Avanos Medical, Inc. Announces Third Quarter 2024 Results, retirement of CEO
Avanos Medical (NYSE: AVNS) reported Q3 2024 financial results and announced CEO Joe Woody's retirement. Total net sales were $170.4 million, down 0.5% year-over-year. The company reported net income of $5.9 million, compared to a net loss of $8.8 million in the prior year. Adjusted EBITDA increased to $30.6 million from $27.8 million. Despite transformation progress, the company fell short of mid-single-digit organic growth targets. The company updated its 2024 outlook, expecting revenue between $683-688 million and adjusted diluted EPS of $1.30-1.35.
Avanos Medical (NYSE: AVNS) ha riportato i risultati finanziari del terzo trimestre del 2024 e ha annunciato il ritiro dell'amministratore delegato Joe Woody. Le vendite nette totali sono state di 170,4 milioni di dollari, in calo dello 0,5% rispetto all'anno precedente. L'azienda ha registrato un utile netto di 5,9 milioni di dollari, rispetto a una perdita netta di 8,8 milioni di dollari nell'anno precedente. L'EBITDA rettificato è aumentato a 30,6 milioni di dollari, rispetto ai 27,8 milioni di dollari. Nonostante i progressi nella trasformazione, l'azienda non ha raggiunto gli obiettivi di crescita organica a crescita media. L'azienda ha aggiornato le proprie previsioni per il 2024, prevedendo ricavi tra 683 e 688 milioni di dollari e un utile per azione diluito rettificato di 1,30-1,35 dollari.
Avanos Medical (NYSE: AVNS) informó los resultados financieros del tercer trimestre de 2024 y anunció la jubilación del CEO Joe Woody. Las ventas netas totales fueron de 170,4 millones de dólares, una caída del 0,5% en comparación con el año anterior. La compañía reportó un ingreso neto de 5,9 millones de dólares, en comparación con una pérdida neta de 8,8 millones de dólares en el año anterior. El EBITDA ajustado aumentó a 30,6 millones de dólares desde 27,8 millones de dólares. A pesar de los progresos en la transformación, la empresa no cumplió con los objetivos de crecimiento orgánico de un dígito medio. La compañía actualizó su perspectiva para 2024, esperando ingresos entre 683 y 688 millones de dólares y un EPS diluido ajustado de 1,30-1,35 dólares.
Avanos Medical (NYSE: AVNS)는 2024년 3분기 재무 결과를 발표하고 CEO인 Joe Woody의 은퇴를 알렸습니다. 총 순매출은 1억 7040만 달러로 전년 대비 0.5% 감소했습니다. 회사는 순이익으로 590만 달러를 보고했으며, 이는 전년의 순손실 880만 달러와 비교됩니다. 조정된 EBITDA는 2780만 달러에서 3060만 달러로 증가했습니다. 전환 과정에도 불구하고 회사는 중간 단위 성장 목표를 달성하지 못했습니다. 이 회사는 2024년 전망을 업데이트하여 수익을 6억 8300만에서 6억 8800만 달러 사이로 예상하고 조정된 희석 EPS를 1.30-1.35달러로 예상하고 있습니다.
Avanos Medical (NYSE: AVNS) a annoncé les résultats financiers du troisième trimestre 2024 et a annoncé la retraite du PDG Joe Woody. Le chiffre d'affaires net total s'élevait à 170,4 millions de dollars, en baisse de 0,5 % par rapport à l'année précédente. L'entreprise a déclaré un revenu net de 5,9 millions de dollars, comparé à une perte nette de 8,8 millions de dollars l'année précédente. Le BAIIA ajusté a augmenté pour atteindre 30,6 millions de dollars, contre 27,8 millions de dollars. Malgré les progrès de la transformation, l'entreprise n'a pas atteint ses objectifs de croissance organique à un chiffre. L'entreprise a mis à jour ses prévisions pour 2024, s'attendant à un chiffre d'affaires compris entre 683 et 688 millions de dollars et un BPA dilué ajusté de 1,30-1,35 $.
Avanos Medical (NYSE: AVNS) berichtete über die finanziellen Ergebnisse des 3. Quartals 2024 und kündigte den Rücktritt von CEO Joe Woody an. Die gesamten Nettoumsätze betrugen 170,4 Millionen USD, was einem Rückgang von 0,5% im Vergleich zum Vorjahreszeitraum entspricht. Das Unternehmen meldete Nettoeinkommen von 5,9 Millionen USD, im Vergleich zu einem Nettoverlust von 8,8 Millionen USD im Vorjahr. Das angepasste EBITDA stieg auf 30,6 Millionen USD von 27,8 Millionen USD. Trotz Fortschritten bei der Transformation verfehlte das Unternehmen die mittleren einstelligen organischen Wachstumsziele. Das Unternehmen aktualisierte seinen Ausblick für 2024 und erwartet Einnahmen zwischen 683 und 688 Millionen USD sowie ein angepasstes verwässertes EPS von 1,30-1,35 USD.
- Net income improved to $5.9M from -$8.8M loss year-over-year
- Adjusted EBITDA increased to $30.6M from $27.8M
- Double-digit growth in Game Ready and IVP segments
- Strong performance in digestive health business
- Operating profit increased to $12.0M from $1.2M
- Net sales decreased 0.5% to $170.4M
- Gross margin declined to 54.5% from 55.8%
- Underperformance in surgical pain category, particularly ON-Q
- Lower demand and pricing for hyaluronic acid products
- Free cash flow decreased to $20.0M from $25.2M year-over-year
Insights
The Q3 2024 results present a mixed financial picture.
