UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
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| Item 7.01 | Regulation FD Disclosure. |
As previously announced, Enovis Corporation’s Chair and Chief Executive Officer, Matt Trerotola, and Chief Financial Officer, Ben Berry, will present at the J.P. Morgan Healthcare Conference on Monday, January 8, 2024 at 9:45 a.m. PST (12:45 p. m. EST).
A link to the live webcast presentation will be available on www.enovis.com. A link to a replay of the presentation will also be available on the Enovis website later in the day.
A copy of the presentation materials is attached hereto as Exhibit 99.1.
The information in this Current Report on Form 8-K, including Exhibit 99.1, is being furnished to the Securities and Exchange Commission (“SEC”) and shall not be deemed to be incorporated by reference into any of Enovis’ filings with the SEC under the Securities Act of 1933, as amended.
| Item 9.01 | Financial Statements and Exhibits |
| (d) | Exhibits |
| 99.1 |
| 104 | Cover Page Interactive Data File – The cover page from this Current Report on Form 8-K is formatted in Inline XBRL |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: January 8, 2024
| ENOVIS CORPORATION | ||||
| By: | /s/ Phillip B. Berry | |||
| Name: | Phillip B. Berry | |||
| Title: | Senior Vice President and Chief Financial Officer | |||
Matt Trerotola Chairman, Chief Executive Officer 2024 JP Morgan Healthcare Conference Ben Berry Chief Financial Officer Kyle Rose Vice President, Investor Relations Exhibit 99.1
Enovis has provided in this presentation 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 per diluted share from continuing operations, adjusted EBITDA (earnings before interest, taxes, depreciation and amortization), adjusted EBITDA margin and organic sales growth. Adjusted net income from continuing operations and adjusted net income per diluted share from continuing operations exclude restructuring and other charges, European Union Medical Device Regulation (“MDR”) and other costs, amortization of acquired intangibles, inventory step-up costs, strategic transaction costs, debt extinguishment costs, insurance settlement gain, gains and losses on the Company’s investments, stock compensation costs and other income/expense. Adjusted net income adjusts interest expense for periods prior to 2023 to reflect pro forma interest from the Company’s term loan facility under the Company’s current capital structure after giving effect to the completing of the refinancing transactions in connection with the Separation, 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 from continuing operations, which is subject to the same adjustments as adjusted net income from continuing operations. Adjusted EBITDA represents net income or loss from continuing operations excluding restructuring and other charges, MDR and other costs, strategic transaction costs, stock-based compensation costs, depreciation and amortization, amortization of acquired intangibles, insurance settlement gain, and inventory step up costs. Enovis presents adjusted EBITDA margin, which is subject to the same adjustments as adjusted EBITDA. Adjusted gross profit represents gross profit excluding the impact of amortization of acquired intangibles, 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. Organic sales growth excludes the impact of acquisitions and foreign exchange rate fluctuations. Sales per day growth includes the same adjustments as Organic sales growth and adjusts for the number of selling days in the period. 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 presentation. 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. This presentation 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 LimaCorporate S.p.A (“Lima”) and other statements that are not historical or current fact. Forward-looking statements and 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 and uncertainties regarding Enovis’ and Lima’s respective businesses, the effects of the Lima acquisition on Enovis’ and Lima’s operations, including on the combined company’s future financial condition and performance, operating results, strategy and plans, including anticipated tax treatment, unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, losses, future prospects, and business and management strategies for the management, expansion and growth of the new combined company’s operations; the potential impact of the consummation of the acquisition on relationships with customer, suppliers and other third parties; the impact of public health emergencies and global pandemics (including COVID-19); 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 presentation speaks only as of the date hereof. Enovis disclaims any duty to update the information herein. Forward-looking Statements Non-GAAP Financial Information
Two Attractive Business Segments P&R 64% Strong portfolio, outgrowing markets Sales Mix by Geography & Segment Fast growing reconstructive (Recon) platform DD growth engine in US, leading in Shoulder and rapid adoption in Knee & Hip Globalized footprint and offering through acquisition of Mathys Expanded into attractive Foot & Ankle market in 2021 Global leader in prevention & recovery (P&R) Global leader in sports medicine bracing Reshaping care path with MotionMD® and MotioniQ™ digital solutions Technology leader in recovery sciences with broad offering in advanced rehabilitation modalities Financial Profile – 2023 Guidance ENOVIS: An Innovation and Growth Driven MedTech Company aEBITDA $264-270mm Sales ~$1.7B Organic Growth (cc) 7.4-7.6%
