COVER PAGE
COVER PAGE - shares | 6 Months Ended | |
Jul. 01, 2022 | Jul. 28, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jul. 01, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-34045 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 54-1887631 | |
Entity Address, Address Line One | 2711 Centerville Road, | |
Entity Address, Address Line Two | Suite 400 | |
Entity Address, City or Town | Wilmington, | |
Entity Address, State or Province | DE | |
Entity Address, Postal Zip Code | 19808 | |
City Area Code | (302) | |
Local Phone Number | 252-9160 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | ENOV | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 54,129,530 | |
Entity Registrant Name | Enovis CORP | |
Entity Central Index Key | 0001420800 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2022 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2022 | Jul. 02, 2021 | Jul. 01, 2022 | Jul. 02, 2021 | |
Income Statement [Abstract] | ||||
Net sales | $ 395,117 | $ 356,124 | $ 770,574 | $ 667,207 |
Cost of sales | 179,211 | 155,531 | 348,768 | 295,332 |
Gross profit | 215,906 | 200,593 | 421,806 | 371,875 |
Selling, general and administrative expense | 225,481 | 197,913 | 444,747 | 375,992 |
Research and development expense | 15,661 | 11,039 | 30,503 | 21,402 |
Insurance settlement gain | (33,034) | 0 | (33,034) | 0 |
Restructuring and other related charges | 2,245 | 1,992 | 4,664 | 2,963 |
Operating income (loss) (GAAP) | 5,553 | (10,351) | (25,074) | (28,482) |
Interest expense, net | 4,546 | 5,689 | 11,610 | 18,629 |
Debt extinguishment charges | 20,104 | 29,870 | 20,104 | 29,870 |
Unrealized gain on investment in ESAB Corporation | (135,500) | 0 | (135,537) | 0 |
Income (loss) from continuing operations before income taxes | 116,440 | (45,910) | 78,749 | (76,981) |
Income tax expense (benefit) | (4,211) | (3,783) | (3,847) | (3,000) |
Net income (loss) from continuing operations | 120,651 | (42,127) | 82,596 | (73,981) |
Income (loss) from discontinued operations, net of taxes | (43,666) | 71,829 | 10,690 | 123,923 |
Net income | 76,985 | 29,702 | 93,286 | 49,942 |
Less: net income attributable to noncontrolling interest from continuing operations - net of taxes | 130 | 355 | 397 | 645 |
Less: net income attributable to noncontrolling interest from discontinued operations - net of taxes | 0 | 705 | 966 | 1,581 |
Net income attributable to Enovis Corporation | $ 76,855 | $ 28,642 | $ 91,923 | $ 47,716 |
Net income (loss) per share - basic | ||||
Net income per share, continuing operations, basic (in usd per share) | $ 2.23 | $ (0.83) | $ 1.52 | $ (1.53) |
Net income (loss) per share, discontinued operations, basic (in usd per share) | (0.81) | 1.39 | 0.18 | 2.50 |
Net income (loss) per share, consolidated, basic (in usd per share) | 1.42 | 0.56 | 1.70 | 0.98 |
Net income (loss) per share - diluted | ||||
Net income (loss) per share, continuing operations, diluted (in usd per share) | 2.21 | (0.83) | 1.51 | (1.53) |
Net income (loss) per share, discontinued operations, diluted (in usd per share) | (0.80) | 1.39 | 0.18 | 2.50 |
Net income (loss) per share, consolidated operations, (in usd per share) | $ 1.41 | $ 0.56 | $ 1.69 | $ 0.98 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2022 | Jul. 02, 2021 | Jul. 01, 2022 | Jul. 02, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 76,985 | $ 29,702 | $ 93,286 | $ 49,942 |
Other comprehensive income (loss): | ||||
Foreign currency translation, net of tax expense (benefit) | (30,876) | 8,784 | (84,337) | (44,397) |
Unrealized gain (loss) on hedging activities, net of tax expense (benefit) | 0 | (2,150) | 9,028 | 10,231 |
Amounts reclassified from Accumulated other comprehensive loss: | ||||
Amortization of pension and other post-retirement net actuarial gain, net of tax expense | 0 | 1,045 | 629 | 2,100 |
Other comprehensive income (loss) | (30,876) | 7,679 | (74,680) | (32,066) |
Comprehensive income | 46,109 | 37,381 | 18,606 | 17,876 |
Less: comprehensive income (loss) attributable to noncontrolling interest | (1,303) | (369) | (408) | 673 |
Comprehensive loss attributable to Enovis Corporation | $ 47,412 | $ 37,750 | $ 19,014 | $ 17,203 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) [Parenthetical] - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2022 | Jul. 02, 2021 | Jul. 01, 2022 | Jul. 02, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Foreign currency translation, tax | $ 0 | $ 896 | $ 338 | $ 3,176 |
Unrealized gain (loss) on hedging activities, tax | 0 | (737) | 2,711 | 3,506 |
Amortization of pension and other post-retirement net actuarial loss, tax | $ 0 | $ 314 | $ 199 | $ 631 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jul. 01, 2022 | Dec. 31, 2021 |
ASSETS | ||
Cash and cash equivalents | $ 95,605 | $ 680,252 |
Trade receivable, less allowance for credit losses | 255,201 | 254,958 |
Inventories, net | 400,852 | 356,233 |
Prepaid expenses | 29,529 | 26,046 |
Other current assets | 33,782 | 29,176 |
Investment in ESAB Corporation | 263,070 | 0 |
Total current assets associated with discontinued operations | 0 | 956,614 |
Total current assets | 1,078,039 | 2,303,279 |
Property, plant and equipment, net | 226,894 | 235,113 |
Goodwill | 1,925,201 | 1,934,258 |
Intangible assets, net | 1,114,325 | 1,154,028 |
Lease asset - right of use | 71,032 | 76,485 |
Other assets | 88,224 | 74,700 |
Total non-current assets associated with discontinued operations | 0 | 2,738,049 |
Total assets | 4,503,715 | 8,515,912 |
LIABILITIES AND EQUITY | ||
Current portion of long-term debt | 449,459 | 7,701 |
Accounts payable | 159,136 | 155,208 |
Accrued liabilities | 204,206 | 225,391 |
Total current liabilities associated with discontinued operations | 0 | 635,284 |
Total current liabilities | 812,801 | 1,023,584 |
Long-term debt, less current portion | 0 | 2,078,625 |
Non-current lease liability | 55,208 | 56,549 |
Other liabilities | 144,243 | 122,159 |
Total non-current liabilities associated with discontinued operations | 0 | 573,562 |
Total liabilities | 1,012,252 | 3,854,479 |
Equity: | ||
Common stock, $0.001 par value; 133,333,333 shares authorized; 54,111,118 and 52,083,078 shares issued and outstanding as of July 1, 2022 and December 31, 2021, respectively | 54 | 52 |
Additional paid-in capital | 2,897,207 | 4,544,315 |
Retained earnings | 680,947 | 589,024 |
Accumulated other comprehensive loss | (88,941) | (516,013) |
Total Enovis Corporation equity | 3,489,267 | 4,617,378 |
Noncontrolling interest | 2,196 | 44,055 |
Total equity | 3,491,463 | 4,661,433 |
Total liabilities and equity | $ 4,503,715 | $ 8,515,912 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS [Parenthetical] - USD ($) $ in Thousands | Jul. 01, 2022 | Dec. 31, 2021 |
Condensed Consolidated Balance Sheet (Parenthetical) [Abstract] | ||
Trade receivables, allowance for doubtful accounts | $ 8,182 | $ 6,589 |
Common Stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 133,333,333 | 133,333,333 |
Common Stock, Shares, Issued | 54,111,118 | 52,083,078 |
Common Stock, Shares, Outstanding | 54,111,118 | 52,083,078 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENT OF EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Noncontrolling Interest |
Balance at Dec. 31, 2020 | $ 3,587,874 | $ 40 | $ 3,478,086 | $ 517,367 | $ (452,106) | $ 44,487 |
Balance, beginning, shares (in shares) at Dec. 31, 2020 | 39,498,896 | |||||
Net income (loss) | $ 20,240 | 19,074 | 1,166 | |||
Distributions to noncontrolling owners | (1,054) | (1,054) | ||||
Other comprehensive (loss) income, net of tax | (39,745) | (39,621) | (124) | |||
Conversion of tangible equity units into common stock (in shares) | 114,804 | |||||
Common stock offering, net of issuance costs | 711,321 | $ 5 | 711,316 | |||
Common stock offering, net of issuance costs (in shares) | 5,366,666 | |||||
Common stock-based award activity (in shares) | 218,744 | |||||
Common stock-based award activity | 12,433 | $ 0 | 12,433 | |||
Balance at Apr. 02, 2021 | $ 4,291,069 | 45 | 4,201,835 | 536,441 | (491,727) | 44,475 |
Balance, ending, shares (in shares) at Apr. 02, 2021 | 45,199,110 | |||||
Balance at Dec. 31, 2020 | $ 3,587,874 | 40 | 3,478,086 | 517,367 | (452,106) | 44,487 |
Balance, beginning, shares (in shares) at Dec. 31, 2020 | 39,498,896 | |||||
Net income (loss) | $ 49,942 | |||||
Other comprehensive (loss) income, net of tax | (32,066) | |||||
Balance at Jul. 02, 2021 | 4,351,960 | $ 47 | 4,225,343 | 565,083 | (482,619) | 44,106 |
Balance, ending, shares (in shares) at Jul. 02, 2021 | 47,447,215 | |||||
Balance at Apr. 02, 2021 | $ 4,291,069 | $ 45 | 4,201,835 | 536,441 | (491,727) | 44,475 |
Balance, beginning, shares (in shares) at Apr. 02, 2021 | 45,199,110 | |||||
Net income (loss) | $ 29,702 | 28,642 | 1,060 | |||
Other comprehensive (loss) income, net of tax | 7,679 | 9,108 | (1,429) | |||
Conversion of tangible equity units into common stock (in shares) | 2,058,000 | |||||
Conversion of tangible equity units into common stock | $ 2 | (2) | ||||
Common stock-based award activity (in shares) | 190,105 | |||||
Common stock-based award activity | 23,510 | $ 0 | 23,510 | |||
Balance at Jul. 02, 2021 | 4,351,960 | $ 47 | 4,225,343 | 565,083 | (482,619) | 44,106 |
Balance, ending, shares (in shares) at Jul. 02, 2021 | 47,447,215 | |||||
Balance at Dec. 31, 2021 | 4,661,433 | $ 52 | 4,544,315 | 589,024 | (516,013) | 44,055 |
Balance, beginning, shares (in shares) at Dec. 31, 2021 | 52,083,078 | |||||
Net income (loss) | 16,301 | 15,068 | 1,233 | |||
Distributions to noncontrolling owners | (941) | (941) | ||||
Other comprehensive (loss) income, net of tax | $ (43,804) | (43,466) | (338) | |||
Conversion of tangible equity units into common stock (in shares) | 1,691,845 | |||||
Conversion of tangible equity units into common stock | $ 2 | (2) | ||||
Common stock-based award activity (in shares) | 255,957 | |||||
Common stock-based award activity | $ 11,056 | 11,056 | ||||
Balance at Apr. 01, 2022 | 4,644,045 | $ 54 | 4,555,369 | 604,092 | (559,479) | 44,009 |
Balance, ending, shares (in shares) at Apr. 01, 2022 | 54,030,880 | |||||
Balance at Dec. 31, 2021 | 4,661,433 | $ 52 | 4,544,315 | 589,024 | (516,013) | 44,055 |
Balance, beginning, shares (in shares) at Dec. 31, 2021 | 52,083,078 | |||||
Net income (loss) | 93,286 | |||||
Other comprehensive (loss) income, net of tax | (74,680) | |||||
Distribution of ESAB Corporation | 499,981 | |||||
Balance at Jul. 01, 2022 | 3,491,463 | $ 54 | 2,897,207 | 680,947 | (88,941) | 2,196 |
Balance, ending, shares (in shares) at Jul. 01, 2022 | 54,111,118 | |||||
Balance at Apr. 01, 2022 | 4,644,045 | $ 54 | 4,555,369 | 604,092 | (559,479) | 44,009 |
Balance, beginning, shares (in shares) at Apr. 01, 2022 | 54,030,880 | |||||
Net income (loss) | 76,985 | 76,855 | 130 | |||
Other comprehensive (loss) income, net of tax | (30,876) | (29,443) | (1,433) | |||
Distribution of ESAB Corporation | (1,207,261) | (1,666,732) | 499,981 | (40,510) | ||
