Core Viewpoint - Avanos Medical, Inc. reported a solid second quarter for 2025, driven by strong performance in its Specialty Nutrition Systems segment and progress in its Pain Management & Recovery segment, despite facing challenges such as a goodwill impairment charge and lower pricing for certain products [2][3][4]. Financial Highlights - Net sales for Q2 2025 reached $175.0 million, a 1.9% increase from the previous year, attributed to strong demand in the Specialty Nutrition Systems portfolio and growth in radiofrequency ablation generator sales [3][11]. - Gross margin for Q2 2025 was 52.6%, down from 55.7% in the prior year, with adjusted gross margin at 55.7%, compared to 59.6% last year, primarily due to higher tariffs and lower pricing for hyaluronic acid products [4][11]. - Operating loss for Q2 2025 was $74.5 million, compared to an operating profit of $6.3 million in the prior year, largely due to a $77.0 million goodwill impairment charge [5][9]. - Adjusted EBITDA for Q2 2025 was $17.0 million, down from $26.8 million in Q2 2024 [6][11]. Segment Performance - Specialty Nutrition Systems segment achieved net sales of $102.7 million in Q2 2025, a $5.0 million increase from the prior year, with a volume growth of 4.4% [12]. - Pain Management & Recovery segment net sales were $61.0 million in Q2 2025, reflecting a $1.7 million increase, with a 13.7% growth in radiofrequency ablation product sales [13]. Year-to-Date Results - For the first six months of 2025, net sales totaled $342.5 million, a 1.4% increase compared to the same period last year [7]. - Gross margin for the first half of 2025 was 53.1%, down from 56.4% in the prior year, with adjusted gross margin at 56.2% compared to 59.7% last year [8]. - The company reported a net loss of $70.2 million for the first six months of 2025, compared to a net income of $4.8 million in the prior year [10]. Cash Flow and Balance Sheet - As of June 30, 2025, the company had $90.3 million in cash, down from $107.7 million at the end of 2024, with cash flow from operations for the first half of 2025 at $32.5 million [17]. - Free cash flow for Q2 2025 was negative $4.2 million, compared to an inflow of $21.9 million in the same period last year [17]. 2025 Outlook - The company maintains its 2025 revenue guidance of $665 million to $685 million and adjusted diluted earnings per share guidance of $0.75 to $0.95, factoring in the impact of the recent divestiture of its hyaluronic acid product line [19][20].

Core Viewpoint - Avanos Medical, Inc. has divested its Hyaluronic Acid product line to Channel-Markers Medical, LLC, aligning with its strategic focus on Pain Management & Recovery and Specialty Nutrition Systems [1][3]. Group 1: Transaction Details - The divested portfolio includes TriVisc® and GenVisc® 850 injection products, which are used for treating osteoarthritis pain in the knee [2]. - Ownership of Avanos' HA product line has officially transferred to Channel-Markers Medical, with Avanos providing transition support through the end of 2025 [4]. Group 2: Strategic Implications - This divestiture is a significant step in Avanos' transformation strategy, aimed at reinforcing its commitment to focused growth and aligning its product portfolio with strategic priorities [3]. - Channel-Markers Medical aims to expand its presence in musculoskeletal health and injectable pain therapies through this acquisition [3]. Group 3: Company Profiles - Avanos Medical is a medical technology company focused on delivering clinically superior medical device solutions, addressing healthcare needs such as nutrition and opioid reduction [5]. - Channel-Markers Medical specializes in joint health, regenerative therapies, and minimally invasive pain management solutions, serving various healthcare specialties [6].

Core Viewpoint - Avanos Medical, Inc. will host a conference call to discuss its financial results and business highlights for Q2 2025 on August 5, 2025, at 9 a.m. ET, with a news release to be issued prior to market opening on the same day [1]. Group 1 - The conference call will be led by key executives including CEO Dave Pacitti, interim CFO Jason Pickett, and Senior VP Scott Galovan [2]. - Participants can join the conference call via a registration link or by dialing specific phone numbers provided [3]. - A simultaneous webcast of the call will be available on the Avanos Medical website, with a replay accessible within two hours post-call for one week [4]. Group 2 - Avanos Medical is a medical technology company headquartered in Alpharetta, Georgia, focused on delivering superior medical device solutions to address critical healthcare needs [5]. - The company aims to provide essential nutrition solutions for patients transitioning from hospital to home and to reduce opioid usage during recovery [5]. - Avanos develops, manufactures, and markets its recognized brands globally, holding leading market positions in various product categories [5].

ALPHARETTA, Ga., June 9, 2025 /PRNewswire/ -- Avanos Medical, Inc. (NYSE: AVNS) a leading medical technology company focused on delivered innovative healthcare solutions, today announced the appointment of Camille Chang Gilmore as senior vice president and chief human resources officer. Camille Chang Gilmore Camille Chang Gilmore In this role, Gilmore will lead all aspects of Avanos' people strategy, including talent acquisition and development, workforce planning, leadership development and employee experi ...

