Summary of Enovis Corporation Conference Call Company Overview - Enovis Corporation operates in the $4 billion prevention and recovery markets and is a growing player in the $40 billion global orthopedic implant market [1][2] - The company has built a strong portfolio across the orthopedics space, focusing on mobility and organic growth [2][3] Core Business Insights - Enovis has a recon business that is growing above market with strong gross margins, complemented by a prevention and recovery business that generates significant cash flow [2][3] - The company aims to enhance its balance sheet and focus on organic growth while integrating acquisitions made over the past four years [3][4] Strategic Focus Areas - The company emphasizes commercial execution and innovation pipeline as key areas for growth [3] - Financial discipline is a priority, with a focus on increasing free cash flow and reducing debt to enable future M&A opportunities [4] Market Trends and Demand - The macro trends of longevity, gut health, brain health, and mobility are seen as significant drivers for the company's growth [5] - Demand for hip and knee procedures remains strong, with the company performing well despite macroeconomic uncertainties [10][11] Product Development and Technology - The ARVIS® Augmented Reality System is viewed as a critical enabling technology for orthopedics, with plans for significant upgrades [17][18] - The company is exploring flexible pricing models for ARVIS® to drive market penetration [20] Financial Performance and Projections - The company anticipates continued improvements in cash flow generation, particularly in 2026, due to reduced regulatory spending and improved working capital efficiency [34][35] - CapEx is currently elevated due to integration efforts but is expected to normalize over the next few years [32][33] R&D and Innovation - Enovis aims to increase its R&D spending, currently at about 5-6% of revenue, to enhance innovation without sacrificing EBITDA [24][25] - The company views its M&A activities as a form of R&D, particularly in expanding its foot and ankle portfolio [26][28] Tariff and Pricing Trends - The company has seen improvements in its tariff situation, which is expected to positively impact financial performance in 2025 [44][45] - Pricing trends in the recon business are slightly down on a like-for-like basis, but new innovations are expected to stabilize overall pricing [53] Long-term Business Strategy - Enovis believes in the importance of maintaining a connection between its prevention and recovery and recon businesses to support patient care throughout their mobility journey [61] Conclusion - Enovis Corporation is positioned for growth through strategic focus on innovation, financial discipline, and leveraging its strong portfolio in the orthopedic market, while navigating macroeconomic challenges and enhancing operational efficiencies [5][34][61]

Core Viewpoint - Enovis Corporation will present at the Baird 2025 Global Healthcare Conference on September 10, 2025, at 2:35 p.m. ET, with a live audio webcast available on its website [1]. Company Overview - Enovis Corporation is an innovation-driven medical technology growth company focused on developing clinically differentiated solutions that improve patient outcomes and transform workflows [2]. - The company emphasizes a culture of continuous improvement and innovation, offering a wide range of products and services that support active lifestyles, particularly in orthopedics [2]. - Enovis's common stock is listed on the New York Stock Exchange under the symbol ENOV [2].

Financial Data and Key Metrics Changes - The company reported high single-digit growth in the first half of the year and generated cash in the second quarter, indicating progress towards set goals [20][21] - EBITDA margins are targeted to exceed 20% for sustainable positioning as a med tech company, with current margins at 17% to 18% [16][19] Business Line Data and Key Metrics Changes - The company aims for high single-digit growth in the recon segment and stable low single-digit growth in the PNR segment, with potential for double-digit growth in recon in 2025 [22][28] - New product launches, including the ARG system and MANIFUSE, are expected to drive growth in both recon and PNR segments [27][24] Market Data and Key Metrics Changes - Market trends show a stable environment with a pickup in the U.S. and a slight slowdown in Europe due to seasonal factors, but overall conditions are expected to stabilize [21] - The company has seen a shift in international sales from 22% to over 50% in the recon segment following the Lima acquisition [50] Company Strategy and Development Direction - The company is focusing on organic growth, operational excellence, and capital allocation, with a priority on debt reduction and free cash