ALPHARETTA, Ga., May 2, 2024
/PRNewswire/ -- Avanos Medical, Inc. (NYSE: AVNS) today reported
first quarter 2024 financial results.
"As we begin the second year of our three-year transformation
initiative, we are pleased with our first quarter results," said
Joe Woody, Avanos's chief executive
officer. Woody added, "We continue to make progress on our
long-term margin expansion targets, are delivering on our Digestive
Health growth objectives and have made improvements in our Pain
Management and Recovery franchise that will support our mid-single
digit growth in the back half of the year."
First Quarter 2024 Financial Highlights
- Total net sales from continuing operations were $166.1 million, a 4.3% increase from the
comparable prior year period.
- Net income from continuing operations for the quarter was
$0.5 million, compared to net loss
from continuing operations of $7.8
million a year ago.
- Adjusted net income from continuing operations totaled
$10.1 million, compared to
$6.0 million a year ago.
- Diluted earnings per share from continuing operations was
$0.01, compared to diluted loss per
share of $0.17 a year ago.
- Adjusted diluted earnings per share from continuing operations
was $0.22, compared to $0.13 a year ago.
- Adjusted EBITDA was $21.6
million, compared to $16.1
million a year ago.
First Quarter 2024 Operating Results From
Continuing Operations
For the three months ended March 31,
2024, net sales totaled $166.1
million, an increase of 4.3% compared to the prior year
period, primarily from strong demand and volume in our Digestive
Health portfolio, primarily from our NeoMed neonatal and pediatric
feeding solutions, as well as overall favorable volume in our Pain
Management and Recovery portfolio, primarily driven by Game Ready
and Diros. This was partially offset by slightly unfavorable
pricing for our Pain Management and Recovery products.
Gross margin during the first quarter of 2024 was 57.1%,
compared to 57.4% in the prior year period. Adjusted gross margin
was 59.8% compared to 59.6% last year. Gross profit margin
decreased primarily due to costs related to our Transformation
Process priorities and plant separation costs associated with the
divestiture of our respiratory health ("RH") business, partially
offset by favorable volume and product mix.
Selling and general expenses as a percentage of net sales was
50.3% for the first quarter of 2024, compared to 55.7% for the
first quarter of 2023. On an adjusted basis, selling and general
expenses as a percentage of net sales was 45.8% for the first
quarter of 2024, compared to 48.0% for the first quarter of 2023.
Selling and general expenses decreased primarily due to savings
realized from the execution on our Transformation Process and a
reduction in external spending.
Operating profit was $4.0 million,
compared to operating loss of $6.1
million in the prior year period, primarily due to higher
sales volume along with a decrease in selling and general expenses
related to the execution on the Transformation Process and
restructuring priorities. On an adjusted basis, operating profit
totaled $16.3 million, compared to
$11.2 million a year ago.
Adjusted EBITDA from continuing operations was $21.6 million in the three months ended
March 31, 2024, compared to
$16.1 million in the three months
ended March 31, 2023.
Cash Flow and Balance Sheet
Cash from operations less capital expenditures, or free cash
flow, for the first quarter was an outflow of $12.1 million, driven primarily by cash used in
operating activities, compared to an outflow of $10.8 million a year ago. The Company's cash
balance at March 31, 2024 was $75.8
million, compared to $87.7
million at year-end 2023.
Total debt outstanding, net of unamortized discounts, was
$176.6 million at March 31,
2024, compared to $168.0 million
at December 31, 2023.
Discontinued Operations
Net sales from discontinued operations were $16.9 million in the three months ended
March 31, 2024, compared to
$32.4 million in the three months
ended March 31, 2023.
2024 Outlook
For the year, the Company anticipates revenue between
$685 million and $705 million from continuing operations, adjusted
gross margins between 59.5% and 60.5% and adjusted diluted earnings
per share from continuing operations of between $1.30 and $1.45 for
the year.
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
U.S., or GAAP, and are therefore referred to as non-GAAP financial
measures:
- Adjusted net income
- Adjusted diluted earnings per share
- Adjusted gross and operating profit
- Adjusted effective tax rate
- Adjusted EBITDA
- 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 of the Company's RH business
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 the United States. A replay of the call will
be available at noon ET today by
calling 888-660-6345 in the United
States and entering passcode 99423#. A webcast of the
call will also be archived in the Investors section on the Avanos
website.
