ALPHARETTA, Ga., Nov. 3, 2020 /PRNewswire/ -- Avanos Medical,
Inc. (NYSE: AVNS) today reported third quarter 2020 financial
results.
"Thanks to the work of our team and their focus on execution,
our momentum continued as we delivered results ahead of our
expectations," stated Joe Woody,
Avanos' chief executive officer. "Our performance was bolstered by
the continued demand for our clinically-proven Respiratory Health
products and the sequential acceleration of elective
procedures."
Woody continued, "The team's resilient mindset along with the
strategic steps we've enacted to reduce expenses and boost cash
flow, have enabled us to effectively manage the business through
this unparalleled environment. Further, we've resumed investing in
our growth platforms to advance our strategy and position us for
sales growth, margin expansion and positive free cash flow in 2021
and beyond."
Third Quarter 2020 Financial Highlights
- Net sales totaled $186 million,
an 8 percent increase compared to the prior year.
- Net income for the quarter was $19
million, compared to net loss of $12
million a year ago.
- Adjusted net income totaled $10
million, compared to $14
million a year ago.
- Diluted earnings per share were $0.40, compared to $(0.24) a year ago.
- Adjusted diluted earnings per share were $0.21, compared to $0.30 in the prior year.
Operational and Business Highlights
- The company continues to strengthen its management team with
the addition of Bill Haydon, senior
vice president and general manager, to lead the Pain Management
franchise and Michelle Scharfenberg,
senior vice president and chief ethics and compliance officer, to
lead the Compliance & Ethics program.
- The company demonstrated its commitment to open innovation with
a minority investment into FUSMobile Inc., for the development of
novel, non-invasive tissue ablation procedures, utilizing high
intensity focused ultrasound technology, which complements its Pain
Management franchise.
- The Journal of Bone & Joint Surgery, the official
journal of the American Orthopedic Association, recently published
a large, randomized, multicentered clinical trial demonstrating the
superiority of COOLIEF* to hyaluronic acid for the management of
knee pain caused by osteoarthritis. The results show tremendous
consistency in response when compared to previously published trial
data on COOLIEF*.
Third Quarter 2020 Operating Results
Net sales totaled $186 million, an
8 percent increase compared to the prior year. Volume increased 8
percent, driven by the continued global demand in Respiratory
Health from Closed Suction Systems and Oral Care products related
to the pandemic and in Digestive Health driven especially by
double-digit demand for CORPAK and NeoMed products. This growth was
offset by the expected lower volume in both Acute Pain and
Interventional Pain, due to fewer elective procedures.
Gross margin was 52 percent, compared to 55 percent a year ago.
Adjusted gross margin was 55 percent, due to product mix, the
elevated costs associated with the company's COVID-19 efforts, and
the write down of obsolete inventory and raw materials, compared to
57 percent last year.
Operating loss was $0.1 million
compared to a loss of $18 million a
year ago. Higher sales, lower post divestiture transition and
restructuring costs and litigation expenses drove the improvement.
On an adjusted basis, operating profit totaled $18 million, compared to $21 million a year ago. The decline was due to
lower gross margin and higher operating expenses, partially offset
by higher sales.
Adjusted EBITDA for the quarter was $24
million, compared to $25
million in the prior year.
First Nine Months 2020 Operating Results
Net sales totaled $530 million, a
4 percent increase compared to a year ago. The acquisitions of
NeoMed and Summit contributed 5 percent of growth. Continued
accelerated pandemic-related demand in Respiratory Health was
offset by lower volume in both Acute Pain and Interventional Pain,
resulting in 1 percent lower organic volume.
Gross margin was 54 percent, compared to 58 percent a year ago.
Adjusted gross margin was 56 percent, due to product mix and the
elevated costs associated with the company's COVID-19 efforts,
compared to 60 percent last year.
Operating loss was $1 million
compared to a loss of $53 million in
the first nine months of 2019. Higher sales and lower post
divestiture transition charges and litigation expenses drove the
improvement. On an adjusted basis, operating profit totaled
$45 million, compared to $51 million in 2019. Performance was impacted by
lower gross margin, which was partially offset by higher sales.
