ALPHARETTA, Ga., Nov. 2, 2021 /PRNewswire/ -- Avanos Medical,
Inc. (NYSE: AVNS) today reported third quarter 2021 financial
results.
"We continue to see unevenness in the recovery across our
product portfolio but are very pleased with our overall execution.
While there were headwinds in acute pain resulting from continued
delays and postponements of elective surgical procedures, we met or
exceeded all of our other priorities and made meaningful progress
in improving our gross profit margins through the third quarter"
stated Joe Woody, Avanos' chief
executive officer.
Woody continued, "we anticipate gross margin further improving
into the end of the year and throughout 2022, which combined with
our continued spending discipline, will enhance our profitability
measures meaningfully."
Operational and Business Highlights
- Operating cash flow of $23
million in the quarter was driven by $47 million of income tax refunds received
associated with the CARES Act.
- The annual Spine Intervention Society selected our study for
podium presentation that used magnetic resonance imaging to
visualize cooled radiofrequency ablation lesions and was awarded
the "Best Science" award for the conference, highlighting our
commitment to science and research.
- In August, the American Academy of Orthopedic Surgeons included
genicular radiofrequency ablation in their treatment guidelines for
the first time. While COOLIEF* was not specifically mentioned, the
Academy called out a clinical study we previously published as a
"high quality study."
- In September, the American Society for Pain and Neuroscience
specifically mentioned that cooled probes, like those used in
COOLIEF*, create larger lesions and increase the likelihood of
treatment success.
Third Quarter 2021 Financial Highlights
- Net sales totaled $184 million, a
less than 1 percent decrease from the prior year.
- Net loss for the quarter was $35
million, compared to net income of $19 million a year ago.
- Adjusted net income totaled $12
million, compared to $10
million a year ago.
- Diluted loss per share was $0.73,
compared to earnings of $0.40 a year
ago.
- Adjusted diluted earnings per share were $0.25, compared to $0.21 in the prior year.
Third Quarter 2021 Operating Results
Net sales totaled $184 million, a
decrease of less than 1 percent compared to the prior year due to
slightly unfavorable pricing. Volume was flat in the pain business
with improvements in Interventional Pain due to favorable
comparisons to last year's sales. In addition, volume benefited
from continued strong demand for Digestive Health offset by lower
volume in Respiratory Health due to the pandemic-fueled demand
experienced last year.
Gross margin was 49 percent, compared to 52 percent a year ago.
Adjusted gross margin was 52 percent, down due primarily to higher
freight costs and inefficiencies at our manufacturing plants,
compared to 55 percent last year.
Operating profit was $4 million
compared to a small operating loss a year ago due to lower general
and administrative expenses with savings realized from the
restructuring activities undertaken at the end of 2020, as well as
the continued discipline of spend throughout 2021. On an adjusted
basis, operating profit totaled $17
million, compared to $18
million a year ago.
Adjusted EBITDA for the quarter was $22
million, compared to $24
million in the prior year.
First Nine Months 2021 Operating Results
Net sales were $551 million, an
increase of 4 percent compared to the prior year. Volume increased
4 percent driven by our pain management franchise due to the
recovery of elective surgical procedures and favorable comparison
to last year's sales which were negatively impacted by the COVID-19
pandemic. In addition, volume benefited from continued robust
demand for Digestive Health, which was partially offset by lower
volume in Respiratory Health due to the pandemic-fueled demand
experienced last year. Volume growth was partially offset by
slightly unfavorable price and mix, while foreign currency exchange
rates provided a 1 percent benefit.
Gross margin was 49 percent, compared to 54 percent last year.
Adjusted gross margin was 52 percent, down due primarily to higher
freight costs and inefficiencies at our manufacturing plants,
compared to 56 percent last year.
Operating loss was $16 million
compared to operating loss of $1
million a year ago due to non-cash restructuring costs
related to the previously announced restructuring in the fourth
quarter of 2020 and legal expense in connection with the resolution
of the DOJ's investigation related to the company's MicroCool
surgical gowns. On an adjusted basis, operating profit was
$48 million compared to $45 million a year ago driven by higher sales and
significantly lower total operating expenses, offsetting lower than
anticipated gross margin.
Adjusted EBITDA for the nine-month period was $64 million compared to $63 million in the prior year.
Cash Flow and Balance Sheet
Cash from operations less capital expenditures, or free cash
flow, for the quarter was $18
million, compared to an outflow of $2
million a year ago. The Company's cash balance was
$98 million at the end of the
quarter, compared to $112 million at
year-end 2020.
