Core Insights - Avanos Medical, Inc. reported a significant decline in adjusted earnings per share (EPS) for Q2 2025, with a 50% year-over-year drop to 17 cents, missing the Zacks Consensus Estimate by 5.6% [1][6] - The company's revenues increased by 1.9% year-over-year to $175 million, surpassing the Zacks Consensus Estimate by 4.7%, driven by strong demand in the Specialty Nutrition Systems (SNS) and radiofrequency ablation (RFA) segments [2][6] Revenue Analysis - Revenues for the SNS segment reached $102.7 million, up 5.1% year-over-year, with volume growth of 4.4% attributed to strong demand in enteral feeding and neonate solutions [9] - The Pain Management and Recovery (PM&R) segment reported revenues of $61 million, down 2.9% year-over-year, affected by unfavorable currency effects and strategic decisions to forgo certain revenue streams [7][8] - Corporate and Other segment revenues fell by 23.1% year-over-year to $11.3 million, primarily due to pricing pressures in the Hyaluronic Acid (HA) product lines [10] Margin and Profitability - Adjusted gross profit decreased by 4.7% year-over-year to $97.4 million, with the adjusted gross margin contracting by 390 basis points to 55.7% [12] - Selling and general expenses rose by 3.2% year-over-year to $83.5 million, while adjusted operating profit fell by 44% to $12.2 million, leading to an adjusted operating margin contraction of 580 basis points to 6.9% [12][13] Financial Position - At the end of Q2 2025, the company had cash and cash equivalents of $90.3 million, down from $97 million at the end of Q1 2025, with total debt slightly reduced to $105.1 million [14] - Cumulative net cash provided by operating activities increased to $32.5 million compared to $19.8 million in the prior-year period [14] Guidance and Outlook - Avanos has reiterated its 2025 outlook, estimating net sales between $665 million and $685 million, with a Zacks Consensus Estimate of $677.1 million [15] - The company anticipates adjusted EPS for 2025 to be between 75 and 95 cents, with the current consensus at 92 cents [15] Strategic Developments - In July, Avanos announced the divestiture of its HA product line to Channel-Markers Medical, aligning with its strategic focus on enhancing its PM&R and SNS segments [11] - The company is facing a volatile tariff environment, estimating an additional $15 million in manufacturing costs for 2025, primarily due to tariffs on products sourced from Mexico and China [18]

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 June 30, 2025 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 001-36440 AVANOS MEDICAL, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction ...

Financial Data and Key Metrics Changes - The company achieved net sales of $175 million for the quarter, with organic sales up 2% compared to the previous year [10] - Adjusted diluted earnings per share were $0.17, and adjusted EBITDA was $17 million, with adjusted gross margins at 55.7% and SG&A as a percentage of revenue at 45.2% [10] - A non-cash impairment charge of $77 million was recorded in the pain management and recovery reporting unit due to goodwill assessment [10] Business Line Data and Key Metrics Changes - The Specialty Nutrition Systems segment grew 5% organically, reaffirming its number one position in internal feeding [12] - The short-term internal feeding portfolio experienced double-digit growth globally, driven by the U.S. CoreTrack offering [13] - The pain management and recovery segment saw normalized organic sales up 3.4%, with the radiofrequency ablation (RFA) business growing nearly 14% [14][15] Market Data and Key Metrics Changes - The neonatal solutions business grew over 12% compared to the prior year [13] - The hyaluronic acid injections and intravenous infusion product lines reported a decline of over 20% due to pricing pressure [18] Company Strategy and Development Direction - The company closed the sale of its hyaluronic acid product line, focusing on growth in Specialty Nutrition Systems and Pain Management and Recovery segments [9] - The management is optimistic about improving commercial effectiveness through organizational enhancements and strategic partnerships [8] - The company aims to exit from China-sourced NeoMed products by 2026 as part of its supply chain strategy [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the 2025 financial guidance despite challenges from tariffs and market conditions [10][22] - The company anticipates approximately $15 million in incremental tariff-related manufacturing costs for the year [21] - Management noted that currency conditions have improved, and strategic segment growth remains healthy [22] Other Important Information - The company maintains a strong balance sheet with $90 million in cash and $105 million in debt as of June 30 [18] - Free cash flow for the quarter was negative approximately $4 million, but the company anticipates generating about $40 million of free cash flow for the year [19] Q&A Session Summary Question: 2025 guidance and its implications for SNS and pain management - Management reaffirmed full-year guidance, noting strong performance in Specialty Nutrition Systems and Pain Management segments [26][27] Question: Growth sustainability in the RF ablation business - Management highlighted strong momentum in the RF ablation segment, driven by a dedicated focus and a three-tiered offering [30][31] Question: Long-term impact of divestiture on income statement - Management indicated that the divestiture would not have a material impact on the bottom line, as strong performance in strategic segments would offset any losses [39][40]