Year to date, adjusted EBITDA was $63
million compared to $62
million in 2019.
Cash Flow and Balance Sheet
Total debt at the end of the third quarter was $249 million, compared to $248 million at year-end 2019. In October, the
company drew down $180 million on its
revolving credit facility and used a portion of available cash to
redeem its 6.25 percent senior unsecured notes that were due
October 2022.
Cash from operations less capital expenditures, or free cash
flow, for the quarter was an outflow of $2
million compared to an outflow of $24
million a year ago. Improved operating results and working
capital efficiencies drove performance. At the end of the quarter,
the company's cash balance was $180
million, compared to $205
million at year-end 2019. The company anticipates that its
current cash position will provide sufficient liquidity to manage
the business during this period of uncertainty.
Update on Response to COVID-19
Due to the continuing uncertainty related to the ongoing
pandemic, and its potential impact on the recovery of elective
procedures, the company anticipates this headwind will continue
into 2021. Despite these near-term challenges, the company
continued to take strategic steps to ensure its Respiratory Health
products remain available to customers, reduce operating expenses
and minimize cash outflow to ensure it remains in a strong
financial position in a post COVID-19 environment.
Full Year 2020 Outlook
On May 4, 2020, the company
withdrew its previously announced full-year 2020 financial
guidance, which was issued on February 25,
2020, due to the uncertainties associated with the impact of
the COVID-19 pandemic. At this time, the company cannot fully
quantify the extent or duration of the impact of the pandemic on
its financial results. However, it will continue to monitor the
situation and anticipates providing further updates in early
2021.
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 net income
- Adjusted diluted earnings per share
- Adjusted gross margin
- Adjusted operating profit
- Adjusted effective tax rate
- Adjusted EBITDA
- 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:
- Expenses associated with restructuring activities, including
IT-related charges.
- Expenses associated with the divestiture of the S&IP
business.
- Expenses associated with the amortization of intangible assets
associated with prior business acquisitions.
- The positive or negative effect of changes in currency exchange
rates during the year.
- Expenses associated with certain litigation matters.
- Expenses associated with altering operations in response to the
COVID-19 pandemic.
- Certain acquisition and integration charges related to the
acquisition of Game Ready, NeoMed, Summit Medical, and Endoclear
LLC.
- Benefit associated with regulatory tax reform and tax effects
of the CARES Act.
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 profit, 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 our 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.
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. The conference call can be
accessed live over the Internet at
https://avanos.investorroom.com or via telephone by dialing
877-240-5772 in the United States.
A replay of the call will be available at noon ET today by calling 877-344-7529 in
the United States and entering
passcode 10148965. A webcast of the call will also be archived
in the Investors section on the Avanos website.
About Avanos Medical, Inc.
Avanos Medical (NYSE: AVNS) is a medical device company focused
on delivering clinically superior breakthrough solutions that will
help patients get back to the things that matter. Headquartered in
Alpharetta, Georgia, Avanos is
committed to creating the next generation of innovative healthcare
solutions which will address our most important healthcare needs,
such as reducing the use of opioids while helping patients move
from surgery to recovery. Avanos develops, manufactures and markets
its recognized brands in more than 90 countries. For more
information, visit www.avanos.com and follow Avanos Medical on
Twitter (@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 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. 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, among
others. 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; risks related to the ongoing COVID-19
pandemic; shortage in drugs used in our Acute Pain products or
other disruptions in our supply chain; S&IP separation
execution and IT implementation; 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.
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-K and Quarterly Reports on Form 10-Q.
