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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________
FORM 10-Q
(Mark One)
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 27, 2024
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from         to         
    
Commission File Number: 001-39054
envistalogoa25.jpg
ENVISTA HOLDINGS CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware83-2206728
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification Number)
200 S. Kraemer Blvd., Building E92821-6208
Brea,California
(Address of Principal Executive Offices)(Zip Code)
Registrant’s telephone number, including area code: 714-817-7000
Securities Registered Pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Common stock, $0.01 par valueNVSTNew York Stock Exchange
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.     Yes   ☒     No  ☐
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).     Yes   ☒     No  ☐
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer☒ Accelerated Filer☐
Non-accelerated Filer☐ Smaller Reporting company☐
Emerging Growth Company☐
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes   ☐     No  ☒
The number of shares of common stock outstanding as of October 25, 2024, was 172,096,816.



TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
PAGE
Item 1.
Item 2.
Item 3.
Item 4.
PART II. OTHER INFORMATION
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.



PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ENVISTA HOLDINGS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
($ in millions, except share amounts)
As of
September 27, 2024December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents$991.3 $940.0 
     Trade accounts receivable, less allowance for credit losses of $28.0 and $17.3, respectively
392.1 407.5 
Inventories, net265.6 258.8 
Prepaid expenses and other current assets148.0 137.4 
Total current assets1,797.0 1,743.7 
Property, plant and equipment, net291.5 309.6 
Operating lease right-of-use assets141.7 125.1 
Other long-term assets250.6 180.5 
Goodwill, net2,333.8 3,292.2 
Other intangible assets, net696.1 954.0 
Total assets$5,510.7 $6,605.1 
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt$115.8 $115.3 
Trade accounts payable172.1 179.5 
Accrued expenses and other liabilities541.4 455.7 
Operating lease liabilities36.2 30.3 
Total current liabilities865.5 780.8 
Operating lease liabilities117.4 109.9 
Other long-term liabilities149.7 142.4 
Long-term debt1,305.6 1,398.1 
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value, 15.0 million shares authorized; no shares issued or outstanding at September 27, 2024 and December 31, 2023
— — 
Common stock, $0.01 par value, 500.0 million shares authorized; 174.0 million shares issued and 172.0 million shares outstanding at September 27, 2024; 173.3 million shares issued and 171.5 million shares outstanding at December 31, 2023
1.7 1.7 
Additional paid-in capital3,783.0 3,758.2 
Accumulated (deficit) earnings(488.6)631.2 
Accumulated other comprehensive loss(223.6)(217.2)
Total stockholders’ equity3,072.5 4,173.9 
Total liabilities and stockholders’ equity$5,510.7 $6,605.1 
See the accompanying Notes to the Condensed Consolidated Financial Statements.
1

ENVISTA HOLDINGS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
($ and shares in millions, except per share amounts)
 Three Months EndedNine Months Ended
 September 27, 2024September 29, 2023September 27, 2024September 29, 2023
Sales$601.0 $631.3 $1,857.7 $1,920.9 
Cost of sales283.7 268.0 857.5 816.3 
Gross profit317.3 363.3 1,000.2 1,104.6 
Operating expenses:
Selling, general and administrative270.9 257.7 858.3 796.7 
Research and development25.5 22.3 72.4 73.6 
Goodwill and intangible asset impairment— — 1,153.8 — 
Operating profit (loss)20.9 83.3 (1,084.3)234.3 
Nonoperating (expense) income:
Other income (expense), net0.6 (32.1)(0.4)(24.7)
Interest expense, net(11.9)(15.4)(36.5)(49.5)
Income (loss) before income taxes9.6 35.8 (1,121.2)160.1 
Income tax expense (benefit)1.4 14.3 (1.4)42.9 
Net income (loss)$8.2 $21.5 $(1,119.8)$117.2 
Earnings (loss) per share:
Earnings (loss) earnings - basic$0.05 $0.13 $(6.51)$0.71 
Earnings (loss) earnings - diluted$0.05 $0.12 $(6.51)$0.66 
Average common stock and common equivalent shares outstanding:
Basic172.2 168.2 172.1 165.3 
Diluted172.9 175.2 172.1 176.3 
See the accompanying Notes to the Condensed Consolidated Financial Statements.
2

ENVISTA HOLDINGS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)
($ in millions)
Three Months EndedNine Months Ended
September 27, 2024September 29, 2023September 27, 2024September 29, 2023
Net income (loss)$8.2 $21.5 $(1,119.8)$117.2 
Other comprehensive income (loss), net of income taxes:
Foreign currency translation adjustments78.1 (69.6)(5.9)(80.7)
Pension plan adjustments(0.1)(0.3)(0.5)(1.0)
Total other comprehensive income (loss), net of income taxes78.0 (69.9)(6.4)(81.7)
Comprehensive income (loss)$86.2 $(48.4)$(1,126.2)$35.5 
See the accompanying Notes to the Condensed Consolidated Financial Statements.
3


ENVISTA HOLDINGS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (Unaudited)
 ($ in millions)
Nine Months Ended September 27, 2024
Common StockAdditional Paid-in CapitalAccumulated Earnings (Deficit)Accumulated Other
Comprehensive Loss		Total
Equity
Balance, December 31, 2023$1.7 $3,758.2 $631.2 $(217.2)$4,173.9 
Common stock-based award activity— 9.2 — — 9.2 
Net income— — 23.6 — 23.6 
Other comprehensive loss— — — (66.4)(66.4)
Balance, March 29, 20241.7 3,767.4 654.8 (283.6)4,140.3 
Common stock-based award activity— 6.0 — — 6.0 
Net loss— — (1,151.6)— (1,151.6)
Other comprehensive loss— — — (18.0)(18.0)
Balance, June 28, 20241.7 3,773.4 (496.8)(301.6)2,976.7 
Common stock-based award activity— 9.6 — — 9.6 
Net income— — 8.2 — 8.2 
Other comprehensive income— — — 78.0 78.0 
Balance, September 27, 2024$1.7 $3,783.0 $(488.6)$(223.6)$3,072.5 

Nine Months Ended September 29, 2023
Common StockAdditional Paid-in CapitalAccumulated EarningsAccumulated Other
Comprehensive Loss		Total
Equity
Balance, December 31, 2022$1.6 $3,699.0 $731.4 $(225.1)$4,206.9 
Common stock-based award activity— 13.8 — — 13.8 
Net income— — 43.8 — 43.8 
Other comprehensive income— — — 14.5 14.5 
Balance, March 31, 20231.6 3,712.8 775.2 (210.6)4,279.0 
Common stock-based award activity— 6.4 — — 6.4 
Net income— — 51.9 — 51.9 
Other comprehensive loss— — — (26.3)(26.3)
Balance, June 30, 20231.6 3,719.2 827.1 (236.9)4,311.0 
Common stock-based award activity— 6.4 — — 6.4 
Partial exchange of convertible notes due 2025 and partial unwind of capped call transactions. See Note 120.1 24.1 — — 24.2 
Net income— — 21.5 — 21.5 
Other comprehensive loss— — — (69.9)(69.9)
Balance, September 29, 2023$1.7 $3,749.7 $848.6 $(306.8)$4,293.2 

