8-K
AVANOS MEDICAL, INC. (AVNS)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 31, 2025
AVANOS MEDICAL, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 001-36440 | 46-4987888 | |||
|---|---|---|---|---|---|
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | |||
| 5405 Windward Parkway | |||||
| Suite 100 South | |||||
| Alpharetta, | Georgia | 30004 | |||
| (Address of principal executive offices) | (Zip code) |
Registrant’s telephone number, including area code: (844) 428-2667
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of exchange on which registered |
|---|---|---|
| Common Stock - $0.01 Par Value | AVNS | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition
On August 5, 2025, Avanos Medical, Inc. (the “Company”) issued a press release announcing its results of operations for the three and six months ended June 30, 2025. A copy of the press release is furnished herewith as Exhibit 99.1.
The information contained in Item 2.02 of this Current Report, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in Item 2.02 of this Current Report or Exhibit 99.1 shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise expressly stated in such filing.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On August 1, 2025, the Board of Directors (the “Board”) of the Company appointed David Pacitti to the Board, effective August 1, 2025. The appointment of Mr. Pacitti, who is the Company’s Chief Executive Officer, fills a vacancy on the Board.
Mr. Pacitti was not selected pursuant to any arrangement or understanding between him and any other persons. There are no transactions between Mr. Pacitti and the Company that would be reportable under Item 404(a) of Regulation S-K. Mr. Pacitti will not receive any compensation in connection with his service as a member of the Board.
On August 1, 2025, the Company appointed Scott Galovan to serve as the Company’s Senior Vice President, Chief Financial Officer, effective August 1, 2025. Mr. Galovan, age 46, has served as the Company’s Senior Vice President, Strategy and Corporate Development since January 2023. He served as the Company’s Vice President, Strategy and Corporate Development from June 2019 until January 2023. Prior to joining the Company in 2013, his experience included serving in senior strategy, finance and M&A roles at Newell Brands, Equity Pacific Partners and Intel Capital.
Mr. Galovan was not selected pursuant to any arrangement or understanding between him and any other persons. There are no transactions between Mr. Galovan and the Company that would be reportable under Item 404(a) of Regulation S-K.
In connection with Mr. Galovan’s appointment, the Company and Mr. Galovan entered into an offer letter pursuant to which he will receive a base salary of $460,000 per year. In addition, he will be eligible to participate in the Company’s annual cash incentive program with a bonus target of 70% of his base salary and will be eligible for annual long-term incentive grants under the Company’s Long Term Incentive Plan with a target award value for 2026 of $1,600,000. In addition, on August 1, 2025 Mr. Galovan received a special equity award of time-based restricted stock units (“TRSUs”) having a grant date value equal to $500,000. Such TRSUs will vest 30% on the first anniversary of the grant date, 30% on the second anniversary of the grant date and 40% on the third anniversary of the grant date. Mr. Galovan will be eligible to participate in the standard employee benefit plans generally available to the Company’s executive employees, including medical, dental, vision and life insurance; flexible spending accounts; Company-paid disability programs; and a matching 401(k) plan. He will also be eligible to participate in the Company’s Executive Severance Plan and Severance Pay Plan. The foregoing description of Mr. Galovan’s offer letter does not purport to be complete and is qualified in its entirety by reference to the full text of the offer letter, which is filed as Exhibit 10.1 to this Current Report on Form 8-K.
Effective August 1, 2025, Jason Pickett, who had served as Interim Chief Financial Officer and Treasurer since April 14, 2025, assumed the position of Vice President, Corporate Finance and Treasurer. In that role, he will lead the Company’s tax, treasury and accounting functions.
Item 7.01 Regulation FD Disclosure
On July 31, 2025, the Company issued a press release announcing the divestiture of its Hyaluronic Acid (HA) product line to Channel-Markers Medical, LLC. A copy of such press release is attached as Exhibit 99.2 hereto and is incorporated by reference herein in its entirety.
On August 5, 2025, the Company issued a press release regarding the appointment of Mr. Pacitti to the Board, effective August 1, 2025, and the appointment of Mr. Galovan to the position of Senior Vice President, Chief Financial Officer, effective August 1, 2025. A copy of such press release is attached as Exhibit 99.3 hereto and is incorporated by reference herein in its entirety.
The information in Item 7.01 of this Current Report, including Exhibit 99.2 and Exhibit 99.3 attached hereto, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in Item 7.01 of this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, except as otherwise expressly stated in such filing.
Item 9.01 Financial Statements and Exhibits
(d)Exhibits.
| Exhibit No. | Description |
|---|---|
| 99.1 | Press release issued by Avanos Medical, Inc. on August 5, 2025 |
| 99.2 | Press release issued by Avanos Medical, Inc. on July 31, 2025 |
| 99.3 | Press release issued by Avanos Medical Inc., on August 5, 2025 |
| 10.1* | Offer Letter by and between Avanos Medical, Inc. and Scott Galovan |
| 104 | Cover Page Interactive Data File (embedded within the inline XBRL document) |
* Management contracts, compensatory plans or arrangements
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| AVANOS MEDICAL, INC. | |||
|---|---|---|---|
| Date: | August 5, 2025 | By: | /s/ Mojirade James |
| Mojirade James<br>Senior Vice President and General Counsel |
Document
| 5405 Windward Parkway<br><br>Alpharetta, GA 30004<br><br>T 1-844-4AVANOS www.avanos.com |
|---|
July 25, 2025
Mr. Scott Galovan
via Email Delivery
Dear Scott,
Congratulations! We are pleased to appoint you to the position of Sr Vice President, Chief Financial Officer at Avanos Medical. In this role you will report to Dave Pacitti, the Chief Executive Officer of Avanos. Your effective date will be August 1, 2025.
Compensation
As discussed, your total direct annual compensation will be $2,382,000, consisting of base salary, short term incentive compensation and long-term incentive compensation. Further details are below:
Base Salary
Your starting salary will be $460,000 per year and is subject to applicable withholdings and deductions. You are paid semi-monthly on the 15th and last day of the month. If the normal check date falls on a weekend or holiday, you will be paid on the previous business day.
Short-Term Incentive
You will be eligible to participate in the Avanos Management Achievement Award Plan (MAAP). Your bonus incentive target will be 70% of your earned base pay (an annual target of $322,000). Your actual bonus for 2025 will be prorated for the year given the mid-year change in position. Bonus criteria are established each year by the Compensation Committee. For the 2025 year, your bonus will be based on Avanos performance for the year against targets established by the Compensation Committee in early 2025. In early 2026, the Committee will assess the extent to which those performance targets have been met and then approve the resulting payouts to officers. The complete terms and conditions of the MAAP are set forth in Avanos' Plan Document.
Long-Term Incentive
Beginning in 2026, you will be eligible for annual long-term grant incentive grants under Avanos' Long Term Incentive Plan (LTIP). For 2026, your annual target award value will be $1,600,000. Future annual LTIP target grant amounts, along with the grant type and mix, are subject to change by Avanos’ Compensation Committee at their discretion. The complete terms and conditions of Avanos' LTIP are set forth in the Plan Document.