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
Alpharetta, Georgia, Avanos is
committed to addressing some of today's most important healthcare
needs, including providing a vital lifeline for nutrition to
patients from hospital to home, and reducing the use of opioids
while helping patients move from surgery to recovery. Avanos
develops, manufactures and markets its recognized brands globally
and holds leading market positions in multiple categories across
its portfolio. For more information, visit www.avanos.com and
follow Avanos Medical on X (@AvanosMedical), LinkedIn and
Facebook.
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 Russia and Ukraine and in the Middle East; our ability to successfully
execute on or achieve the expected benefits of our transformation
initiative or our divestiture, acquisition or merger transactions;
inflationary pressures; financial conditions affecting the banking
system and the potential threats to the solvency of commercial
banks; changes in foreign exchange markets; legislative and
regulatory actions; unanticipated issues arising in connection with
clinical studies and otherwise that affect U.S. Food and Drug
Administration approval of new products; changes in reimbursement
levels from third-party payors; a significant increase in product
liability claims; the impact of investigative and legal proceedings
and compliance risks; the impact of the federal legislation to
reform the United States
healthcare system; changes in financial markets; and changes in the
competitive environment. The information contained herein speaks
only as of the date of this release and we undertake no obligation
to update forward-looking statements, except as may be required by
the securities laws.
Additional information concerning these and other factors that
may impact future results is contained in our filings with the U.S.
Securities and Exchange Commission, including our most recent Form
10-Q.
|
AVANOS MEDICAL,
INC.
CONDENSED
CONSOLIDATED INCOME STATEMENTS
(unaudited)
(in millions, except
per share amounts)
|
|
|
Three Months Ended
March 31,
|
|
2024
|
|
2023
|
|
Net
Sales
|
$
166.1
|
|
$
159.3
|
|
Cost of products
sold
|
71.3
|
|
67.9
|
|
Gross
Profit
|
94.8
|
|
91.4
|
|
Research and
development expenses
|
7.0
|
|
7.5
|
|
Selling and general
expenses
|
83.6
|
|
88.8
|
|
Other expense,
net
|
0.2
|
|
1.2
|
|
Operating Income
(Loss)
|
4.0
|
|
(6.1)
|
|
Interest
income
|
0.6
|
|
0.5
|
|
Interest
expense
|
(3.1)
|
|
(3.5)
|
|
Income (Loss) Before
Income Taxes
|
1.5
|
|
(9.1)
|
|
Income tax (provision)
benefit
|
(1.0)
|
|
1.3
|
|
Income (Loss) from
Continuing Operations
|
0.5
|
|
(7.8)
|
|
(Loss) Income from
discontinued operations, net of tax
|
(1.4)
|
|
7.3
|
|
Net
Loss
|
$
(0.9)
|
|
$
(0.5)
|
|
|
|
|
|
Interest expense,
net
|
$
2.5
|
|
$
3.0
|
|
Income tax
benefit
|
0.5
|
|
0.1
|
|
Depreciation and
amortization
|
11.4
|
|
12.1
|
|
EBITDA
|
$
13.5
|
|
$
14.7
|
|
|
|
|
|
Earnings (Loss) Per
Share
|
|
|
|
|
Basic
|
|
|
|
|
Continuing
operations
|
$
0.01
|
|
$
(0.17)
|
|
Discontinued
operations
|
(0.03)
|
|
0.16
|
|
Basic Loss Per
Share
|
$
(0.02)
|
|
$
(0.01)
|
|
|
|
|
|
Diluted
|
|
|
|
|
Continuing
operations
|
$
0.01
|
|
$
(0.17)
|
|
Discontinued
operations
|
(0.03)
|
|
0.16
|
|
Diluted Loss Per
Share
|
$
(0.02)
|
|
$
(0.01)
|
|
|
|
|
|
Common Shares
Outstanding
|
|
|
|
|
Basic
|
46.2
|
|
46.6
|
|
Diluted
|
46.7
|
|
46.6
|
|
AVANOS MEDICAL,
INC.
