Getting patients back to what matters. Dave Pacitti Chief Executive Officer Q4/FY Overview & Business Update Q4 & Full Year 2025 Earnings Presentation February 24, 2026 Scott Galovan SVP, Chief Financial Officer Q4/FY Results & 2026 Planning Assumptions DISCLAIMER REGARDING FORWARD-LOOKING STATEMENTS Certain matters in this presentation, including expectations and planning assumptions, any comments about our expected performance, and any estimates, projections, or statements relating to our business plans, ...

Q3 2025 Financial Performance - Net sales reached $178 million, reflecting 10% organic growth[18] - Adjusted EPS stood at $0.36[18] - Adjusted EBITDA amounted to $20 million with an 11% margin[18] Segment Performance - Specialty Nutrition Systems experienced 14.5% organic growth, with net sales of $114 million[20] - Specialty Nutrition Systems operating profit was $23 million, representing a 20% margin[21] - Pain Management & Recovery saw 2.4% organic growth, with net sales of $59 million[26] 2025 Outlook - Net sales are estimated to be between $690 million and $700 million[16, 33] - Adjusted EPS is projected to be between $0.85 and $0.95 per share[16, 33] Financial Position - Cash balance was $70 million as of September 30, 2025[31] - Net debt was $(33) million, with a net debt to EBITDA ratio of approximately 0.4x[31] Strategic Initiatives - Expanded transformation initiatives are expected to deliver $15 to $20 million of incremental annualized savings by the end of 2026[16]

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]