AVANOS MEDICAL,
INC.
|
CONDENSED
CONSOLIDATED INCOME STATEMENTS
|
(unaudited)
|
(in millions,
except per share amounts)
|
|
|
Three Months Ended
September 30,
|
|
|
|
Nine Months
Ended
September 30,
|
|
|
|
2020
|
|
2019
|
|
Change
|
|
2020
|
|
2019
|
|
Change
|
Net
Sales
|
$
|
185.7
|
|
|
$
|
171.4
|
|
|
8.3
|
%
|
|
$
|
529.8
|
|
|
$
|
507.8
|
|
|
4.3
|
%
|
Cost of products
sold
|
89.9
|
|
|
76.4
|
|
|
17.7
|
|
|
245.4
|
|
|
215.3
|
|
|
14.0
|
|
Gross
Profit
|
95.8
|
|
|
95.0
|
|
|
0.8
|
|
|
284.4
|
|
|
292.5
|
|
|
(2.8)
|
|
Research and
development expenses
|
8.2
|
|
|
9.6
|
|
|
(14.6)
|
|
|
25.3
|
|
|
29.3
|
|
|
(13.7)
|
|
Selling and general
expenses
|
82.4
|
|
|
94.4
|
|
|
(12.7)
|
|
|
250.4
|
|
|
295.5
|
|
|
(15.3)
|
|
Other expense,
net
|
5.3
|
|
|
9.1
|
|
|
(41.8)
|
|
|
10.0
|
|
|
20.2
|
|
|
N.M.
|
Operating
Loss
|
(0.1)
|
|
|
(18.1)
|
|
|
N.M.
|
|
(1.3)
|
|
|
(52.5)
|
|
|
N.M.
|
Interest
income
|
0.2
|
|
|
1.3
|
|
|
N.M.
|
|
1.1
|
|
|
5.7
|
|
|
N.M.
|
Interest
expense
|
(4.3)
|
|
|
(3.5)
|
|
|
22.9
|
|
|
(12.9)
|
|
|
(10.7)
|
|
|
20.6
|
|
Loss Before Income
Taxes
|
(4.2)
|
|
|
(20.3)
|
|
|
N.M.
|
|
(13.1)
|
|
|
(57.5)
|
|
|
N.M.
|
Income tax
benefit
|
23.5
|
|
|
8.8
|
|
|
N.M.
|
|
33.1
|
|
|
17.7
|
|
|
N.M.
|
Net Income
(Loss)
|
$
|
19.3
|
|
|
$
|
(11.5)
|
|
|
N.M.
|
|
$
|
20.0
|
|
|
$
|
(39.8)
|
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
$
|
4.1
|
|
|
$
|
2.2
|
|
|
86.4
|
|
|
$
|
11.8
|
|
|
$
|
5.0
|
|
|
136.0
|
|
Income tax
benefit
|
(23.5)
|
|
|
(8.8)
|
|
|
N.M.
|
|
(33.1)
|
|
|
(17.7)
|
|
|
N.M.
|
Depreciation and
amortization
|
10.7
|
|
|
8.7
|
|
|
23.0
|
|
|
32.1
|
|
|
25.6
|
|
|
25.4
|
|
EBITDA
|
$
|
10.6
|
|
|
$
|
(9.4)
|
|
|
N.M.
|
|
$
|
30.8
|
|
|
$
|
(26.9)
|
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (Loss)
Per Share
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.40
|
|
|
$
|
(0.24)
|
|
|
N.M.
|
|
$
|
0.42
|
|
|
$
|
(0.84)
|
|
|
N.M.
|
Diluted
|
0.40
|
|
|
(0.24)
|
|
|
N.M.
|
|
0.42
|
|
|
(0.84)
|
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Shares
Outstanding
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
47.8
|
|
|
47.7
|
|
|
|
|
47.8
|
|
|
47.6
|
|
|
|
Diluted
|
48.1
|
|
|
47.7
|
|
|
|
|
48.0
|
|
|
47.6
|
|
|
|
AVANOS MEDICAL,
INC.