See the accompanying Notes to the Condensed Consolidated Financial Statements.
4

ENVISTA HOLDINGS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
($ in millions)
 Nine Months Ended
 September 27, 2024September 29, 2023
Cash flows from operating activities:
Net (loss) income $(1,119.8)$117.2 
Noncash items:
Depreciation31.6 26.8 
Amortization63.7 75.9 
Allowance for credit losses16.0 3.5 
Stock-based compensation expense26.1 26.2 
Loss (gain) on equity investments, net0.5 (3.6)
Gain on sale of property, plant and equipment— (2.0)
Restructuring charges— 0.7 
Goodwill and intangible asset impairments1,153.8 — 
Fixed assets impairments and other charges17.1 0.3 
Non-cash operating lease costs23.1 19.9 
Inducement expense related to exchange of convertible notes— 28.5 
Amortization of debt discount and issuance costs3.7 3.4 
 Deferred income taxes(46.8)— 
Change in trade accounts receivable(0.9)(33.0)
Change in inventories(11.6)9.4 
Change in trade accounts payable(7.5)(53.2)
Change in prepaid expenses and other assets(12.9)5.4 
Change in accrued expenses and other liabilities99.5 (26.1)
Change in operating lease liabilities(31.5)(25.6)
Net cash provided by operating activities204.1 173.7 
Cash flows from investing activities:
Payments for additions to property, plant and equipment(25.2)(50.0)
Purchases of investments held in rabbi trust(32.6)— 
Proceeds from sale of investments held in rabbi trust8.8 — 
Proceeds from sale of equity investment0.4 10.7 
All other investing activities, net1.4 (10.5)
Net cash used in investing activities(47.2)(49.8)
Cash flows from financing activities:
Proceeds from stock option exercises2.0 7.5 
Tax withholding payment related to net settlement of equity awards(4.0)(7.8)
Proceeds from issuance of convertible notes due 2028
— 500.2 
Debt issuance costs related to issuance of convertible notes due 2028— (13.5)
Principal paid related to exchange of convertible notes due 2025
— (401.2)
5

Proceeds from borrowings— 323.5 
Repayment of borrowings(100.0)(288.8)
Debt issuance costs related to other borrowings— (4.5)
All other financing activities(0.8)0.2 
Net cash (used in) provided by financing activities(102.8)115.6 
Effect of exchange rate changes on cash and cash equivalents(2.8)(22.2)
Net change in cash and cash equivalents51.3 217.3 
Beginning balance of cash and cash equivalents940.0 606.9 
Ending balance of cash and cash equivalents$991.3 $824.2 
Supplemental data:
Cash paid for interest$45.4 $47.9 
Cash paid for taxes$29.8 $49.5 
ROU assets obtained in exchange for operating lease obligations$44.5 $18.9 
See the accompanying Notes to the Condensed Consolidated Financial Statements.
6

ENVISTA HOLDINGS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
NOTE 1. BUSINESS AND BASIS OF PRESENTATION
Business Overview

The Company provides products that are used to diagnose, treat and prevent disease and ailments of the teeth, gums and supporting bone, as well as to improve the aesthetics of the human smile. The Company is a worldwide provider of a broad range of dental implants, orthodontic appliances, diagnostic solutions, general dental consumables, equipment and services and is dedicated to driving technological innovations that help dental professionals improve clinical outcomes and enhance productivity.

The Company operates in two business segments: Specialty Products & Technologies and Equipment & Consumables.
The Company’s Specialty Products & Technologies segment primarily develops, manufactures and markets dental implant systems, including regenerative solutions, dental prosthetics and associated treatment software and technologies, as well as orthodontic bracket systems, aligners and lab products. The Company’s Equipment & Consumables segment primarily develops, manufactures and markets dental equipment and supplies used in dental offices, including digital imaging systems, software and other visualization/magnification systems; endodontic systems and related consumables; and restorative materials and instruments, rotary burs, impression materials, bonding agents and cements and infection prevention products.

Basis of Presentation
All revenues and costs as well as assets and liabilities directly associated with the business activity of the Company are included in the financial statements. All significant intercompany accounts and transactions between the businesses comprising the Company have been eliminated in the accompanying Condensed Consolidated Financial Statements.

The Condensed Consolidated Financial Statements included herein have been prepared by the Company without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to such rules and regulations; however, the Company believes that the disclosures are adequate to make the information presented not misleading. The accompanying Condensed Consolidated Financial Statements contain all adjustments (consisting of only normal recurring adjustments and reclassifications to conform to current year presentation) necessary to present fairly the financial position of the Company as of September 27, 2024 and December 31, 2023, and its results of operations for the three and nine month periods ended September 27, 2024 and September 29, 2023 and cash flows for the nine month periods ended September 27, 2024 and September 29, 2023. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company’s Consolidated Financial Statements and accompanying notes for the three years ended December 31, 2023, included in the Annual Report on Form 10-K filed by the Company with the SEC on February 15, 2024.

Accounting Standards Not Yet Adopted

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. The update requires a public business entity to disclose, on an annual basis, a tabular rate reconciliation using both percentages and currency amounts, broken out into specified categories with certain reconciling items further broken out by nature and jurisdiction to the extent those items exceed a specified threshold. In addition, all entities are required to disclose income taxes paid, net of refunds received disaggregated by federal, state/local, and foreign and by jurisdiction if the amount is at least 5% of total income tax payments, net of refunds received. Adoption of the ASU allows for either the prospective or retrospective application of the amendment and is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company has not yet completed its assessment of the impact of ASU 2023-09 on the Company’s Condensed Consolidated Financial Statements.

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In November 2023, the FASB issued ASU 2023-07, “Segment Reporting - Improving Reportable Segment Disclosures (Topic 280)”. The update is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant expenses. The ASU requires disclosures to include significant segment expenses that are regularly provided to the chief operating decision maker (CODM), a description of other segment items by reportable segment, and any additional measures of a segment's profit or loss used by the CODM when deciding how to allocate resources. Adoption of the ASU requires retrospective application to all prior periods presented in the financial statements. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for fiscal periods after December 15, 2024 for interim periods. Early adoption is permitted. The Company has not yet completed its assessment of the impact of ASU 2023-07 on the Company’s Condensed Consolidated Financial Statements.

NOTE 2. CREDIT LOSSES

The allowance for credit losses is a valuation account deducted from accounts receivable to present the net amount expected to be collected. Accounts receivable are charged off against the allowance when management believes the uncollectibility of an accounts receivable balance is confirmed.

Management estimates the adequacy of the allowance by using relevant available information, from internal and external sources, relating to past events, current conditions and forecasts. Historical credit loss experience provides the basis for estimation of expected credit losses and is adjusted as necessary using the relevant information available. The allowance for credit losses is measured on a collective basis when similar risk characteristics exist. The Company has identified one portfolio segment based on the following risk characteristics: geographic regions, product lines, default rates and customer specific factors.

The factors used by management in its credit loss analysis are inherently subject to uncertainty. If actual results are not consistent with management’s estimates and assumptions, the allowance for credit losses may be overstated or understated and a charge or credit to net income (loss) may be required.