Total debt outstanding on our revolving credit facility was
$145 million at the end of the third
quarter compared to $180.0 million at
the end of last year. In the nine months ended September 30, 2021, we borrowed $20.0 million and repaid $55 million on our revolving credit facility.
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 profit and margin
- Adjusted operating profit
- Adjusted income before tax
- Adjusted tax provision and effective tax rate
- Adjusted net income
- Adjusted diluted earnings per share
- 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.
- Certain acquisition and integration charges related to
acquisitions.
- Expenses associated with European Union Medical Device
Regulation ("EU MDR") compliance.
- Expenses associated with certain litigation matters.
- The amortization of intangible assets associated with prior
business acquisitions.
- 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 10160764. 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; 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-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,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net
Sales
|
$
|
184.1
|
|
|
$
|
185.7
|
|
|
$
|
551.2
|
|
|
$
|
529.8
|
|
Cost of products
sold
|
93.7
|
|
|
89.9
|
|
|
283.8
|
|
|
245.4
|
|
Gross
Profit
|
90.4
|
|
|
95.8
|
|
|
267.4
|
|
|
284.4
|
|
Research and
development expenses
|
8.4
|
|
|
8.2
|
|
|
24.7
|
|
|
25.3
|
|
Selling and general
expenses
|
75.0
|
|
|
82.4
|
|
|
225.1
|
|
|
250.4
|
|
Other expense,
net
|
3.4
|
|
|
5.3
|
|
|
33.7
|
|
|
10.0
|
|
Operating (Income)
Loss
|
3.6
|
|
|
(0.1)
|
|
|
(16.1)
|
|
|
(1.3)
|
|
Interest
income
|
0.2
|
|
|
0.2
|
|
|
0.2
|
|
|
1.1
|
|
Interest
expense
|
(0.9)
|
|
|
(4.3)
|
|
|
(2.6)
|
|
|
(12.9)
|
|
Income (Loss)
Before Income Taxes
|
2.9
|
|
|
(4.2)
|
|
|
(18.5)
|
|
|
(13.1)
|
|
Income tax
(provision) benefit
|
(38.0)
|
|
|
23.5
|
|
|
13.7
|
|
|
33.1
|
|
Net (Loss)
Income
|
$
|
(35.1)
|
|
|
$
|
19.3
|
|
|
$
|
(4.8)
|
|
|
$
|
20.0
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
$
|
0.7
|
|
|
$
|
4.1
|
|
|
$
|
2.4
|
|
|
$
|
11.8
|
|
Income tax provision
(benefit)
|
38.0
|
|
|
(23.5)
|
|
|
(13.7)
|
|
|
(33.1)
|
|
Depreciation and
amortization
|
9.6
|
|
|
10.7
|
|
|
28.8
|
|
|
32.1
|
|
EBITDA
|
$
|
13.2
|
|
|
$
|
10.6
|
|
|
$
|
12.7
|
|
|
$
|
30.8
|
|
|
|
|
|
|
|
|
|
(Loss) Earnings
Per Share
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.73)
|
|
|
$
|
0.40
|
|
|
$
|
(0.10)
|
|
|
$
|
0.42
|
|
Diluted
|
(0.73)
|
|
|
0.40
|
|
|
(0.10)
|
|
|
0.42
|
|
|
|
|
|
|
|
|
|
Common Shares
Outstanding
|
|
|
|
|
|
|
|
Basic
|
48.1
|
|
|
47.8
|
|
|
48.1
|
|
|
47.8
|
|
Diluted
|
48.1
|
|
|
48.1
|
|
|
48.1
|
|
|
48.0
|
|
AVANOS MEDICAL,
INC.
