Enovis CORP

Previous wording

Some of the statements contained in this Form 10-Q that are not historical facts are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 21E of the Exchange Act. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date this Form 10-Q is filed with the SEC. Statements other than statements of historical fact are statements that could be deemed forward-looking statements, including statements regarding: the Company’s acquisition (the “Lima Acquisition”) and integration of LimaCorporate S.p.A. (“Lima”); the impact of public health emergencies and global pandemics; disruptions in the global economy caused by escalating geopolitical tensions including in connection with the ongoing conflicts between Russia and the Ukraine and in the Middle East; macroe conomic conditions, including the impact of increasing inflationary pressures; changes in government trade policies, including the implementation of tariffs; supply chain disruptions; increasing energy costs and availability concerns, particularly in the European market; projections of revenue, profit margins, expenses, tax provisions and tax rates, earnings or losses from operations, impact of foreign exchange rates, cash flows, synergies or other financial items; plans, strategies and objectives of management for future operations including statements relating to potential acquisitions, compensation plans or purchase commitments; developments, performance, industry or market rankings relating to products or services; future macroeconomic conditions or performance, including the impact of inflationary pressures; changes in government trade policies, including the implementation of tariffs; the outcome of outstanding claims or legal proceedings; potential gains and recoveries of costs; assumptions underlying any of the foregoing; and any other statements that address activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the future. Forward-looking statements may be characterized by terminology such as “believe,” “anticipate,” “should,” “would,” “could,” “intend,” “plan,” “will,” “expect,” “estimate,” “project,” “positioned,” “strategy,” “targets,” “aims,” “seeks,” “sees,” and similar expressions. These statements are based on assumptions and assessments made by our management as of the filing of this Form 10-Q in light of their experience and perception of historical trends, current conditions, expected future developments and other factors we believe to be appropriate. These forward-looking statements are subject to a number of risks and uncertainties and actual results could differ materially due to numerous factors, including but not limited to the following:

Current wording

Some of the statements contained in this Form 10-Q that are not historical facts are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 21E of the Exchange Act. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date this Form 10-Q is filed with the SEC. Statements other than statements of historical fact are statements that could be deemed forward-looking statements, including statements regarding: the Company’s planned acquisition of eCential and the expected timeline for completing the acquisition, the growth potential of eCential’s surgical robotics platform combined with the Company’s ARVIS® Augmented Reality System, planned funding for the acquisition, the financial and operational impact of the acquisition, including the anticipated impact on Adjusted EBITDA margins, plans, goals, objectives, outlook, expectations and intentions; the Company’s acquisition (the “Lima Acquisition”) and integration of LimaCorporate S.p.A. (“Lima”); the impact of public health emergencies and global pandemics; disruptions in the global economy caused by escalating geopolitical tensions including in connection with the ongoing conflicts between Russia and the Ukraine and in the Middle East; macroe conomic conditions, including the impact of increasing inflationary pressures; changes in government trade policies, including the implementation of tariffs; supply chain disruptions; increasing energy costs and availability concerns, particularly in the European market; projections of revenue, profit margins, expenses, tax provisions and tax rates, earnings or losses from operations, impact of foreign exchange rates, cash flows, synergies or other financial items; plans, strategies and objectives of management for future operations including statements relating to potential acquisitions, compensation plans or purchase commitments; developments, performance, industry or market rankings relating to products or services; future macroeconomic conditions or performance, including the impact of inflationary pressures; changes in government trade policies, including the implementation of tariffs; the outcome of outstanding claims or legal proceedings; potential gains and recoveries of costs; assumptions underlying any of the foregoing; and any other statements that address activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the future. Forward-looking statements may be characterized by terminology such as “believe,” “anticipate,” “should,” “would,” “could,” “intend,” “plan,” “will,” “expect,” “estimate,” “project,” “positioned,” “strategy,” “targets,” “aims,” “seeks,” “sees,” and similar expressions. These statements are based on assumpt…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

The comparability of our operating results for the six months ended July 3, 2026 to the prior periods in 2025 is affected by fewer days as compared to the six months ended July 4, 2025.

Current wording

The comparability of our operating results for the nine months ended October 2, 2026 is affected by one fewer calendar day compared to the nine months ended October 3, 2025. Additionally, the comparability of our operating results for three and nine months ended October 2, 2026 compared to the prior year periods in 2025 is affected by the following significant items:

Previous wording

During the three and six months ended July 3, 2026, approximately 44% and 45% of our sales, respectively, were derived from operations outside the United States, the majority of which are in Europe, with the remaining portion primarily in the Asia-Pacific region. Accordingly, we can be affected by market demand, economic and political factors in countries in Europe and the Asia-Pacific region, and significant movements in foreign exchange rates. Our ability to grow and our financial performance will be affected by our ability to address challenges and opportunities that are a consequence of expanding our global operations through our recent acquisitions, including efficiently utilizing our international sales channels, manufacturing and distribution capabilities, participating in the expansion of market opportunities, successfully completing global acquisitions and engineering innovative new product applications to create better patient outcomes.

