Envista Holdings Corp

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE 1. BUSINESS AND BASIS OF PRESENTATION

Business Overview

The Company provides products that are used to diagnose, treat and prevent disease and ailments of the teeth, gums and supporting bone, as well as to improve the aesthetics of the human smile. The Company is a worldwide provider of a wide range of solutions to support dental implants, orthodontic treatments, dental diagnostics, general dental consumable products, equipment and services and is dedicated to driving technological innovations that help dental professionals improve clinical outcomes and enhance productivity.

The Company operates intwo business segments: Specialty Products & Technologies and Equipment & Consumables.

The Company’s Specialty Products & Technologies segment primarily develops, manufactures and markets dental implant systems, including regenerative solutions, dental prosthetics and associated treatment software and technologies, as well as orthodontic bracket systems, aligners, lab products, and loupes. The Company’s Equipment & Consumables segment primarily develops, manufactures and markets dental equipment and supplies used in dental offices, including digital imaging systems, software and other visualization/magnification systems; endodontic systems and related products; and restorative materials and instruments, rotary burs, impression materials, bonding agents and cements and infection prevention products.

Basis of Presentation

All revenues and costs as well as assets and liabilities directly associated with the business activity of the Company are included in the financial statements. All significant intercompany accounts and transactions between the businesses comprising the Company have been eliminated in the accompanying Condensed Consolidated Financial Statements.

The Condensed Consolidated Financial Statements included herein have been prepared by the Company without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations; however, the Company believes that the disclosures are adequate to make the information presented not misleading. The accompanying Condensed Consolidated Financial Statements contain all adjustments (consisting of only normal recurring adjustments and reclassifications to conform to current year presentation) necessary to present fairly the financial position of the Company as of April 3, 2026 and December 31, 2025, and its results of operations for the three month periods ended April 3, 2026 and March 28, 2025 and cash flows for the three month periods ended April 3, 2026 and March 28, 2025. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company’s Consolidated Financial Statements and accompanying notes for the three years ended December 31, 2025, included in the Annual Report on Form 10-K filed by the Company with the SEC on February 12, 2026.

Certain amounts in the prior period financial statements have been reclassified to conform to the presentation of the current period financial statements.

Accounting Standards Not Yet Adopted

In September 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-07, “Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606).”The update excludes from derivative accounting, nonexchange-traded contracts with underlyings that are based on operations or activities specific to one of the parties to the contract. This scope exception does not apply to (1) variables based on a market rate, market price, or market index, (2) variables based on the price or performance of a financial asset or financial liability of one of the parties to the contract, (3) contracts (or features) involving the issuer’s own equity that are evaluated under the guidance in Subtopic 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity, and (4) call options and put options on debt instruments. ASU 2025-07 is effective for annual reporting periods beginning after December 15, 2026. Early adoption is permitted. The Company has not yet completed its assessment of the impact of ASU 2025-07 on the Company’s consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) Targeted Improvements to the Accounting for Internal-Use Software.”ASU 2025-06 amends the guidance in ASC 350-40 by modernizing the recognition and disclosure framework, removing the previous “development stage” model and introducing a more judgment-based approach. ASU 2025-06 also applies to ASC 350-50, “Intangibles-Goodwill and Other -Website Development Costs,” and is effective for fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company has not yet completed its assessment of the impact of ASU 2025-06 on the Company’s consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03,“Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures, (subtopic 220-40).”The update requires the disclosure of specific information related to certain costs and expenses, including amounts for inventory purchases, employee compensation, and depreciation and amortization included in each relevant expense caption presented on the face of the income statement. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company has not yet completed its assessment of the impact of ASU 2024-03 on the Company’s consolidated financial statements.

NOTE 2. ACQUISITIONS

On February 2, 2026, the Company acquired all of the equity of Versah LLC and its wholly owned subsidiaries (collectively, “Versah”) for total cash consideration of approximately $54.7 million, subject to certain customary closing adjustments. Versah is known for its innovative Densah® Burs, which enable the Osseodensification technique — a procedure that compacts and autografts bone. This acquisition is part of the Company’s Specialty Products & Technologies segment.