|
NON-GAAP
RECONCILIATIONS
|
(unaudited)
|
(in
millions)
|
|
|
Gross
Profit
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
As
reported
|
$
|
95.8
|
|
|
$
|
95.0
|
|
|
$
|
284.4
|
|
|
$
|
292.5
|
|
Gross profit
margin, as reported
|
51.6
|
%
|
|
55.4
|
%
|
|
53.7
|
%
|
|
57.6
|
%
|
|
|
|
|
|
|
|
|
COVID-19 related
expenses
|
1.8
|
|
|
—
|
|
|
4.3
|
|
|
—
|
|
Post divestiture
restructuring and IT charges
|
0.9
|
|
|
0.4
|
|
|
2.0
|
|
|
2.2
|
|
Post divestiture
transition charges
|
0.6
|
|
|
1.7
|
|
|
1.7
|
|
|
4.5
|
|
Acquisition and
integration-related charges
|
0.6
|
|
|
—
|
|
|
0.8
|
|
|
—
|
|
Intangibles
amortization
|
1.7
|
|
|
1.3
|
|
|
5.0
|
|
|
3.7
|
|
|
|
|
|
|
|
|
|
As adjusted
non-GAAP
|
$
|
101.4
|
|
|
$
|
98.4
|
|
|
$
|
298.2
|
|
|
$
|
302.9
|
|
Gross profit
margin, as adjusted
|
54.6
|
%
|
|
57.4
|
%
|
|
56.3
|
%
|
|
59.6
|
%
|
|
|
Operating (Loss)
Profit
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
As
reported
|
$
|
(0.1)
|
|
|
$
|
(18.1)
|
|
|
$
|
(1.3)
|
|
|
$
|
(52.5)
|
|
|
|
|
|
|
|
|
|
COVID-19 related
expenses
|
3.2
|
|
|
—
|
|
|
6.9
|
|
|
—
|
|
Post divestiture
restructuring and IT charges(a)
|
0.9
|
|
|
8.4
|
|
|
1.4
|
|
|
16.2
|
|
Post divestiture
transition charges(b)
|
1.1
|
|
|
10.9
|
|
|
8.2
|
|
|
43.1
|
|
Acquisition and
integration-related charges(c)
|
5.7
|
|
|
6.7
|
|
|
9.6
|
|
|
8.1
|
|
Litigation and
legal(d)
|
2.4
|
|
|
8.0
|
|
|
5.8
|
|
|
21.4
|
|
Intangibles
amortization
|
4.9
|
|
|
5.1
|
|
|
14.6
|
|
|
14.6
|
|
|
|
|
|
|
|
|
|
As adjusted
non-GAAP
|
$
|
18.1
|
|
|
$
|
21.0
|
|
|
$
|
45.2
|
|
|
$
|
50.9
|
|
__________________________________________________
|
(a)
|
Except for amounts
impacting gross profit (see "Gross Profit" table), restructuring
and IT charges are included in "Selling and general
expenses."
|
(b)
|
In the three and nine
months ended September 30, 2020, post divestiture transition
charges include $0.6 million and $1.7 million, respectively, in
"Cost of products sold" (see "Gross Profit" table), $0.5 million
and $6.8 million, respectively, in "Selling and general
expenses" and $— million and $0.3 million, respectively, in "Other
expense, net."
|
(c)
|
In the three and nine
months ended September 30, 2020, acquisition related charges
includes $0.6 million and $0.8 million, respectively, in "Cost of
products sold" (see "Gross Profit" table), $4.7 million and $6.6
million, respectively, in "Selling and general expenses" and
$0.4 million and $2.2 million, respectively, in "Other expense,
net."
|
(d)
|
Litigation and legal
expenses are included in "Other expense, net."
|
AVANOS MEDICAL,
INC.
