Avanos Medical, Inc. Announces Fourth Quarter and Full-Year 2024 Results

Core Viewpoint - Avanos Medical, Inc. reported a challenging financial performance for the fourth quarter and full year of 2024, with significant losses attributed to transformation initiatives and impairment charges, while maintaining a focus on organic growth and cash flow generation [2][19]. Financial Highlights - Fourth quarter net sales reached $179.6 million, a 3.6% increase year-over-year, driven by strong performance in the digestive health portfolio and interventional pain portfolio [5][10]. - For the full year 2024, net sales from continuing operations increased by 2.2% to $687.8 million [11]. - The company generated $83 million in free cash flow for the year, with fourth quarter free cash flow of $53.1 million, a significant improvement from an outflow of $3.4 million in the previous year [2][15]. Operating Results - The gross margin for the fourth quarter was 54.6%, slightly down from 54.8% a year ago, while the adjusted gross margin improved to 58.7% [6][11]. - Operating loss for the fourth quarter was $418.5 million, compared to an operating profit of $11.2 million in the same quarter of 2023, primarily due to a goodwill impairment charge of $436.7 million [8][14]. - Adjusted EBITDA for the fourth quarter was $28.6 million, down from $32.1 million in the prior year [8]. Earnings Per Share - Fourth quarter diluted loss per share from continuing operations was $8.63, compared to earnings of $0.24 per share a year ago [10]. - For the full year, diluted loss per share from continuing operations was $8.40, compared to a loss of $0.21 in 2023, while adjusted diluted earnings per share improved to $1.35 from $1.03 [10][13]. Cash Flow and Balance Sheet - As of December 31, 2024, the company's cash balance was $107.7 million, up from $87.7 million at the end of 2023, with total debt of $134.7 million [16]. - Net debt decreased to $27 million from $80.3 million in the prior year, reflecting improved cash flow management [10]. 2025 Outlook - The company expects net sales for 2025 to be between $665 million and $685 million, with adjusted diluted earnings per share projected between $1.05 and $1.25 [18][19]. - The guidance reflects anticipated challenges in certain product categories and currency headwinds, with a commitment to long-term strategy and margin improvement [19].