ALPHARETTA, Ga., Feb. 18, 2021 /PRNewswire/ -- Avanos Medical,
Inc. (NYSE: AVNS) today reported fourth quarter and full-year 2020
results.
"I'm pleased with our team's execution and accomplishments in
2020 highlighted by our cost savings, the integration of our recent
acquisitions and free cash flow improvement throughout the year,
while successfully responding to the challenges presented by the
pandemic," stated Joe Woody, Avanos'
chief executive officer. "During the quarter we continued to build
momentum across our franchises, while we maintained our cost
discipline and implemented a 2020 restructuring program to further
drive efficiencies and reduce costs."
Woody continued, "We enter 2021 in a strong position and are
poised to execute on our plan to deliver top-line growth, drive
margin improvement and generate free cash flow in 2021 and
beyond."
2020 Financial Highlights
- Fourth quarter net sales totaled $185
million, a 3 percent decrease from the prior year. For the
year, net sales increased 3 percent to $715
million.
- Net loss for the fourth quarter was $47
million, compared to net loss of $6
million in the prior year. Adjusted net income for the
quarter totaled $13 million, compared
to $16 million a year ago. For the
year, net loss totaled $27 million,
compared to net loss of $46 million
in the prior year. On an adjusted basis, net income for 2020
totaled $38 million, compared to
$51 million in the prior year.
- Fourth quarter diluted earnings per share were $(0.99), compared to $(0.13) a year ago. 2020 diluted earnings per
share were $(0.57), compared to
$(0.96) in the prior year.
- Fourth quarter adjusted diluted earnings per share were
$0.28, compared to $0.34 in the prior year. For the year, adjusted
diluted earnings per share totaled $0.79, compared to $1.07 in 2019.
Operational and Business Highlights
- The company implemented a 2020 restructuring program that
included, streamlining the senior leadership team, consolidating
other corporate functions to gain efficiencies and aligning office
space with its post-pandemic work model. Overall, the restructuring
charge is expected to range between $25
million and $30 million, which
includes approximately $21 million of
non-cash intangibles and asset write-downs that have already been
expensed in 2020. The company expects annual cash savings of
approximately $7 million.
- The company recently presented new COOLIEF* data at the 19th
Annual Pain Meeting hosted by the American Society of Regional
Anesthesia and Pain Medicine. The long-term follow-up from our
large, multicentered randomized clinical trial indicated that
patients saw extended clinical improvements in both pain and
function lasting two years. This is the second clinical study that
has demonstrated up to 24 months of pain relief and functional
improvements for subjects suffering from knee osteoarthritis
following a single COOLIEF procedure.
- The Centers for Medicare & Medicaid Service (CMS) released
its 2021 Ambulatory Surgical Center (ASC) Payment System Final
Rule, which favorably includes higher reimbursement for
radiofrequency nerve ablation procedures in the knee when performed
in an ASC setting.
Fourth Quarter 2020 Operating Results
Net sales totaled $185 million, a
3 percent decrease compared to the prior year. Continued growth in
Chronic Care was driven by an elevated demand in Respiratory Health
from Closed Suction Catheters and Oral Care products due to the
pandemic. This growth was offset by the expected lower volume in
both Acute Pain and Interventional Pain, due to fewer elective
procedures.
Gross margin was 48 percent compared to 58 percent a year ago.
Adjusted gross margin was 54 percent, primarily due to product mix,
the write-down of obsolete inventory and raw materials, and the
elevated costs associated with the company's COVID-19 efforts,
compared to 60 percent in the prior year.
Operating loss was $45 million
compared to a loss of $3 million in
2019. Charges related to the 2020 restructuring program and a
settlement payment to resolve litigation related to surgical gowns
impacted results. On an adjusted basis, operating profit was
$21 million, compared to $26 million a year ago. Performance was impacted
by lower gross margin and lower sales, partially offset by cost
savings in operating expenses.
Adjusted EBITDA for the quarter was $27
million, compared to $31
million in the prior year.
Full-Year 2020 Operating Results
Net sales increased 3 percent to $715
million, compared to 2019. The acquisitions of NeoMed and
Summit contributed 4 percent of growth. Continued strong
pandemic-related demand for Respiratory Health products was offset
by lower volume in Acute Pain and Interventional Pain due to fewer
elective procedures, resulting in 1 percent lower organic
volume.