The Company makes an initial allocation of the purchase price at the date of acquisition based upon its understanding of the fair value of the acquired assets and assumed liabilities. The Company obtains this information during due diligence and through other sources. For those assets and liabilities that were accounted for on a preliminary basis, the Company may up to 12 months after closing, refine the estimates of fair value and more accurately allocate the purchase price. Only items that existed as of the acquisition date are considered for subsequent adjustment to the purchase price. The Company makes the appropriate adjustments to the purchase price allocation prior to completion of the measurement period, as required.

The following table summarizes the fair values of the assets acquired and liabilities assumed for the Versah acquisition as of the acquisition date ($ in millions):

The intangible assets acquired consist of developed technology, customer relationships, and trade name. The weighted average amortization period of the acquired intangible assets in the aggregate is 10 years.

The excess of the purchase price over the fair value assigned to the assets acquired and liabilities assumed represents the goodwill resulting from the acquisition. Goodwill attributable to the acquisition has been recorded as a non-current asset and is not amortized, but is subject to review at least on an annual basis for impairment. Goodwill recognized was primarily attributable to expected operating efficiencies and expansion opportunities in the business acquired. The amount allocated to goodwill will be deductible for income tax purposes. The pro forma impact of the acquisition is not presented as the acquisition was not considered material to the Company’s Condensed Consolidated Financial Statements.

For the three months ended April 3, 2026, legal, accounting, and other professional service costs associated with the acquisition of Versah were $0.3 million and have been recorded as selling, general and administrative expense in the Condensed Consolidated Statements of Operations.

NOTE 3. CREDIT LOSSES

The allowance for credit losses is a valuation account deducted from accounts receivable to present the net amount expected to be collected. Accounts receivable are charged off against the allowance when management believes the uncollectibility of an accounts receivable balance is confirmed.

Management estimates the adequacy of the allowance by using relevant available information, from internal and external sources, relating to past events, current conditions and forecasts. Historical credit loss experience provides the basis for estimation of expected credit losses and is adjusted as necessary using the relevant information available. The allowance for credit losses is measured on a collective basis when similar risk characteristics exist. The Company has identifiedone portfolio segment based on the following risk characteristics: geographic regions, product lines, default rates and customer specific factors.

The factors used by management in its credit loss analysis are inherently subject to uncertainty. If actual results are not consistent with management’s estimates and assumptions, the allowance for credit losses may be overstated or understated and a charge or credit to net income may be required.

The rollforward of the allowance for credit losses is summarized as follows ($ in millions):

NOTE 4. INVENTORIES

The classes of inventory are summarized as follows ($ in millions):

NOTE 5. PROPERTY, PLANT AND EQUIPMENT

The classes of property, plant and equipment are summarized as follows ($ in millions):

NOTE 6. EQUITY SECURITY INVESTMENTS USING THE MEASUREMENT ALTERNATIVE METHOD

The summary below represents the Company’s equity security investments using the measurement alternative method that do not have readily determinable fair values. The Company records these investments at cost, and they are remeasured to fair value upon observable price changes in orderly transactions for the identical or similar investment of the same issuer, or upon impairment. The Company records these investments as Other long-term assets in the Condensed Consolidated Balance Sheets and are summarized as follows ($ in millions):

The Company records net realized and unrealized gains (losses) for the above security investments in other income (expense), net, in the Condensed Consolidated Statements of Operations. Net unrealized gains (losses) are summarized as follows ($ in millions):

NOTE 7. GOODWILL

The following is a rollforward of the Company’s goodwill by segment ($ in millions):

NOTE 8. ACCRUED EXPENSES AND OTHER LIABILITIES

Accrued expenses and other liabilities were as follows ($ in millions):

NOTE 9. HEDGING TRANSACTIONS AND DERIVATIVE FINANCIAL INSTRUMENTS

The Company uses cross-currency swap derivative contracts to partially hedge its net investments in foreign operations against adverse movements in exchange rates between the U.S. dollar and the euro. The cross-currency swap derivative contracts are agreements to exchange fixed-rate payments in one currency for fixed-rate payments in another currency. On December 23, 2024, the Company extended its existing $150.0 million notional value cross-currency swap derivative contract for an additional three years, which now matures on January 17, 2028. This contract effectively converts a portion of the Company’s U.S. dollar denominated senior term loan facilities to obligations denominated in euros and partially offsets the impact of changes in currency rates on foreign currency denominated net investments.