|
NON-GAAP
RECONCILIATIONS
|
(unaudited)
|
(in
millions)
|
|
|
Gross
Profit
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
As
reported
|
$
|
90.4
|
|
|
$
|
95.8
|
|
|
$
|
267.4
|
|
|
$
|
284.4
|
|
COVID-19 related
expenses
|
—
|
|
|
1.8
|
|
|
—
|
|
|
4.3
|
|
2020 Restructuring
charges
|
1.1
|
|
|
—
|
|
|
4.1
|
|
|
—
|
|
Post divestiture
restructuring charges
|
2.9
|
|
|
0.9
|
|
|
5.5
|
|
|
2.0
|
|
Post divestiture
transition charges
|
—
|
|
|
0.6
|
|
|
3.8
|
|
|
1.7
|
|
Acquisition and
integration-related charges
|
0.1
|
|
|
0.6
|
|
|
0.1
|
|
|
0.8
|
|
Intangibles
amortization
|
1.7
|
|
|
1.7
|
|
|
5.0
|
|
|
5.0
|
|
As adjusted
non-GAAP
|
$
|
96.2
|
|
|
$
|
101.4
|
|
|
$
|
285.9
|
|
|
$
|
298.2
|
|
Gross profit margin,
as reported
|
49.1
|
%
|
|
51.6
|
%
|
|
48.5
|
%
|
|
53.7
|
%
|
Gross profit margin,
as adjusted
|
52.3
|
%
|
|
54.6
|
%
|
|
51.9
|
%
|
|
56.3
|
%
|
|
|
Operating (Loss)
Profit
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
As
reported
|
$
|
3.6
|
|
|
$
|
(0.1)
|
|
|
$
|
(16.1)
|
|
|
$
|
(1.3)
|
|
COVID-19 related
expenses
|
—
|
|
|
3.2
|
|
|
0.2
|
|
|
6.9
|
|
2020 Restructuring
charges(a)
|
1.7
|
|
|
—
|
|
|
10.4
|
|
|
—
|
|
Post divestiture
restructuring charges
|
2.9
|
|
|
0.9
|
|
|
5.5
|
|
|
1.4
|
|
Post divestiture
transition charges(b)
|
—
|
|
|
1.1
|
|
|
3.6
|
|
|
8.2
|
|
Acquisition and
integration-related charges
|
0.1
|
|
|
5.7
|
|
|
0.7
|
|
|
9.6
|
|
EU MDR
Compliance(c)
|
1.2
|
|
|
—
|
|
|
2.4
|
|
|
—
|
|
Litigation and
legal(d)
|
3.3
|
|
|
2.4
|
|
|
28.5
|
|
|
5.8
|
|
Intangibles
amortization
|
4.2
|
|
|
4.9
|
|
|
12.5
|
|
|
14.6
|
|
As adjusted
non-GAAP
|
$
|
17.0
|
|
|
$
|
18.1
|
|
|
$
|
47.7
|
|
|
$
|
45.2
|
|
________________________
|
(a)
|
In the three months
ended September 30, 2021, 2020 Restructuring charges includes
$1.1 million in "Cost of products sold" (see "Gross Profit" table),
$0.8 million in "Selling and general expenses" partially offset by
$0.2 million of income in "Other expense, net." Likewise, in the
nine months ended September 30, 2021, 2020 Restructuring
includes $4.1 million in "Cost of products sold," $1.5 million in
"Selling and general expenses" and $4.8 million in "Other expense,
net."
|
(b)
|
In the three and nine
months ended September 30, 2021, post divestiture transition
charges include $— million and $3.8 million in "Cost of products
sold" (see "Gross Profit" table) partially offset by a benefit of
$— million and $0.2 million in "Selling and general
expenses."
|
(c)
|
European Union
Medical Device Regulation ("EU MDR") compliance related charges are
included in "Selling and general expenses".
|
(d)
|
Litigation and legal
expenses are included in "Other expense, net."
|
AVANOS MEDICAL,
INC.
