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]

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].

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]