The rollforward of the allowance for credit losses is summarized as follows ($ in millions):

Balance at December 31, 2023$17.3 
Foreign currency translation(0.1)
Provision for credit losses16.0 
Write-offs charged against the allowance(3.1)
Recoveries(2.1)
Balance at September 27, 2024$28.0 

NOTE 3. INVENTORIES
The classes of inventory are summarized as follows ($ in millions):
September 27, 2024December 31, 2023
Finished goods$209.5 $196.4 
Work in process24.9 17.2 
Raw materials93.1 100.3 
Reserve for inventory obsolescence(61.9)(55.1)
Total$265.6 $258.8 

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NOTE 4. PROPERTY, PLANT AND EQUIPMENT
The classes of property, plant and equipment are summarized as follows ($ in millions):
September 27, 2024December 31, 2023
Land and improvements$10.0 $10.0 
Buildings and improvements167.9 157.4 
Machinery, equipment and other assets437.2 417.9 
Construction in progress40.5 65.3 
Gross property, plant and equipment655.6 650.6 
Less: accumulated depreciation(364.1)(341.0)
Property, plant and equipment, net$291.5 $309.6 

For the nine months ended September 27, 2024, the Company recognized fixed asset impairment charges of $13.0 million for certain assets included in machinery, equipment and other assets and construction in progress related to its Specialty Products & Technologies segment. The fixed asset impairment charge is recorded as a component of cost of sales within the Condensed Consolidated Statement of Operations. There were no impairment charges for the three months ended September 27, 2024 nor for the three and nine months ended September 29, 2023.

NOTE 5. EQUITY SECURITY INVESTMENTS USING THE MEASUREMENT ALTERNATIVE METHOD
The summary below represents the Company’s equity security investments using the measurement alternative method that do not have readily determinable fair values. The Company records these investments at cost, and they are remeasured to fair value upon observable price changes in orderly transactions for the identical or similar investment of the same issuer, or upon impairment. The Company records these investments as Other long-term assets in the Condensed Consolidated Balance Sheets and are summarized as follows ($ in millions):

September 27, 2024December 31, 2023
Equity security investments$27.6 $28.6 

The Company records net realized and unrealized gains (losses) for the above security investments in other income (expense), net, in the Condensed Consolidated Statements of Operations. Net unrealized gains (losses) are summarized as follows ($ in millions):
Three Months EndedNine Months Ended
September 27, 2024September 29, 2023September 27, 2024September 29, 2023
Investment loss
    Unrealized loss$— $(3.3)$(1.5)$(3.3)
Total$— $(3.3)$(1.5)$(3.3)

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NOTE 6. GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill and other intangible assets result from the Company’s acquisition of existing businesses. In accordance with accounting standards related to business combinations, goodwill and indefinite-lived intangibles are not amortized; however, certain finite-lived identifiable intangible assets, primarily customer relationships and acquired technology, are amortized over their estimated useful lives. The Company assesses both goodwill and indefinite-lived intangible assets for impairment as of the first day of the fourth quarter annually or more frequently if events or changes in circumstances indicate the asset might be impaired. During the nine months ended September 27, 2024, the Company identified indicators of a "more likely than not" impairment related to its various reporting units within the Specialty Products & Technologies and Equipment & Consumables segments.

The Company used the income approach in performing a goodwill impairment test in order to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value amount. The Company’s reporting units are the financial components of operating segments which constitute businesses for which discrete financial information is available and regularly reviewed by segment management. The income approach uses a discounted cash flow model with inputs developed using both internal and market-based data. The Company's significant assumptions in the discounted cash flow models vary amongst, and are specific to, each reporting unit which include, but are not limited to, discount rates, revenue growth rates assumptions (including perpetual growth rates) and operating margin percentages. These assumptions were developed in light of current market conditions and future expectations which include, but were not limited to, impact of competition, new product development and future economic conditions. As a result of this impairment test, the Company recorded a pre-tax goodwill impairment charge of $707.8 million related to its Specialty Products & Technologies segment and $252.7 million related to its Equipment & Consumables segment during the nine months ended September 27, 2024. The reduction in value was primarily due to adverse macroeconomic factors such as a sustained suppressed stock price, higher cost of borrowing and inflationary pressures, geopolitical factors, and lower forecast of operating results which contributed to reduced expectations of future cash flows as mentioned above.

The Company used the relief from royalty method to estimate the fair value of its indefinite-lived intangible assets. The Company's significant assumptions vary amongst, and are specific to, each underlying indefinite-lived intangible asset which include, but are not limited to, revenue growth rates assumptions (including perpetual growth rates), discount rates and royalty rates. The Company recorded an impairment charge of $101.1 million related to certain indefinite-lived trade names within the Specialty Products & Technologies segment during the nine months ended September 27, 2024. The reduction in value was primarily due to a reduction in projected cash flows due to the factors discussed above.

Any deviation in actual financial results compared to the forecasted financial results or valuation assumptions used in the impairment tests, a decline in equity valuations, increases in interest rates, or changes in the use of intangible assets, among other factors, could have a material adverse effect on the fair value of either the reporting units or indefinite-lived intangible assets and could result in future impairment charges. There can be no assurance that the Company’s future asset impairment testing will not result in a material charge to earnings. These impairment charges described above were recorded in the goodwill and intangible asset impairment line within the Condensed Consolidated Statements of Operations during the nine months ended September 27, 2024.

There were no goodwill impairment charges recorded for the three month period ended September 27, 2024 nor the three or nine month periods ended September 29, 2023.



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The following is a rollforward of the Company’s goodwill by segment ($ in millions):
Specialty Products & TechnologiesEquipment & ConsumablesTotal
GrossAccumulated Impairment ChargesTotalGrossAccumulated Impairment ChargesTotalGrossAccumulated Impairment ChargesTotal
Balance at December 31, 2023$2,007.0 $(134.5)$1,872.5 $1,497.5 $(77.8)$1,419.7 $3,504.5 $(212.3)$3,292.2 
Impairment charges— (707.8)(707.8)— (252.7)(252.7)— (960.5)(960.5)
Foreign currency translation0.4 — 0.4 1.7 — 1.7 2.1 — 2.1 
Balance at September 27, 2024$2,007.4 $(842.3)$1,165.1 $1,499.2 $(330.5)$1,168.7 $3,506.6 $(1,172.8)$2,333.8 

Additionally, management reviews the carrying amounts of other finite-lived intangible assets whenever events or circumstances indicate that the carrying amounts of an asset may not be recoverable. Impairment indicators include, among other factors, cash flow deficits, historic or anticipated declines in revenue or operating profit, and adverse legal or regulatory developments. If it is determined that such indicators are present and the review indicates that the assets will not be fully recoverable based on undiscounted estimated cash flows, their carrying values are reduced to estimated fair market value. Estimated fair market value is determined primarily using projected cash flows discounted at a rate commensurate with the risk involved. For the purposes of identifying and measuring impairment, long-lived assets are grouped with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. During the nine months ended September 27, 2024, the Company recorded an impairment charge of $92.2 million related to developed technology and customer relationships within the Equipment & Consumables segment. The reduction in value was primarily due to a reduction in projected cash flows due to the factors discussed above.
Finite-lived intangible assets are amortized over the shorter of their legal or estimated useful life. The following summarizes the gross carrying value, accumulated amortization and accumulated impairment losses, for each major category of intangible asset ($ in millions): 
As of September 27, 2024
Gross
Carrying
Amount		Accumulated
Amortization		Accumulated Impairment LossesNet Carrying Amount
Finite-lived intangibles:
Patents and technology$390.3 $(239.4)$(87.2)$63.7 
Customer relationships and other intangibles912.5 (727.9)(5.0)179.6 
Trademarks and trade names190.9 (89.5)— 101.4 
Total finite-lived intangibles1,493.7 (1,056.8)(92.2)344.7 
Indefinite-lived intangibles:
Trademarks and trade names498.5 — (147.1)351.4 
Total intangibles$1,992.2 $(1,056.8)$(239.3)$696.1 

