v3.26.1
Segment Information
 6 Months Ended
Jul. 03, 2026
Segment Reporting [Abstract]  
Segment Information Segment Information
The Company conducts its continuing operations through the Prevention & Recovery and Reconstructive operating segments, which also represent the Company’s reportable segments.

▪P&R - 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.

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

The Company’s management, including the chief operating decision maker, evaluates the operating results of each of its reportable segments based upon Net sales and Adjusted EBITDA. Net sales represents revenue from external customers. There are no revenues from transactions between our segments reported in our segment measures of profitability. There are certain costs incurred centrally which are allocated to the segments generally using the proportionate share of net sales. Adjusted EBITDA excludes the effect of Other (income) expense, net, non-operating (gain) loss on investments, debt extinguishment charges, interest expense, net, restructuring charges, Medical Device Regulation (MDR) and other costs, strategic transaction costs, stock-based compensation, depreciation and other amortization, acquisition-related intangible asset amortization, purchase of royalty interest, and goodwill impairment charges from the results of the Company’s operating segments.

For the three and six months ended July 3, 2026, we revised our definition of Adjusted EBITDA to no longer adjust for inventory step-up charges. Adjusted EBITDA in prior periods has been revised to reflect this change for consistency of presentation.

The chief operating decision maker is a group, which includes both the Company’s Chief Executive Officer and Chief Financial Officer. The chief operating decision maker uses Adjusted EBITDA because this measure assists our management in comparing operating performance over time because certain items are not normal recurring charges necessary to operate our business, and these items may obscure underlying business trends and make comparisons of long-term performance difficult, as they are of a nature and/or size that occur with inconsistent frequency or relate to discrete restructuring plans and other initiatives that are fundamentally different from our ongoing productivity improvements. The chief operating decision maker utilizes Adjusted EBITDA to assess segment performance, incorporating it into the annual budgeting process and monthly comparisons of actual results to budget and updated forecasts. This analysis supports decisions regarding the allocation of capital and personnel to the segments.
The Company’s segment results were as follows:
Three Months EndedSix Months Ended
July 3, 2026July 4, 2025July 3, 2026July 4, 2025
(In thousands)
Prevention & Recovery:
Net sales$288,248 $290,570 $560,266 $563,154 
Segment cost of sales124,094 131,336 249,851 260,100 
Segment research and development7,706 9,669 15,453 18,910 
Segment operating expense111,250 107,523 223,720 215,367 
Total segment expenses243,050 248,528 489,024 494,377 
Add: Depreciation5,129 4,689 10,194 8,857 
Adjusted EBITDA (non-GAAP)$50,327 $46,731 $81,436 $77,634 
Reconstructive:
Net sales$294,534 $273,975 $611,667 $560,225 
Segment cost of sales98,873 97,750 196,208 195,024 
Segment research and development23,980 21,031 47,766 40,318 
Segment operating expense141,376 134,729 290,659 273,666 
Total segment expenses264,229 253,510 534,633 509,008 
Add: Depreciation23,689 23,957 49,418 49,354 
Adjusted EBITDA (non-GAAP)(1)
$53,994 $44,422 $126,452 $100,571 
Total:
Net Sales$582,782 $564,545 $1,171,933 $1,123,379 
Adjusted EBITDA (non-GAAP) (1)
$104,321 $91,153 $207,888 $178,205 
(1) In conjunction with our Form 10-Q filing for the three months ended April 3, 2026, we revised our definition of Adjusted EBITDA to no longer adjust for inventory step-up charges. Adjusted EBITDA in prior periods has been revised to reflect this change for consistency of presentation. Accordingly, Adjusted EBITDA for the three and six months ended July 4, 2025 has been revised from $97.2 million and $196.3 million, as presented in our Form 10-Q for the period ended July 4, 2025, to $91.2 million and $178.2 million, respectively, reflecting the removal of a $6.0 million and $18.1 million adjustment for inventory step-up in connection with acquired businesses. Adjusted EBITDA for our Recon segment for the three and six months ended July 4, 2025 has also been revised from $50.4 million and $118.7 million , as presented in our Form 10-Q for the period ended July 4, 2025, to $44.4 million and $100.6 million, respectively, reflecting the removal of the same $6.0 million and $18.1 million adjustment for inventory step-up in connection with acquired businesses from the prior period.
The following is a reconciliation of Net Loss to Adjusted EBITDA:
Three Months EndedSix Months Ended
July 3, 2026July 4, 2025July 3, 2026July 4, 2025
(In thousands)
Net Loss (GAAP)$(1,036)$(36,548)$(9,486)$(92,253)
Loss from discontinued operations, net of taxes— 93 39 218 
Income tax expense (benefit)8,501 10,801 17,546 9,032 
Restructuring charges(1)
4,859 920 7,567 4,829 
MDR and other costs (2)
710 3,320 1,904 6,558 
Strategic transaction costs (3)
1,408 13,450 12,440 25,504 
Stock-based compensation 8,902 8,668 17,652 16,075 
Depreciation and other amortization 29,468 28,588 60,917 58,212 
Amortization of acquired intangibles 41,561 42,962 83,465 84,774 
Purchase of royalty interest (5)
— 10,041 — 45,818 
Interest expense, net 8,038 9,294 17,207 18,482 
Other (income) expense, net (4)
1,910 (436)(1,363)956 
Adjusted EBITDA (non-GAAP) (6)
$104,321 $91,153 $207,888 $178,205 
