SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

(Exact name of registrant as specified in its charter)


(302)			252-9160
(Registrant’s telephone number, including area code)


~~Colfax Corporation~~
~~(Former name, former address and former fiscal year, if changed since last report~~

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☑ Accelerated filer ☐ Non-accelerated filer ☐

Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of April ~~18, 2022,~~27, 2023, there were ~~54,030,880~~54,496,415 shares of the registrant’s common stock, par value $.001 per share, outstanding.


			Page
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements			2
Condensed Consolidated Statements of Operations			2
Condensed Consolidated Statements of Comprehensive Income (Loss)			34
Condensed Consolidated Balance Sheets			43
Condensed Consolidated Statements of Equity			5
Condensed Consolidated Statements of Cash Flows			6
Notes to Condensed Consolidated Financial Statements			7
Note 1. General			7
Note 2. Recently Issued Accounting Pronouncements			87
Note 3. Discontinued Operations			8
Note 4. Acquisitions and Investments			8
Note 5. Revenue			910
Note 6. Net ~~Income~~Loss Per Share from Continuing Operations			1011
Note 7. Income Taxes			11
Note 8. Equity			12
Note 9. Inventories, Net			13
Note 10. Debt			13
Note 11. Accrued Liabilities			15
Note 12. Financial Instruments and Fair Value Measurements			1715
Note 13. Commitments and Contingencies			1816
Note 14. Segment Information			2016
~~Note 15. Subsequent Events~~			21

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			2318
Item 3. Quantitative and Qualitative Disclosures About Market Risk			3731
Item 4. Controls and Procedures			3932

PART II - OTHER INFORMATION
Item 1. Legal Proceedings			4033
Item 1A. Risk Factors			4033
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			4133
Item 3. Defaults Upon Senior Securities			4133
Item 4. Mine Safety Disclosures			4133
Item 5. Other Information			4133
Item 6. Exhibits			4234

SIGNATURES			4335

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Dollars in thousands, except per share amounts

Three Months Ended
April 1, 2022 April 2, 2021
Net sales $ 1,023,368 $ 879,211
Cost of sales 593,137 508,134
Gross profit 430,231 371,077
Selling, general and administrative expense 369,390 305,724
Restructuring and other related charges 7,723 4,046
Operating income 53,118 61,307
Interest expense, net 15,099 25,660
Income from continuing operations before income taxes 38,019 35,647
Income tax expense 18,660 7,917
Net income from continuing operations 19,359 27,730
Loss from discontinued operations, net of taxes (3,058) (7,490)
Net income 16,301 20,240
Less: income attributable to noncontrolling interest, net of taxes 1,233 1,166
Net income attributable to Enovis Corporation $ 15,068 $ 19,074
Net income (loss) per share - basic
Continuing operations $ 0.34 $ 0.57
Discontinued operations $ (0.06) $ (0.16)
Consolidated operations $ 0.28 $ 0.41
Net income (loss) per share - diluted
Continuing operations $ 0.33 $ 0.56
Discontinued operations $ (0.06) $ (0.16)
Consolidated operations $ 0.28 $ 0.40


	Three Months Ended
	March 31, 2023		April 1, 2022

Net sales	$	406,151	$	375,457
Cost of sales	171,086		169,557
Gross profit	235,065		205,900
Selling, general and administrative expense	207,165		188,480
Research and development expense	18,193		14,842
Amortization of acquired intangibles	32,040		30,786

Restructuring and other charges	2,635		2,419
Operating loss	(24,968)		(30,627)

Interest expense, net	5,652		7,064



Other income	(661)		—
Loss from continuing operations before income taxes	(29,959)		(37,691)
Income tax expense (benefit)	(7,113)		364
Net loss from continuing operations	(22,846)		(38,055)



Income (loss) from discontinued operations, net of taxes	(312)		54,356
Net income (loss)	(23,158)		16,301
Less: net income attributable to noncontrolling interest from continuing operations - net of taxes	192		267
Less: net income attributable to noncontrolling interest from discontinued operations - net of taxes	—		966
Net income (loss) attributable to Enovis Corporation	$	(23,350)	$	15,068
Net income (loss) per share - basic and diluted
Continuing operations	$	(0.42)	$	(0.71)
Discontinued operations	$	(0.01)	$	0.99
Consolidated operations	$	(0.43)	$	0.28

See Notes to Condensed Consolidated Financial Statements.

CONDENSED CONSOLIDATED ~~STATEMENTS OF COMPREHENSIVE INCOME (LOSS)~~BALANCE SHEETS

Dollars in thousands, except share amounts

Three Months Ended
April 1, 2022 April 2, 2021
Net income $ 16,301 $ 20,240
Other comprehensive income (loss):
Foreign currency translation, net of tax expense of $338 and $2,280 (53,461) (53,181)
Unrealized gain on hedging activities, net of tax expense of $2,711 and $4,243 9,028 12,381
Amounts reclassified from Accumulated other comprehensive loss:
Amortization of pension and other post-retirement net actuarial gain, net of tax expense of $199 and $317 629 1,055
Other comprehensive loss (43,804) (39,745)
Comprehensive loss (27,503) (19,505)
Less: comprehensive income attributable to noncontrolling interest 895 1,042
Comprehensive loss attributable to Enovis Corporation $ (28,398) $ (20,547)


	March 31, 2023		December 31, 2022
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	21,900	$	24,295

Trade receivables, less allowance for credit losses of $8,063 and $7,965	280,748		267,380
Inventories, net	438,957		426,643
Prepaid expenses	30,487		28,550
Other current assets	61,018		48,155
Total current assets	833,110		795,023
Property, plant and equipment, net	245,989		236,741
Goodwill	1,987,222		1,983,588
Intangible assets, net	1,081,801		1,110,727
Lease asset - right of use	63,590		66,881
Other assets	87,874		80,288
Total assets	$	4,299,586	$	4,273,248

LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt	$	—	$	219,279
Accounts payable	151,743		135,628
Accrued liabilities	197,754		210,292
Total current liabilities	349,497		565,199
Long-term debt, less current portion	285,000		40,000
Non-current lease liability	49,293		51,259
Other liabilities	170,525		166,989
Total liabilities	854,315		823,447
Equity:
Common stock, $0.001 par value; 133,333,333 shares authorized; 54,493,154 and 54,228,619 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively	54		54
Additional paid-in capital	2,933,773		2,925,729
Retained earnings	552,382		575,732
Accumulated other comprehensive loss	(42,870)		(53,430)
Total Enovis Corporation equity	3,443,339		3,448,085
Noncontrolling interest	1,932		1,716
Total equity	3,445,271		3,449,801
Total liabilities and equity	$	4,299,586	$	4,273,248

See Notes to Condensed Consolidated Financial Statements.

CONDENSED CONSOLIDATED ~~BALANCE SHEETS~~STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Dollars in thousands ~~except share amounts~~

April 1, 2022 December 31, 2021
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 661,504 $ 719,370
Trade receivables, less allowance for credit losses of $37,871 and $32,501 657,056 638,700
Inventories, net 852,814 776,295
Prepaid expenses 84,816 78,186
Other current assets 91,547 90,728
Total current assets 2,347,737 2,303,279
Property, plant and equipment, net 504,583 521,391
Goodwill 3,440,615 3,467,295
Intangible assets, net 1,637,257 1,675,462
Lease asset - right of use 178,643 184,429
Other assets 374,816 363,489
Total assets $ 8,483,651 $ 8,515,345
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $ 422,289 $ 8,314
Accounts payable 537,676 504,173
Accrued liabilities 490,050 511,097
Total current liabilities 1,450,015 1,023,584
Long-term debt, less current portion 1,647,870 2,078,679
Non-current lease liability 140,704 145,326
Other liabilities 601,017 606,323
Total liabilities 3,839,606 3,853,912
Equity:
Common stock, $0.001 par value; 133,333,333 shares authorized; 54,030,880 and 52,083,078 shares issued and outstanding as of April 1, 2022 and December 31, 2021, respectively 54 52
Additional paid-in capital 4,555,369 4,544,315
Retained earnings 604,092 589,024
Accumulated other comprehensive loss (559,479) (516,013)
Total Enovis Corporation equity 4,600,036 4,617,378
Noncontrolling interest 44,009 44,055
Total equity 4,644,045 4,661,433
Total liabilities and equity $ 8,483,651 $ 8,515,345


	Three Months Ended
		March 31, 2023		April 1, 2022
Net income (loss)		$	(23,158)	$	16,301
Other comprehensive income (loss):
Foreign currency translation, net of tax expense of $0 and $338		10,584		(53,461)
Unrealized gain on hedging activities, net of tax expense of $0 and $2,711		—		9,028


Amounts reclassified from Accumulated other comprehensive loss:
Amortization of pension and other post-retirement net actuarial gain, net of tax expense of $0 and $199		—		629


Other comprehensive income (loss)		10,584		(43,804)
Comprehensive loss		(12,574)		(27,503)
Less: comprehensive income attributable to noncontrolling interest		216		895
Comprehensive loss attributable to Enovis Corporation		$	(12,790)	$	(28,398)

See Notes to Condensed Consolidated Financial Statements.

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

Dollars in thousands, except share amounts

Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Noncontrolling Interest Total
Shares Amount
Balance at December 31, 2021 52,083,078 $ 52 $ 4,544,315 $ 589,024 $ (516,013) $ 44,055 $ 4,661,433
Net income — — — 15,068 — 1,233 16,301
Distributions to noncontrolling owners — — — — — (941) (941)
Other comprehensive loss, net of tax of $3,248 — — — — (43,466) (338) (43,804)
Conversion of tangible equity units into common stock 1,691,845 2 (2) — — — —
Common stock-based award activity 255,957 — 11,056 — — — 11,056
Balance at April 1, 2022 54,030,880 $ 54 $ 4,555,369 $ 604,092 $ (559,479) $ 44,009 $ 4,644,045


	Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Noncontrolling Interest		Total
	Shares	Amount
Balance at December 31, 2022	54,228,619	$	54	$	2,925,729	$	575,732	$	(53,430)	$	1,716	$	3,449,801
Net loss	—	—		—		(23,350)		—		192		(23,158)

Other comprehensive income, net of tax of $—	—	—		—		—		10,560		24		10,584


Common stock-based award activity	264,535	—		8,044		—		—		—		8,044
Balance at March 31, 2023	54,493,154	$	54	$	2,933,773	$	552,382	$	(42,870)	$	1,932	$	3,445,271

See Notes to Condensed Consolidated Financial Statements.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Dollars in thousands

See Notes to Condensed Consolidated Financial Statements.

ENOVIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Enovis Corporation (the “Company” or “Enovis”) was previously Colfax Corporation (“Colfax”) until its separation into 2two differentiated, independent, and publicly traded companies on April 4, 2022 ~~as discussed further below.~~(the “Separation”). Colfax was a leading diversified technology company that provided fabrication technology and medical device products and services to customers around the world, principally under the ESAB and DJO brands. ~~The~~Following the completion of the Separation, the Company ~~conducted~~revised its ~~operations~~reporting structure and conducts its business through 2two operating segments, ~~“Fabrication Technology”, which incorporated~~“Prevention & Recovery” and “Reconstructive”. The segment results were retroactively restated to the ~~operations of ESAB and~~current method the Company uses to conduct its ~~related brands, and “Medical Technology”, which incorporated the operations of DJO and its related brands.~~business for all periods presented.

~~On April 4, 2022 (the “Distribution Date”), the Company~~The Separation was completed ~~the separation of its fabrication technology business (the “Separation”)~~ through a tax-free, pro-rata distribution of 90% of the outstanding common stock of ESAB Corporation (“~~ESAB Corp”~~ESAB”) to Colfax stockholders. To affect the Separation, Colfax distributed to its stockholders 1one share of ESAB ~~Corp~~ common stock for every three shares of Colfax common stock held at the close of business on March 22, 2022, with the Company initially retaining 10% of the shares of ESAB ~~Corp~~ common stock immediately following the Separation. ~~The Company intends to divest its 10% retained shares in ESAB Corp in a tax-efficient exchange for its outstanding debt no later than 12 months after the Distribution Date.~~ Upon completion of the Separation, Colfax, which retained the Company’s specialty medical technology business, changed its name to Enovis Corporation. On April 5, 2022, the Company began trading under the stock symbol “ENOV” on the New York Stock Exchange. ~~For further information on the Separation, refer to Note 15, “Subsequent Events”.~~

In connection with the Separation, ESAB ~~Corp~~ issued $1.2 billion of new debt securities, the proceeds from which were used to fund a $1.2 billion cash distribution to Enovis upon ~~Separation.~~separation. The distribution proceeds were used by Enovis in conjunction with $450 million of borrowings on a term loan under the new Enovis credit facility ~~as discussed below,~~(the “Enovis Credit Agreement”) and $52.3 million of cash on hand to repay $1.4 billion of outstanding debt and accrued interest on ~~its Credit Facility,~~the Company’s prior credit facility, repay $302.8 million of outstanding debt and accrued interest on its 6.375% senior notes due February 15, 2026 ~~Notes, as well as~~(the “2026 Notes”), pay a redemption premium at 103.188% of the principal amount of the 2026 Notes, and pay other fees and expenses due at closing. Additionally, on April 7, 2022, the Company ~~also~~ completed the redemption of its ~~Euro~~3.250% senior unsecured notes due April 2025 (the “Euro Senior ~~Notes~~Notes”) representing all of its outstanding €350 million principal ~~3.250%~~Euro Senior Notes, ~~due 2025~~ at a redemption price of 100.813% of the principal amount. ~~For further information on the Separation, refer to Note 15, “Subsequent Events”.~~

~~Immediately following the Separation,~~On November 18, 2022, the Company ~~effected~~completed the divestiture of its 10% retained shares in ESAB in a ~~one-for-three reverse stock split~~tax-efficient exchange for $230.5 million of ~~all issued and~~its $450 million term loan outstanding ~~shares of~~under the Enovis common stock. As a result of the reverse stock split, all share and per share figures contained in the accompanying Condensed Consolidated Financial Statements have been retroactively restated as if the reverse stock split occurred at the beginning of the periods presented.

Since the disposition occurred in the second quarter of 2022, Enovis will classify its fabrication technology business as a discontinued operation in its historical financial statements beginning in the second quarter of 2022. The assets, liabilities, revenues and expenses of the fabrication technology businesses are included in continuing operations in the accompanying Condensed Consolidated Financial Statements.Credit Agreement.

The Condensed Consolidated Financial Statements included in this quarterly report have been prepared by the Company in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and accounting principles generally accepted in the United States of America (“GAAP”) for interim financial ~~statements.~~statements and reflect, in the opinion of management, all adjustments, which consist solely of normal recurring adjustments, necessary to present fairly the Company’s financial position and results of operations as of and for the periods indicated. Certain prior period amounts have been reclassified to conform to the current period presentation. The Condensed Consolidated Balance Sheet as of December 31, ~~2021~~2022 is derived from the Company’s audited financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted in accordance with the SEC’s rules and regulations for interim financial statements. The Condensed Consolidated Financial Statements included herein should be read in conjunction with the audited financial statements and related footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 (the ~~“2021~~“2022 Form 10-K”), filed with the SEC on ~~February 22, 2022.~~

The Condensed Consolidated Financial Statements reflect, in the opinion of management, all adjustments, which consist solely of normal recurring adjustments, necessary to present fairly the Company’s financial position and results of operations as of and for the periods indicated. Intercompany transactions and accounts are eliminated in consolidation.March 1, 2023.