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As of December 31, 2023
Gross
Carrying
Amount		Accumulated
Amortization		Accumulated Impairment LossesNet Carrying Amount
Finite-lived intangibles:
Patents and technology$439.5 $(269.1)$— $170.4 
Customer relationships and other intangibles928.1 (706.9)— 221.2 
Trademarks and trade names225.5 (115.8)— 109.7 
Total finite-lived intangibles1,593.1 (1,091.8)— 501.3 
Indefinite-lived intangibles:
Trademarks and trade names498.7 — (46.0)452.7 
Total intangibles$2,091.8 $(1,091.8)$(46.0)$954.0 

NOTE 7. ACCRUED EXPENSES AND OTHER LIABILITIES
Accrued expenses and other liabilities were as follows ($ in millions):
September 27, 2024December 31, 2023
CurrentNoncurrentCurrentNoncurrent
Compensation and benefits$151.1 $25.5 $120.0 $23.1 
Sales and product allowances70.3 1.6 72.0 1.7 
Contract liabilities137.2 20.8 106.4 8.4 
Taxes, income and other62.6 43.6 39.9 44.3 
Restructuring-employee severance, benefits and other7.2 — 16.0 — 
Pension benefits5.8 25.1 5.8 30.1 
Loss contingencies6.7 24.1 11.0 27.0 
Other100.5 9.0 84.6 7.8 
Total$541.4 $149.7 $455.7 $142.4 


NOTE 8.  HEDGING TRANSACTIONS AND DERIVATIVE FINANCIAL INSTRUMENTS
The Company uses cross-currency swap derivative contracts to partially hedge its net investments in foreign operations against adverse movements in exchange rates between the U.S. dollar and the euro. The cross-currency swap derivative contracts are agreements to exchange fixed-rate payments in one currency for fixed-rate payments in another currency. On January 17, 2023, the Company entered into a two-year cross-currency swap derivative contract, with a notional value of $150.0 million. This contract effectively converts a portion of the Company’s U.S. dollar denominated senior term loan facilities to obligations denominated in euros and partially offsets the impact of changes in currency rates on foreign currency denominated net investments. This instrument matures on January 17, 2025.
The Company also has foreign currency denominated long-term debt consisting of a senior euro term loan facility. The senior euro term loan facility represents a partial hedge of the Company’s net investment in foreign operations against adverse movements in exchange rates between the U.S. dollar and the euro. The senior euro term loan facility is designated and qualifies as a non-derivative hedging instrument.

Refer to Note 12 for further discussion of the Company’s debt and credit facilities.

The change in the fair value of the cross-currency swap instrument and the foreign currency translation of the senior euro term loan facilities are recorded in accumulated other comprehensive loss in the accompanying Condensed Consolidated Balance Sheets, partially offsetting the foreign currency translation adjustment of the Company’s related net investment that is also recorded in accumulated other comprehensive loss as reflected in Note 14.

12

The Company has also historically used interest rate swap derivative contracts to reduce its variability of cash flows related to interest payments with respect to its senior term and senior euro term loan facilities. The interest rate swap contracts exchanged interest payments based on variable rates for interest payments based on fixed rates. The changes in the fair value of these instruments are recorded in accumulated other comprehensive loss (see Note 14). The interest income or expense from the cross-currency and interest rate swaps is recorded in interest expense, net in the Company’s Condensed Consolidated Statements of Operations consistent with the classification of interest expense attributable to the underlying debt. The Company did not have any outstanding interest rate swap contracts as of September 27, 2024.

The following table summarizes the notional values and pretax impact of changes in the fair values of instruments designated as net investment hedges in accumulated other comprehensive loss (“OCI”) for the three and nine months ended September 27, 2024 and September 29, 2023 ($ in millions):
Three Months Ended
September 27, 2024September 29, 2023
Notional AmountLoss Recognized in OCINotional AmountGain Recognized in OCI
Foreign currency denominated debt$390.7 $(15.7)$370.1 $11.6 
Foreign currency contract150.0 (5.9)150.0 4.2 
Total$540.7 $(21.6)$520.1 $15.8 
Nine Months Ended
September 27, 2024September 29, 2023
Notional AmountLoss Recognized in OCINotional AmountGain Recognized in OCI
Foreign currency denominated debt$390.7 $(4.3)$370.1 $7.3 
Foreign currency contract150.0 (1.6)150.0 2.5 
Total$540.7 $(5.9)$520.1 $9.8 

The Company did not reclassify any deferred gains or losses related to its net investment hedge from accumulated other comprehensive loss to income during the three and nine months ended September 27, 2024 and September 29, 2023. In addition, the Company did not have any ineffectiveness related to its net investment hedge and therefore did not reclassify any portion of the above net investment hedge from accumulated other comprehensive loss into income during the three and nine months ended September 27, 2024 and September 29, 2023. The cash inflows and outflows associated with the Company’s derivative contract designated as a net investment hedge is classified in investing activities in the accompanying Condensed Consolidated Statements of Cash Flows.

The Company’s derivative instrument, as well as its non-derivative debt instrument designated and qualifying as net investment hedges, were classified in the Company’s Condensed Consolidated Balance Sheets as follows ($ in millions):
September 27, 2024December 31, 2023
Derivative liabilities:
Accrued expenses and other liabilities$5.0 $— 
Other long-term liabilities$— $3.3 
Nonderivative hedging instruments:
Long-term debt$390.7 $386.4 

Amounts related to the Company’s derivative expected to be reclassified from accumulated other comprehensive loss to net income during the next 12 months is not significant.

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NOTE 9. FAIR VALUE MEASUREMENTS
Accounting standards define fair value based on an exit price model, establish a framework for measuring fair value where the Company’s assets and liabilities are required to be carried at fair value and provide for certain disclosures related to the valuation methods used within a valuation hierarchy as established within the accounting standards. This hierarchy prioritizes the inputs into three broad levels as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 inputs are quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets in markets that are not active, or other observable characteristics for the asset or liability, including interest rates, yield curves and credit risks, or inputs that are derived principally from, or corroborated by, observable market data through correlation; and Level 3 inputs are unobservable inputs based on the Company’s assumptions. A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
A summary of financial assets and liabilities that are measured at fair value on a recurring basis were as follows ($ in millions):
Quoted Prices in
Active Market
(Level 1)		Significant Other
Observable Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)		Total
September 27, 2024:
Assets:
Investments in rabbi trust$16.0 $8.3 $— $24.3 
Liabilities:
Cross-currency swap derivative contract$— $5.0 $— $5.0 
Deferred compensation plans$— $24.3 $— $24.3 
Contingent consideration$— $— $2.0 $2.0 
December 31, 2023:
Liabilities:
Cross-currency swap derivative contract$— $3.3 $— $3.3 
Deferred compensation plans$— $21.4 $— $21.4 
Contingent consideration$— $— $3.8 $3.8 

Derivative Instruments
The cross-currency swap derivative contract was classified as Level 2 in the fair value hierarchy as it is measured using the income approach with the relevant foreign currency current exchange rates and forward curves as inputs. Refer to Note 8 for additional information.