Current wording

During the three and nine months ended October 2, 2026, approximately 41% and 44% of our sales, respectively, were derived from operations outside the United States, the majority of which are in Europe, with the remaining portion primarily in the Asia-Pacific region. Accordingly, we can be affected by market demand, economic and political factors in countries in Europe and the Asia-Pacific region, and significant movements in foreign exchange rates. Our ability to grow and our financial performance will be affected by our ability to address challenges and opportunities that are a consequence of expanding our global operations through our recent acquisitions, including efficiently utilizing our international sales channels, manufacturing and distribution capabilities, participating in the expansion of market opportunities, successfully completing global acquisitions and engineering innovative new product applications to create better patient outcomes.

Previous wording

The majority of our Net sales derived from operations outside the United States are denominated in currencies other than the U.S. Dollar. Similar portions of our manufacturing and employee costs are also outside the United States and denominated in currencies other than the U.S. Dollar. Changes in foreign exchange rates can impact our results of operations and are quantified when significant. For the three months ended July 3, 2026 compared to the three months ended July 4, 2025, fluctuations in foreign currencies increased Net sales by 1.0%, increased Gross profit by approximately 0.6%, and increased operating expenses by approximately 0.9%. For the six months ended July 3, 2026 compared to the six months ended July 4, 2025, fluctuations in foreign currencies increased Net sales by 2.6%, increased Gross profit by approximately 2.2%, and increased operating expenses by approximately 2.4%.

Current wording

The majority of our Net sales derived from operations outside the United States are denominated in currencies other than the U.S. Dollar. Similar portions of our manufacturing and employee costs are also outside the United States and denominated in currencies other than the U.S. Dollar. Changes in foreign exchange rates can impact our results of operations and are quantified when significant. For the three months ended October 2, 2026 compared to the three months ended October 3, 2025, fluctuations in foreign currencies decreased Net sales by 0.3%, decreased Gross profit by approximately 0.7%, and decreased operating expenses by approximately 0.2%. For the nine months ended October 2, 2026 compared to the nine months ended October 3, 2025, fluctuations in foreign currencies increased Net sales by 1.6%, increased Gross profit by approximately 1.2%, and increased operating expenses by approximately 1.6%.

Previous wording

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

Current wording

The following table sets forth a reconciliation of net income (loss) to Adjusted EBITDA, for the three and nine months ended October 2, 2026 and October 3, 2025, respectively.

Previous wording

(3)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 $0.3 million classified as Cost of sales on the Company’s Condensed Consolidated Statements of Operations for the three months ended July 4, 2025. There were no similar charges for the three months ended July 3, 2026.

Current wording

(3)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 $1.5 million classified as Cost of sales on the Company’s Condensed Consolidated Statements of Operations for the three months ended October 3, 2025. There were no similar charges for the three months ended October 2, 2026.

Previous wording

(4)MDR and other costs includes (i) $0.4 million for the three months ended July 3, 2026 and $2.8 million for the three 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 for the three months ended July 3, 2026 and $0.4 million for the three 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.

Current wording

(4)MDR and other costs includes (i) $0.4 million for the three months ended October 2, 2026 and $2.1 million for the three months ended October 3, 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) $0.5 million for the three months ended October 2, 2026 and $0.4 million for the three months ended October 3, 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.

Previous wording

(5) Strategic transaction costs includes: (i) $4.7 million for the three months ended July 3, 2026 and $7.8 million for the three months ended July 4, 2025 related to non-recurring integration costs associated with the Lima Acquisition, which includes (a) payroll and retention costs for roles eliminated in connection with the integration of our recent acquisition of Lima where a legal notice period was required prior to the employee’s separation from the Company, or integration-related daily activities not related to former roles performed by an employee during their legal notice period and prior to their separation from the Company (in each case, such costs relate solely to roles eliminated in connection with the integration of the Lima acquisition, and are non-recurring and not part of our normal business operations); (b) professional and consulting fees specifically incurred to consummate the acquisition and advise and facilitate on post-acquisition integration matters including legal entity consolidation, costs associated with rebranding and marketing acquired business under Enovis name, such as marketing materials, trade show redesign costs and product labeling; and (c) integration related costs associated with sales agent and distributor network rationalization, including contract termination and retention expenses, supply chain and portfolio integration, and quality management system consolidation, (ii) $(3.5) million for the three months ended July 3, 2026 and $5.4 million for the three 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 for the three months ended July 3, 2026 and $0.3 million for the three 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.