The Company makes certain estimates and assumptions in preparing its Condensed Consolidated Financial Statements in accordance with GAAP. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the date of the Condensed Consolidated Financial Statements, and the reported amounts of revenues and expenses for the periods presented. Actual results may differ from those estimates.

~~ENOVIS CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)~~

~~(Unaudited)~~

In the normal course of business, the Company incurs research and development costs related to new product development which are expensed as incurred and included in Selling, general and administrative expense on the Company’s Condensed Consolidated Statements of Operations. Research and development costs were $24.4 million and $19.9 million during the three months ended April 1, 2022 and April 2, 2021, respectively.

The results of operations for the three months ended April 1, 2022 are not necessarily indicative of the results of operations that may be achieved for the full year. Quarterly results are affected by seasonal variations in the Company’s businesses as Medical Technology sales typically peak in the fourth quarter. General economic conditions may, however, impact future seasonal variations.

In December 2019, a novel coronavirus disease (“COVID-19”) was first reported in China. On March 11, 2020, due to worldwide spread of the virus, the World Health Organization characterized COVID-19 as a pandemic. The COVID-19 global pandemic has resulted in a widespread health crisis, and the resulting impact on governments, businesses and individuals and actions taken by them in response to the situation have resulted in widespread economic disruptions, significantly affecting broader economies, financial markets, and overall demand for the Company’s products. These impacts lessened in 2021 due to broadening access to COVID-19 vaccines and gradual relaxing of some government-mandated restrictions. However, a surge of COVID-19 cases due to the emergence of certain COVID-19 variants in the third quarter of 2021 led to the reinstatement of restrictions in certain jurisdictions, slowing the overall economic recovery. Some of these restrictions have been lifted as of the end of the first quarter of 2022. The COVID-19 outbreak has caused increased uncertainty in estimates and assumptions affecting the reported amounts of assets and liabilities in the Condensed Consolidated Financial Statements as the extent and period of recovery from the COVID-19 outbreak and related economic disruption are difficult to forecast. Furthermore, the historical seasonality trends have been disrupted by the commercial impacts caused by the COVID-19 pandemic.

2. Recently Issued Accounting Pronouncements

The Company has not adopted any new accounting standards during the three months ended ~~April 1, 2022.~~March 31, 2023. There are no recently issued accounting pronouncements that are expected to have a material effect on the Company’s financial position, results of operations or cash flows.

ENOVIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

3. Discontinued Operations

The ~~Company~~Company’s discontinued operations include the following: (1) operating results of ESAB prior to Separation, (2) charges related to previously retained ~~certain asbestos-related~~asbestos contingencies ~~and insurance coverages~~ from certain divested businesses for which itwe did not retain an interest in the ongoing operations ~~subject~~that were fully transferred to ~~the contingencies. In~~ESAB in conjunction with the Separation, ~~all asbestos-related contingencies~~ and ~~insurance coverages from its industrial businesses were transferred fully~~(3) expenses related to ~~ESAB Corp.~~ the Separation and the 2019 divestiture of our former air & gas handling business.

The ~~Company has classified asbestos-related selling, general and administrative activity in its Condensed Consolidated Statements~~following table presents the financial results of ~~Operations as part of Loss from~~the Company’s discontinued ~~operations, net of taxes. Asbestos-related costs, net of taxes were $2.5~~operations:


	Three Months Ended
	March 31, 2023		April 1, 2022
	(in thousands)
Net sales	$	—	$	647,911
Cost of sales	—		423,580
Selling, general and administrative expense	—		125,529
Restructuring and other charges	—		5,304
Asbestos charges	—		3,194
Divestiture-related expenses(1)	411		10,478
Operating (loss) income	(411)		79,826
Interest expense(2)	—		8,035

(Loss) income from discontinued operations before income taxes	(411)		71,791
Income tax (benefit) expense	(99)		17,435
(Loss) income from discontinued operations, net of taxes	$	(312)	$	54,356

(1) Divestiture-related expenses include $9.8 million ~~and $0.9 million during~~for the Separation for the three months ended April 1, 2022 and ~~April 2, 2021, respectively. See Note 13, “Commitments and Contingencies” for further information.~~

~~The Company also recorded Loss from discontinued operations, net of taxes of $0.6~~$0.4 million and ~~$6.6~~$0.7 million ~~during~~for Air & Gas for the three months ended March 31, 2023 and April 1, 2022, respectively.

(2) Interest expense was allocated to discontinued operations based on allocating $1.2 billion of corporate level debt to discontinued operations consistent with the dividend received from ESAB and ~~April 2, 2021, respectively, related to its divested air and gas handling business, including a settlement executed in~~ the ~~first quarter~~debt repaid at the time of ~~2021.~~the Separation.

Cash ~~used in~~provided by operating activities related to discontinued operations for the three months ended April 1, 2022 ~~and April 2, 2021~~ was ~~$5.8 million and $7.3 million, respectively.~~

~~4. Acquisitions and Investments~~

~~The Medical Technology segment completed 3 transactions during~~$9.2 million. Cash used in investing activities related to discontinued operations for the three months ended April 1, 2022 for $13.8 million, 1 of which is carried at cost as the investment does not have a readily determinable fair value, while the other 2 are accounted for as asset purchases. The 3 investments broaden the platform’s product offering and distribution network.was $3.2 million.

During the three months ended April 2, 2021, the Company completed 1 acquisition in its Fabrication Technology segment and 2 acquisitions in its Medical Technology segment for aggregate net cash consideration of $88.7 million. The

ENOVIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

~~acquisitions are~~4. Acquisitions and Investments

On March 31, 2023, the Company entered into a definitive agreement with Amplitude Surgical SA to acquire Novastep®, a leading player in Minimally Invasive Surgery (MIS) foot and ankle solutions. The transaction is subject to customary closing conditions and regulatory approvals and is expected to close in the second quarter of 2023.

In April 2023, the Company entered into a definitive agreement to acquire the SEAL external fixation product line from D.N.E., LLC. The transaction is subject to customary closing conditions and regulatory approvals and is expected to close in the second quarter of 2023.

On May 6, 2022, the Company completed a business acquisition in its Reconstructive segment of KICo Knee Innovation Company Pty Limited and subsidiaries, an Australian private company doing business as 360 Med Care, by acquiring 100% of its equity interests. 360 Med Care is a medical device distributor that bundles certain computer-assisted surgery and patient experience enhancement programs to add value to its device supply arrangements with surgeons, hospitals, and insurers. The acquisition is accounted for under the acquisition method of accounting, and accordingly, the Condensed Consolidated Financial Statements include the financial position and results of operations from the ~~respective~~ acquisition date. The ~~Medical Technology segment’s acquisitions in~~Company paid $14.3 million for the ~~first quarter~~acquisition, net of ~~2021 included Trilliant Surgical (“Trilliant”), a national provider~~cash received, and recorded estimated contingent consideration at fair value of ~~foot and ankle orthopedic implants, which was acquired for net cash consideration of $79.6 million. The purchase accounting for all acquisitions made in the first quarter of 2021 has been completed.~~$12.8 million related to expected results over future revenue targets. The Company ~~also made two investments~~has allocated $16.3 million to goodwill and $18.2 million to intangible assets acquired. The 360 Med Care acquisition broadens our customer base in ~~medical technology businesses during the three months ended April 2, 2021 for a total of $14.8 million. Both investments are carried at cost, as they do not have a readily determinable fair value.~~Australia and adds to our overall product offerings.

~~During~~On July 5, 2022, the ~~year ended December 31, 2021,~~Reconstructive segment of the Company ~~completed 1~~acquired a controlling interest of Insight Medical Systems (“Insight”). Insight’s flagship solution, ARVIS, is an FDA-cleared augmented reality solution precisely engineered for the specific needs of hip and knee replacement surgery. The ARVIS navigation unit consists of a hands-free heads-up display worn by the surgeon which provides surgical guidance at the point of care in a streamlined, space-conserving and cost-effective manner compared to traditional robotic offerings. The acquisition in its Fabrication Technology segment and 5 acquisitions in its Medical Technology segment for aggregate net cash consideration of $206.5 million and equity consideration of $285.7 million. The acquisitions areis accounted for under the acquisition method of accounting as a step-acquisition, and accordingly, the Condensed Consolidated Financial Statements include the financial position and results of operations from the ~~respective~~ acquisition date.

The ~~purchase accounting for the Mathys AG Bettlach acquisition~~Company made initial investments in Insight in 2020 and 2021, which ~~was completed in~~were initially carried at cost. During the third quarter of ~~2021~~2022, the Company acquired an additional 53.7% interest in Insight for $34.2 million net of cash received, and recorded contingent consideration of $5.0 million, which is the maximum payable under the agreement based on Insight’s achievement of certain milestones related to ARVIS. The Company holds a 99.5% interest in Insight and recognized an initial $0.3 million noncontrolling equity interest in its financial statements attributed to Insight.

The Company has ~~yet~~preliminarily allocated $36.3 million to goodwill and $38.4 million to intangible assets acquired. Goodwill is primarily driven by expected synergies between ARVIS’ augmented reality surgical guidance system and our existing customer base and existing products. The Company does not expect any of the goodwill to be ~~finalized.~~deductible for tax purposes. Purchase accounting procedures are ongoing and revisions to contingent consideration, intangible assets acquired, and working capital adjustments may be recorded in future periods during the measurement period.

As a result of obtaining control of Insight, the Company remeasured its initial investments to fair value, resulting in a $8.8 million gain in the fourth quarter of 2022.

During the three months ended April 1, 2022, the Company also completed two asset acquisitions and one investment in its Prevention & Recovery segment. The asset acquisitions broaden the Company’s product offering and distribution network. Aggregate purchase consideration for the two asset acquisitions and one investment was $18.2 million, of which $13.6 million was paid in cash and $4.6 million of deferred and contingent consideration. For further information on prior year acquisitions and investments, refer to Note 5. ~~“Acquisitions”~~“Acquisitions and Investments” in the ~~Notes to the Consolidated Financial Statements~~ in the Company’s ~~2021 Form 10-K. There have been no material changes to purchase accounting estimates for the prior year acquisitions since the issuance of the Company’s 2021~~2022 Form 10-K.

The Company’s Fabrication Technology segment develops, manufactures and supplies consumable welding and cutting products and equipment, as well as gas control equipment. Substantially all revenue from the Fabrication Technology business is recognized at a point in time. The Company disaggregates its Fabrication Technology revenue into the following product groups:

~~The consumables product grouping generally has less production complexity and shorter production cycles than equipment products.~~

The Company’s Medical Technology segment provides orthopedic solutions, including products and services spanning the full continuum of patient care, from injury prevention to rehabilitation. While the Company’s Medical Technology sales are primarily derived from 3 sales channels including dealers and distributors, insurance, and direct to consumers and hospitals, substantially all its revenue is recognized at a point in time. The Company disaggregates its Medical Technology revenue into the following product groups:

Given the nature of the Fabrication Technology and Medical Technology businesses, the total amount of unsatisfied performance obligations with an original contract duration of greater than one year as of April 1, 2022 is immaterial.

ENOVIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

As of March 31, 2023, the balance of investments held by the Company without readily determinable fair values was $21 million. The investments are carried at cost minus impairments, if any, plus adjustments for fair value indicators from observable price changes in orderly transactions for the identical or similar investment of the same issuer. There have been no impairments or upward adjustments in the current year or since acquisition of these investments.

The Company provides orthopedic solutions, including products and services spanning the full continuum of patient care, from injury prevention to rehabilitation. While the Company’s sales are primarily derived from three sales channels including dealers and distributors, insurance, and direct to consumers and hospitals, substantially all of the Company’s revenue is recognized at a point in time. The Company disaggregates its revenue into the following segments:

International P&R (1)

(1) The quarter ended March 31, 2023 includes the unfavorable impact of $4.2 million of currency.

Given the nature of the businesses, the Company does not generally have unsatisfied performance obligations with an original contract duration of greater than one year.

The nature of the Company’s contracts gives rise to certain types of variable consideration, including rebates, implicit price concessions, and other discounts. The Company includes estimated amounts of variable consideration in the transaction price to the extent that it is probable there will not be a significant reversal of revenue.

In some circumstances, customers are billed in advance of revenue recognition, resulting in contract liabilities. As of December 31, 2021 and 2020, total contract liabilities were $31.5 million and $36.6 million, respectively. During the three months ended April 1, 2022 and April 2, 2021, revenue recognized that was included in the contract liability balance at the beginning of the year was $12.8 million and $14.3 million, respectively. As of April 1, 2022 and April 2, 2021, total contract liabilities were $31.4 million and $40.0 million, respectively, and were included in Accrued liabilities on the Company’s Condensed Consolidated Balance Sheets. The contract liabilities as of April 1, 2022 and December 31, 2021 included $2.0 million and $4.9 million, respectively, of certain one-time advance payments in the Medical Technology business.

Allowance for Credit Losses

The Company’s estimate of current expected credit losses on trade receivables considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. In calculating and applying its current expected credit losses, the Company disaggregates trade receivables into business segments due to risk characteristics unique to each segment given the individual lines of business and market. The business segments are further disaggregated based on either geography or product type. The Company uses a loss rate methodology in calculating its current expected credit losses, ~~leveraging~~considering historical write-offs over a defined lookback period in deriving a historical loss rate. The expected credit loss model further considers current conditions and reasonable and supportable forecasts using an adjustment for current and projected macroeconomic factors.

ENOVIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

A summary of the activity in the Company’s allowance for credit losses included within Trade receivables in the Condensed Consolidated Balance Sheets is as follows:

Three Months Ended April 1, 2022
Balance at
Beginning
of Period Charged to Expense, net Write-Offs, Deductions and Other, net Foreign
Currency
Translation Balance at
End of
Period
(In thousands)
Allowance for credit losses $ 32,501 $ 5,206 $ 141 $ 23 $ 37,871


	Three Months Ended March 31, 2023
	Balance at Beginning of Period		Charged to Expense, net		Write-Offs, Deductions and Other, net		Foreign Currency Translation		Balance at End of Period
	(In thousands)
Allowance for credit losses	$	7,965	$	528	$	(463)	$	33	$	8,063

6. Net ~~Income~~Loss Per Share from Continuing Operations

Net ~~income~~loss per share from continuing operations was computed as follows:

Net income from continuing operations attributable to Enovis Corporation(1)

Net loss from continuing operations attributable to Enovis Corporation(1)

(1) Net ~~income~~loss from continuing operations attributable to Enovis Corporation for the respective periods is calculated using Net ~~income~~loss from continuing operations less the continuing operations component of the income attributable to noncontrolling interest, net of taxes, of ~~$1.2~~$0.2 million for the three months ended March 31, 2023 and $0.3 million for the three months ended April 1, ~~2022 and April 2, 2021.~~

~~ENOVIS CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)~~

~~(Unaudited)~~

2022.