|
NON-GAAP
RECONCILIATIONS
|
(unaudited)
|
(in
millions)
|
|
|
(Loss) Income
Before Taxes
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
As
reported
|
$
|
(4.2)
|
|
|
$
|
(20.3)
|
|
|
$
|
(13.1)
|
|
|
$
|
(57.5)
|
|
|
|
|
|
|
|
|
|
COVID-19 related
expenses
|
3.2
|
|
|
—
|
|
|
6.9
|
|
|
—
|
|
Post divestiture
restructuring and IT charges
|
0.9
|
|
|
8.4
|
|
|
1.4
|
|
|
16.2
|
|
Post divestiture
transition charges
|
1.1
|
|
|
10.9
|
|
|
8.2
|
|
|
43.1
|
|
Acquisition and
integration-related charges
|
5.7
|
|
|
6.7
|
|
|
9.6
|
|
|
8.1
|
|
Litigation and
legal
|
2.4
|
|
|
8.0
|
|
|
5.8
|
|
|
21.4
|
|
Intangibles
amortization
|
4.9
|
|
|
5.1
|
|
|
14.6
|
|
|
14.6
|
|
|
|
|
|
|
|
|
|
As adjusted
non-GAAP
|
$
|
14.0
|
|
|
$
|
18.8
|
|
|
$
|
33.4
|
|
|
$
|
45.9
|
|
|
|
Tax Benefit
(Provision)
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
As
reported
|
$
|
23.5
|
|
|
$
|
8.8
|
|
|
$
|
33.1
|
|
|
$
|
17.7
|
|
Effective tax
rate, as reported
|
559.5
|
%
|
|
43.3
|
%
|
|
252.7
|
%
|
|
30.8
|
%
|
|
|
|
|
|
|
|
|
Tax effects of
adjusting items
|
(3.8)
|
|
|
(13.5)
|
|
|
(11.2)
|
|
|
(29.1)
|
|
Effects of the CARES
Act and other(a)
|
(23.5)
|
|
|
—
|
|
|
(31.0)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
As adjusted
non-GAAP
|
$
|
(3.8)
|
|
|
$
|
(4.7)
|
|
|
$
|
(9.1)
|
|
|
$
|
(11.4)
|
|
Effective tax
rate, as adjusted
|
27.1
|
%
|
|
25.0
|
%
|
|
27.2
|
%
|
|
24.8
|
%
|
|
__________________________________________________
|
(a)
|
The CARES Act allows
for the carryback of U.S. net operating losses to prior years
resulting in a benefit of $23.4 million and $33.1 million for three
and nine months ended September 30, 2020,
respectively.
|
AVANOS MEDICAL,
INC.
|
NON-GAAP
RECONCILIATIONS
|
(unaudited)
|
(in millions,
except per share amounts)
|
|
|
Net Income
(Loss)
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
As
reported
|
$
|
19.3
|
|
|
$
|
(11.5)
|
|
|
$
|
20.0
|
|
|
$
|
(39.8)
|
|
Diluted EPS, as
reported
|
$
|
0.40
|
|
|
$
|
(0.24)
|
|
|
$
|
0.42
|
|
|
$
|
(0.84)
|
|
|
|
|
|
|
|
|
|
COVID-19 related
expenses
|
3.2
|
|
|
—
|
|
|
6.9
|
|
|
—
|
|
Post divestiture
restructuring and IT charges
|
0.9
|
|
|
8.4
|
|
|
1.4
|
|
|
16.2
|
|
Post divestiture
transition charges
|
1.1
|
|
|
10.9
|
|
|
8.2
|
|
|
43.1
|
|
Acquisition and
integration-related charges
|
5.7
|
|
|
6.7
|
|
|
9.6
|
|
|
8.1
|
|
Litigation and
legal
|
2.4
|
|
|
8.0
|
|
|
5.8
|
|
|
21.4
|
|
Intangibles
amortization
|
4.9
|
|
|
5.1
|
|
|
14.6
|
|
|
14.6
|
|
Tax effects of
adjusting items
|
(3.8)
|
|
|
(13.5)
|
|
|
(11.2)
|
|
|
(29.1)
|
|
Tax effects of the
CARES Act and other
|
(23.5)
|
|
|
—
|
|
|
(31.0)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
As adjusted
non-GAAP
|
$
|
10.2
|
|
|
$
|
14.1
|
|
|
$
|
24.3
|
|
|
$
|
34.5
|
|
Diluted EPS, as
adjusted
|
$
|
0.21
|
|
|
$
|
0.30
|
|
|
$
|
0.51
|
|
|
$
|
0.72
|
|
|
|
EBITDA
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
EBITDA, as
reported
|
$
|
10.6
|
|
|
$
|
(9.4)
|
|
|
$
|
30.8
|
|
|
$
|
(26.9)
|
|
|
|
|
|
|
|
|
|
COVID-19 related
expenses
|
3.2
|
|
|
—
|
|
|
6.9
|
|
|
—
|
|
Post divestiture
restructuring and IT charges
|
0.9
|
|
|
8.4
|
|
|
1.4
|
|
|
16.2
|
|
Post divestiture
transition charges
|
1.1
|
|
|
10.9
|
|
|
8.2
|
|
|
43.1
|
|
Acquisition and
integration-related charges
|
5.7
|
|
|
6.7
|
|
|
9.6
|
|
|
8.1
|
|
Litigation and
legal
|
2.4
|
|
|
8.0
|
|
|
5.8
|
|
|
21.4
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
23.9
|
|
|
$
|
24.6
|
|
|
$
|
62.7
|
|
|
$
|
61.9
|
|
AVANOS MEDICAL,
INC.