Current wording

(5) Strategic transaction costs includes: (i) $9.2 million for the three months ended October 2, 2026 and $9.2 million for the three months ended October 3, 2025 related to non-recurring integration costs associated with the Lima Acquisition, which includes (a) payroll and retention costs for roles eliminated in connection with the integration of our recent acquisition of Lima where a legal notice period was required prior to the employee’s separation from the Company, or integration-related daily activities not related to former roles performed by an employee during their legal notice period and prior to their separation from the Company (in each case, such costs relate solely to roles eliminated in connection with the integration of the Lima acquisition, and are non-recurring and not part of our normal business operations); (b) professional and consulting fees specifically incurred to consummate the acquisition and advise and facilitate on post-acquisition integration matters including legal entity consolidation, costs associated with rebranding and marketing acquired business under Enovis name, such as marketing materials, trade show redesign costs and product labeling; and (c) integration related costs associated with sales agent and distributor network rationalization, including contract termination and retention expenses, supply chain and portfolio integration, and quality management system consolidation, (ii) $6.1 million for the three months ended October 2, 2026 and $6.1 million for the three months ended October 3, 2025, of 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) $0.3 million for the three months ended October 2, 2026 and $0.4 million for the three months ended October 3, 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.

Previous wording

(3)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 $0.3 million classified as Cost of sales on the Company’s Condensed Consolidated Statements of Operations for the six months ended July 4, 2025. There were no similar charges for the six months ended July 3, 2026.

Current wording

(3)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 $1.7 million classified as Cost of sales on the Company’s Condensed Consolidated Statements of Operations for the nine months ended October 3, 2025. There were no similar charges for the nine months ended October 2, 2026.

Previous wording

(4)MDR and other costs includes (i) $1.2 million for the six months ended July 3, 2026 and $5.4 million for the 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) $0.7 million for the six months ended July 3, 2026 and $1.1 million for the 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.

Current wording

(4)MDR and other costs includes (i) $1.6 million for the nine months ended October 2, 2026 and $7.6 million for the nine months ended October 3, 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) $1.2 million for the nine months ended October 2, 2026 and $1.4 million for the nine months ended October 3, 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.

Previous wording

(5) Strategic transaction costs includes: (i) $11.7 million for the six months ended July 3, 2026 and $16.5 million for the six months ended July 4, 2025, respectively, related to non-recurring integration costs associated with the Lima Acquisition, which includes payroll and retention costs for roles to be eliminated or that are dedicated to integration activities, 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 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) $0.3 million for the six months ended July 3, 2026 and $8.2 million for the six months ended July 4, 2025, respectively, of non-recurring (non-Lima) acquisition integration costs and other costs associated with non-recurring projects, including global ERP rationalization and establishment of a new shared service center, and (iii) $0.4 million for the six months ended July 3, 2026 and $0.8 million for the 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.

Current wording

(5) Strategic transaction costs includes: (i) $21.0 million for the nine months ended October 2, 2026 and $28.1 million for the nine months ended October 3, 2025, respectively, related to non-recurring integration costs associated with the Lima Acquisition, which includes payroll and retention costs for roles to be eliminated or that are dedicated to integration activities, 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 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) $6.5 million for the nine months ended October 2, 2026 and $11.8 million for the nine months ended October 3, 2025, respectively, of non-recurring (non-Lima) acquisition integration costs and other costs associated with non-recurring projects, including global ERP rationalization and establishment of a new shared service center, offset by a $5.7 million non-cash gain in the second quarter of 2026 from the reversal of a portion of a contingent consideration liability (See Note 11), and (iii) $0.6 million for the nine months ended October 2, 2026 and $1.3 million for the nine months ended October 3, 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.

Previous wording

(7) 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, the following non-GAAP measures for the six months ended July 4, 2025 as presented in our Form 10-Q for the period ended July 4, 2025 have been revised to reflect the removal of a $18.1 million adjustment for inventory step-up in connection with acquired businesses: Adjusted EBITDA for our Recon segment has been revised from $118.7 million to $100.6 million, Total Adjusted EBITDA has been revised from $196.3 million to $178.2 million, Adjusted EBITDA margin for our Recon segment has been revised from 21.2% to 18.0%, and Total Adjusted EBITDA margin has been revised from 17.5% to 15.9%.

Current wording

(7) In conjunction with our Form 10-Q filing for the first quarter of 2026, we revised our definition of Adjusted EBITDA to no longer adjust for inventory step-up charges. Adjusted EBITDA in prior periods has been revised to reflect this change for consistency of presentation. Accordingly, the following non-GAAP measures for the nine months ended October 3, 2025 as presented in our Form 10-Q for the period ended October 3, 2025 have been revised to reflect the removal of a $18.1 million adjustment for inventory step-up in connection with acquired businesses: Adjusted EBITDA for our Recon segment has been revised from $171.2 million to $153.0 million, Total Adjusted EBITDA has been revised from $291.1 million to $273.0 million, Adjusted EBITDA margin for our Recon segment has been revised from 20.9% to 18.7%, and Total Adjusted EBITDA margin has been revised from 17.4% to 16.3%.

Previous wording

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

Current wording

The following table presents the components of change for the three and nine months ended October 2, 2026 compared with the prior period. As noted in the Items Affecting Comparability of Reported Results section above, the nine months ended October 2, 2026 include the impact of one fewer calendar day as compared to the nine months ended October 3, 2025.