Key concerns include underperformance in surgical pain products and declining HA pricing, though bright spots exist in digestive health and Game Ready segments. The revised full-year guidance of
The CEO transition marks a significant leadership change during a important transformation period. The appointment of CFO Michael Greiner as interim CEO provides continuity, given his role in executing the three-year transformation plan. However, the timing amid ongoing restructuring initiatives and market challenges creates uncertainty. The retention of outgoing CEO Joe Woody as a consultant through April 2025 suggests a structured transition approach to maintain operational stability.
Gary Blackford, Avanos Board Chairman, noted, "Joe has decided to retire after leading Avanos for the past seven years. Joe has agreed to assist the Company in the transition of leadership, and will continue to consult with the Company through April of next year. Avanos is better positioned financially and organizationally today to achieve its longer-term value creation goals because of Joe's leadership these past seven years and we thank him." Blackford continued, "We are also pleased to announce that Michael Greiner has agreed to serve as interim CEO for Avanos. As Avanos' CFO and Chief Transformation Officer, Michael has demonstrated his ability to deliver consistent results against our three-year transformation plan and he is well positioned to step in as interim CEO."
Third Quarter 2024 Financial Highlights
- Total net sales from continuing operations were
, a$170.4 million 0.5% decrease from the comparable prior year period. - Net income from continuing operations was
, compared to net loss from continuing operations of$5.9 million a year ago.$8.8 million - Adjusted net income from continuing operations totaled
, compared to$16.7 million a year ago.$14.0 million - Diluted earnings per share from continuing operations was
, compared to diluted loss per share of$0.12 a year ago.$0.19 - Adjusted diluted earnings per share from continuing operations was
, compared to$0.36 a year ago.$0.30 - Adjusted EBITDA was
, compared to$30.6 million a year ago.$27.8 million
"Although we are pleased with our transformation progress, we fell short in the third quarter of our stated objective of mid-single-digit organic growth, which also negatively impacted gross profit margin for the quarter," said Michael Greiner, Avanos' interim chief executive officer. "We had a few strong pockets of sales performance for the quarter, including continued execution in our digestive health business and double digit growth for Game Ready and IVP. However, underperformance in our surgical pain category, particularly ON-Q, negatively impacted our overall sales performance."
Third Quarter 2024 Operating Results From Continuing Operations
For the three months ended September 30, 2024, net sales totaled
Gross margin during the third quarter of 2024 was
Selling and general expenses as a percentage of net sales was
Operating profit in the third quarter of 2024 was
Adjusted EBITDA from continuing operations was
First Nine Months of 2024 Operating Results From Continuing Operations
For the nine months ended September 30, 2024, net sales were
Gross margin was
Selling and general expenses as a percentage of net sales were
Operating profit was
Net income from continuing operations for the nine months ended September 30, 2024 was
Adjusted EBITDA for the nine months ended September 30, 2024 was
Cash Flow and Balance Sheet
Cash flow from operations for the third quarter was
Cash from operations less capital expenditures, or free cash flow, for the third quarter was
Total debt outstanding, net of unamortized discounts, was
Discontinued Operations
Net sales from discontinued operations were
2024 Outlook
For the year, the Company anticipates revenue from continuing operations of between
Non-GAAP Financial Measures
This press release and the accompanying tables include the following financial measures that have not been calculated in accordance with accounting principles generally accepted in the
- Adjusted net income;
- Adjusted diluted earnings per share;
- Adjusted gross and operating profit;
- Adjusted effective tax rate;
- Adjusted EBITDA; and
- Free cash flow.
These non-GAAP financial measures exclude the following items, as applicable, for the relevant time periods as indicated in the accompanying non-GAAP reconciliations to the comparable GAAP financial measures:
- Certain acquisition and integration charges related to acquisitions.
- Expenses associated with restructuring and transformation activities, including the Divestiture in the fourth quarter of 2023.
- Expenses associated with European Union Medical Device Regulation ("EU MDR") compliance.
- The amortization of intangible assets associated with prior business acquisitions.
- The tax effects of certain adjusting items.
- The benefit associated with the tax effects of the CARES Act.
- The positive or negative effect of changes in currency exchange rates during the year.
The Company provides these non-GAAP financial measures as supplemental information to its GAAP financial measures. Management and the Company's board of directors use net sales on a constant currency basis, adjusted net income, adjusted diluted earnings per share, adjusted operating profit, adjusted EBITDA, and free cash flow to: (a) evaluate the Company's historical and prospective financial performance and its performance relative to its competitors, (b) allocate resources and (c) measure the operational performance of the Company's business units and their managers. Management also believes that the use of an adjusted effective tax rate provides improved insight into the tax effects of the Company's ongoing business operations.
Additionally, the compensation committee of the Company's board of directors will use certain of the non-GAAP financial measures when setting and assessing achievement of incentive compensation goals. These goals are based, in part, on the Company's net sales on a constant currency basis and adjusted EBITDA, which will be determined by excluding certain items that are used in calculating these non-GAAP financial measures.
