ALPHARETTA, Ga., Feb. 23, 2022 /PRNewswire/ -- Avanos
Medical, Inc. (NYSE: AVNS) today reported fourth quarter and
full-year 2021 results.
"We are happy with our top line performance despite the extended
duration of the COVID-19 pandemic and related supply chain
headwinds," stated Joe Woody,
Avanos' chief executive officer. Woody continued, "Our employees
remain focused on advancing our strategy despite the challenges,
and we are very pleased with our execution throughout the year
including growing the organic business by 4 percent, maintaining
cost discipline across our operating expenses, executing a
strategic acquisition and announcing a $30
million share repurchase program. Each of these efforts
further position us for achieving our long-term financial
goals."
2021 Financial Highlights
- Fourth quarter net sales totaled $193
million, a 5 percent increase from the prior year. For the
year, net sales increased 4 percent to $745
million.
- Fourth quarter diluted earnings per share were $0.21, compared to a $0.99 per share loss a year ago and fourth
quarter adjusted diluted earnings per share were $0.46 compared to $0.28 in the prior year. 2021 full year diluted
earnings per share were $0.11,
compared to a $0.57 loss per share
loss in the prior year, and adjusted diluted earnings per share
were $1.15, compared to $0.79 in 2020.
- Fourth quarter free cash flow was $47
million compared to a $4
million outflow in the prior year. 2021 full year free cash
flow was $66 million compared to an
outflow of $23 million in 2020.
- As of February 15, 2022, after
closing the acquisition of OrthogenRx, Inc. (OrthogenRx) and
execution of a $30 million share
repurchase program we have greater than $110
million of cash on hand.
Operational and Business Highlights
- In December 2021, the company
announced an agreement to acquire OrthogenRx, a leader in
viscosupplementation therapies for the treatment of knee
osteoarthritis (OA) pain, for $130
million in cash and up to an additional $30 million in contingent cash consideration. The
acquisition was completed on January 20,
2022.
- Data from an investigator-initiated study demonstrating the
unique therapy delivered by COOLIEF* was awarded a podium
presentation at the recent annual American Society of Regional
Anesthesia meeting.
- At the annual American Association of Hip and Knee Surgeons, a
symposium highlighted the utility of COOLIEF* in helping patients
who suffer from painful post-total knee arthoplasty. The emerging
data on this unique set of patients suggests COOLIEF* can be
valuable in helping manage their pain.
Fourth Quarter 2021 Operating Results
In the fourth quarter of 2021, net sales totaled $193 million, a 5 percent increase compared to
the prior year. Volume was driven by continued strong demand for
Digestive Health products and improvements in Interventional Pain
solutions, partially offset by lower volume in Respiratory Health
products compared to the pandemic-driven demand in the prior year
and expected lower volume in Acute Pain products due to fewer
elective procedures.
Gross margin for the fourth quarter was 50 percent compared to
48 percent a year ago. Adjusted gross margin was 53 percent, down
due primarily to higher freight costs and inefficiencies at our
manufacturing plants, compared to 54 percent in the prior year.
Operating profit in the quarter was $25
million compared to a loss of $45
million in the fourth quarter of 2020. This improvement
reflected lower general and administrative expenses with savings
realized from the restructuring activities undertaken at the end of
2020, as well as continued spending discipline throughout 2021. On
an adjusted basis, operating profit was $25
million, compared to $21
million a year ago.
Adjusted EBITDA for the quarter was $31
million, compared to $27
million in the prior year.
Full-Year 2021 Operating Results
Net sales in 2021 increased 4 percent to $745 million, compared to 2020. Volume increased
4% driven by our pain management franchise due to the recovery of
elective procedures and a favorable comparison to the prior year's
sales, which were negatively impacted by the COVID-19 pandemic. In
addition, volume benefited from continued robust demand for
Digestive Health products, which was partially offset by lower
volume in Respiratory Health products 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% benefit.