Previous wording

The increase in Net sales during the three months ended July 3, 2026 compared to the prior year period was primarily attributable to an increase in sales from existing businesses across both of our segments and favorable foreign currency translation offset by a $14.4 million decrease in sales from the October 2025 divestiture of our Dr. Comfort Footcare Solutions product line in our P&R segment.

Current wording

The increase in Net sales during the three months ended October 2, 2026 compared to the prior year period was primarily attributable to an increase in sales from existing businesses across both of our segments offset by a $13.8 million decrease in sales from the October 2025 divestiture of our Dr. Comfort Footcare Solutions product line in our P&R segment.

Previous wording

The increase in Net sales during the six months ended July 3, 2026 compared to the prior year period was primarily attributable to an increase in sales from existing businesses across both of our segments and favorable foreign currency translation offset by fewer sales days compared to the prior year period and a $27.2 million decrease in sales from the October 2025 divestiture of our Dr. Comfort Footcare Solutions product line in our P&R segment.

Current wording

The increase in Net sales during the nine months ended October 2, 2026 compared to the prior year period was primarily attributable to an increase in sales from existing businesses across both of our segments and favorable foreign currency translation offset by one fewer calendar day compared to the prior year period and a $40.9 million decrease in sales from the October 2025 divestiture of our Dr. Comfort Footcare Solutions product line in our P&R segment.

Previous wording

Existing business sales in Recon increased $17.2 million and $33.0 million during the three and six months ended July 3, 2026, respectively, due to higher sales volumes compared to the prior year period driven by broad market strength, offset by fewer calendar days in the first quarter of 2026 compared to the prior year period.

Current wording

Existing business sales in Recon increased $16.3 million and $49.3 million during the three and nine months ended October 2, 2026, respectively, due to higher sales volumes compared to the prior year period driven by broad market strength, offset by one fewer calendar day in the nine months ended October 2, 2026 compared to the prior year period.

Previous wording

Existing business sales in P&R increased $10.0 million and $12.6 million during the three and six months ended July 3, 2026, respectively, due to higher sales volumes compared to the prior year period, offset by fewer calendar days in the first quarter of 2026 compared to the prior year period.

Current wording

Existing business sales in P&R increased $8.7 million and $21.3 million during the three and nine months ended October 2, 2026, respectively, due to higher sales volumes compared to the prior year period, offset by one fewer calendar day in the nine months ended October 2, 2026 compared to the prior year period.

Previous wording

The weakening of the U.S. dollar relative to other currencies resulted in $5.4 million and $28.8 million favorable foreign currency translation impacts during the three and six months ended July 3, 2026, respectively.

Current wording

The weakening of the U.S. dollar relative to other currencies resulted in $27.4 million favorable foreign currency translation impacts during the nine months ended October 2, 2026, respectively.

Previous wording

(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 resulting in a corresponding reduction to Adjusted EBITDA margin for the three and six months ended July 4, 2025 from 17.2% and 17.5%, as presented in our Form 10-Q for the period ended July 4, 2025, to 16.2% and 15.9%, respectively.

Current wording

(1) In conjunction with our Form 10-Q filing for first quarter of 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 nine months ended October 3, 2025 has been revised from $291.1 million, as presented in our Form 10-Q for the period ended October 3, 2025, to $273.0 million reflecting the removal of a $18.1 million adjustment for inventory step-up in connection with acquired businesses resulting in a corresponding reduction to Adjusted EBITDA margin for the nine months ended October 3, 2025 from 17.4%, as presented in our Form 10-Q for the period ended October 3, 2025, to 16.3%, respectively. There was no adjustment for inventory step-up during the three months ended October 3, 2025.

Previous wording

(2)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.

Current wording

(2)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 $1.5 million and $1.7 million classified as Cost of sales on the Company’s Condensed Consolidated Statements of Operations for the three and nine months ended October 3, 2025, respectively. There were no similar charges for the three and nine months ended October 2, 2026.

Previous wording

Gross profit increased $24.6 million, or 7.3%, in the three months ended July 3, 2026 compared with the prior year period due to a $19.6 million increase in our Recon segment and a $5.0 million net increase in our P&R segment, net of a decrease from the Dr. Comfort divestiture. The Gross profit increase was attributable to growth in sales volume, improved mix of higher margin product sales, the decrease of $6.0 million in inventory fair value step-up amortization charges, a net benefit of tariffs driven by tariff refunds, partially offset by a decrease in gross profit from the October 2025 divestiture of our Dr. Comfort Footcare Solutions product line and inflationary pressures. We recorded a net tariff benefit of $4.0 million in the three months ended July 3, 2026, driven by the receipt of $7.7 million in 2025 tariff refunds. Gross profit margin increased by 230 basis points due to the decrease in inventory fair value step-up amortization charges, net benefit from tariffs, product mix, and operational productivity, partially offset by inflationary pressures.