Common stock-based award activity (in shares) | 80,238 | |||||
Common stock-based award activity | 8,570 | 8,570 | ||||
Balance at Jul. 01, 2022 | $ 3,491,463 | $ 54 | $ 2,897,207 | $ 680,947 | $ (88,941) | $ 2,196 |
Balance, ending, shares (in shares) at Jul. 01, 2022 | 54,111,118 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENT OF EQUITY Statement of Stockholders' Equity [Parenthetical] - USD ($) $ in Thousands | 3 Months Ended | |||
Jul. 01, 2022 | Apr. 01, 2022 | Jul. 02, 2021 | Apr. 02, 2021 | |
Statement of Stockholders' Equity [Parenthetical] [Abstract] | ||||
Other comprehensive income, tax | $ 0 | $ 3,248 | $ 473 | $ 6,840 |
CONDENSED CONSOLIDATED STATEM_6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 01, 2022 | Jul. 02, 2021 | |
Statement of Cash Flows [Abstract] | ||
Net income | $ 93,286 | $ 49,942 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation, amortization and other impairment charges | 117,300 | 128,721 |
Stock-based compensation expense | 19,793 | 17,262 |
Non-cash interest expense | 1,658 | 2,676 |
Unrealized gain on investment in ESAB Corporation | (135,537) | 0 |
Debt extinguishment charges | 20,104 | 29,870 |
Deferred income tax expense (benefit) | 2,174 | (3,865) |
(Gain)/Loss on sale of property, plant and equipment | 352 | (1,437) |
Changes in operating assets and liabilities: | ||
Trade receivables, net | (33,123) | (83,458) |
Inventories, net | (92,910) | (79,338) |
Accounts payable | 15,919 | 124,354 |
Other operating assets and liabilities | (48,329) | (21,975) |
Net cash (used in) provided by operating activities | (39,313) | 162,752 |
Cash flows from investing activities: | ||
Purchases of property, plant and equipment and intangibles | (47,796) | (44,641) |
Proceeds from sale of property, plant and equipment | 2,746 | 3,191 |
Acquisitions, net of cash received, and investments | (35,123) | (230,650) |
Net cash used in investing activities | (80,173) | (272,100) |
Cash flows from financing activities: | ||
Proceeds from borrowings on term credit facility | 450,000 | 455,641 |
Payments under term credit facility | (785,000) | 0 |
Repayments of borrowings on revolving credit facilities and other | (607,618) | (383,384) |
Repayments of borrowings on Senior notes | (300,000) | (700,000) |
Repayments of borrowings on Euro senior notes | (386,278) | 0 |
Distribution from ESAB Corporation, net | 1,143,369 | 0 |
Payment of debt issuance costs | (2,938) | 0 |
Proceeds from issuance of common stock, net | 1,727 | 730,002 |
Payment of debt extinguishment costs | (12,704) | (24,375) |
Deferred consideration payments and other | (6,857) | (6,201) |
Net cash (used in) provided by financing activities | (506,299) | 71,683 |
Effect of foreign exchange rates on Cash and cash equivalents and Restricted Cash | 2,020 | (1,095) |
Decrease in Cash and cash equivalents and Restricted cash | (623,765) | (38,760) |
Cash and cash equivalents and Restricted Cash, beginning of period | 719,370 | 101,069 |
Cash and cash equivalents, end of period | $ 95,605 | $ 62,309 |
General
General | 6 Months Ended |
Jul. 01, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
General | General Enovis Corporation (the “Company” or “Enovis”) was previously Colfax Corporation (“Colfax”) until its separation into two differentiated, independent, and publicly traded companies on April 4, 2022, as discussed below. 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. On April 4, 2022 (the “Distribution Date”), the Company 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”) to Colfax stockholders. To affect the Separation, Colfax distributed to its stockholders one share of ESAB common stock for every three shares of Colfax common stock held at the close of business on March 22, 2022, with the Company retaining 10% of the shares of ESAB common stock immediately following the Separation. At July 1, 2022, the Company’s investment in ESAB was measured at fair value based on ESAB’s closing stock price, and was valued at $263.1 million. The Company intends to divest its retained stake in ESAB, 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. Since the Separation occurred in the second quarter of 2022, Enovis has classified its fabrication technology business as a discontinued operation in its historical financial statements for all periods presented. Following the completion of the Separation, the Company revised its reporting structure to now conduct its business through two operating segments, “Prevention and Recovery”, which consists of the Company’s bracing, recovery sciences, and footcare product lines, and “Reconstructive”, which includes the Company’s surgical implant product lines. In connection with the Separation, ESAB issued $1.2 billion of new debt securities, the proceeds from which were used to fund a $1.2 billion cash distribution to Enovis. The distribution proceeds were used by Enovis in conjunction with $450 million of borrowings on a term loan (the “Enovis Term Loan”) under the new Enovis credit facility (the “Enovis Credit Agreement”), and $52.3 million of cash on hand to repay $1.4 billion of outstanding debt and accrued interest under the Company’s previous credit agreement, which was legally extinguished upon completion of the Separation, $302.8 million of outstanding debt and accrued interest on its 2026 Notes at a redemption price of 103.188% of the principal amount, and other fees and expenses due at closing. Additionally, on April 7, 2022, the Company completed a full redemption of its €350 million principal 3.250% Euro Senior Notes due 2025 using cash on hand at a redemption price of 100.813% of the principal amount. 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, prior-period 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. 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 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 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 (the “2021 Form 10-K”), filed with the SEC on February 22, 2022. 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. The COVID-19 outbreak, which was characterized as a pandemic by the World Health Organization on March 11, 2020, 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 |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 6 Months Ended |
Jul. 01, 2022 | |
Accounting Policies [Abstract] | |
Recently Issued Accounting Pronouncements | Recently Issued Accounting PronouncementsThe Company has not adopted any new accounting standards during the six months ended July 1, 2022. 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. |
Discontinued Operations
Discontinued Operations | 6 Months Ended |
Jul. 01, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations Separation of Fabrication Technology Business On April 4, 2022, the Company completed the Separation of its fabrication technology business into an independent, publicly traded company: ESAB, a global organization that develops, manufactures and supplies consumable welding and cutting products and equipment, as well as gas control equipment, into diversified end markets such as medical and alternative energy. The spin-off was effected through a pro-rata distribution of 90% of the 60,034,311 outstanding common shares of ESAB to Enovis stockholders of record at the close of business on March 22, 2022 (the “Record Date”). Enovis stockholders received one share of ESAB for every three shares of Enovis stock they owned on the Record Date. The carrying value of the assets and liabilities of the Company’s former fabrication technology business’ discontinued operations, other contributed legal entities, discontinued operations containing asbestos, and certain pension assets and liabilities, as of December 31, 2021 were as follows: December 31, 2021 ASSETS (in thousands) Cash and cash equivalents $ 39,118 Trade receivables, net 383,742 Inventories, net 420,062 Prepaid expenses 52,140 Other current assets 61,552 Total current assets associated with discontinued operations 956,614 Property, plant and equipment, net 286,278 Goodwill 1,533,037 Other intangibles, net 521,434 Lease asset - right of use 107,944 Other assets 289,356 Total assets associated with discontinued operations (1) $ 3,694,663 LIABILITIES Current portion of long-term debt $ 613 Accounts payable 348,965 Accrued liabilities 285,706 Total current liabilities associated with discontinued operations 635,284 Long-term debt, less current portion 54 Non-current lease liability 88,777 Deferred tax liabilities 116,198 Other liabilities 368,533 Total liabilities associated with discontinued operations (1) $ 1,208,846 (1) Total assets and liabilities include asbestos-related contingencies and insurance coverages previously reported by Colfax as discontinued operations. See Asbestos Contingencies section below for more information. The financial results of the discontinued operation for the three and six months ended July 1, 2022 and July 2, 2021 include the fabrication technology business through the date of Separation and separation-related costs incurred and are presented as income from discontinued operations, net of income taxes, on the Company’s Consolidated Statements of Operations. The following table presents the financial results of the fabrication technology business: Three Months Ended Six Months Ended July 1, 2022 July 2, 2021 July 1, 2022 July 2, 2021 (in thousands) Net sales $ — $ 629,803 $ 647,911 $ 1,197,932 Cost of sales — 411,412 423,580 779,746 Selling, general and administrative expense (1) 35,463 130,425 174,664 257,724 Restructuring and other related charges — 3,488 5,304 6,563 Operating loss (35,463) 84,478 44,363 153,899 Interest expense — 12,117 8,035 24,837 Pension settlement gain — (11,208) — (11,208) Income from discontinued operations before income taxes (35,463) 83,569 36,328 140,270 Income tax (benefit) expense 8,203 11,740 25,638 16,347 Income from discontinued operations, net of taxes $ (43,666) $ 71,829 $ 10,690 $ 123,923 (1) Selling, general and administrative expenses for the three months ended July 1, 2022 include certain transaction costs incurred to effect the Separation. Total income attributable to noncontrolling interest related to ESAB, net of taxes was $1.0 million for the six months ended July 1, 2022, and $0.7 million and $1.6 million for the three and six months ended July 2, 2021, respectively. Cash used in operating activities related to discontinued operations for the six months ended July 1, 2022 was $29.6 million. Cash provided by operating activities related to discontinued operations for the six months ended July 2, 2021 was $122.6 million. Cash used in investing activities related to discontinued operations for the six months ended July 1, 2022 and July 2, 2021 was $3.2 million and $14.4 million, respectively. Asbestos Contingencies The Company retained certain asbestos-related contingencies and insurance coverages from its previously divested businesses for which it did not retain an interest in the ongoing operations except for the contingencies. The net costs and cash flows associated with these contingencies and coverages were reported by the Company as discontinued operations. In conjunction with the Separation, all asbestos-related contingencies and insurance coverages from its divested businesses were transferred fully to ESAB. The Company has classified asbestos-related selling, general and administrative activity through the the date of Separation in its Condensed Consolidated Statements of Operations as part of Loss from discontinued operations, net of taxes. Subsequent to the Separation, the asbestos-related selling, general and administrative activity and asbestos assets and liabilities are no longer reflected in the Enovis financial statements. . |