Discontinued
Operations Summary
(unaudited)
(in millions, except
per share amounts)
|
|
|
Three Months Ended
March 31,
|
|
2024
|
|
2023
|
|
Net Sales
|
$
16.9
|
|
$
32.4
|
|
Cost of products
sold
|
15.9
|
|
19.3
|
|
Gross
Profit
|
1.0
|
|
13.1
|
|
Research and
development expenses
|
—
|
|
0.4
|
|
Selling, general and
other expenses
|
—
|
|
3.9
|
|
Other expense,
net
|
2.9
|
|
0.1
|
|
Operating (Loss)
Income
|
(1.9)
|
|
8.7
|
|
(Loss) Income from
discontinued operations before income taxes
|
(1.9)
|
|
8.7
|
|
Income tax benefit
(provision) from discontinued operations
|
0.5
|
|
(1.4)
|
|
(Loss) Income from
discontinued operations, net of tax
|
$
(1.4)
|
|
$
7.3
|
|
|
|
|
|
(Loss) Earnings Per
Share
|
|
|
|
|
Basic
|
$
(0.03)
|
|
$
0.16
|
|
Diluted
|
$
(0.03)
|
|
$
0.16
|
|
AVANOS MEDICAL,
INC.
NON-GAAP
RECONCILIATIONS
(unaudited)
(in
millions)
|
|
|
Gross
Profit
|
|
Three Months Ended
March 31, 2024
|
|
Three Months Ended
March 31, 2023
|
|
Continuing
Operations
|
|
Discontinued
Operations
|
|
Total
|
|
Continuing
Operations
|
|
Discontinued
Operations
|
|
Total
|
|
As reported
|
$ 94.8
|
|
$
1.0
|
|
$ 95.8
|
|
$ 91.4
|
|
$ 13.1
|
|
$
104.5
|
|
Restructuring and
transformation charges
|
0.7
|
|
—
|
|
0.7
|
|
—
|
|
—
|
|
—
|
|
Post-RH Divestiture
transition charges
|
0.5
|
|
—
|
|
0.5
|
|
—
|
|
—
|
|
—
|
|
Intangibles
amortization
|
3.4
|
|
—
|
|
3.4
|
|
3.6
|
|
—
|
|
3.6
|
|
As adjusted
non-GAAP
|
$ 99.4
|
|
$
1.0
|
|
$
100.4
|
|
$ 95.0
|
|
$ 13.1
|
|
$
108.1
|
|
Gross profit margin, as
reported
|
57.1 %
|
|
5.9 %
|
|
52.3 %
|
|
57.4 %
|
|
40.4 %
|
|
54.5 %
|
|
Gross profit margin, as
adjusted
|
59.8 %
|
|
5.9 %
|
|
54.9 %
|
|
59.6 %
|
|
40.4 %
|
|
56.4 %
|
|
AVANOS MEDICAL,
INC.
NON-GAAP
RECONCILIATIONS
(unaudited)
(in
millions)
|
|
|
Operating Profit
(Loss)
|
|
Three Months Ended
March 31, 2024
|
|
Three Months Ended
March 31, 2023
|
|
Continuing
Operations
|
|
Discontinued
Operations
|
|
Total
|
|
Continuing
Operations
|
|
Discontinued
Operations
|
|
Total
|
|
As reported
|
$
4.0
|
|
$
(1.9)
|
|
$
2.1
|
|
$
(6.1)
|
|
$
8.7
|
|
$
2.6
|
|
Acquisition and
integration-related charges
|
0.3
|
|
—
|
|
0.3
|
|
1.5
|
|
—
|
|
1.5
|
|
Restructuring and
transformation charges(a)
|
2.9
|
|
—
|
|
2.9
|
|
8.9
|
|
—
|
|
8.9
|
|
Post-RH Divestiture
transition charges
|
1.0
|
|
—
|
|
1.0
|
|
—
|
|
—
|
|
—
|
|
Post-RH Divestiture
restructuring
|
0.7
|
|
—
|
|
0.7
|
|
—
|
|
—
|
|
—
|
|
EU MDR
Compliance(b)
|
1.3
|
|
—
|
|
1.3
|
|
1.1
|
|
—
|
|
1.1
|
|
Intangibles
amortization
|
6.1
|
|
—
|
|
6.1
|
|
5.8
|
|
0.5
|
|
6.3
|
|
As adjusted
non-GAAP
|
$
16.3
|
|
$
(1.9)
|
|
$
14.4
|
|
$
11.2
|
|
$
9.2
|
|
$
20.4
|
|
|
|
|
|
|
|
|
|
|
|
(a) Expenses
incurred for the Transformation Process are included in "Costs of
products sold," "Research and development" and "Selling and general
expenses" on the Condensed Consolidated Income
Statements.
|
|
(b) In the three
months ended March 31, 2024, EU MDR Compliance related charges are
included in "Selling and general expenses" on the Condensed
Consolidated Income Statements. In the three months ended March 31,
2023, EU MDR Compliance related charges are included in "Selling
and general expenses" on the Condensed Consolidated Income
Statements.
|
|
AVANOS MEDICAL,
INC.