Gross margin was 52 percent compared to 58 percent in 2019.
Adjusted gross margin was 56 percent, which reflects the impact of
product mix, the write down of obsolete inventory and raw
materials, and the elevated costs associated with the company's
COVID-19 efforts, compared to 60 percent last year.
Operating loss was $46 million
compared to loss of $56 million in the prior year. On an
adjusted basis, operating profit totaled $66
million compared to $76
million in 2019. Performance was impacted by lower gross
margin, which was partially offset by higher sales and cost savings
in operating expenses.
Full-year, adjusted EBITDA totaled $89
million, compared to $93
million in the prior year.
Cash Flow and Balance Sheet
Cash from operations less capital expenditures, or free cash
flow, for the quarter was an outflow of $4
million, which includes a $25
million payment to the company's former parent company to
amicably resolve the disputes between them, compared to an outflow
of $11 million a year ago. For the
year, free cash flow was an outflow of $23
million, compared to an outflow of $125 million in the prior year.
At year-end 2020, the company's cash balance was $112 million, compared to $205 million at year-end 2019. Total debt at the
end of the fourth quarter totaled $180
million, consisting of a draw on the company's revolving
credit facility. Overall, debt decreased by $68 million compared to year-end 2019.
Full-Year 2021 Outlook
At this time, the company is not providing 2021 guidance, due to
the uncertainties associated with the impact of the COVID-19
pandemic. The company cannot fully quantify the extent or duration
of the impact of the pandemic on its financial results. However,
the company will continue to monitor the situation and provide
further updates as appropriate.
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 and 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:
- Incremental expenses associated with altering operations in
response to the COVID-19 pandemic.
- Expenses associated with restructuring activities, including
IT-related charges.
- Expenses associated with post divestiture transition
activities.
- The amortization of intangible assets associated with prior
business acquisitions.
- Expenses associated with certain litigation matters.
- Certain acquisition and integration charges related to the
acquisition of Game Ready, NeoMed, Summit Medical, and Endoclear
LLC.
- The tax effects of the adjusting items,
- Benefit associated with tax effects of the CARES Act.
- 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 our 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 10151737. 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
December 31,
|
|
|
|
|
Year Ended
December 31,
|
|
|
|
2020
|
|
2019
|
|
Change
|
|
|
2020
|
|
2019
|
|
Change
|
|
Net
Sales
|
$
|
185.0
|
|
|
$
|
189.8
|
|
|
(2.5)%
|
|
|
$
|
714.8
|
|
|
$
|
697.6
|
|
|
2.5%
|
|
Cost of products
sold
|
96.1
|
|
|
80.1
|
|
|
20.0
|
|
|
341.5
|
|
|
295.4
|
|
|
15.6
|
|
Gross
Profit
|
88.9
|
|
|
109.7
|
|
|
(19.0)
|
|
|
373.3
|
|
|
402.2
|
|
|
(7.2)
|
|
Research and
development expenses
|
9.6
|
|
|
8.4
|
|
|
14.3
|
|
|
34.9
|
|
|
37.7
|
|
|
(7.4)
|
|
Selling and general
expenses
|
82.2
|
|
|
103.6
|
|
|
(20.7)
|
|
|
332.6
|
|
|
399.1
|
|
|
(16.7)
|
|
Other expense,
net
|
41.9
|
|
|
0.9
|
|
|
N.M.
|
|
|
51.9
|
|
|
21.1
|
|
|
N.M.
|
|
Operating
Loss
|
(44.8)
|
|
|
(3.2)
|
|
|
N.M.
|
|
|
(46.1)
|
|
|
(55.7)
|
|
|
(17.2)
|
|
Interest
income
|
0.1
|
|
|
1.0
|
|
|
N.M.
|
|
|
1.2
|
|
|
6.7
|
|
|
N.M.
|
|
Interest
expense
|
(2.7)
|
|
|
(4.3)
|
|
|
(37.2)
|
|
|
(15.6)
|
|
|
(15.0)
|
|
|
4.0
|
|
Loss Before Income
Taxes
|
(47.4)
|
|
|
(6.5)
|
|
|
N.M.