|
NON-GAAP
RECONCILIATIONS
|
(unaudited)
|
(in
millions)
|
|
|
Income (Loss)
Before Taxes
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
As
reported
|
$
|
2.9
|
|
|
$
|
(4.2)
|
|
|
$
|
(18.5)
|
|
|
$
|
(13.1)
|
|
COVID-19 related
expenses
|
—
|
|
|
3.2
|
|
|
0.2
|
|
|
6.9
|
|
2020 Restructuring
charges
|
1.7
|
|
|
—
|
|
|
10.4
|
|
|
—
|
|
Post divestiture
restructuring charges
|
2.9
|
|
|
0.9
|
|
|
5.5
|
|
|
1.4
|
|
Post divestiture
transition charges
|
—
|
|
|
1.1
|
|
|
3.6
|
|
|
8.2
|
|
Acquisition and
integration-related charges
|
0.1
|
|
|
5.7
|
|
|
0.7
|
|
|
9.6
|
|
EU MDR
Compliance
|
1.2
|
|
|
—
|
|
|
2.4
|
|
|
—
|
|
Litigation and
legal
|
3.3
|
|
|
2.4
|
|
|
28.5
|
|
|
5.8
|
|
Intangibles
amortization
|
4.2
|
|
|
4.9
|
|
|
12.5
|
|
|
14.6
|
|
As adjusted
non-GAAP
|
$
|
16.3
|
|
|
$
|
14.0
|
|
|
$
|
45.3
|
|
|
$
|
33.4
|
|
|
|
Tax Benefit
(Provision)
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
As
reported
|
$
|
(38.0)
|
|
|
$
|
23.5
|
|
|
$
|
13.7
|
|
|
$
|
33.1
|
|
Tax effects of
adjusting items
|
33.4
|
|
|
(3.8)
|
|
|
(23.6)
|
|
|
(11.2)
|
|
Effects of the CARES
Act and other(a)
|
0.2
|
|
|
(23.5)
|
|
|
(2.3)
|
|
|
(31.0)
|
|
As adjusted
non-GAAP
|
$
|
(4.4)
|
|
|
$
|
(3.8)
|
|
|
$
|
(12.2)
|
|
|
$
|
(9.1)
|
|
Effective tax rate,
as reported
|
1310.3
|
%
|
|
559.5
|
%
|
|
74.1
|
%
|
|
252.7
|
%
|
Effective tax rate,
as adjusted
|
27.0
|
%
|
|
27.1
|
%
|
|
26.9
|
%
|
|
27.2
|
%
|
______________________
|
(a)
|
The CARES Act, which
allows for the carryback of U.S. net operating losses to prior
years, provided an income tax benefit of $3.6 million in the nine
months ended September 30, 2021 compared to $33.1 million last
year.
|
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,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
As
reported
|
$
|
(35.1)
|
|
|
$
|
19.3
|
|
|
$
|
(4.8)
|
|
|
$
|
20.0
|
|
COVID-19 related
expenses
|
—
|
|
|
3.2
|
|
|
0.2
|
|
|
6.9
|
|
2020 Restructuring
charges
|
1.7
|
|
|
—
|
|
|
10.4
|
|
|
—
|
|
Post divestiture
restructuring charges
|
2.9
|
|
|
0.9
|
|
|
5.5
|
|
|
1.4
|
|
Post divestiture
transition charges
|
—
|
|
|
1.1
|
|
|
3.6
|
|
|
8.2
|
|
Acquisition and
integration-related charges
|
0.1
|
|
|
5.7
|
|
|
0.7
|
|
|
9.6
|
|
EU MDR
Compliance
|
1.2
|
|
|
—
|
|
|
2.4
|
|
|
—
|
|
Litigation and
legal
|
3.3
|
|
|
2.4
|
|
|
28.5
|
|
|
5.8
|
|
Intangibles
amortization
|
4.2
|
|
|
4.9
|
|
|
12.5
|
|
|
14.6
|
|
Tax effects of
adjusting items
|
33.4
|
|
|
(3.8)
|
|
|
(23.6)
|
|
|
(11.2)
|
|
Tax effects of the
CARES Act and other
|
0.2
|
|
|
(23.5)
|
|
|
(2.3)
|
|
|
(31.0)
|
|
As adjusted
non-GAAP
|
$
|
11.9
|
|
|
$
|
10.2
|
|
|
$
|
33.1
|
|
|
$
|
24.3
|
|
Diluted EPS, as
reported
|
$
|
(0.73)
|
|
|
$
|
0.40
|
|
|
$
|
(0.10)
|
|
|
$
|
0.42
|
|
Diluted EPS, as
adjusted
|
$
|
0.25
|
|
|
$
|
0.21
|
|
|
$
|
0.69
|
|
|
$
|
0.51
|
|
|
|
EBITDA
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
EBITDA, as
reported
|
$
|
13.2
|
|
|
$
|
10.6
|
|
|
$
|
12.7
|
|
|
$
|
30.8
|
|
COVID-19 related
expenses
|
—
|
|
|
3.2
|
|
|
0.2
|
|
|
6.9
|
|
2020 Restructuring
charges
|
1.7
|
|
|
—
|
|
|
10.4
|
|
|
—
|
|
Post divestiture
restructuring charges
|
2.9
|
|
|
0.9
|
|
|
5.5
|
|
|
1.4
|
|
Post divestiture
transition charges
|
—
|
|
|
1.1
|
|
|
3.6
|
|
|
8.2
|
|
Acquisition and
integration-related charges
|
0.1
|
|
|
5.7
|
|
|
0.7
|
|
|
9.6
|
|
EU MDR
Compliance
|
1.2
|
|
|
—
|
|
|
2.4
|
|
|
—
|
|
Litigation and
legal
|
3.3
|
|
|
2.4
|
|
|
28.5
|
|
|
5.8
|
|
Adjusted
EBITDA
|
$
|
22.4
|
|
|
$
|
23.9
|
|
|
$
|
64.0
|
|
|
$
|
62.7
|
|
AVANOS MEDICAL,
INC.