Deferred Compensation Plans
Certain management employees of the Company participate in nonqualified deferred compensation programs that permit such employees to defer a portion of their compensation, on a pretax basis. Participants may choose among alternative earning rates for the amounts they defer, which are based on the programs’ investment options. These deferred compensation obligations are classified as Level 2 as inputs are derived principally from, or corroborated by observable market data.

The deferred compensation obligations are funded through a Company established irrevocable rabbi trust (refer to Note 13 Deferred Compensation Plans). The investments in the rabbi trust primarily consist of mutual funds and corporate owned life insurance policies. The mutual funds are valued based on quoted market prices and therefore are classified as Level 1. The corporate owned life insurance policies have cash surrender values (which approximate fair value), that derive their values from investments in mutual funds that are managed by an insurance company, valued using a market approach and therefore are classified within Level 2.
14


Contingent Consideration
Contingent consideration represents a cash hold back intended to be used for certain liabilities related to the Company’s acquisitions. Contingent consideration was classified as Level 3 in the fair value hierarchy as the estimated fair value was measured using a probability weighted discounted cash flow model.
Fair Value of Financial Instruments
The carrying amounts and fair values of the Company’s financial instruments were as follows ($ in millions):
September 27, 2024December 31, 2023
 Carrying AmountFair ValueCarrying AmountFair Value
Assets:
 Investments in rabbi trust$24.3 $24.3 $— $— 
Liabilities:
Contingent consideration$2.0 $2.0 $3.8 $3.8 
Cross-currency swap derivative contract$5.0 $5.0 $3.3 $3.3 
Convertible senior notes due 2028$489.0 $453.8 $486.9 $455.7 
Convertible senior notes due 2025$115.8 $127.3 $115.3 $145.1 
Other debt$816.6 $816.6 $911.2 $911.2 

The fair value of long-term debt approximates the carrying value as these borrowings are based on variable market rates. The fair value of the convertible senior notes due 2028 and convertible senior notes due 2025 were determined based on the quoted bid price of the convertible senior notes in an over-the-counter market on September 27, 2024 and December 31, 2023. The convertible senior notes are considered as Level 2 of the fair value hierarchy. The fair values of cash and cash equivalents, which consist primarily of money market funds, time and demand deposits, trade accounts receivables and trade accounts payable approximate their carrying amounts due to the short-term maturities of these instruments.

NOTE 10. WARRANTY
The Company generally accrues estimated warranty costs at the time of sale. In general, manufactured products are warranted against defects in material and workmanship when properly used for their intended purpose, installed correctly and appropriately maintained. Warranty periods depend on the nature of the product and range from 90 days up to the life of the product. The amount of the accrued warranty liability is determined based on historical information such as past experience, product failure rates or number of units repaired, estimated cost of material and labor and in certain instances estimated property damage. The accrued warranty liability is reviewed on a quarterly basis and may be adjusted as additional information regarding expected warranty costs becomes known. At September 27, 2024 and December 31, 2023, the warranty liability was $9.4 million and $9.0 million, respectively.


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NOTE 11. LITIGATION AND CONTINGENCIES
The Company records accruals for loss contingencies associated with legal matters when it is probable that a liability will be incurred, and the amount of the loss can be reasonably estimated.

For litigation matters that the Company has determined are both probable and can be reasonably estimated, the Company has accrued $30.8 million and $38.0 million as of September 27, 2024 and December 31, 2023, respectively, which are included in accrued liabilities in the Condensed Consolidated Balance Sheets. The Company has accrued for these matters and will continue to monitor each related legal issue and adjust accruals as might be warranted based on new information and further developments in accordance with Accounting Standards Codification (“ASC”) 450-20-25. Amounts accrued for legal contingencies often result from a complex series of judgments about future events and uncertainties that rely heavily on estimates and assumptions including timing of related payments. The ability to make such estimates and judgments can be affected by various factors including, among other things, whether damages sought in the proceedings are unsubstantiated or indeterminate; legal discovery has not commenced or is not complete; proceedings are in early stages; matters present legal uncertainties; there are significant facts in dispute; procedural or jurisdictional issues; the uncertainty and unpredictability of the number of potential claims; or there are numerous parties involved. To the extent adverse verdicts have been rendered against the Company, the Company does not record an accrual until a loss is determined to be probable and can be reasonably estimated. In the Company's opinion, based on its examination of these matters, its experience to date and discussions with counsel, the ultimate outcome of legal proceedings, net of liabilities accrued in the Company's Condensed Consolidated Balance Sheets, is not expected to have a material adverse effect on the Company's financial position. However, the resolution of, or increase in accruals for one or more of these matters in any reporting period may have a material adverse effect on the Company’s results of operations and cash flows for that period.

NOTE 12. DEBT AND CREDIT FACILITIES
The components of the Company’s debt were as follows, net of debt discount and debt issuance costs ($ in millions):
September 27, 2024December 31, 2023
Senior term loan facility due 2028 (the “2028 Term Loan”)
$426.7 $525.8 
Senior euro term loan facility due 2028 (the “2028 Euro Term Loan”)389.9 385.4 
Convertible senior notes due 2028 (the “2028 Convertible Notes”)
489.0 486.9 
Convertible senior notes due 2025 (the “2025 Convertible Notes”)
115.8 115.3 
Total debt1,421.4 1,513.4 
Less: current portion(115.8)(115.3)
Long-term debt$1,305.6 $1,398.1 

Credit Facilities

On August 31, 2023, the Company entered into a second amended and restated credit agreement (the “Second Amended Credit Agreement”), which amends and restates the Company’s credit agreement dated June 15, 2021. Under the Second Amended Credit Agreement, the Company entered into the 2028 Term Loan for $530.0 million and the 2028 Euro Term Loan for €350.0 million (collectively the “2028 Term Loans”). The Second Amended Credit Agreement also includes a revolving credit facility (together with the 2028 Term Loans, the “Senior Credit Facilities”) with an aggregate available borrowing capacity of $750.0 million and a $30.0 million sublimit for the issuance of standby letters of credit that can be used for working capital and other general corporate purposes. The Company may request further increases to the revolving credit facility by an amount that is the greater of 100% of Consolidated EBITDA or $525.0 million. As of September 27, 2024 and December 31, 2023 there were no borrowings outstanding under this revolving credit facility. The Senior Credit Facilities mature on August 31, 2028, and are subject to an earlier maturity date of 91 days prior to the maturity date of the 2028 Convertible Notes, if more than $250.0 million of such notes are outstanding at that time.

The proceeds from the 2028 Term Loans were used to pay outstanding balances of the 2024 Term Loans. The Company paid fees aggregating approximately $5.2 million in connection with the Second Amended Credit Agreement.

On September 17, 2024, the Company repaid $100.0 million of the 2028 Term Loan.