Gross margin for 2021 was 49 percent compared to 52 percent in
2020. Adjusted gross margin was 52 percent, down from 56 percent
last year due primarily to higher freight costs and inefficiencies
at our manufacturing plants.
Operating income in 2021 was $9
million compared to loss of $46 million in the prior
year. On an adjusted basis, operating profit was $73 million compared to $66 million in 2020.
For the full year, adjusted EBITDA totaled $95 million, compared to $89 million in the prior year.
Cash Flow and Balance Sheet
Cash from operations less capital expenditures, or free cash
flow, for the fourth quarter of 2021 was an inflow of $47 million, compared to an outflow of
$4 million a year ago. For 2021, free
cash flow was an inflow of $66
million, compared to an outflow of $23 million in the prior year.
At year-end 2021, the company's cash balance was $119 million, compared to $112 million at year-end 2020. Total debt at the
end of the fourth quarter totaled $130
million, consisting of borrowings on the company's revolving
credit facility. Overall, debt decreased by $50 million compared to year-end 2020.
2022 Outlook
The company expects 2022 net sales to be between $830 million to $850
million, which assumes organic growth between 3 percent to 6
percent. Gross profit margins are expected to be between 55 percent
to 57 percent with adjusted diluted earnings per share between
$1.55 to $1.75.
Each of these measures is inclusive of the impact of the
OrthogenRx acquisition and assumes that supply chain headwinds
related to both product availability and inflation pressures, will
continue well into 2022.
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 certain adjusting items,
- The 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 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 our
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 our 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. 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 10161855. 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,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net
Sales
|
$
|
193.4
|
|
|
$
|
185.0
|
|
|
$
|
744.6
|
|
|
$
|
714.8
|
|
Cost of products
sold
|
96.5
|
|
|
96.1
|
|
|
380.3
|
|
|
341.5
|
|
Gross
Profit
|
96.9
|
|
|
88.9
|
|
|
364.3
|
|
|
373.3
|
|
Research and
development expenses
|
7.6
|
|
|
9.6
|
|
|
32.3
|
|
|
34.9
|
|
Selling and general
expenses
|
75.2
|
|
|
82.2
|
|
|
300.3
|
|
|
332.6
|
|
Other expense,
net
|
(10.9)
|
|
|
41.9
|
|
|
22.8
|
|
|
51.9
|
|
Operating Income
(Loss)
|
25.0
|
|
|
(44.8)
|
|
|
8.9
|
|
|
(46.1)
|
|
Interest
income
|
—
|
|
|
0.1
|
|
|
0.2
|
|
|
1.2
|
|
Interest
expense
|
(0.7)
|
|
|
(2.7)
|
|
|
(3.3)
|
|
|
(15.6)
|
|
Income (Loss)
Before Income Taxes
|
24.3
|
|
|
(47.4)
|
|
|
5.8
|
|
|
(60.5)
|
|
Income tax
(provision) benefit
|
(14.3)
|
|
|
0.2
|
|
|
(0.6)
|
|
|
33.3
|
|
Net Income