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.

Core Insights - The international operations of Avanos Medical are crucial for assessing its financial resilience and growth prospects [1][2][3] Revenue Performance - The total revenue for Avanos Medical in the quarter was $167.5 million, reflecting a year-over-year increase of 0.8% [4] - Revenue from Europe, Middle East, and Africa accounted for 14.15% of total revenue, amounting to $23.7 million, which was a surprise increase of 3.4% compared to analyst expectations [5] - Asia Pacific and Latin America contributed $13 million, or 7.76% of total revenue, representing a surprise increase of 12.07% over expectations [6] Future Revenue Forecasts - For the current fiscal quarter, total revenue is anticipated to be $167.69 million, a decline of 2.3% year-over-year, with expected contributions of 13.9% from Europe, Middle East, and Africa and 7.1% from Asia Pacific and Latin America [7] - The forecast for total revenue for the entire year is $677.36 million, a reduction of 1.5% from the previous year, with expected contributions of 13.8% from Europe, Middle East, and Africa and 7.1% from Asia Pacific and Latin America [8] Market Dynamics - Avanos Medical's reliance on international markets presents both opportunities and challenges, making it essential to track international revenue trends for future projections [9] - Financial analysts are closely monitoring these developments to refine earnings estimations, influenced by various factors including local market status [10]

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]

Financial Performance - Net income for the three months ended March 31, 2025, was $6.6 million, compared to a net loss of $0.9 million for the same period in 2024[14] - Total comprehensive income for the same period was $8.9 million, an increase from a comprehensive loss of $3.4 million in 2024[14] - Cash provided by operating activities was $25.7 million for the three months ended March 31, 2025, compared to cash used in operating activities of $8.0 million in 2024[19] - The company reported net sales of $157.4 million for the three months ended March 31, 2025, compared to $150.9 million for the same period in 2024, representing a year-over-year increase of approximately 4.0%[33] - The company’s total consolidated net sales for Q1 2025 were $167.5 million, compared to $166.1 million in Q1 2024, reflecting a slight increase of approximately 0.8%[33] - Specialty Nutrition Systems segment reported sales of $101.1 million for the three months ended March 31, 2025, an increase of 6.9% from $94.6 million in 2024[77] - Pain Management and Recovery segment sales remained stable at $56.2 million for the three months ended March 31, 2025, compared to $56.3 million in 2024[77] Assets and Liabilities - Cash and cash equivalents decreased to $97.0 million as of March 31, 2025, down from $107.7 million at the end of 2024[16] - Total assets decreased to $1,107.8 million as of March 31, 2025, from $1,154.2 million at the end of 2024[16] - Total liabilities decreased to $268.4 million as of March 31, 2025, from $325.7 million at the end of 2024[16] - Stockholders' equity increased to $839.4 million as of March 31, 2025, compared to $828.5 million at the end of 2024[16] - Total long-term debt, net, as of March 31, 2025, is $98.0 million, down from $125.3 million on December 31, 2024[55] - The current portion of long-term debt is $9.4 million as of March 31, 2025[59] Expenses and Costs - Capital expenditures for the same period were $6.7 million, up from $4.1 million in 2024[19] - The company incurred $3.1 million in restructuring costs related to the post-RH divestiture plan during Q1 2025, compared to $0.7 million in Q1 2024, reflecting an increase of approximately 342.9%[35] - Stock-based compensation expense increased to $3.8 million for the three months ended March 31, 2025, from $3.6 million in 2024[62] - The company expects to incur up to $16.0 million in cash expenses related to the restructuring plan, primarily for employee termination benefits and temporary labor costs[35] Receivables and Inventories - The company reported a decrease in accounts receivable of $25.1 million for the three months ended March 31, 2025[19] - Total accounts receivable decreased to $104.8 million as of March 31, 2025, down from $132.8 million at the end of 2024, a decline of approximately 21.1%[39] - The company reported total inventories of $138.1 million as of March 31, 2025, slightly down from $138.8 million at the end of 2024, a decrease of approximately 0.5%[40] Depreciation and Amortization - Depreciation expense for Q1 2025 was $4.5 million, a decrease from $5.3 million in Q1 2024, representing a reduction of approximately 15.0%[41] - Amortization expense for intangible assets was $5.1 million for the three months ended March 31, 2025, down from $6.1 million for the same period in 2024[43] - Estimated amortization expense for the remainder of 2025 is $20.5 million, with a total estimated amortization of $107.2 million over the next five years[43] Other Financial Information - The company closed the sale of its Respiratory Health business for $110 million in cash on October 2, 2023[46] - The company repaid $2.3 million of the Term Loan Facility and $25.0 million of the Revolving Credit Facility during the three months ended March 31, 2025[60] - The restructuring liability balance as of March 31, 2025, was $1.9 million, down from $3.8 million at the end of 2024[38] - The company had letters of credit outstanding of $4.0 million as of March 31, 2025[60] - As of March 31, 2025, the aggregate notional values of outstanding foreign currency swap contracts designated as cash flow hedges were $30.8 million[72] - The company recorded a change in Accumulated Other Comprehensive Loss of $2.3 million for the three months ended March 31, 2025, compared to a loss of $2.5 million in 2024[8] - The company incurred no costs related to indemnification matters for the three months ended March 31, 2025[63] - The company had no repurchases of common stock in the three months ended March 31, 2025, but repurchased 342,680 shares for $6.7 million in the first quarter of 2024[82] Strategic Focus - The company is focused on addressing healthcare needs, including providing nutrition solutions and reducing opioid use[21] - The company adopted ASU No. 2023-05 effective January 1, 2025, which did not have a material effect on its financial position or results of operations[29]