|
NON-GAAP
RECONCILIATIONS
|
(unaudited)
|
(in
millions)
|
|
|
Free Cash
Flow
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Cash provided by
(used in) operating activities
|
$
|
1.1
|
|
|
$
|
(16.6)
|
|
|
$
|
(3.6)
|
|
|
$
|
(71.6)
|
|
Capital
expenditures
|
(3.0)
|
|
|
(7.1)
|
|
|
(15.1)
|
|
|
(42.5)
|
|
Free Cash
Flow
|
$
|
(1.9)
|
|
|
$
|
(23.7)
|
|
|
$
|
(18.7)
|
|
|
$
|
(114.1)
|
|
AVANOS MEDICAL,
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(unaudited)
|
(in
millions)
|
|
|
September
30,
2020
|
|
December
31,
2019
|
ASSETS
|
|
|
|
Current
Assets
|
|
|
|
Cash and cash
equivalents
|
$
|
180.0
|
|
|
$
|
205.3
|
|
Accounts receivable,
net of allowances
|
182.3
|
|
|
163.8
|
|
Inventories
|
184.1
|
|
|
145.9
|
|
Prepaid expenses and
other current assets
|
21.2
|
|
|
23.5
|
|
Total Current
Assets
|
567.6
|
|
|
538.5
|
|
Property, Plant
and Equipment, net
|
177.3
|
|
|
184.5
|
|
Operating Lease
Right-of-Use Assets
|
56.5
|
|
|
64.0
|
|
Goodwill
|
801.2
|
|
|
800.9
|
|
Other Intangible
Assets, net
|
170.1
|
|
|
184.3
|
|
Deferred Tax
Assets
|
12.0
|
|
|
16.1
|
|
Other
Assets
|
14.4
|
|
|
11.3
|
|
TOTAL
ASSETS
|
$
|
1,799.1
|
|
|
$
|
1,799.6
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
Liabilities
|
|
|
|
Current portion of
operating lease obligations
|
$
|
15.6
|
|
|
$
|
14.7
|
|
Trade accounts
payable
|
75.9
|
|
|
83.0
|
|
Accrued
expenses
|
87.9
|
|
|
114.8
|
|
Total Current
Liabilities
|
179.4
|
|
|
212.5
|
|
Long-Term
Debt
|
248.5
|
|
|
248.1
|
|
Operating Lease
Liabilities
|
56.1
|
|
|
62.6
|
|
Deferred Tax
Liabilities
|
13.8
|
|
|
—
|
|
Other Long-Term
Liabilities
|
11.4
|
|
|
11.2
|
|
TOTAL
LIABILITIES
|
509.2
|
|
|
534.4
|
|
Stockholders'
Equity
|
1,289.9
|
|
|
1,265.2
|
|
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY
|
$
|
1,799.1
|
|
|
$
|
1,799.6
|
|
AVANOS MEDICAL,
INC.