(1) Restructuring charges reflect costs associated with the Company’s restructuring programs to reduce the structural costs of the Company. For further information, see Note 10, “Accrued Liabilities - Accrued Restructuring Liability.” Includes expenses of $0.2 million and $0.3 million classified as Cost of sales on the Company’s Condensed Consolidated Statements of Operations for the three and six months ended July 4, 2025, respectively. There were no similar charges for the three and six months ended July 3, 2026.
(2) MDR and other costs includes (i) $0.4 million and $1.2 million for the three and six months ended July 3, 2026 and $2.8 million and $5.4 million for the three and six months ended July 4, 2025, respectively, in non-recurring costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with the medical device reporting regulations and other requirements of the new medical device regulations in the European Union for devices which were introduced to the market prior to the regulation and (ii) $0.3 million and $0.7 million for the three and six months ended July 3, 2026 and $0.4 million and $1.1 million for the three and six months ended July 4, 2025, respectively, of expenses to resolve certain infrequent, non-recurring regulatory or other legal matters. These costs are classified as Selling, general and administrative expense on our Condensed Consolidated Statements of Operations.
(3) Strategic transaction costs includes: (i) $4.7 million and $11.7 million for the three and six months ended July 3, 2026 and $7.8 million and $16.5 million for the three and six months ended July 4, 2025, respectively, related to non-recurring integration costs associated with the Lima Acquisition which includes (a) payroll and retention costs for roles eliminated in connection with the integration of our recent acquisition of Lima where a legal notice period was required prior to the employee’s separation from the Company, or integration-related daily activities not related to former roles performed by an employee during their legal notice period and prior to their separation from the Company. In each case, such costs relate solely to roles eliminated in connection with the integration of the Lima acquisition, and are non-recurring and not part of our normal business operations; (b) professional and consulting fees specifically incurred to consummate the acquisition and advise and facilitate on post-acquisition integration matters including legal entity consolidation, costs associated with rebranding and marketing acquired business under Enovis name, such as marketing materials, trade show redesign costs and product labeling; and (c) integration related costs associated with sales agent and distributor network rationalization, including contract termination and retention expenses, supply chain and portfolio integration, and quality management system consolidation, (ii) $(3.5) million and $0.3 million for the three and six months ended July 3, 2026 and $5.4 million and $8.2 million for the three and six months ended July 4, 2025, including a $5.7 million non-cash gain upon the reversal of a portion of a contingent consideration liability (See Note 11, “Financial Instruments and Fair Value Measurements” for additional information), partially offset by non-recurring (non-Lima) acquisition integration costs and other non-recurring project costs for global ERP rationalization and shared service center start-up, and (iii) $0.2 million and $0.4 million for the three and six months ended July 3, 2026 and $0.3 million and $0.8 million for the three and six months ended July 4, 2025, respectively, related to the Separation of our former fabrication technology business. These costs are classified as Selling, general and administrative expense on our Condensed Consolidated Statements of Operations.
(4) Includes the fair value gain adjustment for non-designated cross-currency swaps in 2026. Includes the final fair value loss adjustment for the Contingent Acquisition Shares issued in the first quarter of 2025.
(5) Purchase of royalty interest represents the one-time, up-front expense incurred by the Company to acquire the economic rights to future royalties under product development agreements in connection with the termination of such agreements as part of a strategic shift to a new product development model. The Company believes that excluding the impact of such expense enhances comparability between periods, provides investors with a clear and meaningful view of our underlying business trends and aligns with how management evaluates the ongoing business performance.
(6) In conjunction with our Form 10-Q filing for the three months ended April 3, 2026, we revised our definition of Adjusted EBITDA to no longer adjust for inventory step-up charges. Adjusted EBITDA in prior periods has been revised to reflect this change for consistency of presentation. Accordingly, Adjusted EBITDA for the three and six months ended July 4, 2025 has been revised from $97.2 million and $196.3 million, respectively, as presented in our Form 10-Q for the period ended July 4, 2025, to $91.2 million and $178.2 million, reflecting the removal of a $6.0 million and $18.1 million, respectively, adjustment for inventory step-up in connection with acquired businesses.
The Company’s total assets and capital expenditures by segment were as follows:

July 3, 2026December 31, 2025
(In thousands)
Total assets (1):
Prevention & Recovery$1,420,223 $1,474,243 
Reconstructive2,345,903 2,360,494 
Total$3,766,126 $3,834,737 
(1) Includes allocation of certain centrally managed assets, including cash and cash equivalents.


Three Months EndedSix Months Ended
July 3, 2026July 4, 2025July 3, 2026July 4, 2025
(In thousands)
Capital expenditures (2):
Prevention & Recovery$7,106 $5,542 $14,307 $14,335 
Reconstructive36,789 38,827 82,392 73,296 
Total capital expenditures$43,895 $44,369 $96,699 $87,631 
(2) Includes allocation of capital expenditures from certain corporate/centrally managed functions.