Inducement Award
As a material inducement to your acceptance of this offer and continuing employment with Avanos in your new role, on your effective date (August 1, 2025) you will be granted time-based restricted share units (“TRSUs”) covering a number of shares of Avanos common stock (“Common Stock”) having a grant value equal to $500,000 divided by the Common Stock Price as of your effective date (August 1, 2025), with such number rounded down to the nearest share. The TRSUs will be subject to the provisions of our 2021 Long-Term Incentive Plan. The TRSUs will be subject to the provisions of our standard grant agreement under the Plan, except that your TRSUs will vest as to 30% on each of the first and second anniversaries of the grant date, and
40% on the third anniversary of the grant date, in each case conditioned upon your continuing service through such vesting dates. Upon vesting, the award will be subject to applicable federal and state tax withholdings.
Benefits
Avanos Medical offers a comprehensive benefits package that includes medical, dental, vision, life insurance, flexible spending accounts, company-paid disability programs and a matching 401(k) plan. Your benefit choices will not be affected by this change in position.
Severance
You will be eligible to participate in Avanos' existing Severance Plans. The general terms of the Plans are described in Avanos' Proxy Statement and the complete terms and conditions are set forth in Avanos' Plan Documents.
Other Considerations
Employment at Avanos Medical is at-will and can be ended by you or the company for any reason at any time. Furthermore, this letter is simply intended to provide a general description of the terms of your at-will employment. It does not constitute a contract or give rise to any contractual or quasi-contractual rights, and the offer of employment or the terms of the employment may be changed or rescinded by Avanos at any time.
We look forward to your acceptance of this offer and would appreciate your prompt response. If you have any questions or need additional Information, please feel free to give me a call.
Sincerely,
/s/ Dave Pacitti
Dave Pacitti
Chief Executive Officer
To indicate your acceptance of this offer and its terms and conditions, please sign in the space provided below:
/s/ Scott Galovan
Scott Galovan
Date: July 27, 2025
Document
| Investor Contact: Scott Galovan |
|---|
| Avanos Medical, Inc. |
| 470-562-2692 |
| Investor.Relations@Avanos.com |
| Media Contact: Katrine Kubis |
| Avanos Medical, Inc. |
| CorporateCommunications@Avanos.com |
Avanos Medical, Inc. Announces Second Quarter 2025 Results
ALPHARETTA, Ga., August 5, 2025/PRNewswire/ -- Avanos Medical, Inc. (NYSE: AVNS) today reported second quarter 2025 financial results.
“Building off our first quarter results, we delivered a strong second quarter anchored by continued healthy performance in our life-sustaining Specialty Nutrition Systems segment along with continued progress in our opioid-sparing Pain Management & Recovery segment,” said David Pacitti, Avanos’ chief executive officer. Pacitti continued, “Our overall execution this quarter was solid, and the steady progress we’ve made against each of our transformation priorities provides confidence in our ability to achieve the ranges of our 2025 financial guidance.”
Second Quarter 2025 Financial Highlights
•Total net sales were $175.0 million, a 1.9% increase from the comparable prior year period.
•Net loss was $76.8 million, compared to net income from continuing operations of $4.3 million a year ago.
•Adjusted net income was $7.9 million, compared to $15.8 million a year ago.
•Diluted loss per share was $1.66, compared to diluted earnings per share of $0.09 a year ago.
•Adjusted diluted earnings per share was $0.17, compared to $0.34 a year ago.
•Adjusted EBITDA was $17.0 million, compared to $26.8 million a year ago.
Second Quarter of 2025 Operating Results
For the three months ended June 30, 2025, net sales totaled $175.0 million, an increase of 1.9% compared to the prior year period, due to continued strong demand and volume across our Specialty Nutrition Systems (“SNS”) portfolio and positive momentum in radiofrequency ablation (“RFA”) generator sales, which resulted in more RFA procedures. This was partially offset by lower volume in our surgical pain and recovery portfolio.
Gross margin during the second quarter of 2025 was 52.6%, compared to 55.7% in the prior year period. Adjusted gross margin was 55.7% compared to 59.6% last year. Gross profit margin decreased primarily due to the effects of higher tariffs and lower pricing for our hyaluronic acid (“HA”) products.
Selling and general expenses as a percentage of net sales was 47.7% for the second quarter of 2025, compared to 47.1% for the second quarter of 2024. On an adjusted basis, selling and general expenses as a percentage of net sales was 45.2% for the second quarter of 2025, compared to 43.0% for the second quarter of 2024. Selling and general expenses increased primarily due to post-divestiture restructuring costs that are included in “Corporate and Other.”
Operating loss in the second quarter of 2025 was $74.5 million, compared to operating profit of $6.3 million in the prior year period, primarily due to a goodwill impairment charge of $77.0 million. On an adjusted basis, operating profit was $12.2 million, compared to $21.8 million a year ago.
Adjusted EBITDA from continuing operations was $17.0 million in the three months ended June 30, 2025, compared to $26.8 million in the three months ended June 30, 2024.
First Six Months of 2025 Operating Results
For the six months ended June 30, 2025, net sales were $342.5 million, an increase of 1.4% compared to the prior year period, driven by volume growth across the SNS portfolio and in RFA solutions and partially offset by lower volume in surgical pain and recovery.
Gross margin for the six months ended June 30, 2025 was 53.1%, compared to 56.4% in the prior year period. Adjusted gross margin was 56.2% compared to 59.7% last year and was impacted by higher tariffs and unfavorable pricing for our hyaluronic acid (“HA”) products, which are reported in “Corporate and Other.”
Selling and general expenses as a percentage of net sales were 46.5% for the six months ended June 30, 2025, compared to 48.7% for the prior year period. The decrease was primarily due to lower costs associated with restructuring, transformation and divestiture-related transition activities. On an adjusted basis, selling and general expenses as a percentage of net sales was 44.3% for the first six months of 2025, unchanged from the prior year period.
Following a $77.0 million impairment charge to goodwill, operating loss for the six months ended June 30, 2025 was $64.2 million, compared to an operating income of $10.3 million in the prior year period. On an adjusted basis, operating income for the second quarter was $29.3 million compared to $38.1 million in the prior year period.
Net loss for the six months ended June 30, 2025 was $70.2 million, compared to net income from continuing operations of $4.8 million in the prior year period. Adjusted net income was $19.9 million in the six months ended June 30, 2025 compared to $25.9 million in the six months ended June 30, 2024.
Adjusted EBITDA for the six months ended June 30, 2025 was $38.6 million, compared to $48.4 million in the prior year period.
Second Quarter 2025 Segment Results
Specialty Nutrition Systems (“SNS”)
The SNS segment delivered above-market results in the second quarter of 2025, achieving net sales of $102.7 million, an increase of $5.0 million compared to the prior year period, with 4.4% volume growth driven by continued strong demand across both our life-sustaining enteral feeding and neonate solutions categories. Operating income for the three months ended June 30, 2025 was $18.0 million, or 18% of SNS net sales, a decrease of $3.8 million compared to the prior year period.
Pain Management & Recovery (“PM&R”)
The PM&R segment net sales for the second quarter of 2025 were $61.0 million, an increase of $1.7 million compared to the prior year period, with volume growth partially offset by the effects of certain revenue streams that we strategically decided not to pursue this year. Net sales of RFA products grew 13.7%, reflecting momentum in RFA generator sales, which resulted in more procedures, especially in the ESENTEC and TRIDENT product lines, designed to help patients get back to the things that matter. Net sales in surgical pain and recovery for the second quarter of 2025 were 9.4% lower than last year, in line with our expectations. Operating profit for the second quarter of 2025 was $1.8 million compared to $0.1 million last year.
