On April 4, 2022, the Company completed the Separation of its fabrication technology business into an independent, publicly traded company: ESAB, a global organization that develops, manufactures and supplies consumable welding and cutting products and equipment, as well as gas control equipment. The spin-off was affected through a pro rata distribution of 90% of the 60,034,311 outstanding common shares of ESAB to Enovis stockholders of record at the close of business on March 22, 2022 (the “Record Date”). Enovis stockholders retained their Enovis shares and received one share of ESAB for every three shares of Enovis stock they owned on the Record Date. ESAB began “regular way” trading on the New York Stock Exchange on April 5, 2022 under the symbol “ESAB”. In connection with the Separation, the Company received a one-time tax-free cash distribution from ESAB of $1.2 billion.

In connection with the Separation, Enovis and ESAB entered into various agreements to effect the Separation and provide a framework for ESAB’s relationship with Enovis after the Separation. These agreements include a separation and distribution agreement, a stockholders’ and registration rights agreement, an employee matters agreement, a tax matters agreement, a transition services agreement, an ESAB Business Excellence System (“EBS”) license agreement, and an intellectual property matters agreement (the “Agreements”). These Agreements govern the Separation between Enovis and ESAB of the assets, employees, liabilities and obligations (including its investments, property and employee benefits and tax-related assets and liabilities) of Enovis and its subsidiaries attributable to periods prior to, at and after the Separation and will govern certain relationships between Enovis and ESAB after the Separation. The impact of services provided to ESAB and agreed upon charges as part of the Separation are not material to our consolidated financial statements. The matters of the agreements with ESAB have substantially concluded.

Prior to the Separation, the Company retained certain asbestos-related contingencies and insurance coverages from its previously divested businesses for which it did not retain an interest in the ongoing operations except for the contingencies. The net costs and cash flows associated with these contingencies and coverages were reported by the Company as discontinued operations. In conjunction with the Separation, all asbestos-related contingencies and insurance coverages from its divested businesses were transferred fully to ESAB. The Company has classified asbestos-related charges through the date of Separation in its Consolidated Statements of Operations as part of Income from discontinued operations, net of taxes.

The Company sold its air & gas handling business in 2019. Accordingly, the accompanying Consolidated Financial Statements for all periods presented reflect pre-tax divestiture-related expenses (benefit) of $(0.7) million, $1.7 million and $9.1 million for the years ended December 31, 2023, 2022 and 2021, respectively, as discontinued operations. The divestiture-related expenses (benefit) are primarily maintenance costs and cost to sell a retained interest in a facility no longer used in operations including certain professional, legal, and consulting fees as well as a settlement executed in the first quarter of 2021. In the third quarter of 2023, the Company sold the retained interest in the facility and recorded a gain of $15.5 million.

As a result of the Separation and prior divestitures, the operating results of (1) ESAB, the Company’s former fabrication technology business, (2) charges related to the previously retained asbestos contingencies and (3) items related to our divested air & gas handling business have been presented as discontinued operations in the Consolidated Statements of Operations for all periods presented.

The following table presents the financial results of the former fabrication technology business including all divestiture-related expenses incurred by the company and allocated interest expense; asbestos charges; items related related to Air & Gas; and the combined income tax effect of those items for the years ended December 31, 2023, 2022 and 2021.


	Year Ended December 31,
	2023		2022		2021
	(in thousands)
Net sales	$	—	$	647,911	$	2,428,115
Cost of sales	—		423,580		1,592,132
Selling, general and administrative expense	—		125,529		477,040
Gain on disposal of facility	(15,517)		—		—
Restructuring and other charges	—		5,304		18,954
Asbestos charges	—		3,194		15,578
Divestiture-related expenses and other(1)	4,387		46,684		29,668
Operating income	11,130		43,620		294,743
Interest expense(2)	—		8,035		43,481
Pension settlement gain	—		—		(11,208)
Income from discontinued operations before income taxes	11,130		35,585		262,470
Income tax (benefit) expense(3)	(9,978)		9,155		83,939
Income from discontinued operations, net of taxes	$	21,108	$	26,430	$	178,531

(1) Divestiture-related expenses and other includes a charge of $5.1 million for the release of a tax indemnification receivable from ESAB for the year ended December 31, 2023 and divestiture-related expenses for the Separation of $45.0 million and $20.6 million for the years ended December 31, 2022 and 2021, respectively.

(2) Interest expense was allocated to discontinued operations based on allocating $1.2 billion of corporate level debt to discontinued operations consistent with the dividend received from ESAB and the debt repaid at the time of the Separation.

Total income attributable to noncontrolling interest related to ESAB, net of taxes for the years ended December 31, 2022 and 2021 was $1.0 million, and $3.6 million, respectively. These amounts are presented as net income attributable to noncontrolling interest from discontinued operations - net of taxes on the Consolidated Statements of Operations.