Our competitors may define these non-GAAP financial measures differently, and as a result, our measure of these non-GAAP financial measures may not be directly comparable to those of other companies. Items excluded from these non-GAAP financial measures are significant components in understanding and assessing financial performance. These non-GAAP financial measures are supplemental measures of operating performance that do not represent, and should not be considered in isolation or as an alternative to, or substitute for, the financial statement data presented in the Company's consolidated financial statements as indicators of financial performance. These non-GAAP financial measures have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analysis of the Company's results as reported under GAAP. We compensate for these limitations by relying primarily on our GAAP results and using these non-GAAP financial measures as supplemental information.
Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the attached financial tables.
Conference Call Webcast
Avanos Medical, Inc. will host a conference call today at 9 a.m. ET. The conference call can be accessed live over the internet at https://avanos.investorroom.com or via telephone by dialing 800-836-8184 in
About Avanos Medical, Inc.
Avanos Medical (NYSE: AVNS) is a medical technology company focused on delivering clinically superior solutions that will help patients get back to the things that matter. Headquartered in
Forward-Looking Statements
This press release contains information that includes or is based on "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that do not relate solely to historical or current facts, and can generally be identified by the use of words such as "may," "believe," "will," "expect," "project," "estimate," "anticipate," "plan" or "continue" and similar expressions. Forward-looking statements are based on the current plans and expectations of management and are subject to various risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in such statements. Such factors include, but are not limited to: weakening of economic conditions that could adversely affect the level of demand for our products; pricing pressures generally, including cost-containment measures that could adversely affect the price of or demand for our products; shortage in drugs used in our Surgical Pain and Recovery products or other disruptions in our supply chain; the ongoing regional conflicts between
Additional information concerning these and other factors that may impact future results is contained in our filings with the
AVANOS MEDICAL, INC. | |||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
2024 | 2023 | 2024 | 2023 | ||||
Net Sales | $ 170.4 | $ 171.3 | $ 508.2 | $ 500.0 | |||
Cost of products sold | 77.5 | 75.8 | 224.9 | 215.3 | |||
Gross Profit | 92.9 | 95.5 | 283.3 | 284.7 | |||
Research and development expenses | 7.2 | 6.1 | 20.5 | 20.4 | |||
Selling and general expenses | 74.3 | 78.7 | 238.8 | 260.5 | |||
Other (income) expense, net | (0.6) | 9.5 | 1.7 | 10.8 | |||
Operating Income (Loss) | 12.0 | 1.2 | 22.3 | (7.0) | |||
Interest income | 0.7 | 0.9 | 4.3 | 1.9 | |||
Interest expense | (3.2) | (4.7) | (9.4) | (11.7) | |||
Income (Loss) Before Income Taxes | 9.5 | (2.6) | 17.2 | (16.8) | |||
Income tax provision | (3.6) | (6.2) | (6.5) | (4.1) | |||
Income (Loss) from Continuing Operations | 5.9 | (8.8) | 10.7 | (20.9) | |||
(Loss) Income from discontinued operations, net of tax | (1.6) | 5.1 | (5.5) | (51.4) | |||
Net Income (Loss) | $ 4.3 | $ (3.7) | $ 5.2 | $ (72.3) | |||
Interest expense, net | $ 2.5 | $ 3.8 | $ 5.1 | $ 9.8 | |||
Income tax provision | 3.0 | 7.8 | 4.5 | 6.3 | |||
Depreciation and amortization | 11.7 | 11.0 | 34.4 | 34.6 | |||
EBITDA | $ 21.5 | $ 18.9 | $ 49.2 | $ (21.6) | |||
Earnings (Loss) Per Share | |||||||
Basic | |||||||
Continuing operations | $ 0.13 | $ (0.19) | $ 0.23 | $ (0.45) | |||
Discontinued operations | (0.03) | 0.11 | (0.12) | (1.10) | |||
Basic Earnings (Loss) Per Share | $ 0.10 | $ (0.08) | $ 0.11 | $ (1.55) | |||