|
|
|
(60.5)
|
|
|
(64.0)
|
|
|
(5.5)
|
|
Income tax
benefit
|
0.2
|
|
|
0.4
|
|
|
N.M.
|
|
|
33.3
|
|
|
18.1
|
|
|
N.M.
|
|
Net (Loss)
Income
|
$
|
(47.2)
|
|
|
$
|
(6.1)
|
|
|
N.M.
|
|
|
$
|
(27.2)
|
|
|
$
|
(45.9)
|
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
2.6
|
|
|
3.3
|
|
|
(21.2)
|
|
|
14.4
|
|
|
8.3
|
|
|
N.M.
|
|
Income tax (benefit)
provision
|
(0.2)
|
|
|
(0.4)
|
|
|
N.M.
|
|
|
(33.3)
|
|
|
(18.1)
|
|
|
N.M.
|
|
Depreciation and
amortization
|
10.8
|
|
|
11.3
|
|
|
(4.4)
|
|
|
42.9
|
|
|
36.9
|
|
|
16.3
|
|
EBITDA
|
$
|
(34.0)
|
|
|
$
|
8.1
|
|
|
N.M.
|
|
|
$
|
(3.2)
|
|
|
$
|
(18.8)
|
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss Per
Share
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.99)
|
|
|
$
|
(0.13)
|
|
|
N.M.
|
|
|
$
|
(0.57)
|
|
|
$
|
(0.96)
|
|
|
N.M.
|
|
Diluted
|
$
|
(0.99)
|
|
|
$
|
(0.13)
|
|
|
N.M.
|
|
|
$
|
(0.57)
|
|
|
$
|
(0.96)
|
|
|
N.M.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Shares
Outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
47.9
|
|
|
47.7
|
|
|
|
|
|
47.8
|
|
|
47.6
|
|
|
|
Diluted
|
47.9
|
|
|
47.7
|
|
|
|
|
|
47.8
|
|
|
47.6
|
|
|
|
|
|
|
AVANOS MEDICAL,
INC.
|
NON-GAAP
RECONCILIATIONS
|
(unaudited)
|
(in
millions)
|
|
|
Gross
Profit
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
As
reported
|
$
|
88.9
|
|
|
$
|
109.7
|
|
|
$
|
373.3
|
|
|
$
|
402.2
|
|
Gross profit
margin, as reported
|
48.1
|
%
|
|
57.8
|
%
|
|
52.2
|
%
|
|
57.7
|
%
|
|
|
|
|
|
|
|
|
COVID-19 related
expenses
|
0.6
|
|
|
—
|
|
|
4.9
|
|
|
—
|
|
2020 Restructuring
charges
|
1.1
|
|
|
—
|
|
|
1.1
|
|
|
—
|
|
Post divestiture
restructuring and IT charges
|
0.8
|
|
|
0.7
|
|
|
2.8
|
|
|
2.9
|
|
Post divestiture
transition charges
|
5.9
|
|
|
1.4
|
|
|
7.6
|
|
|
5.9
|
|
Acquisition and
integration-related charges
|
0.1
|
|
|
0.1
|
|
|
0.9
|
|
|
0.1
|
|
Intangibles
amortization
|
1.6
|
|
|
1.9
|
|
|
6.6
|
|
|
5.6
|
|
|
|
|
|
|
|
|
|
As adjusted
non-GAAP
|
$
|
99.0
|
|
|
$
|
113.8
|
|
|
$
|
397.2
|
|
|
$
|
416.7
|
|
Gross profit
margin, as adjusted
|
53.5
|
%
|
|
60.0
|
%
|
|
55.6
|
%
|
|
59.7
|
%
|
|
|
|
|
|
|
|
Operating
Profit
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
As
reported
|
$
|
(44.8)
|
|
|
$
|
(3.2)
|
|
|
$
|
(46.1)
|
|
|
$
|
(55.7)
|
|
|
|
|
|
|
|
|
|
COVID-19 related
expenses(a)
|
1.0
|
|
|
—
|
|
|
7.9
|
|
|
—
|
|
2020 Restructuring
charges(b)
|
27.6
|
|
|
—
|
|
|
27.6
|
|
|
—
|
|
Post divestiture
restructuring and IT charges(c)
|
0.8
|
|
|
4.0
|
|
|
2.2
|
|
|
20.2
|
|
Post divestiture
transition charges(d)(e)
|
6.7
|
|
|
13.2
|
|
|
14.9
|
|
|
56.3
|
|
Acquisition and
integration-related charges
|
2.9
|
|
|
5.0
|
|
|
12.5
|
|
|
13.1
|
|
Litigation and
legal(f)
|
21.7
|
|
|
1.1
|
|
|
27.5
|
|
|
22.5
|
|
Intangibles
amortization
|
4.8
|
|
|
5.4
|
|
|
19.4
|
|
|
20.0
|
|
|
|
|
|
|
|
|
|
As adjusted
non-GAAP
|
$
|
20.7
|
|
|
$
|
25.5
|
|
|
$
|
65.9
|
|
|
$
|
76.4
|
|
|
|
(a)
|
Except for the
amounts impacting gross profit (see "Gross Profit" table), COVID-19
related expenses are included in "Selling and general
expenses."