Current wording

Gross profit increased $10.9 million, or 3.3%, in the three months ended October 2, 2026 compared with the prior year period due to a $6.2 million increase in our Recon segment and a $4.8 million net increase in our P&R segment, net of a decrease from the Dr. Comfort divestiture. The Gross profit increase was attributable to growth in sales volume, improved mix of higher margin product sales, a net benefit of tariffs driven by tariff refunds, partially offset by a decrease in gross profit from the October 2025 divestiture of our Dr. Comfort Footcare Solutions product line and inflationary pressures. We recorded a net tariff benefit of $4.7 million in the three months ended October 2, 2026, driven by the receipt of $7.8 million in 2025 tariff refunds. Gross profit margin increased by 90 basis points due to product mix, net benefit from tariffs, and operational productivity, partially offset by inflationary pressures.

Previous wording

Selling, general and administrative expense decreased $3.4 million in the three months ended July 3, 2026 compared to the prior year period, primarily due to a $12.1 million decrease in strategic transaction costs driven by a $5.7 million gain recognized upon settlement of the 2022 KICo Knee Innovation Company Pty Limited acquisition contingent consideration and a reduction in acquisition integration costs, offset by a $7.5 million increase in commissions on increased sales and an increased investment in the business in selling, general and administrative costs of $1.2 million.

Current wording

Selling, general and administrative expense decreased $4.2 million in the three months ended October 2, 2026 compared to the prior year period due to a decreased investment in the business in selling, general and administrative costs of $7.6 million and a $0.1 million decrease in strategic transaction costs driven by a reduction in acquisition integration costs, offset by a $3.5 million increase in commissions on increased sales.

Previous wording

Interest expense, net decreased in the three months ended July 3, 2026 compared to the prior year period due to lower interest rates and lower debt balances in the current year compared to the prior year period, partially offset by a decrease in interest income of $1.4 million from our undesignated cross-currency swap derivatives which are presented in Other (income) expense, net.

Current wording

Interest expense, net decreased in the three months ended October 2, 2026 compared to the prior year period due to lower interest rates and lower debt balances in the current year compared to the prior year period, partially offset by a decrease in interest income of $0.9 million from our undesignated cross-currency swap derivatives which are presented in Other (income) expense, net.

Previous wording

The effective tax rate for Net income from continuing operations during the three months ended July 3, 2026 differs from the 2026 U.S. federal statutory tax rate of 21%, primarily due to an increase in valuation allowance on U.S. deferred tax assets, non-deductible expenses, and U.S. taxation on international operations. This was partially offset by tax credits for research and development and non-U.S. income taxed at lower rates. The effective tax rate for Net loss from continuing operations during the three months ended July 4, 2025 differs from the 2025 U.S. federal statutory rate of 21%, primarily due to an increase in valuation allowance on U.S. deferred tax assets, non-deductible expenses, and U.S. taxation on international operations. This was partially offset by tax credits for research and development and non-U.S. income taxed at lower rates.

Current wording

The effective tax rate for Net loss from continuing operations during the three months ended October 2, 2026 differs from the 2026 U.S. federal statutory tax rate of 21%, primarily due to tax credits for research and development and non-U.S. income taxed at lower rates. This was partially offset by U.S. taxation on international operations and non-deductible expense. The effective tax rate for Net loss from continuing operations during the three months ended October 3, 2025 differs from the 2025 U.S. federal statutory rate of 21%, primarily due to non-deductible goodwill impairment charges and an increase in valuation allowance on U.S. deferred tax assets, which had a significant impact on the effective tax rate. Additionally, non-deductible expenses and U.S. taxation on international operations also contributed to the rate difference. This was partially offset by tax credits for research and development and non-U.S. income taxed at lower rates.

Previous wording

Net loss and Net loss from continuing operations decreased in the three months ended July 3, 2026 compared with the prior year period, primarily due to an increase in Gross Profit which was partially aided by the decrease in inventory step-up and the decrease in Purchase of royalty interest. Adjusted EBITDA and Adjusted EBITDA margin increased due to improved scale of aforementioned gross profit growth over a more stable fixed base of selling, general, and administrative expenses and net benefit from tariffs.

Current wording

Net income and Net income from continuing operations increased in the three months ended October 2, 2026 compared with the prior year period, primarily due to the $548.4 million decrease in Goodwill impairment charge and the aforementioned increase in Gross Profit. Adjusted EBITDA and Adjusted EBITDA margin increased due to improved scale of aforementioned gross profit growth over a more stable fixed base of selling, general, and administrative expenses and net benefit from tariffs.

Previous wording

Gross profit increased $57.8 million in the six months ended July 3, 2026 compared with the prior year period due to a $50.4 million increase in our Recon segment and a $7.4 million increase in our P&R segment, net of a decrease from the Dr. Comfort divestiture. The Gross profit increase was attributable to growth in sales volume, improved mix of higher margin product sales, and a decrease of $18.1 million in inventory fair value step-up amortization charges. We recorded a net tariff expense of $1.7 million in the six months ended July 3, 2026, which was net of $7.7 million in 2025 tariff refunds. Gross profit margin increased by 240 basis points due to improved product mix, a decrease in inventory fair value step-up amortization charges, and supply chain productivity.