~~As a result~~The weighted-average computation of the reverse stock split, all share and per share figures contained in the Condensed Consolidated Financial Statements have been retroactively restated as if the reverse stock split occurred at the beginningdilutive effect of ~~the periods presented.~~

~~For all periods presented, the weighted-average~~potentially issuable shares of Common stock ~~outstanding - basic includes~~under the ~~impact of the shares related to the issuance of the tangible equity units. During~~treasury stock method for the three months ended ~~April 1, 2022, conversions of the Company’s tangible equity units resulted in the issuance of approximately 1.7~~March 31, 2023 excludes 1.1 million shares of Company common stock. All issuances of Company common stock related to the tangible equity units were converted at the minimum settlement rate of 1.33 shares of common stock for each purchase contractunderlying outstanding stock-based compensation awards, as ~~a result of the Company’s share price. The issued shares are included in the Common stock issued and outstanding as of April 1, 2022. See Note 8, “Equity” for details.~~their inclusion would be anti-dilutive.

The weighted-average computation of the dilutive effect of potentially issuable shares of Common stock under the treasury stock method for the three months ended April 1, 2022 ~~and April 2, 2021~~ excludes 0.5 million ofshares underlying outstanding stock-based compensation awards, as their inclusion would be anti-dilutive.

During the three months ended ~~April 1, 2022, Income~~March 31, 2023, Loss from continuing operations before income taxes was ~~$38.0~~$30.0 million, while ~~income~~Income tax ~~expense~~benefit was ~~$18.7~~$7.1 million. The effective tax rate was ~~49.1%~~23.7% for the three months ended March 31, 2023, which differed from the 2023 federal statutory rate of 21% mainly due to non-U.S. income taxed at lower rates, release of valuation allowance on non-U.S. attributes, and tax credits for research and development offset by other non-deductible expenses and U.S. taxation on international operations.

During the three months ended April 1, ~~2022.~~2022, Loss from continuing operations before income taxes was $37.7 million while Income tax expense was $0.4 million. The effective tax rate was (1.0)% for the three months ended April 1, 2022, which differed from the ~~2021~~2022 U.S. federal statutory rate of 21% mainly due to ~~withholding taxes, taxable foreign exchange gains,~~ U.S. taxation ofon international operations ~~other non-deductible expenses, and various items expensed discretely to the quarter.~~

During the three months ended April 2, 2021, Income from continuing operations before income taxes was $35.6 million, while income tax expense was $7.9 million. The effective tax rate was 22.2% for the three months ended April 2, 2021. The effective tax rate for the three months ended April 2, 2021 differed from the 2021 U.S. federal statutory rate of 21% mainly due to withholding taxes, taxable foreign exchange gains and other non-deductible ~~expenses partially offset by the benefit of U.S. tax credits.~~expenses.

ENOVIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

Share Repurchase Program

In 2018, the Company’s Board of Directors authorized the repurchase of shares of the Company’s Common stock from time-to-time on the open market or in privately negotiated transactions. No repurchases of the Company’s Common stock have been made under this plan since the third quarter of 2018. As of ~~April 1, 2022,~~March 31, 2023, the remaining stock repurchase authorization provided by the Board of Directors was $100 million. The timing, amount and method of shares repurchased is determined by management based on its evaluation of market conditions and other factors. There is no term associated with the remaining repurchase authorization.

Accumulated Other Comprehensive Loss

The following tables present the changes in the balances of each component of Accumulated other comprehensive loss including reclassifications out of Accumulated other comprehensive loss for the three months ended March 31, 2023 and April 1, ~~2022 and April 2, 2021.~~2022. All amounts are net of tax and noncontrolling interest, if any.

Accumulated Other Comprehensive Loss Components
Net Unrecognized Pension and Other Post-Retirement Benefit Cost Foreign Currency Translation Adjustment Unrealized Gain on Hedging Activities Total
(In thousands)
Balance at January 1, 2022 $ (85,559) $ (475,125) $ 44,671 $ (516,013)
Other comprehensive income (loss) before reclassifications:
Foreign currency translation adjustment 470 (38,333) — (37,863)
Loss on long-term intra-entity foreign currency transactions — (15,260) 0 (15,260)
Gain on net investment hedges — — 9,028 9,028
Other comprehensive income (loss) before reclassifications 470 (53,593) 9,028 (44,095)
Amounts reclassified from Accumulated other comprehensive loss 629 — — 629
Net Other comprehensive income (loss) 1,099 (53,593) 9,028 (43,466)
Balance at April 1, 2022 $ (84,460) $ (528,718) $ 53,699 $ (559,479)

ENOVIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

Accumulated Other Comprehensive Loss Components
Net Unrecognized Pension and Other Post-Retirement Benefit Cost Foreign Currency Translation Adjustment Unrealized Gain on Hedging Activities Total
(In thousands)
Balance at January 1, 2021 $ (112,783) $ (360,977) $ 21,654 $ (452,106)
Other comprehensive income (loss) before reclassifications:
Foreign currency translation adjustment 709 (82,663) (2,201) (84,155)
Gain on long-term intra-entity foreign currency transactions — 31,098 — 31,098
Gain on net investment hedges — — 12,381 12,381
Other comprehensive income (loss) before reclassifications 709 (51,565) 10,180 (40,676)
Amounts reclassified from Accumulated other comprehensive loss 1,055 — — 1,055
Net Other comprehensive income (loss) 1,764 (51,565) 10,180 (39,621)
Balance at April 2, 2021 $ (111,019) $ (412,542) $ 31,834 $ (491,727)

~~Tangible equity unit offering~~

On January 11, 2019, the Company issued 4.6 million in Tangible Equity Units (“TEUs”) at the stated amount of $100 per unit. Net cash of $447.7 million was received upon closing. The gross proceeds and deferred finance costs from the issuance of the TEUs were allocated 84.4% to equity (the “TEU prepaid stock purchase contracts”) and 15.6% to debt (the “TEU amortizing notes”) based on the relative fair value of the respective components of each TEU. See Note 10, “Debt” for additional information on the TEU amortizing notes. The TEU prepaid stock purchase contracts were mandatorily converted into shares of Company common stock ~~on January 15, 2022, unless previously settled at the holder’s option. All the~~ ~~TEU prepaid stock purchase contracts~~ ~~converted at the minimum settlement rate.~~ ~~Approximately 1.3 million and 0.1 million TEU prepaid stock purchase contracts were settled into approximately 1.7 million and 0.1 million shares of Company common stock~~ ~~as adjusted for the reverse split, during the~~ three months ended April 1, 2022 and April 2, 2021, respectively. Since the 4.6 million TEU prepaid stock purchase contracts were mandatorily convertible into shares of Company common stock at the minimum settlement rate or greater, 6.1 million shares, as adjusted for the reverse split, are included in basic net income per share calculations for all periods presented. See Note 6, “Net Income Per Share from Continuing Operations” for additional information.

Inventories, net consisted of the following:

The valuation of LIFO inventories is made at the end of the year based on inventory levels and costs at the time. At April 1, 2022 and December 31, 2021, approximately 17.4% and 18.3% of total inventories, respectively, were valued using the LIFO method.

~~ENOVIS CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)~~

~~(Unaudited)~~

Long-term debt consisted of the following:

~~Subsequent Event~~ Debt Redemptions

In conjunction with the Separation, which occurred on April 4, 2022, the Company repaid all obligations under its ~~Term loan and Revolver (each as defined below)~~previous credit agreement and entered into a new credit agreement (the “Enovis Credit Agreement”) with certain of its ~~banking partners.~~existing bank lenders. Additionally, on ~~March~~April 7, 2022, after the completion of the Separation, the Company ~~announced a conditional redemption~~completed the redemptions of its 3.25% Euro Senior Notes due 2025 and its 6.375% Senior Notes due 2026. ~~The Euro Senior Notes~~As a result of these changes, the Company recorded Debt extinguishment charges of $20.1 million in the second quarter of 2022, comprised of $12.7 million in redemption premiums and ~~2026 Notes were redeemed on April 7, 2022 after the completion~~$7.4 million in noncash write-offs of ~~the Separation. In accordance with the redemption notices~~original issue discount and subsequent redemption of the debt described above, $421.3 million has been reclassified from long-term debt to current maturities. The amount reflects the debt retired that was not refinanced on a long-term basis. Refer to Note 15, “Subsequent Events” for further detail of ongoingdeferred financing ~~arrangements.~~fees.

Enovis Term Loan and Revolving Credit Facility

The ~~Company’s credit agreement (the “Credit Facility”), which was legally extinguished in conjunction with the Separation~~Enovis Credit Agreement became effective on April 4, 2022 ~~consisted~~and consists of a ~~$975~~$900 million revolving credit facility (the “Revolver”) with an April 4, 2027 maturity date and a ~~Term A-1~~term loan with an initial aggregate principal amount of ~~$825~~$450 million ~~(the “Term Loan”), each with a~~and an April 4, 2023 maturity date ~~of December 6, 2024.~~(the “Enovis Term Loan”). The Revolver ~~contained~~contains a $50 million swing line loan sub-facility. Certain U.S. subsidiaries of the Company guarantee the obligations under the Enovis Credit ~~Facility.~~Agreement.

On November 18, 2022, the Company completed an exchange with a lender under the Enovis Credit Agreement of 6,003,431 shares of common stock of ESAB, representing all of the retained shares in ESAB following the Separation, for $230.5 million of the $450.0 million in term loan outstanding under the Credit Agreement, net of cost to sell. On March 1, 2023, the Company extinguished the remaining outstanding balance on the Enovis Term Loan with borrowings on the Revolver.

The Enovis Credit ~~Facility contained~~Agreement contains customary covenants limiting the ability of the Company and its subsidiaries to, among other things, incur debt or liens, merge or consolidate with others, dispose of assets, make investments, or pay dividends. In addition, the Enovis Credit ~~Facility contained~~Agreement contains financial covenants requiring the Company to maintain (i) a maximum total leverage ratio of not more than 4.00:1.00, stepping down to 3.75:1.00 for the fiscal quarter ending June 30, 2023 and to 3.50:1.00 for the fiscal quarter ending June 30, 2024, and (ii) a minimum interest coverage ratio ~~financial covenants. For further description~~ of 3.00:1:00. The Enovis Credit Agreement contains various events of default (including failure to comply with the ~~Company’s financial~~ covenants asunder the Enovis Credit Agreement and related agreements), and upon an event of ~~April 1, 2022, refer~~default the lenders may, subject to ~~Note~~ various customary cure rights,

13 ~~“Debt” in~~

ENOVIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

require the ~~Notes to~~immediate payment of all amounts outstanding under the ~~Consolidated Financial Statements in the Company’s 2021 Form 10-K.~~Enovis Credit Agreement. As of ~~April 1, 2022,~~March 31, 2023, the Company was in compliance with the covenants under the Enovis Credit ~~Facility.~~Agreement.

As of ~~April 1, 2022,~~March 31, 2023, the weighted-average interest rate of borrowings under the Enovis Credit ~~Facility~~Agreement was ~~1.74%~~6.02%, excluding accretion of original issue discount and deferred financing fees, and there was $~~375~~615 million available on the Revolver.

The Company has $4.3 million in deferred financing fees recorded in conjunction with the Enovis Credit Agreement as of March 31, 2023, which are being accreted to Interest expense, net primarily using the effective interest method over the life of the facility.

The Company had senior unsecured notes with an aggregate principal amount of €350 million due in May 2025, with an interest rate of 3.25% ~~(the “Euro Senior Notes”)~~. The Euro Senior Notes were redeemed on April 7, 2022 at a 100.813% redemption premium after the completion of the Separation.

~~TEU~~Tangible Equity Unit (“TEU”) Amortizing Notes

The Company previously had 6.50% TEU amortizing notes at an initial principal amount of $15.6099 per note with equal quarterly cash installments of $1.4375 per note representing a payment of interest and partial payment of principal. The ~~final installment payment was made on January 15, 2022. The~~ Company paid $6.5 ~~million and $6.1~~ million of principal on the TEU amortizing notes in the three months ended April 1, ~~2022 and April 2, 2021, respectively.~~2022. The final installment payment was made on January 15, 2022.

~~ENOVIS CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)~~

~~(Unaudited)~~

The Company had senior notes with a remaining principal amount of $300 million, ~~(the “2026 Notes”),~~ which were due on February 15, 2026 and had an interest rate of 6.375%. The 2026 Notes were redeemed on April 7, 2022 at a 103.188% redemption premium after the completion of the Separation.

In addition to the debt agreements discussed above, the Company is party to ~~various bilateral credit~~overdraft facilities with a borrowing capacity of ~~$168.2~~$30.0 million. As of April 1, 2022, there were no outstanding borrowings under these facilities. Subsequent to the end of the first quarter of 2022, the bilateral credit facilities are no longer available to Enovis due to the completion of the Separation as they relate to ESAB Corp or expired.

~~The Company is party to letter of credit facilities with an aggregate capacity of $211.9 million.~~ Total letters of credit and surety bonds of ~~$40.2~~$7.1 million were outstanding as of April 1, 2022. Subsequent to the end of the first quarter of 2022, substantially all of the letter of credit facilities are no longer available to Enovis due to the completion of the Separation as they relate to ESAB Corp.

~~Deferred Financing Fees~~

In total, the Company had deferred financing fees, including the original issue discount, of $11.3 million included in its Condensed Consolidated Balance Sheet as of April 1, 2022, which would be charged to Interest expense, net, primarily using the effective interest method, over the life of the applicable debt agreements. In conjunction with the Separation and debt redemptions in the second quarter of 2022, the Company expects a net loss on the early extinguishment of debt of approximately $17 million, including approximately $13 million of redemption premiums on the retired debt instruments and $4 million of noncash write-offs of original issue discount and deferred financing fees on the Euro Senior Notes and Senior Notes. The Company also expects additional charges of approximately $7 million in conjunction with entering into the new Enovis Credit Facility and the extinguishment of the prior Credit Facility, which is subject to finalization.March 31, 2023.

ENOVIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

11. Accrued Liabilities

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

~~ENOVIS CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)~~

~~(Unaudited)~~

~~Warranty Liability~~

~~The activity in the Company’s warranty liability consisted of the following:~~

Accrued Restructuring Liability

The Company’s restructuring programs include a series of actions to reduce the structural costs of the Company. A summary of the activity in the Company’s restructuring liability included in Accrued liabilities and Other liabilities in the Condensed Consolidated Balance Sheets is as follows:

Balance at End of Period(3)

Termination benefits(1)

Facility closure costs and other(2)

Termination benefits(1)

Facility closure costs and other(2)

(1) Includes severance and other termination benefits, including outplacement services.