The Company also has foreign currency denominated debt consisting of a senior euro term loan and euro borrowings under a revolving credit facility. Both the senior euro term loan and the euro borrowings under the revolving credit facility represent a partial hedge of the Company’s net investment in foreign operations against adverse movements in exchange rates between the U.S. dollar and the euro and are designated and qualify as non-derivative hedging instruments.

Refer to Note 12 for further discussion of the Company’s debt and credit facilities.

The change in the fair value of the cross-currency swap instrument and the foreign currency translation related to the senior euro term loan and euro borrowings under the revolving credit facility are recorded in accumulated other comprehensive loss (“OCI”) in the accompanying Condensed Consolidated Balance Sheets, partially offsetting the foreign currency translation adjustment of the Company’s related net investments in foreign operations that is also recorded in OCI reflected in Note 13.

The following table summarizes the notional values and pretax impact of changes in the fair values of instruments designated as net investment hedges in OCI for the three months ended April 3, 2026 and March 28, 2025 ($ in millions):

The Company didnot reclassify any deferred gains or losses related to its net investment hedge from OCI to income during the three months ended April 3, 2026 and March 28, 2025. In addition, the Company did not have any ineffectiveness related to its net investment hedge and therefore didnot reclassify any portion of the above net investment hedge from OCI into income during the three months ended April 3, 2026 and March 28, 2025. The cash inflows and outflows associated with the Company’s derivative contract designated as a net investment hedge are classified in investing activities in the accompanying Condensed Consolidated Statements of Cash Flows.

Additionally, the Company uses foreign currency forward and call option contracts to hedge its foreign currency risk associated with certain foreign denominated balance sheet transactions. These foreign currency forwards and call option contracts are not designated as a hedge for accounting purposes and therefore the changes in the fair value of these instruments are recognized immediately in earnings. As of April 3, 2026, the Company had outstanding foreign currency forward contracts with an aggregate notional amount of $174.7 million. The realized and unrealized gain (losses) related to forward contracts or call options partially offset the corresponding gains (losses) related to the underlying foreign denominated balance sheet transactions.

The Company’s derivative instruments, as well as its non-derivative debt instrument designated and qualifying as net investment hedges, were classified in the Company’s Condensed Consolidated Balance Sheets as follows ($ in millions):

Amounts above related to the Company’s hedged derivative assets expected to be reclassified from OCI loss to net income during the next 12 months are not significant.

NOTE 10. FAIR VALUE MEASUREMENTS

Accounting standards define fair value based on an exit price model, establish a framework for measuring fair value where the Company’s assets and liabilities are required to be carried at fair value and provide for certain disclosures related to the valuation methods used within a valuation hierarchy as established within the accounting standards. This hierarchy prioritizes the inputs into three broad levels as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 inputs are quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in markets that are not active, or other observable characteristics for the asset or liability, including interest rates, yield curves and credit risks, or inputs that are derived principally from, or corroborated by, observable market data through correlation; and Level 3 inputs are unobservable inputs based on the Company’s assumptions. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

A summary of financial assets and liabilities that are measured at fair value on a recurring basis were as follows ($ in millions):

Derivative Instruments

The cross-currency swap and the foreign currency forward contract are classified as Level 2 in the fair value hierarchy. The cross-currency swap is measured using the income approach with the relevant foreign currency current exchange rates and forward curves as inputs. The foreign currency forward contracts are measured using the spot and forward exchange rates for foreign currencies. Refer to Note 9 for additional information.

Deferred Compensation Plans

Certain management or highly compensated employees of the Company participate in nonqualified deferred compensation programs that permit such employees to defer a portion of their compensation, on a pretax basis. Participants may choose among alternative earning rates for the amounts they defer, which are based on the programs’ investment options. These deferred compensation obligations are classified as Level 2 as inputs are derived principally from, or corroborated by, observable market data.