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Under the Senior Credit Facilities, borrowings bear interest as follows: (1) Term SOFR Loans (as defined in the Second Amended Credit Agreement) bear interest at a variable rate on a forward-looking Secured Overnight Financing Rate (“SOFR”) term rate plus 0.10% credit spread adjustment plus a margin of between 0.910% and 1.625%, depending on the Company’s Consolidated Leverage Ratio (as defined in the Second Amended Credit Agreement) as of the last day of the immediately preceding fiscal quarter; and (2) Base Rate Loans (as defined in the Second Amended Credit Agreement) bear interest at a variable rate equal to (a) the highest of (i) the Federal funds rate (as published by the Federal Reserve Bank of New York from time to time) plus 0.50%, (ii) Bank of America’s “prime rate” as publicly announced from time to time, (iii) the Term SOFR (as defined in the Second Amended Credit Agreement) plus 1.0% and (iv) 1.0%, plus a margin of between 0.0% and 0.625%, depending on the Company’s Consolidated Leverage Ratio as of the last day of the immediately preceding fiscal quarter. In no event will Term SOFR Loans or Base Rate Loans bear interest at a rate lower than 0.0%. In addition, the Company is required to pay a per annum facility fee of between 0.09% and 0.225% depending on the Company’s Consolidated Leverage Ratio as of the last day of the immediately preceding fiscal quarter and based on the aggregate commitments under the revolving credit facility, whether drawn or not.

The interest rates for borrowings under the 2028 Term Loan were 6.68% and 6.70% as of September 27, 2024 and December 31, 2023, respectively. The interest rates for borrowings under the 2028 Euro Term Loan were 4.80% and 5.00% as of September 27, 2024 and December 31, 2023, respectively. Interest is payable monthly for the 2028 Term Loans. The Company is required to maintain a Consolidated Leverage Ratio of 4.00 to 1.00 or less and includes a provision that the maximum Consolidated Leverage Ratio will be increased to 4.50 to 1.00 for the three consecutive full fiscal quarters immediately following the consummation of any acquisition by the Company or any subsidiary of the Company in which the purchase price exceeds $100.0 million. The Company is also required to maintain a Consolidated Interest Coverage Ratio (as defined in the Second Amended Credit Agreement) of at least 3.00 to 1.00. The Company is subject to customary representations, warranties, conditions precedent, events of default, indemnities and affirmative and negative covenants, including covenants that, among other things, limit or restrict the Company’s and/or the Company’s subsidiaries’ ability, subject to certain exceptions and qualifications, to incur liens or indebtedness, merge, consolidate or sell or otherwise transfer assets, make dividends or distributions, enter into transactions with the Company’s affiliates and use proceeds of the debt financing for other than permitted uses. Additionally, upon the occurrence and during the continuance of an event of default, the lenders may declare the outstanding advances and all other obligations immediately due and payable. The Company was in compliance with all of its debt covenants as of September 27, 2024.

2028 Convertible Notes

On August 10, 2023, the Company issued the 2028 Convertible Notes due on August 15, 2028, unless earlier repurchased, redeemed or converted. The aggregate principal amount, which includes the initial purchasers’ exercise in full of their option to purchase an additional $65.2 million principal amount, was $500.2 million. The net proceeds from the issuance, after deducting purchasers’ discounts and estimated offering expenses, were $485.9 million.

The 2028 Convertible Notes accrue interest at a rate of 1.75% per annum, payable semi-annually in arrears on February 15 and August 15 of each year. The 2028 Convertible Notes have an initial conversion rate of 21.5942 shares of the Company’s common stock per $1,000 principal amount, which is equivalent to an initial conversion price of approximately $46.31 per share of the Company’s common stock and is subject to adjustment upon the occurrence of specified events. The 2028 Convertible Notes are governed by an indenture dated as of August 10, 2023 (the “Indenture”) between the Company and Wilmington Trust, National Association, as trustee. The Indenture does not contain any financial covenants or any restrictions on the payment of dividends, the incurrence of senior debt or other indebtedness or the issuance or repurchase of the Company’s securities by the Company.

The 2028 Convertible Notes are senior, unsecured obligations and are (i) equal in right of payment with the Company’s existing and future senior, unsecured indebtedness; (ii) senior in right of payment to the Company’s existing and future indebtedness that is expressly subordinated to the 2028 Convertible Notes; (iii) effectively subordinated to the Company’s existing and future secured indebtedness, to the extent of the value of the collateral securing that indebtedness; and (iv) structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables, and (to the extent the Company is not a holder thereof) preferred equity, if any, of the Company’s subsidiaries.

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Holders of the 2028 Convertible Notes may convert at any time on or after February 15, 2028 until the close of business on the second scheduled trading day immediately before the maturity date. Holders will also have the right to convert prior to February 15, 2028, but only upon the occurrence of specified events. The Company will settle any convertible note conversions through a combination settlement by satisfying the principal amount outstanding with cash and any convertible note conversion value in excess of the principal amount in cash or shares of the Company’s common stock or any combination thereof. If a fundamental change occurs prior to the maturity date, holders may require the Company to repurchase all or a portion of their 2028 Convertible Notes for cash at a repurchase price equal to 100% of the principal amount plus any accrued and unpaid interest. In addition, if specific corporate events occur prior to the maturity date, the Company would increase the conversion rate for a holder who elects to convert in connection with such an event in certain circumstances. As of September 27, 2024, none of the conditions permitting early conversion by holders had been met, therefore, the 2028 Convertible Notes are classified as long-term debt.

The 2028 Convertible Notes will be redeemable, in whole or in part, at the Company’s option at any time, and from time to time, on or after August 17, 2026 and on or before the 40th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount to be redeemed, plus accrued and unpaid interest, if any, to, but excluding the redemption date, but only if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice; and (ii) the trading day immediately before the date the Company sends such notice. In addition, calling any 2028 Convertible Note for redemption will constitute a “Make-Whole Fundamental Change” (as defined in the Indenture) with respect to that 2028 Convertible Note, in which case the conversion rate applicable to the conversion will be increased in certain circumstances if it is converted after it is called for redemption.

The 2028 Convertible Notes are accounted for in accordance with ASC 470 “Debt” and ASC 815 “Derivatives and Hedging.” The Company has evaluated all the embedded conversion options contained in the 2028 Convertible Notes to determine if there are embedded features that require bifurcation as a derivative as required by U.S. GAAP. Based on the Company’s analysis, it accounts for the 2028 Convertible Notes as single units of accounting, a liability, because the Company concluded that the conversion features do not require bifurcation as a derivative.

2025 Convertible Notes
On May 21, 2020, the Company issued the 2025 Convertible Notes due on June 1, 2025, unless earlier repurchased, redeemed or converted. The aggregate principal amount, which includes the initial purchasers’ exercise in full of their option to purchase an additional $67.5 million principal amount was $517.5 million. The net proceeds from the issuance, after deducting purchasers’ discounts and estimated offering expenses, were $502.6 million. The Company used part of the net proceeds to pay for the capped call transactions (“Capped Calls”) as further described below.

On August 10, 2023, the Company entered into exchange agreements with a limited number of holders of the 2025 Convertible Notes to exchange $401.2 million principal amount of the 2025 Convertible Notes for aggregate consideration which consisted of approximately $403.0 million in cash, which included accrued interest, and approximately 8.4 million shares of the Company’s common stock (the “Notes Exchanges”). The Company recognized a non-cash inducement charge of $28.5 million in connection with the Notes Exchanges which was recorded within Other Expense in the Condensed Consolidated Statements of Operations, a reduction of $4.4 million of unamortized debt issuance costs, and an increase in additional paid-in capital of $24.1 million.