|
(b)
|
2020 Restructuring
charges include $1.1 million in "Cost of products sold" (see "Gross
Profit" table), $1.0 million in "Research and Development," $5.5
million in "Selling and general expenses" and $20.0 million in
"Other expense, net."
|
(c)
|
Except for amounts
impacting gross profit (see "Gross Profit" table), post divestiture
restructuring and IT charges are included in "Selling and general
expenses."
|
(d)
|
In the three months
ended December 31, 2020, post divestiture transition charges
includes $5.9 million in "Cost of products sold" (see "Gross
Profit" table), $0.9 million of expense in "Selling and general
expenses" partially offset by a credit of $0.1 million of expense
in "Other expense, net." For the year ended December 31, 2020,
post divestiture transition charges includes $7.6 million, in "Cost
of products sold," $7.7 million of expense in "Selling and general
expenses" partially offset by a credit of $0.4 million in "Other
expense, net."
|
(e)
|
In the three months
ended December 31, 2019, post divestiture transition charges
includes $1.4 million in "Cost of products sold" (see "Gross
Profit" table), $12.4 million of expense in "Selling and general
expenses" partially offset by a credit of $0.6 million in "Other
expense, net." For the year ended December 31, 2019, post
divestiture transition charges includes $5.9 million in "Cost of
products sold, $53.1 million of expense in "Selling and general
expenses" partially offset by a credit of $2.7 million in "Other
expense, net."
|
(f)
|
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
December 31,
|
|
Year Ended
December 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
As
reported
|
$
|
(47.4)
|
|
|
$
|
(6.5)
|
|
|
$
|
(60.5)
|
|
|
$
|
(64.0)
|
|
|
|
|
|
|
|
|
|
COVID-19 related
expenses
|
1.0
|
|
|
—
|
|
|
7.9
|
|
|
—
|
|
2020 Restructuring
charges
|
27.6
|
|
|
—
|
|
|
27.6
|
|
|
—
|
|
Post divestiture
restructuring and IT charges
|
0.8
|
|
|
4.0
|
|
|
2.2
|
|
|
20.2
|
|
Post divestiture
transition charges
|
6.7
|
|
|
13.2
|
|
|
14.9
|
|
|
56.3
|
|
Acquisition and
integration-related charges
|
2.9
|
|
|
5.0
|
|
|
12.5
|
|
|
13.1
|
|
Litigation and
legal
|
21.7
|
|
|
1.1
|
|
|
27.5
|
|
|
22.5
|
|
Intangibles
amortization
|
4.8
|
|
|
5.4
|
|
|
19.4
|
|
|
20.0
|
|
|
|
|
|
|
|
|
|
As adjusted
non-GAAP
|
$
|
18.1
|
|
|
$
|
22.2
|
|
|
$
|
51.5
|
|
|
$
|
68.1
|
|
|
|
|
|
|
|
|
Tax Benefit
(Provision)
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
As
reported
|
$
|
0.2
|
|
|
$
|
0.4
|
|
|
$
|
33.3
|
|
|
$
|
18.1
|
|
Effective tax
rate, as reported
|
0.4
|
%
|
|
6.2
|
%
|
|
55.0
|
%
|
|
28.3
|
%
|
|
|
|
|
|
|
|
|
Tax effects of
adjusting items
|
(13.4)
|
|
|
(6.3)
|
|
|
(24.6)
|
|
|
(35.4)
|
|
Tax effects of the
CARES Act and other(a)
|
8.5
|
|
|
—
|
|
|
(22.5)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
As adjusted
non-GAAP
|
$
|
(4.7)
|
|
|
$
|
(5.9)
|
|
|
$
|
(13.8)
|
|
|
$
|
(17.3)
|
|
Effective tax
rate, as adjusted
|
26.0
|
%
|
|
26.6
|
%
|
|
26.8
|
%
|
|
25.4
|
%
|
|
|
(a)
|
The CARES Act allows
for the carryback of U.S. net operating losses to prior years
resulting in a benefit reversal of $8.0 million and a benefit of
$25.1 million for three and twelve months ended December 31,
2020, respectively.