NON-GAAP
RECONCILIATIONS
(unaudited)
(in
millions)
|
|
|
Income (Loss) Before
Taxes
|
|
Three Months Ended
March 31, 2024
|
|
Three Months Ended
March 31, 2023
|
|
Continuing
Operations
|
|
Discontinued
Operations
|
|
Total
|
|
Continuing
Operations
|
|
Discontinued
Operations
|
|
Total
|
|
As reported
|
$
1.5
|
|
$
(1.9)
|
|
$
(0.4)
|
|
$
(9.1)
|
|
$
8.7
|
|
$
(0.4)
|
|
Acquisition and
integration-related charges
|
0.3
|
|
—
|
|
0.3
|
|
1.5
|
|
—
|
|
1.5
|
|
Restructuring and
transformation charges
|
2.9
|
|
—
|
|
2.9
|
|
8.9
|
|
—
|
|
8.9
|
|
Post-RH Divestiture
transition charges
|
1.0
|
|
—
|
|
1.0
|
|
—
|
|
—
|
|
—
|
|
Post-RH Divestiture
restructuring
|
0.7
|
|
—
|
|
0.7
|
|
—
|
|
—
|
|
—
|
|
EU MDR
Compliance
|
1.3
|
|
—
|
|
1.3
|
|
1.1
|
|
—
|
|
1.1
|
|
Intangibles
amortization
|
6.1
|
|
—
|
|
6.1
|
|
5.8
|
|
0.5
|
|
6.3
|
|
As adjusted
non-GAAP
|
$
13.8
|
|
$
(1.9)
|
|
$
11.9
|
|
$
8.2
|
|
$
9.2
|
|
$
17.4
|
|
AVANOS MEDICAL,
INC.
NON-GAAP
RECONCILIATIONS
(unaudited)
(in
millions)
|
|
|
Tax (Provision)
Benefit
|
|
Three Months Ended
March 31, 2024
|
|
Three Months Ended
March 31, 2023
|
|
Continuing
Operations
|
|
Discontinued
Operations
|
|
Total
|
|
Continuing
Operations
|
|
Discontinued
Operations
|
|
Total
|
|
As reported
|
$ (1.0)
|
|
$
0.5
|
|
$ (0.5)
|
|
$
1.3
|
|
$ (1.4)
|
|
$ (0.1)
|
|
Tax effects of
adjusting items
|
(2.7)
|
|
—
|
|
(2.7)
|
|
(3.5)
|
|
(1.1)
|
|
(4.6)
|
|
As adjusted
non-GAAP
|
$ (3.7)
|
|
$
0.5
|
|
$ (3.2)
|
|
$ (2.2)
|
|
$ (2.5)
|
|
$ (4.7)
|
|
Effective tax rate, as
reported
|
66.7 %
|
|
26.3 %
|
|
125.0 %
|
|
14.3 %
|
|
16.1 %
|
|
25.0 %
|
|
Effective tax rate, as
adjusted
|
26.8 %
|
|
26.3 %
|
|
26.9 %
|
|
26.8 %
|
|
27.2 %
|
|
27.0 %
|
|
AVANOS MEDICAL,
INC.