(Loss)
|
$
|
10.0
|
|
|
$
|
(47.2)
|
|
|
$
|
5.2
|
|
|
$
|
(27.2)
|
|
|
Interest expense,
net
|
0.7
|
|
|
2.6
|
|
|
3.1
|
|
|
14.4
|
|
Income tax provision
(benefit)
|
14.3
|
|
|
(0.2)
|
|
|
0.6
|
|
|
(33.3)
|
|
Depreciation and
amortization
|
9.5
|
|
|
10.8
|
|
|
38.3
|
|
|
42.9
|
|
EBITDA
|
$
|
34.5
|
|
|
$
|
(34.0)
|
|
|
$
|
47.2
|
|
|
$
|
(3.2)
|
|
|
|
|
|
|
|
|
|
Earnings (Loss)
Per Share
|
|
|
|
|
|
|
|
Basic
|
$
|
0.21
|
|
|
$
|
(0.99)
|
|
|
$
|
0.11
|
|
|
$
|
(0.57)
|
|
Diluted
|
$
|
0.21
|
|
|
$
|
(0.99)
|
|
|
$
|
0.11
|
|
|
$
|
(0.57)
|
|
|
|
|
|
|
|
|
|
Common Shares
Outstanding
|
|
|
|
|
|
|
|
Basic
|
48.2
|
|
|
47.9
|
|
|
48.1
|
|
|
47.8
|
|
Diluted
|
48.6
|
|
|
47.9
|
|
|
48.6
|
|
|
47.8
|
|
AVANOS MEDICAL,
INC. NON-GAAP
RECONCILIATIONS (unaudited) (in
millions)
|
|
|
Gross
Profit
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
As
reported
|
$
|
96.9
|
|
|
$
|
88.9
|
|
|
$
|
364.3
|
|
|
$
|
373.3
|
|
COVID-19 related
expenses
|
—
|
|
|
0.6
|
|
|
—
|
|
|
4.9
|
|
2020 Restructuring
charges
|
0.1
|
|
|
1.1
|
|
|
4.2
|
|
|
1.1
|
|
Post divestiture
restructuring
|
2.8
|
|
|
0.8
|
|
|
8.3
|
|
|
2.8
|
|
Post divestiture
transition charges
|
0.3
|
|
|
5.9
|
|
|
4.1
|
|
|
7.6
|
|
Acquisition and
integration-related charges
|
0.2
|
|
|
0.1
|
|
|
0.3
|
|
|
0.9
|
|
Intangibles
amortization
|
1.7
|
|
|
1.6
|
|
|
6.7
|
|
|
6.6
|
|
As adjusted
non-GAAP
|
$
|
102.0
|
|
|
$
|
99.0
|
|
|
$
|
387.9
|
|
|
$
|
397.2
|
|
Gross profit margin,
as reported
|
50.1
|
%
|
|
48.1
|
%
|
|
48.9
|
%
|
|
52.2
|
%
|
Gross profit margin,
as adjusted
|
52.7
|
%
|
|
53.5
|
%
|
|
52.1
|
%
|
|
55.6
|
%
|
|
|
Operating Profit
(Loss)
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
As
reported
|
$
|
25.0
|
|
|
$
|
(44.8)
|
|
|
$
|
8.9
|
|
|
$
|
(46.1)
|
|
COVID-19 related
expenses
|
0.1
|
|
|
1.0
|
|
|
0.3
|
|
|
7.9
|
|
2020 Restructuring
charges(a)(b)
|
2.0
|
|
|
27.6
|
|
|
12.4
|
|
|
27.6
|
|
Post divestiture
restructuring(c)
|
4.7
|
|
|
0.8
|
|
|
10.2
|
|
|
2.2
|
|
Post divestiture
transition charges(d)(e)
|
0.3
|
|
|
6.7
|
|
|
3.9
|
|
|
14.9
|
|
Acquisition and
integration-related charges
|
0.9
|
|
|
2.9
|
|
|
1.6
|
|
|
12.5
|
|
EU MDR
Compliance
|
1.6
|
|
|
—
|
|
|
4.0
|
|
|
—
|
|
Litigation and
legal(f)
|
(13.5)
|
|
|
21.7
|
|
|
15.0
|
|
|
27.5
|
|
Intangibles
amortization
|
4.2
|
|
|
4.8
|
|
|
16.7
|
|
|
19.4
|
|
As adjusted
non-GAAP
|
$
|
25.3
|
|
|
$
|
20.7
|
|
|
$
|
73.0
|
|
|
$
|
65.9
|
|
|
|
|
|
|
(a)
|
In the three months
ended December 31, 2021, 2020 Restructuring charges include $0.1
million in "Cost of products sold" (see "Gross Profit" table), $0.9
million in "Selling and general expenses" and $1.0 million in
"Other expense, net." In the year ended December 31, 2021, 2020
Restructuring charges include $4.2 million in "Cost of products
sold," $2.4 million in "Selling and general expenses" and $5.8
million in "Other expense, net."