The deferred compensation obligations are funded through a Company established irrevocable rabbi trust, which holds investments that primarily consist of mutual funds and corporate owned life insurance policies. The mutual funds are valued based on quoted market prices and therefore are classified as Level 1. The corporate owned life insurance policies have cash surrender values (which approximate fair value), that derive their values from investments in mutual funds that are managed by an insurance company, are valued using a market approach and therefore are classified within Level 2.

Fair Value of Financial Instruments

The carrying amounts and fair values of the Company’s financial instruments were as follows ($ in millions):

The fair value of the convertible senior notes due 2028 was determined based on the quoted bid price of the convertible senior notes in an over-the-counter market on April 3, 2026 and December 31, 2025, and therefore are considered as Level 2 of the fair value hierarchy. The fair value of other long-term debt approximates the carrying value as these borrowings are based on variable market rates. The fair values of cash and cash equivalents, which consist primarily of money market funds, time and demand deposits, trade accounts receivables and trade accounts payable approximate their carrying amounts due to the short-term maturities of these instruments.

NOTE 11. LITIGATION AND CONTINGENCIES

The Company records accruals for loss contingencies associated with legal matters when it is probable that a liability will be incurred, and the amount of the loss can be reasonably estimated.

For litigation matters that the Company has determined are both probable and can be reasonably estimated, the Company has accrued $27.2 million and $25.8 million as of April 3, 2026 and December 31, 2025, respectively, which are included in accrued liabilities in the Condensed Consolidated Balance Sheets. The Company has accrued for these matters and will continue to monitor each related legal issue and adjust accruals as might be warranted based on new information and further developments in accordance with Accounting Standards Codification (“ASC”) 450-20-25. Amounts accrued for legal contingencies often result from a complex series of judgments about future events and uncertainties that rely heavily on estimates and assumptions including timing of related payments. The ability to make such estimates and judgments can be affected by various factors including, among other things, whether damages sought in the proceedings are unsubstantiated or indeterminate; legal discovery has not commenced or is not complete; proceedings are in early stages; matters present legal uncertainties; there are significant facts in dispute; procedural or jurisdictional issues; the uncertainty and unpredictability of the number of potential claims; or there are numerous parties involved. To the extent adverse verdicts have been rendered against the Company, the Company does not record an accrual until a loss is determined to be probable and can be reasonably estimated. In the Company's opinion, based on its examination of these matters, its experience to date and discussions with counsel, the ultimate outcome of legal proceedings, net of liabilities accrued in the Company's Condensed Consolidated Balance Sheets, is not expected to have a material adverse effect on the Company's financial position. However, the resolution of, or increase in accruals for one or more of these matters in any reporting period may have a material adverse effect on the Company’s results of operations and cash flows for that period.

NOTE 12. DEBT AND CREDIT FACILITIES

The components of the Company’s debt were as follows, net of debt discount and debt issuance costs ($ in millions):

Credit Facilities

On August 31, 2023, the Company entered into a second amended and restated credit agreement (the “Second Amended Credit Agreement”), which amends and restates the Company’s credit agreement dated June 15, 2021. Under the Second Amended Credit Agreement, the Company entered into the 2028 Term Loan for $530.0 million and the 2028 Euro Term Loan for €350.0 million (collectively, the “2028 Term Loans”). The Second Amended Credit Agreement also includes a Revolving Credit Facility (together with the 2028 Term Loans, the “Senior Credit Facilities”) with an aggregate available borrowing capacity up to $750.0 million, with a maximum alternative currency sublimit of $675.0 million, and a $30.0 million sublimit for the issuance of standby letters of credit that can be used for working capital and other general corporate purposes. The Company may request further increases to the Revolving Credit Facility by an amount that is the greater of 100% of Consolidated EBITDA or $525.0 million. As of April 3, 2026 and December 31, 2025, the Company had €100.0 million in outstanding borrowings under its Revolving Credit Facility. The Senior Credit Facilities mature on August 31, 2028, and are subject to an earlier maturity date of 91 days prior to the maturity date of the 2028 Convertible Notes, if more than $250.0 million of such notes are outstanding at that time.