Acquisitions and Investments
Acquisitions and Investments | 6 Months Ended |
Jul. 01, 2022 | |
Business Combinations [Abstract] | |
Acquisitions and Investments | Acquisitions and Investments 2022 Acquisitions During the six months ended July 1, 2022, the Company completed three asset acquisitions, one business acquisition and two investments, which are carried at cost as they do not have a readily determinable fair value. Two of these transactions were completed by the Company’s Reconstructive segment, and the other four transactions were completed by the Prevention & Recovery segment. The asset acquisitions broaden the Company’s product offering and distribution network. Aggregate purchase consideration for the three asset acquisitions was $18.2 million, of which $8.6 million was paid in cash and $9.6 million of deferred and contingent consideration. The investments were acquired for $12.0 million in cash consideration. 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. The entity is an Australian 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 acquisition date. The Company paid $14.3 million for the acquisition, net of cash received, and recorded estimated contingent consideration at fair value of $12.8 million related to certain future revenue targets. The Company allocated $13 million to goodwill and $18.2 million to intangible assets acquired. Purchase accounting procedures are ongoing and revisions to contingent consideration, intangible assets acquired, and adjustments for working capital true-ups may be recorded in future periods during the purchase price allocation period. The 360 Med Care acquisition broadens our customer base in Australia and adds to our overall product offerings. Investments As of July 1, 2022, the balance of investments held by the company without readily determinable fair values was $31.9 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 the investments. The Company holds equity securities in ESAB Corporation for total value of $263.1 million which are recorded at fair value. During the three and six months ended July 1, 2022, the Company recorded an unrealized gain of $135.5 million over cost basis. The company does not hold other equity securities measured at fair value. 2021 Acquisitions During the six months ended July 2, 2021, the Company completed three acquisitions in its Reconstructive segment for aggregate net cash consideration of $208.1 million. The acquisitions are 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 Reconstructive segment acquired Trilliant Surgical (“Trilliant”), a provider of foot and ankle orthopedic implants, in the first quarter of 2021 for net cash consideration of $79.6 million. The Reconstructive segment’s acquisitions in the second quarter of 2021 included MedShape, Inc. (“MedShape”), a provider of innovative surgical solutions for foot and ankle surgeons, which was acquired for net cash consideration of $124.6 million. The Trilliant and MedShape acquisitions further expand the Company’s U.S. foot and ankle product lines. The purchase accounting for all acquisitions made in the six months ended July 2, 2021 has been completed. The Company also made two investments in medical technology businesses during the six months ended July 2, 2021 for a total of $14.8 million. Both investments were carried at cost as of July 1, 2022, as they do not have a readily determinable fair value. |
Revenue
Revenue | 6 Months Ended |
Jul. 01, 2022 | |
Revenue [Abstract] | |
Revenue | RevenueThe Company provides orthopedic solutions, including products and services spanning the full continuum of patient care, from injury prevention to rehabilitation. Substantially all its revenue is recognized at a point in time. The Company disaggregates its revenue into the following segments: Three Months Ended Six Months Ended July 1, 2022 July 2, 2021 July 1, 2022 July 2, 2021 (In thousands) Prevention and Recovery $ 263,783 $ 266,919 $ 508,618 $ 501,593 Reconstructive 131,334 89,205 261,956 165,614 Total $ 395,117 $ 356,124 $ 770,574 $ 667,207 Given the nature of the Company’s business, the total amount of unsatisfied performance obligations with an original contract duration of greater than one year as of July 1, 2022 is immaterial. 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 $9.2 million and $15.0 million, respectively. During the three and six months ended July 1, 2022, revenue recognized that was included in the contract liability balance at the beginning of the year was $2.6 million and $6.2 million, respectively. During the three and six months ended July 2, 2021, revenue recognized that was included in the contract liability balance at the beginning of the year was $2.3 million and $3.1 million, respectively. As of July 1, 2022 and July 2, 2021, total contract liabilities were $3.1 million and $13.6 million, respectively, and were included in Accrued liabilities on the Company’s Condensed Consolidated Balance Sheets. The contract liabilities as of December 31, 2021 included $4.9 million of certain one-time advance payments. 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 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. 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: Six Months Ended July 1, 2022 Balance at Charged to Expense, net Write-Offs, Deductions and Other, net Foreign Balance at (In thousands) Allowance for credit losses $ 6,589 $ 343 $ 1,391 $ (141) $ 8,182 |
Net Income (Loss) Per Share fro
Net Income (Loss) Per Share from Continuing Operations | 6 Months Ended |
Jul. 01, 2022 | |
Earnings Per Share [Abstract] | |
Net Income Per Share from Continuing Operations | Net Income Per Share from Continuing Operations Net income per share from continuing operations was computed as follows: Three Months Ended Six Months Ended July 1, 2022 July 2, 2021 July 1, 2022 July 2, 2021 (In thousands, except share and per share data) Computation of Net income (loss) per share from continuing operations - basic: Net income (loss) from continuing operations attributable to Enovis Corporation (1) $ 120,521 $ (42,482) $ 82,199 $ (74,626) Weighted-average shares of Common stock outstanding – basic 54,080,549 51,291,986 53,969,738 48,902,883 Net income (loss) per share from continuing operations – basic $ 2.23 $ (0.83) $ 1.52 $ (1.53) Computation of Net income (loss) per share from continuing operations - diluted: Net income (loss) from continuing operations attributable to Enovis Corporation (1) $ 120,521 $ (42,482) $ 82,199 $ (74,626) Weighted-average shares of Common stock outstanding – basic 54,080,549 51,291,986 53,969,738 48,902,883 Net effect of potentially dilutive securities - stock options, restricted stock units and tangible equity units 441,300 — 489,134 — Weighted-average shares of Common stock outstanding – diluted 54,521,849 51,291,986 54,458,872 48,902,883 Net income (loss) per share from continuing operations – diluted $ 2.21 $ (0.83) $ 1.51 $ (1.53) (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 $0.1 million and $0.4 million for the three and six months ended July 1, 2022, respectively, and $0.4 million and $0.6 million for the three and six months ended July 2, 2021, respectively. As a result of the reverse stock split following the Separation, prior-period 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 beginning of the periods presented. For the three and six months ended July 1, 2022 and the three and six months ended July 2, 2021, the weighted-average shares of Common stock outstanding - basic includes the impact of 6.1 million shares, as adjusted for the reverse stock split, for the actual or potential issuance of shares from tangible equity unit purchase contracts. In January 2022, the final remaining amount of tangible equity unit purchase contracts were converted into approximately 1.7 million shares of the Company’s common stock, as adjusted for the reverse stock split. All issuances of Company common stock related to the tangible equity units were converted at the minimum settlement rate as a result of the increase in the Company’s share price. All the issued shares are included in the Common stock issued and outstanding as of July 1, 2022. See Note 8, “Equity” for details. The weighted-average computation of the dilutive effect of potentially issuable shares of Common stock under the treasury stock method for the three and six months ended July 1, 2022 excludes 0.4 million of outstanding stock-based compensation awards as 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 and six months ended July 2, 2021 excludes 0.5 million and 0.4 million, respectively, of outstanding stock-based compensation awards as their inclusion would be anti-dilutive. |
Income Taxes
Income Taxes | 6 Months Ended |
Jul. 01, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes During the three and six months ended July 1, 2022, Income from continuing operations before income taxes was $116.4 million and $78.7 million, respectively, while income tax benefit was $4.2 million and $3.8 million, respectively. The effective tax rate was (3.6)% and (4.9)% for the three and six months ended July 1, 2022, both of which differed from the 2022 federal statutory rate of 21% mainly due to non-taxable unrealized gains on the investment in ESAB offset by non-deductible costs related to the tax-free separation transaction. During the three and six months ended July 2, 2021, Loss from continuing operations before income taxes was $45.9 million and $77.0 million, respectively, while the income tax benefit was $3.8 million and $3.0 million, respectively. The effective tax rate was 8.2% and 3.9% for the three and six months ended July 2, 2021, respectively, both of which differed from the 2021 U.S. federal statutory rate of 21% mainly due to U.S. taxation on international operations and other non-deductible expenses. |
Equity
Equity | 6 Months Ended |
Jul. 01, 2022 | |
Equity [Abstract] | |
