Enovis Announces Third Quarter 2024 Results
Continued commercial momentum with third-quarter sales growth of 21% on a reported basis and strong adjusted EBITDA margin expansion
Reconstructive sales grew 57% Y/Y on a reported basis and 9% on a Comparable basis
Reported third-quarter net loss from continuing operations of $0.61 per share, adjusted net income per diluted share of $0.73, up +30% Y/Y
Wilmington, DE, Nov. 06, 2024 (GLOBE NEWSWIRE) -- Enovis™ Corporation (NYSE:ENOV), an innovation-driven medical technology growth company, today announced its financial results for the third quarter ended September 27, 2024. The Company will host an investor conference call and live webcast to discuss these results today at 8:30 am ET.
Third Quarter 2024 Financial Results
Enovis' third-quarter net sales of $505 million grew 21% on a reported basis and 6% on a Comparable sales basis from the same quarter in 2023. Third-quarter results reflect strong growth in Global Recon, stable execution in P&R, and our recent acquisition of Lima. Compared to the same quarter in 2023, net sales in Recon grew 57% on a reported basis, with 9% Comparable sales growth, and P&R grew 1% on a reported basis and 3% on a Comparable sales basis.
Enovis also reported third-quarter net loss from continuing operations of $34 million, or a loss of 6.2% of sales on a reported basis, and adjusted EBITDA of $90 million, or 17.9% of sales on a reported basis, an increase of 220 basis points versus the comparable prior-year quarter.
The Company reported third-quarter 2024 net loss from continuing operations of $0.61 per share and adjusted earnings per diluted share of $0.73.
"Our performance this quarter reflects the significant progress of our integration efforts and represents a return to above market growth rates in Recon," said Matt Trerotola, Chief Executive Officer of Enovis. "We are closing in on a strong finish for 2024 that will propel us into 2025 as we shift our focus from integration to growth, fueled by a robust lineup of important new product introductions across all areas of our business."
2024 Financial Outlook
Enovis narrowed its revenue range and adjusted EBITDA expectations for 2024. Full-year revenue is estimated at $2.10 billion, and adjusted EBITDA is forecasted to be $373-$378 million. The Company also raised its full-year adjusted earnings per diluted share guidance from $2.62-$2.77 to $2.75-$2.80.
Conference call and Webcast
Investors can access the webcast via a link on the Enovis website, www.enovis.com. For those planning to participate on the call, please dial (833) 685-0901 (U.S. callers) or +1 (412) 317-5715 (International callers) and ask to join the Enovis call. A link to a replay of the call will also be available on the Enovis website later in the day.
About Enovis
Enovis Corporation (NYSE:ENOV) is an innovation-driven medical technology growth company dedicated to developing clinically differentiated solutions that generate measurably better patient outcomes and transform workflows. Powered by a culture of continuous improvement, global talent and innovation, the Company's extensive range of products, services and integrated technologies fuels active lifestyles in orthopedics and beyond. The Company's shares of common stock are listed in the United States on the New York Stock Exchange under the symbol ENOV. For more information about Enovis, please visit www.enovis.com.
Availability of Information on the Enovis Website
Investors and others should note that Enovis routinely announces material information to investors and the marketplace using SEC filings, press releases, public conference calls, webcasts and the Enovis Investor Relations website. While not all of the information that the Company posts to the Enovis Investor Relations website is of a material nature, some information could be deemed to be material. Accordingly, the Company encourages investors, the media and others interested in Enovis to review the information that it shares on ir.enovis.com.
Forward-Looking Statements
This press release includes forward-looking statements, including forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, statements concerning Enovis' plans, goals, objectives, outlook, expectations and intentions, including the potential benefits of the recently completed acquisition of Lima, and other statements that are not historical or current fact. Forward-looking statements are based on Enovis' current expectations and involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such forward-looking statements. Factors that could cause Enovis' results to differ materially from current expectations include, but are not limited to, risks related to Enovis' recently completed acquisition of Lima; the impact of public health emergencies and global pandemics (including COVID-19); disruptions in the global economy caused by escalating geopolitical tensions including in connection with Russia's invasion of Ukraine; macroeconomic conditions, including the impact of inflationary pressures; supply chain disruptions; increasing energy costs and availability concerns, particularly in the European market; other impacts on Enovis' business and ability to execute business continuity plans; and the other factors detailed in Enovis' reports filed with the U.S. Securities and Exchange Commission (the "SEC"), including its most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q under the caption "Risk Factors," as well as the other risks discussed in Enovis' filings with the SEC. In addition, these statements are based on assumptions that are subject to change. This press release speaks only as of the date hereof. Enovis disclaims any duty to update the information herein.
Non-GAAP Financial Measures
Enovis has provided in this press release financial information that has not been prepared in accordance with accounting principles generally accepted in the United States of America ("non-GAAP"). These non-GAAP financial measures may include one or more of the following: adjusted net income from continuing operations ("Adjusted net income"), Adjusted net income per diluted share, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted gross profit, Adjusted gross profit margin, Comparable sales, Comparable sales growth, and Comparable sales growth on constant currency basis.
Adjusted net income and Adjusted net income per diluted share excludes restructuring and other charges, European Union Medical Device Regulation ("MDR") and other costs, amortization of acquired intangibles, inventory step up costs, property plant and equipment step-up depreciation, strategic transaction costs, stock compensation costs, other income/expense, and it includes the tax effect of adjusted pre-tax income at applicable tax rates and other tax adjustments. Enovis also presents Adjusted net income margin, which is subject to the same adjustments as Adjusted net income.