flow improvement [6][8][42] - The management emphasizes a robust product pipeline and innovation, aiming for a mix of singles and doubles rather than home runs [11][75] Management's Comments on Operating Environment and Future Outlook - Management acknowledges macroeconomic uncertainties as a wildcard affecting growth, particularly in Europe and Asia [33][28] - The company expects to be free cash flow positive in 2025, with a clear path to achieving 70% to 80% free cash conversion by 2026 [29][30] Other Important Information - The company plans to mitigate tariff impacts by shifting sourcing from China and increasing prices on the PNR side [37][39] - The ARVIS platform launch has been delayed by six months, but it is expected to enhance growth in the recon segment once fully operational [48][63] Q&A Session Summary Question: What are the business trends in July and August? - The company experienced high single-digit growth in the first half and anticipates stable market conditions for the third quarter [20][21] Question: Is there a pathway to double-digit recon growth in 2025? - The company believes it can achieve double-digit growth in recon, depending on new product launches and market conditions [22][23] Question: What are the key metrics for driving shareholder value? - The focus will be on meeting growth commitments, expanding EBITDA, and improving free cash flow [19] Question: What are the trends in the PNR market? - The PNR segment has shown resilience with stable growth of 3% to 4%, contributing significantly to cash generation [67] Question: What is the company's approach to capital allocation? - The immediate focus is on debt reduction, with M&A activities being deprioritized for the time being [42][46] Question: How will ARVIS contribute to revenue? - ARVIS is expected to start contributing meaningfully to revenues within a year, with initial contributions already noted [63] Question: What are the expectations for growth in 2026? - The company anticipates stable growth in recon and PNR, with potential headwinds from macroeconomic factors [31][33]

Core Viewpoint - Enovis (ENOV) has shown a significant price increase of 12.4% over the past four weeks, with a mean price target of $52.4 indicating a potential upside of 77.3% from its current price of $29.55 [1] Price Targets and Analyst Estimates - The mean estimate consists of 10 short-term price targets with a standard deviation of $11.51, suggesting variability in analyst predictions. The lowest estimate is $33.00 (11.7% increase), while the highest is $75.00 (153.8% increase) [2] - A low standard deviation among price targets indicates strong agreement among analysts regarding the stock's price movement direction, which can serve as a starting point for further research [9] Earnings Estimates and Analyst Sentiment - Analysts have shown increasing optimism about ENOV's earnings prospects, as evidenced by a positive trend in earnings estimate revisions. This correlation between earnings revisions and stock price movements supports the expectation of potential upside [11] - Over the last 30 days, three earnings estimates for the current year have been revised higher, leading to a 2.9% increase in the Zacks Consensus Estimate [12] Zacks Rank and Investment Potential - ENOV holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate factors, indicating a strong potential for upside in the near term [13] - While the consensus price target may not be entirely reliable, the implied direction of price movement appears to be a useful guide for investors [14]

Financial Data and Key Metrics Changes - The company reported second quarter sales of $565 million, up 7% year-over-year and 5% on an organic basis, with approximately 200 basis points of positive currency tailwinds offset by a similar headwind from selling days [21][22][25] - Adjusted gross margins improved by 90 basis points in the quarter and 200 basis points year-to-date, driven by favorable segment and product mix [22] - Adjusted EBITDA margins were flat at 17.2% year-over-year, with year-to-date adjusted EBITDA margins expanding by 75 basis points [23][24] - Adjusted earnings per share increased by 27% year-over-year to $0.79, with first half adjusted EPS growing 42% [23][24] Business Line Data and Key Metrics Changes - The recon business saw organic growth of 8%, with U.S. extremities growing by 10% driven by strong double-digit growth in shoulders [14][21] - The P and R segment experienced stable growth of 3% in the quarter, with adjusted EBITDA margins improving by 130 basis points year-over-year [19][22] - U.S. hip and knee growth was flat, reflecting fewer selling days and headwinds in capital sales, but underlying implant growth was mid-single digit [16][22] Market Data and Key Metrics Changes - U.S. extremities growth was driven by the launch of