cfx-20230331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM			10-Q


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

For the quarterly period ended March 31, 2023


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

For the transition period from to

Commission File Number: 001-34045

Enovis Corporation

(Exact name of registrant as specified in its charter)


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

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


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

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


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

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

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

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

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

Smaller reporting company ☐ Emerging growth company ☐

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

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

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

TABLE OF CONTENTS


			Page
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements			2
Condensed Consolidated Statements of Operations			2
Condensed Consolidated Statements of Comprehensive Income (Loss)			4
Condensed Consolidated Balance Sheets			3
Condensed Consolidated Statements of Equity			5
Condensed Consolidated Statements of Cash Flows			6
Notes to Condensed Consolidated Financial Statements			7
Note 1. General			7
Note 2. Recently Issued Accounting Pronouncements			7
Note 3. Discontinued Operations			8
Note 4. Acquisitions and Investments			8
Note 5. Revenue			10
Note 6. Net Loss Per Share from Continuing Operations			11
Note 7. Income Taxes			11
Note 8. Equity			12
Note 9. Inventories, Net			13
Note 10. Debt			13
Note 11. Accrued Liabilities			15
Note 12. Financial Instruments and Fair Value Measurements			15
Note 13. Commitments and Contingencies			16
Note 14. Segment Information			16


Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			18
Item 3. Quantitative and Qualitative Disclosures About Market Risk			31
Item 4. Controls and Procedures			32

PART II - OTHER INFORMATION
Item 1. Legal Proceedings			33
Item 1A. Risk Factors			33
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			33
Item 3. Defaults Upon Senior Securities			33
Item 4. Mine Safety Disclosures			33
Item 5. Other Information			33
Item 6. Exhibits			34

SIGNATURES			35

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

ENOVIS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Dollars in thousands, except per share amounts

(Unaudited)


	Three Months Ended
	March 31, 2023		April 1, 2022

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

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

Interest expense, net	5,652		7,064



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



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

See Notes to Condensed Consolidated Financial Statements.

ENOVIS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

Dollars in thousands, except share amounts

(Unaudited)


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

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

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

See Notes to Condensed Consolidated Financial Statements.

ENOVIS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Dollars in thousands

(Unaudited)


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


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


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

See Notes to Condensed Consolidated Financial Statements.

ENOVIS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

Dollars in thousands, except share amounts

(Unaudited)


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

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


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


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

See Notes to Condensed Consolidated Financial Statements.

ENOVIS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Dollars in thousands

(Unaudited)

SEC Form 10-Q filed by Enovis Corporation