|
NON-GAAP
RECONCILIATIONS
|
(unaudited)
|
(in
millions)
|
|
|
Free Cash
Flow
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Cash provided by
(used in) operating activities
|
$
|
23.2
|
|
|
$
|
1.1
|
|
|
$
|
35.2
|
|
|
$
|
(3.6)
|
|
Capital
expenditures
|
(4.8)
|
|
|
(3.0)
|
|
|
(16.3)
|
|
|
(15.1)
|
|
Free Cash
Flow
|
$
|
18.4
|
|
|
$
|
(1.9)
|
|
|
$
|
18.9
|
|
|
$
|
(18.7)
|
|
2021
OUTLOOK
|
|
|
Estimated
Range
|
Diluted earnings per
share (GAAP)
|
$
|
0.02
|
|
to
|
$
|
0.26
|
|
Intangibles
amortization
|
0.26
|
|
to
|
0.26
|
|
Restructuring
initiatives
|
0.20
|
|
to
|
0.16
|
|
Litigation and
legal
|
0.52
|
|
to
|
0.46
|
|
Other
|
0.10
|
|
to
|
0.06
|
|
Adjusted diluted
earnings per share (non-GAAP)
|
$
|
1.10
|
|
to
|
$
|
1.20
|
|
AVANOS MEDICAL,
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(unaudited)
|
(in
millions)
|
|
|
September 30,
2021
|
|
December 31,
2020
|
ASSETS
|
|
|
|
Current
Assets
|
|
|
|
Cash and cash
equivalents
|
$
|
97.8
|
|
|
$
|
111.5
|
|
Accounts receivable,
net of allowances
|
129.1
|
|
|
167.9
|
|
Inventories
|
158.4
|
|
|
168.9
|
|
Prepaid expenses and
other current assets
|
19.7
|
|
|
18.9
|
|
Total Current
Assets
|
405.0
|
|
|
467.2
|
|
Property, Plant
and Equipment, net
|
169.7
|
|
|
175.3
|
|
Operating Lease
Right-of-Use Assets
|
41.4
|
|
|
48.3
|
|
Goodwill
|
801.8
|
|
|
802.5
|
|
Other Intangible
Assets, net
|
145.3
|
|
|
157.7
|
|
Deferred Tax
Assets
|
23.6
|
|
|
10.0
|
|
Other
Assets
|
11.1
|
|
|
11.8
|
|
TOTAL
ASSETS
|
$
|
1,597.9
|
|
|
$
|
1,672.8
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
Liabilities
|
|
|
|
Current portion of
operating lease obligations
|
$
|
14.7
|
|
|
$
|
15.5
|
|
Trade accounts
payable
|
54.9
|
|
|
67.6
|
|
Accrued
expenses
|
59.6
|
|
|
83.2
|
|
Total Current
Liabilities
|
129.2
|
|
|
166.3
|
|
Long-Term
Debt
|
145.0
|
|
|
180.0
|
|
Operating Lease
Liabilities
|
46.1
|
|
|
53.3
|
|
Deferred Tax
Liabilities
|
5.6
|
|
|
5.7
|
|
Other Long-Term
Liabilities
|
10.1
|
|
|
11.0
|
|
TOTAL
LIABILITIES
|
336.0
|
|
|
416.3
|
|
Stockholders'
Equity
|
1,261.9
|
|
|
1,256.5
|
|
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY
|
$
|
1,597.9
|
|
|
$
|
1,672.8
|
|
AVANOS MEDICAL,
INC.
