Earning Date, Transcript Summary & Report

Transformational Growth Achieved: 2024 was a transformational year for Enovis with significant progress toward long-term strategic goals, reporting growth of 23% and 7% on a constant-currency basis.

EBITDA Margin Expansion: Adjusted EBITDA margins expanded by 210 basis points, reflecting productivity improvements and the impact of the Lima acquisition.

Global Revenue Growth: Recon business delivered 59% reported global revenue growth, with double-digit growth in Hip, Knee, and Extremity segments.

U.S. Recon Growth Highlights: U.S. Recon grew 7%, with notable growth in Extremities (10%) and Hips and Knees (8%).

International Growth Success: International growth in Recon was 13%, supported by successful integration plans and new product launches.

Successful Acquisition Outcomes: The Lima acquisition exceeded revenue and profit goals, with successful channel and organizational integrations.

P&R Segment Growth and Margins: P&R segment achieved 3% growth, with EBITDA margins expanding by 130 basis points year-over-year.

Adjusted Gross Margin Increase: Fourth quarter adjusted gross margin was 60.1%, up 150 basis points year-over-year, driven by favorable segment mix including Lima.

Earnings Per Share Increase: Adjusted earnings per share increased by 24% to $0.98 compared to the prior year.

2025 Revenue Guidance: 2025 guidance anticipates revenues between $2.19 billion to $2.22 billion, with organic revenue growth of 6% to 6.5%.

Projected EBITDA Range: Expected adjusted EBITDA for 2025 is in the range of $405 million to $415 million, with underlying margin improvement.

Free Cash Flow Expectations: Positive free cash flow is expected in 2025, supporting investments for growth and integration of Lima.

Goodwill Impairment Concerns: The company recorded a non-cash technical impairment of goodwill amounting to $645 million due to a sustained decrease in share price and market capitalization, which could raise concerns about the company's valuation and market perception.

Rising Interest Expense: Interest expense increased significantly to $9 million for the quarter compared to $4 million in the previous year, indicating rising costs that could impact profitability.

Currency Headwinds Impacting Growth: Despite reporting growth, the company faced approximately 20 basis points of negative currency headwinds, which could affect future revenue performance.

Currency Headwinds Impacting Growth: The guidance for 2025 includes expected negative currency headwinds of approximately 1% to 2%, suggesting potential challenges in maintaining revenue growth in a fluctuating currency environment.

Revenue and Margin Projections: The company anticipates a unique year in 2025 due to variability in selling days, which could complicate revenue and margin projections, particularly in the fourth quarter.

Tariff Impact on Profitability: The potential impact of tariffs on goods crossing the border into the U.S. from Mexico could represent a $3 million to $4 million exposure per month, which is not included in the 2025 guidance, indicating a risk to profitability.

CEO Retirement Announcement: The CEO announced plans to retire later this year, which could introduce uncertainty regarding leadership and strategic direction during the transition period.