Equity | 8. Equity Outstanding shares As discussed in Note 1, the Company effected a reverse stock split immediately following the Separation on April 4, 2022 and 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. As of December 31, 2021, the outstanding shares for the Company after the reverse stock split were 52,083,078. 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 July 1, 2022, 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 six months ended July 1, 2022 and July 2, 2021. 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 (61,257) — (60,787) Loss on long-term intra-entity foreign currency transactions — (21,779) — (21,779) Gain on net investment hedges — — 9,028 9,028 Other comprehensive income (loss) before reclassifications 470 (83,036) 9,028 (73,538) Amounts reclassified from Accumulated other comprehensive income (loss) 629 — — 629 Net Other comprehensive income (loss) 1,099 (83,036) 9,028 (72,909) Distribution of ESAB Corporation 84,460 469,220 (53,699) 499,981 Balance at July 1, 2022 $ — $ (88,941) $ — $ (88,941) 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 583 (71,276) (2,076) (72,769) Gain on long-term intra-entity foreign currency transactions — 29,925 — 29,925 Gain on net investment hedges — — 10,231 10,231 Other comprehensive income (loss) before reclassifications 583 (41,351) 8,155 (32,613) Amounts reclassified from Accumulated other comprehensive loss 2,100 — — 2,100 Net Other comprehensive income (loss) 2,683 (41,351) 8,155 (30,513) Balance at July 2, 2021 $ (110,100) $ (402,328) $ 29,809 $ (482,619) 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 1.6 million TEU prepaid stock purchase contracts were settled into approximately 1.7 million and 2.2 million shares of Company common stock as adjusted for the reverse split, during the six months ended July 1, 2022 and July 2, 2021, respectively. Since the 4.6 million TEU prepaid stock purchase contracts were mandatorily converted 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 (Text Block)
Inventories, Net (Text Block) | 6 Months Ended |
Jul. 01, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories, Net | Inventories, Net Inventories, net consisted of the following: July 1, 2022 December 31, 2021 (In thousands) Raw materials $ 83,048 $ 66,824 Work in process 30,183 29,506 Finished goods 338,568 298,450 451,799 394,780 Less: allowance for excess, slow-moving and obsolete inventory (50,947) (38,547) $ 400,852 $ 356,233 |
Debt
Debt | 6 Months Ended |
Jul. 01, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt Long-term debt consisted of the following: July 1, 2022 December 31, 2021 (In thousands) Term loan $ 448,815 $ 782,435 Euro senior notes — 395,552 2026 notes — 297,906 TEU amortizing notes — 6,501 Revolving credit facilities and other 644 603,932 Total debt 449,459 2,086,326 Less: current portion (449,459) (7,701) Long-term debt $ — $ 2,078,625 Debt Redemptions In conjunction with the Separation which occurred on April 4, 2022, the Company repaid all obligations under its previous credit agreement and entered into a new credit agreement (the “Enovis Credit Agreement”) with certain of its existing bank lenders. Additionally, on April 7, 2022 after the completion of the Separation, the Company completed the redemptions of its 3.25% Euro Senior Notes due 2025 and its 6.375% Senior Notes due 2026. 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 $7.4 million in noncash write-offs of original issue discount and deferred financing fees. Enovis Term Loan and Revolving Credit Facility The new Enovis Credit Agreement became effective on April 4, 2022 and consists of a $900 million revolving credit facility (the “Revolver”) with an April 4, 2027 maturity date and a term loan with an initial aggregate principal amount of $450 million and an April 4, 2023 maturity date (the “Enovis Term Loan”). The Revolver contains a $50 million swing line loan sub-facility. Certain U.S. subsidiaries of the Company guarantee the obligations under the Credit Facility. 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. As of July 1, 2022, the Company was in compliance with the covenants under the Enovis Credit Agreement. For further descriptions of the Company’s financial covenants as of April 1, 2022, refer to Note 13, “Debt” in the Notes to the Consolidated Financial Statements in the Company’s 2021 Form 10-K. As of July 1, 2022, the weighted-average interest rate of borrowings under the Enovis Credit Agreement was 2.58%, excluding accretion of original issue discount and deferred financing fees, and there was $900 million available on the Revolver. Euro Senior Notes 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 were redeemed on April 7, 2022 including a 100.813% redemption premium after the completion of the Separation. 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 Company paid $6.5 million and $12.3 million of principal on the TEU amortizing notes in the six months ended July 1, 2022 and July 2, 2021, respectively. The final installment payment was made on January 15, 2022. 2026 Notes The Company had senior notes with a remaining principal amount of $300 million, which were due on February 15, 2026 and had an interest rate of 6.375%. The 2026 Notes were redeemed on April 7, 2022 including a 103.188% redemption premium after the completion of the Separation. Other Indebtedness In addition to the debt agreements discussed above, the Company is party to bilateral credit facilities with a borrowing capacity of $30.0 million. As of July 1, 2022, there were $0.9 million in outstanding borrowings under these facilities. The Company is party to a letter of credit facility with a capacity of $30.0 million. Total letters of credit of $2.3 million were outstanding as of July 1, 2022. Deferred Financing Fees In total, the Company had deferred financing fees of $6.2 million included in its Condensed Consolidated Balance Sheet as of July 1, 2022, which will 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-related debt redemptions and extinguishment of its prior credit facility in the second quarter of 2022, the Company recorded $7.4 million of noncash write-offs of original issue discounts and deferred financing fees. Additionally, the Company deferred $2.9 million of financing costs in the second quarter of 2022 in connection with the new Enovis Credit Facility. |
Accrued Liabilities
Accrued Liabilities | 6 Months Ended |
Jul. 01, 2022 | |
Accrued Liabilities [Abstract] | |
Accrued Liabilities | Accrued Liabilities Accrued liabilities in the Condensed Consolidated Balance Sheets consisted of the following: July 1, 2022 December 31, 2021 (In thousands) Accrued compensation and related benefits $ 57,352 $ 66,290 Accrued taxes 12,240 12,970 Accrued freight 7,957 5,299 Contingent consideration - current portion 3,975 1,816 Warranty liability 2,539 2,503 Accrued restructuring liability 2,589 2,170 Accrued third-party commissions 20,380 22,362 Customer advances and billings in excess of costs incurred 3,050 9,203 Lease liability - current portion 22,208 21,936 Accrued interest 596 11,066 Accrued rebates 11,302 12,584 Accrued professional fees 17,094 13,711 Accrued royalties 5,241 5,045 Other 37,683 38,436 $ 204,206 $ 225,391 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: Six Months Ended July 1, 2022 Balance at Beginning of Period Provisions Payments Balance at End of Period (In thousands) Restructuring and other related charges: Termination benefits (1) $ 2,470 $ 2,352 $ (2,233) $ 2,589 Facility closure costs and other (2) 358 2,564 (2,922) — Total $ 2,828 4,916 $ (5,155) $ 2,589 Non-cash charges (2) 592 Total Provisions (3) $ 5,508 (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. (3) For the six months ended July 1, 2022 , $3.4 million and $2.1 million of the Company’s total provisions were related to the Prevention and Recovery and Reconstructive segments, respectively. Restructuring and other related charges includes $0.8 million of expense classified as Cost of sales on the Company’s Condensed Consolidated Statements of Operations for the six months ended July 1, 2022. |
Financial Instruments and Fair
Financial Instruments and Fair Value Measurements | 6 Months Ended |
Jul. 01, 2022 | |
Financial Instruments and Fair Value Measurements [Abstract] | |
Financial Instruments and Fair Value Measurements | Financial Instruments and Fair Value Measurements The carrying values of financial instruments, including trade receivables, other receivables and accounts payable, approximate their fair values due to their short-term maturities. The estimated fair value of the Company’s debt, which was $0.5 billion and $2.1 billion as of July 1, 2022 and December 31, 2021, respectively, 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. As of July 1, 2022, the Company held $25.0 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 six months ended July 1, 2022, the company recorded contingent consideration of $20.0 million in conjunction with current acquisitions. There were no transfers in or out of Level One, Two or Three during the six months ended July 1, 2022. Investment in ESAB On April 4, 2022, the Company completed the Separation and retained 10% of the shares of ESAB common stock. The Company did not retain a controlling interest in ESAB and, therefore, the fair value of the retained shares is included in the assets of continuing operations on the Company’s Condensed Consolidated Balance Sheet as of July 1, 2022, and the subsequent fair value changes are included in results from continuing operations on the Company’s Condensed Consolidated Statements of Operations for the three and six months ended July 1, 2022. At July 1, 2022, the Company’s investment in ESAB was measured at fair value based on ESAB’s closing stock price, and it is classified as Level 1 in the fair value hierarchy. The fair value of the ESAB investment as of July 1, 2022 was $263.1 million, and the gain on investment for the three and six months ended July 1, 2022 was $135.5 million. Deferred Compensation Plans The Company maintains deferred compensation plans for the benefit of certain employees and non-executive officers. As of July 1, 2022 and December 31, 2021 the fair value of these plans were $9.7 million and $11.2 million, respectively. These plans are deemed to be Level Two within the fair value hierarchy. Foreign Currency Contracts |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jul. 01, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company is involved in various 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, management of the Company believes that 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. In conjunction with the Separation, all asbestos-related contingencies and insurance coverages from the divested industrial businesses were transferred fully to ESAB. The historical asbestos-related activity and balances are presented in discontinued operations on the Condensed Consolidated Statements of Operations and in assets/liabilities associated with discontinued operations on the Condensed Consolidated Balance Sheets, respectively. 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. |
Segment Information
Segment Information | 6 Months Ended |