|
CONDENSED
CONSOLIDATED CASH FLOW STATEMENTS
|
(unaudited)
|
(in
millions)
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Operating
Activities
|
|
|
|
|
|
|
|
Net (loss)
income
|
$
|
(35.1)
|
|
|
$
|
19.3
|
|
|
$
|
(4.8)
|
|
|
$
|
20.0
|
|
Depreciation and
amortization
|
9.6
|
|
|
10.7
|
|
|
28.8
|
|
|
32.1
|
|
Net loss on asset
dispositions and impairments
|
—
|
|
|
1.1
|
|
|
4.9
|
|
|
1.3
|
|
Changes in operating
assets and liabilities
|
7.9
|
|
|
(9.6)
|
|
|
11.4
|
|
|
(34.6)
|
|
Deferred income taxes
and other
|
40.8
|
|
|
(20.4)
|
|
|
(5.1)
|
|
|
(22.4)
|
|
Cash Provided by
(Used in) Operating Activities
|
23.2
|
|
|
1.1
|
|
|
35.2
|
|
|
(3.6)
|
|
Investing
Activities
|
|
|
|
|
|
|
|
Capital
expenditures
|
(4.8)
|
|
|
(3.0)
|
|
|
(16.3)
|
|
|
(15.1)
|
|
Acquisition of assets
and investments in businesses
|
—
|
|
|
(4.0)
|
|
|
—
|
|
|
(4.0)
|
|
Cash Used in
Investing Activities
|
(4.8)
|
|
|
(7.0)
|
|
|
(16.3)
|
|
|
(19.1)
|
|
Financing
Activities
|
|
|
|
|
|
|
|
Revolving credit
facility proceeds
|
20.0
|
|
|
—
|
|
|
20.0
|
|
|
—
|
|
Revolving credit
facility repayments
|
(40.0)
|
|
|
—
|
|
|
(55.0)
|
|
|
—
|
|
Purchase of treasury
stock
|
(0.1)
|
|
|
(0.1)
|
|
|
(0.6)
|
|
|
(0.4)
|
|
Proceeds from the
exercise of stock options
|
0.9
|
|
|
0.8
|
|
|
6.1
|
|
|
1.4
|
|
Payment of contingent
consideration liabilities
|
—
|
|
|
(2.7)
|
|
|
—
|
|
|
(2.7)
|
|
Cash Used in
Financing Activities
|
(19.2)
|
|
|
(2.0)
|
|
|
(29.5)
|
|
|
(1.7)
|
|
Effect of Exchange
Rate Changes on Cash and Cash Equivalents
|
(1.3)
|
|
|
2.9
|
|
|
(3.1)
|
|
|
(0.9)
|
|
Decrease in Cash
and Cash Equivalents
|
(2.1)
|
|
|
(5.0)
|
|
|
(13.7)
|
|
|
(25.3)
|
|
Cash and Cash
Equivalents - Beginning of Period
|
99.9
|
|
|
185.0
|
|
|
111.5
|
|
|
205.3
|
|
Cash and Cash
Equivalents - End of Period
|
$
|
97.8
|
|
|
$
|
180.0
|
|
|
$
|
97.8
|
|
|
$
|
180.0
|
|
AVANOS MEDICAL,
INC.
|
SELECTED BUSINESS
AND PRODUCTS DATA
|
(unaudited)
|
(in
millions)
|
|
|
Three Months Ended
September 30,
|
|
|
|
Nine Months Ended
September 30,
|
|
|
|
2021
|
|
2020
|
|
Change
|
|
2021
|
|
2020
|
|
Change
|
Chronic
care
|
$
|
117.1
|
|
|
$
|
119.3
|
|
|
(1.8)
|
%
|
|
$
|
354.2
|
|
|
$
|
355.2
|
|
|
(0.3)
|
%
|
Pain
management
|
67.0
|
|
|
66.4
|
|
|
0.9
|
|
|
197.0
|
|
|
174.6
|
|
|
12.8
|
|
Total Net
sales
|
$
|
184.1
|
|
|
$
|
185.7
|
|
|
(0.9)
|
%
|
|
$
|
551.2
|
|
|
$
|
529.8
|
|
|
4.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
Volume
|
|
Pricing/Mix
|
|
Currency
|
|
Other(a)
|
Net Sales -
percentage change
|
QTD
|
|
(1)
|
%
|
|
—
|
%
|
|
(1)
|
%
|
|
—
|
%
|
|
—
|
%
|
|
YTD
|
|
4
|
%
|
|
4
|
%
|
|
(1)
|
%
|
|
1
|
%
|
|
—
|
%
|
_____________
|
(a)
|
Other includes
rounding.
|
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SOURCE Avanos Medical, Inc.