Financial Data and Key Metrics Changes - The company achieved net sales of approximately $178 million for Q3 2025, with organic sales for strategic segments up 10% year-over-year [5][6] - Adjusted diluted earnings per share were $0.22, with adjusted EBITDA of $20 million and an adjusted gross margin of 52.8% [6][18] - Full-year revenue estimates have been raised to $690-$700 million, and adjusted EPS estimates have been raised to $0.85-$0.95 per share [6][19] Business Line Data and Key Metrics Changes - The Specialty Nutrition Systems (SNS) segment grew organically by 14.5% year-over-year, driven by strong demand for enteral feeding products [11] - The Pain Management and Recovery segment saw normalized organic sales increase by 2.4%, with double-digit growth in the radio frequency ablation business [13][16] - The hyaluronic acid injections and intravenous infusion product lines declined over 20% due to the divestiture of the HA business [16] Market Data and Key Metrics Changes - The SNS segment's operating profit improved to 20%, reflecting higher sales volume despite tariff impacts [12] - The Pain Management and Recovery segment's operating profit was 3%, a 200 basis point improvement year-over-year [16] Company Strategy and Development Direction - The company aims to accelerate growth in strategic segments, manage tariff impacts, improve operational efficiencies, divest underperforming assets, and pursue synergistic acquisitions [4][6] - The acquisition of Nexus Medical is expected to be immediately accretive to revenue growth and earnings per share, expanding the company's presence in a $70 million market [7][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in addressing tariff impacts and enhancing the company's growth profile despite challenges [21] - The company anticipates generating approximately $25-$30 million of free cash flow for the year, factoring in one-time charges related to transformation efforts [18][30] Other Important Information - The company is prioritizing supply chain investments to exit China by mid-2026, which will result in higher-than-anticipated capital expenditures in 2025 [10] - The company has maintained a strong balance sheet with $70 million in cash and $103 million in debt, keeping leverage levels below one turn [17] Q&A Session Summary Question: Details on the cost improvement plan and annualized cost savings - Management explained that the $15 million-$20 million in annualized cost savings will be realized by the end of 2026 through streamlining the organization and improving decision-making [24][25] Question: Insights on the product development pipeline - Management indicated a shift to a hybrid model for product development, combining internal projects with external contracting to improve speed to market [26][27] Question: Appetite for more M&A deals - Management confirmed an appetite for more synergistic M&A opportunities, particularly in the Specialty Nutrition Systems business, while actively seeking such opportunities [28][29] Question: Clarification on free cash flow assumptions - Management clarified that the $25 million-$30 million free cash flow estimate includes charges related to transformation efforts and higher capital expenditures for the China exit plan [30]

Financial Data and Key Metrics Changes - Sales from continuing operations in Q4 2024 were approximately $180 million, with organic sales up 5% year-over-year after adjusting for foreign exchange and discontinued revenue streams [10][12] - Adjusted diluted earnings per share for Q4 were $0.43, with adjusted EBITDA from continuing operations at nearly $29 million [11] - For the full year, sales from continuing operations were approximately $688 million, with adjusted diluted earnings per share of $1.35, a 31% increase compared to the prior year [12][11] - The company generated $83 million of free cash flow in 2024, an increase of almost $70 million compared to the previous year [14] Business Line Data and Key Metrics Changes - The enteral feeding portfolio grew almost 12% organically in Q4, reaffirming the company's leading position in short-term, long-term, and neonatal feeding [15] - The pain management and recovery portfolio saw normalized organic sales down approximately 3% in Q4, but a sequential growth of 13% compared to Q3 [17][18] - The interventional pain business posted high single-digit growth in Q4, supported by increased procedural volumes [19] Market Data and Key Metrics Changes - The company served over two million patients in 2024 through its enteral feeding and pain management solutions [9] - The NeoMed product line benefited from strong demand for ENFit conversions in North America, while the Ambit product grew more than 30% in each quarter of 2024 [16][21] Company Strategy and Development Direction - The company is focused on a three-year transformation process, having completed the divestiture of its respiratory health business [8][26] - Key transformation priorities include optimizing the organization, transforming the product portfolio, enhancing operating profitability, and efficient capital allocation [25] - Starting in Q1 2025, the company will report under three operating segments to improve transparency and guide internal capital allocation decisions [29][32] Management's Comments on Operating Environment and Future Outlook - Management anticipates a challenging market environment for some product categories in 2025, with expected net sales in the range of $665 million to $685 million [33][34] - The guidance reflects currency headwinds and pricing pressures, with expectations for flat to low single-digit organic growth in the Pain Management and Recovery segment [34][35] - Management expressed confidence in reigniting margin expansion in 2026 as macroeconomic uncertainties are resolved [44] Other Important Information - The company exited its deferred prosecution agreement with the DOJ in January 2025, marking a significant milestone in its transformation journey [27] - The company has a strong balance sheet with $108 million in cash and $135 million in debt as of December 31, 2024 [14] Q&A Session Summary Question: Insights on 2025 margin improvement pause - Management indicated that the 2025 guidance is conservative due to macroeconomic uncertainties, with expectations to finish 2025 at similar revenue levels as previously stated [42][44] Question: Progress on business evaluation and urgency - Management acknowledged the connection between the impairment charge and the evaluation process, noting that volume growth was achieved but offset by pricing dynamics [48] Question: Guidance details and potential upside/downside - Upside potential includes tariff certainty and demand growth from competitor back orders, while downside risks are primarily macroeconomic [54][57] Question: Cash flow expectations for 2025 - Management expects free cash flow in 2025 to be similar to 2024, with ongoing opportunities for improvement in working capital [62] Question: Product innovations for 2025 - Management anticipates launching one to three product innovations in the Specialty Nutrition Systems segment within the next 12 months [66][68]