|
|
|
|
AVANOS MEDICAL,
INC.
|
NON-GAAP
RECONCILIATIONS
|
(unaudited)
|
(in millions,
except per share amounts)
|
|
|
Net (Loss)
Income
|
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
As
reported
|
$
|
(47.2)
|
|
|
$
|
(6.1)
|
|
|
$
|
(27.2)
|
|
|
$
|
(45.9)
|
|
Diluted EPS, as
reported
|
$
|
(0.99)
|
|
|
$
|
(0.13)
|
|
|
$
|
(0.57)
|
|
|
$
|
(0.96)
|
|
|
|
|
|
|
|
|
|
COVID-19 related
expenses
|
1.0
|
|
|
—
|
|
|
7.9
|
|
|
—
|
|
2020 Restructuring
charges
|
27.6
|
|
|
—
|
|
|
27.6
|
|
|
—
|
|
Post divestiture
restructuring and IT charges
|
0.8
|
|
|
4.0
|
|
|
2.2
|
|
|
20.2
|
|
Post divestiture
transition charges
|
6.7
|
|
|
13.2
|
|
|
14.9
|
|
|
56.3
|
|
Acquisition and
integration-related charges
|
2.9
|
|
|
5.0
|
|
|
12.5
|
|
|
13.1
|
|
Litigation and
legal
|
21.7
|
|
|
1.1
|
|
|
27.5
|
|
|
22.5
|
|
Intangibles
amortization
|
4.8
|
|
|
5.4
|
|
|
19.4
|
|
|
20.0
|
|
Tax effects of
adjusting items
|
(13.4)
|
|
|
(6.3)
|
|
|
(24.6)
|
|
|
(35.4)
|
|
Tax effects of the
CARES Act and other
|
8.5
|
|
|
—
|
|
|
(22.5)
|
|
|
—
|
|
|
|
|
|
|
|
|
|
As adjusted
non-GAAP
|
$
|
13.4
|
|
|
$
|
16.3
|
|
|
$
|
37.7
|
|
|
$
|
50.8
|
|
Diluted EPS, as
adjusted
|
$
|
0.28
|
|
|
$
|
0.34
|
|
|
$
|
0.79
|
|
|
$
|
1.07
|
|
|
|
|
|
|
|
|
EBITDA
|
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
EBITDA, as
reported
|
$
|
(34.0)
|
|
|
$
|
8.1
|
|
|
$
|
(3.2)
|
|
|
$
|
(18.8)
|
|
|
|
|
|
|
|
|
|
COVID-19 related
expenses
|
1.0
|
|
|
—
|
|
|
7.9
|
|
|
—
|
|
2020 Restructuring
charges
|
27.6
|
|
|
—
|
|
|
27.6
|
|
|
—
|
|
Post divestiture
restructuring and IT charges
|
0.8
|
|
|
4.0
|
|
|
2.2
|
|
|
20.2
|
|
Post divestiture
transition charges
|
6.7
|
|
|
13.2
|
|
|
14.9
|
|
|
56.3
|
|
Acquisition and
integration-related charges
|
2.9
|
|
|
5.0
|
|
|
12.5
|
|
|
13.1
|
|
Litigation and
legal
|
21.7
|
|
|
1.1
|
|
|
27.5
|
|
|
22.5
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
26.7
|
|
|
$
|
31.4
|
|
|
$
|
89.4
|
|
|
$
|
93.3
|
|
|
|
|
AVANOS MEDICAL,
INC.