Jul. 01, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company conducts its continuing operations through the Prevention and Recovery and Reconstructive operating segments, which also represent the Company’s reportable segments. ▪ Prevention and 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-driven leader offering a comprehensive suite of reconstructive joint products for the hip, knee, shoulder, elbow, foot, ankle, and finger. In conjunction with revising its reporting structure, the Company allocated $1.1 billion and $0.8 billion of goodwill to the Prevention and Recovery and Reconstructive segments, respectively. The total segment assets as of the beginning of the quarter were $2.8 billion and $1.8 billion for the Prevention and Recovery and Reconstructive segments, respectively. There have not been any material changes to the segment assets since the start of the quarter. The Company’s management evaluates the operating results of each of its reportable segments based upon Net sales and Adjusted EBITDA, which excludes the effect of restructuring and other related charges, MDR and related costs, strategic transaction costs, stock-based compensation, depreciation and other amortization charges, amortization of acquired intangibles, insurance settlement gains, and inventory step-up from the operating income of the Company’s operating segments. The amounts presented below have been recast for the change in operating segments for all periods presented. The Company’s segment results were as follows: Three Months Ended Six Months Ended July 1, 2022 July 2, 2021 July 1, 2022 July 2, 2021 (In thousands) Net sales: Prevention and Recovery $ 263,783 $ 266,919 $ 508,618 $ 501,593 Reconstructive 131,334 89,205 261,956 165,614 $ 395,117 $ 356,124 $ 770,574 $ 667,207 Segment Adjusted EBITDA (1) : Prevention and Recovery $ 35,148 $ 33,299 $ 61,518 $ 54,550 Reconstructive 21,042 17,350 42,399 33,349 $ 56,190 $ 50,649 $ 103,917 $ 87,899 (1) The following is a reconciliation of Income from continuing operations before income taxes to Adjusted EBITDA: Three Months Ended Six Months Ended July 1, 2022 July 2, 2021 July 1, 2022 July 2, 2021 (In thousands) Operating income (loss) (GAAP) $ 5,553 $ (10,351) $ (25,074) $ (28,482) Restructuring and other related charges (1) 2,555 1,992 5,508 2,963 MDR and other costs (2) 4,421 1,919 7,048 3,672 Strategic transaction costs 12,707 4,037 24,403 4,418 Stock-based compensation 7,821 6,793 14,529 12,747 Depreciation and other amortization 19,450 16,350 37,950 33,242 Amortization of acquired intangibles 31,824 29,504 62,610 57,042 Insurance settlement gain (3) (33,034) — (33,034) — Inventory step-up 4,893 405 9,977 2,297 Adjusted EBITDA (non-GAAP) $ 56,190 $ 50,649 $ 103,917 $ 87,899 (1) Restructuring and other related charges includes $0.3 million and $0.8 million of expense classified as Cost of sales on the Company’s Condensed Consolidated Statements of Operations for the three and six months ended July 1, 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. (3) Insurance settlement gain is related to the 2019 acquisition of DJO. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jul. 01, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Related Party Agreements On April 4, 2022, in connection with the Separation, the Company entered into several agreements with ESAB that govern the Separation and provide a framework for the future relationship between the parties, including a separation and distribution agreement, a transition services agreement (the “Separation Agreement”), tax matters agreement, employee matters agreements, a stockholder’s and registration rights agreement, and an intellectual property matters agreement. The Separation and Distribution Agreement The Company entered into the Separation Agreement with ESAB immediately prior to the distribution of ESAB’s common stock to Enovis stockholders. The Separation Agreement sets forth the Company’s agreements with ESAB regarding the principal actions to be taken in connection with the Separation. The Separation agreement contains provisions that, among other things, relate to (i) assets, liabilities and contracts to be transferred, assumed and assigned to each of ESAB and Enovis as part of the Separation; (ii) the cash distribution made to Enovis in partial consideration of the transfer of ESAB Assets in connection with the Separation; and, (iii) cross-indemnities principally designed to place financial responsibility for obligations and liabilities with either Enovis or ESAB, depending on the responsible party. Transition Services Agreement The transition services agreement ("TSA") sets forth the terms and conditions pursuant to which the Company and its subsidiaries and ESAB’s and its subsidiaries will provide various services to each other. The services to be provided include human resources, payroll, certain information technology services, treasury services and financial reporting services. The charges for the transition services generally are expected to allow the providing company to fully recover all actual internal and external costs and expenses in connection with providing the service (including a reasonable allocation of overhead) provided in the manner and at a level substantially consistent with that provided by the respective providing company immediately preceding the Separation. Tax Matters Agreement The tax matters agreement governs the Company’s and ESAB’s respective rights, responsibilities and obligations after the Separation with respect to tax liabilities and benefits, tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings and certain other matters regarding taxes. Employee Matters Agreement The employee matters agreement sets forth, among other things, the allocation of assets, liabilities and responsibilities relating to employee compensation and benefit plans, and programs and other related matters in connection with the Separation, including the treatment of outstanding equity and other incentive awards and certain retirement and welfare benefit obligations. Stockholders and Registration Rights Agreement The stockholders and registration rights agreement sets forth the terms and conditions pursuant to which ESAB has granted Company and its affiliates certain registration rights with respect to the shares of ESAB common stock owned by the Company. Upon the request of the Company or certain subsequent transferees as further defined in the agreement, ESAB will use its reasonable best efforts to effect the registration under applicable federal and state securities laws of any shares of ESAB common stock retained by the Company. Under the agreement, the Company has agreed to vote any shares of ESAB common stock retained by it immediately after the Separation in proportion to the votes cast by ESAB’s other stockholders. Intellectual Property Matters Agreement The intellectual property matters agreement sets forth the terms and conditions pursuant to which, among other things, the Company and ESAB have granted each other a non-exclusive, royalty-free, fully paid-up, irrevocable, sublicenseable (subject to certain limitations) and worldwide license to use certain intellectual property rights retained by the other party. The term of the intellectual property matters agreement is perpetual . |
Recently Issued Accounting Pr_2
Recently Issued Accounting Pronouncements (Policies) | 6 Months Ended |
Jul. 01, 2022 | |
Accounting Policies [Abstract] | |
Basis of Accounting | 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 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. |
Use of Estimates | 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. |
New Accounting Pronouncements | 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. |
Discontinued Operations and Dis
Discontinued Operations and Disposal Groups (Tables) | 6 Months Ended |
Jul. 01, 2022 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Carrying Value of Assets and Liabilities and the Financial Results | The carrying value of the assets and liabilities of the Company’s former fabrication technology business’ discontinued operations, other contributed legal entities, discontinued operations containing asbestos, and certain pension assets and liabilities, as of December 31, 2021 were as follows: December 31, 2021 ASSETS (in thousands) Cash and cash equivalents $ 39,118 Trade receivables, net 383,742 Inventories, net 420,062 Prepaid expenses 52,140 Other current assets 61,552 Total current assets associated with discontinued operations 956,614 Property, plant and equipment, net 286,278 Goodwill 1,533,037 Other intangibles, net 521,434 Lease asset - right of use 107,944 Other assets 289,356 Total assets associated with discontinued operations (1) $ 3,694,663 LIABILITIES Current portion of long-term debt $ 613 Accounts payable 348,965 Accrued liabilities 285,706 Total current liabilities associated with discontinued operations 635,284 Long-term debt, less current portion 54 Non-current lease liability 88,777 Deferred tax liabilities 116,198 Other liabilities 368,533 Total liabilities associated with discontinued operations (1) $ 1,208,846 (1) Total assets and liabilities include asbestos-related contingencies and insurance coverages previously reported by Colfax as discontinued operations. See Asbestos Contingencies section below for more information. Three Months Ended Six Months Ended July 1, 2022 July 2, 2021 July 1, 2022 July 2, 2021 (in thousands) Net sales $ — $ 629,803 $ 647,911 $ 1,197,932 Cost of sales — 411,412 423,580 779,746 Selling, general and administrative expense (1) 35,463 130,425 174,664 257,724 Restructuring and other related charges — 3,488 5,304 6,563 Operating loss (35,463) 84,478 44,363 153,899 Interest expense — 12,117 8,035 24,837 Pension settlement gain — (11,208) — (11,208) Income from discontinued operations before income taxes (35,463) 83,569 36,328 140,270 Income tax (benefit) expense 8,203 11,740 25,638 16,347 Income from discontinued operations, net of taxes $ (43,666) $ 71,829 $ 10,690 $ 123,923 (1) Selling, general and administrative expenses for the three months ended July 1, 2022 include certain transaction costs incurred to effect the Separation. |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jul. 01, 2022 | |
Revenue [Abstract] | |
Schedule of Revenue by Major Customers by Reporting Segments | The Company provides orthopedic solutions, including products and services spanning the full continuum of patient care, from injury prevention to rehabilitation. Substantially all its revenue is recognized at a point in time. The Company disaggregates its revenue into the following segments: Three Months Ended Six Months Ended July 1, 2022 July 2, 2021 July 1, 2022 July 2, 2021 (In thousands) Prevention and Recovery $ 263,783 $ 266,919 $ 508,618 $ 501,593 Reconstructive 131,334 89,205 261,956 165,614 Total $ 395,117 $ 356,124 $ 770,574 $ 667,207 |
Financing Receivable, Allowance for Credit Loss | 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: Six Months Ended July 1, 2022 Balance at Charged to Expense, net Write-Offs, Deductions and Other, net Foreign Balance at (In thousands) Allowance for credit losses $ 6,589 $ 343 $ 1,391 $ (141) $ 8,182 |