First Six Months of 2025 Segment Results
Specialty Nutrition Systems (“SNS”)
The SNS segment delivered above-market results in the six months ended June 30, 2025, achieving net sales of $203.8 million, an increase of $11.5 million compared to the prior year period, with 6.5% volume growth driven by continued strong demand across both our enteral feeding and neonate solutions categories. Operating income for the six months ended June 30, 2025 was $39.1 million, or 19.2% of SNS net sales, due to higher volume. This was an increase of $1.9 million compared to the prior year period.
Pain Management & Recovery (“PM&R”)
The PM&R segment net sales for the six months ended June 30, 2025 were $117.2 million, an increase of $1.6 million compared to the prior year period, with volume growth partially offset by the effects of certain revenue streams that we strategically decided not to pursue this year. Net sales of RFA products grew 11.0%, reflecting momentum in RFA generator sales, which resulted in more procedures, especially in the ESENTEC and TRIDENT product lines. Net sales in surgical pain and recovery for the six months ended June 30, 2025 were 9.3% lower than last year, in line with our expectations. Operating profit for the six months ended June 30, 2025 was $2.0 million compared to an operating loss of $2.0 million last year.
Non-Cash Goodwill Impairment
During the second quarter, due to downward pressure on our market capitalization, we assessed goodwill for impairment and recorded an impairment charge of $77.0 million in the PM&R segment.
Cash Flow and Balance Sheet
We had $90.3 million of cash on hand as of June 30, 2025 compared to $107.7 million at year-end 2024. Cash flow from operations for the six months ended June 30, 2025 was $32.5 million, compared to $19.8 million a year ago. Free cash flow for the second quarter of 2025 was a negative $4.2 million compared to an inflow of $21.9 million in the comparable prior year period. For the six months ended June 30, 2025, free cash flow was an inflow of $14.8 million, compared to $9.8 million a year ago. Total debt outstanding, net of unamortized discounts, was $105.1 million at June 30, 2025, compared to $134.7 million at December 31, 2024.
Sale of HA Product Line
On July 31, 2025, we announced the divestiture of our HA product line to Channel-Markers Medical, LLC, a privately held company. This transaction aligns with our ongoing transformation, which is focused on advancing our strategic segments in PM&R and SNS.
2025 Outlook
We are maintaining our 2025 estimated revenue of between $665 million and $685 million and our estimated adjusted diluted earnings per share to between $0.75 and $0.95 inclusive of the HA divestiture impact.
The guidance on adjusted diluted earnings per share range affirms the Company’s previous estimate of the impact of the tariffs. The estimate assumes that management’s mitigation plans will be able to moderate the impact of tariffs, including through cost containment measures, pricing actions where appropriate, supply chain adjustments and reliance on existing international agreements that allow for reduced or duty-free importation of products. Tariff rates continue to fluctuate, and if the final tariffs are higher than we anticipate, or if we are unable to successfully mitigate the impact of tariffs, the adverse effect on the Company’s business, financial condition, results of operations and cash flows could be material. The ultimate impact from any tariffs remains uncertain and will depend on various factors, including the level of our imports from China and Mexico, the level of tariff exemptions we are able to achieve, the proportion of our components procured and our finished goods manufactured outside of the United States, and the amount, scope, nature, timing and duration of the tariffs.
Non-GAAP Financial Measures
This press release and the accompanying tables include the following financial measures that have not been calculated in accordance with accounting principles generally accepted in the U.S., or GAAP, and are therefore referred to as non-GAAP financial measures:
•Adjusted gross and operating income;
•Adjusted income before taxes;
•Adjusted effective tax rate;
•Adjusted net income;
•Adjusted diluted earnings per share;
•Adjusted selling, general and administrative expenses;
•Adjusted EBITDA; and
•Free cash flow.
These non-GAAP financial measures exclude the following items, as applicable, for the relevant time periods as indicated in the accompanying non-GAAP reconciliations to the comparable GAAP financial measures:
•Certain acquisition and integration charges related to acquisitions;
•Expenses associated with restructuring and transformation activities, including the divestiture of the Company’s respiratory health business;
•Expenses associated with European Union Medical Device Regulation (“EU MDR”) compliance;
•The amortization of intangible assets associated with prior business acquisitions;
•Impairments of intangibles or goodwill;
•The tax effects of certain adjusting items; and
•The positive or negative effect of changes in currency exchange rates during the year.
The Company provides these non-GAAP financial measures as supplemental information to its GAAP financial measures. Management and the Company’s board of directors use net sales on a constant currency basis, adjusted net income, adjusted diluted earnings per share, adjusted operating income, adjusted EBITDA, and free cash flow to: (a) evaluate the Company’s historical and prospective financial performance and its performance relative to its competitors, (b) allocate resources and (c) measure the operational performance of the Company’s business units and their managers. Management also believes that the use of an adjusted effective tax rate provides improved insight into the tax effects of the Company’s ongoing business operations.
Additionally, the compensation committee of the Company’s board of directors will use certain of the non-GAAP financial measures when setting and assessing achievement of incentive compensation goals. These goals are based, in part, on the Company’s net sales on a constant currency basis and adjusted EBITDA, which will be determined by excluding certain items that are used in calculating these non-GAAP financial measures.
Our competitors may define these non-GAAP financial measures differently, and as a result, our measure of these non-GAAP financial measures may not be directly comparable to those of other companies. Items excluded from these non-GAAP financial measures are significant components in understanding and assessing financial performance. These non-GAAP financial measures are supplemental measures of operating performance that do not represent, and should not be considered in isolation or as an alternative to, or substitute for, the financial statement data presented in the Company’s consolidated financial statements as indicators of financial performance. These non-GAAP financial measures have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analysis of the Company’s results as reported under GAAP. We compensate for these limitations by relying primarily on our GAAP results and using these non-GAAP financial measures as supplemental information.
Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the attached financial tables.
Conference Call Webcast
Avanos Medical, Inc. will host a conference call today at 9 a.m. ET. To instantly join the conference by phone, use the following link to register close to the start time: https://emportal.ink/4ic36xn. After registering, the system will call you and automatically connect you to the conference call. Alternatively, you may join the call by dialing 1-646-357-8785 or 1-800-836-8184 and you will be connected to the call by an operator. A simultaneous webcast of the call and presentation will be accessible via the Investors section of the Avanos Medical website, https://avanos.investorroom.com. A replay of the call will be available within two hours of the end of the call and will be available for one week. Alternatively, you may dial 1-646-517-4150 or 1-888-660-6345 in the United States and enter passcode 35230#.
About Avanos Medical, Inc.
Avanos Medical (NYSE: AVNS) is a medical technology company focused on delivering clinically superior solutions that will help patients get back to the things that matter. Headquartered in Alpharetta, Georgia, Avanos is committed to addressing some of today’s most important healthcare needs, including providing a vital lifeline for nutrition to patients from hospital to home, and reducing the use of opioids while helping patients move from surgery to recovery. Avanos develops, manufactures and markets its recognized brands globally and holds leading market positions in multiple categories across its portfolio. For more information, visit www.avanos.com and follow Avanos Medical on X (@AvanosMedical), LinkedIn and Facebook.