|
NON-GAAP
RECONCILIATIONS
|
(unaudited)
|
(in millions,
except per share amounts)
|
|
|
Free Cash
Flow
|
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Cash (used in)
provided by operating activities
|
$
|
1.1
|
|
|
$
|
(2.9)
|
|
|
$
|
(2.5)
|
|
|
$
|
(74.5)
|
|
Capital
expenditures
|
(5.1)
|
|
|
(8.1)
|
|
|
(20.2)
|
|
|
(50.6)
|
|
Free Cash
Flow
|
$
|
(4.0)
|
|
|
$
|
(11.0)
|
|
|
$
|
(22.7)
|
|
|
$
|
(125.1)
|
|
|
|
|
AVANOS MEDICAL,
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(unaudited)
|
(in
millions)
|
|
|
As of December
31,
|
|
2020
|
|
2019
|
ASSETS
|
|
|
|
Current
Assets
|
|
|
|
Cash and cash
equivalents
|
$
|
111.5
|
|
|
$
|
205.3
|
|
Accounts receivable,
net of allowances
|
167.9
|
|
|
163.8
|
|
Inventories
|
168.9
|
|
|
145.9
|
|
Prepaid expenses and
other current assets
|
18.9
|
|
|
23.5
|
|
Total Current
Assets
|
467.2
|
|
|
538.5
|
|
Property, Plant
and Equipment, net
|
175.3
|
|
|
184.5
|
|
Operating Lease
Right of Use Assets
|
48.3
|
|
|
64.0
|
|
Goodwill
|
802.5
|
|
|
800.9
|
|
Other Intangible
Assets, net
|
157.7
|
|
|
184.3
|
|
Deferred Tax
Assets
|
10.0
|
|
|
16.1
|
|
Other
Assets
|
11.8
|
|
|
11.3
|
|
TOTAL
ASSETS
|
$
|
1,672.8
|
|
|
$
|
1,799.6
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
Liabilities
|
|
|
|
Current portion of
operating lease obligation
|
$
|
15.5
|
|
|
$
|
14.7
|
|
Trade accounts
payable
|
67.6
|
|
|
83.0
|
|
Accrued
expenses
|
83.2
|
|
|
114.8
|
|
Total Current
Liabilities
|
166.3
|
|
|
212.5
|
|
Long-Term
Debt
|
180.0
|
|
|
248.1
|
|
Operating Lease
Obligation
|
53.3
|
|
|
62.6
|
|
Deferred Tax
Liabilities
|
5.7
|
|
|
—
|
|
Other Long-Term
Liabilities
|
11.0
|
|
|
11.2
|
|
TOTAL
LIABILITIES
|
416.3
|
|
|
534.4
|
|
Stockholders'
Equity
|
1,256.5
|
|
|
1,265.2
|
|
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY
|
$
|
1,672.8
|
|
|
$
|
1,799.6
|
|
|
|
|
AVANOS MEDICAL,
INC.