Under the Senior Credit Facilities, borrowings bear interest as follows: (1) Term SOFR Loans (as defined in the Second Amended Credit Agreement) bear interest at a variable rate on a forward-looking Secured Overnight Financing Rate (“SOFR”) term rate plus 0.10% credit spread adjustment plus a margin of between 0.910% and 1.625%, depending on the Company’s Consolidated Leverage Ratio (as defined in the Second Amended Credit Agreement) as of the last day of the immediately preceding fiscal quarter; and (2) Base Rate Loans (as defined in the Second Amended Credit Agreement) bear interest at a variable rate equal to the highest of (i) the Federal funds rate (as published by the Federal Reserve Bank of New York from time to time) plus 0.50%, (ii) Bank of America’s “prime rate” as publicly announced from time to time, (iii) the Term SOFR (as defined in the Second Amended Credit Agreement) plus 1.0% and (iv)1.0%, plus a margin of between 0.0% and 0.625%, depending on the Company’s Consolidated Leverage Ratio as of the last day of the immediately preceding fiscal quarter. In no event will Term SOFR Loans or Base Rate Loans bear interest at a rate lower than 0.0%. In addition, the Company is required to pay a per annum facility fee of between 0.09% and 0.225% depending on the Company’s Consolidated Leverage Ratio as of the last day of the immediately preceding fiscal quarter and based on the aggregate commitments under the Revolving Credit Facility, whether drawn or not.

The interest rates for borrowings under the 2028 Term Loan were 5.02% and 5.07% as of April 3, 2026 and December 31, 2025, respectively. The interest rates for borrowings under the 2028 Euro Term Loan were 2.97% and 2.98% as of April 3, 2026 and December 31, 2025, respectively. The interest rate for the Revolving Credit Facility was 3.02% as of April 3, 2026 and December 31, 2025. Interest is payable quarterly for the Senior Credit Facilities. The Company is required to maintain a Consolidated Leverage Ratio of 4.00 to 1.00 or less and includes a provision that the maximum Consolidated Leverage Ratio will be increased to 4.50 to 1.00 for the three consecutive full fiscal quarters immediately following the consummation of any acquisition by the Company or any subsidiary of the Company in which the purchase price exceeds $100.0 million. The Company is also required to maintain a Consolidated Interest Coverage Ratio (as defined in the Second Amended Credit Agreement) of at least 3.00 to 1.00. The Company is subject to customary representations, warranties, conditions precedent, events of default, indemnities and affirmative and negative covenants, including covenants that, among other things, limit or restrict the Company’s and/or the Company’s subsidiaries’ ability, subject to certain exceptions and qualifications, to incur liens or indebtedness, merge, consolidate or sell or otherwise transfer assets, make dividends or distributions, enter into transactions with the Company’s affiliates and use proceeds of the debt financing for other than permitted uses. Additionally, upon the occurrence and during the continuance of an event of default, the lenders may declare the outstanding advances and all other obligations immediately due and payable. The Company was in compliance with all of its debt covenants as of April 3, 2026.

2028 Convertible Notes

On August 10, 2023, the Company issued the 2028 Convertible Notes due on August 15, 2028, unless earlier repurchased, redeemed or converted. The aggregate principal amount, which includes the initial purchasers’ exercise in full of their option to purchase an additional $65.2 million principal amount, was $500.2 million. The net proceeds from the issuance, after deducting purchasers’ discounts and estimated offering expenses, were $485.9 million. The Company used a portion of the net proceeds to pay the cash portion of the consideration in the exchange transaction described below under “2025 Convertible Notes.”

The 2028 Convertible Notes accrue interest at a rate of 1.75% per annum, payable semi-annually in arrears on February 15 and August 15 of each year. The 2028 Convertible Notes have an initial conversion rate of 21.5942 shares of the Company’s common stock per $1,000 principal amount, which is equivalent to an initial conversion price of approximately $46.31 per share of the Company’s common stock and is subject to adjustment upon the occurrence of specified events. The 2028 Convertible Notes are governed by an indenture dated as of August 10, 2023 (the “Indenture”) between the Company and Wilmington Trust, National Association, as trustee. The Indenture does not contain any financial covenants or any restrictions on the payment of dividends, the incurrence of senior debt or other indebtedness or the issuance or repurchase of the Company’s securities by the Company.

