting the removal of athe $12.1same $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 our Recon segment for the three and six months ended AprilJuly 4, 2025 from 23.9%,18.4% and 21.2%, as presented in our Form 10-Q for the period ended AprilJuly 4, 2025, to 19.6%.16.2% and 18.0%, respectively.

Three Months Ended AprilJuly 3, 2026 Compared to Prior Year

Net sales increased by $30.8$20.5 million, or 10.8%,7.5%, in the three months ended AprilJuly 3, 2026 compared with the prior year period. Net sales from existing businesses increased by 5.5%. This was6.3%, driven by strong volume growth, partially offset by a headwind due to fewer sales days compared to the prior year period.growth. Additionally, foreign currency translations caused a 5.3%1.2% favorable increase in net sales during the period. Gross profit and Gross profit margin increased over the same period, primarily due to higher net salessales, improved operating leverage, and a decrease of $12.1$6.0 million in inventory fair value step-up amortization charges.

Selling, general and administrative expenses increaseddecreased by $8.8$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.