Forward-Looking Statements
This press release contains information that includes or is based on “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that do not relate solely to historical or current facts, and can generally be identified by the use of words such as “may,” “believe,” “will,” “expect,” “project,” “estimate,” “anticipate,” “plan” or “continue” and similar expressions. Forward-looking statements are based on the current plans and expectations of management and are subject to various risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in such statements. Such factors include, but are not limited to: weakening of economic conditions that could adversely affect the level of demand for our products; pricing pressures generally, including cost-containment measures that could adversely affect the price of or demand for our products; shortage in drugs used in our Surgical Pain and Recovery products or other disruptions in our supply chain; the ongoing regional conflicts between Russia and Ukraine and in the Middle East; our ability to successfully execute on or achieve the expected benefits of our transformation initiative or our divestiture, acquisition or merger transactions; inflationary pressures; the expected impact of tariffs and our ability to mitigate tariffs; financial conditions affecting the banking system and the potential threats to the solvency of commercial banks; changes in foreign exchange markets; legislative and regulatory actions; unanticipated issues arising in connection with clinical studies and otherwise that affect U.S. Food and Drug Administration approval of new products; changes in reimbursement levels from third-party payors; a significant increase in product liability claims; the impact of investigative and legal proceedings and compliance risks; the impact of the federal legislation to reform the United States healthcare system; changes in financial markets; and changes in the competitive environment. The information contained herein speaks only as of the date of this release and we undertake no obligation to update forward-looking statements, except as may be required by the securities laws.
Additional information concerning these and other factors that may impact future results is contained in our filings with the U.S. Securities and Exchange Commission, including our most recent Form 10-Q.
AVANOS MEDICAL, INC.
CONDENSED CONSOLIDATED INCOME STATEMENTS
(unaudited)
(in millions, except per share amounts)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |||||
| Net Sales | $ | 175.0 | $ | 171.7 | $ | 342.5 | 337.8 | |
| Cost of products sold | 82.9 | 76.1 | 160.6 | 147.4 | ||||
| Gross Profit | 92.1 | 95.6 | 181.9 | 190.4 | ||||
| Research and development expenses | 5.8 | 6.3 | 11.2 | 13.3 | ||||
| Selling and general expenses | 83.5 | 80.9 | 159.2 | 164.5 | ||||
| Goodwill impairment | 77.0 | — | 77.0 | — | ||||
| Other (income) expense, net | 0.3 | 2.1 | (1.3) | 2.3 | ||||
| Operating Income (Loss) | (74.5) | 6.3 | (64.2) | 10.3 | ||||
| Interest income | 0.6 | 3.0 | 2.1 | 3.6 | ||||
| Interest expense | (2.0) | (3.1) | (4.1) | (6.2) | ||||
| Income (Loss) Before Income Taxes | (75.9) | 6.2 | (66.2) | 7.7 | ||||
| Income tax provision | (0.9) | (1.9) | (4.0) | (2.9) | ||||
| Income (Loss) from Continuing Operations | (76.8) | 4.3 | (70.2) | 4.8 | ||||
| (Loss) Income from discontinued operations, net of tax | — | (2.5) | — | (3.9) | ||||
| Net Income (Loss) | $ | (76.8) | $ | 1.8 | $ | (70.2) | $ | 0.9 |
| Interest expense, net | $ | 1.4 | $ | 0.1 | $ | 2.0 | $ | 2.6 |
| Income tax provision | 0.9 | 1.0 | 4.0 | 1.5 | ||||
| Depreciation and amortization | 10.0 | 11.3 | 19.6 | 22.7 | ||||
| EBITDA | $ | (64.5) | $ | 14.2 | $ | (44.6) | $ | 27.7 |
| Earnings (Loss) Per Share | ||||||||
| Basic | ||||||||
| Continuing operations | $ | (1.66) | $ | 0.09 | $ | (1.52) | $ | 0.10 |
| Discontinued operations | — | (0.05) | — | (0.08) | ||||
| Basic Earnings (Loss) Per Share | $ | (1.66) | $ | 0.04 | $ | (1.52) | $ | 0.02 |
| Diluted | ||||||||
| Continuing operations | $ | (1.66) | $ | 0.09 | $ | (1.52) | $ | 0.10 |
| Discontinued operations | — | (0.05) | — | (0.08) | ||||
| Diluted Earnings (Loss) Per Share | $ | (1.66) | $ | 0.04 | $ | (1.52) | $ | 0.02 |
| Common Shares Outstanding | ||||||||
| Basic | 46.3 | 45.9 | 46.2 | 46.1 | ||||
| Diluted | 46.3 | 46.3 | 46.2 | 46.6 |
AVANOS MEDICAL, INC.
Discontinued Operations Summary
(unaudited)
(in millions, except per share amounts)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |||||
| Net Sales | $ | — | $ | 13.6 | $ | — | $ | 30.5 |
| Cost of products sold | — | 15.6 | — | 31.5 | ||||
| Gross Profit | — | (2.0) | — | (1.0) | ||||
| Other expense, net | — | 1.4 | — | 4.3 | ||||
| Loss from discontinued operations before income taxes | — | (3.4) | — | (5.3) | ||||
| Income tax benefit from discontinued operations | — | 0.9 | — | 1.4 | ||||
| Loss from discontinued operations, net of tax | $ | — | $ | (2.5) | $ | — | $ | (3.9) |
| Loss Per Share | ||||||||
| Basic | $ | — | $ | (0.05) | $ | — | $ | (0.08) |
| Diluted | $ | — | $ | (0.05) | $ | — | $ | (0.08) |
AVANOS MEDICAL, INC.
NON-GAAP RECONCILIATIONS
(unaudited)
(in millions)
| Gross Profit | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | ||||||||||||||
| Continuing<br>Operations | Discontinued<br>Operations | Total | |||||||||||||
| As reported | $ | 92.1 | $ | 95.6 | $ | (2.0) | 93.6 | ||||||||
| Acquisition and integration-related charges | — | 0.1 | — | 0.1 | |||||||||||
| Restructuring and transformation charges | — | 0.3 | — | 0.3 | |||||||||||
| Post-RH Divestiture transition charges | — | 0.4 | — | 0.4 | |||||||||||
| Post-RH Divestiture restructuring | 2.3 | 2.2 | — | 2.2 | |||||||||||
| Intangibles amortization | 3.0 | 3.6 | — | 3.6 | |||||||||||
| As adjusted non-GAAP | $ | 97.4 | $ | 102.2 | $ | (2.0) | $ | 100.2 | |||||||
| Gross profit margin, as reported | 52.6 | % | 55.7 | % | (14.7) | % | 50.5 | % | |||||||
| Gross profit margin, as adjusted | 55.7 | % | 59.6 | % | (14.7) | % | 54.1 | % | |||||||
| Gross Profit | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | ||||||||||||||
| Continuing<br>Operations | Discontinued<br>Operations | Total | |||||||||||||
| As reported | $ | 181.9 | $ | 190.4 | $ | (1.0) | $ | 189.4 | |||||||
| Acquisition and integration-related charges | — | 0.1 | — | 0.1 | |||||||||||
| Restructuring and transformation charges | — | 1.0 | — | 1.0 | |||||||||||
| Post-RH Divestiture transition charges | — | 0.8 | — | 0.8 | |||||||||||
| Post-RH Divestiture restructuring | 4.6 | 2.2 | — | 2.2 | |||||||||||
| Intangibles amortization | 5.9 | 7.0 | — | 7.0 | |||||||||||
| As adjusted non-GAAP | $ | 192.4 | $ | 201.5 | $ | (1.0) | $ | 200.5 | |||||||
| Gross profit margin, as reported | 53.1 | % | 56.4 | % | (3.3) | % | 51.4 | % | |||||||
| Gross profit margin, as adjusted | 56.2 | % | 59.7 | % | (3.3) | % | 54.4 | % |
AVANOS MEDICAL, INC.