Diluted | |||||||
Continuing operations | $ 0.12 | $ (0.19) | $ 0.23 | $ (0.45) | |||
Discontinued operations | (0.03) | 0.11 | (0.12) | (1.10) | |||
Diluted Earnings (Loss) Per Share | $ 0.09 | $ (0.08) | $ 0.11 | $ (1.55) | |||
Common Shares Outstanding | |||||||
Basic | 46.0 | 46.8 | 46.0 | 46.7 | |||
Diluted | 46.6 | 46.8 | 46.5 | 46.7 |
AVANOS MEDICAL, INC. | |||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
2024 | 2023 | 2024 | 2023 | ||||
Net Sales | $ 10.5 | $ 31.1 | $ 41.0 | $ 93.9 | |||
Cost of products sold | 15.9 | 19.9 | 47.4 | 57.8 | |||
Gross Profit | (5.4) | 11.2 | (6.4) | 36.1 | |||
Research and development expenses | — | 0.2 | — | 0.8 | |||
Selling, general and other expenses | — | 4.2 | — | 11.9 | |||
Pretax loss on classification as discontinued operations | — | — | — | 72.3 | |||
Other (income) expense, net | (3.2) | 0.1 | 1.1 | 0.3 | |||
(Loss) Income from discontinued operations before income taxes | (2.2) | 6.7 | (7.5) | (49.2) | |||
Income tax benefit (provision) from discontinued operations | 0.6 | (1.6) | 2.0 | (2.2) | |||
(Loss) Income from discontinued operations, net of tax | $ (1.6) | $ 5.1 | $ (5.5) | $ (51.4) | |||
(Loss) Earnings Per Share | |||||||
Basic | $ (0.03) | $ 0.11 | $ (0.12) | $ (1.10) | |||
Diluted | $ (0.03) | $ 0.11 | $ (0.12) | $ (1.10) |
AVANOS MEDICAL, INC. | |||||||||||
Gross Profit | |||||||||||
Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | ||||||||||
Continuing | Discontinued | Total | Continuing | Discontinued | Total | ||||||
As reported | $ 92.9 | $ (5.4) | $ 87.5 | $ 95.5 | $ 11.2 | $ 106.7 | |||||
Restructuring and transformation charges | 0.7 | — | 0.7 | 0.6 | — | 0.6 | |||||
Post-RH Divestiture transition charges | 0.6 | — | 0.6 | — | — | — | |||||
Post-RH Divestiture restructuring | 0.8 | — | 0.8 | — | — | — | |||||
EU MDR Compliance | 0.2 | — | 0.2 | — | — | — | |||||
Intangibles amortization | 3.7 | — | 3.7 | 3.6 | — | 3.6 | |||||
As adjusted non-GAAP | $ 98.9 | $ (5.4) | $ 93.5 | $ 99.7 | $ 11.2 | $ 110.9 | |||||
Gross profit margin, as reported | 54.5 % | (51.4) % | 48.4 % | 55.8 % | 36.0 % | 52.7 % | |||||
Gross profit margin, as adjusted | 58.0 % | (51.4) % | 51.7 % | 58.2 % | 36.0 % | 54.8 % | |||||
Gross Profit | |||||||||||
Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 | ||||||||||
Continuing | Discontinued | Total | Continuing | Discontinued | Total | ||||||
As reported | $ 283.3 | $ (6.4) | $ 276.9 | $ 284.7 | $ 36.1 | $ 320.8 | |||||
Acquisition and integration-related charges | 0.1 | — | 0.1 | — | — | — | |||||
Restructuring and transformation charges | 1.7 | — | 1.7 | 0.6 | — | 0.6 | |||||
Post-RH Divestiture transition charges | 1.4 | — | 1.4 | — | — | — | |||||
Post-RH Divestiture restructuring | 3.0 | — | 3.0 | — | — | — | |||||
EU MDR Compliance | 0.2 | — | 0.2 | — | — | — | |||||
Intangibles amortization | 10.7 | — | 10.7 | 10.8 | — | 10.8 | |||||
As adjusted non-GAAP | $ 300.4 | $ (6.4) | $ 294.0 | $ 296.1 | $ 36.1 | $ 332.2 | |||||
Gross profit margin, as reported | 55.7 % | (15.6) % | 50.4 % | 56.9 % | 38.4 % | 54.0 % | |||||
Gross profit margin, as adjusted | 59.1 % | (15.6) % | 53.5 % | 59.2 % | 38.4 % | 55.9 % |
AVANOS MEDICAL, INC. | |||||||||||
Operating Profit (Loss) | |||||||||||
Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | ||||||||||
Continuing | Discontinued | Total | Continuing | Discontinued | Total | ||||||
As reported | $ 12.0 | $ (2.2) | $ 9.8 | $ 1.2 | $ 6.7 | $ 7.9 | |||||
Acquisition and integration-related charges | 1.6 | — | 1.6 | 0.6 | — | 0.6 | |||||
Restructuring and transformation charges | 0.7 | — | 0.7 | 4.3 | — | 4.3 | |||||
Post-RH Divestiture transition charges | 0.7 | — | 0.7 | — | — | — | |||||
Post-RH Divestiture restructuring | 2.3 | — | 2.3 | — | — | — | |||||
Divestiture related | — | — | — | 1.4 | 0.8 | 2.2 | |||||
EU MDR Compliance | 1.6 | — | 1.6 | 0.8 | — | 0.8 | |||||
Litigation and legal | — | — | — | 8.5 | — | 8.5 | |||||
Intangibles amortization | 6.4 | — | 6.4 | 6.2 | — | 6.2 | |||||
