ENOV

New in FY2025

• Risks Related to Our Business and Operations Acquisitions have formed a significant part of our growth strategy.
• If we are unable to identify suitable acquisition candidates, complet e any proposed acquisitions or successfully integrate the businesses we acquire, our growth strategy may not succeed and we may not realize the anticipated benefits of our acquisitions.
• We intend to seek strategic acquisition opportunities both to expand into new markets and to enhance our position in our existing markets.
• For example, if the Lima Acquisition is not successfully integrated into our existing operations, our business and financial results may be adversely affected.
• We may elect the one year scope exception provided by the Exchange Act and the applicable SEC rules and regulations concerning business combinations as we did for the Lima acquisition, but we cannot avoid the requirements.
• We may require additional capital to finance our operating needs and to finance our growth.
• Any further impairment in the value of our intangible assets, including Goodwill, would negatively affect our operating results and total capitalization.
• In the quarter ended December 31, 2025, we recognized a non-cash Goodwill impairment charge associated with a sustained decrease in our publicly quoted share price and market capitalization relative to the carrying value of our reporting units of $501.0 million as of December 31, 2025 ($157.6 million for the P&R reporting unit and $343.4 million for the Recon reporting unit).
• Previously, for the quarter ended October 3, 2025, we identified an impairment indicator associated with a sustained decrease in our publicly quoted share price and market capitalization, relative to the carrying value of our reporting units.
• As a result, we performed an interim quantitative assessment of Goodwill and recognized a non-cash Goodwill impairment charge of $540.8 million as of October 3, 2025 ($222.3 million for the P&R reporting unit and $318.6 million for the Recon reporting unit).
• Additionally, in connection with our annual assessment for the year ended December 31, 2024, we recognized a non-cash Goodwill impairment charge of $645.0 million ($315.0 million for the P&R reporting unit and $330.0 million for the Recon reporting unit).
• See “ Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies—Goodwill and Intangible Assets .” If future operating performance at either of our reporting units were to fall significantly below current levels, if competing or alternative technologies emerge, if market conditions for an acquired business decline, or if there is a further sustained decrease in our publicly reported stock price and market capitalization, among other things, we could incur, under current applicable accounting rules, additional non-cash charges to operating earnings for Goodwill impairment, which could be material and may adversely affect our reported earnings and may impact our ability to designate our Swiss-Franc cross-currency swaps as net investment hedges.
• Risks relating to contagious diseases, terrorist activity, man-made or natural disasters and war have adversely impacted, and may, either alone or in combination with other risks, in the future have an adverse effect on our results of operations, financial condition, and business.
• The spread or fear of spread of contagious diseases, terrorist activity, man-made or natural disasters, actual or threatened war, political unrest, civil strife and other geopolitical uncertainty could cause a decline in the demand for our products, which may adversely affect our financial condition, growth strategy and operating performance.
• In addition, pandemics and public health emergencies, and government measures in response to such emergencies, have in the past and could in the future result in additional challenges for our business, including disruptions or delays to our supply chain and distribution channels, cost inflation, and healthcare provider staffing shortages.
• Any one or more of these events could adversely affect our results of operations, financial condition, and business Significant movements in foreign currency exchange rates may harm our financial results.
• During the year ended December 31, 2025, approximately 42% of our sales were derived from operations outside the United States, which percentage is expected to continue to increase as a result of the Lima Acquisition.
• For example, the introduction of new tariffs or trade restrictions and any retaliatory trade measures could also increase the cost of or impair sourcing flexibility for raw materials and other inputs used in the manufacturing of our products.