NON-GAAP RECONCILIATIONS
(unaudited)
(in millions)
| Operating Income (Loss) | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | ||||||||||
| Continuing<br>Operations | Discontinued<br>Operations | Total | |||||||||
| As reported | $ | (74.5) | $ | 6.3 | $ | (3.4) | $ | 2.9 | |||
| Acquisition and integration-related charges | — | 2.2 | — | 2.2 | |||||||
| Restructuring and transformation charges | — | 1.6 | — | 1.6 | |||||||
| Post-RH Divestiture transition charges | — | 0.5 | — | 0.5 | |||||||
| Post-RH Divestiture restructuring | 4.5 | 3.4 | — | 3.4 | |||||||
| Goodwill impairment | 77.0 | — | — | — | |||||||
| EU MDR Compliance | — | 1.5 | — | 1.5 | |||||||
| Litigation and legal | — | — | — | — | |||||||
| Intangibles amortization | 5.2 | 6.3 | — | 6.3 | |||||||
| As adjusted non-GAAP | $ | 12.2 | $ | 21.8 | $ | (3.4) | $ | 18.4 | |||
| Operating Income (Loss) | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Six Months Ended<br>June 30, 2025 | Six Months Ended June 30, 2024 | ||||||||||
| Continuing<br>Operations | Discontinued<br>Operations | Total | |||||||||
| As reported | $ | (64.2) | $ | 10.3 | $ | (5.3) | $ | 5.0 | |||
| Acquisition and integration-related charges | — | 2.5 | — | 2.5 | |||||||
| Restructuring and transformation charges | — | 4.5 | — | 4.5 | |||||||
| Post-RH Divestiture transition charges | — | 1.5 | — | 1.5 | |||||||
| Post-RH Divestiture restructuring | 7.6 | 4.1 | — | 4.1 | |||||||
| Goodwill impairment | 77.0 | — | — | — | |||||||
| EU MDR Compliance | — | 2.8 | — | 2.8 | |||||||
| Litigation and legal | (1.4) | — | — | — | |||||||
| Intangibles amortization | 10.3 | 12.4 | — | 12.4 | |||||||
| As adjusted non-GAAP | $ | 29.3 | $ | 38.1 | $ | (5.3) | $ | 32.8 |
AVANOS MEDICAL, INC.
NON-GAAP RECONCILIATIONS
(unaudited)
(in millions)
| Income (Loss) Before Taxes | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | ||||||||||
| Continuing<br>Operations | Discontinued<br>Operations | Total | |||||||||
| As reported | $ | (75.9) | $ | 6.2 | $ | (3.4) | $ | 2.8 | |||
| Acquisition and integration-related charges | — | 2.2 | — | 2.2 | |||||||
| Restructuring and transformation charges | — | 1.6 | — | 1.6 | |||||||
| Post-RH Divestiture transition charges | — | 0.5 | — | 0.5 | |||||||
| Post-RH Divestiture restructuring | 4.5 | 3.4 | — | 3.4 | |||||||
| Goodwill impairment | 77.0 | — | — | — | |||||||
| EU MDR Compliance | — | 1.5 | — | 1.5 | |||||||
| Litigation and legal | — | — | — | — | |||||||
| Intangibles amortization | 5.2 | 6.3 | — | 6.3 | |||||||
| As adjusted non-GAAP | $ | 10.8 | $ | 21.7 | $ | (3.4) | $ | 18.3 | |||
| Income (Loss) Before Taxes | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Six Months Ended<br>June 30, 2025 | Six Months Ended June 30, 2024 | ||||||||||
| Continuing<br>Operations | Discontinued<br>Operations | Total | |||||||||
| As reported | $ | (66.2) | $ | 7.7 | $ | (5.3) | $ | 2.4 | |||
| Acquisition and integration-related charges | — | 2.5 | — | 2.5 | |||||||
| Restructuring and transformation charges | — | 4.5 | — | 4.5 | |||||||
| Post-RH Divestiture transition charges | — | 1.5 | — | 1.5 | |||||||
| Post-RH Divestiture restructuring | 7.6 | 4.1 | — | 4.1 | |||||||
| Goodwill impairment | 77.0 | — | — | — | |||||||
| EU MDR Compliance | — | 2.8 | — | 2.8 | |||||||
| Litigation and legal | (1.4) | — | — | — | |||||||
| Intangibles amortization | 10.3 | 12.4 | — | 12.4 | |||||||
| As adjusted non-GAAP | $ | 27.3 | $ | 35.5 | $ | (5.3) | $ | 30.2 |
AVANOS MEDICAL, INC.
NON-GAAP RECONCILIATIONS
(unaudited)
(in millions)
| Tax (Provision) Benefit | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | ||||||||||||||
| Continuing<br>Operations | Discontinued<br>Operations | Total | |||||||||||||
| As reported | $ | (0.9) | $ | (1.9) | $ | 0.9 | $ | (1.0) | |||||||
| Tax effects of adjusting items | (2.0) | (4.0) | — | (4.0) | |||||||||||
| As adjusted non-GAAP | $ | (2.9) | $ | (5.9) | $ | 0.9 | $ | (5.0) | |||||||
| Effective tax rate, as reported | (1.2) | % | 30.6 | % | 26.5 | % | 35.7 | % | |||||||
| Effective tax rate, as adjusted | 26.9 | % | 27.2 | % | 26.5 | % | 27.3 | % | |||||||
| Tax (Provision) Benefit | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | ||||||||||||||
| Continuing<br>Operations | Discontinued<br>Operations | Total | |||||||||||||
| As reported | $ | (4.0) | $ | (2.9) | $ | 1.4 | $ | (1.5) | |||||||
| Tax effects of adjusting items | (3.4) | (6.7) | — | (6.7) | |||||||||||
| As adjusted non-GAAP | $ | (7.4) | $ | (9.6) | $ | 1.4 | $ | (8.2) | |||||||
| Effective tax rate, as reported | (6.0) | % | 37.7 | % | 26.4 | % | (62.5) | % | |||||||
| Effective tax rate, as adjusted | 27.1 | % | 27.0 | % | 26.4 | % | 27.2 | % |
AVANOS MEDICAL, INC.