NON-GAAP
RECONCILIATIONS
(unaudited)
(in millions except
per share amounts)
|
|
|
Net Income
(Loss)
|
|
Three Months Ended
March 31, 2024
|
|
Three Months Ended
March 31, 2023
|
|
Continuing
Operations
|
|
Discontinued
Operations
|
|
Total
|
|
Continuing
Operations
|
|
Discontinued
Operations
|
|
Total
|
|
As reported
|
$
0.5
|
|
$
(1.4)
|
|
$
(0.9)
|
|
$
(7.8)
|
|
$
7.3
|
|
$
(0.5)
|
|
Acquisition and
integration-related charges
|
0.3
|
|
—
|
|
0.3
|
|
1.5
|
|
—
|
|
1.5
|
|
Restructuring and
transformation charges
|
2.9
|
|
—
|
|
2.9
|
|
8.9
|
|
—
|
|
8.9
|
|
Post-RH Divestiture
transition charges
|
1.0
|
|
—
|
|
1.0
|
|
—
|
|
—
|
|
—
|
|
Post-RH Divestiture
restructuring
|
0.7
|
|
—
|
|
0.7
|
|
—
|
|
—
|
|
—
|
|
EU MDR
Compliance
|
1.3
|
|
—
|
|
1.3
|
|
1.1
|
|
—
|
|
1.1
|
|
Intangibles
amortization
|
6.1
|
|
—
|
|
6.1
|
|
5.8
|
|
0.5
|
|
6.3
|
|
Tax effects of
adjusting items
|
(2.7)
|
|
—
|
|
(2.7)
|
|
(3.5)
|
|
(1.1)
|
|
(4.6)
|
|
As adjusted
non-GAAP
|
$
10.1
|
|
$
(1.4)
|
|
$
8.7
|
|
$
6.0
|
|
$
6.7
|
|
$
12.7
|
|
Diluted earnings (loss)
per share, as reported
|
$
0.01
|
|
$
(0.03)
|
|
$
(0.02)
|
|
$
(0.17)
|
|
$
0.16
|
|
$
(0.01)
|
|
Diluted earnings (loss)
per share, as adjusted
|
$
0.22
|
|
$
(0.03)
|
|
$
0.19
|
|
$
0.13
|
|
$
0.14
|
|
$
0.27
|
|
AVANOS MEDICAL,
INC.
NON-GAAP
RECONCILIATIONS
(unaudited)
(in millions except
per share amounts)
|
|
|
Selling, General and
Administrative Expenses
|
|
Three Months Ended
March 31, 2024
|
|
Three Months Ended
March 31, 2023
|
|
Continuing
Operations
|
|
Discontinued
Operations
|
|
Total
|
|
Continuing
Operations
|
|
Discontinued
Operations
|
|
Total
|
|
As reported
|
$ 83.6
|
|
$
—
|
|
$ 83.6
|
|
$ 88.8
|
|
$
3.9
|
|
$ 92.7
|
|
Acquisition and
integration-related charges
|
(0.3)
|
|
—
|
|
(0.3)
|
|
(0.2)
|
|
—
|
|
(0.2)
|
|
Restructuring and
transformation charges
|
(2.1)
|
|
—
|
|
(2.1)
|
|
(8.9)
|
|
—
|
|
(8.9)
|
|
Post-RH Divestiture
transition charges
|
(0.4)
|
|
—
|
|
(0.4)
|
|
—
|
|
—
|
|
—
|
|
Post-RH Divestiture
restructuring
|
(0.7)
|
|
—
|
|
(0.7)
|
|
—
|
|
—
|
|
—
|
|
EU MDR
Compliance
|
(1.3)
|
|
—
|
|
(1.3)
|
|
(1.1)
|
|
—
|
|
(1.1)
|
|
Intangibles
amortization
|
(2.7)
|
|
—
|
|
(2.7)
|
|
(2.2)
|
|
(0.5)
|
|
(2.7)
|
|
As adjusted
non-GAAP
|
$ 76.1
|
|
$
—
|
|
$ 76.1
|
|
$ 76.4
|
|
$
3.4
|
|
$ 79.8
|
|
SG&A as a
percentage of revenue, as reported
|
50.3 %
|
|
— %
|
|
45.7 %
|
|
55.7 %
|
|
12.0 %
|
|
48.4 %
|
|
SG&A as a
percentage of revenue, as adjusted
|
45.8 %
|
|
— %
|
|
41.6 %
|
|
48.0 %
|
|
10.5 %
|
|
41.6 %
|
|
AVANOS MEDICAL,
INC.