Net Income Per Share from Conti
Net Income Per Share from Continuing Operations (Tables) | 6 Months Ended |
Jul. 01, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share - Basic and Diluted | Net income per share from continuing operations was computed as follows: Three Months Ended Six Months Ended July 1, 2022 July 2, 2021 July 1, 2022 July 2, 2021 (In thousands, except share and per share data) Computation of Net income (loss) per share from continuing operations - basic: Net income (loss) from continuing operations attributable to Enovis Corporation (1) $ 120,521 $ (42,482) $ 82,199 $ (74,626) Weighted-average shares of Common stock outstanding – basic 54,080,549 51,291,986 53,969,738 48,902,883 Net income (loss) per share from continuing operations – basic $ 2.23 $ (0.83) $ 1.52 $ (1.53) Computation of Net income (loss) per share from continuing operations - diluted: Net income (loss) from continuing operations attributable to Enovis Corporation (1) $ 120,521 $ (42,482) $ 82,199 $ (74,626) Weighted-average shares of Common stock outstanding – basic 54,080,549 51,291,986 53,969,738 48,902,883 Net effect of potentially dilutive securities - stock options, restricted stock units and tangible equity units 441,300 — 489,134 — Weighted-average shares of Common stock outstanding – diluted 54,521,849 51,291,986 54,458,872 48,902,883 Net income (loss) per share from continuing operations – diluted $ 2.21 $ (0.83) $ 1.51 $ (1.53) (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 $0.1 million and $0.4 million for the three and six months ended July 1, 2022, respectively, and $0.4 million and $0.6 million for the three and six months ended July 2, 2021, respectively. |
Equity (Tables)
Equity (Tables) | 6 Months Ended |
Jul. 01, 2022 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | 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 (61,257) — (60,787) Loss on long-term intra-entity foreign currency transactions — (21,779) — (21,779) Gain on net investment hedges — — 9,028 9,028 Other comprehensive income (loss) before reclassifications 470 (83,036) 9,028 (73,538) Amounts reclassified from Accumulated other comprehensive income (loss) 629 — — 629 Net Other comprehensive income (loss) 1,099 (83,036) 9,028 (72,909) Distribution of ESAB Corporation 84,460 469,220 (53,699) 499,981 Balance at July 1, 2022 $ — $ (88,941) $ — $ (88,941) 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 583 (71,276) (2,076) (72,769) Gain on long-term intra-entity foreign currency transactions — 29,925 — 29,925 Gain on net investment hedges — — 10,231 10,231 Other comprehensive income (loss) before reclassifications 583 (41,351) 8,155 (32,613) Amounts reclassified from Accumulated other comprehensive loss 2,100 — — 2,100 Net Other comprehensive income (loss) 2,683 (41,351) 8,155 (30,513) Balance at July 2, 2021 $ (110,100) $ (402,328) $ 29,809 $ (482,619) |
Inventories, Net (Tables)
Inventories, Net (Tables) | 6 Months Ended |
Jul. 01, 2022 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Current | Inventories, net consisted of the following: July 1, 2022 December 31, 2021 (In thousands) Raw materials $ 83,048 $ 66,824 Work in process 30,183 29,506 Finished goods 338,568 298,450 451,799 394,780 Less: allowance for excess, slow-moving and obsolete inventory (50,947) (38,547) $ 400,852 $ 356,233 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jul. 01, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Long-term debt consisted of the following: July 1, 2022 December 31, 2021 (In thousands) Term loan $ 448,815 $ 782,435 Euro senior notes — 395,552 2026 notes — 297,906 TEU amortizing notes — 6,501 Revolving credit facilities and other 644 603,932 Total debt 449,459 2,086,326 Less: current portion (449,459) (7,701) Long-term debt $ — $ 2,078,625 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 6 Months Ended |
Jul. 01, 2022 | |
Accrued Liabilities [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities in the Condensed Consolidated Balance Sheets consisted of the following: July 1, 2022 December 31, 2021 (In thousands) Accrued compensation and related benefits $ 57,352 $ 66,290 Accrued taxes 12,240 12,970 Accrued freight 7,957 5,299 Contingent consideration - current portion 3,975 1,816 Warranty liability 2,539 2,503 Accrued restructuring liability 2,589 2,170 Accrued third-party commissions 20,380 22,362 Customer advances and billings in excess of costs incurred 3,050 9,203 Lease liability - current portion 22,208 21,936 Accrued interest 596 11,066 Accrued rebates 11,302 12,584 Accrued professional fees 17,094 13,711 Accrued royalties 5,241 5,045 Other 37,683 38,436 $ 204,206 $ 225,391 |
Schedule of Restructuring Reserve by Type of Cost | 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: Six Months Ended July 1, 2022 Balance at Beginning of Period Provisions Payments Balance at End of Period (In thousands) Restructuring and other related charges: Termination benefits (1) $ 2,470 $ 2,352 $ (2,233) $ 2,589 Facility closure costs and other (2) 358 2,564 (2,922) — Total $ 2,828 4,916 $ (5,155) $ 2,589 Non-cash charges (2) 592 Total Provisions (3) $ 5,508 (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. (3) For the six months ended July 1, 2022 , $3.4 million and $2.1 million of the Company’s total provisions were related to the Prevention and Recovery and Reconstructive segments, respectively. Restructuring and other related charges includes $0.8 million of expense classified as Cost of sales on the Company’s Condensed Consolidated Statements of Operations for the six months ended July 1, 2022. |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jul. 01, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The Company’s segment results were as follows: Three Months Ended Six Months Ended July 1, 2022 July 2, 2021 July 1, 2022 July 2, 2021 (In thousands) Net sales: Prevention and Recovery $ 263,783 $ 266,919 $ 508,618 $ 501,593 Reconstructive 131,334 89,205 261,956 165,614 $ 395,117 $ 356,124 $ 770,574 $ 667,207 Segment Adjusted EBITDA (1) : Prevention and Recovery $ 35,148 $ 33,299 $ 61,518 $ 54,550 Reconstructive 21,042 17,350 42,399 33,349 $ 56,190 $ 50,649 $ 103,917 $ 87,899 (1) The following is a reconciliation of Income from continuing operations before income taxes to Adjusted EBITDA: Three Months Ended Six Months Ended July 1, 2022 July 2, 2021 July 1, 2022 July 2, 2021 (In thousands) Operating income (loss) (GAAP) $ 5,553 $ (10,351) $ (25,074) $ (28,482) Restructuring and other related charges (1) 2,555 1,992 5,508 2,963 MDR and other costs (2) 4,421 1,919 7,048 3,672 Strategic transaction costs 12,707 4,037 24,403 4,418 Stock-based compensation 7,821 6,793 14,529 12,747 Depreciation and other amortization 19,450 16,350 37,950 33,242 Amortization of acquired intangibles 31,824 29,504 62,610 57,042 Insurance settlement gain (3) (33,034) — (33,034) — Inventory step-up 4,893 405 9,977 2,297 Adjusted EBITDA (non-GAAP) $ 56,190 $ 50,649 $ 103,917 $ 87,899 (1) Restructuring and other related charges includes $0.3 million and $0.8 million of expense classified as Cost of sales on the Company’s Condensed Consolidated Statements of Operations for the three and six months ended July 1, 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. (3) Insurance settlement gain is related to the 2019 acquisition of DJO. |
General (Details)
General (Details) $ in Thousands, € in Millions | 3 Months Ended | ||||||||
Apr. 07, 2022 USD ($) | Apr. 06, 2022 | Apr. 04, 2022 USD ($) company shares | Jul. 02, 2022 salesChannel | Jul. 01, 2022 USD ($) | Apr. 07, 2022 EUR (€) | Apr. 01, 2022 EUR (€) | Mar. 22, 2022 shares | Dec. 31, 2021 USD ($) | |
Debt Instrument [Line Items] | |||||||||
Number of new independent companies created from separation | company | 2 | ||||||||
Number of operating segments | salesChannel | 2 | ||||||||
Equity securities, fair value | $ 263,070 | $ 0 | |||||||
Cash distribution upon separation | $ 1,200,000 | ||||||||
Cash used to pay outstanding debt | 52,300 | ||||||||
Term loan | |||||||||
Debt Instrument [Line Items] | |||||||||
Borrowings on term loan | 450,000 | ||||||||
Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Repayments of debt | 1,400,000 | ||||||||
2026 Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt issued | $ 300,000 | ||||||||
Redemption price, percentage | 103.188% | ||||||||
Debt instrument, interest rate, stated percentage | 6.375% | 6.375% | |||||||
2026 Notes | Senior Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Repayments of debt | $ 302,800 | ||||||||
Redemption price, percentage | 103.188% | ||||||||
Debt instrument, interest rate, stated percentage | 6.375% | 6.375% | |||||||
2025 Senior Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt issued | € | € 350 | ||||||||
Debt instrument, interest rate, stated percentage | 3.25% | ||||||||
2025 Senior Notes | Senior Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Redemption price, percentage | 100.813% | ||||||||
Notes redeemed | € | € 350 | ||||||||
Debt instrument, interest rate, stated percentage | 3.25% | 3.25% | |||||||
ESAB Corporation | |||||||||
Debt Instrument [Line Items] | |||||||||
Business separation, distribution to shareholders, ownership percentage after transaction | 10% | ||||||||
Debt issued | $ 1,200,000 | ||||||||
ESAB Corporation | Common Stock | |||||||||
Debt Instrument [Line Items] | |||||||||
Business, separation, pro-rata distribution, of outstanding common stock to shareholders, percentage | 90% | ||||||||
Number of shares of common stock distributed to shareholders for every three shares owned | shares | 1 | 1 | |||||||
Business separation, distribution to shareholders, ownership percentage after transaction | 10% | ||||||||
Reverse stock split ratio | 0.3333 |
Discontinued Operations - Narra
Discontinued Operations - Narratives (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jul. 01, 2022 | Jul. 02, 2021 | Jul. 01, 2022 | Jul. 02, 2021 | Apr. 04, 2022 | Mar. 22, 2022 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Business separation, pro-rata distribution, outstanding common stock to shareholders (in shares) | 60,034,311 | |||||
Income attributable to noncontrolling interest from discontinued operations, net of taxes | $ 0 | $ 705 | $ 966 | $ 1,581 | ||
ESAB Corporation | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Income attributable to noncontrolling interest from discontinued operations, net of taxes | $ 700 | 1,000 | 1,600 | |||
Common Stock | ESAB Corporation | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Number of shares of common stock distributed to shareholders for every three shares owned | 1 | 1 | ||||
Fabrication Technology | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Cash (used in) provided by operating activities, discontinued operations | (29,600) | 122,600 | ||||
