Avanos Medical(US:AVNS)2025-11-05 21:28Financial Performance - For the three months ended September 30, 2025, the net loss was $1.4 million compared to a net income of $4.3 million for the same period in 2024[14]. - For the nine months ended September 30, 2025, the net loss increased to $71.6 million from a net income of $5.2 million in 2024[14]. - The company reported comprehensive loss of $2.0 million for the three months ended September 30, 2025, compared to a comprehensive income of $4.9 million in 2024[14]. - The company reported a net loss of $0.8 million for the three months ended September 30, 2025, compared to a net income of $3.8 million in 2024[47]. - The company reported a net loss from continuing operations of $1.4 million for the three months ended September 30, 2025, compared to a net income of $5.9 million in the same period of 2024[88]. Assets and Liabilities - Total assets decreased to $1,067.7 million as of September 30, 2025, down from $1,154.2 million as of December 31, 2024[16]. - Cash and cash equivalents decreased to $70.5 million as of September 30, 2025, compared to $107.7 million at the end of 2024[16]. - Total liabilities decreased to $289.7 million as of September 30, 2025, from $325.7 million as of December 31, 2024[16]. - The accumulated deficit increased to $778.6 million as of September 30, 2025, compared to $707.0 million at the end of 2024[16]. - Total accrued expenses decreased to $74.8 million as of September 30, 2025, from $91.3 million as of December 31, 2024, a reduction of 18.0%[58]. - The Term Loan Facility balance was $103.1 million as of September 30, 2025, down from $110.2 million as of December 31, 2024, a decrease of 6.4%[69]. Goodwill and Impairment - The company incurred a goodwill impairment of $77.0 million during the nine months ended September 30, 2025[19]. - The company recorded a goodwill impairment of $77.0 million in the second quarter of 2025 due to the fair value of its Pain Management and Recovery reporting unit falling below its carrying value[38]. - As of September 30, 2025, the total balance of goodwill was $394.4 million, with $341.6 million attributed to the SNS segment and $52.8 million to the PM&R segment[39]. - The company’s market capitalization decreased in the second quarter of 2025, prompting an interim goodwill impairment test[38]. Restructuring and Expenses - The company initiated a three-year restructuring initiative in January 2023, incurring net expenses of $27.4 million related to organizational design and business process efficiencies[41]. - In the first six months of 2025, the company incurred $10.3 million in costs related to its restructuring plan, compared to $2.3 million in the same period of 2024[42]. - The company expects to incur up to $10.0 million in incremental expenses due to the expansion of its restructuring plan, anticipating annualized savings between $15.0 million and $20.0 million[43]. - The company’s restructuring liability as of September 30, 2025, was $2.0 million, down from $3.8 million at the end of 2024[44]. Sales and Revenue - Pro forma net sales for the three months ended September 30, 2025, were $180.8 million, compared to $174.0 million in 2024, reflecting a 4.5% increase[47]. - For the nine months ended September 30, 2025, pro forma net sales were $531.7 million, up from $519.0 million in 2024, a 2.6% increase[47]. - Total consolidated net sales for the three months ended September 30, 2025, were $177.8 million, compared to $170.4 million in 2024, a 2.5% increase[49]. - Total consolidated net sales for the nine months ended September 30, 2025, reached $520.3 million, compared to $508.2 million in 2024, a 2.6% increase[50]. - Specialty Nutrition Systems segment reported net sales of $114.0 million for the three months ended September 30, 2025, compared to $98.2 million in 2024, a 16.5% increase[49]. - Specialty Nutrition Systems segment sales increased to $317.8 million for the nine months ended September 30, 2025, compared to $290.5 million in 2024[90]. Stock and Share Repurchase - The company has a share repurchase program approved for $25.0 million, which began on July 28, 2023[92]. - The Board of Directors approved a new one-year share repurchase program allowing up to $25.0 million in common stock repurchases[93]. - No common stock repurchases occurred in the nine months ended September 30, 2025[95]. - For the nine months ended September 30, 2024, a total of 1,085,333 shares were repurchased at an aggregate purchase price of $6.7 million, averaging $19.45 per share[96]. - Additionally, 211,566 shares were withheld for $3.0 million in taxes related to stock-based compensation transactions for the nine months ended September 30, 2025[96]. Other Financial Information - The company’s financial statements are prepared in accordance with GAAP, and the interim financial statements contain all necessary material adjustments[22]. - The company incurred $0.4 million in costs related to the Nexus acquisition for both the three and nine months ended September 30, 2025[46]. - Nexus acquisition contributed $0.9 million in net sales since the acquisition date[46]. - The estimated amortization expense for the remainder of 2025 is projected to be $4.5 million[57]. - The derivative asset for foreign exchange contracts was $1.2 million as of September 30, 2025[85]. - The effective portion of the gain or loss on derivative instruments was not material for the three and nine months ended September 30, 2025[86]. - There have been no material changes in the company's market risk position since the last disclosure[151].