NON-GAAP
RECONCILIATIONS
(unaudited)
(in
millions)
|
|
|
EBITDA
|
|
Three Months Ended
March 31, 2024
|
|
Three Months Ended
March 31, 2023
|
|
Continuing
Operations
|
|
Discontinued
Operations
|
|
Total
|
|
Continuing
Operations
|
|
Discontinued
Operations
|
|
Total
|
|
Net income
(loss)
|
$
0.5
|
|
$
(1.4)
|
|
$
(0.9)
|
|
$
(7.8)
|
|
$
7.3
|
|
$
(0.5)
|
|
Interest expense,
net
|
2.5
|
|
—
|
|
2.5
|
|
3.0
|
|
—
|
|
3.0
|
|
Income tax (provision)
benefit
|
1.0
|
|
(0.5)
|
|
0.5
|
|
(1.3)
|
|
1.4
|
|
0.1
|
|
Depreciation
|
5.3
|
|
—
|
|
5.3
|
|
4.9
|
|
0.9
|
|
5.8
|
|
Amortization
|
6.1
|
|
—
|
|
6.1
|
|
5.8
|
|
0.5
|
|
6.3
|
|
EBITDA
|
15.4
|
|
(1.9)
|
|
13.5
|
|
4.6
|
|
10.1
|
|
14.7
|
|
Acquisition and
integration-related charges
|
0.3
|
|
—
|
|
0.3
|
|
1.5
|
|
—
|
|
1.5
|
|
Restructuring and
transformation charges
|
2.9
|
|
—
|
|
2.9
|
|
8.9
|
|
—
|
|
8.9
|
|
Post-RH Divestiture
transition charges
|
1.0
|
|
—
|
|
1.0
|
|
—
|
|
—
|
|
—
|
|
Post-RH Divestiture
restructuring
|
0.7
|
|
—
|
|
0.7
|
|
—
|
|
—
|
|
—
|
|
EU MDR
Compliance
|
1.3
|
|
—
|
|
1.3
|
|
1.1
|
|
—
|
|
1.1
|
|
Adjusted
EBITDA
|
$
21.6
|
|
$
(1.9)
|
|
$
19.7
|
|
$
16.1
|
|
$
10.1
|
|
$
26.2
|
|
AVANOS MEDICAL,
INC.
NON-GAAP
RECONCILIATIONS
(unaudited)
(in millions except
per share amounts)
|
|
|
Free Cash
Flow
|
|
Three Months Ended
March 31,
|
|
2024
|
|
2023
|
|
Cash used in operating
activities
|
$
(8.0)
|
|
$
(6.8)
|
|
Capital
expenditures
|
(4.1)
|
|
(4.0)
|
|
Free Cash
Flow
|
$
(12.1)
|
|
$
(10.8)
|
|
2024
OUTLOOK
|
|
|
Estimated
Range
|
|
Diluted earnings per
share (GAAP)
|
$
0.63
|
to
|
$
0.87
|
|
Intangibles
amortization
|
0.37
|
to
|
0.34
|
|
Restructuring and
transformation charges
|
0.08
|
to
|
0.06
|
|
Post RH-Divestiture
transition charges
|
0.12
|
to
|
0.10
|
|
Other
|
0.10
|
to
|
0.08
|
|
Adjusted diluted
earnings per share (non-GAAP)
|
$
1.30
|
to
|
$
1.45
|
|
AVANOS MEDICAL,
INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(unaudited)
(in
millions)
|
|
|
March 31,
2024
|
|
December 31,
2023
|
|
ASSETS
|
|
|
|
|
Current
Assets
|
|
|
|
|
Cash and cash
equivalents
|
$
75.8
|
|
$
87.7
|
|
Accounts receivable,
net
|
131.3
|
|
142.8
|
|
Inventories
|
165.6
|
|
163.2
|
|
Prepaid and other
current assets
|
28.6
|
|
28.8
|
|
Assets held for
sale
|
66.5
|
|
64.5
|
|
Total Current
Assets
|
467.8
|
|
487.0
|
|
Property, Plant and
Equipment, net
|
116.2
|
|
117.2
|
|
Operating Lease
Right-of-Use Assets
|
24.2
|
|
26.8
|
|
Goodwill
|
794.9
|
|
796.1
|
|
Other Intangible
Assets, net
|
232.8
|
|
239.5
|
|
Deferred Tax
Assets
|
6.3
|
|
6.5
|
|
Other
Assets
|
19.1
|
|
19.3
|
|
TOTAL
ASSETS
|
$
1,661.3
|
|
$
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
|
11.5
|
|
12.8
|
|
Trade accounts
payable
|
57.0
|
|
56.3
|
|
Accrued
expenses
|
75.1
|
|
93.2
|
|
Liabilities held for
sale
|
52.2
|
|
63.7
|
|
Total Current
Liabilities
|
205.2
|
|
234.6
|
|
Long-Term
Debt
|
167.2
|
|
159.4
|
|
Operating Lease
Liabilities
|
26.6
|
|
28.3
|
|
Deferred Tax
Liabilities
|
23.6
|
|
23.8
|
|
Other Long-Term
Liabilities
|
10.8
|
|
10.0
|
|
TOTAL
LIABILITIES
|
433.4
|
|
456.1
|
|
Stockholders'
Equity
|
1,227.9
|
|
1,236.3
|
|
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY
|
$
1,661.3
|
|
$
1,692.4
|
|
AVANOS MEDICAL,
INC.