The 2028 Convertible Notes are senior, unsecured obligations and are (i) equal in right of payment with the Company’s existing and future senior, unsecured indebtedness; (ii) senior in right of payment to the Company’s existing and future indebtedness that is expressly subordinated to the 2028 Convertible Notes; (iii) effectively subordinated to the Company’s existing and future secured indebtedness, to the extent of the value of the collateral securing that indebtedness; and (iv) structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables, and (to the extent the Company is not a holder thereof) preferred equity, if any, of the Company’s subsidiaries.

Holders of the 2028 Convertible Notes may convert at any time on or after February 15, 2028 until the close of business on the second scheduled trading day immediately before the maturity date. Holders will also have the right to convert prior to February 15, 2028, but only upon the occurrence of specified events. The Company will settle any convertible note conversions through a combination settlement by satisfying the principal amount outstanding with cash and any convertible note conversion value in excess of the principal amount in cash or shares of the Company’s common stock or any combination thereof. If a fundamental change occurs prior to the maturity date, holders may require the Company to repurchase all or a portion of their 2028 Convertible Notes for cash at a repurchase price equal to 100% of the principal amount plus any accrued and unpaid interest. In addition, if specific corporate events occur prior to the maturity date, the Company would increase the conversion rate for a holder who elects to convert in connection with such an event in certain circumstances. As of April 3, 2026 and December 31, 2025, none of the conditions permitting early conversion by holders had been met, therefore, the 2028 Convertible Notes are classified as long-term debt.

The 2028 Convertible Notes will be redeemable, in whole or in part, at the Company’s option at any time, and from time to time, on or after August 17, 2026 and on or before the 40th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount to be redeemed, plus accrued and unpaid interest, if any, to, but excluding the redemption date, but only if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice; and (ii) the trading day immediately before the date the Company sends such notice. In addition, calling any 2028 Convertible Note for redemption will constitute a “Make-Whole Fundamental Change” (as defined in the Indenture) with respect to that 2028 Convertible Note, in which case the conversion rate applicable to the conversion will be increased in certain circumstances if it is converted after it is called for redemption.

The 2028 Convertible Notes are accounted for in accordance with ASC 470“Debt”and ASC 815“Derivatives and Hedging.” The Company has evaluated all the embedded conversion options contained in the 2028 Convertible Notes to determine if there are embedded features that require bifurcation as a derivative as required by U.S. GAAP. Based on the Company’s analysis, it accounts for the 2028 Convertible Notes as single units of accounting, a liability, because the Company concluded that the conversion features do not require bifurcation as a derivative.

2025 Convertible Notes

On May 21, 2020, the Company issued the 2025 Convertible Notes for $517.5 million in aggregate principal amount, which accrued interest at a rate of 2.375% per annum, and were due on June 1, 2025. On August 10, 2023, the Company exchanged $401.2 million principal amount of the 2025 Convertible Notes for cash, including accrued interest, and approximately 8.4 million shares of common stock. The remaining $116.3 million principal amount matured and was repaid in cash, together with accrued interest, on June 1, 2025. No shares of common stock were issued to settle the 2025 Convertible Notes at maturity.

The following table sets forth total interest expense recognized related to convertible notes ($ in millions):

Debt issuance costs for the 2028 Convertible Notes and the 2025 Convertible Notes were amortized using an annual effective interest rate of 2.4% and 3.0%, respectively.

As of April 3, 2026 and December 31, 2025, the if-converted value of the 2028 Convertible Notes did not exceed its outstanding principal amount.

Debt Issuance Costs

The remaining unamortized debt issuance costs for debt outstanding were as follows ($ in millions):

The above unamortized debt issuance costs have been netted against their respective aggregate principal amounts of the related debt and are being amortized to interest expense over the term of the respective debt.