The 2025 Convertible Notes accrue interest at a rate of 2.375% per annum, payable semi-annually in arrears on June 1 and December 1 of each year. The 2025 Convertible Notes have an initial conversion rate of 47.5862 shares of the Company’s common stock per $1,000 principal amount, which is equivalent to an initial conversion price of approximately $21.01 per share of the Company’s common stock and is subject to adjustment upon the occurrence of specified events. The 2025 Convertible Notes are governed by an indenture dated as of May 21, 2020 (the “2025 Convertible Note Indenture”) between the Company and Wilmington Trust, National Association, as trustee. The 2025 Convertible Note Indenture does not contain any financial covenants or any restrictions on the payment of dividends, the incurrence of senior debt or other indebtedness or the issuance or repurchase of the Company’s securities by the Company.

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The 2025 Convertible Notes are senior, unsecured obligations and are (i) equal in right of payment with the Company’s existing and future senior, unsecured indebtedness; (ii) senior in right of payment to the Company’s existing and future indebtedness that is expressly subordinated to the 2025 Convertible Notes; (iii) effectively subordinated to the Company’s existing and future secured indebtedness, to the extent of the value of the collateral securing that indebtedness; and (iv) structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables, and (to the extent the Company is not a holder thereof) preferred equity, if any, of the Company’s subsidiaries.

Holders may convert at any time on or after December 2, 2024, until the close of business on the second scheduled trading day preceding the maturity date. Holders will also have the right to convert prior to December 2, 2024, but only upon the occurrence of specified events. The Company will settle any convertible note conversions through a combination settlement by satisfying the principal amount outstanding with cash and any convertible note conversion value in excess of the principal amount in cash or shares of the Company’s common stock or any combination thereof. If a fundamental change occurs prior to the maturity date, holders may require the Company to repurchase all or a portion of their 2025 Convertible Notes for cash at a repurchase price equal to 100.0% of the principal amount plus any accrued and unpaid interest. In addition, if specific corporate events occur prior to the maturity date, the Company would increase the conversion rate for a holder who elects to convert in connection with such an event in certain circumstances. The 2025 Convertible Notes are classified as short-term debt as of September 27, 2024 and December 31, 2023, as holders may convert at any time after December 2, 2024.

The 2025 Convertible Notes are redeemable, in whole or in part, at the Company’s option at any time, on or before the 40th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amounts to be redeemed, plus accrued and unpaid interest, if any, to, but excluding the redemption date, but only if the last reported sale price per share of the Company’s common stock exceeds 130.0% of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice; and (ii) the trading day immediately before the date the Company sends such notice. In addition, calling any 2025 Convertible Note for redemption will constitute a “Make-Whole Fundamental Change”, as defined in the 2025 Convertible Note Indenture, in which case the conversion rate applicable to the conversion will be increased in certain circumstances if it is converted after it is called for redemption.

The following table sets forth total interest expense recognized related to convertible notes ($ in millions):
Three Months EndedNine Months Ended
September 27, 2024September 29, 2023September 27, 2024September 29, 2023
Contractual interest expense:
   2028 Convertible Notes$2.2 $1.2 $6.6 $1.2 
   2025 Convertible Notes0.7 2.3 2.1 8.4 
Amortization of debt issuance costs:
   2028 Convertible Notes0.7 0.3 2.1 0.3 
   2025 Convertible Notes0.1 0.4 0.5 1.9 
Total interest expense
$3.7 $4.2 $11.3 $11.8 

For the three and nine months ended September 27, 2024 and September 29, 2023, the debt issuance costs were amortized using an annual effective interest rate of 2.4% and 3.0% for the 2028 Convertible Notes and the 2025 Convertible Notes, respectively.

As of September 27, 2024, the if-converted value of the 2025 Convertible Notes and the 2028 Convertible Notes did not exceed their respective outstanding principal amounts. As of December 31, 2023, the if-converted value of the 2025 Convertible Notes exceeded the outstanding principal amount by $16.9 million while the if-converted value of the 2028 Convertible Notes did not exceed the outstanding principal.

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Debt Issuance Costs

The remaining unamortized debt issuance costs for debt outstanding were as follows ($ in millions):
September 27, 2024December 31, 2023
2028 Convertible Notes$11.2 $13.3 
2025 Convertible Notes0.5 1.0 
2028 Term Loan3.3 4.2 
2028 Euro Term Loan0.8 1.0 
$15.8 $19.5 

The above unamortized debt issuance costs have been netted against their respective aggregate principal amounts of the related debt and are being amortized to interest expense over the term of the respective debt.

Capped Call Transactions
In connection with the offering of the 2025 Convertible Notes, the Company entered into Capped Calls with certain counterparties. The Capped Calls have an initial strike price of approximately $21.01 per share, subject to certain adjustments, which corresponds to the initial conversion price of the 2025 Convertible Notes. The Capped Calls have initial cap prices of $23.79 per share, subject to certain adjustments. The Capped Calls are generally intended to reduce or offset the potential dilution from shares of common stock issued upon any conversion of the 2025 Convertible Notes with such reduction or offset, as the case may be, subject to a cap based on the cap price. In connection with the Notes Exchanges as discussed above, the Company completed a partial unwind of the Capped Calls.

As the Capped Call transactions are considered indexed to the Company's own stock and are considered equity classified, they are recorded in equity and are not accounted for as derivatives. The cost of $20.7 million incurred in connection with the Capped Calls was recorded as a reduction to additional paid-in capital.


NOTE 13. DEFERRED COMPENSATION PLANS
Certain management employees of the Company participate in nonqualified deferred compensation programs that permit such employees to defer a portion of their compensation, on a pretax basis. The obligations are presented as a component of the Company’s compensation and benefits accrual included in accrued expenses in the accompanying Condensed Consolidated Balance Sheets (refer to Note 7). Participants may choose among alternative earnings rates for the amounts they defer, which are based on the programs’ investment options. Changes in the deferred compensation liability under these programs are recognized based on changes in the fair value of the participants’ accounts. Amounts voluntarily deferred by employees into the Company stock fund and amounts contributed to participant accounts by the Company are deemed invested in the Company’s common stock and future distributions of such contributions will be made solely in shares of Company common stock, and therefore are not reflected in the plan obligations.

As a nonqualified compensation plan, funding of the obligation is not required; however during the quarter ended September 27, 2024, the Company funded the plan obligations through a Company established irrevocable rabbi trust. The assets held in the irrevocable rabbi trust consist primarily of mutual funds and corporate owned life insurance policies, which are measured at fair value, and are intended to align with the deferred compensation obligation investment options selected by plan participants (refer to Note 9).