|
|
|
(b)
|
In the year ended
December 31, 2020, 2020 Restructuring charges included $1.1 million
in "Cost of products sold," $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 are included in "Other expense, net."
|
|
|
(d)
|
In the three months
ended December 31, 2021, post divestiture transition charges
includes $0.3 million in "Cost of products sold" (see "Gross
Profit" table). For the year ended December 31, 2021, post
divestiture transition charges includes $4.1 million, in "Cost of
products sold," and $0.2 million of expense in "Selling and general
expenses".
|
|
|
(e)
|
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."
|
|
|
(f)
|
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
December 31,
|
|
Year Ended
December 31,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
As
reported
|
$
|
24.3
|
|
|
$
|
(47.4)
|
|
|
$
|
5.8
|
|
|
$
|
(60.5)
|
|
COVID-19 related
expenses
|
0.1
|
|
|
1.0
|
|
|
0.3
|
|
|
7.9
|
|
2020 Restructuring
charges
|
2.0
|
|
|
27.6
|
|
|
12.4
|
|
|
27.6
|
|
Post divestiture
restructuring
|
4.7
|
|
|
0.8
|
|
|
10.2
|
|
|
2.2
|
|
Post divestiture
transition charges
|
0.3
|
|
|
6.7
|
|
|
3.9
|
|
|
14.9
|
|
Acquisition and
integration-related charges
|
0.9
|
|
|
2.9
|
|
|
1.6
|
|
|
12.5
|
|
EU MDR
Compliance
|
1.6
|
|
|
—
|
|
|
4.0
|
|
|
—
|
|
Litigation and
legal
|
(13.5)
|
|
|
21.7
|
|
|
15.0
|
|
|
27.5
|
|
Intangibles
amortization
|
4.2
|
|
|
4.8
|
|
|
16.7
|
|
|
19.4
|
|
As adjusted
non-GAAP
|
$
|
24.6
|
|
|
$
|
18.1
|
|
|
$
|
69.9
|
|
|
$
|
51.5
|
|
|
|
Tax Benefit
(Provision)
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
As
reported
|
$
|
(14.3)
|
|
|
$
|
0.2
|
|
|
$
|
(0.6)
|
|
|
$
|
33.3
|
|
Tax effects of
adjusting items
|
11.7
|
|
|
(13.4)
|
|
|
(11.9)
|
|
|
(24.6)
|
|
Tax effects of the
CARES Act and other
|
0.7
|
|
|
8.5
|
|
|
(1.6)
|
|
|
(22.5)
|
|
As adjusted
non-GAAP
|
$
|
(1.9)
|
|
|
$
|
(4.7)
|
|
|
$
|
(14.1)
|
|
|
$
|
(13.8)
|
|
Effective tax rate,
as reported
|
58.9
|
%
|
|
0.4
|
%
|
|
10.0
|
%
|
|
55.0
|
%
|
Effective tax rate,
as adjusted
|
7.7
|
%
|
|
26.0
|
%
|
|
20.2
|
%
|
|
26.8
|
%
|
AVANOS MEDICAL,
INC. NON-GAAP
RECONCILIATIONS (unaudited) (in millions,
except per share amounts)
|
|
|
Net Income
(Loss)
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
As
reported
|
$
|
10.0
|
|
|
$
|
(47.2)
|
|
|
$
|
5.2
|
|
|
$
|
(27.2)
|
|
COVID-19 related
expenses
|
0.1
|
|
|
1.0
|
|
|
0.3
|