Cash used in investing activities, discontinued operations | $ (3,200) | $ (14,400) |
Discontinued Operations - Carry
Discontinued Operations - Carrying Value of Assets and Liabilities (Details) - USD ($) $ in Thousands | Jul. 01, 2022 | Dec. 31, 2021 |
ASSETS | ||
Total current assets associated with discontinued operations | $ 0 | $ 956,614 |
LIABILITIES | ||
Total current liabilities associated with discontinued operations | $ 0 | 635,284 |
Fabrication Technology | ||
ASSETS | ||
Cash and cash equivalents | 39,118 | |
Trade receivables, net | 383,742 | |
Inventories, net | 420,062 | |
Prepaid expenses | 52,140 | |
Other current assets | 61,552 | |
Total current assets associated with discontinued operations | 956,614 | |
Property, plant and equipment, net | 286,278 | |
Goodwill | 1,533,037 | |
Other intangibles, net | 521,434 | |
Lease asset - right of use | 107,944 | |
Other assets | 289,356 | |
Total assets associated with discontinued operations | 3,694,663 | |
LIABILITIES | ||
Current portion of long-term debt | 613 | |
Accounts payable | 348,965 | |
Accrued liabilities | 285,706 | |
Total current liabilities associated with discontinued operations | 635,284 | |
Long-term debt, less current portion | 54 | |
Non-current lease liability | 88,777 | |
Deferred tax liabilities | 116,198 | |
Other liabilities | 368,533 | |
Total liabilities associated with discontinued operation | $ 1,208,846 |
Discontinued Operations - Finan
Discontinued Operations - Financial Results of the Fabrication Business (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2022 | Jul. 02, 2021 | Jul. 01, 2022 | Jul. 02, 2021 | |
Disposal Group, Including Discontinued Operations, Statement of Income | ||||
Income from discontinued operations, net of taxes | $ (43,666) | $ 71,829 | $ 10,690 | $ 123,923 |
Fabrication Technology | ||||
Disposal Group, Including Discontinued Operations, Statement of Income | ||||
Net sales | 0 | 629,803 | 647,911 | 1,197,932 |
Cost of sales | 0 | 411,412 | 423,580 | 779,746 |
Selling, general and administrative expense | 35,463 | 130,425 | 174,664 | 257,724 |
Restructuring and other related charges | 0 | 3,488 | 5,304 | 6,563 |
Operating loss | (35,463) | 84,478 | 44,363 | 153,899 |
Interest expense | 0 | 12,117 | 8,035 | 24,837 |
Pension settlement gain | 0 | (11,208) | 0 | (11,208) |
Income from discontinued operations before income taxes | (35,463) | 83,569 | 36,328 | 140,270 |
Income tax (benefit) expense | 8,203 | 11,740 | 25,638 | 16,347 |
Income from discontinued operations, net of taxes | $ (43,666) | $ 71,829 | $ 10,690 | $ 123,923 |
Acquisitions and Investments -
Acquisitions and Investments - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
May 06, 2022 USD ($) | Jul. 01, 2022 USD ($) | Jul. 02, 2021 USD ($) investment acquisition | Jul. 01, 2022 USD ($) transaction acquisition investment salesChannel | Dec. 31, 2021 USD ($) | Jul. 02, 2021 USD ($) | |
Business Acquisition [Line Items] | ||||||
Number of asset acquisitions | acquisition | 3 | |||||
Number of acquisitions | acquisition | 1 | |||||
Number of investments | investment | 2 | |||||
Asset acquisition, consideration | $ 18,200 | |||||
Payments for asset acquisitions | 8,600 | |||||
Asset acquisition, contingent consideration | 9,600 | |||||
Cash consideration for equity method investments | 12,000 | |||||
Acquisition, net of cash received | 35,123 | $ 230,650 | ||||
Contingent consideration, liability | $ 20,000 | 20,000 | ||||
Goodwill | 1,925,201 | 1,925,201 | $ 1,934,258 | |||
Equity investment without readily determinable fair value | 31,900 | 31,900 | ||||
Equity securities, fair value | 263,070 | 263,070 | 0 | |||
Unrealized gain on investment in ESAB Corporation | (135,500) | $ 0 | $ (135,537) | 0 | ||
ESAB Corporation | ||||||
Business Acquisition [Line Items] | ||||||
Unrealized gain on investment in ESAB Corporation | (135,537) | |||||
Medical Technology Businesses | ||||||
Business Acquisition [Line Items] | ||||||
Number of investments | investment | 2 | |||||
Cash consideration for equity method investments | 14,800 | |||||
Knee Innovation Company PTY Limited | ||||||
Business Acquisition [Line Items] | ||||||
Ownership interests acquired | 100% | |||||
Acquisition, net of cash received | $ 14,300 | |||||
Contingent consideration, liability | 12,800 | |||||
Goodwill | 13,000 | |||||
Intangible assets acquired | $ 18,200 | |||||
Mathys AG Bettlach | ||||||
Business Acquisition [Line Items] | ||||||
Business acquisition, consideration | 285,700 | |||||
Cash acquired | $ 14,700 | |||||
Reconstructive Segment | ||||||
Business Acquisition [Line Items] | ||||||
Number of acquisitions | acquisition | 3 | |||||
Number of transactions | salesChannel | 2 | |||||
Acquisition, net of cash received | $ 208,100 | |||||
Goodwill | 800,000 | $ 800,000 | ||||
Reconstructive Segment | Trilliant Surgical | ||||||
Business Acquisition [Line Items] | ||||||
Acquisition, net of cash received | $ 79,600 | |||||
Reconstructive Segment | MedShape, Inc | ||||||
Business Acquisition [Line Items] | ||||||
Acquisition, net of cash received | $ 124,600 | |||||
Prevention and Recovery | ||||||
Business Acquisition [Line Items] | ||||||
Number of transactions | transaction | 4 | |||||
Goodwill | $ 1,100,000 | $ 1,100,000 |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2022 | Jul. 02, 2021 | Jul. 01, 2022 | Jul. 02, 2021 | |
Revenue from contract with customer | $ 395,117 | $ 356,124 | $ 770,574 | $ 667,207 |
Prevention and Recovery | ||||
Revenue from contract with customer | 263,783 | 266,919 | 508,618 | 501,593 |
Reconstructive Segment | ||||
Revenue from contract with customer | $ 131,334 | $ 89,205 | $ 261,956 | $ 165,614 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jul. 01, 2022 | Jul. 02, 2021 | Jul. 01, 2022 | Jul. 02, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue [Abstract] | ||||||
Contract liability | $ 3.1 | $ 13.6 | $ 3.1 | $ 13.6 | $ 9.2 | $ 15 |
Revenue recognized, contract liability | $ 2.6 | $ 2.3 | $ 6.2 | $ 3.1 | ||
Contract liability, one time advance payments | $ 4.9 |
Revenue - Allowance for Credit
Revenue - Allowance for Credit Loss Rollforward (Details) $ in Thousands | 6 Months Ended |
Jul. 01, 2022 USD ($) | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |
Balance at Beginning of Period | $ 6,589 |
Charged to Expense, net | 343 |
Write-Offs, Deductions and Other, net | 1,391 |
Foreign Currency Translation | (141) |
Balance at End of Period | $ 8,182 |
Net Income Per Share from Con_2
Net Income Per Share from Continuing Operations (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2022 | Jul. 02, 2021 | Jul. 01, 2022 | Jul. 02, 2021 | |
Earnings Per Share [Abstract] | ||||
Net Income from continuing operations attributable to Parent | $ 120,521 | $ (42,482) | $ 82,199 | $ (74,626) |
Weighted-average shares of Common stock outstanding - basic (in shares) | 54,080,549 | 51,291,986 | 53,969,738 | 48,902,883 |
Net income per share, continuing operations, basic (in usd per share) | $ 2.23 | $ (0.83) | $ 1.52 | $ (1.53) |
Net effect of potentially dilutive securities - stock options, restricted stock units and tangible equity units | 441,300 | 0 | 489,134 | 0 |
Weighted-average shares of Common stock outstanding - diluted (in shares) | 54,521,849 | 51,291,986 | 54,458,872 | 48,902,883 |
Continuing operations, (in usd per share) | $ 2.21 | $ (0.83) | $ 1.51 | $ (1.53) |
Less: net income attributable to noncontrolling interest from continuing operations - net of taxes | $ 130 | $ 355 | $ 397 | $ 645 |
Net Income Per Share from Con_3
Net Income Per Share from Continuing Operations - Narrative (Details) - shares shares in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Jan. 31, 2022 | Jul. 01, 2022 | Jul. 02, 2021 | Jul. 01, 2022 | Jul. 02, 2021 | |
Earnings Per Share, Basic | |||||
Impact of shares, as adjusted for reverse stock split (in shares) | 6.1 | 6.1 | 6.1 | 6.1 | |
Conversion of tangible equity units into common stock (in shares) | 1.7 | 2.2 | |||
Antidilutive securities excluded from computation of earnings per share | 0.4 | 0.5 | 0.4 | 0.4 | |
Common Stock | |||||
Earnings Per Share, Basic | |||||
Conversion of tangible equity units into common stock (in shares) | 1.7 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 01, 2022 | Jul. 02, 2021 | Jul. 01, 2022 | Jul. 02, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Income from continuing operations before income taxes | $ 116,440 | $ (45,910) | $ 78,749 | $ (76,981) |
Income tax benefit | $ 4,211 | $ 3,783 | $ 3,847 | $ 3,000 |
Effective tax rate | (3.60%) | 8.20% | (4.90%) | 3.90% |
Equity Textual (Details)
Equity Textual (Details) - USD ($) | 1 Months Ended | 6 Months Ended | ||||
Jan. 15, 2022 | Jan. 11, 2019 | Jan. 31, 2022 | Jul. 01, 2022 | Jul. 02, 2021 | Dec. 31, 2021 | |
Shares outstanding after reverse stock split (in shares) | 52,083,078 | |||||
Stock repurchase program, authorized amount | $ 100,000,000 | |||||
Tangible Equity Units Issued, Amount | $ 4,600,000 | |||||
Tangible Equity Units Issued, Par Value | $ 100 | |||||
Tangible Equity Units Issued, Cash Proceeds | $ 447,700,000 | |||||
Tangible Equity Units Allocated to Equity, Percentage | 84.40% | |||||
Tangible Equity Units Allocated to Debt, Percentage | 15.60% | |||||
Stock Purchase Contracts Converted | 1,600,000 | |||||
Conversion of tangible equity units into common stock (in shares) | 1,700,000 | 2,200,000 | ||||
Tangible Equity Units, Threshold For Conversion | 6,100,000 | |||||
Prepaid Stock Purchase Contracts [Member] | ||||||
Stock Purchase Contracts Converted | 1,300,000 | |||||
Common Stock | ||||||
Conversion of tangible equity units into common stock (in shares) | 1,700,000 |
Equity - AOCL Components (Detai
Equity - AOCL Components (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jul. 01, 2022 | Jul. 01, 2022 | Jul. 02, 2021 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning Balance | $ (516,013) | ||
Foreign currency translation adjustment | (60,787) | $ (72,769) | |
Loss on long-term intra-entity foreign currency transactions | (21,779) | 29,925 | |
Gain (loss) on on net investment hedges | 9,028 | 10,231 | |
Other comprehensive income (loss) before reclassifications | (73,538) | (32,613) | |
Amounts reclassified from Accumulated other comprehensive loss | 629 | 2,100 | |
Net current period other comprehensive income (loss) | (72,909) | (30,513) | |
Distribution of ESAB Corporation | $ (1,207,261) | ||
Ending Balance | (88,941) | (88,941) | |
Accumulated Other Comprehensive Loss | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning Balance | (516,013) | (452,106) | |
Distribution of ESAB Corporation | 499,981 | 499,981 | |
Ending Balance | (88,941) | (88,941) | (482,619) |
Net Unrecognized Pension and Other Post-Retirement Benefit Cost | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning Balance | (85,559) | (112,783) | |
Foreign currency translation adjustment | 470 | 583 | |
Loss on long-term intra-entity foreign currency transactions | 0 | 0 | |