Financial Performance - Q2 2025 - Net sales reached $175 million, a 2% organic growth compared to $172 million in Q2 2024[17] - Adjusted EBITDA was $17 million, representing a 10% margin, compared to $27 million in Q2 2024[17] - Adjusted EPS was $0.17, compared to $0.34 in Q2 2024[17] Segment Performance - Specialty Nutrition Systems net sales grew to $103 million, a 5% organic growth, compared to $98 million in Q2 2024[20] - Specialty Nutrition Systems operating profit was $18 million, representing an 18% margin, compared to $22 million in Q2 2024[21] - Pain Management & Recovery net sales grew to $61 million, a 34% organic growth, compared to $59 million in Q2 2024[26] - Pain Management & Recovery operating profit increased to $2 million, compared to $0 million in Q2 2024[27] Financial Position - Cash decreased to $90 million as of June 30, 2025, compared to $108 million as of December 31, 2024[30] - Net debt decreased to $15 million as of June 30, 2025, compared to $27 million as of December 31, 2024[30] - Net Debt / EBITDA ratio was approximately 02x as of June 30, 2025, compared to approximately 03x as of December 31, 2024[30] 2025 Outlook - Sales guidance reaffirmed at $665 million to $685 million[33] - Adjusted diluted EPS estimate maintained at $075 to $095[33]

Investor Contact: Scott Galovan Avanos Medical, Inc. 470-562-2692 Investor.Relations@Avanos.com Media Contact: Katrine Kubis Avanos Medical, Inc. CorporateCommunications@Avanos.com Avanos Medical, Inc. Announces Second Quarter 2025 Results ALPHARETTA, Ga., August 5, 2025/PRNewswire/ -- Avanos Medical, Inc. (NYSE: AVNS) today reported second quarter 2025 financial results. "Building off our first quarter results, we delivered a strong second quarter anchored by continued healthy performance in our life-susta ...

ALPHARETTA, Ga., Aug. 5, 2025 /PRNewswire/ -- Avanos Medical, Inc. (NYSE: AVNS) today reported second quarter 2025 financial results."Building off our first quarter results, we delivered a strong second quarter anchored by continued healthy performance in our life-sustaining Specialty Nutrition Systems segment along with continued progress in our opioid-sparing Pain Management & Recovery segment," said David Pacitti, Avanos' chief executive officer. Pacitti continued, "Our overall execution this quarter was ...

ALPHARETTA, Ga., July 24, 2025 /PRNewswire/ -- Avanos Medical, Inc. (NYSE: AVNS) will webcast its conference call discussing financial results and business highlights for the second quarter 2025 on Tuesday, Aug. 5, at 9 a.m. ET. The company will issue a news release detailing its results before the market opens that same day.The conference call will be hosted by Dave Pacitti, chief executive officer; Jason Pickett, interim chief financial officer; and Scott Galovan, senior vice president, strategy and corpo ...