(2) Includes the cost of relocating associates, relocating equipment, lease termination expense and other costs in connection with the closure and optimization of facilities, site cost structures, and product lines. ~~The Medical Technology segment~~

(3) For the three months ended March 31, 2023, $1.3 million and $1.6 million of the Company’s total provisions were related to the Prevention & Recovery and Reconstructive segments, respectively. Restructuring and other charges ~~include $0.5~~includes $0.3 million of expense classified as Cost of sales on the Company’s Condensed Consolidated Statements of Operations for the three months ended ~~April 1, 2022.~~

~~(3)~~ ~~As of April 1, 2022, $9.5 million and $0.2 million of the Company’s restructuring liability was included in Accrued liabilities and Other liabilities, respectively.~~March 31, 2023.

~~ENOVIS CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)~~

~~(Unaudited)~~

12. Financial Instruments and Fair Value Measurements

The carrying values of financial instruments, including ~~Trade~~trade receivables, other receivables and ~~Accounts~~accounts payable, approximate their fair values due to their short-term maturities. The estimated fair value of the Company’s debt, which was ~~$2.1 billion~~$285.0 million as of ~~both April 1, 2022 and December~~March 31, ~~2021,~~2023, was based on current interest rates for similar types of borrowings and is in Level Two of the fair value hierarchy. The estimated fair values may not represent actual values of the financial instruments that could be realized as of the balance sheet date or that will be realized in the future.

ENOVIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

~~A summary of the Company’s assets and liabilities that are measured at fair value for each fair value hierarchy level for the periods presented is as follows:~~

April 1, 2022
Level
One Level
Two Level
Three Total
(In thousands)
Assets:
Cash equivalents $ 5,875 $ — $ — $ 5,875
Foreign currency contracts - not designated as hedges — 1,628 — 1,628
Deferred compensation plans — 13,811 — 13,811
$ 5,875 $ 15,439 $ — $ 21,314
Liabilities:
Foreign currency contracts - not designated as hedges $ — $ 2,984 $ — $ 2,984
Deferred compensation plans — 13,811 — 13,811
$ — $ 16,795 $ — $ 16,795

December 31, 2021
Level
One Level
Two Level
Three Total
(In thousands)
Assets:
Cash equivalents $ 8,133 $ — $ — $ 8,133
Foreign currency contracts - not designated as hedges — 2,607 — 2,607
Deferred compensation plans — 11,213 — 11,213
$ 8,133 $ 13,820 $ — $ 21,953
Liabilities:
Foreign currency contracts - not designated as hedges $ — $ 3,044 $ — $ 3,044
Deferred compensation plans — 11,213 — 11,213
$ — $ 14,257 $ — $ 14,257
As of March 31, 2023, the Company held $22.2 million in Level Three liabilities arising from contingent consideration related to acquisitions. The fair value of the contingent consideration liabilities is determined using unobservable inputs and the inputs vary based on the nature of the purchase agreements. These inputs can include the estimated amount and timing of projected cash flows, the risk-adjusted discount rate used to present value the projected cash flows, and the probability of the acquired company attaining certain targets stated within the purchase agreements. A change in these unobservable inputs to a different amount might result in a significantly higher or lower fair value measurement at the reporting date due to the nature of uncertainty inherent to the estimates. During the three months ended March 31, 2023 the Company recorded a reduction in contingent consideration of $0.8 million due to a final agreement on the payout from an acquisition in 2020. The gross range of outcomes for contingent consideration arrangements that have a fixed limit on the maximum payout is zero to $10.9 million. There are two contingent consideration arrangements that have no limits and are based on a percentage of sales in excess of a benchmark over a three-year period and five-year period, respectively.

There were no transfers in or out of Level One, Two or Three during the three months ended ~~April 1, 2022.~~March 31, 2023.

~~ENOVIS CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)~~

~~(Unaudited)~~Deferred Compensation Plans

The Company maintains deferred compensation plans for the benefit of certain employees and non-executive officers. As of March 31, 2023 and December 31, 2022 the fair value of these plans were $12.8 million and $10.3 million, respectively. These plans are deemed to be Level Two within the fair value hierarchy.

Foreign Currency Contracts

As of ~~April 1, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, the Company had foreign currency contracts related to purchases and sales with notional values of ~~$203.6~~$3.0 million and ~~$273.2~~$0.8 million, respectively.

~~The~~ During the three months ended March 31, 2023, the Company recognized ~~the following in~~an unrealized gain of $0.1 million on its Condensed Consolidated ~~Financial~~ Statements of Operations related to its derivative ~~instruments:~~

Three Months Ended
April 1, 2022 April 2, 2021
(In thousands)
Contracts Designated as Hedges:
Unrealized gain (loss) on net investment hedges(1)
$ 9,028 $ 12,381
Contracts Not Designated in a Hedge Relationship:
Foreign Currency Contracts:
Unrealized gain (loss) (1,356) (2,611)
Realized gain (loss) (14,582) 51

~~(1)~~ ~~The unrealized gain (loss) on net investment hedges is attributable to the change in valuation of Euro denominated debt.~~

instruments.

13. Commitments and Contingencies

For further description of the Company’s litigation and contingencies, reference is made to Note 18, “Commitments and Contingencies” in the Notes to Consolidated Financial Statements in the Company’s 2021 Form 10-K. Since the Company did not retain an interest in the ongoing operations of its divested businesses, the retained asbestos-related activity has been classified in its Condensed Consolidated Statements of Operations as a component of Loss from discontinued operations, net of taxes. In conjunction with the Separation, all asbestos-related contingencies and insurance coverages from the divested industrial businesses were transferred fully to ESAB Corp.

~~Asbestos Contingencies~~

~~Asbestos-related claims activity since December 31 is as follows:~~

Three Months Ended
April 1, 2022 April 2, 2021
(Number of claims)
Claims unresolved, beginning of period 14,559 14,809
Claims filed(1)
1,065 1,067
Claims resolved(2)
(779) (581)
Claims unresolved, end of period 14,845 15,295

~~(1)~~ ~~Claims filed include all asbestos claims for which notification has been received or a file has been opened.~~

~~(2)~~ Claims resolved include all asbestos claims that have been settled, dismissed or that are in the process of being settled or dismissed based upon agreements or understandings in place with counsel for the claimants.

~~ENOVIS CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)~~

~~(Unaudited)~~

~~The Company’s Condensed Consolidated Balance Sheets included the following amounts related to asbestos-related litigation:~~

April 1, 2022 December 31, 2021
(In thousands)
Long-term asbestos insurance asset(1)
$ 229,215 $ 231,900
Long-term asbestos insurance receivable(1)
17,002 15,421
Accrued asbestos liability(2)
34,494 30,572
Long-term asbestos liability(3)
254,106 261,779

~~(1)~~ ~~Included in Other assets in the Condensed Consolidated Balance Sheets.~~

~~(2)~~ Represents current accruals for probable and reasonably estimable asbestos-related liability costs that the Company believes the subsidiaries will pay, and unpaid legal costs related to defending themselves against asbestos-related liability claims and legal action against the Company’s insurers, which is included in Accrued liabilities in the Condensed Consolidated Balance Sheets.

~~(3)~~ ~~Included in Other liabilities in the Condensed Consolidated Balance Sheets.~~

Management’s analyses are based on currently known facts and assumptions. Projecting future events, such as new claims to be filed each year, the average cost of resolving each claim, coverage issues among layers of insurers, the method in which losses will be allocated to the various insurance policies, interpretation of the effect on coverage of various policy terms and limits and their interrelationships, the continuing solvency of various insurance companies, the amount of remaining insurance available, as well as the numerous uncertainties inherent in asbestos litigation could cause the actual liabilities and insurance recoveries to be higher or lower than those projected or recorded which could materially affect the Company’s financial condition, results of operations or cash flow.

~~General Litigation~~

The Company is involved in various ~~other~~ pending legal proceedings arising out of the ordinary course of the Company’s business. None of these legal proceedings are expected to have a material adverse effect on the financial condition, results of operations or cash flow of the Company. With respect to these proceedings, ~~and the litigation and claims described in the preceding paragraphs,~~ management of the Company believes that either it will ~~either~~ prevail, has adequate insurance coverage or has established appropriate accruals to cover potential liabilities. Legal costs related to proceedings or claims are recorded as incurred. Other costs that management estimates may be paid related to the claims are accrued when the liability is considered probable and the amount can be reasonably estimated. There can be no assurance, however, as to the ultimate outcome of any of these matters, and if all or substantially all of these legal proceedings were to be determined adverse to the Company, there could be a material adverse effect on the financial condition, results of operations or cash flow of the Company.

14. Segment Information

The Company conducts its continuing operations through the Prevention & Recovery and Reconstructive operating segments, which also represent the Company’s reportable segments.

▪Prevention & Recovery -a leader in orthopedic solutions and recovery sciences, providing devices, software, and services across the patient care continuum from injury prevention to rehabilitation after surgery, injury, or from degenerative disease.

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

ENOVIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(Unaudited)

~~14. Segment Information~~

The ~~Company conducts its continuing operations through~~Company’s management, including the ~~Fabrication Technology and Medical Technology~~chief operating ~~segments, which also represent the Company’s reportable segments.~~

▪~~Fabrication Technology~~ -a leading global supplier of consumable products and equipment for use in cutting, joining and automated welding, as well as gas control equipment, providing a wide range of products with innovative technologies to solve challenges in a wide range of industries.

•~~Medical Technology~~ ~~- a leader in orthopedic solutions, providing devices, software and services spanning the full continuum of patient care, from injury prevention to joint replacement to rehabilitation.~~

~~Certain amounts not allocated to the 2 reportable segments and intersegment eliminations are reported under the heading “Corporate and other.” The Company’s management~~decision maker, evaluates the operating results of each of its reportable segments based upon Net sales and ~~segment operating income (loss),~~Adjusted EBITDA, which ~~represents Operating income (loss) before Restructuring~~excludes the effect of restructuring and certain other ~~charges.~~charges, MDR and other costs, strategic transaction costs, stock-based compensation, depreciation and other amortization, acquisition-related intangible asset amortization, and inventory step-up charges from the results of the Company’s operating segments.

The Company’s segment results were as follows:

Three Months Ended
April 1, 2022 April 2, 2021
(In thousands)
Net sales:
     Fabrication Technology $ 647,911 $ 568,128
Medical Technology 375,457 311,083
$ 1,023,368 $ 879,211
Segment operating income (loss)(1):
     Fabrication Technology $ 95,545 $ 82,305
Medical Technology (147) 2,162
     Corporate and other (31,396) (17,361)
$ 64,002 $ 67,106


	Three Months Ended
	March 31, 2023		April 1, 2022
	(In thousands)
Net sales:
Prevention & Recovery	$	250,740	$	244,835
Reconstructive	155,411		130,622
	$	406,151	$	375,457
Segment Adjusted EBITDA(1):
Prevention & Recovery	$	25,695	$	26,370
Reconstructive	30,716		21,357
	$	56,411	$	47,727

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

Three Months Ended
April 1, 2022 April 2, 2021
(In thousands)
Income from continuing operations before income taxes $ 38,019 $ 35,647
Interest expense, net 15,099 25,660
Restructuring and other related charges(1)
8,257 4,046
MDR and related costs(2)
2,627 1,753
Segment operating income $ 64,002 $ 67,106


	Three Months Ended
	March 31, 2023		April 1, 2022
	(In thousands)
Loss from continuing operations before income taxes (GAAP)	$	(29,959)	$	(37,691)
Restructuring and other charges(1)	2,936		2,953
MDR and other costs(2)	7,796		2,627
Strategic transaction costs	11,629		11,696
Stock-based compensation	6,908		6,708
Depreciation and other amortization	19,951		18,500
Amortization of acquired intangibles	32,040		30,786
Inventory step-up	119		5,084
Interest expense, net	5,652		7,064

Other income	(661)		—
Adjusted EBITDA (non-GAAP)	$	56,411	$	47,727

(1) Restructuring and other ~~related~~ charges includes $0.3 million and $0.5 million of expense classified as Cost of sales on the Company’s Condensed Consolidated Statements of Operations for the three months ended March 31, 2023 and April 1, ~~2022.~~2022, respectively.

(2) Primarily related to costs specific to compliance with medical device reporting regulations and other requirements of the European Union Medical Devices Regulation. These costs are classified as Selling, general and administrative expense on our Condensed Consolidated Statements of Operations.

~~ENOVIS CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)~~

~~(Unaudited)~~

~~15. Subsequent Events~~

As discussed in Note 1, “General”, the Company completed the separation of its fabrication technology business on April 4, 2022 through a tax-free, pro-rata distribution of 90% of the outstanding common stock of ESAB Corp to the Company’s stockholders. In connection with the Separation, ESAB Corp and Enovis entered into various agreements to affect the Separation and provide a framework for Enovis’ relationship with ESAB Corp after the Separation, including a separation and distribution agreement, stockholders’ and registration rights agreement, employee matters agreement, tax matters agreement, transition services agreement, ESAB Business Excellence System (“EBS”) license agreement, and intellectual property matters agreement. These agreements will govern the Separation between Enovis and ESAB Corp of the assets, employees, liabilities and obligations (including its investments, property and employee benefits and tax-related assets and liabilities) of Enovis and its subsidiaries attributable to periods prior to, at and after the Separation and will govern certain relationships between Enovis and ESAB Corp after the Separation.

In connection with the Separation, ESAB Corp issued $1.2 billion of new debt securities, the proceeds from which were used to fund a $1.2 billion cash distribution to Enovis upon Separation. The distribution proceeds were used by Enovis in conjunction with $450 million of borrowings on a term loan under the new Enovis credit facility, as discussed below, and $52.3 million of cash on hand to repay $1.4 billion of outstanding debt and accrued interest on its Credit Facility, $302.8 million of outstanding debt and accrued interest on its 2026 Notes, as well as a redemption premium at 103.188% of the principal amount of the 2026 Notes, and other fees and expenses due at closing. Additionally, on April 7, 2022, the Company completed the redemption of its Euro Senior Notes representing all of its outstanding €350 million principal 3.250% Senior Notes due 2025 consisting of $392.1 million outstanding debt and accrued interest as well as a redemption premium of 100.813% of the principal amount. In the second quarter of 2022, the Company expects a net loss on the early extinguishment of debt of approximately $17 million, including approximately $13 million of redemption premiums on the retired debt instruments and $4 million of noncash write-offs of original issue discount and deferred financing fees on the Euro Senior Notes and Senior Notes. The Company also expects additional charges of approximately $7 million in conjunction with entering into the new Enovis Credit Facility and the extinguishment of the prior Credit Facility, which is subject to finalization.

In accordance with the redemption notices and subsequent redemption of the debt described above, $421.3 million has been reclassified from long-term debt to current maturities. The amount reflects the debt retired that was not refinanced on a long-term basis.

The Company retained 10% of the shares of ESAB Corp common stock as part of the Separation. The Company intends to divest its 10% retained shares in ESAB Corp in a tax-efficient exchange for its outstanding debt under the new Enovis credit facility no later than 12 months after the Distribution Date. The retained stake in ESAB Corp, based on the initial opening share price, is approximately $300 million on a fair value basis and will be marked-to-market each reporting period.

Immediately following the Separation, the Company effected a one-for-three reverse stock split of all issued and outstanding shares of Enovis common stock. As a result of the reverse stock split, all share and per share figures contained in the accompanying Condensed Consolidated Financial Statements have been retroactively restated as if the reverse stock split occurred at the beginning of the periods presented.