NON-GAAP RECONCILIATIONS
(unaudited)
(in millions except per share amounts)
| Net Income (Loss) | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | ||||||||||
| Continuing<br>Operations | Discontinued<br>Operations | Total | |||||||||
| As reported | $ | (76.8) | $ | 4.3 | $ | (2.5) | $ | 1.8 | |||
| Acquisition and integration-related charges | — | 2.2 | — | 2.2 | |||||||
| Restructuring and transformation charges | — | 1.6 | — | 1.6 | |||||||
| Post-RH Divestiture transition charges | — | 0.5 | — | 0.5 | |||||||
| Post-RH Divestiture restructuring | 4.5 | 3.4 | — | 3.4 | |||||||
| Goodwill impairment | 77.0 | — | — | — | |||||||
| EU MDR Compliance | — | 1.5 | — | 1.5 | |||||||
| Litigation and legal | — | — | — | — | |||||||
| Intangibles amortization | 5.2 | 6.3 | — | 6.3 | |||||||
| Tax effects of adjusting items | (2.0) | (4.0) | — | (4.0) | |||||||
| As adjusted non-GAAP | $ | 7.9 | $ | 15.8 | $ | (2.5) | $ | 13.3 | |||
| Diluted earnings (loss) per share, as reported | $ | (1.66) | $ | 0.09 | $ | (0.05) | $ | 0.04 | |||
| Diluted earnings (loss) per share, as adjusted | $ | 0.17 | $ | 0.34 | $ | (0.05) | $ | 0.29 | |||
| Net Income (Loss) | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | ||||||||||
| Continuing<br>Operations | Discontinued<br>Operations | Total | |||||||||
| As reported | $ | (70.2) | $ | 4.8 | $ | (3.9) | $ | 0.9 | |||
| Acquisition and integration-related charges | — | 2.5 | — | 2.5 | |||||||
| Restructuring and transformation charges | — | 4.5 | — | 4.5 | |||||||
| Post-RH Divestiture transition charges | — | 1.5 | — | 1.5 | |||||||
| Post-RH Divestiture restructuring | 7.6 | 4.1 | — | 4.1 | |||||||
| Goodwill impairment | 77.0 | — | — | — | |||||||
| EU MDR Compliance | — | 2.8 | — | 2.8 | |||||||
| Litigation and legal | (1.4) | — | — | — | |||||||
| Intangibles amortization | 10.3 | 12.4 | — | 12.4 | |||||||
| Tax effects of adjusting items | (3.4) | (6.7) | — | (6.7) | |||||||
| As adjusted non-GAAP | $ | 19.9 | $ | 25.9 | $ | (3.9) | $ | 22.0 | |||
| Diluted earnings (loss) per share, as reported | $ | (1.52) | $ | 0.10 | $ | (0.08) | $ | 0.03 | |||
| Diluted earnings (loss) per share, as adjusted | $ | 0.43 | $ | 0.56 | $ | (0.08) | $ | 0.48 |
AVANOS MEDICAL, INC.
NON-GAAP RECONCILIATIONS
(unaudited)
(in millions except per share amounts)
| Selling, General and Administrative Expenses | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | ||||||||||||||
| Continuing<br>Operations | Discontinued<br>Operations | Total | |||||||||||||
| As reported | $ | 83.5 | $ | 80.9 | $ | — | $ | 80.9 | |||||||
| Acquisition and integration-related charges | — | (0.3) | — | (0.3) | |||||||||||
| Restructuring and transformation charges | — | (1.3) | — | (1.3) | |||||||||||
| Post-RH Divestiture transition charges | — | (0.1) | — | (0.1) | |||||||||||
| Post-RH Divestiture restructuring | (2.2) | (1.2) | — | (1.2) | |||||||||||
| EU MDR Compliance | — | (1.5) | — | (1.5) | |||||||||||
| Intangibles amortization | (2.2) | (2.7) | — | (2.7) | |||||||||||
| As adjusted non-GAAP | $ | 79.1 | $ | 73.8 | $ | — | $ | 73.8 | |||||||
| SG&A as a percentage of revenue, as reported | 47.7 | % | 47.1 | % | — | % | 43.7 | % | |||||||
| SG&A as a percentage of revenue, as adjusted | 45.2 | % | 43.0 | % | — | % | 39.8 | % | |||||||
| Selling, General and Administrative Expenses | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | ||||||||||||||
| Continuing<br>Operations | Discontinued<br>Operations | Total | |||||||||||||
| As reported | $ | 159.2 | $ | 164.5 | $ | — | $ | 164.5 | |||||||
| Acquisition and integration-related charges | — | (0.6) | — | (0.6) | |||||||||||
| Restructuring and transformation charges | — | (3.4) | — | (3.4) | |||||||||||
| Post-RH Divestiture transition charges | — | (0.5) | — | (0.5) | |||||||||||
| Post-RH Divestiture restructuring | (3.0) | (1.9) | — | (1.9) | |||||||||||
| EU MDR Compliance | — | (2.8) | — | (2.8) | |||||||||||
| Intangibles amortization | (4.4) | (5.4) | — | (5.4) | |||||||||||
| As adjusted non-GAAP | $ | 151.8 | $ | 149.9 | $ | — | $ | 149.9 | |||||||
| SG&A as a percentage of revenue, as reported | 46.5 | % | 48.7 | % | — | % | 44.7 | % | |||||||
| SG&A as a percentage of revenue, as adjusted | 44.3 | % | 44.4 | % | — | % | 40.7 | % |
AVANOS MEDICAL, INC.
NON-GAAP RECONCILIATIONS
(unaudited)
(in millions)
| EBITDA | ||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | |||||||||||||||||||||||
| Continuing<br>Operations | Discontinued<br>Operations | Total | ||||||||||||||||||||||
| Net income (loss) | $ | (76.8) | $ | 4.3 | $ | (2.5) | $ | 1.8 | ||||||||||||||||
| Interest expense, net | 1.4 | 0.1 | — | 0.1 | ||||||||||||||||||||
| Income tax provision (benefit) | 0.9 | 1.9 | (0.9) | 1.0 | ||||||||||||||||||||
| Depreciation | 4.8 | 5.0 | — | 5.0 | ||||||||||||||||||||
| Amortization | 5.2 | 6.3 | — | 6.3 | ||||||||||||||||||||
| EBITDA | (64.5) | 17.6 | (3.4) | 14.2 | ||||||||||||||||||||
| Acquisition and integration-related charges | — | 2.2 | — | 2.2 | ||||||||||||||||||||
| Restructuring and transformation charges | — | 1.6 | — | 1.6 | ||||||||||||||||||||
| Post-RH Divestiture transition charges | — | 0.5 | — | 0.5 | ||||||||||||||||||||
| Post-RH Divestiture restructuring | 4.5 | 3.4 | — | 3.4 | ||||||||||||||||||||
| Goodwill impairment | 77.0 | — | — | — | ||||||||||||||||||||
| EU MDR Compliance | — | 1.5 | — | 1.5 | ||||||||||||||||||||
| Litigation and legal | — | — | — | — | ||||||||||||||||||||
| Adjusted EBITDA | $ | 17.0 | $ | 26.8 | $ | (3.4) | $ | 23.4 | EBITDA | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||||||||||
| Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | |||||||||||||||||||||||
| Continuing<br>Operations | Discontinued<br>Operations | Total | ||||||||||||||||||||||
| Net income (loss) | $ | (70.2) | $ | 4.8 | $ | (3.9) | $ | 0.9 | ||||||||||||||||
| Interest expense, net | 2.0 | 2.6 | — | 2.6 | ||||||||||||||||||||
| Income tax provision (benefit) | 4.0 | 2.9 | (1.4) | 1.5 | ||||||||||||||||||||
| Depreciation | 9.3 | 10.3 | — | 10.3 | ||||||||||||||||||||
| Amortization | 10.3 | 12.4 | — | 12.4 | ||||||||||||||||||||
| EBITDA | (44.6) | 33.0 | (5.3) | 27.7 | ||||||||||||||||||||
| Acquisition and integration-related charges | — | 2.5 | — | 2.5 | ||||||||||||||||||||
| Restructuring and transformation charges | — | 4.5 | — | 4.5 | ||||||||||||||||||||
| Post-RH Divestiture transition charges | — | 1.5 | — | 1.5 | ||||||||||||||||||||
| Post-RH Divestiture restructuring | 7.6 | 4.1 | — | 4.1 | ||||||||||||||||||||
| Goodwill impairment | 77.0 | — | — | — | ||||||||||||||||||||
| EU MDR Compliance | — | 2.8 | — | 2.8 | ||||||||||||||||||||
| Litigation and legal | (1.4) | — | — | — | ||||||||||||||||||||
| Adjusted EBITDA | $ | 38.6 | $ | 48.4 | $ | (5.3) | $ | 43.1 |
AVANOS MEDICAL, INC.