Gain (loss) on on net investment hedges | 0 | 0 | |
Other comprehensive income (loss) before reclassifications | 470 | 583 | |
Amounts reclassified from Accumulated other comprehensive loss | 629 | 2,100 | |
Net current period other comprehensive income (loss) | 1,099 | 2,683 | |
Distribution of ESAB Corporation | 84,460 | ||
Ending Balance | 0 | 0 | (110,100) |
Foreign Currency Translation Adjustment | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning Balance | (475,125) | (360,977) | |
Foreign currency translation adjustment | (61,257) | (71,276) | |
Loss on long-term intra-entity foreign currency transactions | (21,779) | 29,925 | |
Gain (loss) on on net investment hedges | 0 | 0 | |
Other comprehensive income (loss) before reclassifications | (83,036) | (41,351) | |
Amounts reclassified from Accumulated other comprehensive loss | 0 | 0 | |
Net current period other comprehensive income (loss) | (83,036) | (41,351) | |
Distribution of ESAB Corporation | 469,220 | ||
Ending Balance | (88,941) | (88,941) | (402,328) |
Unrealized Gain on Hedging Activities | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning Balance | 44,671 | 21,654 | |
Foreign currency translation adjustment | 0 | (2,076) | |
Loss on long-term intra-entity foreign currency transactions | 0 | 0 | |
Gain (loss) on on net investment hedges | 9,028 | 10,231 | |
Other comprehensive income (loss) before reclassifications | 9,028 | 8,155 | |
Amounts reclassified from Accumulated other comprehensive loss | 0 | 0 | |
Net current period other comprehensive income (loss) | 9,028 | 8,155 | |
Distribution of ESAB Corporation | (53,699) | ||
Ending Balance | $ 0 | $ 0 | $ 29,809 |
Inventories, Net (Details)
Inventories, Net (Details) - USD ($) $ in Thousands | Jul. 01, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 83,048 | $ 66,824 |
Work in process | 30,183 | 29,506 |
Finished goods | 338,568 | 298,450 |
Inventory, gross | 451,799 | 394,780 |
Less: allowance for excess, slow-moving and obsolete inventory | (50,947) | (38,547) |
Inventories, net | $ 400,852 | $ 356,233 |
Debt - Components (Details)
Debt - Components (Details) - USD ($) $ in Thousands | Jul. 01, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Total Debt | $ 449,459 | $ 2,086,326 |
Current portion of long-term debt | 449,459 | 7,701 |
Long-term debt | 0 | 2,078,625 |
Term loan | ||
Debt Instrument [Line Items] | ||
Total Debt | 448,815 | 782,435 |
Euro senior notes | ||
Debt Instrument [Line Items] | ||
Total Debt | 0 | 395,552 |
2026 notes | ||
Debt Instrument [Line Items] | ||
Total Debt | 0 | 297,906 |
TEU amortizing notes | ||
Debt Instrument [Line Items] | ||
Total Debt | 0 | 6,501 |
Revolving credit facilities and other | ||
Debt Instrument [Line Items] | ||
Total Debt | $ 644 | $ 603,932 |
Debt -Textual (Details)
Debt -Textual (Details) $ / shares in Units, $ in Thousands, € in Millions | 3 Months Ended | 6 Months Ended | |||||||
Apr. 07, 2022 USD ($) | Apr. 04, 2022 USD ($) | Jul. 01, 2022 USD ($) | Jul. 02, 2021 USD ($) | Jul. 01, 2022 USD ($) | Jul. 02, 2021 USD ($) | Apr. 01, 2022 EUR (€) | Apr. 01, 2022 $ / shares | Dec. 31, 2021 USD ($) | |
Debt extinguishment charges | $ 20,104 | $ 29,870 | $ 20,104 | $ 29,870 | |||||
Non cash write -offs of original issue discount and deferred financing fee | 7,400 | ||||||||
Tangible equity units issued, interest rate | 6.50% | ||||||||
Tangible equity unit, initial principal amount | $ / shares | $ 15.6099 | ||||||||
Tangible equity unit, quarterly cash distribution | $ / shares | $ 1.4375 | ||||||||
Tangible equity unit, repayment | 6,500 | $ 12,300 | |||||||
Long-term debt | 449,459 | 449,459 | $ 2,086,326 | ||||||
Letters of credit, outstanding | 2,300 | 2,300 | |||||||
Debt deferred financing fees | 6,200 | 6,200 | |||||||
Senior Notes | |||||||||
Debt extinguishment charges | (20,100) | ||||||||
Redemption premium on retired debt | 12,700 | ||||||||
Non cash write -offs of original issue discount and deferred financing fee | 7,400 | ||||||||
Term loan | |||||||||
Long-term debt | 448,815 | 448,815 | $ 782,435 | ||||||
Bilateral agreements | |||||||||
Credit facility | 30,000 | 30,000 | |||||||
Long-term debt | 900 | 900 | |||||||
Letter of Credit | |||||||||
Credit facility | $ 30,000 | $ 30,000 | |||||||
2025 Senior Notes | |||||||||
Debt instrument, interest rate, stated percentage | 3.25% | ||||||||
Principal amount | € | € 350 | ||||||||
2025 Senior Notes | Senior Notes | |||||||||
Debt instrument, interest rate, stated percentage | 3.25% | ||||||||
Redemption price, percentage | 100.813% | ||||||||
2026 Notes | |||||||||
Debt instrument, interest rate, stated percentage | 6.375% | ||||||||
Principal amount | $ 300,000 | ||||||||
Redemption price, percentage | 103.188% | ||||||||
2026 Notes | Senior Notes | |||||||||
Debt instrument, interest rate, stated percentage | 6.375% | ||||||||
Redemption price, percentage | 103.188% | ||||||||
Enovis Credit Agreement | |||||||||
Swing line loan sub-facility | $ 50,000 | ||||||||
Enovis Credit Agreement | Term loan | |||||||||
Principal amount | 450,000 | ||||||||
Enovis Credit Agreement | Revolving Credit Facility | |||||||||
Credit facility | $ 900,000 | ||||||||
Debt covenant, maximum total leverage ratio | 4.50 | ||||||||
Debt instrument covenant minimum interest coverage ratio | 3 | ||||||||
Weighted average interest rate | 2.58% | 2.58% | |||||||
Amount available on the Revolver | $ 900,000 | $ 900,000 | |||||||
Deferred financing costs | $ 2,900 | $ 2,900 | |||||||
Enovis Credit Agreement | Revolving Credit Facility | Debt Covenant Period One | |||||||||
Debt instrument covenant maximum total leverage ratio (step down) | 4 | ||||||||
Enovis Credit Agreement | Revolving Credit Facility | Debt Covenant Period Two | |||||||||
Debt instrument covenant maximum total leverage ratio (step down) | 3.75 | ||||||||
Enovis Credit Agreement | Revolving Credit Facility | Debt Covenant Period Three | |||||||||
Debt instrument covenant maximum total leverage ratio (step down) | 3.50 |
Accrued Liabilities - Chart (De
Accrued Liabilities - Chart (Details) - USD ($) $ in Thousands | Jul. 01, 2022 | Dec. 31, 2021 |
Accrued Liabilities [Abstract] | ||
Accrued compensation and related benefits | $ 57,352 | $ 66,290 |
Accrued taxes | 12,240 | 12,970 |
Accrued freight | 7,957 | 5,299 |
Contingent consideration - current portion | 3,975 | 1,816 |
Warranty liability | 2,539 | 2,503 |
Accrued restructuring liability | 2,589 | 2,170 |
Accrued third-party commissions | 20,380 | 22,362 |
Customer advances and billings in excess of costs incurred | 3,050 | 9,203 |
Lease liability - current portion | 22,208 | 21,936 |
Accrued interest | 596 | 11,066 |
Accrued rebates | 11,302 | 12,584 |
Accrued professional fees | 17,094 | 13,711 |
Accrued royalties | 5,241 | 5,045 |
Other | 37,683 | 38,436 |
Accrued liabilities | $ 204,206 | $ 225,391 |
Accrued Liabilities -Restructur
Accrued Liabilities -Restructuring Rollforward (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 01, 2022 | Jul. 02, 2021 | |
Restructuring Reserve [Roll Forward] | ||
Balance at Beginning of Period | $ 2,828 | |
Provisions before non-cash charges | 4,916 | |
Non cash impairment restructuring provisions | 592 | |
Restructuring, Settlement and Impairment Provisions | 5,508 | |
Payments | (5,155) | |
Balance at End of Period | 2,589 | |
Prevention and Recovery | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring, Settlement and Impairment Provisions | $ 3,400 | |
Reconstructive Segment | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring, Settlement and Impairment Provisions | $ 2,100 | |
Termination benefits | ||
Restructuring Reserve [Roll Forward] | ||
Balance at Beginning of Period | 2,470 | |
Provisions before non-cash charges | 2,352 | |
Payments | (2,233) | |
Balance at End of Period | 2,589 | |
Facility closure costs | ||
Restructuring Reserve [Roll Forward] | ||
Balance at Beginning of Period | 358 | |
Provisions before non-cash charges | 2,564 | |
Payments | (2,922) | |
Balance at End of Period | $ 0 |
Financial Instruments and Fai_2
Financial Instruments and Fair Value Measurements (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Apr. 04, 2022 | Jul. 01, 2022 | Jul. 02, 2021 | Jul. 01, 2022 | Jul. 02, 2021 | Dec. 31, 2021 | |
Financial Instruments and Fair Value Measurements [Abstract] | ||||||
Long-term Debt, Fair Value | $ 500,000 | $ 500,000 | $ 2,100,000 | |||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||||||
Contingent consideration, liability | 20,000 | 20,000 | ||||
Equity securities, fair value | 263,070 | 263,070 | 0 | |||
Unrealized gain on investment in ESAB Corporation | (135,500) | $ 0 | (135,537) | $ 0 | ||
Derivative asset, notional amount | 4,600 | 4,600 | 7,600 | |||
ESAB Corporation | ||||||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||||||
Business separation, distribution to shareholders, ownership percentage after transaction | 10% | |||||
Foreign currency contracts related to customer sales contracts | ||||||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||||||
Unrealized losses on derivatives | 100 | 200 | ||||
Realized gain (loss) | 200 | 300 | ||||
Fair Value, Inputs, Level 3 | ||||||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||||||
Contingent consideration, liability | 25,000 | 25,000 | ||||
Fair Value, Inputs, Level 2 | ||||||
Fair Value Disclosure, Asset and Liability, Not Measured at Fair Value [Line Items] | ||||||
Deferred compensation plans asset | $ 9,700 | $ 9,700 | $ 11,200 |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jul. 01, 2022 | Jul. 02, 2021 | Jul. 01, 2022 | Jul. 02, 2021 | Apr. 01, 2022 | Dec. 31, 2021 | |
Net sales | $ 395,117 | $ 356,124 | $ 770,574 | $ 667,207 | ||
Adjusted EBITDA (non-GAAP) | 56,190 | 50,649 | 103,917 | 87,899 | ||
Operating income (loss) (GAAP) | 5,553 | (10,351) | (25,074) | (28,482) | ||
Restructuring and other related charges | 2,555 | 1,992 | 5,508 | 2,963 | ||
MDR and other costs | 4,421 | 1,919 | 7,048 | 3,672 | ||
Strategic transaction costs | 12,707 | 4,037 | 24,403 | 4,418 | ||
Stock-based compensation | 7,821 | 6,793 | 14,529 | 12,747 | ||
Depreciation and other amortization | 19,450 | 16,350 | 37,950 | 33,242 | ||
Amortization of acquired intangibles | 31,824 | 29,504 | 62,610 | 57,042 | ||
Insurance settlement gain | (33,034) | 0 | (33,034) | 0 | ||
Inventory step-up | 4,893 | 405 | 9,977 | 2,297 | ||
Goodwill | 1,925,201 | 1,925,201 | $ 1,934,258 | |||
Assets | 4,503,715 | 4,503,715 | $ 8,515,912 | |||
Cost of Sales | ||||||
Restructuring and other related charges | 300 | 800 | ||||
Prevention and Recovery | ||||||
Net sales | 263,783 | 266,919 | 508,618 | 501,593 | ||
Adjusted EBITDA (non-GAAP) | 35,148 | 33,299 | 61,518 | 54,550 | ||
Goodwill | 1,100,000 | 1,100,000 | ||||
Assets | $ 2,800,000 | |||||
Reconstructive Segment | ||||||
Net sales | 131,334 | 89,205 | 261,956 | 165,614 | ||
Adjusted EBITDA (non-GAAP) | 21,042 | $ 17,350 | 42,399 | $ 33,349 | ||
Goodwill | $ 800,000 | $ 800,000 | ||||
Assets | $ 1,800,000 |