NOTE 13. ACCUMULATED OTHER COMPREHENSIVE LOSS

The changes in accumulated other comprehensive loss by component are summarized below ($ in millions):

NOTE 14. REVENUE

The following table presents the Company’s revenues disaggregated by geographical region for the three months ended April 3, 2026 and March 28, 2025 ($ in millions). Sales taxes and other usage-based taxes collected from customers are excluded from revenues. The Company has historically defined emerging markets as developing markets of the world experiencing extended periods of accelerated growth in gross domestic product and infrastructure, including Eastern Europe, the Middle East, Africa, Latin America and Asia (with the exception of Japan and Australia). The Company defines developed markets as all markets of the world that are not emerging markets.

Remaining Performance Obligations

ASC 606, Revenue from Contracts with Customers, requires disclosure of remaining performance obligations that represent the aggregate transaction price allocated to performance obligations with an original contract term greater than one year which are fully or partially unsatisfied at the end of the period. Remaining performance obligations include noncancelable purchase orders, unfulfilled obligations, extended warranty and service agreements and do not include revenue from contracts with customers with an original term of one year or less.

With respect to certain clear aligner treatment plans, the Company enters into contracts that involve multiple future performance obligations which include optional additional aligners at no additional charge. The Company’s treatment plans are comprised of the following performance obligations: initial aligner shipment and the subsequent shipments of any optional refinement aligners. For such plans, the Company also considers usage rates, which is the number of times a customer is expected to order additional refinement aligners.

As of April 3, 2026, the aggregate amount of the transaction price allocated to remaining performance obligations was $171.3 million, including $130.8 million related to clear aligner treatment plans. The Company expects to fulfill the majority of these performance obligations over the next 12 months.

Contract Liabilities

The Company often receives cash payments from customers in advance of the Company’s performance resulting in contract liabilities. These contract liabilities are classified as either current or long-term in the Condensed Consolidated Balance Sheets based on the timing of when the Company expects to recognize revenue. As of April 3, 2026 and December 31, 2025, the contract liabilities were $212.2 million and $207.2 million, respectively, and are included within accrued expenses and other liabilities and other long-term liabilities in the accompanying Condensed Consolidated Balance Sheets. Revenue recognized during the three months ended April 3, 2026 and March 28, 2025 that is included in the contract liability balance at December 31, 2025 and December 31, 2024 was $67.4 million and $44.7 million, respectively.

Significant Customers

Sales to the Company’s largest customer were 11% of total sales for the three months ended April 3, 2026 and 10% for the three months ended March 28, 2025.

NOTE 15. RESTRUCTURING ACTIVITIES AND RELATED IMPAIRMENTS

Restructuring Activities

The Company’s restructuring activities are undertaken as necessary to implement management’s strategy, streamline operations, take advantage of available capacity and resources, and ultimately achieve net cost reductions. These activities generally relate to reductions in workforce, the realignment of existing manufacturing capacity and closure of facilities and other exit or disposal activities, as it relates to executing the Company’s strategy, pursuant to restructuring programs.

Restructuring related charges recorded by segment were as follows ($ in millions):

Restructuring related charges incurred were reflected in the following captions in the accompanying Condensed Consolidated Statements of Operations ($ in millions):

At April 3, 2026 and December 31, 2025, the restructuring liability was $12.8 million and $12.0 million, respectively. The liability as of April 3, 2026 is expected to be paid during 2026.

NOTE 16. INCOME TAXES

The Company’s effective tax rates of 25.9% and 37.9% for the three months ended April 3, 2026 and March 28, 2025, respectively, differ from the U.S. federal statutory rate of 21.0% primarily due to the Company’s geographical mix of earnings and impacts of a valuation allowance against certain U.S. interest carryforwards.

The Company establishes valuation allowances for its deferred tax assets if it is more likely than not that some or all of its deferred tax assets will not be realized. In assessing whether it is more likely than not that deferred tax assets will be realized, the Company considers all available evidence, both positive and negative, including its recent cumulative earnings experience and expectations of future taxable income of the appropriate character by taxing jurisdiction, tax attribute carryback and carryforward periods, reversal patterns of existing deferred tax liabilities, and prudent and feasible tax planning strategies, however, there can be no assurance that the Company’s deferred tax assets will be fully realized. At April 3, 2026, the Company maintains valuation allowances primarily against certain net operating losses and the portion of its U.S. nondeductible interest expense carryforward that it believes it will more likely than not be unable to realize.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. During 2025, the Company evaluated the impact of the OBBBA and, as part of that evaluation, modified its indefinite reinvestment assertion with respect to a foreign subsidiary.