NON-GAAP RECONCILIATIONS
(unaudited)
(in millions except per share amounts)
| Free Cash Flow | ||||||||
|---|---|---|---|---|---|---|---|---|
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||
| 2025 | 2024 | 2025 | 2024 | |||||
| Cash provided by operating activities | $ | 6.8 | $ | 27.8 | $ | 32.5 | $ | 19.8 |
| Capital expenditures | (11.0) | (5.9) | (17.7) | (10.0) | ||||
| Free Cash Flow | $ | (4.2) | $ | 21.9 | $ | 14.8 | $ | 9.8 |
2025 OUTLOOK
| Estimated Range | |||||
|---|---|---|---|---|---|
| Diluted earnings per share (GAAP) | $ | 0.33 | to | $ | 0.56 |
| Intangibles amortization | 0.25 | to | 0.24 | ||
| Post RH-Divestiture restructuring charges | 0.12 | to | 0.10 | ||
| Other | 0.05 | to | 0.05 | ||
| Adjusted diluted earnings per share (non-GAAP) | $ | 0.75 | to | $ | 0.95 |
AVANOS MEDICAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(in millions)
| June 30,<br>2025 | December 31,<br>2024 | |||
|---|---|---|---|---|
| ASSETS | ||||
| Current Assets | ||||
| Cash and cash equivalents | $ | 90.3 | $ | 107.7 |
| Accounts receivable, net | 110.2 | 132.8 | ||
| Inventories | 142.7 | 138.8 | ||
| Prepaid and other current assets | 12.8 | 14.1 | ||
| Total Current Assets | 356.0 | 393.4 | ||
| Property, Plant and Equipment, net | 114.3 | 110.7 | ||
| Operating Lease Right-of-Use Assets | 31.1 | 34.1 | ||
| Goodwill | 381.2 | 455.6 | ||
| Other Intangible Assets, net | 105.4 | 112.3 | ||
| Deferred Tax Assets | 25.3 | 24.9 | ||
| Other Assets | 25.7 | 23.2 | ||
| TOTAL ASSETS | $ | 1,039.0 | $ | 1,154.2 |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||
| Current Liabilities | ||||
| Current portion of long-term debt | $ | 9.4 | $ | 9.4 |
| Current portion of operating lease liabilities | 10.4 | 10.9 | ||
| Trade accounts payable | 48.8 | 54.3 | ||
| Accrued expenses | 66.0 | 91.3 | ||
| Total Current Liabilities | 134.6 | 165.9 | ||
| Long-Term Debt | 95.7 | 125.3 | ||
| Operating Lease Liabilities | 21.8 | 24.6 | ||
| Deferred Tax Liabilities | 6.3 | 5.5 | ||
| Other Long-Term Liabilities | 4.3 | 4.4 | ||
| TOTAL LIABILITIES | 262.7 | 325.7 | ||
| Stockholders’ Equity | 776.3 | 828.5 | ||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 1,039.0 | $ | 1,154.2 |
AVANOS MEDICAL, INC.
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS
(unaudited)
(in millions)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |||||
| Operating Activities | ||||||||
| Net income (loss) | $ | (76.8) | $ | 1.8 | $ | (70.2) | $ | 0.9 |
| Depreciation and amortization | 10.0 | 11.3 | 19.6 | 22.7 | ||||
| Goodwill impairment | 77.0 | — | 77.0 | — | ||||
| Loss on asset dispositions | 0.1 | — | 0.3 | 0.3 | ||||
| Changes in operating assets and liabilities, net of acquisition | (6.8) | 8.3 | (1.4) | (13.7) | ||||
| Deferred income taxes and other | 3.3 | 6.4 | 7.2 | 9.6 | ||||
| Cash Provided by (Used in) Operating Activities | 6.8 | 27.8 | 32.5 | 19.8 | ||||
| Investing Activities | ||||||||
| Capital expenditures | (11.0) | (5.9) | (17.7) | (10.0) | ||||
| Proceeds from RH Divestiture post-closing settlement | — | — | — | 2.1 | ||||
| Investment in Non-affiliates | (2.2) | — | (4.6) | — | ||||
| Cash Used in Investing Activities | (13.2) | (5.9) | (22.3) | (7.9) | ||||
| Financing Activities | ||||||||
| Secured debt repayments | (2.4) | (1.5) | (4.7) | (3.1) | ||||
| Revolving credit facility proceeds | — | — | — | 20.0 | ||||
| Revolving credit facility repayments | — | — | (25.0) | (10.0) | ||||
| Purchases of treasury stock | (0.8) | (3.5) | (3.0) | (12.6) | ||||
| Proceeds from the exercise of stock options | — | — | 0.4 | 0.5 | ||||
| Payment of contingent consideration liabilities | — | — | — | (0.5) | ||||
| Cash Used in Financing Activities | (3.2) | (5.0) | (32.3) | (5.7) | ||||
| Effect of Exchange Rate Changes on Cash and Cash Equivalents | 2.9 | (0.5) | 4.7 | (1.7) | ||||
| Decrease in Cash and Cash Equivalents | (6.7) | 16.4 | (17.4) | 4.5 | ||||
| Cash and Cash Equivalents - Beginning of Period | 97.0 | 75.8 | 107.7 | 87.7 | ||||
| Cash and Cash Equivalents - End of Period | $ | 90.3 | $ | 92.2 | $ | 90.3 | $ | 92.2 |
AVANOS MEDICAL, INC.