As adjusted non-GAAP | $ 25.3 | $ (2.2) | $ 23.1 | $ 23.0 | $ 7.5 | $ 30.5 | |||||
Operating Profit (Loss) | |||||||||||
Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 | ||||||||||
Continuing | Discontinued | Total | Continuing | Discontinued | Total | ||||||
As reported | $ 22.3 | $ (7.5) | $ 14.8 | $ (7.0) | $ (49.2) | $ (56.2) | |||||
Acquisition and integration-related charges | 4.1 | — | 4.1 | 2.4 | — | 2.4 | |||||
Restructuring and transformation charges | 5.2 | — | 5.2 | 23.0 | — | 23.0 | |||||
Post-RH Divestiture transition charges | 2.2 | — | 2.2 | — | — | — | |||||
Post-RH Divestiture restructuring | 6.4 | — | 6.4 | — | — | — | |||||
Divestiture related | — | — | — | 5.1 | 0.8 | 5.9 | |||||
Estimated loss on Divestiture | — | — | — | — | 72.3 | 72.3 | |||||
EU MDR Compliance | 4.4 | — | 4.4 | 2.8 | — | 2.8 | |||||
Litigation and legal | — | — | — | 8.5 | — | 8.5 | |||||
Intangibles amortization | 18.8 | — | 18.8 | 17.8 | 0.8 | 18.6 | |||||
As adjusted non-GAAP | $ 63.4 | $ (7.5) | $ 55.9 | $ 52.6 | $ 24.7 | $ 77.3 |
AVANOS MEDICAL, INC. | |||||||||||
Income (Loss) Before Taxes | |||||||||||
Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | ||||||||||
Continuing | Discontinued | Total | Continuing | Discontinued | Total | ||||||
As reported | $ 9.5 | $ (2.2) | $ 7.3 | $ (2.6) | $ 6.7 | $ 4.1 | |||||
Acquisition and integration-related charges | 1.6 | — | 1.6 | 0.6 | — | 0.6 | |||||
Restructuring and transformation charges | 0.7 | — | 0.7 | 4.3 | — | 4.3 | |||||
Post-RH Divestiture transition charges | 0.7 | — | 0.7 | — | — | — | |||||
Post-RH Divestiture restructuring | 2.3 | — | 2.3 | — | — | — | |||||
Divestiture related | — | — | — | 1.4 | 0.8 | 2.2 | |||||
EU MDR Compliance | 1.6 | — | 1.6 | 0.8 | — | 0.8 | |||||
Litigation and legal | — | — | — | 8.5 | — | 8.5 | |||||
Intangibles amortization | 6.4 | — | 6.4 | 6.2 | — | 6.2 | |||||
As adjusted non-GAAP | $ 22.8 | $ (2.2) | $ 20.6 | $ 19.2 | $ 7.5 | $ 26.7 | |||||
Income (Loss) Before Taxes | |||||||||||
Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 | ||||||||||
Continuing | Discontinued | Total | Continuing | Discontinued | Total | ||||||
As reported | $ 17.2 | $ (7.5) | $ 9.7 | $ (16.8) | $ (49.2) | $ (66.0) | |||||
Acquisition and integration-related charges | 4.1 | — | 4.1 | 2.4 | — | 2.4 | |||||
Restructuring and transformation charges | 5.2 | — | 5.2 | 23.0 | — | 23.0 | |||||
Post-RH Divestiture transition charges | 2.2 | — | 2.2 | — | — | — | |||||
Post-RH Divestiture restructuring | 6.4 | — | 6.4 | — | — | — | |||||
Divestiture related | — | — | — | 5.1 | 0.8 | 5.9 | |||||
Estimated loss on Divestiture | — | — | — | — | 72.3 | 72.3 | |||||
EU MDR Compliance | 4.4 | — | 4.4 | 2.8 | — | 2.8 | |||||
Litigation and legal | — | — | — | 8.5 | — | 8.5 | |||||
Intangibles amortization | 18.8 | — | 18.8 | 17.8 | 0.8 | 18.6 | |||||
As adjusted non-GAAP | $ 58.3 | $ (7.5) | $ 50.8 | $ 42.8 | $ 24.7 | $ 67.5 |
AVANOS MEDICAL, INC. | |||||||||||
Tax (Provision) Benefit | |||||||||||
Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | ||||||||||
Continuing | Discontinued | Total | Continuing | Discontinued | Total | ||||||
As reported | $ (3.6) | $ 0.6 | $ (3.0) | $ (6.2) | $ (1.6) | $ (7.8) | |||||
Tax effects of adjusting items | (2.5) | — | (2.5) | 1.0 | (0.4) | 0.6 | |||||
As adjusted non-GAAP | $ (6.1) | $ 0.6 | $ (5.5) | $ (5.2) | $ (2.0) | $ (7.2) | |||||
Effective tax rate, as reported | 37.9 % | 27.3 % | 41.1 % | (238.5) % | 23.9 % | 190.2 % | |||||
Effective tax rate, as adjusted | 26.8 % | 27.3 % | 26.7 % | 27.0 % | 26.7 % | 26.9 % | |||||
Tax (Provision) Benefit | |||||||||||
Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 | ||||||||||
Continuing | Discontinued | Total | Continuing | Discontinued | Total | ||||||
As reported | $ (6.5) | $ 2.0 | $ (4.5) | $ (4.1) | $ (2.2) | $ (6.3) | |||||
Tax effects of adjusting items | (9.2) | — | (9.2) | (7.5) | (4.4) | (11.9) | |||||
As adjusted non-GAAP | $ (15.7) | $ 2.0 | $ (13.7) | $ (11.6) | $ (6.6) | $ (18.2) | |||||