Current wording

Gross profit increased $68.7 million in the nine months ended October 2, 2026 compared with the prior year period due to a $56.6 million increase in our Recon segment and a $12.2 million increase in our P&R segment, net of a decrease from the Dr. Comfort divestiture. The Gross profit increase was attributable to growth in sales volume, improved mix of higher margin product sales, and a decrease of $18.1 million in inventory fair value step-up amortization charges. We recorded a net tariff benefit of $3.0 million in the nine months ended October 2, 2026, which was net of $15.5 million in 2025 tariff refunds. Gross profit margin increased by 200 basis points due to improved product mix, a decrease in inventory fair value step-up amortization charges, and supply chain productivity.

Previous wording

Selling, general and administrative expense increased $10.4 million in the six months ended July 3, 2026 compared to the prior year period, primarily due to a $12.1 million increase in commissions on increased sales and increased investment in selling, general and administrative costs of $11.5 million, offset by a reduction in acquisition integration costs and a $13.1 million decrease in strategic transaction costs driven by a $5.7 million gain recognized upon settlement of the 2022 KICo Knee Innovation Company Pty Limited acquisition contingent consideration.

Current wording

Selling, general and administrative expense increased $6.2 million in the nine months ended October 2, 2026 compared to the prior year period, primarily due to a $15.6 million increase in commissions on increased sales and increased investment in selling, general and administrative costs of $3.7 million, offset by a $8.5 million decrease in strategic transaction costs and a $4.6 million gain recognized upon settlement of the 2022 KICo Knee Innovation Company Pty Limited acquisition contingent consideration.

Previous wording

Interest expense, net decreased in the six months ended July 3, 2026 compared to the prior year period due to lower interest rates and lower debt balances in the current year compared to the prior year, partially offset by a decrease in interest income of $3.7 million from our undesignated cross-currency swap derivatives which are presented in Other (income) expense, net.

Current wording

Interest expense, net decreased in the nine months ended October 2, 2026 compared to the prior year period due to lower interest rates and lower debt balances in the current year compared to the prior year, partially offset by a decrease in interest income of $4.5 million from our undesignated cross-currency swap derivatives which are presented in Other (income) expense, net.

Previous wording

The effective tax rate for Net income from continuing operations during the six months ended July 3, 2026 was higher than the 2026 U.S. federal statutory tax rate of 21%, primarily due to an increase in valuation allowance on U.S. deferred tax assets, non-deductible expenses, and U.S. taxation on international operations. This was partially offset by tax credits for research and development and non-U.S. income taxed at lower rates. The effective tax rate for Net loss from continuing operations during the six months ended July 4, 2025 differs from the 2025 U.S. federal statutory tax rate of 21%, primarily due to an increase in valuation allowance on U.S. deferred tax assets, non-deductible expenses and U.S. taxation on international operations. This was partially offset by tax credits for research and development and non-U.S. income taxed at lower rates.

Current wording

The effective tax rate for Net income from continuing operations during the nine months ended October 2, 2026 differs from the 2026 U.S. federal statutory tax rate of 21%, primarily due to U.S. taxation on international operations and non-deductible expenses. This was partially offset by tax credits for research and development and non-U.S. income taxed at lower rates. The effective tax rate for Net loss from continuing operations during the nine months ended October 3, 2025 differs from the 2025 U.S. federal statutory tax rate of 21%, primarily due to non-deductible goodwill impairment charges and an increase in valuation allowance on U.S. deferred tax assets, which had a significant impact on the effective tax rate. Additionally, non-deductible expenses and U.S. taxation on international operations also contributed to the rate difference. This was partially offset by tax credits for research and development and non-U.S. income taxed at lower rates.

Previous wording

Net loss and Net loss from continuing operations decreased in the six months ended July 3, 2026 compared with the prior year period, primarily due to the increase in Gross Profit, which was partially aided by the decrease in inventory step-up, and the decrease in Purchase of royalty interest, partially offset by the aforementioned increases in selling, general, and administrative expense and research and development costs. Adjusted EBITDA and Adjusted EBITDA margin increased due to improved scale of aforementioned gross profit growth over a more stable fixed base of selling, general, and administrative expenses.

Current wording

Net loss and Net loss from continuing operations decreased in the nine months ended October 2, 2026 compared with the prior year period, primarily due to the $548.4 million decrease in Goodwill impairment charge, an increase in Gross Profit, which was partially aided by the decrease in inventory step-up, and the decrease in Purchase of royalty interest, partially offset by the aforementioned increases in selling, general, and administrative expense and research and development costs. Adjusted EBITDA and Adjusted EBITDA margin increased due to improved scale of aforementioned gross profit growth over a more stable fixed base of selling, general, and administrative expenses and net benefit from tariffs.