Summary of Avanos Medical (AVNS) Conference Call - May 13, 2025 Company Overview - **Company**: Avanos Medical (AVNS) - **Industry**: Consumer Goods, specifically in health and hygiene products Key Points and Arguments Company Evolution and Strategy - The company has evolved from being perceived as a "pulp proxy" to focusing on volume mix-led growth, aided by a reorganization in the previous year [3][9] - The CEO highlighted the importance of innovation and the need to elevate and expand product categories, particularly in emerging markets [11][13] - Organic growth improved from 1-2% to approximately 4% over the past five years, indicating a successful shift in strategy [14] Financial Performance and Challenges - The company faced significant cost inflation of approximately $3.5 to $3.7 billion between 2021 and 2022, impacting gross margins which fell to 29.8%, 500 basis points lower than pre-pandemic levels [31][33] - Despite challenges, the company achieved a gross margin of 36.5% in 2024, up 200 basis points year-on-year, and aims for at least 40% by the end of the decade [77] Market Dynamics - The overall category growth has decelerated to about 1.5-2%, below the historical range of 2-3%, leading to a reduction in full-year guidance primarily due to tariff impacts [51][53] - Demand for essential products remains resilient, with consumers exhibiting value-seeking behavior in developed markets [55][62] Innovation and Product Development - The company has focused on launching premium products while also ensuring competitive offerings in the value tier, with a significant shift from 60% value tier to 85% premium in North American diapers [73][74] - Recent product launches include Huggies Skin Essentials and Snug and Dry, which leverage advanced technology for better performance [101][106] Supply Chain and Cost Management - A new global supply chain organization was established to drive efficiency and standardization across product platforms [41][46] - The company is adopting a proactive risk management approach, including programmatic hedging and strategic supplier relationships to manage costs effectively [35][36] Tariff Impacts and Guidance - The company anticipates a gross impact of $300 million from tariffs, with two-thirds of this impact stemming from China [84][96] - The management is exploring ways to mitigate these costs through network reflowing and other strategies [86][90] Marketing and Advertising Strategy - The company has doubled its advertising spend since 2018, focusing on storytelling to enhance brand perception rather than relying on promotions [126][128] - The CEO expressed a preference for advertising over promotions, viewing the latter as potentially dilutive to brand value [128][129] Additional Important Insights - The company is committed to maintaining investments in innovation and brand support despite the challenging market environment [77][100] - There is a strong bifurcation in consumer behavior, with higher-income households continuing to spend on premium products while budget-constrained consumers seek value [62][65] This summary encapsulates the key discussions and insights from the Avanos Medical conference call, highlighting the company's strategic direction, financial performance, market challenges, and innovation efforts.

Have you assessed how the international operations of Avanos Medical (AVNS) performed in the quarter ended March 2025? For this medical technology company, possessing an expansive global footprint, parsing the trends of international revenues could be critical to gauge its financial resilience and growth prospects.In today's increasingly interconnected global economy, a company's ability to tap into international markets can be a pivotal factor in shaping its overall financial health and growth trajectory. ...

Core Insights - Avanos Medical, Inc. reported first-quarter 2025 adjusted earnings per share (EPS) of 26 cents, an 18.2% increase year over year, surpassing the Zacks Consensus Estimate by 36.8% [1] - Revenues for the quarter reached $167.5 million, a 0.8% year-over-year increase, beating the Zacks Consensus Estimate by 2% [2] - The company has revised its 2025 outlook, estimating net sales between $665 million and $685 million and adjusted EPS between 75 and 95 cents, down from previous estimates [11] Revenue Performance - The Specialty Nutrition Systems (SNS) segment generated revenues of $101.1 million, up 6.9% year over year, driven by strong demand in enteral feeding and neonate solutions [5] - The Pain Management and Recovery (PM&R) segment reported revenues of $56.2 million, down 0.2% year over year, affected by unfavorable currency effects and strategic decisions to forgo certain revenue streams [3][4] - Organic sales increased by 2.8% year over year, indicating overall growth despite segment weaknesses [2] Margin and Expense Analysis - Gross profit declined by 5.3% year over year to $89.8 million, with a gross margin contraction of 346 basis points to 53.6% [7] - Selling and general expenses decreased by 9.4% year over year to $75.7 million, while research and development expenses fell by 22.9% to $5.4 million [7] - Adjusted operating profit increased by 107.1% year over year to $8.7 million, with an adjusted operating margin expansion of 267 basis points to 5.2% [8] Financial Position - At the end of the first quarter 2025, cash and cash equivalents totaled $97 million, down from $107.7 million at the end of 2024 [10] - Total debt decreased to $107.4 million from $134.7 million at the end of 2024 [10] - Net cash provided by operating activities was $25.7 million, compared to net cash used of $8 million in the prior-year period [10] Market Reaction and Guidance - Shares of Avanos gained nearly 5.4% following the earnings report [2] - The company expressed caution regarding potential impacts from tariffs on profitability and cash flow, alongside expectations of a softer second quarter for the SNS segment [13]