the augmented reverse glenoid system, while international growth benefited from recent geographical expansion [15][17] - The company continues to take share in resilient international markets, with competitive share gains in hip and shoulder portfolios [17][18] Company Strategy and Development Direction - The company aims to focus on three key priorities: commercial execution and innovation, operational excellence, and financial discipline [10][12] - There is a commitment to maximizing organic growth, margin expansion, and cash flow generation through disciplined capital allocation [7][10] - The company plans to leverage its diverse portfolio and capitalize on cross-selling opportunities to drive growth [17][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the evolving market environment and maintain progress towards strategic goals [28] - The company anticipates acceleration in growth in the second half of the year, particularly with new product launches [16][22] - Management highlighted the importance of relationships with key opinion leaders and the commitment to medical education as critical to maintaining market leadership [82] Other Important Information - The company raised its revenue guidance for 2025 to a range of $2.245 billion to $2.275 billion, driven by improved currency outlook and organic growth execution [25][26] - The adjusted EBITDA range was also raised to $392 million to $400 million, reflecting an updated view on tariffs [26][27] - The company paid $6 million in tariffs in Q2, primarily related to the P and R segment, with expectations for mitigation efforts to accelerate through the year [27][28] Q&A Session Summary Question: What are the assumptions for ARVIS in the back half and other new products driving growth? - Management noted that the Nebula hip and ARG for shoulder are expected to drive growth in the back half, with positive early feedback from the market [32][33] Question: Concerns about adjusted EBITDA metrics and free cash flow normalization? - Management reassured that they maintain high standards of transparency and are confident in their adjusted EBITDA metrics, with expectations for improved free cash flow as integration costs decrease [36][39] Question: Insights on M&A strategy post-Lima and balancing debt paydown with acquisitions? - The focus is on debt reduction as the primary capital allocation priority, with potential for opportunistic share buybacks or focused M&A in the future [47] Question: Updates on the ARVIS shoulder launch and its importance? - The ARVIS launch has received tremendous feedback, and the next-gen updates are expected to enhance market share gains in the shoulder portfolio [74] Question: Competitive dynamics in the shoulder market and maintaining market leadership? - Management emphasized the importance of relationships, commercial execution, and new product releases to maintain and grow market share [81][85]

Financial Performance - Enovis reported a net sales increase to $565 million in Q2 2025, compared to $525 million in Q2 2024[20] - Adjusted Earnings Per Share (EPS) increased by 27% in Q2 2025[8] - The adjusted gross profit margin improved from 59.6% in Q2 2024 to 60.5% in Q2 2025[20] - Adjusted EBITDA for Q2 2025 was $97 million, compared to $90 million in Q2 2024, maintaining a margin of 17.2%[20] - For the first half of 2025, net sales reached $1.123 billion, up from $1.041 billion in the first half of 2024[20] - Adjusted EPS for the first half of 2025 was $1.60, compared to $1.13 in the first half of 2024[20] Segment Performance - Reconstructive segment sales grew by 11% year-over-year, with 8% organic growth, reaching $274 million in Q2 2025[10] - Prevention & Recovery (P&R) segment sales grew by 5% year-over-year, with 3% organic growth, reaching $291 million in Q2 2025[15] - Extremities within the Reconstructive segment experienced 10% growth[14] Outlook - Enovis raised its full-year 2025 revenue outlook to $2.245-$2.275 billion[22] - The company anticipates organic growth of approximately 6.25-6.75% year-over-year[25]

Core Insights - Enovis (ENOV) reported quarterly earnings of $0.79 per share, exceeding the Zacks Consensus Estimate of $0.74 per share, and up from $0.62 per share a year ago, representing an earnings surprise of +6.76% [1] - The company achieved revenues of $564.55 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.83% and increasing from $525.16 million year-over-year [2] - Enovis has consistently surpassed consensus EPS and revenue estimates over the last four quarters [2] Earnings Performance - The earnings surprise for the previous quarter was +9.46%, with actual earnings of $0.81 per share against an expectation of $0.74 [1] - The current consensus EPS estimate for the upcoming quarter is $0.66, with expected revenues of $535.09 million, and for the current