Financial Data and Key Metrics Changes - The company achieved sales of approximately $168 million for Q1 2025, with organic sales up 2.8% compared to the previous year [10] - Adjusted diluted earnings per share were $0.26, and adjusted EBITDA was approximately $22 million, with adjusted gross margins at 56.7% [10] - The balance sheet remains strong with $97 million in cash and $107 million in debt outstanding as of March 31 [10] Business Line Data and Key Metrics Changes - Specialty Nutrition Systems segment grew almost 9% organically compared to the prior year, reaffirming its number one position in long-term, short-term, and neonatal internal feeding [14] - Pain Management and Recovery segment saw normalized organic sales up 2.4%, with near double-digit growth in the radiofrequency ablation business [16][17] - Operating profit for the Specialty Nutrition Systems segment was nearly 21%, a 460 basis point increase from the prior year [15] Market Data and Key Metrics Changes - The company anticipates a softer Q2 for the Specialty Nutrition Systems segment due to distributor order timing but remains confident in the segment's strength for the rest of the year [19] - The company incurred $1.5 million in tariffs during Q1, with an estimated $15 million in incremental tariff-related manufacturing costs for the year [21][22] Company Strategy and Development Direction - The company is focused on enhancing its growth profile through transformation efforts, capital deployment for M&A, and partnerships [7][11] - The organizational focus has been refined to ensure clarity in strategic business priorities for 2025, aiming for margin expansion and improved patient and customer experience [11][12] - The company plans to transition all syringe manufacturing and supply chain operations out of China by the first half of 2026 in response to tariffs [19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strong start to the year, particularly in strategic segments, while acknowledging the dynamic economic environment [23] - The revised adjusted EPS estimate reflects a reasonable view of the tariff impact on full-year results, with ongoing monitoring of the situation [23] Other Important Information - The company has closed two smaller transactions this year that support its specialty nutrition system strategy [11] - The new operating segments are expected to provide improved visibility and highlight the financial profiles of the two segments [13] Q&A Session Summary Question: How does the company view the second quarter relative to the first? - Management indicated that while the second quarter may see a slight decline due to distributor order dynamics, they maintain confidence in the full-year guidance [30][31] Question: Can you elaborate on the tariff assumptions and their impact? - Management expects approximately $15 million in incremental tariff-related manufacturing costs for the year, with strategies in place to mitigate these impacts [41][44] Question: What are the growth expectations for the segments moving forward? - Management anticipates mid-single-digit growth for the Specialty Nutrition Systems segment and flat to low single-digit growth for the Pain Management and Recovery segment for the year [51][53]

Q1 2025 Financial Performance - Net sales increased to $168 million in Q1 2025 from $166 million in Q1 2024, representing a 2.8% organic growth[19] - Adjusted EPS grew by 18% from $0.22 in Q1 2024 to $0.26 in Q1 2025[19] - The company generated $19 million of free cash flow during the quarter[22] - Net debt decreased to $10 million as of March 31, 2025, compared to $27 million as of December 31, 2024[21] Segment Performance - Specialty Nutrition Systems net sales increased to $101 million in Q1 2025 from $95 million in Q1 2024, reflecting a 9.4% organic growth[27] - Specialty Nutrition Systems operating profit increased by 37% from $15 million in Q1 2024 to $21 million in Q1 2025[29] - Pain Management & Recovery segment net sales remained stable at $56 million in Q1 2025, showing a 1.1% organic growth[33] - Pain Management & Recovery segment operating profit improved from -$2 million in Q1 2024 to $0 million in Q1 2025[34] 2025 Outlook - The company maintains its sales estimate of $665 million to $685 million[44] - The company lowered its adjusted diluted EPS estimate to $0.75 to $0.95, primarily due to tariff impacts[45]