|
CONDENSED
CONSOLIDATED CASH FLOW STATEMENTS
|
(unaudited)
|
(in
millions)
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Operating
Activities
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
19.3
|
|
|
$
|
(11.5)
|
|
|
$
|
20.0
|
|
|
$
|
(39.8)
|
|
Depreciation and
amortization
|
10.7
|
|
|
8.7
|
|
|
32.1
|
|
|
25.6
|
|
Net loss on asset
dispositions
|
1.1
|
|
|
—
|
|
|
1.3
|
|
|
0.5
|
|
Changes in operating
assets and liabilities
|
(9.6)
|
|
|
(16.9)
|
|
|
(34.6)
|
|
|
(65.1)
|
|
Deferred income taxes
and other
|
(20.4)
|
|
|
3.1
|
|
|
(22.4)
|
|
|
7.2
|
|
Cash Provided by
(Used in) Operating Activities
|
1.1
|
|
|
(16.6)
|
|
|
(3.6)
|
|
|
(71.6)
|
|
Investing
Activities
|
|
|
|
|
|
|
|
Capital
expenditures
|
(3.0)
|
|
|
(7.1)
|
|
|
(15.1)
|
|
|
(42.5)
|
|
Acquisition of assets
and investments in businesses
|
(4.0)
|
|
|
(50.5)
|
|
|
(4.0)
|
|
|
(57.5)
|
|
Cash Used in
Investing Activities
|
(7.0)
|
|
|
(57.6)
|
|
|
(19.1)
|
|
|
(100.0)
|
|
Financing
Activities
|
|
|
|
|
|
|
|
Debt
Repayment
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.2)
|
|
Purchase of treasury
stock
|
(0.1)
|
|
|
(0.1)
|
|
|
(0.4)
|
|
|
(3.4)
|
|
Proceeds from the
exercise of stock options
|
0.8
|
|
|
2.6
|
|
|
1.4
|
|
|
5.2
|
|
Payment of contingent
consideration liabilities
|
(2.7)
|
|
|
—
|
|
|
(2.7)
|
|
|
—
|
|
Cash (Used in)
Provided by Financing Activities
|
(2.0)
|
|
|
2.5
|
|
|
(1.7)
|
|
|
1.6
|
|
Effect of Exchange
Rate Changes on Cash and Cash Equivalents
|
2.9
|
|
|
(2.0)
|
|
|
(0.9)
|
|
|
(0.1)
|
|
Decrease in Cash
and Cash Equivalents
|
(5.0)
|
|
|
(73.7)
|
|
|
(25.3)
|
|
|
(170.1)
|
|
Cash and Cash
Equivalents - Beginning of Period
|
185.0
|
|
|
288.1
|
|
|
205.3
|
|
|
384.5
|
|
Cash and Cash
Equivalents - End of Period
|
$
|
180.0
|
|
|
$
|
214.4
|
|
|
$
|
180.0
|
|
|
$
|
214.4
|
|
|
|
|
|
|
|
|
|
AVANOS MEDICAL,
INC.
|
SELECTED BUSINESS
AND PRODUCTS DATA
|
(unaudited)
|
(in
millions)
|
|
|
Three Months Ended
September 30,
|
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2020
|
|
2019
|
|
Change
|
|
2020
|
|
2019
|
|
Change
|
Chronic
care
|
$
|
119.3
|
|
|
$
|
98.0
|
|
|
21.7
|
%
|
|
$
|
355.2
|
|
|
$
|
300.3
|
|
|
18.3
|
%
|
Pain
management
|
66.4
|
|
|
73.4
|
|
|
(9.5)
|
|
|
174.6
|
|
|
207.5
|
|
|
(15.9)
|
|
Total Net
sales
|
$
|
185.7
|
|
|
$
|
171.4
|
|
|
8.3
|
%
|
|
$
|
529.8
|
|
|
$
|
507.8
|
|
|
4.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
Volume(a)
|
|
Pricing/Mix
|
|
Currency
|
|
Other(b)
|
Net Sales -
percentage change
|
QTD
|
|
8
|
%
|
|
8
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
YTD
|
|
4
|
%
|
|
5
|
%
|
|
—
|
%
|
|
—
|
%
|
|
(1)
|
%
|
|
_______________________________________________
|
(a)
|
Volume includes
incremental sales of NeoMed and Summit products.
|
(b)
|
Other includes
rounding.
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/avanos-medical-inc-announces-third-quarter-2020-results-301165466.html
SOURCE Avanos Medical