Enovis Strategy and Goals Strategic Pillars Strategic Objectives Acquisitions $2B+ Sales by 2024 EGX Innovation Talent HSD Organic Growth >+50bps aEBITDA margin/year Goals Shape and Improve P&R Aggressively Expand Recon Scale our company
Powerful momentum building as we enter 2024 1: Consensus Sales and aEBITDA estimate for FY2023 per FactSet Lima the “next” catalyst for growth & margins Deal closed Jan 3rd Aggressive, thoughtful, integration plan in place Deal metrics on track for 2024 Sales: $290-300mm aEBITDA: $70-75mm, aEPS: accretive Foot and ankle momentum building Robust NPI from ramp of 2023 launches and strong 2024 lineup Rich History + Strong Execution Colfax established in 1995 by Danaher founders Mitch and Steve Rales Strong and proven history with a: Lean business system Innovation focus Strong acquisition engine Spun out in April 2022 to transform into focused MedTech player, Enovis, (NYSE: ENOV) 1 /YR 1 +130 bps Enovis History Enovis Progress Sales ($B) aEBITDA Margin (%) Looking ahead to 2024 20 acquisitions since 2019
Lima Acquisition Expands Recon Scale & Margins 1 $B ~$2B +~120bps 1 REVENUE GEOGRAPHIC MIX ADJUSTED EBITDA MARGIN Creates >$1B high-growth global Recon player and accelerates trajectory of margin expansion 2023 Enovis 2023 Combined1 1 Latest ENOV guidance plus estimated LimaCorporate 2023 full year financials adjusted for IFRS to US GAAP differences; Excludes any expected synergies
Prevention & Rehabilitation (P&R) Est. Market Growth Rate 3-4% 7-8% 2-3% ~4% 7 6 10 5 Knee Extremities Trauma Sports Medicine Spine Biologics $48bn $5bn 9 8 3 Market Growth Trends Provide Runway 3-4% 6-7% 3-4% Well-positioned with strong long-term growth drivers Aging but active population Transitioning to outpatient care Innovation improving the quality of care Our P&R served markets Source: Orthoworld 2021 Orthopedic Industry Annual Report, public company filings, Wall Street research, Forbes. Enovis competes in half of the $53bn Orthopedics market and “touches” nearly all segments Surgical Implants and Instrumentation Addressing a Large and Attractive Market Hip Our Recon served markets
Scaled and Agile in Fragmented Industry Enovis is positioned for share gain, scale, and leverage Competitive Ortho Landscape Large, diversified majors Scaled, differentiated players Focused innovators Big enough for healthy, sustainable margins but additional room to scale Small enough to operate like an innovator Can select the most valuable growth paths Ample bolt-on opportunities, attractive path to market/scale for innovators ~30 players in $0.1-0.5B range >$3B $0.5 - $3B <$0.5B ~1,000 pre-revenue or early revenue players Enovis’ Attractive Position Ortho Revenue1 Source: Orthoworld 2021 Orthopedic Industry Annual Report, public company filings, Wall Street research, Forbes. 1 2021 revenue, as reported.
Uniquely Positioned Across Full Ortho Care Continuum PREVENTION Off-loading braces Back braces Cold therapy SURGICAL Shoulders Knees Hips Foot/Ankle RECOVERY Post-op braces Walker boots Cold therapy PERFORMANCE Athletic braces Muscle stimulation REHAB Electrotherapy Laser therapy Heat/cold therapy Traction devices PREVENTION REPAIR RECOVERY Brand leverage with hospitals, surgeons, clinicians, patients Digital workflow solutions for clinics Connected medicine solutions for patient journey Full “episode of care” partner to ambulatory surgery centers (ASC) STRATEGIC ADVANTAGES Leveraging broad and deep market access and technology for strategic advantage
Lima M&A Creates ~$1B Recon Leader, Attractive Mix & Innovation Combined Revenue & Geographic Mix Leading in Shoulder, winning across Recon with measurably better patient outcomes Drive DD organic growth from winning innovation and strong channel Continue to lead in Shoulder and rapidly gain share in Hip/Knee and Foot & Ankle Realize strategic advantage of advanced technologies: Ceramics, RM Monoblock, 3D Printing Leverage Arvis and other Enabling Tech for global advantage over time Lead in Medical Education Growth Opportunity US 2023 combined1 Int’l AltiVate® EMPOWR® 3D Optimus® RM Cup Modulus R AMF TT Cones ~$1B Other Extremities 1 Latest ENOV guidance plus estimated LimaCorporate 2023 full year financials adjusted for IFRS to US GAAP differences; Excludes any expected synergies
Rapidly Expanding High Growth & Margin Recon Platform Leverage Demonstrated Outcomes AltiVate Reverse® Shoulder: Breakthrough in range of motion Expansion in product bag penetration: ~65% to ~75% Leverage enabling technologies: e.g. ARVIS®, ADAPTABLE® Launch innovative technologies: e.g. DynaNail®, Arsenal Foot Plating System™ Lima acquisition: Nearly doubles addressable market, expands portfolio, drives margins Continue Pace of Innovation Win in the High Growth ASC Grow & Scale Foot & Ankle Expand Geographically EMPOWR 3D Knee®: breakthrough in natural kinematics Launch enabling technology: e.g. AR, CAS/Robotics Products aligned to favorable patient profiles Continuum of care coverage: Pre, intra & post op offerings Modernize STAR™ ankle: Patient Specific Instrumentation & Surface enhancements (e+ poly) Cross-selling opportunities: AltiVate® & EMPOWR® expansion
Recon Proven Formula for DD Growth and Share Gain % of Enovis Recon1 Market Growth2 Projected Growth vs. Market Growth Projection US Shoulder ~30% 7-8% ~2x 12 – 15% US Hip / Knee ~30% 3-4% 3-5x 10 – 15% Foot / Ankle ~10% 6-7% 2-3x 12 – 18% Int’l Recon ~30% 4-5% 2-3x 7 – 10% 5-6% WAMGR 2-3X Market Growth 10-15% Clear track record and trajectory for sustained double-digit organic growth 1) These estimates do not account for the recent acquisition of LimaCorporate S.p.A 11% 21% 15% 17% 15% 2023 9M 2) Internal estimates, Orthoworld 2021 Orthopedic Industry Annual Report.