Effective tax rate, as reported | 37.8 % | 26.7 % | 46.4 % | (24.4) % | (4.5) % | (9.5) % | |||||
Effective tax rate, as adjusted | 26.9 % | 26.7 % | 27.0 % | 27.0 % | 26.7 % | 26.9 % |
AVANOS MEDICAL, INC. | |||||||||||
Net Income (Loss) | |||||||||||
Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | ||||||||||
Continuing | Discontinued | Total | Continuing | Discontinued | Total | ||||||
As reported | $ 5.9 | $ (1.6) | $ 4.3 | $ (8.8) | $ 5.1 | $ (3.7) | |||||
Acquisition and integration-related charges | 1.6 | — | 1.6 | 0.6 | — | 0.6 | |||||
Restructuring and transformation charges | 0.7 | — | 0.7 | 4.3 | — | 4.3 | |||||
Post-RH Divestiture transition charges | 0.7 | — | 0.7 | — | — | — | |||||
Post-RH Divestiture restructuring | 2.3 | — | 2.3 | — | — | — | |||||
Divestiture related | — | — | — | 1.4 | 0.8 | 2.2 | |||||
EU MDR Compliance | 1.6 | — | 1.6 | 0.8 | — | 0.8 | |||||
Litigation and legal | — | — | — | 8.5 | — | 8.5 | |||||
Intangibles amortization | 6.4 | — | 6.4 | 6.2 | — | 6.2 | |||||
Tax effects of adjusting items | (2.5) | — | (2.5) | 1.0 | (0.4) | 0.6 | |||||
As adjusted non-GAAP | $ 16.7 | $ (1.6) | $ 15.1 | $ 14.0 | $ 5.5 | $ 19.5 | |||||
Diluted earnings (loss) per share, as reported | $ 0.12 | $ (0.03) | $ 0.09 | $ (0.19) | $ 0.11 | $ (0.08) | |||||
Diluted earnings (loss) per share, as adjusted | $ 0.36 | $ (0.03) | $ 0.33 | $ 0.30 | $ 0.12 | $ 0.42 | |||||
Net Income (Loss) | |||||||||||
Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 | ||||||||||
Continuing | Discontinued | Total | Continuing | Discontinued | Total | ||||||
As reported | $ 10.7 | $ (5.5) | $ 5.2 | $ (20.9) | $ (51.4) | $ (72.3) | |||||
Acquisition and integration-related charges | 4.1 | — | 4.1 | 2.4 | — | 2.4 | |||||
Restructuring and transformation charges | 5.2 | — | 5.2 | 23.0 | — | 23.0 | |||||
Post-RH Divestiture transition charges | 2.2 | — | 2.2 | — | — | — | |||||
Post-RH Divestiture restructuring | 6.4 | — | 6.4 | — | — | — | |||||
Divestiture related | — | — | — | 5.1 | 0.8 | 5.9 | |||||
Estimated loss on Divestiture | — | — | — | — | 72.3 | 72.3 | |||||
EU MDR Compliance | 4.4 | — | 4.4 | 2.8 | — | 2.8 | |||||
Litigation and legal | — | — | — | 8.5 | — | 8.5 | |||||
Intangibles amortization | 18.8 | — | 18.8 | 17.8 | 0.8 | 18.6 | |||||
Tax effects of adjusting items | (9.2) | — | (9.2) | (7.5) | (4.4) | (11.9) | |||||
As adjusted non-GAAP | $ 42.6 | $ (5.5) | $ 37.1 | $ 31.2 | $ 18.1 | $ 49.3 | |||||
Diluted earnings (loss) per share, as reported | $ 0.23 | $ (0.12) | $ 0.11 | $ (0.45) | $ (1.10) | $ (1.55) | |||||
Diluted earnings (loss) per share, as adjusted | $ 0.92 | $ (0.12) | $ 0.80 | $ 0.67 | $ 0.39 | $ 1.06 |
AVANOS MEDICAL, INC. | |||||||||||
Selling, General and Administrative Expenses | |||||||||||
Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | ||||||||||
Continuing | Discontinued | Total | Continuing | Discontinued | Total | ||||||
As reported | $ 74.3 | $ — | $ 74.3 | $ 78.7 | $ 4.2 | $ 82.9 | |||||
Acquisition and integration-related charges | (0.7) | — | (0.7) | (0.6) | — | (0.6) | |||||
Restructuring and transformation charges | — | — | — | (2.1) | — | (2.1) | |||||
Post-RH Divestiture transition charges | (0.1) | — | (0.1) | — | — | — | |||||
Post-RH Divestiture restructuring | (1.5) | — | (1.5) | — | — | — | |||||
Divestiture related | — | — | — | (1.4) | (0.8) | (2.2) | |||||
EU MDR Compliance | (1.4) | — | (1.4) | (0.8) | — | (0.8) | |||||
Intangibles amortization | (2.7) | — | (2.7) | (2.6) | — | (2.6) | |||||
As adjusted non-GAAP | $ 67.9 | $ — | $ 67.9 | $ 71.2 | $ 3.4 | $ 74.6 | |||||
SG&A as a percentage of revenue, as reported | 43.6 % | — % | 41.1 % | 45.9 % | 13.5 % | 41.0 % | |||||
SG&A as a percentage of revenue, as adjusted | 39.8 % | — % | 37.5 % | 41.6 % | 10.9 % | 36.9 % | |||||
Selling, General and Administrative Expenses | |||||||||||
Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 | ||||||||||
Continuing | Discontinued | Total | Continuing | Discontinued | Total | ||||||
As reported | $ 238.8 | $ — | $ 238.8 | $ 260.5 | $ 11.9 | $ 272.4 | |||||