fiscal year, the EPS estimate is $3.04 on revenues of $2.24 billion [7] Stock Performance and Outlook - Enovis shares have declined approximately 41.3% year-to-date, contrasting with the S&P 500's gain of 7.9% [3] - The company's Zacks Rank is currently 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Medical Info Systems industry, to which Enovis belongs, is currently ranked in the top 37% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Enovis Q2 2025 Earnings Release [Second Quarter 2025 Performance Summary](index=1&type=section&id=Second%20Quarter%202025%20Performance%20Summary) Enovis reported strong Q2 2025 with **$565 million net sales** (7% reported, 5% organic) and **$97 million adjusted EBITDA** Q2 2025 Key Financial Metrics | Metric | Value | Growth (YoY, Reported) | Growth (YoY, Organic) | | :--- | :--- | :--- | :--- | | Net Sales | $565 million | 7% | 5% | | Recon Sales | - | 11% | 8% | | P&R Sales | - | 5% | 3% | | Net Loss | $37 million | - | - | | Adjusted EBITDA | $97 million | - | - | | Adjusted EBITDA Margin | 17.2% | - | - | | Net Loss per Share (GAAP) | $0.64 | - | - | | Adjusted EPS (diluted) | $0.79 | - | - | - CEO Damien McDonald expressed confidence in the company's foundation and momentum to drive **durable, profitable growth**, emphasizing operational discipline and scalable execution[5](index=5&type=chunk) [Full Year 2025 Financial Outlook](index=2&type=section&id=Full%20Year%202025%20Financial%20Outlook) Enovis raised FY2025 guidance, projecting higher revenue, adjusted EBITDA, and EPS, reflecting confidence Updated FY 2025 Guidance | Metric | New 2025 Guidance | Prior 2025 Guidance | | :--- | :--- | :--- | | Revenue (in billions) | $2.245 - $2.275 | $2.220 - $2.250 | | Adjusted EBITDA (in millions) | $392 - $402 | $385 - $395 | | Adjusted EPS ($) | $3.05 - $3.20 | $2.95 - $3.10 | [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) Consolidated financial statements detail Enovis's performance and position across operations, balance sheet, and cash flows [Statements of Operations](index=4&type=section&id=Statements%20of%20Operations) Q2 2025 operations show **$564.5 million net sales** and improved gross margin, despite a **$36.5 million net loss** Q2 Statement of Operations Highlights (in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Sales | $564,545 | $525,160 | | Gross Profit | $334,697 | $288,883 | | Gross Profit Margin | 59.3% | 55.0% | | Operating Loss | $(16,796) | $(44,219) | | Net Loss from Continuing Operations | $(36,455) | $(18,444) | | Net Loss per Share (Continuing Ops) | $(0.64) | $(0.34) | [Balance Sheets](index=9&type=section&id=Balance%20Sheets) As of July 4, 2025, Enovis's total assets grew to **$5.02 billion**, with liabilities rising to **$2.44 billion** Balance Sheet Summary (in thousands) | Account | July 4, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | $1,280,351 | $1,146,446 | | Total Assets | $5,021,398 | $4,718,777 | | Total Current Liabilities | $568,184 | $528,998 | | Total Liabilities | $2,440,438 | $2,154,448 | | Total Equity | $2,580,960 | $2,564,329 | [Statements of Cash Flows](index=10&type=section&id=Statements%20of%20Cash%20Flows) H1 2025 operating cash flow was **$46.2 million**, a significant improvement, with **$110.3 million** used in investing Six Months Ended Cash Flow Summary (in thousands) | Activity | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $46,173 | $(28,383) | | Net cash used in investing activities | $(110,320) | $(839,168) | | Net cash provided by financing activities | $57,422 | $867,049 | | **Decrease in Cash and cash equivalents** | **$(4,093)** | **$(1,408)** | [Segment Performance and Sales Analysis](index=11&type=section&id=Segment%20Performance%20and%20Sales%20Analysis) Q2 2025 net sales grew **7.5% to $564.5 million**, with **Reconstructive** up **10.8%** and **5.2% organic growth** Q2 2025 Net Sales Change by Segment (vs Q2 2024) | Segment | Q2 2025 Sales (in millions) | Total Change % | Organic Growth % (Existing Businesses) | Foreign Currency Impact % | | :--- | :--- | :--- | :--- | :--- | | Prevention and Recovery | $290.6 | 4.6% | 2.6% | 1.4% | | Reconstructive | $274.0 | 10.8% | 8.1% | 2.7% | | **Total Enovis** | **$564.5** | **7.5%** | **5.2%** | **2.0%** | [Reconciliation of GAAP to Non-GAAP Measures](index=3&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) GAAP to non-GAAP reconciliation adjusts **net loss** to **adjusted net income** and **operating loss** to **adjusted EBITDA** for clarity Q2 2025 GAAP Net Loss to Adjusted Net Income Reconciliation (in millions) | Description | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **Net Loss (GAAP)** | **$(36.5)** | **$(18.5)** | | Amortization of acquired intangibles | $43.0 | $40.9 | | Strategic transaction costs | $13.5 | $22.7 | | Purchase of royalty interest | $10.0 | - | | Stock-based