Fast-Growing Recon Business with Proven Playbook 2X market growth led by Altivate Reverse and accelerating Altivate Edge anatomic stemless Proven MatchPoint® pre-operative plan and PSI system in 35%+ of procedures Sustained strong DD growth across segments 3-5X market growth powered by Empowr3D® Knee and Taperfill® Hip Stem Great implants and enabling technologies for ASC US Shoulder Revenue US Hip / Knee Revenue 14% CAGR Best-in-Class medical education across segments | Unparalleled KOL leadership team | Aggressive NPI cadence 16% CAGR 2023 9M +11% 2023 9M +21%
Computer Assisted Surgery (CAS) Strategy Enovis enabling technologies will provide a flexible and scalable approach Match Point™ System used in ~33% of Enovis shoulder cases Anatomically distinct Suite of offerings uniquely tooled to each anatomy Low capital costs Time and Space Efficient Micro footprint Optimized for ASC success—effective, efficient and affordable Unique guidance platform leveraging AR Best-in-class Pre-Op Planning & PSI1 for Total Ankle Pre-Op / Patient Specific Instrumentation Intra-Operative Imaging Surgical Guidance / Robotics 1 PSI stands for Patient Specific Instrumentation. Spanning entire workflow Platform purpose-built for ASC End-to-end set of integrated components that can also be used on a standalone basis
Successful M&A Track Record in Recon 2022 ‘20-2021 2023 2024 2020-2021: Globalized Recon with Mathys, established Foot & Ankle business 2022: Advanced enabling technology capabilities 2023: Scaled Foot & Ankle to $100m run rate 2024: Scaling Global Recon STAR® ANKLE Accelerating Recon with attractive growth & gross margin profiles
Market Leader in Prevention & Recovery with Differentiated Brands P&R Sales & Market Position1 Market Leadership Technology and Brand Leadership $5B market expected to grow 3-4% per year Industry-defining products across Orthopedics Leader in fast growing Sports Medicine segment MotionMD® workflow software solution drives workflow productivity in US Clinics Leader in therapy modalities strengthened by LiteCure™ Strong International Position: 32% ex-US Sales Aircast® EXOS® Chattanooga® LiteCure® DonJoy® Recovery Sciences ~$1.1B #1 Globally in Bracing #1 Globally in Rehab #2 In Bone Stimulation Attractive leading global positions in bracing and recovery sciences Industry Leadership 1 Source: Based on internal Enovis analysis.
Shaping P&R - Driving Core Growth and Accelerating Key Strategies Investments focused on driving sustained above-industry growth + margin improvement Sales Growth 2023 YTD (9mo) Global Bracing & Supports Innovation Focus Modernizing Core segments Expanding into high growth categories Leading transition to modalities Pioneering Connected Medicine MotionIQ™ LSD Global Recovery Sciences MSD Global FootCare Solutions Declining P&R aEBITDA margin 14% With ability to shape & scale 100%+ FCF conversion potential *YTD results through the 3Q 2023 Financial Profile P&R Free Cash Flow
Leading in Digital Healthcare with MotionMD® A purpose-built SaaS platform creates stickiness and enables share gain SaaS Workflow Automation Software Solution Clinic Location Growth Key driver in large Hospital clinic conversions: $15mm 2020-2021 MotionMD® revenue delivers 600 bps higher gross margin Customer Retention Rate of 99% DJO Share of wallet Direct 70% / OfficeCare® 96% (CAGR) Winning with Workflow Solutions 2023 Secure. Paperless. Integrated 24% Reduction in inventory 8% Improvement in collections 40% Reduction in Billing lead time +39% 1 Products transacted through MotionMD in clinics. Present in +40% of US clinics
Delivering on Strategic Goals in 2023 Set up for strong 2024 performance and momentum Organic Revenue Growth See appendix for non-GAAP reconciliations. aEBITDA Expansion +100 bps YTD 9mo Considerations for 2024 Recon Double-Digit P&R Low/Mid Single-Digit Gross Margin Improvement High-Single Digit Operating Leverage Growth Investments / M&A Recon backlog tailwinds continue Innovation momentum and new product introductions Pricing, inflation, and currency trends Foot/Ankle scaling, Lima synergy opportunities +8% YTD 9mo >50 bps per year
Appendix
Q3 and YTD Sales Bridge
Adjusted EBITDA Reconciliation