Acquisition and integration-related charges | (1.3) | — | (1.3) | (1.0) | — | (1.0) | |||||
Restructuring and transformation charges | (3.4) | — | (3.4) | (20.5) | — | (20.5) | |||||
Post-RH Divestiture transition charges | (0.6) | — | (0.6) | — | — | — | |||||
Post-RH Divestiture restructuring | (3.4) | — | (3.4) | — | — | — | |||||
Divestiture related | — | — | — | (5.1) | (0.8) | (5.9) | |||||
EU MDR Compliance | (4.2) | — | (4.2) | (2.8) | — | (2.8) | |||||
Intangibles amortization | (8.1) | — | (8.1) | (7.0) | (0.8) | (7.8) | |||||
As adjusted non-GAAP | $ 217.8 | $ — | $ 217.8 | $ 224.1 | $ 10.3 | $ 234.4 | |||||
SG&A as a percentage of revenue, as reported | 47.0 % | — % | 43.5 % | 52.1 % | 12.7 % | 45.9 % | |||||
SG&A as a percentage of revenue, as adjusted | 42.9 % | — % | 39.7 % | 44.8 % | 11.0 % | 39.5 % |
AVANOS MEDICAL, INC. | |||||||||||
EBITDA | |||||||||||
Three Months Ended September 30, 2024 | Three Months Ended September 30, 2023 | ||||||||||
Continuing | Discontinued | Total | Continuing | Discontinued | Total | ||||||
Net income (loss) | $ 5.9 | $ (1.6) | $ 4.3 | $ (8.8) | $ 5.1 | $ (3.7) | |||||
Interest expense, net | 2.5 | — | 2.5 | 3.8 | — | 3.8 | |||||
Income tax provision (benefit) | 3.6 | (0.6) | 3.0 | 6.2 | 1.6 | 7.8 | |||||
Depreciation | 5.3 | — | 5.3 | 4.8 | — | 4.8 | |||||
Amortization | 6.4 | — | 6.4 | 6.2 | — | 6.2 | |||||
EBITDA | 23.7 | (2.2) | 21.5 | 12.2 | 6.7 | 18.9 | |||||
Acquisition and integration-related charges | 1.6 | — | 1.6 | 0.6 | — | 0.6 | |||||
Restructuring and transformation charges | 0.7 | — | 0.7 | 4.3 | — | 4.3 | |||||
Post-RH Divestiture transition charges | 0.7 | — | 0.7 | — | — | — | |||||
Post-RH Divestiture restructuring | 2.3 | — | 2.3 | — | — | — | |||||
Divestiture related | — | — | — | 1.4 | 0.8 | 2.2 | |||||
EU MDR Compliance | 1.6 | — | 1.6 | 0.8 | — | 0.8 | |||||
Litigation and legal | — | — | — | 8.5 | — | 8.5 | |||||
Adjusted EBITDA | $ 30.6 | $ (2.2) | $ 28.4 | $ 27.8 | $ 7.5 | $ 35.3 | |||||
EBITDA | |||||||||||
Nine Months Ended September 30, 2024 | Nine Months Ended September 30, 2023 | ||||||||||
Continuing | Discontinued | Total | Continuing | Discontinued | Total | ||||||
Net income (loss) | $ 10.7 | $ (5.5) | $ 5.2 | $ (20.9) | $ (51.4) | $ (72.3) | |||||
Interest expense, net | 5.1 | — | 5.1 | 9.8 | — | 9.8 | |||||
Income tax provision (benefit) | 6.5 | (2.0) | 4.5 | 4.1 | 2.2 | 6.3 | |||||
Depreciation | 15.6 | — | 15.6 | 14.2 | 1.8 | 16.0 | |||||
Amortization | 18.8 | — | 18.8 | 17.8 | 0.8 | 18.6 | |||||
EBITDA | 56.7 | (7.5) | 49.2 | 25.0 | (46.6) | (21.6) | |||||
Acquisition and integration-related charges | 4.1 | — | 4.1 | 2.4 | — | 2.4 | |||||
Restructuring and transformation charges | 5.2 | — | 5.2 | 23.0 | — | 23.0 | |||||
Post-RH Divestiture transition charges | 2.2 | — | 2.2 | — | — | — | |||||
Post-RH Divestiture restructuring | 6.4 | — | 6.4 | — | — | — | |||||
Divestiture related | — | — | — | 5.1 | 0.8 | 5.9 | |||||
Estimated loss on Divestiture | — | — | — | — | 72.3 | 72.3 | |||||
EU MDR Compliance | 4.4 | — | 4.4 | 2.8 | — | 2.8 | |||||
Litigation and legal | — | — | — | 8.5 | — | 8.5 | |||||
Adjusted EBITDA | $ 79.0 | $ (7.5) | $ 71.5 | $ 66.8 | $ 26.5 | $ 93.3 |
AVANOS MEDICAL, INC. | |||||||
Free Cash Flow | |||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
2024 | 2023 | 2024 | 2023 | ||||
Cash provided by operating activities | $ 23.0 | $ 29.1 | $ 42.8 | $ 19.7 | |||
Capital expenditures | (3.0) | (3.9) | (13.0) | (11.9) | |||
Free Cash Flow | $ 20.0 | $ 25.2 | $ 29.8 | $ 7.8 |
2024 OUTLOOK | |||
Estimated Range | |||
Diluted earnings per share (GAAP) | $ 0.46 | to | $ 0.56 |
Intangibles amortization | 0.39 | to | 0.38 |
Restructuring and transformation charges | 0.08 | to | 0.07 |
Post RH-Divestiture transition charges | 0.20 | to | 0.18 |
Other | 0.17 | to | 0.16 |
Adjusted diluted earnings per share (non-GAAP) | $ 1.30 | to | $ 1.35 |
AVANOS MEDICAL, INC. | |||
September 30, | December 31, | ||
ASSETS | |||
Current Assets | |||
Cash and cash equivalents | $ 89.0 | $ 87.7 | |