On April 4, 2022, the Company entered into a new credit agreement (the “Enovis Credit Agreement”) which replaces the Company’s prior credit agreement and concurrently terminated all indebtedness of the Company outstanding thereunder being repaid on such date with proceeds of the Enovis Credit Agreement and other funds of the Company.

The Enovis Credit Agreement consists of a revolving credit facility that totals $900 million in commitments with a maturity date of April 4, 2027 (the “Enovis Revolver”) and a term loan in an aggregate amount of $450 million with a maturity date of April 4, 2023 (the “Enovis Term Loan”, and together with the Enovis Revolver, the “Enovis Credit Facilities”). The Enovis Revolver includes a $50 million swingline loan sub-facility. The Enovis Revolver will be used to provide funds for the Company’s ongoing working capital requirements and for general corporate purposes.

The Enovis Term Loan bears interest, at the election of the Company, at either the base rate (as defined in the Enovis Credit Agreement) or at the term Secured overnight financing rate (“SOFR”) plus an adjustment (as defined in the Enovis Credit Agreement), in each case, plus the applicable interest rate margin. The Enovis Revolver bears interest, at the election of the Company, at either the base rate or, in the case of loans denominated in dollars, the term SOFR rate plus an adjustment or the daily simple SOFR plus an adjustment, in the case of loans denominated in euros, the adjusted EURIBOR rate and, in the case of loans denominated in sterling, SONIA plus an adjustment (as all such rates are defined in the Enovis Credit Agreement), in each case, plus the applicable interest rate margin. Initially, the applicable interest rate margin will be 1.500% or, in the case

~~ENOVIS CORPORATION~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)~~

~~(Unaudited)~~

of base rate loans, 0.500%, and in future quarters it may change based upon the Company’s total leverage ratio (ranging from 1.125% to 1.750% or in the case of the base rate margin, 0.125% to 0.750%). Each swing line loan denominated in dollars will bear interest at the base rate plus the applicable interest rate margin.

~~Certain U.S. subsidiaries of the Company have agreed to guarantee the obligations of the Company under the Enovis Credit Agreement.~~

The Enovis Credit Agreement contains customary covenants limiting the ability of the Company and its subsidiaries to, among other things, incur debt or liens, merge or consolidate with others, dispose of assets, make investments or pay dividends. In addition, the Enovis Credit Agreement contains financial covenants requiring the Company to maintain (i) a maximum total leverage ratio of not more than 4.50:1.00, with a step-down to, on the date on which the Company and its subsidiaries have transferred any retained shares of ESAB common stock to one or more unaffiliated third parties, 4.00:1.00, commencing with the fiscal quarter ending June 30, 2023, 3.75:1.00 and commencing with the fiscal quarter ending June 30, 2024, 3.50:1.00, and (ii) a minimum interest coverage ratio of 3.00:1:00. The Enovis Credit Agreement contains various events of default (including failure to comply with the covenants under the Enovis Credit Agreement and related agreements) and upon an event of default the lenders may, subject to various customary cure rights, require the immediate payment of all amounts outstanding under the Enovis Term Loan and the Enovis Revolver.

2217

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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 ~~April 1, 2022~~March 31, 2023 (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, ~~2021~~2022 (the ~~“2021~~“2022 Form 10-K”) filed with the Securities and Exchange Commission (the “SEC”) on ~~February 22, 2022.~~March 1, 2023.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Some of the statements contained in this Form 10-Q that are not historical facts are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 21E of the Exchange Act. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date this Form 10-Q is filed with the ~~Securities and Exchange Commission (the “SEC”). All statements~~SEC. Statements other than statements of historical fact are statements ~~that~~ could be deemed forward-looking statements, including statements regarding: the ~~separation~~impacts of ~~our fabrication and medical technology businesses~~the recently completed spin-off of ESAB Corporation (“ESAB”) into ~~two differentiated,~~an independent publicly traded ~~companies~~company (the “Separation”); ~~the anticipated benefits of the Separation;~~ the expected financial and operating performance of, and future opportunities for, ~~each company~~the Company following the Separation; the impact of the COVID-19 global pandemic, including the rise, prevalence and severity of variants of the virus, the actions by governments, businesses and individuals in response to the situation, on the global and regional economies, financial markets, and overall demand for our products;pandemic; projections of revenue, profit margins, expenses, tax provisions and tax rates, earnings or losses from operations, impact of foreign exchange rates, cash flows, synergies or other financial items; plans, strategies and objectives of management for future operations including statements relating to potential acquisitions, compensation plans or purchase commitments; developments, performance, industry or market rankings relating to products or services; future economic conditions or ~~performance;~~performance, including the impact of increasing inflationary pressures; the outcome of outstanding claims or legal proceedings; potential gains and recoveries of costs; assumptions underlying any of the foregoing; and any other statements that address activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the future. Forward-looking statements may be characterized by terminology such as “believe,” “anticipate,” “should,” “would,” “could,” “intend,” “plan,” “will,” “expect,” “estimate,” “project,” “positioned,” “strategy,” “targets,” “aims,” “seeks,” “sees,” and similar expressions. These statements are based on assumptions and assessments made by our management as of the filing of this Form 10-Q in light of their experience and perception of historical trends, current conditions, expected future developments and other factors we believe to be appropriate. These forward-looking statements are subject to a number of risks and uncertainties and actual results could differ materially due to numerous factors, including but not limited to the following:

•risks related to the impact of the COVID-19 global pandemic, including the rise, prevalence and severity of variants of the virus, actions by governments, businesses and individuals in response to the situation, such as the scope and duration of the outbreak, the nature and effectiveness of government actions and restrictive measures implemented in response, delays and cancellations of medical procedures, supply chain disruptions, the impact on creditworthiness and financial viability of customers, and other impacts on the Company’s business and ability to execute business continuity plans;

•risks related to the Separation, including our ability to realize the anticipated benefits of the Separation; the potential to incur significant liability if the separation and distribution of ESAB Corp is determined to be a taxable transaction; potential indemnification liabilities to ESAB Corp pursuant to the separation and distribution agreement and related agreements entered into in connection with the Separation; developments related to the impact of the COVID-19 pandemic on the Separation, and the financial and operating performance of each company following the Separation;

•~~volatility in the commodity markets and certain commodity prices due to economic disruptions from the COVID-19 pandemic and various geopolitical events;~~

•~~changes in the general economy, as well as the cyclical nature of the markets we serve;~~

•supply chain constraints and backlogs, including risks affecting raw material, part and component availability, labor shortages and inefficiencies, freight and logistical challenges, and inflation in raw material, part, component, freight and delivery costs;

•~~our ability~~an inability to identify, finance, acquire and successfully integrate attractive acquisition targets;

•the availability of additional capital and our ~~exposure~~inability to ~~unanticipated liabilities resulting from acquisitions;~~pursue our growth strategy without it;

•our ~~ability~~indebtedness and ~~the ability of~~ our ~~customers to access required capital at a reasonable cost;~~debt agreements, which contain restrictions that may limit our flexibility in operating our business;

•our ~~ability~~restructuring activities, which may subject us to ~~accurately estimate the cost of or realize savings from~~additional uncertainty in our ~~restructuring programs;~~operating results;

•~~disruptions~~any impairment in the ~~global economy caused by the ongoing conflict between Russia and Ukraine (including any political or economic responses and counter-responses);~~value of our intangible assets, including goodwill;

•a material ~~disruptions~~disruption at any of our manufacturing facilities;

•~~noncompliance with various laws~~any failure to maintain, protect and ~~regulations associated with~~defend our ~~international operations, including anti-bribery laws, export control regulations and sanctions and embargoes;~~intellectual property rights;

•~~risks associated~~the effects of the COVID-19 global pandemic;

•significant movements in foreign currency exchange rates;

•the availability of raw materials, as well as parts and components used in our products, as well as the impact of raw material, energy and labor price fluctuations and supply shortages;

•the competitive environment in which we operate;

•our reliance on a variety of distribution methods to market and sell our medical device products;

•extensive government regulation and oversight of our products;

•safety issues or recalls of our products;

•failure to comply with federal and state regulations related to the manufacture of our ~~international operations, including risks from trade protection measures and other changes in trade relations;~~products;

•improper marketing or promotion of our products;

•risks associated with the ~~representation of our employees by trade unions and work councils;~~clinical trial process;

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

•our exposure to product liability claims;

•~~potential costs~~our inability to obtain coverage and ~~liabilities associated~~adequate levels of reimbursement from third party payors for our medical device products;

•audits or denials of claims by government officials;

•federal and state health reform and cost control efforts;

•our failure or the failure of our employees or third parties with ~~environmental, health and safety~~which we have relationships to comply with healthcare laws and regulations;

•~~failure~~our relationships with leading surgeons and our ability to ~~maintain, protect and defend our intellectual property rights;~~comply with enhanced disclosure requirements regarding payments to physicians;

•~~the loss of key members of our leadership team,~~actual or ~~the inability~~perceived failures to ~~attract, develop, engage,~~comply with applicable data protection, privacy and ~~retain qualified employees;~~

•~~restrictions in our principal credit facility that may limit our flexibility in operating our business;~~

•~~impairment in the value of intangible assets;~~

•~~significant movements in foreign currency exchange rates;~~

•~~new~~security laws, regulations, standards and ~~customer preferences reflecting an increased focus on environmental, social and governance issues, including new regulations related to the use of conflict minerals;~~other requirements;

•service interruptions, data corruption, cyber-based attacks or network security breaches affecting our information technology infrastructure;

•~~risks arising from changes in technology;~~noncompliance with anti-bribery laws, export control regulations, economic sanctions or other trade laws;

•our inability to achieve some or all of the ~~competitive environment in~~expected benefits of the Separation;

•if the Separation and/or certain related transactions do not qualify as transactions that are generally tax-free for U.S. federal income tax purposes, we and our ~~industry;~~stockholders could be subject to significant tax liabilities;

•potential indemnification liabilities to ESAB pursuant to the Separation and distribution agreement and other related agreements

•changes in ~~our tax rates, realizability of deferred tax assets, or exposure to additional income tax liabilities, including~~ the ~~effects of the COVID-19 global pandemic;~~general economy;

•~~our ability to manage~~disruptions in the global economy caused by the ongoing conflict between Russia and ~~grow our business and execution of our business and growth strategies;~~Ukraine;

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

2419

•~~difficulties and delays in integrating or fully realizing projected cost savings and benefits of our acquisitions; and~~

•other risks and factors listed in Item 1A. “Risk Factors” in Part I of our ~~2021~~2022 Form ~~10-K and Part II. Item 1A. “Risk Factors” in this Form 10-Q.~~10-K.

The effects of the COVID-19 pandemic, including the rise, prevalence and severity of variants of the virus and actions by governments, businesses and individuals in response to the situation, may give rise or contribute to or amplify the risks associated with many of these factors.

Any such forward-looking statements are not guarantees of future performance and actual results, developments and business decisions may differ materially from those envisaged by such forward-looking statements. ~~These forward-looking statements speak only as of the date this Form 10-Q is filed with the SEC.~~ We do not assume any obligation and do not intend to update any forward-looking statement, except as required by law. See Part I. Item 1A. “Risk Factors” in our ~~2021~~2022 Form 10-K ~~and Part II. Item 1A. “Risk Factors” in this Form 10-Q~~ for a further discussion regarding some of the reasons that actual results may be materially different from those that we anticipate.

2520

Overview

Please see Part I, Item 1. “Business” in our ~~2021~~2022 Form 10-K for a discussion of the Company’s objectives and methodologies for delivering shareholder value.

~~Prior to~~We previously reported our operations through our Fabrication Technology and Medical Technology segments. These businesses operated in distinct markets, with unique business opportunities and investment requirements. Following the Separation, onthe Company holds only the medical technology business reported through our Prevention & Recovery and Reconstructive segments. On April 4, 2022, the Company ~~conducted~~changed its name from “Colfax Corporation” to “Enovis Corporation”, began operating its business as “Enovis” and, as of April 5, 2022, the Company’s common stock began trading under the new ticker symbol “ENOV”. See the Results of Operations section below for further information on the Separation.

As mentioned above, beginning in the second quarter of 2022, Enovis conducts its operations through two operating segments: ~~Fabrication Technology~~Prevention & Recovery and ~~Medical Technology.~~Reconstructive. We have reflected this change in all historical periods presented.

•~~Fabrication Technology~~Prevention & Recovery - a leading global supplier of consumable products and equipment for use in the cutting, joining and automated welding, as well as gas control equipment, providing a wide range of products with innovative technologies to solve challenges in a wide range of industries.

•~~Medical Technology~~ - a leader in orthopedic solutions, providing devices, software, and services ~~spanning~~across the ~~full continuum of~~ patient care continuum from injury prevention to ~~joint replacement to rehabilitation.~~rehabilitation after surgery, injury, or from degenerative disease.

~~Certain amounts not allocated to~~•Reconstructive - an innovation market-leader positioned in the ~~two reportable segments~~fast-growing surgical implant business, offering a comprehensive suite of reconstructive joint products for the hip, knee, shoulder, elbow, foot, ankle, and ~~intersegment eliminations are reported under the heading “Corporate~~finger and ~~other.”~~surgical productivity tools.

~~Prior to the Separation, we had~~We have a global footprint, with production facilities in North America, Europe, North ~~America, South America, Asia, Australia~~Africa, and ~~Africa, serving~~Asia. We serve a global customer base across multiple markets through a combination of direct sales and third-party distribution channels. ~~Prior to our Separation, our~~Our customer base ~~was~~is highly diversified in the medical and industrial end markets. Enovis, after the Separation, now serves two primary end markets in medical devices, prevention & recovery products and reconstructive surgical products, and it generates approximately 68% of its revenues in the United States and the majority of the remaining balance in Europe.market.

~~In conjunction with the Separation, we rebranded~~Integral to our operations is our business management system, as Enovis Growth Excellence ~~(“EGX”)~~(EGX). EGX is ~~integral to~~ our ~~operations~~culture and includes our values and behaviors, a comprehensive set of tools, and repeatable, teachable processes that we use to drive continuous improvement and create superior value for our customers, shareholders, and associates. ~~EGX leverages our culture of continuous improvement to rapidly uncover and execute growth opportunities.~~ We believe that our management team’s access to, and experience in, the application of the EGX methodology is one of our primary competitive strengths.

Results of Operations

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 ~~Segment operating income, which represents Operating income before Restructuring and other related charges and European Union Medical Devices Regulation (“MDR”) costs,~~ and Adjusted ~~EBITA~~EBITDA, as defined in the “Non-GAAP Measures” section.

Items Affecting Comparability of Reported Results and Other Recent Developments

The comparability of our operating results for the three months ended ~~April 1, 2022~~March 31, 2023 to the comparable period in ~~2021~~2022 is affected by the following significant items:

The Separation

On April 4, 2022, ~~(the “Distribution Date”),~~ we completed the Separation of our fabrication technology business through a tax-free, pro-rata distribution of 90% of the outstanding common stock of ESAB ~~Corp~~ to ~~Enovis~~our stockholders. WeOn November 18, 2022, we subsequently disposed of the retained 10% ofstake in the shares of ESAB ~~Corp~~ common stock ~~immediately following~~through a debt-for-equity exchange with a lender under our Enovis Credit Agreement. Once the Separation. We intend to divest the 10% retained shares in ESAB Corp in a tax-efficient exchange for outstanding debt no later than 12 months after the Distribution Date. The Chairman of our board of directors and co-founder of Colfax, Mitchell P. Rales, is also serving as Chairman of the board of directors of ESAB Corp.