• Energy, commodity, raw material, labor and other cost inflation has impacted and could continue to impact our results of operations, financial condition and cash flows.
• To continue to place products on the market in the EU and United Kingdom after expiry of our existing notified body certificate(s), we will need to apply for their certification under the MDR and UK Medical Device Regulations.
• We may not be able to continue to place our devices on the market in the EU and/or United Kingdom for any current use if we cannot obtain certification for their current use under the MDR or under the UK Medical Device Regulations when required, if we are unable to do so before the current certificates for our products expire, or if our technical documentation does not meet the new (and more stringent) requirements under the MDR or under the UK Medical Device Regulations.
• Changes in international trade policy could have a substantial adverse effect on our business, results of operations, financial position and cash flows.
• The U.S. government has shifted U.S. trade policy under the current administration, renegotiating or terminating existing trade agreements and imposing or threatening to impose tariffs on imported goods from Canada, China, Mexico and many other countries.
• In response, certain countries have imposed or threatened to impose retaliatory tariffs.
• Further notification may be required under the UK Medical Device Regulations Obtaining new clearances and approvals can be a time-consuming process, and delays in obtaining required future clearances or approvals would adversely affect our ability to introduce new or enhanced products in a timely manner, which could harm our future growth.
• We also are required to comply with strict post-marketing obligations for our CE marked medical devices in the EU and United Kingdom.
• The MDR and UK Medical Device Regulations provide various requirements relating to post-market surveillance and vigilance, including the obligation for manufacturers to implement a post-market surveillance system, in a manner proportionate to the risk class and appropriate for the type of device.
• Once a device is on the market in the EU and/or United Kingdom, manufacturers must comply with certain vigilance requirements, such as reporting serious incidents and fielding safety corrective actions.
• In addition, the initiation and completion of any clinical studies may be prevented, delayed, or halted for numerous reasons.
• Our failure to comply with U.S. federal, state and foreign governmental regulations, including in the EU and United Kingdom, could lead to the issuance of warning letters or untitled letters, the imposition of injunctions, suspensions or loss of regulatory clearance, certificates or approvals, product recalls, termination of distribution, product seizures, civil penalties, and in extreme cases, criminal sanctions or closure of manufacturing facilities.
• Further, any impact on CE certification or marking in the EU could adversely impact our ability to market our products in the United Kingdom.
• Our information technology infrastructure and information are vulnerable to service interruptions, data corruption, cyber-based attacks, or network security breaches.
• For example, in 2025, a well-known, third-party cloud service provider experienced a cybersecurity incident that impacted many companies, including us, and compromised certain business and personal information records that has required us to investigate, remediate and ultimately issue relevant notifications.
• While to date we have not experienced any material cybersecurity incidents, future attacks and incidents could have a material adverse effect on our business, financial condition, results of operations or liquidity.
• Our use of artificial intelligence and machine‑learning technologies may expose us to operational, regulatory, and reputational risks.
• We use, and may increasingly use, artificial intelligence (“AI”) and machine‑learning technologies to support aspects of our operations, product development, and business processes.
• AI technologies are rapidly evolving and may produce unintended, inaccurate, or inconsistent results.
• If these technologies do not perform as expected, are misused, or are not appropriately governed, our operations, compliance efforts, and reputation could be adversely affected.
• Risks Related to the Separation We could incur significant liability if the separation and distribution of ESAB Corporation is determined to be a taxable transaction.
• We have received (i) a private letter ruling from the IRS and (ii) an opinion from outside tax counsel regarding the qualification of the separation and distribution of ESAB Corporation (“ESAB”) as a transaction that is described in Sections 355(a) and 368(a)(1)(D) of the Internal Revenue Code.