|
|
7.9
|
|
2020 Restructuring
charges
|
2.0
|
|
|
27.6
|
|
|
12.4
|
|
|
27.6
|
|
Post divestiture
restructuring
|
4.7
|
|
|
0.8
|
|
|
10.2
|
|
|
2.2
|
|
Post divestiture
transition charges
|
0.3
|
|
|
6.7
|
|
|
3.9
|
|
|
14.9
|
|
Acquisition and
integration-related charges
|
0.9
|
|
|
2.9
|
|
|
1.6
|
|
|
12.5
|
|
EU MDR
Compliance
|
1.6
|
|
|
—
|
|
|
4.0
|
|
|
—
|
|
Litigation and
legal
|
(13.5)
|
|
|
21.7
|
|
|
15.0
|
|
|
27.5
|
|
Intangibles
amortization
|
4.2
|
|
|
4.8
|
|
|
16.7
|
|
|
19.4
|
|
Tax effects of
adjusting items
|
11.7
|
|
|
(13.4)
|
|
|
(11.9)
|
|
|
(24.6)
|
|
Tax effects of the
CARES Act and other
|
0.7
|
|
|
8.5
|
|
|
(1.6)
|
|
|
(22.5)
|
|
As adjusted
non-GAAP
|
$
|
22.7
|
|
|
$
|
13.4
|
|
|
$
|
55.8
|
|
|
$
|
37.7
|
|
Diluted EPS, as
reported
|
$
|
0.21
|
|
|
$
|
(0.99)
|
|
|
$
|
0.11
|
|
|
$
|
(0.57)
|
|
Diluted EPS, as
adjusted
|
$
|
0.46
|
|
|
$
|
0.28
|
|
|
$
|
1.15
|
|
|
$
|
0.79
|
|
|
|
EBITDA
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31, 2021
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
EBITDA, as
reported
|
$
|
34.5
|
|
|
$
|
(34.0)
|
|
|
$
|
47.2
|
|
|
$
|
(3.2)
|
|
COVID-19 related
expenses
|
0.1
|
|
|
1.0
|
|
|
0.3
|
|
|
7.9
|
|
2020 Restructuring
charges
|
2.0
|
|
|
27.6
|
|
|
12.4
|
|
|
27.6
|
|
Post divestiture
restructuring
|
4.7
|
|
|
0.8
|
|
|
10.2
|
|
|
2.2
|
|
Post divestiture
transition charges
|
0.3
|
|
|
6.7
|
|
|
3.9
|
|
|
14.9
|
|
Acquisition and
integration-related charges
|
0.9
|
|
|
2.9
|
|
|
1.6
|
|
|
12.5
|
|
EU MDR
Compliance
|
1.6
|
|
|
—
|
|
|
4.0
|
|
|
—
|
|
Litigation and
legal
|
(13.5)
|
|
|
21.7
|
|
|
15.0
|
|
|
27.5
|
|
Adjusted
EBITDA
|
$
|
30.6
|
|
|
$
|
26.7
|
|
|
$
|
94.6
|
|
|
$
|
89.4
|
|
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,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Cash (used in)
provided by operating activities
|
$
|
52.2
|
|
|
$
|
1.1
|
|
|
$
|
87.3
|
|
|
$
|
(2.5)
|
|
Capital
expenditures
|
(4.8)
|
|
|
(5.1)
|
|
|
(21.0)
|
|
|
(20.2)
|
|
Free Cash
Flow
|
$
|
47.4
|
|
|
$
|
(4.0)
|
|
|
$
|
66.3
|
|
|
$
|
(22.7)
|
|
2022
OUTLOOK
|
|
|
Estimated
Range
|
Diluted earnings per
share (GAAP)
|
$
|
1.05
|
|
to
|
$
|
1.30
|
|
Intangibles
amortization
|
0.25
|
|
to
|
0.25
|
|
Other
|
0.25
|
|
to
|
0.20
|
|
Adjusted diluted
earnings per share (non-GAAP)
|
$
|
1.55
|
|
to
|
$
|
1.75
|
|
AVANOS MEDICAL,
INC. CONDENSED CONSOLIDATED BALANCE