NOTE 17. EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the applicable income by the weighted average number of shares of common stock outstanding for the applicable period. Diluted earnings per share is computed based on the weighted average number of common shares outstanding plus the effect of dilutive potential shares outstanding during the period using the treasury stock method, except for the 2028 Convertible Notes, whichare calculated using the if-converted method. Dilutive potential common shares include employee equity options, non-vested shares and similar instruments granted by the Company and the assumed conversion impact of convertible notes. The Company will settle any convertible note conversions through a combination settlement by satisfying the principal amount outstanding with cash and any convertible note conversion value in excess of the principal amount in cash or shares of the Company’s common stock or any combination thereof. As the Company will settle the principal amount of convertible notes in cash upon conversion, the convertible notes only have an impact on the Company's diluted earnings per share when the average share price of the Company’s common stock exceeds the conversion price, in any applicable period.

The table below presents the computation of basic and diluted earnings per share ($ and shares in millions, except per share amounts):

The following table presents the number of outstanding securities not included in the computation of diluted income per share, because their effect was anti-dilutive (in millions):

NOTE 18. SEGMENT INFORMATION

The Company operates and reports its results intwo business segments, the Specialty Products & Technologies and Equipment & Consumables segments. The Company’s Specialty Products & Technologies products primarily include implants, regenerative products, prosthetics, orthodontic brackets, aligners, lab products, and loupes. The Company’s Equipment & Consumables products primarily include traditional consumable products such as bonding agents and cements, rotary burs, impression materials, infection prevention products, restorative products and endodontic systems and related products while the Company’s equipment products primarily include digital imaging systems, software, and services.

The Company’s operating segments are also its reportable segments. The Company’s chief operating decision maker (“CODM”) is the chief executive officer. The CODM primarily utilizes segment operating profit or loss as the key indicator in assessing the segment's performance and allocating resources. Operating profit represents total revenues less expenses, excluding corporate and other expenses, nonoperating income (expense), interest expense and income taxes. The expense components used in determining operating profit include the following:

Cost of sales which includes the cost of materials, labor, facilities, restructuring costs and other infrastructure used to manufacture the Company’s products, and shipping and handling costs attributable to delivering these products to customers.

Selling, General & Administrative expenses which includes, among other things, the costs of selling, marketing, promotion, advertising and administration (including business technology, facilities, legal, finance, human resources, business development and procurement), restructuring costs, and amortization expense for intangible assets that have been acquired through business combinations.

Research and development (“R&D”) expenses which include project costs specific to new product R&D and product lifecycle management, overhead costs associated with R&D operations, regulatory costs, product registrations and investments that support local market clinical trials for approved indications.

For corporate and other, these expenses represent unallocated corporate costs and other costs, including goodwill and intangible impairment charges. These activities do not meet the criteria for a stand-alone reporting segment under ASC 280 Segment Reporting, thus are not considered in management’s evaluation of reportable segment operating performance.

The identifiable assets by segment are those used in each segment’s operations. Additionally, inter-segment amounts which have been eliminated, are not significant to the below presentation of segment information.

Segment related information is shown below ($ in millions):

NOTE 19. SUBSEQUENT EVENT

On May 5, 2026, the Company’s Board of Directors authorized a new stock repurchase program, pursuant to which the Company may purchase up to $300.0 million of its outstanding common stock through December 31, 2029. Similar to its current $250.0 million stock repurchase plan authorized on February 5, 2025, the Company may repurchase its common stock from time to time, in amounts, at prices, and at such times as the Company deems appropriate, subject to market conditions and other considerations and in accordance with applicable federal securities laws and other legal requirements. The Company's repurchases may be executed using open market purchases, unsolicited or solicited privately negotiated transactions, an accelerated stock repurchase program, and/or a trading plan in compliance with Rule 10b5-1 promulgated under the Exchange Act.