and 8 more.

Gone since FY2024

• Risks Related to Our Business and Operations Acquisitions have formed a significant part of our growth strategy in the past and are expected to continue to do so.
• If we are unable to identify suitable acquisition candidates, complete any proposed acquisitions or successfully integrate the businesses we acquire, our growth strategy may not succeed and we may not realize the anticipated benefits of our acquisitions.
• We intend to seek acquisition opportunities both to expand into new markets and to enhance our position in our existing markets.
• For example, we completed the acquisition of Lima.
• If the Lima Acquisition is not successfully integrated into our existing operations, our business and financial results may be adversely affected.
• We may elect the one year scope exception provided by the Exchange Act and the applicable SEC rules and regulations concerning business combinations as we did for the Lima acquisition, but we can not avoid the requirements.
• We may require additional capital to finance our operating needs and to finance our growth, including acquisitions.
• Any impairment in the value of our intangible assets, including Goodwill, would negatively affect our operating results and total capitalization.
• For the year ended December 31, 2024, we recognized a non-cash Goodwill impairment charge of $645 million ($330 million for the Reconstructive reporting unit and $315 million for the Prevention & Recovery reporting unit) as part of our annual Goodwill impairment testing.
• See “ Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies—Goodwill and Intangible Assets .” If future operating performance at either of our reporting units were to fall significantly below current levels, if competing or alternative technologies emerge, if market conditions for an acquired business decline, or if there is a sustained decrease in our market capitalization, among other things, we could incur, under current applicable accounting rules, additional non-cash charges to operating earnings for Goodwill impairment, which could be material and may adversely affect our reported earnings.
• Risks relating to contagious diseases, terrorist activity, man-made or natural disasters and war could reduce the demand for our products and have an adverse effect on our results of operations, financial condition, and business.
• Contagious diseases, terrorist activity, man-made or natural disasters and war, as well as the spread or fear of the spread of contagious diseases, could cause a decline in the demand for our products, which may adversely affect our financial condition and operating performance.
• For example, as a result of the COVID-19 pandemic, we experienced adverse impacts on sales, as well as material delays and periodic cancellations of elective medical procedures, orthopedic clinics and physical therapy centers operating at reduced levels, and periodic cancellation of sports programs impacting our business.
• The effect of the COVID-19 pandemic on the global economy resulted in a number of additional challenges for our business, including cost inflation, supply chain challenges such as logistics delays, and healthcare provider staffing shortages, all of which are attributable in some part to the pandemic.
• The spread or fear of spread of contagious diseases, terrorist activity, man-made or natural disasters, actual or threatened war, political unrest, civil strife and other geopolitical uncertainty could have a similar effect on our financial condition or our growth strategy.
• Any one or more of these events may reduce the overall demand for our products which could adversely affect our results of operations, financial condition, and business Significant movements in foreign currency exchange rates may harm our financial results.
• During the year ended December 31, 2024, approximately 41% of our sales were derived from operations outside the United States, which percentage is expected to increase as a result of the Lima Acquisition.
• For example, the introduction of new tariffs or trade restrictions, such as the tariffs announced by the new U.S. administration in February 2025 and any retaliatory trade measures could also increase the cost of or impair sourcing flexibility for raw materials and other inputs used in the manufacturing of our products.
• Energy, commodity, raw material energy, labor and other cost inflation has impacted and could continue to impact our results of operations, financial condition and cash flows.
• To continue to place products on the market in the EU and United Kingdom after expiry of our existing notified body certificate[s], we will need to apply for their certification under the MDR and UK MDR.
• We may not be able to continue to place our devices on the market in the EU and/or United Kingdom for any current use if we cannot obtain certification for their current use under the MDR or under the UK MDR 2002 when required, if we are unable to do so before the current certificates for our products expire, or if our technical documentation does not meet the new (and more stringent) requirements under the MDR.
• Changes in international trade policy can also have a substantial adverse effect on our business, results of operations, financial position and cash flows.
• For example, the U.S. government has recently signaled its intention to change U.S. trade policy, including potentially renegotiating or terminating existing trade agreements and leveraging tariffs.
• In February 2025, the U.S. government imposed additional tariffs on imports from China and announced and subsequently paused implementation of tariffs on imports from Mexico (and Canada).
• Obtaining new clearances and approvals can be a time-consuming process, and delays in obtaining required future clearances or approvals would adversely affect our ability to introduce new or enhanced products in a timely manner, which could harm our future growth.
• We also are required to comply with strict post-marketing obligations for our CE marked medical devices in the EU.
• The MDR provides various requirements relating to post-market surveillance and vigilance, including the obligation for manufacturers to implement a post-market surveillance system, in a manner proportionate to the risk class and appropriate for the type of device.
• Once a device is on the EEA market, manufacturers must comply with certain vigilance requirements, such as reporting serious incidents and fielding safety corrective actions.
• In addition, the initiation and completion of any of clinical studies may be prevented, delayed, or halted for numerous reasons.
• Our failure to comply with U.S. federal, state and foreign governmental regulations, including in the EU, could lead to the issuance of warning letters or untitled letters, the imposition of injunctions, suspensions or loss of regulatory clearance, certificates or approvals, product recalls, termination of distribution, product seizures, civil penalties, and in extreme cases, criminal sanctions or closure of manufacturing facilities.
• Our information technology infrastructure and information are vulnerable to service interruptions, data corruption, cyber-based attacks, or network security breaches, which could result in the disruption of operations or the loss of data confidentiality.
• Any such future attacks could have a material adverse effect on our business, financial condition, results of operations or liquidity.
• Risks Related to the Separation We could incur significant liability if the separation and distribution of ESAB is determined to be a taxable transaction.
• We have received (i) a private letter ruling from the IRS and (ii) an opinion from outside tax counsel regarding the qualification of the separation and distribution of ESAB as a transaction that is described in Sections 355(a) and 368(a)(1)(D) of the Internal Revenue Code.
• Our business, financial condition and results of operations could be adversely affected by disruptions in the global economy caused by the ongoing conflict between Russia and Ukraine.
• The global economy has been negatively impacted by the military conflict between Russia and Ukraine.
• Furthermore, governments in the United States, United Kingdom and European Union have each imposed export controls on certain products and financial and economic sanctions on certain industry sectors and parties in Russia, and Russia has imposed counter- sanctions in response.
• Although we have no direct operations in Russia or Ukraine or government-imposed sanctions on our products currently, we could experience the impact of sanctions in the future and/or shortages in materials, increased costs for raw material and other supply chain issues due in part to the negative impact of the Russia-Ukraine military conflict on the global economy.
• Further escalation of geopolitical tensions related to the military conflict, including increased trade barriers or restrictions on global trade, could result in, among other things, cyberattacks, additional supply disruptions, lower consumer demand and changes to foreign exchange rates and financial markets, any of which may adversely affect our business and supply chain.