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NOTE 14. ACCUMULATED OTHER COMPREHENSIVE LOSS
The changes in accumulated other comprehensive loss by component are summarized below ($ in millions):
Foreign Currency Translation AdjustmentsUnrealized Pension CostsTotal Accumulated Other Comprehensive Loss
Three Months Ended September 27, 2024
Balance, June 28, 2024$(307.7)$6.1 $(301.6)
Other comprehensive loss before reclassifications:
Increase 72.8 — 72.8 
Income tax impact5.3 — 5.3 
Other comprehensive loss before reclassifications, net of income taxes78.1 — 78.1 
Amounts reclassified from accumulated other comprehensive loss:
Decrease— (0.2)(0.2)
Income tax impact— 0.1 0.1 
Amounts reclassified from accumulated other comprehensive loss, net of income taxes— (0.1)(0.1)
Net current period other comprehensive income (loss), net of income taxes78.1 (0.1)78.0 
Balance, September 27, 2024$(229.6)$6.0 $(223.6)

Foreign Currency Translation AdjustmentsUnrealized Pension CostsTotal Accumulated Other Comprehensive Loss
Three Months Ended September 29, 2023
Balance, June 30, 2023$(251.6)$14.7 $(236.9)
Other comprehensive loss before reclassifications:
Decrease (65.7)— (65.7)
Income tax impact(3.9)— (3.9)
Other comprehensive loss before reclassifications, net of income taxes(69.6)— (69.6)
Amounts reclassified from accumulated other comprehensive loss:
Decrease— (0.4)(0.4)
Income tax impact— 0.1 0.1 
Amounts reclassified from accumulated other comprehensive loss, net of income taxes— (0.3)(0.3)
Net current period other comprehensive loss, net of income taxes(69.6)(0.3)(69.9)
Balance, September 29, 2023$(321.2)$14.4 $(306.8)


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Foreign Currency Translation AdjustmentsUnrealized Pension CostsTotal Accumulated Other Comprehensive Loss
Nine Months Ended September 27, 2024
Balance, December 31, 2023$(223.7)$6.5 $(217.2)
Other comprehensive loss before reclassifications:
Decrease (7.4)— (7.4)
Income tax impact1.5 — 1.5 
Other comprehensive loss before reclassifications, net of income taxes(5.9)— (5.9)
Amounts reclassified from accumulated other comprehensive loss:
Decrease— (0.6)(0.6)
Income tax impact— 0.1 0.1 
Amounts reclassified from accumulated other comprehensive loss, net of income taxes— (0.5)(0.5)
Net current period other comprehensive loss, net of income taxes(5.9)(0.5)(6.4)
Balance, September 27, 2024$(229.6)$6.0 $(223.6)

Foreign Currency Translation AdjustmentsUnrealized Pension CostsTotal Accumulated Other Comprehensive Loss
Nine Months Ended September 29, 2023
Balance, December 31, 2022$(240.5)$15.4 $(225.1)
Other comprehensive loss before reclassifications:
Decrease(78.3)— (78.3)
Income tax impact(2.4)— (2.4)
Other comprehensive loss before reclassifications, net of income taxes(80.7)— (80.7)
Amounts reclassified from accumulated other comprehensive loss:
Decrease— (1.3)(1.3)
Income tax impact— 0.3 0.3 
Amounts reclassified from accumulated other comprehensive loss, net of income taxes— (1.0)(1.0)
Net current period other comprehensive loss, net of income taxes(80.7)(1.0)(81.7)
Balance, September 29, 2023$(321.2)$14.4 $(306.8)

NOTE 15. REVENUE
The following table presents the Company’s revenues disaggregated by geographical region for the three and nine months ended September 27, 2024 and September 29, 2023 ($ in millions). Sales taxes and other usage-based taxes collected from customers are excluded from revenues. The Company has historically defined emerging markets as developing markets of the world experiencing extended periods of accelerated growth in gross domestic product and infrastructure, including Eastern Europe, the Middle East, Africa, Latin America and Asia (with the exception of Japan and Australia). The Company defines developed markets as all markets of the world that are not emerging markets.
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Three Months Ended September 27, 2024Three Months Ended September 29, 2023
Specialty Products & TechnologiesEquipment & ConsumablesTotalSpecialty Products & TechnologiesEquipment & ConsumablesTotal
Geographical region:
North America$165.3 $154.2 $319.5 $170.1 $161.9 $332.0 
Western Europe85.2 24.1 109.3 95.4 24.1 119.5 
Other developed markets21.7 9.6 31.3 22.0 8.4 30.4 
Emerging markets109.5 31.4 140.9 112.0 37.4 149.4 
Total$381.7 $219.3 $601.0 $399.5 $231.8 $631.3 

Nine Months Ended September 27, 2024Nine Months Ended September 29, 2023
Specialty Products & TechnologiesEquipment & ConsumablesTotalSpecialty Products & TechnologiesEquipment & ConsumablesTotal
Geographical region:
North America$511.0 $452.3 $963.3 $533.7 $463.4 $997.1 
Western Europe319.9 75.2 395.1 327.0 86.5 413.5 
Other developed markets64.8 25.5 90.3 68.2 27.1 95.3 
Emerging markets309.8 99.2 409.0 297.6 117.4 415.0 
Total$1,205.5 $652.2 $1,857.7 $1,226.5 $694.4 $1,920.9 

Remaining Performance Obligations
ASC 606, Revenue from Contracts with Customers, requires disclosure of remaining performance obligations that represent the aggregate transaction price allocated to performance obligations with an original contract term greater than one year which are fully or partially unsatisfied at the end of the period. Remaining performance obligations include noncancelable purchase orders, unfulfilled obligations, extended warranty and service agreements and do not include revenue from contracts with customers with an original term of one year or less.

With respect to certain clear aligner treatment plans, the Company enters into contracts that involve multiple future performance obligations which include optional additional aligners at no additional charge. The Company’s treatment plans are comprised of the following performance obligations: initial aligner shipment and the subsequent shipments of any optional refinement aligners. For such plans, the Company also consider usage rates, which is the number of times a customer is expected to order additional refinement aligners.

At September 27, 2024, the aggregate amount of the transaction price allocated to remaining performance obligations was $126.7 million, including $93.6 million related to clear aligner treatment plans. The Company expects to fulfill the majority of these performance obligations over the next 12 months.

Contract Liabilities
The Company often receives cash payments from customers in advance of the Company’s performance resulting in contract liabilities. These contract liabilities are classified as either current or long-term in the Condensed Consolidated Balance Sheets based on the timing of when the Company expects to recognize revenue. As of September 27, 2024 and December 31, 2023, the contract liabilities were $158.0 million and $114.8 million, respectively, and are included within accrued expenses and other liabilities and other long-term liabilities in the accompanying Condensed Consolidated Balance Sheets. Revenue recognized during the nine months ended September 27, 2024 and September 29, 2023 that was included in the contract liability balance at December 31, 2023 and December 31, 2022 was $87.4 million and $66.4 million, respectively.
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Significant Customers
Sales to the Company’s largest customer were 11% and 10% of total sales for the three and nine months ended September 27, 2024, respectively. Sales to the Company’s largest customer were 13% and 11% of total sales for the three and nine months ended September 29, 2023, respectively.

NOTE 16. RESTRUCTURING ACTIVITIES AND RELATED IMPAIRMENTS
Restructuring Activities
The Company’s restructuring activities are undertaken as necessary to implement management’s strategy, streamline operations, take advantage of available capacity and resources, and ultimately achieve net cost reductions. These activities generally relate to reductions in workforce, the realignment of existing manufacturing capacity and closure of facilities and other exit or disposal activities, as it relates to executing the Company’s strategy, pursuant to restructuring programs.
Restructuring related charges by segment were as follows ($ in millions): 
Three Months EndedNine Months Ended
September 27, 2024September 29, 2023September 27, 2024September 29, 2023
Specialty Products & Technologies$0.2 $1.7 $8.1 $9.5 
Equipment & Consumables1.0 5.0 4.2 14.0 
Other0.4 0.1 2.0 1.2 
Total$1.6 $6.8 $14.3 $24.7 
Restructuring related charges were reflected in the following captions in the accompanying Condensed Consolidated Statements of Operations ($ in millions):
Three Months EndedNine Months Ended
September 27, 2024September 29, 2023September 27, 2024September 29, 2023
Cost of sales$0.1 $1.0 $5.1 $