SHEETS (unaudited) (in millions)
|
|
|
As of December
31,
|
|
2021
|
|
2020
|
ASSETS
|
|
|
|
Current
Assets
|
|
|
|
Cash and cash
equivalents
|
$
|
118.5
|
|
|
$
|
111.5
|
|
Accounts receivable,
net of allowances
|
131.2
|
|
|
167.9
|
|
Inventories
|
150.3
|
|
|
168.9
|
|
Prepaid expenses and
other current assets
|
18.6
|
|
|
18.9
|
|
Total Current
Assets
|
418.6
|
|
|
467.2
|
|
Property, Plant
and Equipment, net
|
168.1
|
|
|
175.3
|
|
Operating Lease
Right of Use Assets
|
38.6
|
|
|
48.3
|
|
Goodwill
|
801.6
|
|
|
802.5
|
|
Other Intangible
Assets, net
|
141.2
|
|
|
157.7
|
|
Deferred Tax
Assets
|
10.0
|
|
|
10.0
|
|
Other
Assets
|
16.5
|
|
|
11.8
|
|
TOTAL
ASSETS
|
$
|
1,594.6
|
|
|
$
|
1,672.8
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
Liabilities
|
|
|
|
Current portion of
operating lease obligation
|
$
|
14.7
|
|
|
$
|
15.5
|
|
Trade accounts
payable
|
56.4
|
|
|
67.6
|
|
Accrued
expenses
|
68.1
|
|
|
83.2
|
|
Total Current
Liabilities
|
139.2
|
|
|
166.3
|
|
Long-Term
Debt
|
130.0
|
|
|
180.0
|
|
Operating Lease
Obligation
|
42.8
|
|
|
53.3
|
|
Deferred Tax
Liabilities
|
9.6
|
|
|
5.7
|
|
Other Long-Term
Liabilities
|
9.1
|
|
|
11.0
|
|
TOTAL
LIABILITIES
|
330.7
|
|
|
416.3
|
|
Stockholders'
Equity
|
1,263.9
|
|
|
1,256.5
|
|
TOTAL LIABILITIES
AND STOCKHOLDERS' EQUITY
|
$
|
1,594.6
|
|
|
$
|
1,672.8
|
|
AVANOS MEDICAL,
INC. CONDENSED CONSOLIDATED CASH FLOW
STATEMENTS (unaudited) (in
millions)
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Operating
Activities
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
10.0
|
|
|
$
|
(47.2)
|
|
|
$
|
5.2
|
|
|
$
|
(27.2)
|
|
Depreciation and
amortization
|
9.5
|
|
|
10.8
|
|
|
38.3
|
|
|
42.9
|
|
Stock-based
compensation expense
|
3.0
|
|
|
—
|
|
|
13.2
|
|
|
12.1
|
|
Asset
impairments
|
3.1
|
|
|
21.5
|
|
|
7.9
|
|
|
21.5
|
|
Net loss on asset
dispositions
|
—
|
|
|
0.9
|
|
|
0.1
|
|
|
2.2
|
|
Changes in operating
assets and liabilities
|
14.6
|
|
|
(33.2)
|
|
|
26.0
|
|
|
(67.8)
|
|
Deferred income taxes
and other
|
12.0
|
|
|
48.3
|
|
|
(3.4)
|
|
|
13.8
|
|
Cash Provided by
(Used in) Operating Activities
|
52.2
|
|
|
1.1
|
|
|
87.3
|
|
|
(2.5)
|
|
Investing
Activities
|
|
|
|
|
|
|
|
Capital
expenditures
|
(4.8)
|
|
|
(5.1)
|
|
|
(21.0)
|
|
|
(20.2)
|
|
Acquisition of assets
and investments in businesses
|
—
|
|
|
—
|
|
|
—
|
|
|
(4.0)
|
|
|
Cash (Used in)
Provided by Investing Activities
|
(4.8)
|
|
|