SELECTED BUSINESS SEGMENT DATA
(unaudited)
(in millions)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | Change | 2025 | 2024 | Change | ||||||||||
| Specialty Nutrition Systems: | |||||||||||||||
| Enteral feeding | $ | 74.5 | $ | 72.7 | 2.5 | % | $ | 149.0 | $ | 142.7 | 4.4 | % | |||
| Neonate solutions | 28.2 | 25.0 | 12.8 | % | 54.8 | 49.6 | 10.5 | % | |||||||
| Total Specialty Nutrition Systems | 102.7 | 97.7 | 5.1 | % | 203.8 | 192.3 | 6.0 | % | |||||||
| Pain Management & Recovery: | |||||||||||||||
| Surgical pain and recovery | 25.2 | 27.8 | (9.4) | % | 49.7 | 54.8 | (9.3) | % | |||||||
| Radiofrequency Ablation | 35.8 | 31.5 | 13.7 | % | 67.5 | 60.8 | 11.0 | % | |||||||
| Total Pain Management & Recovery | 61.0 | 59.3 | 2.9 | % | 117.2 | 115.6 | 1.4 | % | |||||||
| Corporate and Other | 11.3 | 14.7 | (23.1) | % | 21.5 | 29.9 | (28.1) | % | |||||||
| Total Net Sales | $ | 175.0 | $ | 171.7 | 1.9 | % | $ | 342.5 | $ | 337.8 | 1.4 | % | |||
| Operating Income (Loss) | |||||||||||||||
| Specialty Nutrition Systems | $ | 18.0 | $ | 21.8 | (17.4) | % | $ | 39.1 | $ | 37.2 | 5.1 | % | |||
| Pain Management & Recovery | 1.8 | 0.1 | N.M. | 2.0 | (2.0) | (200.0) | % | ||||||||
| Corporate and Other(a) | (94.3) | (15.6) | 504.5 | % | (105.3) | (24.9) | 322.9 | % | |||||||
| Total Operating Income (Loss) | $ | (74.5) | $ | 6.3 | N.M. | $ | (64.2) | $ | 10.3 | N.M. | |||||
| Net sales - percentage change (QTD) | Total | Volume | Pricing/Mix | Currency | Other(b) | ||||||||||
| Specialty Nutrition Systems | 5.1 | % | 4.4 | % | 0.5 | % | 0.7 | % | (0.5) | % | |||||
| Pain Management & Recovery | 2.9 | % | 3.1 | % | 0.3 | % | 0.4 | % | (0.9) | % | |||||
| Corporate and Other | (23.1) | % | (26.4) | % | (2.0) | % | — | % | 5.3 | % | |||||
| Net sales - percentage change (YTD) | Total | Volume | Pricing/Mix | Currency | Other(b) | ||||||||||
| Specialty Nutrition Systems | 6.0 | % | 6.5 | % | 0.4 | % | (0.2) | % | (0.7) | % | |||||
| Pain Management & Recovery | 1.4 | % | 2.6 | % | 0.3 | % | (0.1) | % | (1.4) | % | |||||
| Corporate and Other | (28.1) | % | (18.8) | % | (15.4) | % | (0.1) | % | 6.2 | % |
______________________________
N.M.: Not Meaningful
(a)Corporate and Other operating loss includes $77.0 million of goodwill impairment associated with our PM&R segment.
(b)Other includes the effects of our withdrawal from certain revenue streams that did not meet our return criteria and rounding.
Document
Avanos Medical Announces Divestiture of Hyaluronic Acid Product Line
to Channel-Markers Medical
ALPHARETTA, Ga., July 31, 2025 /PRNewswire/ – Avanos Medical, Inc. (NYSE: AVNS), announced today the divestiture of its Hyaluronic Acid (HA) product line to Channel-Markers Medical, LCC (CMM), a privately held company based in Raleigh, NC.
This transaction aligns with Avanos’ ongoing transformation, which is focused on advancing its strategic segments in Pain Management & Recovery and Specialty Nutrition Systems.
Channel-Markers Medical specializes in the development and commercialization of joint health, regenerative therapies, and minimally invasive pain management solutions. The acquisition of the HA portfolio supports CMM’s strategic goal to expand its presence in musculoskeletal health and injectable pain therapies.
The divested portfolio includes the TriVisc® and GenVisc® 850 injection products, which are indicated for the treatment of osteoarthritis (OA) pain in the knee. These injectable HA therapies are designed to help patients manage OA symptoms and improve joint function.
“This divestiture represents a meaningful step in advancing our transformation strategy and reinforcing our commitment to focused growth,” said Dave Pacitti, Avanos’ chief executive officer. “By aligning our product portfolio more closely with our strategic priorities, we expect to strengthen our ability to invest in those areas where we see the greatest potential to lead, innovate, and deliver long-term value for patients, customers, and shareholders.”
Channel-Markers Medical specializes in the development and commercialization of joint health, regenerative therapies, and minimally invasive pain management solutions. The acquisition of the HA portfolio supports CMM’s strategic goal to expand its presence in musculoskeletal health and injectable pain therapies.
With today’s announcement, ownership of Avanos’ HA product line has officially transferred to CMM. Avanos will provide transition support through the end of 2025 to ensure uninterrupted service and support for customers, partners, and patients.
“This acquisition aligns with our mission to deliver high-quality, clinically proven therapies that improve patient mobility and quality of life,” said David Toledo, one of CMM’s managing partners. “We’re proud to integrate these trusted brands into our portfolio as we accelerate our growth in the pain therapy market.”
About Avanos Medical, Inc.
Avanos Medical (NYSE: AVNS) is a medical technology company focused on delivering clinically superior medical device solutions that help patients get back to the things that matter. Headquartered in Alpharetta, Georgia, Avanos is committed to addressing some of today's most important healthcare needs, including providing a vital lifeline for nutrition to patients from hospital to home, and reducing the use of opioids while helping patients move from surgery to recovery. Avanos develops, manufactures and markets its recognized brands globally and holds leading market positions in multiple product categories. For more information, visit www.avanos.com and follow Avanos Medical on X (@AvanosMedical), LinkedIn and Facebook.
About Channel-Markers Medical
Channel-Markers Medical is a privately held medical device company specializing in the development and commercialization of joint health, regenerative therapies, and minimally invasive pain management solutions. With a commitment to innovation, patient access, and outcomes, the company serves healthcare providers and patients across the Orthopaedic, Sports Medicine, and Pain Management specialties. Learn more at: www.channel-markers.com.
Document
Avanos Medical Announces Appointment of Scott Galovan as Senior Vice President, Chief Financial Officer; David Pacitti Appointed to Board of Directors
ALPHARETTA, Ga., August 5, 2025/PRNewswire/ -- Avanos Medical, Inc. (NYSE: AVNS), a leading medical technology company, today announced the appointment of Scott Galovan as its new senior vice president, chief financial officer, effective Aug. 1, 2025.
Galovan most recently served as Avanos’ senior vice president of strategy and corporate development. His background with the company spans 12 years and is highlighted by a proven track record of leading a number of acquisition and divestiture initiatives. Prior to Avanos, he spent 10 years in a variety of strategy, finance, and M&A roles for Newell Brands, Equity Pacific Partners, and Intel Capital.
As CFO, Galovan will oversee the company’s global finance, treasury, tax, corporate development, investor relations, and accounting groups, as well as its Enterprise Program Management Office.
He will report directly to David Pacitti, Avanos chief executive officer.
“Scott brings a growth-oriented mindset to the CFO role, which will be critical as we look to build on the significant progress we’ve made with our transformation efforts,” said Pacitti. “His ability to drive strategic partnerships, coupled with his deep understanding of market dynamics, will help to shape our next chapter, enhance our long-term planning, and maintain a sharp focus on shareholder value.”
Galovan earned a bachelor’s degree from BYU and a master’s of business administration from the University of California at Los Angeles, where he was a Venture Fellow.
The Company also announced the appointment of Pacitti as a member of its board of directors, effective Aug. 1, 2025.
“On behalf of the entire board, I am pleased to welcome Dave to the Avanos board,” said Gary Blackford, Avanos board chair. “His extensive industry experience and leadership will further strengthen the Company’s vision of being the best at getting patients back to the things that matter.”
About Avanos Medical
Avanos Medical (NYSE: AVNS) is a medical technology company focused on delivering clinically superior medical device solutions that will help patients get back to the things that matter. Headquartered in Alpharetta, Georgia, Avanos is committed to addressing some of today’s most important healthcare needs, including providing a vital lifeline for nutrition to patients from hospital to home, and reducing the use of opioids while helping patients move from surgery to recovery. Avanos develops, manufactures and markets its recognized brands globally and holds leading market positions in multiple product categories. For more information, visit www.avanos.com and follow Avanos Medical on X (@AvanosMedical), LinkedIn and Facebook.
SOURCE Avanos Medical
Media Contact:
Katrine Kubis
Vice President, Corporate Communications
Avanos Medical, Inc.
CorporateCommunications@Avanos.com