~~Since the disposition occurred~~Separation was completed in the second quarter of 2022, we ~~will classify our~~began classifying the results from the fabrication technology business for the comparable periods presented as a discontinued operation in our financial ~~statements beginning in the second quarter of 2022;~~statements. Accordingly, the results of our fabrication technology businesses ~~are included in continuing operations~~have been recast as a discontinued operation in the accompanying ~~financials~~financial statements for the three months ended April 1, ~~2022 and April 2, 2021.~~

We expect that the Separation will allow each company to: (1) optimize capital allocation for internal investment, mergers and acquisitions, and return of capital to shareholders; (2) tailor investment to its specific business profile and strategic priorities in the most efficient manner possible; (3) increase operating flexibility and resources to capitalize on growth opportunities in its respective markets; and (4) improve both investor alignment with its clear value proposition and the ability for investors to value it based on its distinct strategic, operational and financial characteristics. The Separation also provides each company with an appropriately valued acquisition currency that could be used for larger, transformational transactions.

~~Refer to Note 10, “Debt” and Note 15, “Subsequent Events” in the accompanying Notes to the Condensed Consolidated Financial Statements for more information regarding the Separation.~~

~~The COVID-19 Pandemic~~

In an effort to contain COVID-19 or slow its spread, governments around the world enacted measures including periodically closing businesses not deemed “essential,” isolating residents to their homes, limiting access to healthcare, curtailing activities including sporting events, and practicing social distancing. Increased access to vaccinations subsequently contributed to slowing the spread of COVID-19, resulting in some or all restrictions being lifted in a number of jurisdictions around the world, allowing a return to more normal activity and operational levels during the first half of 2021. However, the emergence and subsequent spread of COVID-19 variants in the second half of 2021 led to the reinstatement of certain restrictions, which slowed the pace of recovery into the beginning of the first quarter of 2022.

As reflected in the discussions that follow, the pandemic and actions taken in response to it had a variety of impacts on our results of operations during 2021 and 2022, including sales levels, inflation and supply chain challenges.

There may be developments outside our control that require us to further adjust our operations. Given the potential dynamic nature of this situation, including the rise, prevalence and severity of variants of the virus, we cannot reasonably estimate the full impacts of COVID-19 on our financial condition, results of operations or cash flows in the future.

2721

COVID-19 and other market dynamics have caused widespread supply chain challenges due to labor, raw material, and component shortages. As a result, we continue to experience supply constraints in our businesses, which have led to cost inflation and logistics delays. We are taking actions in an effort to mitigate impacts to our supply chain, however, we expect these pressures to continue.

~~Please see Part I. Item 1A. “Risk Factors” in our 2021 Form 10-K for a further discussion of some of the risks related to the COVID-19 pandemic.~~

Strategic Acquisitions

We complement our organic growth plans with strategic acquisitions. Acquisitions can significantly affect our reported results, and we report the change in our Net sales between periods both from existing and acquired businesses. The change in Net sales due to acquisitions for the three months ended ~~April 1, 2022~~March 31, 2023 presented in this filing represents the incremental sales subsequent to the beginning of the prior year ~~periods.~~

period. During ~~2021,~~the year ended December 31, 2022, the Company completed two business acquisitions for aggregate net cash consideration of $50.5 million. In the second quarter of 2022, the Company acquired KICo Knee Innovation Company Pty Limited and subsidiaries, an Australian private company doing business as 360 Med Care, which is a medical device distributor that bundles certain computer-assisted surgery and patient experience enhancement programs to add value to the device supply arrangements with surgeons, hospitals, and insurers. In the third quarter of 2022, the Company acquired a controlling interest in Insight Medical Systems, the flagship product of which is the ARVIS surgical navigation system. Additionally, during the three months ended April 1, 2022, we completed ~~one acquisition in our Fabrication Technology segment and five~~two asset acquisitions in our ~~Medical Technology~~Prevention & Recovery segment for net cash consideration of ~~$206.5 million and equity consideration of $285.7~~$3.7 million. ~~The largest of these acquisitions were~~

On March 31, 2023, the Company also entered into a definitive agreement with Amplitude Surgical SA to acquire Novastep®, a leading player in ~~our Medical Technology segment, including Trilliant Surgical, a national provider of~~Minimally Invasive Surgery (MIS) foot and ankle ~~orthopedic implants; MedShape, Inc., a provider of innovative surgical~~ solutions for ~~foot~~cash considerations of 90 million Euros. The transaction is subject to customary closing conditions and ~~ankle surgeons;~~regulatory approvals and ~~Mathys AG Bettlach, a Switzerland-based company that develops and distributes innovative products for artificial joint replacement, synthetic bone graft solutions and sports medicine.~~is expected to close in the second quarter of 2023.

Foreign Currency Fluctuations

~~A significant portion of our Net sales, approximately 61% for both~~During the three months ended ~~April 1, 2022 and April 2, 2021, were~~March 31, 2023, approximately 33% of our sales are derived from operations outside the U.S., ~~with~~ the majority of ~~those~~which is in Europe, with the remaining portion mostly 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 U.S. are denominated in currencies other than the U.S. dollar. ~~Because much~~Similar portions of our manufacturing and employee costs are also outside the U.S.~~, a significant portion of our costs are also~~ 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 ~~April 1, 2022~~March 31, 2023 compared to the three months ended April ~~2, 2021,~~1, 2022, fluctuations in foreign currencies ~~had an unfavorable impact on the change in~~decreased Net sales ~~and~~by 1.5%, decreased Gross profit ofby approximately 3%1.9% and ~~reduced Selling, general and administrative~~decreased operating expenses by ~~2%. The changes in foreign exchange rates since December 31, 2021 also decreased net assets by~~ approximately 1% ~~as of April 1, 2022.~~.

Seasonality

~~European operations in our Fabrication Technology segment typically experience a slowdown during the July, August and December vacation seasons.~~ Sales in our ~~Medical Technology segment~~Prevention & Recovery and Reconstructive segments typically peak in the fourth quarter. ~~However, the business~~General economic conditions and other factors may, however, impact ~~caused by the COVID-19 pandemic has distorted the effects of historical seasonality patterns.~~future seasonal variations.

2822

Non-GAAP Measures

Adjusted ~~EBITA~~EBITDA

Adjusted ~~EBITA, a~~EBITDA and Adjusted EBITDA margin, two non-GAAP performance ~~measure, is~~measures, are included in this report because ~~it is a~~they are key ~~metric~~metrics used by our management to assess our operating performance. Adjusted ~~EBITA~~EBITDA excludes from Net income (loss) from continuing operations the effect of income tax expense (benefit), Other income, non-operating (gain) loss on investments, debt extinguishment charges, interest expense, net, restructuring and other ~~related~~ charges, ~~MDR~~Medical Device Regulation (MDR) fees and ~~related~~other costs, strategic transaction costs, stock-based compensation, depreciation and other amortization, acquisition-related intangible asset amortization, and ~~other non-cash~~fair value charges ~~and strategic transaction costs, as well as income tax expense, pension settlement gain, debt extinguishment charges and interest expense, net.~~on acquired inventory. We also present Adjusted ~~EBITA~~EBITDA and Adjusted EBITDA margin by operating segment, which isare subject to the same ~~adjustments as~~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 EBITA. Further, we present Adjusted EBITA (and Adjusted EBITA margin) on a segment basis, where we exclude the impact of restructuring and other related charges, MDR and related costs, acquisition-related intangible asset amortization and other non-cash charges, and strategic transaction costs from segment operating income. Adjusted EBITAEBITDA assists ~~Enovis~~our management in comparing ~~its~~ 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. ~~Enovis~~Our management also believes that presenting these measures allows investors to view ~~its~~our performance using the same ~~measure~~measures that we use in evaluating our financial and business performance and trends.

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 income~~net loss from continuing operations, the most directly comparable ~~GAAP~~ financial statement measure, to Adjusted ~~EBITA.~~EBITDA, for the three months ended March 31, 2023 and April 1, 2022.

Three Months Ended
April 1, 2022 April 2, 2021
(Dollars in millions)
Net income from continuing operations (GAAP) $ 19.4 $ 27.7
Income tax expense 18.7 7.9
Interest expense, net 15.1 25.7
Restructuring and other related charges(1)
8.3 4.0
MDR and related costs(2)
2.6 1.8
Strategic transaction costs(3)
21.4 1.4
Acquisition-related amortization and other non-cash charges(4)
43.6 38.5
Adjusted EBITA (non-GAAP) $ 129.0 $ 107.1
Net income margin from continuing operations (GAAP) 1.9 % 3.2 %
Adjusted EBITA margin (non-GAAP) 12.6 % 12.2 %


	Three Months Ended March 31, 2023
	Prevention & Recovery			Reconstructive			Total
	(Dollars in millions)
Net loss from continuing operations (GAAP)(1)							$	(22.8)
Income tax benefit							(7.1)
Other income							(0.7)
Interest expense, net							5.7
Operating loss (GAAP)	$	(18.1)		$	(6.8)		(25.0)
Operating loss margin	(7.2)		%	(4.4)		%	(6.1)		%
Adjusted to add (deduct):
Restructuring and other charges(2)	1.3			1.6			2.9
MDR and other costs(3)	3.2			4.6			7.8
Strategic transaction costs(3)	6.2			5.4			11.6
Stock-based compensation(3)	4.1			2.8			6.9
Depreciation and other amortization	5.7			14.2			20.0
Amortization of acquired intangibles	23.3			8.8			32.0
Inventory step-up	—			0.1			0.1
Adjusted EBITDA (non-GAAP)	$	25.7		$	30.7		$	56.4
Adjusted EBITDA margin (non-GAAP)	10.3		%	19.8		%	13.9		%

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

(2) Restructuring and other ~~related~~charges includes $0.3 million of expense classified as Cost of sales on our Condensed Consolidated Statements of Operations.

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


	Three Months Ended April 1, 2022
	Prevention & Recovery			Reconstructive			Total
	(Dollars in millions)
Net loss from continuing operations (GAAP)(1)							$	(38.1)
Income tax expense							0.4
Interest expense, net							7.1
Operating loss (GAAP)	$	(14.4)		$	(16.2)		(30.6)
Operating loss margin	(5.9)		%	(12.4)		%	(8.2)		%
Adjusted to add (deduct):
Restructuring and other charges(2)	2.1			0.8			3.0
MDR and other costs(3)	1.7			0.9			2.6
Strategic transaction costs(3)	7.6			4.1			11.7
Stock-based compensation(3)	4.4			2.3			6.7
Depreciation and other amortization	5.8			12.7			18.5
Amortization of acquired intangibles	19.1			11.7			30.8
Inventory step-up	—			5.1			5.1
Adjusted EBITDA (non-GAAP)	$	26.4		$	21.4		$	47.7
Adjusted EBITDA margin (non-GAAP)	10.8		%	16.4		%	12.7		%

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

(2) Restructuring and other charges includes $0.5 million of expense classified as Cost of sales on our Condensed Consolidated Statements of ~~Operations for the three months ended April 1, 2022.~~

~~(2)~~ Primarily related to costs specific to compliance with medical device reporting regulations and other requirements of the European Union MDR. These costs are classified as Selling, general and administrative expense on our Condensed Consolidated Statements of Operations.

(3) ~~For the three months ended April 1, 2022, Strategic transaction costs includes costs related~~Certain amounts are allocated to the ~~Separation and certain transaction and integration~~segments as a percentage of revenue as the costs ~~related~~are not discrete to ~~recent acquisitions. For the three months ended April 2, 2021, Strategic transaction costs includes costs related to the Separation.~~

~~(4)~~ ~~Includes amortization of acquired intangibles and fair value charges on acquired inventory.~~

either segment.

The following tables set forth a reconciliation of operating income (loss), the most directly comparable financial statement measure, to Adjusted EBITA by segment for the three months ended April 1, 2022 and April 2, 2021, respectively.

Three Months Ended April 1, 2022
Fabrication Technology Medical Technology Corporate and other Total
(Dollars in millions)
Operating income (loss) (GAAP) $ 90.2 $ (5.7) $ (31.4) $ 53.1
Restructuring and other related charges 5.3 3.0 — 8.3
MDR and other costs — 2.6 — 2.6
Segment operating income (loss) (non-GAAP) 95.5 (0.1) (31.4) 64.0
Strategic transaction costs 3.6 2.1 15.7 21.4
Acquisition-related amortization and other non-cash charges 7.7 35.9 — 43.6
Adjusted EBITA (non-GAAP) $ 106.9 $ 37.8 $ (15.7) $ 129.0
Segment operating income margin (non-GAAP) 14.7 % — % — % 6.3 %
Adjusted EBITA margin (non-GAAP) 16.5 % 10.1 % — % 12.6 %

~~(1)~~ ~~Restructuring and other related charges includes $0.5 million of expense classified as Cost of sales on our Condensed Consolidated Statements of Operations for the three months ended April 1, 2022.~~

Three Months Ended April 2, 2021
Fabrication Technology Medical Technology Corporate and other Total
(Dollars in millions)
Operating income (loss) (GAAP) $ 79.2 $ (0.6) $ (17.4) $ 61.3
Restructuring and other related charges(1)
3.1 1.0 — 4.0
MDR and other costs — 1.8 — 1.8
Segment operating income (loss) (non-GAAP) 82.3 2.2 (17.4) 67.1
Strategic transaction costs — — 1.4 1.4
Acquisition-related amortization and other non-cash charges 9.1 29.4 — 38.5
Adjusted EBITA (non-GAAP) $ 91.4 $ 31.6 $ (15.9) $ 107.1
Segment operating income margin (non-GAAP) 14.5 % 0.7 % — % 7.6 %
Adjusted EBITA margin (non-GAAP) 16.1 % 10.2 % — % 12.2 %

3024

Total Company

Sales

Net sales for the three months ended ~~April 1, 2022~~March 31, 2023 increased from the three months ended April ~~2, 2021.~~1, 2022. The following table presents the components of changes in our consolidated Net sales.


		Three Months Ended			Three Months Ended
			Net Sales			Change %			Net Sales		Change %
			(Dollars in millions)						(Dollars in millions)
For the three months ended April 2, 2021			$	879.2
For the three months ended April 1, 2022								For the three months ended April 1, 2022	$	375.5
Components of Change:	Components of Change:							Components of Change:
Existing Businesses(1)	Existing Businesses(1)		124.5			14.2	%	Existing Businesses(1)	35.2		9.4	%
Acquisitions(2)	Acquisitions(2)		45.6			5.2	%	Acquisitions(2)	1.1		0.3	%
Foreign Currency Translation(3)	Foreign Currency Translation(3)		(25.9)			(2.9)	%	Foreign Currency Translation(3)	(5.6)		(1.5)	%
			144.2			16.4	%		30.7		8.2	%
For the three months ended April 1, 2022			$	1,023.4
For the three months ended March 31, 2023								For the three months ended March 31, 2023	$	406.2

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

(2) Represents the incremental sales as a result of acquisitions closed subsequent to the beginning of the prior year period.

