Envista Holdings Corp

Current report

We have recognized substantial impairment charges for our goodwill and indefinite-lived assets and may be required to recognize additional impairment charges for our goodwill and other intangible assets in the future.

Current report

As of June 28, 2024, the net carrying value of our goodwill and other intangible assets totaled approximately $3.0 billion. In accordance with generally accepted accounting principles, we periodically assess these assets to determine if they are impaired. The valuation models used to determine the fair value of goodwill or intangible assets are dependent upon various assumptions and reflect management’s best estimates. We conducted a goodwill and an intangibles impairment test during the second quarter of 2024 and recorded a pre-tax goodwill impairment charge of $960.5 million related to certain reporting units and a pre-tax impairment charge related to certain trade names, developed technology and customer relationships for $193.3 million. As the fair value of these reporting units and indefinite-lived intangible assets approximate carrying value as of June 28, 2024, any further decline in key assumptions could result in additional impairment in future periods.

Current report

Significant negative industry or economic trends, disruptions to our business, inability to effectively integrate acquired businesses, unexpected significant changes or planned changes in use of our assets, changes in the structure of our business, divestitures, market capitalization declines, or increases in associated discount rates may further impair our goodwill and other intangible assets. Any additional charges relating to such impairments would adversely affect our results of operations in the periods recognized.

Current report

Generally accepted accounting principles and related accounting pronouncements, implementation guidelines and interpretations with regard to a wide range of matters that are relevant to our business, including but not limited to revenue recognition, future performance obligations, valuation of intangible assets and goodwill, purchase price allocations and contingent consideration related to business combinations, stock-based compensation expense and income taxes, are highly complex and involve many subjective assumptions, estimates and judgments. Changes in these rules or their interpretation or changes in underlying assumptions, estimates or judgments by management could significantly change or increase volatility of our reported or expected financial performance or financial condition. Please refer to Note 2 to our Consolidated Financial Statements in our 2023 10-K for additional information on our significant accounting policies and underlying assumptions, estimates and judgments.

Previous report

The loss of members of our senior management and the resulting management transition might have an adverse impact on our future operating results.

Previous report

On April 15, 2024, we announced the appointment of Paul Keel as our President and Chief Executive Officer, effective as of May 1, 2024. Mr. Keel was also appointed to our Board of Directors, effective as of May 1, 2024. In connection with this appointment and pursuant to the transition letter agreement dated February 22, 2024 between the Company and Amir Aghdaei, Mr. Aghdaei resigned from his position as a director of the Board effective May 1, 2024 and will transition to the role of senior advisor to support the Chief Executive Officer transition on that date. Additionally, as previously reported, we have experienced several executive officer departures over the past year, including our Chief Financial Officer. These leadership transitions along with other senior management changes may be inherently difficult to manage. If we do not successfully manage this transition process, it could be viewed negatively by our customers, employees or investors and could have a negative impact on our business, results of operations and financial condition.