Previous wording

Net sales decreased $2.4 million, or 0.8%, in the three months ended July 3, 2026 compared with the prior year period. Sales from existing businesses increased 3.5% driven by volume growth in the U.S. market. Additionally, the net effect of acquisition and divestiture activity caused a 5.0% decrease in sales primarily due to the Dr. Comfort divestiture. Lastly, foreign currency translations caused a 0.7% favorable increase in net sales during the period. Gross profit increased $5.0 million, net of a decrease from the Dr. Comfort divestiture, due to volume growth and a net benefit from tariffs driven by refunds which primarily related to our P&R segment. Gross profit margin increased by 220 basis points, primarily due to an improved mix of higher margin product sales and a net benefit from tariffs.

Current wording

Net sales decreased $5.5 million, or 1.9%, in the three months ended October 2, 2026 compared with the prior year period. Sales from existing businesses increased 3.0% driven by volume growth in the U.S. market. Additionally, the net effect of acquisition and divestiture activity caused a 4.7% decrease in sales primarily due to the Dr. Comfort divestiture. Lastly, foreign currency translations caused a 0.1% unfavorable impact in net sales during the period. Gross profit increased $4.8 million, net of a decrease from the Dr. Comfort divestiture, due to volume growth and a net benefit from tariffs driven by refunds which primarily related to our P&R segment. Gross profit margin increased by 280 basis points, primarily due to an improved mix of higher margin product sales and a net benefit from tariffs.

Previous wording

Selling, general and administrative expenses increased slightly and as a percentage of sales from an increase in commissions expense on product mix and an increased investment in the business in selling, general and administrative costs. Research and development expense decreased due to the timing of projects. Operating income and Operating income margin increased slightly due to the aforementioned higher gross profit. Adjusted EBITDA and Adjusted EBITDA margin increased slightly due to the increase in gross profit and improved mix of higher margin product sales, partially offset by the timing of the aforementioned net increase in operating expenses and the aforementioned net impact of tariffs.

Current wording

Selling, general and administrative expenses decreased due to a decrease from the Dr. Comfort divestiture and to a lesser extent operational efficiencies and lower MDR & other costs, offset by an increase in commissions expense on product mix. Research and development expense decreased mostly due to the timing of projects. Operating income and Operating income margin increased due to the decrease in Goodwill impairment charges and aforementioned higher gross profit. Adjusted EBITDA and Adjusted EBITDA margin increased due to the increase in gross profit and improved mix of higher margin product sales, and the aforementioned tariff impacts.

Previous wording

Net sales decreased $2.9 million, or 0.5%, compared with the prior year period. Sales from existing businesses increased 2.2%. This was driven by volume growth, partially offset by a headwind due to fewer sales days in the first quarter of 2026 compared to the prior year period. Additionally, the net effect of acquisition and divestiture activity caused a 4.8% decrease in sales primarily due to the Dr. Comfort divestiture. Lastly, foreign currency translations resulted in a 1.8% increase in net sales during the period. Gross profit increased $7.4 million and Gross profit margin increased by 160 basis points primarily due to volume growth, a mix of higher margin product sales, and supply chain productivity.

Current wording

Net sales decreased $8.4 million, or 1.0%, compared with the prior year period. Sales from existing businesses increased 2.5%. This was driven by volume growth, partially offset by a headwind due to one fewer calendar day in 2026 compared to the prior year period. Additionally, the net effect of acquisition and divestiture activity caused a 4.8% decrease in sales primarily due to the Dr. Comfort divestiture. Lastly, foreign currency translations resulted in a 1.2% increase in net sales during the period. Gross profit increased $12.2 million and Gross profit margin increased by 200 basis points primarily due to volume growth, a mix of higher margin product sales, and supply chain productivity.

Previous wording

Selling, general and administrative expenses was mostly flat but increased as a percentage of net sales primarily due to an increase in commissions expense on product mix. Research and development expense decreased mostly due to the timing of projects. Operating income and Operating income margin increased slightly due to the aforementioned higher gross profit. Adjusted EBITDA and Adjusted EBITDA margin increased slightly due to the increase in gross profit and improved mix of higher margin product sales, and the aforementioned tariff impacts, partially offset by the timing of the aforementioned net increase in operating expenses.

Current wording

Selling, general and administrative expenses remained flat due to a decrease from the Dr. Comfort divestiture and to a lesser extent lower MDR & other costs, offset by an increase in commissions expense on product mix. Research and development expense decreased due to the timing of projects. Operating income and Operating income margin increased due to the decrease in Goodwill impairment charges and aforementioned higher gross profit. Adjusted EBITDA and Adjusted EBITDA margin increased due to the increase in gross profit and improved mix of higher margin product sales, and the aforementioned net impact of tariffs.

Previous wording

(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 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, resulting in a corresponding reduction to Adjusted EBITDA margin for the three and six months ended July 4, 2025 from 18.4% and 21.2%, as presented in our Form 10-Q for the period ended July 4, 2025, to 16.2% and 18.0%, respectively.