Adjusted EBITDA represents Adjusted net income excluding interest, taxes, and depreciation and amortization. Enovis presents Adjusted EBITDA margin, which is subject to the same adjustments as Adjusted EBITDA.
Adjusted gross profit represents gross profit excluding the fair value charges of acquired inventory and the impact of restructuring and other charges. Adjusted gross profit margin is subject to the same adjustments as Adjusted gross profit.
Comparable sales adjusts net sales for prior periods to include the sales of acquired businesses (including Lima and Novastep) prior to our ownership from acquisitions that closed in the periods presented and to exclude the net sales of certain non-core product lines that were divested or discontinued, as applicable, during the periods presented.
Comparable sales growth represents the change in Comparable sales for the current period from Comparable sales for the prior year period.
Comparable sales growth on constant currency basis represents Comparable sales growth excluding the impact of foreign exchange rate fluctuations.
Comparable sales, comparable sales growth and comparative sales growth on a constant currency basis are presented for illustrative purposes only and do not and are not intended to comply with Article 11 of Regulation S-X promulgated by the SEC in respect of proforma financial information, and may differ, including materially, from proforma financial statements presented in accordance therewith.
These non-GAAP financial measures assist Enovis management in comparing its operating performance over time because certain items may obscure underlying business trends and make comparisons of long-term performance difficult, as they are of a nature and/or size that occur with inconsistent frequency or relate to discrete restructuring plans that are fundamentally different from the ongoing productivity improvements of the Company. Enovis management also believes that presenting these measures allows investors to view its performance using the same measures that the Company uses in evaluating its financial and business performance and trends. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information calculated in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures. A reconciliation of non-GAAP financial measures presented above to GAAP results has been provided in the financial tables included in this press release. Enovis does not provide reconciliations of adjusted EBITDA or adjusted earnings per share on a forward-looking basis to the closest GAAP financial measures, as such information is not available without unreasonable efforts on a forward-looking basis due to uncertainties regarding, and the potential variability of, reconciling items excluded from these measures. These items are uncertain, depend on various factors, and could have a material impact on GAAP reported results for the guidance period.
Kyle RoseVice President, Investor RelationsEnovis
Enovis CorporationCondensed Consolidated Statements of OperationsDollars in thousands, except per share data(Unaudited)
Three Months Ended
Nine Months Ended
September 27, 2024
September 29, 2023
September 27, 2024
September 29, 2023
Net sales
$
505,222
$
417,524
$
1,546,648
$
1,252,177
Cost of sales
218,763
174,558
673,410
525,787
Gross profit
286,459
242,966
873,238
726,390
Gross profit margin
56.7
%
58.2
%
56.5
%
58.0
%
Selling, general and administrative expense
249,854
204,248
769,645
619,294
Research and development expense
20,491
19,901
67,347
57,012
Amortization of acquired intangibles
42,786
33,967
124,653
98,256
Restructuring and other charges
5,065
5,342
22,563
11,782
Operating loss
(31,737
)
(20,492
)
(110,970
)
(59,954
)
Operating loss margin
(6.3) %
(4.9) %
(7.2) %
(4.8) %
Interest expense, net
11,066
5,768
48,031
15,496
Other (income) expense, net
(202
)
(757
)
(9,803
)
(665
)
Loss from continuing operations before income taxes
(42,601
)
(25,503
)
(149,198
)
(74,785
)
Income tax benefit
(9,096
)
(6,052
)
(25,408
)
(17,878
)
Net loss from continuing operations
(33,505
)
(19,451
)
(123,790
)
(56,907
)
Income from discontinued operations, net of taxes
2,243
16,611
2,175
21,096
Net loss
(31,262
)
(2,840
)
(121,615
)
(35,811
)
Net loss margin
(6.2) %
(0.7) %
(7.9) %
(2.9) %
Less: net income attributable to noncontrolling interest from continuing operations - net of taxes
259
40
542
414
Net loss attributable to Enovis Corporation
$
(31,521
)
$
(2,880
)
$
(122,157
)
$
(36,225
)
Net income (loss) per share - basic and diluted
Continuing operations
$
(0.61
)
$
(0.36
)
$
(2.26
)
$
(1.05
)
Discontinued operations
$
0.04
$
0.30
$
0.04
$
0.39
Consolidated operations
$
(0.58
)
$
(0.05
)
$
(2.23
)
$
(0.67
)
Enovis CorporationReconciliation of GAAP to Non-GAAP Financial MeasuresDollars in millions, except per share data(Unaudited)
Three Months Ended
Nine Months Ended
September 27, 2024
September 29, 2023
September 27, 2024
September 29, 2023
Adjusted Net Income and Adjusted Net Income Per Share
Net loss from continuing operations attributable to Enovis Corporation(1) (GAAP)
$
(33.8
)
$
(19.5
)
$
(124.3
)
$
(57.3
)
Restructuring and other charges - pretax(2)
7.8
5.3
25.3
12.1
MDR and other costs - pretax(3)
5.3
6.2
14.8
23.0
Amortization of acquired intangibles - pretax
42.8
34.0
124.7
98.3
Inventory step-up and PPE step-up depreciation - pretax(4)
9.1
—
40.2
0.1
Strategic transaction costs - pretax(5)
21.4
10.5
65.0
27.5
Stock-based compensation
7.8
8.4
21.9
24.1
Other (income) expense, net(6)
(0.2
)
(0.8
)
(9.8
)
(0.7
)
Tax adjustment(7)
(19.2
)
(13.1
)
(54.5
)
