Enovis Returns to Operating Profit as Organic Growth Accelerates
Gross margin widened 2.3 percentage points to 61.6% as profitability improved.
Enovis Corporation (ENOV), a medical-technology company, returned to quarterly operating profit as organic sales growth accelerated despite slower reported growth.
Second-quarter net sales edged down sequentially to $582.8 million from $589 million, while reported growth slowed to 3% from 5% in the first quarter. Organic growth strengthened to 5% from 3%, extending its acceleration from 2% in the fourth quarter.
Adjusted diluted earnings rose to $0.90 a share from $0.72 a year earlier and $0.89 in the preceding quarter. Adjusted net income increased to $52.2 million from $41.3 million, lifting its margin to 9.0% from 7.3%.
Reconstructive sales rose 7.5% to $294.5 million, driven by 6.4% growth in the U.S. and 8.5% internationally. The segment's organic growth held near 6%, although reported growth moderated from 11% in the first quarter.
Prevention & Recovery sales fell 0.8% to $288.2 million as a 15.8% decline in U.S. Other P&R outweighed growth in bracing and international operations. The divestiture reduced segment sales growth by $14.4 million, while organic growth accelerated to 3.5%.
Enovis posted GAAP operating income of $17.4 million, compared with a $16.8 million loss a year earlier, as gross margin expanded to 61.6% from 59.3%. Adjusted EBITDA rose to $104.3 million from $91.2 million, widening the margin to 17.9% from 16.2%.
The company reaffirmed its 2026 outlook for a second consecutive quarter. It expects revenue of $2.31 billion to $2.37 billion, organic growth of 4% to 6%, adjusted EBITDA of $425 million to $435 million and adjusted earnings of $3.52 to $3.73 a share.
First-half operating cash flow more than doubled to $99.0 million as the inventory cash outflow narrowed, though purchases of capital assets and intangibles increased to $96.7 million.