CONDENSED
CONSOLIDATED CASH FLOW STATEMENTS
(unaudited)
(in
millions)
|
|
|
Three Months Ended
March 31,
|
|
2024
|
|
2023
|
|
Operating
Activities
|
|
|
|
|
Net loss
|
$
(0.9)
|
|
$
(0.5)
|
|
Depreciation and
amortization
|
11.4
|
|
12.1
|
|
Loss on asset
dispositions
|
0.3
|
|
—
|
|
Changes in operating
assets and liabilities, net of acquisition
|
(22.0)
|
|
(19.3)
|
|
Deferred income taxes
and other
|
3.2
|
|
0.9
|
|
Cash Used in
Operating Activities
|
(8.0)
|
|
(6.8)
|
|
Investing
Activities
|
|
|
|
|
Capital
expenditures
|
(4.1)
|
|
(4.0)
|
|
Proceeds from RH
Divestiture post-closing settlement
|
2.1
|
|
—
|
|
Cash Used in
Investing Activities
|
(2.0)
|
|
(4.0)
|
|
Financing
Activities
|
|
|
|
|
Secured debt
repayments
|
(1.6)
|
|
(1.6)
|
|
Revolving credit
facility proceeds
|
20.0
|
|
—
|
|
Revolving credit
facility repayments
|
(10.0)
|
|
(20.0)
|
|
Purchase of treasury
stock
|
(9.1)
|
|
(1.1)
|
|
Proceeds from the
exercise of stock options
|
0.5
|
|
0.6
|
|
Payment of contingent
consideration liabilities
|
(0.5)
|
|
—
|
|
Cash Used in
Financing Activities
|
(0.7)
|
|
(22.1)
|
|
Effect of Exchange Rate
Changes on Cash and Cash Equivalents
|
(1.2)
|
|
0.9
|
|
Decrease in Cash and
Cash Equivalents
|
(11.9)
|
|
(32.0)
|
|
Cash and Cash
Equivalents - Beginning of Period
|
87.7
|
|
127.7
|
|
Cash and Cash
Equivalents - End of Period
|
$
75.8
|
|
$
95.7
|
|
AVANOS MEDICAL,
INC.
SELECTED BUSINESS
AND PRODUCTS DATA
(unaudited)
(in
millions)
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
|
|
|
|
2024
|
|
2023
|
|
Change
|
|
Digestive
Health
|
|
|
|
|
$
94.7
|
|
$
88.8
|
|
6.6 %
|
|
Pain Management and
Recovery:
|
|
|
|
|
|
|
|
|
|
|
Surgical pain and
recovery
|
|
|
|
|
$
31.2
|
|
$
34.7
|
|
(10.1) %
|
|
Interventional
pain
|
|
|
|
|
40.2
|
|
35.8
|
|
12.3 %
|
|
Total Pain Management
and Recovery
|
|
|
|
|
71.4
|
|
70.5
|
|
1.3 %
|
|
Total Net
Sales
|
|
|
|
|
$
166.1
|
|
$ 159.3
|
|
4.3 %
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
Volume
|
|
Pricing/Mix
|
|
Currency
|
|
Other(a)
|
|
Net sales - percentage
change
|
4.3 %
|
|
5.2 %
|
|
(1.1) %
|
|
0.1 %
|
|
0.1 %
|
|
|
|
|
|
|
|
|
|
|
|
(a) Other includes
rounding.
|
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SOURCE Avanos Medical