(5.1)
|
|
|
(21.0)
|
|
|
(24.2)
|
|
Financing
Activities
|
|
|
|
|
|
|
|
Debt
repayments
|
—
|
|
|
(249.8)
|
|
|
—
|
|
|
(249.8)
|
|
Line of credit
facility proceeds
|
—
|
|
|
185.0
|
|
|
20.0
|
|
|
185.0
|
|
Line of credit
facility repayments
|
(15.0)
|
|
|
(5.0)
|
|
|
(70.0)
|
|
|
(5.0)
|
|
Purchase of treasury
stock
|
(10.9)
|
|
|
(0.5)
|
|
|
(11.5)
|
|
|
(0.9)
|
|
Proceeds from the
exercise of stock options
|
0.1
|
|
|
2.0
|
|
|
6.2
|
|
|
3.4
|
|
Payment of contingent
consideration liabilities
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.7)
|
|
Cash (Used in)
Provided by Financing Activities
|
(25.8)
|
|
|
(68.3)
|
|
|
(55.3)
|
|
|
(70.0)
|
|
Effect of Exchange
Rate Changes on Cash and Cash Equivalents
|
(0.9)
|
|
|
3.8
|
|
|
(4.0)
|
|
|
2.9
|
|
(Decrease)
Increase in Cash and Cash Equivalents
|
20.7
|
|
|
(68.5)
|
|
|
7.0
|
|
|
(93.8)
|
|
Cash and Cash
Equivalents - Beginning of Period
|
97.8
|
|
|
180.0
|
|
|
111.5
|
|
|
205.3
|
|
Cash and Cash
Equivalents - End of Period
|
$
|
118.5
|
|
|
$
|
111.5
|
|
|
$
|
118.5
|
|
|
$
|
111.5
|
|
AVANOS MEDICAL,
INC. SELECTED BUSINESS AND PRODUCTS
DATA (unaudited) (in millions)
|
|
|
Three Months Ended
December 31,
|
|
|
|
Year Ended
December 31,
|
|
|
|
2021
|
|
2020
|
|
Change
|
|
2021
|
|
2020
|
|
Change
|
Chronic
Care:
|
|
|
|
|
|
|
|
|
|
|
|
Digestive
health
|
$
|
86.8
|
|
|
$
|
74.0
|
|
|
17.3
|
%
|
|
$
|
322.2
|
|
|
$
|
294.1
|
|
|
9.6
|
%
|
Respiratory
health
|
38.8
|
|
|
42.0
|
|
|
(7.6)
|
%
|
|
157.6
|
|
|
177.1
|
|
|
(11.0)
|
%
|
Total Chronic
Care
|
125.6
|
|
|
116.0
|
|
|
8.3
|
%
|
|
479.8
|
|
|
471.2
|
|
|
1.8
|
%
|
Pain
Management:
|
|
|
|
|
|
|
|
|
|
|
|
Acute pain
|
41.1
|
|
|
44.0
|
|
|
(6.6)
|
%
|
|
162.7
|
|
|
157.4
|
|
|
3.4
|
%
|
Interventional
pain
|
26.7
|
|
|
25.0
|
|
|
6.8
|
%
|
|
102.1
|
|
|
86.2
|
|
|
18.4
|
%
|
Total Pain
Management
|
67.8
|
|
|
69.0
|
|
|
(1.7)
|
%
|
|
264.8
|
|
|
243.6
|
|
|
8.7
|
%
|
Total Net
sales
|
$
|
193.4
|
|
|
$
|
185.0
|
|
|
4.5
|
%
|
|
$
|
744.6
|
|
|
$
|
714.8
|
|
|
4.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
Volume
|
|
Pricing/Mix
|
|
Currency
|
|
Other
|
|
|
Net Sales -
percentage change - QTD
|
5
|
%
|
|
5
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
|
Net Sales -
percentage change - YTD
|
4
|
%
|
|
4
|
%
|
|
(1)
|
%
|
|
1
|
%
|
|
—
|
%
|
|
|
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SOURCE Avanos Medical, Inc.