Current wording

(1) In conjunction with our Form 10-Q filing for first quarter of 2026, we revised our definition of Adjusted EBITDA to no longer adjust for inventory step-up charges. Adjusted EBITDA in prior periods has been revised to reflect this change for consistency of presentation. Accordingly, Adjusted EBITDA for our Recon segment for the nine months ended October 3, 2025 has also been revised from $171.2 million , as presented in our Form 10-Q for the period ended October 3, 2025, to $153.0 million, respectively, reflecting the removal of the $18.1 million adjustment for inventory step-up in connection with acquired businesses, resulting in a corresponding reduction to Adjusted EBITDA margin for the nine months ended October 3, 2025 from 20.9%, as presented in our Form 10-Q for the period ended October 3, 2025, to 18.7%, respectively. There was no adjustment for inventory step-up during the three months ended October 3, 2025.

Previous wording

Net sales increased by $20.5 million, or 7.5%, in the three months ended July 3, 2026 compared with the prior year period. Net sales from existing businesses increased by 6.3%, driven by volume growth. Additionally, foreign currency translations caused a 1.2% favorable increase in net sales during the period. Gross profit and Gross profit margin increased over the same period, primarily due to higher net sales, improved operating leverage, and a decrease of $6.0 million in inventory fair value step-up amortization charges.

Current wording

Net sales increased by $15.3 million, or 6.0%, in the three months ended October 2, 2026 compared with the prior year period. Net sales from existing businesses increased by 6.3%, driven by volume growth. Additionally, foreign currency translations caused a 0.4% unfavorable impact in net sales during the period. Gross profit increased over the same period, primarily due to higher net sales. Gross profit margin decreased by 150 basis points primarily due to product and geographic mix and cost inflation.

Previous wording

Selling, general and administrative expenses decreased by $3.6 million over the same period primarily due to a decrease in strategic integration costs from the Lima acquisition and to a lesser extent lower MDR & other costs, partially offset by an increase in commissions driven by higher sales and increases in existing business investments to support growth. Research and development expense increased compared to the prior year period due to an increase in new product development projects and activities and spending within our recently acquired businesses, which are investing in surgical productivity solutions and computer-assisted surgery technologies.

Current wording

Selling, general and administrative expenses increased by $1.1 million over the same period primarily due to an increase in commissions driven by higher sales. Research and development expense increased compared to the prior year period due to an increase in new product development projects and activities and spending within our recently acquired businesses, which are investing in surgical productivity solutions and computer-assisted surgery technologies.

Previous wording

Net sales increased by $51.5 million, or 9.2%, due to strong sales volumes, favorable foreign currency translation of 3.3%, partially offset by a headwind due to fewer sales days compared to the prior year period. Gross profit and Gross profit margin increased $50.4 million in the six months ended July 3, 2026 compared to the prior year period, primarily due to higher net sales, improved operating leverage and a decrease of $18.1 million in inventory fair value step-up amortization charges.

Current wording

Net sales increased by $66.8 million, or 8.2%, due to strong sales volumes, favorable foreign currency translation of 2.1%, partially offset by one fewer calendar day compared to the prior year period. Gross profit and Gross profit margin increased $56.6 million and 150 basis points, respectively, in the nine months ended October 2, 2026 compared to the prior year period, primarily due to higher net sales, improved operating leverage and a decrease of $18.1 million in inventory fair value step-up amortization charges.

Previous wording

Selling, general and administrative expenses increased by $5.1 million over the same period primarily due to an increase in commissions driven by higher sales and increases in existing business investments to support growth, offset by a decrease in Lima Acquisition integration costs. Research and development expense increased compared to the prior year period due to an increase in new product development projects and activities and spending within our recently acquired businesses, which are investing in surgical productivity solutions and computer-assisted surgery technologies.

Current wording

Selling, general and administrative expenses increased by $6.3 million over the same period primarily due to an increase in commissions driven by higher sales and increases in existing business investments to support growth, offset by a decrease in Lima Acquisition integration costs. Research and development expense increased compared to the prior year period due to an increase in new product development projects and activities and spending within our recently acquired businesses, which are investing in surgical productivity solutions and computer-assisted surgery technologies.

Previous wording

Operating income increased, primarily due to the decrease in Purchase of royalty interest and inventory fair value step-up amortization charges, the aforementioned gross profit increases and a $13.7 million decrease in strategic transaction costs including the integration and transaction costs for the Lima Acquisition. Adjusted EBITDA increased primarily due to the aforementioned sales growth and gross profit increase, driven by higher net sales and a decrease of $18.1 million in inventory fair value step-up amortization charges.

Current wording

Operating income increased, primarily due to the decreases in Goodwill impairment charge, Purchase of royalty interest and inventory fair value step-up amortization charges, the aforementioned gross profit increases and a $21.3 million decrease in strategic transaction costs including the integration and transaction costs for the Lima Acquisition. Adjusted EBITDA increased primarily due to the aforementioned sales growth and gross profit increase, driven by higher net sales and a decrease of $18.1 million in inventory fair value step-up amortization charges.