compensation | $8.7 | $7.6 | | Other adjustments | $(0.4) | $(33.8) | | Tax adjustment | $(3.2) | $(19.6) | | **Adjusted net income (non-GAAP)** | **$45.7** | **$34.4** | Q2 2025 GAAP Operating Loss to Adjusted EBITDA Reconciliation (in millions) | Description | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **Operating loss (GAAP)** | **$(16.8)** | **$(44.1)** | | Depreciation and other amortization | $28.6 | $30.1 | | Amortization of acquired intangibles | $43.0 | $40.9 | | Strategic transaction costs | $13.5 | $22.7 | | Purchase of royalty interest | $10.0 | - | | Stock-based compensation | $8.7 | $7.6 | | Other adjustments | $10.2 | $33.0 | | **Adjusted EBITDA (non-GAAP)** | **$97.2** | **$90.2** | - Adjusted gross profit margin (Non-GAAP) for Q2 2025 was **60.5%**, compared to the GAAP gross profit margin of **59.3%**[27](index=27&type=chunk) [Disclosures and Company Information](index=2&type=section&id=Disclosures%20and%20Company%20Information) This section provides essential investor information: conference call, forward-looking statements, and non-GAAP measure explanations - The company will host an investor conference call and live webcast to discuss the **Q2 2025 results**[2](index=2&type=chunk)[8](index=8&type=chunk) - The press release contains **forward-looking statements** concerning plans, outlook, and expectations, subject to risks and uncertainties[11](index=11&type=chunk) - Enovis explains its use of **non-GAAP financial measures** (e.g., Adjusted EBITDA, Adjusted net income) to provide a clearer view of underlying business trends[13](index=13&type=chunk)[17](index=17&type=chunk)

Core Viewpoint - Enovis Corporation has launched the Manafuse® bone growth stimulator, a portable device utilizing low-intensity pulsed ultrasound (LIPUS) technology for non-invasive treatment of fresh fractures and non-union fractures, aiming to accelerate healing processes [1][3][4]. Product Overview - Manafuse® stimulates the body's natural healing process by emitting LIPUS signals, designed for specific fresh fractures and non-union fractures, excluding cranial and vertebral bones [3][4]. - The device is portable, battery-operated, and requires only 20 minutes of daily use, with a maximum usage period of 343 days, making it suitable for home use [4]. - LIPUS technology has 30 years of clinical evidence supporting its effectiveness in improving fracture healing [4][7]. Clinical Data - A prospective, randomized, double-blind, placebo-controlled study indicated that LIPUS treatment can accelerate healing by 38%, with a difference of over 8 weeks [9]. - Clinical studies report a success rate of up to 86% for Manafuse in treating non-union fractures [9]. Market Overview - The global bone growth stimulator market is projected to grow from $1.4 billion in 2022 to $1.8 billion by 2027, with a compound annual growth rate (CAGR) of 5.9% [13]. - Key growth drivers include an increasing target patient population, rising sports and orthopedic-related injuries, and an aging population [13]. - Major competitors in the market include Orthofix Medical Inc., ZimVie, Bioventus LLC, Medtronic, Stryker, and DePuy Synthes [13]. Financial Performance - Enovis reported a loss of $703.3 million, with a net loss attributed to a non-cash goodwill impairment charge of $645 million related to its Recon and P&R business segments [22]. - Despite a 23.3% increase in sales to approximately $561 million, the company faced significant net losses [22]. - Adjusted earnings per share are expected to be between $3.10 and $3.25 for 2025, with sales projected between $2.19 billion and $2.22 billion [22].

Core Viewpoint - Enovis Corporation will host an investor conference call and live webcast to discuss its second quarter 2025 financial results on August 7, 2025, at 8:30 a.m. Eastern Time, with an earnings press release issued earlier that morning [1]. Group 1: Conference Call/Webcast Information - Investors can access the live webcast via a link on the Enovis website, and those participating in the call can dial (833) 685-0901. A replay of the call will be available on the Enovis website later that day [2]. Group 2: Company Overview - Enovis Corporation is an innovation-driven medical technology growth company focused on developing clinically differentiated solutions that improve patient outcomes and transform workflows. The company offers a wide range of products, services, and integrated technologies aimed at supporting active lifestyles in orthopedics and beyond [3]. Group 3: Information Availability - Enovis routinely announces material information to investors and the marketplace through SEC filings, press releases, public conference calls, webcasts, and its Investor Relations website. The company encourages stakeholders to review the information shared on its Investor Relations site [4].