Accounts receivable, net | 131.9 | 142.8 | |
Inventories | 161.9 | 163.2 | |
Prepaid and other current assets | 15.9 | 28.8 | |
Assets held for sale | 73.9 | 64.5 | |
Total Current Assets | 472.6 | 487.0 | |
Property, Plant and Equipment, net | 109.5 | 117.2 | |
Operating Lease Right-of-Use Assets | 26.5 | 26.8 | |
Goodwill | 795.1 | 796.1 | |
Other Intangible Assets, net | 220.1 | 239.5 | |
Deferred Tax Assets | 6.6 | 6.5 | |
Other Assets | 25.8 | 19.3 | |
TOTAL ASSETS | $ 1,656.2 | $ 1,692.4 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Current Liabilities | |||
Current portion of long-term debt | $ 9.4 | $ 8.6 | |
Current portion of operating lease liabilities | 13.7 | 12.8 | |
Trade accounts payable | 54.2 | 56.3 | |
Accrued expenses | 82.7 | 93.2 | |
Liabilities held for sale | 52.9 | 63.7 | |
Total Current Liabilities | 212.9 | 234.6 | |
Long-Term Debt | 152.6 | 159.4 | |
Operating Lease Liabilities | 26.5 | 28.3 | |
Deferred Tax Liabilities | 23.9 | 23.8 | |
Other Long-Term Liabilities | 10.6 | 10.0 | |
TOTAL LIABILITIES | 426.5 | 456.1 | |
Stockholders' Equity | 1,229.7 | 1,236.3 | |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 1,656.2 | $ 1,692.4 |
AVANOS MEDICAL, INC. | |||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
2024 | 2023 | 2024 | 2023 | ||||
Operating Activities | |||||||
Net income (loss) | $ 4.3 | $ (3.7) | $ 5.2 | $ (72.3) | |||
Depreciation and amortization | 11.7 | 11.0 | 34.4 | 34.6 | |||
Goodwill impairment | — | — | — | 59.1 | |||
Loss on asset dispositions | 0.1 | 1.1 | 0.4 | 1.1 | |||
Changes in operating assets and liabilities, net of acquisition | 3.7 | 20.6 | (10.0) | (12.1) | |||
Deferred income taxes and other | 3.2 | 0.1 | 12.8 | 9.3 | |||
Cash Provided by Operating Activities | 23.0 | 29.1 | 42.8 | 19.7 | |||
Investing Activities | |||||||
Capital expenditures | (3.0) | (3.9) | (13.0) | (11.9) | |||
Proceeds from RH Divestiture post-closing settlement | — | — | 2.1 | — | |||
Acquisition of assets and investments in businesses | — | (45.0) | — | (47.5) | |||
Investment in Note Receivable | (9.0) | — | (9.0) | — | |||
Cash Used in Investing Activities | (12.0) | (48.9) | (19.9) | (59.4) | |||
Financing Activities | |||||||
Secured debt repayments | (3.2) | — | (6.3) | (3.1) | |||
Revolving credit facility proceeds | — | 55.0 | 20.0 | 55.0 | |||
Revolving credit facility repayments | (10.0) | — | (20.0) | (20.0) | |||
Purchase of treasury stock | (0.1) | (9.2) | (12.7) | (12.9) | |||
Proceeds from the exercise of stock options | 0.6 | 0.9 | 1.1 | 1.5 | |||
Payment of contingent consideration liabilities | (3.3) | — | (3.8) | — | |||
Cash (Used in) Provided by Financing Activities | (16.0) | 46.7 | (21.7) | 20.5 | |||
Effect of Exchange Rate Changes on Cash and Cash Equivalents | 1.8 | (1.6) | 0.1 | (1.4) | |||
(Decrease) Increase in Cash and Cash Equivalents | (3.2) | 25.3 | 1.3 | (20.6) | |||
Cash and Cash Equivalents - Beginning of Period | 92.2 | 81.8 | 87.7 | 127.7 | |||
Cash and Cash Equivalents - End of Period | $ 89.0 | $ 107.1 | $ 89.0 | $ 107.1 |
AVANOS MEDICAL, INC. | ||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
2024 | 2023 | Change | 2024 | 2023 | Change | |||||||
Digestive Health | $ 98.2 | $ 95.0 | 3.4 % | $ 290.6 | $ 276.8 | 5.0 % | ||||||
Pain Management and Recovery: | ||||||||||||
Surgical pain and recovery | $ 30.3 | $ 34.1 | (11.1) % | $ 93.8 | $ 103.6 | (9.5) % | ||||||
Interventional pain | 41.9 | 42.2 | (0.7) % | 123.8 | 119.6 | 3.5 % | ||||||
Total Pain Management and Recovery | 72.2 | 76.3 | (5.4) % | 217.6 | 223.2 | (2.5) % | ||||||
Total Net Sales | $ 170.4 | $ 171.3 | (0.5) % | $ 508.2 | $ 500.0 | 1.6 % | ||||||
Total | Volume | Pricing/Mix | Currency | Other(a) | ||||||||
Net sales - percentage change | QTD | (0.5) % | 2.4 % | (2.9) % | (0.1) % | 0.1 % | ||||||
Net sales - percentage change | YTD | 1.6 % | 3.6 % | (1.9) % | (0.1) % | — % |
(a) | Other includes rounding |
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SOURCE Avanos Medical
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