|
CONDENSED
CONSOLIDATED CASH FLOW STATEMENTS
|
(unaudited)
|
(in
millions)
|
|
|
|
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Operating
Activities
|
|
|
|
|
|
|
|
Net (loss)
income
|
$
|
(47.2)
|
|
|
$
|
(6.1)
|
|
|
$
|
(27.2)
|
|
|
$
|
(45.9)
|
|
Depreciation and
amortization
|
10.8
|
|
|
11.3
|
|
|
42.9
|
|
|
36.9
|
|
Asset
impairments
|
21.5
|
|
|
—
|
|
|
21.5
|
|
|
—
|
|
Net loss on asset
dispositions
|
0.9
|
|
|
0.1
|
|
|
2.2
|
|
|
0.6
|
|
Changes in operating
assets and liabilities
|
(33.2)
|
|
|
5.5
|
|
|
(67.8)
|
|
|
(59.6)
|
|
Deferred income taxes
and other
|
48.3
|
|
|
(13.7)
|
|
|
25.9
|
|
|
(6.5)
|
|
Cash (Used in)
Provided by Operating Activities
|
1.1
|
|
|
(2.9)
|
|
|
(2.5)
|
|
|
(74.5)
|
|
Investing
Activities
|
|
|
|
|
|
|
|
Capital
expenditures
|
(5.1)
|
|
|
(8.1)
|
|
|
(20.2)
|
|
|
(50.6)
|
|
Acquisition of assets
and investments in businesses
|
—
|
|
|
—
|
|
|
(4.0)
|
|
|
(57.5)
|
|
Cash (Used in)
Provided by Investing Activities
|
(5.1)
|
|
|
(8.1)
|
|
|
(24.2)
|
|
|
(108.1)
|
|
Financing
Activities
|
|
|
|
|
|
|
|
Debt
repayments
|
(249.8)
|
|
|
—
|
|
|
(249.8)
|
|
|
(0.2)
|
|
Line of credit
facility proceeds
|
185.0
|
|
|
—
|
|
|
185.0
|
|
|
—
|
|
Line of credit
facility repayments
|
(5.0)
|
|
|
—
|
|
|
(5.0)
|
|
|
—
|
|
Purchase of treasury
stock
|
(0.5)
|
|
|
(0.2)
|
|
|
(0.9)
|
|
|
(3.6)
|
|
Proceeds from the
exercise of stock options
|
2.0
|
|
|
0.1
|
|
|
3.4
|
|
|
5.3
|
|
Payment of contingent
consideration liabilities
|
—
|
|
|
—
|
|
|
(2.7)
|
|
|
—
|
|
Cash (Used in)
Provided by Financing Activities
|
(68.3)
|
|
|
(0.1)
|
|
|
(70.0)
|
|
|
1.5
|
|
Effect of Exchange
Rate Changes on Cash and Cash Equivalents
|
3.8
|
|
|
2.0
|
|
|
2.9
|
|
|
1.9
|
|
(Decrease)
Increase in Cash and Cash Equivalents
|
(68.5)
|
|
|
(9.1)
|
|
|
(93.8)
|
|
|
(179.2)
|
|
Cash and Cash
Equivalents - Beginning of Period
|
180.0
|
|
|
214.4
|
|
|
205.3
|
|
|
384.5
|
|
Cash and Cash
Equivalents - End of Period
|
$
|
111.5
|
|
|
$
|
205.3
|
|
|
$
|
111.5
|
|
|
$
|
205.3
|
|
|
|
|
AVANOS MEDICAL,
INC.
|
SELECTED BUSINESS
AND PRODUCTS DATA
|
(unaudited)
|
(in
millions)
|
|
|
Three Months
Ended
December 31,
|
|
|
|
Year Ended
December 31,
|
|
|
|
2020
|
|
2019
|
|
Change
|
|
2020
|
|
2019
|
|
Change
|
Chronic
care
|
$
|
116.0
|
|
|
$
|
113.4
|
|
|
2.3
|
%
|
|
$
|
471.2
|
|
|
$
|
413.7
|
|
|
13.9
|
%
|
Pain
management
|
69.0
|
|
|
76.4
|
|
|
(9.7)
|
|
|
243.6
|
|
|
283.9
|
|
|
(14.2)
|
|
Total Net
sales
|
$
|
185.0
|
|
|
$
|
189.8
|
|
|
(2.5)
|
%
|
|
$
|
714.8
|
|
|
$
|
697.6
|
|
|
2.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
Volume(a)
|
|
Pricing/Mix
|
|
Currency
|
|
Other(b)
|
|
|
Net Sales -
percentage change - QTD
|
(3)
|
%
|
|
(3)
|
%
|
|
(1)
|
%
|
|
1
|
%
|
|
—
|
%
|
|
|
Net Sales -
percentage change - YTD
|
3
|
%
|
|
3
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
|
|
|
(a)
|
For the quarter,
volume includes incremental sales for NeoMed and Summit products.
For the full-year, volume includes incremental sales for Game
Ready, NeoMed, and Summit products.
|
(b)
|
Other includes
rounding.
|
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SOURCE Avanos Medical