(3) 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 ~~first quarter~~three months ended ~~April 1, 2022~~March 31, 2023 compared to the prior year period was primarily attributable to ~~acquisition-related~~an increase in sales ~~inflation-related pricing increases and organic volume increases.Both current year and prior year periods sales volumes were negatively impacted~~from existing businesses across both of our segments, partially offset by ~~COVID-19.~~foreign currency headwinds. Existing business sales in our ~~Fabrication Technology~~Reconstructive segment increased ~~$101.2~~$25.1 million induring the three months ended April 1, 2022 primarily due to inflation-related pricing increases and, to a lesser extent, new product initiatives and improved sales volume. During the three months ended April 1, 2022, existing business sales in our Medical Technology segment increased $23.3 millionMarch 31, 2023 due to higher sales volumes compared to the prior year ~~period.~~period, driven by broad market strength and market outperformance. Existing business sales in our Prevention & Recovery segment increased $10.1 million during the three months ended March 31, 2023 due to volume and inflation-related pricing increases. Net sales from acquisitions ~~for~~increased in the three months ended ~~April 1, 2022 are~~March 31, 2023 due to ~~acquisitions~~the 360 Med Care acquisition in our ~~Medical Technology~~Reconstructive segment ~~that closed since the beginning of 2021.~~in May 2022. The strengthening of the U.S. dollar relative to other currencies ~~most notably the Euro,~~ resulted in ~~a $25.9~~$5.6 million unfavorable foreign currency translation ~~impact.~~

impacts during the three months ended March 31, 2023.

The following table summarizes our results of continuing operations for the comparable periods.

Restructuring and other related charges(1)

(1) Restructuring and other ~~related~~ charges includes $0.3 million and $0.5 million of expense classified as Cost of sales on our Condensed Consolidated Statements of Operations for the three months ended March 31, 2023 and April 1, ~~2022.~~2022, respectively.

~~First Quarter of 2022~~Three Months Ended March 31, 2023 Compared to ~~First Quarter of 2021~~Three Months Ended April 1, 2022

Gross profit increased in the ~~first quarter of 2022~~three months ended March 31, 2023 compared with the prior year period due to a ~~$24.5~~$24.7 million increase in our ~~Fabrication Technology~~Reconstructive segment and a ~~$34.6~~$4.4 million increase in our ~~Medical Technology~~Prevention & Recovery segment. The Gross profit increase was ~~primarily~~ attributable to ~~business acquisition-related increases, favorable~~increased sales ~~mix, and improved volumes. Increased Gross profit~~ in our ~~Medical Technology segment was also due to acquisition growth primarily~~existing businesses from volume and inflation-related pricing increases, improved operating cost leverage, and the benefit of a decrease of $5.0 million in ~~Reconstructive product lines. Improved Gross profit in both segments was~~inventory fair value step-up amortization charges, partially offset by ~~increased~~unfavorable foreign currency translation and inflation in supply chain, logistics, and ~~logistic~~other costs. Gross profit margin ~~was impacted by the same drivers as Gross profit, but decreased slightly~~increased due to ~~inflation-related customer pricing and cost increases in our Fabrication Technology segment.~~the aforementioned factors.

Selling, general and administrative expense increased ~~$63.7~~$18.7 million in the ~~first quarter~~three months ended March 31, 2023 compared to the prior year period, primarily due to increased commissions driven by higher sales, investments to support growth, spending on MDR and other costs, and cost inflation, partially offset by cost reduction initiatives. Research and development costs also increased compared to the prior year period, primarily due to increased spend within recently acquired businesses in our Reconstructive segment, which are investing in surgical productivity solutions and computer-assisted surgery technologies. Amortization of ~~2022~~acquired intangibles and Depreciation and other amortization also increased compared to the prior year period due to business acquisition-related increases of $26.7 million in our Medical Technology segment, a $20.0 million increase in strategic transaction costs driven by higher Separation-related costs, and, to a lesser extent, increases in compensation and travel costs.acquisitions.

Interest expense, net decreased in the ~~first quarter of 2022~~three months ended March 31, 2023 compared to the prior year period due to a reduction in debt balances ~~primarily~~ as a result of the ~~redemption~~Separation-related debt redemptions at the beginning of ~~senior notes in~~ the second quarter of ~~2021.~~2022 and the partial extinguishment of the outstanding balance of the Enovis Term Loan (as defined below) in November 2022.

The effective tax rate for Net ~~income~~loss from continuing operations during the ~~first quarter of 2022~~three months ended March 31, 2023 was ~~49.1%~~23.7%, which ~~was higher than~~differed from the ~~2022~~2023 U.S. federal statutory tax rate of 21%, ~~mainly~~primarily due to ~~withholding taxes, taxable foreign exchange gains, U.S. taxation~~non-U.S. income taxed at lower rates, release of ~~international operations,~~valuation allowance on non-U.S attributes, and tax credits for research and development offset by other non-deductible expenses and ~~various items expensed discretely to the quarter.~~U.S. taxation on international operations. The effective tax rate for the ~~first quarter of 2021~~three months ended April 1, 2022 was ~~22.2%~~(1.0)%, which was ~~higher~~lower than the ~~2021~~2022 U.S. federal statutory tax rate of 21% mainly due to ~~withholding taxes, taxable foreign exchange gains~~U.S. taxation on international operations and other non-deductible ~~expenses partially offset by the benefit of U.S. tax credits.~~expenses.

Net ~~income~~loss from continuing operations decreased in the ~~first quarter of 2022~~three months ended March 31, 2023 compared with the prior year period, primarily due to ~~costs associated with~~ the ~~Separation, increased~~aforementioned Gross profit increase and an income tax ~~expense and acquisition-related costs, partially~~benefit, offset by ~~improved sales volumes.~~the aforementioned Selling, general and administrative expense increase. Net ~~income~~loss margin from continuing operations decreased by ~~130~~450 basis points due to the aforementioned factors. Adjusted ~~EBITA~~EBITDA increased due to organic growth. Adjusted EBITDA margin excluding the ~~improved sales volumes, partially offset~~effects of recent acquisitions and foreign currency pressures increased by ~~higher supply chain and logistic costs. Adjusted EBITA margin increased 40~~approximately 200 basis ~~points for the same reasons Adjusted EBITA increased, partially offset by inflation-related customer pricing and cost increases in our Fabrication Technology segment, as well as~~points. Our recent acquisitions in our ~~Medical Technology~~Reconstructive segment, which were dilutive to the net loss margin ~~but~~from continuing operations and to Adjusted EBITDA margin by approximately 40 basis points, are expected to be accretive to margins in future years.

As discussed further above, we report results in two reportable segments: ~~Fabrication Technology~~Prevention & Recovery and ~~Medical Technology.~~Reconstructive. Operating loss, adjusted EBITDA, and adjusted EBITDA margins at the operating segment level also include allocations of certain central function expenses not directly attributable to either operating segment. See Item 2. “Non-GAAP Measures” for a further discussion and reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures.

~~Fabrication Technology~~Prevention & Recovery

~~Our fabrication technology business formulates, develops, manufactures~~We develop, manufacture, and ~~supplies consumable~~distribute rigid bracing products, orthopedic soft goods, vascular systems, and compression garments, and hot and cold therapy products and ~~equipment, including cutting, joining,~~offer robust recovery sciences products in the clinical rehabilitation and ~~automated welding products,~~sports medicine markets such as ~~well as gas control equipment.~~bone growth stimulators and electrical stimulators used for pain management. Our ~~fabrication technology~~Prevention & Recovery products are marketed under several brand names, most notably ~~ESAB, providing a wide range of products with innovative technologies~~DJO, to solve challenges in virtually any industry. ESAB’s comprehensive range of welding consumables includes electrodes, cored and solid wires, and fluxes using a wide range of specialty and other materials, and cutting consumables including electrodes, nozzles, shields and tips. ESAB’s fabrication technology equipment ranges from portable welding machines to large customized automated cutting and welding systems. ESAB also offers a range of digital software and solutions to help its customers increase their productivity, remotely monitor their welding operations and digitize their documentation. Products are sold into a wide range of end markets, including general industry, construction, infrastructure, transportation, energy, renewable energy, and medical & life sciences. As part of the Separation described elsewhere in this report, on April 4, 2022, we spun-off our fabrication technology business. Refer to Note 15, “Subsequent Events” in the accompanying Notes to the Condensed Consolidated Financial Statements for more information regarding the Separation.

~~The following table summarizes selected financial results for our Fabrication Technology segment:~~

~~First Quarter of 2022 Compared to First Quarter of 2021~~

Net sales in our Fabrication Technology segment increased $79.8 million, or 14%, in the first quarter of 2022 compared with the prior year period driven primarily by inflation-related customer pricing impacts, as well as new product initiatives and improved sales volumes, partially offset by unfavorable foreign currency translation. Gross profit increased $24.5 million due to the improved sales volumes, driven by new product initiatives, and favorable product mix. Gross profit margin decreased 60 basis points due to inflation-related customer pricing and cost increases, which compressed the margin. Selling, general and administrative expense increased primarily due to increased costs related to the Separation, as well as increased allowances on receivables in certain regions and increased compensation costs. Segment operating income and Segment operating income margin improved due to increased sales and favorable product mix, partially offset by increased Selling, general and

administrative expenses. Adjusted EBITA and Adjusted EBITA margin increased for the same reasons, partially offset by inflation-related customer pricing and cost increases during the first quarter of 2022.

~~Medical Technology~~

We develop, manufacture and distribute high-quality medical devices and services across the continuum of patient care from injury prevention to joint replacement to rehabilitation after surgery, injury or from degenerative disease, enabling people to regain or maintain their natural motion. Our products are used by orthopedic specialists, ~~surgeons,~~ primary care physicians, pain management specialists, physical therapists, podiatrists, chiropractors, athletic trainers, and other healthcare ~~professionals.~~professionals who treat patients with a variety of treatment needs including musculoskeletal conditions resulting from degenerative diseases, deformities, traumatic events and sports-related injuries. Many of our medical devices and related accessories are used by athletes and other patients for injury prevention and at-home physical therapy treatments. We reach a diverse customer base through multiple distribution channels, including independent distributors, direct salespeople, and directly to patients.

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

Three Months Ended March 31, 2023 Compared to Three Months Ended April 1, 2022

Net sales in our Prevention & Recovery segment increased $5.9 million, or 2.4%, in the first quarter ended March 31, 2023 compared with the prior year period, driven by a 4.1% or $10.1 million increase from volume and inflation-related pricing increases, offset by foreign currency headwinds. Gross profit increased $4.4 million due to inflation-related pricing increases and improved sales mix in our existing businesses, partially offset by the effect of unfavorable foreign currency impacts in a primary production facility. Gross profit margin increased 60 basis points due to the aforementioned factors. Selling, general and administrative expense increased over the same period primarily due to investments to support growth, spending on MDR and other costs, and cost inflation, partially offset by cost reduction initiatives. Research and development expense increased slightly due to timing of certain initiatives. Operating loss increased due to higher acquisition amortization, higher selling, general and administrative expenses and inflation of supply chain, logistics, and other costs, offset by improved sales mix in our existing businesses. Adjusted EBITDA and Adjusted EBITDA margin decreased due to higher costs caused by unfavorable foreign currency impacts and inflation-related pricing increases which partially offset by improved Gross profit margin due to improved sales mix.

We develop, manufacture, and market a wide variety of knee, hip, shoulder, elbow, foot, ankle, and finger implant products and surgical productivity solutions that serve the orthopedic reconstructive joint implant market. Our products are primarily ~~include orthopedic braces, rehabilitation devices, footwear,~~used by surgeons for surgical ~~implants, and bone growth stimulators.~~procedures.

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

Three Months Ended
April 1, 2022 April 2, 2021
(Dollars in millions)
Net sales $ 375.5 $ 311.1
Gross profit $ 205.9 $ 171.3
Gross profit margin 54.8 % 55.1 %
Selling, general and administrative expense $ 208.4 $ 170.9
Segment operating income (non-GAAP) $ (0.1) $ 2.2
Segment operating income margin (non-GAAP) — % 0.7 %
Adjusted EBITA (non-GAAP) $ 37.8 $ 31.6
Adjusted EBITA margin (non-GAAP) 10.1 % 10.2 %
Items excluded from Adjusted EBITA:
Restructuring and other related charges(1)
$ 3.0 $ 1.0
MDR and related costs(2)
$ 2.6 $ 1.8
Strategic transaction costs $ 2.1 $ —
Acquisition-related amortization and other non-cash charges $ 35.9 $ 29.4


	Three Months Ended
	March 31, 2023			April 1, 2022
	(Dollars in millions)
Net sales	$	155.4		$	130.6
Gross profit	$	108.1		$	83.4
Gross profit margin	69.6		%	64.0		%
Selling, general and administrative expenses	$	95.0		$	80.4
Research and development expense	$	9.7		$	6.6

Operating loss (GAAP)	$	(6.8)		$	(16.2)
Operating loss margin (GAAP)	(4.4)		%	(12.4)		%
Adjusted EBITDA (non-GAAP)	$	30.7		$	21.4
Adjusted EBITDA margin (non-GAAP)	19.8		%	16.4		%

~~First Quarter of 2022~~Three Months Ended March 31, 2023 Compared to ~~First Quarter of 2021~~Three Months Ended April 1, 2022

Net ~~sales~~sales increased in our ~~Medical Technology~~Reconstructive segment by $24.8 million, or 19.0%, in the first quarter ~~of 2022~~ended March 31, 2023 compared with the prior year period, primarily due to ~~acquisition-related sales growth of $45.6 million in the current year period. Sales from existing business increased $23.3 million primarily due to~~ higher sales volumes ~~in the current year period compared to the prior year period, both of which were impacted~~driven by ~~COVID-19. The benefit from acquisition-related sales~~broad market strength and ~~increased existing business sales was partially offset by unfavorable foreign currency translation. Gross~~market outperformance. Gross profit increased in the first quarter ~~of 2022~~ended March 31, 2023 compared to the first quarter ~~of 2021~~ended April 1, 2022, primarily due to ~~acquisition-related growth~~increased sales in our existing businesses and ~~favorable product mix, partially offset by increased supply chain and logistic costs and acquisition-related inventory valuation step-up charges,~~improved operating cost leverage, which also led to ~~a slight decrease~~an increase in Gross profit margin. Selling, general and administrative expense increased over the same period primarily due to ~~costs associated with acquisitions, including integration costs for the newly-acquired businesses and~~ increased commissions ~~as a result of improved~~driven by higher sales, ~~volumes. Segment operating income~~investments to support growth, spending on MDR and ~~Segment operating income margin decreased~~other costs, and cost inflation, partially offset by cost reduction initiatives. Research and development expense increased compared to the prior year period, primarily due to increased ~~acquisition-related costs~~spend within recently acquired businesses in our Reconstructive segment, which are investing in surgical productivity solutions and ~~costs related~~computer-assisted surgery technologies. Operating loss decreased in the first quarter ended March 31, 2023 compared to the ~~Separation, partially~~first quarter ended April 1, 2022, primarily due to the aforementioned Gross profit increase and a reduction of acquisition amortization, offset by ~~improved sales volumes.~~the aforementioned Selling, general and administrative expense increase. Adjusted ~~EBITA~~EBITDA increased primarily due to growth in existing businesses and improved ~~sales volumes in~~operating cost leverage. Without the current year, partially offset by increased supply chain and logistic costs and increased Selling, general and administrative costs, while adjusted EBITA margin decreased slightly primarily due to the dilutive impact of recent ~~acquisitions. Restructuring and other related charges~~acquisitions, Adjusted EBITDA margins increased ~~by $2.0 million due~~450 basis points compared to prior year. Recent acquisitions were dilutive to the ~~implementation of new restructuring initiatives.~~

margin by approximately 100 basis points, but are expected to be accretive to margins in future years.

Liquidity and Capital Resources


Delaware		54-1887631
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification ~~Number)~~No.)

2711 Centerville Road,	Suite 400
Wilmington,	Delaware	19808
(Address of principal executive offices)		(Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	ENOV	New York Stock Exchange


		Three Months Ended					Three Months Ended
		April 1, 2022		April 2, 2021			March 31, 2023		April 1, 2022

Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income		$	16,301	$	20,240
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Net (loss) income						Net (loss) income	$	(23,158)	$	16,301
Adjustments to reconcile net income to net cash provided by (used in) operating activities:						Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Depreciation, amortization and other impairment charges	Depreciation, amortization and other impairment charges	66,026		62,785		Depreciation, amortization and other impairment charges	51,991		66,026
Stock-based compensation expense	Stock-based compensation expense	9,857		7,807		Stock-based compensation expense	7,606		9,857
Non-cash interest expense	Non-cash interest expense	978		1,537		Non-cash interest expense	838		978

Deferred income tax expense (benefit)		2,232		(3,614)

Deferred income tax expense						Deferred income tax expense	831		2,232
Loss on sale of property, plant and equipment	Loss on sale of property, plant and equipment	352		257		Loss on sale of property, plant and equipment	429		352

Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Trade receivables, net	Trade receivables, net	(20,690)		(39,950)		Trade receivables, net	(12,288)		(20,690)
Inventories, net	Inventories, net	(70,830)		(32,743)		Inventories, net	(9,249)		(70,830)
Accounts payable	Accounts payable	24,713		83,442		Accounts payable	15,621		24,713

Other operating assets and liabilities	Other operating assets and liabilities	(43,362)		(15,379)		Other operating assets and liabilities	(25,164)		(43,362)
Net cash (used in) provided by operating activities		(14,423)		84,382
Net cash provided by (used in) operating activities						Net cash provided by (used in) operating activities	7,457		(14,423)
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Purchases of property, plant and equipment and intangibles	Purchases of property, plant and equipment and intangibles	(24,089)		(24,537)		Purchases of property, plant and equipment and intangibles	(30,443)		(24,089)
Proceeds from sale of property, plant and equipment	Proceeds from sale of property, plant and equipment	2,746		—		Proceeds from sale of property, plant and equipment	—		2,746
Acquisitions, net of cash received, and investments	Acquisitions, net of cash received, and investments	(13,823)		(103,475)		Acquisitions, net of cash received, and investments	(3,942)		(13,823)

Net cash used in investing activities	Net cash used in investing activities	(35,166)		(128,012)		Net cash used in investing activities	(34,385)		(35,166)
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:

Payments under term credit facility						Payments under term credit facility	(219,468)		—
Proceeds from borrowings on revolving credit facilities and other	Proceeds from borrowings on revolving credit facilities and other	—		179,367		Proceeds from borrowings on revolving credit facilities and other	250,000		—
Repayments of borrowings on revolving credit facilities and other	Repayments of borrowings on revolving credit facilities and other	(7,428)		(185,643)		Repayments of borrowings on revolving credit facilities and other	(5,672)		(7,428)

Proceeds from issuance of common stock, net	Proceeds from issuance of common stock, net	1,199		716,632		Proceeds from issuance of common stock, net	438		1,199

Deferred consideration payments and other	Deferred consideration payments and other	(4,590)		(2,704)		Deferred consideration payments and other	(800)		(4,590)
Net cash (used in) provided by financing activities		(10,819)		707,652

Effect of foreign exchange rates on Cash and cash equivalents and Restricted Cash		2,542		(1,438)

(Decrease) increase in Cash and cash equivalents and Restricted cash		(57,866)		662,584
Cash and cash equivalents and Restricted Cash, beginning of period		719,370		101,069
Net cash provided by (used in) financing activities						Net cash provided by (used in) financing activities	24,498		(10,819)
Effect of foreign exchange rates on Cash and cash equivalents						Effect of foreign exchange rates on Cash and cash equivalents	35		2,542
Decrease in Cash and cash equivalents						Decrease in Cash and cash equivalents	(2,395)		(57,866)
Cash and cash equivalents, beginning of period						Cash and cash equivalents, beginning of period	24,295		719,370
Cash and cash equivalents, end of period	Cash and cash equivalents, end of period	$	661,504	$	763,653	Cash and cash equivalents, end of period	$	21,900	$	661,504


	Three Months Ended
	March 31, 2023		April 1, 2022
	(In thousands)
Prevention & Recovery:
U.S. Bracing & Support	$	104,375	$	103,035
U.S. Other P&R	62,347		57,714
International P&R (1)	84,018		84,086
Total Prevention & Recovery	250,740		244,835

Reconstructive:
U.S. Reconstructive	103,492		88,479
International Reconstructive	51,919		42,143
Total Reconstructive	155,411		130,622

Total	$	406,151	$	375,457


	Three Months Ended
		April 1, 2022		April 2, 2021
		(In thousands, except share and per share data)
Computation of Net income per share from continuing operations - basic:
Net income from continuing operations attributable to Enovis Corporation(1)		$	18,126	$	26,564
Weighted-average shares of Common stock outstanding – basic		53,872,007		46,534,463
Net income per share from continuing operations – basic		$	0.34	$	0.57

Computation of Net income per share from continuing operations - diluted:
Net income from continuing operations attributable to Enovis Corporation(1)		$	18,126	$	26,564
Weighted-average shares of Common stock outstanding – basic		53,872,007		46,534,463
Net effect of potentially dilutive securities - stock options, restricted stock units and tangible equity units		536,967		722,639
Weighted-average shares of Common stock outstanding – diluted		54,408,974		47,257,102
Net income per share from continuing operations – diluted		$	0.33	$	0.56


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	April 1, 2022		December 31, 2021
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	661,504	$	719,370

Trade receivables, less allowance for credit losses of $37,871 and $32,501	657,056		638,700
Inventories, net	852,814		776,295
Prepaid expenses	84,816		78,186
Other current assets	91,547		90,728

Total current assets	2,347,737		2,303,279
Property, plant and equipment, net	504,583		521,391
Goodwill	3,440,615		3,467,295
Intangible assets, net	1,637,257		1,675,462
Lease asset - right of use	178,643		184,429
Other assets	374,816		363,489

Total assets	$	8,483,651	$	8,515,345

LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt	$	422,289	$	8,314
Accounts payable	537,676		504,173

Accrued liabilities	490,050		511,097


Total current liabilities	1,450,015		1,023,584
Long-term debt, less current portion	1,647,870		2,078,679
Non-current lease liability	140,704		145,326
Other liabilities	601,017		606,323

Total liabilities	3,839,606		3,853,912
Equity:
Common stock, $0.001 par value; 133,333,333 shares authorized; 54,030,880 and 52,083,078 shares issued and outstanding as of April 1, 2022 and December 31, 2021, respectively	54		52
Additional paid-in capital	4,555,369		4,544,315
Retained earnings	604,092		589,024
Accumulated other comprehensive loss	(559,479)		(516,013)
Total Enovis Corporation equity	4,600,036		4,617,378
Noncontrolling interest	44,009		44,055
Total equity	4,644,045		4,661,433
Total liabilities and equity	$	8,483,651	$	8,515,345


	Accumulated Other Comprehensive Loss Components
	Net Unrecognized Pension and Other Post-Retirement Benefit Cost		Foreign Currency Translation Adjustment		Unrealized Gain on Hedging Activities		Total
	(In thousands)

Balance at January 1, 2022	$	(85,559)	$	(475,125)	$	44,671	$	(516,013)

Other comprehensive income (loss) before reclassifications:

Foreign currency translation adjustment	470		(38,333)		—		(37,863)
Loss on long-term intra-entity foreign currency transactions	—		(15,260)		0		(15,260)
Gain on net investment hedges	—		—		9,028		9,028


Other comprehensive income (loss) before reclassifications	470		(53,593)		9,028		(44,095)
Amounts reclassified from Accumulated other comprehensive loss	629		—		—		629

Net Other comprehensive income (loss)	1,099		(53,593)		9,028		(43,466)
Balance at April 1, 2022	$	(84,460)	$	(528,718)	$	53,699	$	(559,479)


		Three Months Ended April 1, 2022								Three Months Ended March 31, 2023
		Balance at Beginning of Period		Provisions		Payments		Foreign Currency Translation			Balance at End of Period(3)			Balance at Beginning of Period		Provisions		Payments		Balance at End of Period
		(In thousands)								(In thousands)
Restructuring and other related charges:
Fabrication Technology:
Restructuring and other charges:													Restructuring and other charges:
Termination benefits(1)	Termination benefits(1)	$	7,818	$	452	$	(1,861)	$	(26)		$	6,383	Termination benefits(1)	$	973	$	874	$	(926)	$	921
Facility closure costs and other(2)	Facility closure costs and other(2)	291		4,815		(4,796)		(1)			309		Facility closure costs and other(2)	118		1,761		(1,856)		23
		8,109		5,267		(6,657)		(27)			6,692
Total													Total	$	1,091	2,635		$	(2,782)	$	944
Non-cash charges(2)	Non-cash charges(2)			37									Non-cash charges(2)			301
				5,304
Medical Technology:
Termination benefits(1)		2,470		2,438		(1,905)		(9)			2,994
Facility closure costs and other(2)		358		233		(575)		—			16
		2,828		2,671		(2,480)		(9)			3,010
Non-cash charges(2)				282
				2,953

Total:
Total restructuring liability activity		$	10,937	7,938		$	(9,137)	$	(36)		$	9,702
Total Non-cash charges				319
				$	8,257
Total Provisions(3)													Total Provisions(3)			$	2,936


	April 1, 2022
	Level One		Level Two		Level Three		Total
	(In thousands)
Assets:
Cash equivalents	$	5,875	$	—	$	—	$	5,875


Foreign currency contracts - not designated as hedges	—		1,628		—		1,628


Deferred compensation plans	—		13,811		—		13,811
	$	5,875	$	15,439	$	—	$	21,314

Liabilities:

Foreign currency contracts - not designated as hedges	$	—	$	2,984	$	—	$	2,984


Deferred compensation plans	—		13,811		—		13,811
	$	—	$	16,795	$	—	$	16,795


	Three Months Ended April 1, 2022
		Fabrication Technology			Medical Technology			Corporate and other			Total
		(Dollars in millions)
Operating income (loss) (GAAP)		$	90.2		$	(5.7)		$	(31.4)		$	53.1
Restructuring and other related charges		5.3			3.0			—			8.3
MDR and other costs		—			2.6			—			2.6
Segment operating income (loss) (non-GAAP)		95.5			(0.1)			(31.4)			64.0
Strategic transaction costs		3.6			2.1			15.7			21.4
Acquisition-related amortization and other non-cash charges		7.7			35.9			—			43.6
Adjusted EBITA (non-GAAP)		$	106.9		$	37.8		$	(15.7)		$	129.0
Segment operating income margin (non-GAAP)		14.7		%	—		%	—		%	6.3		%
Adjusted EBITA margin (non-GAAP)		16.5		%	10.1		%	—		%	12.6		%


	Three Months Ended April 2, 2021
		Fabrication Technology			Medical Technology			Corporate and other			Total
		(Dollars in millions)
Operating income (loss) (GAAP)		$	79.2		$	(0.6)		$	(17.4)		$	61.3
Restructuring and other related charges(1)		3.1			1.0			—			4.0
MDR and other costs		—			1.8			—			1.8
Segment operating income (loss) (non-GAAP)		82.3			2.2			(17.4)			67.1
Strategic transaction costs		—			—			1.4			1.4
Acquisition-related amortization and other non-cash charges		9.1			29.4			—			38.5
Adjusted EBITA (non-GAAP)		$	91.4		$	31.6		$	(15.9)		$	107.1
Segment operating income margin (non-GAAP)		14.5		%	0.7		%	—		%	7.6		%
Adjusted EBITA margin (non-GAAP)		16.1		%	10.2		%	—		%	12.2		%


Exhibit No.			Exhibit Description

3.0 1 .1 3.01.1			Amended and Restated Certificate of Incorporation.

3.0 ~~1.2~~3.01.2*			Certificate of Amendment to Amended and Restated Certificate of Incorporation

3.02***			Amended and Restated Bylaws of Enovis Corporation.

31.01			Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.02			Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.01			Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.02			Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS			Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH			Inline XBRL Taxonomy Extension Schema Document.

101.CAL			Inline XBRL Extension Calculation Linkbase Document.

101.DEF			Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB			Inline XBRL Taxonomy Extension Label Linkbase Document.

101.PRE			Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104			Cover Page Interactive Data File - The cover page from this Quarterly Report on Form 10-Q for the quarter ended ~~April 1, 2022~~March 31, 2023 is formatted in Inline XBRL (included as Exhibit 101).

*			Incorporated by reference to Exhibit 3.01 to Enovis (formerly Colfax) Corporation’s Form 8-K (File No. 001-34045) as filed with the SEC on January 30, 2012.

**			Incorporated by reference to Exhibit 3.1 to Enovis Corporation’s Form 8-K (File No. 001-34045) as filed with the SEC on April 8, 2022.

***			Incorporated by reference to Exhibit ~~3.2~~3.02 to Enovis Corporation’s Form 8-K (File No. 001-34045) as filed with the SEC on ~~April 8,~~December 15, 2022.


FORM			10-Q


		April 1, 2022		December 31, 2021			March 31, 2023		December 31, 2022
		(In thousands)					(In thousands)
Raw materials	Raw materials	$	233,031	$	215,200	Raw materials	$	100,095	$	100,038
Work in process	Work in process	76,208		69,101		Work in process	33,936		28,164
Finished goods	Finished goods	626,911		567,281		Finished goods	363,473		357,143
		936,150		851,582			497,504		485,345
LIFO reserve		797		1,129
Less: allowance for excess, slow-moving and obsolete inventory	Less: allowance for excess, slow-moving and obsolete inventory	(84,133)		(76,416)		Less: allowance for excess, slow-moving and obsolete inventory	(58,547)		(58,702)
		$	852,814	$	776,295		$	438,957	$	426,643