Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report: October 28, 2024

(Date of earliest event reported)

AVANOS MEDICAL, INC.

(Exact name of registrant as specified in its charter)

Delaware

001-36440

46-4987888

(State or other jurisdiction of incorporation)

(Commission file number)

(I.R.S. Employer Identification No.)

5405 Windward Parkway

Suite 100 South

Alpharetta,

Georgia

30004

(Address of principal executive offices)

(Zip code)

Registrant’s telephone number, including area code: (844) 428-2667

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of exchange on which registered
Common Stock - $0.01 Par Value	AVNS	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition

On October 30, 2024, Avanos Medical, Inc. (the "Company") issued a press release announcing its results of operations for the three and nine months ended September 30, 2024. A copy of the press release is furnished herewith as Exhibit 99.1.

The information contained in Item 2.02 of this Current Report, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in Item 2.02 of this Current Report or Exhibit 99.1 shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise expressly stated in such filing.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On October 28, 2024, the Company announced the retirement of Joseph F. Woody as Chief Executive Officer and a member of the Board of Directors of the Company, effective immediately. There were no disagreements between Mr. Woody and the Company on any matter relating to the Company’s operations, policies or practices. Mr. Woody has agreed to remain with the Company in a consulting capacity until April 30, 2025. Mr. Woody had served as the Company’s CEO and member of the Company’s Board of Directors since 2017.

The terms of Mr. Woody’s retirement and consulting arrangement are set forth in a Separation and Consulting Agreement with the Company, dated October 28, 2024 (the “Separation and Consulting Agreement”). Pursuant to the Separation and Consulting Agreement, the Company has agreed to pay Mr. Woody his annual bonus for 2024, which will be determined based upon actual performance against the relevant performance goals and paid in 2025 at the same time the Company pays annual bonuses to its senior executives. In addition, the Company will pay 100% of Mr. Woody’s monthly COBRA premiums for a period of twelve months. During Mr. Woody’s engagement as a consultant, he will receive consulting fees in the amount of $84,618.10 per month, and unless the Company terminates the consulting engagement for Cause, the cessation of Mr. Woody’s consulting services at the end of the consulting period will be deemed to qualify as a “Retirement” for purposes of the Company’s 2021 Long-Term Incentive Plan, as amended. Accordingly, under the terms of Mr. Woody’s outstanding equity awards, his vested stock options will remain exercisable for five years following the end of the consulting period (or until their normal expiration date, if earlier), his time-based restricted stock units will vest pro rata at the end of the consulting period, and his performance-based restricted stock units will vest after the end of the relevant performance period on the Company’s actual performance against the relevant performance goals. These payments and benefits are conditioned upon Mr. Woody’s execution and non-revocation of a general release of claims against the Company and his continued compliance with the terms of his Confidentiality, Non-Solicitation and Assignment of Business Ideas Agreement with the Company. The foregoing description of the Separation and Consulting Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Separation and Consulting Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K.

At the close of business on October 28, 2024, the Company appointed Michael C. Greiner to serve as Interim Chief Executive Officer of the Company. Mr. Greiner, age 52, has served as the Company’s Senior Vice President and Chief Financial Officer since 2020 and was appointed to an additional position as Chief Transformation Officer in 2023. Previously, he served as Executive Vice President and CFO for AngioDynamics, Inc., a publicly listed medical device company (NASDAQ: ANGO), where he played an integral role in transforming and optimizing its product portfolio through both internal development and M&A. Prior to that, Mr. Greiner was the CFO at Extreme Reach, Inc., a cloud-based enterprise platform for brand advertising, responsible for all finance and human resource operations. Earlier in his career, Mr. Greiner held several senior executive roles, including Senior Vice President corporate finance and Chief Accounting Officer at Cimpress N.V. (formerly known as Vistaprint N.V.), global controller for GE’s Water and Processing Technologies division, as well as leadership roles at Bausch & Lomb and Wyeth.

Mr. Greiner was not selected pursuant to any arrangement or understanding between him and any other person, and he has no family relationships with any of the Company’s directors or executive officers. There have been no related person transactions between the Company and Mr. Greiner reportable under Item 404(a) of Regulation S-K.

In connection with his appointment as Interim Chief Executive Officer, Mr. Greiner and the Company entered into an amendment to his offer letter dated December 12, 2019. Pursuant to the amended offer letter, during the period Mr. Greiner is Interim Chief Executive Officer, he will receive a salary of $600,000 per year and a stipend of $83,333 per month. In addition, on October 29, 2024, the Company granted Mr. Greiner a special equity award of time-based restricted stock units having a grant date value equal to $1,000,000, with a twelve-month vesting schedule. All other terms of Mr. Greiner’s original offer letter remain in effect. The foregoing description of the amendment to Mr. Greiner’s offer letter does not purport to be complete and is qualified in its entirety by reference to the full text of the amendment, which is filed as Exhibit 10.2 to this Current Report on Form 8-K.

While Mr. Greiner is the Company’s leading candidate to become the Company’s permanent Chief Executive Officer, the Board of Directors of the Company will evaluate other candidates and will conduct a fulsome search for a permanent Chief Executive Officer over the coming weeks. If Mr. Greiner is appointed as the permanent Chief Executive Officer, the Company will enter into a new offer letter with him. If the permanent Chief Executive Officer role is not offered to Mr. Greiner, he will return to the Chief Financial Officer and Chief Transformation Officer role that he held prior to his appointment as Interim Chief Executive Officer.

At the close of business on October 28, 2024, the Company also appointed Warren J. Machan as Interim Chief Financial Officer. Mr. Machan, age 59, served as the Company’s Senior Vice President - Business Strategy from 2014 to 2021. He also served as the Company’s Interim Chief Financial Officer in 2019. Since 2021, Mr. Machan has served as a medical technology health care strategy consultant, primarily to the Company. His career began in 1987 with Kimberly-Clark Corp., where he progressed through a variety of Finance leadership roles leading to his last position in 2014 as Kimberly-Clark’s Senior Director of Strategy - Global Health Care.

Mr. Machan was not selected pursuant to any arrangement or understanding between him and any other person, and he has no family relationships with any of the Company’s directors or executive officers. There have been no related person transactions between the Company and Mr. Machan reportable under Item 404(a) of Regulation S-K. Mr. Machan’s compensation has not yet been determined, and the Company has not yet entered into any contract or arrangement with Mr. Machan in his role as Interim Chief Financial Officer. The Company will file an amendment to this Current Report on Form 8-K containing such information within four business days after the information is determined or becomes available.

Item 9.01 Financial Statements and Exhibits

(d)Exhibits.


Exhibit No.						Description
10 .1*						Separation and Consulting Agreement , dated October 28, 2024, by and between Avanos Medical, Inc. and Jo s e ph F. Woody
10.2*						Amendment dated October 2 8, 2024 to Employment Offer Letter for Michael C. Greiner
99.1						Press release issued by Avanos Medical, Inc. on October 3 0 , 2024
104						Cover Page Interactive Data File (embedded within the inline XBRL document)

* Management contracts, compensatory plans or arrangements

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

AVANOS MEDICAL, INC.

Date:

October 30, 2024

By:

/s/ Mojirade James

Mojirade James
Senior Vice President and General Counsel

SEPARATION AND CONSULTING AGREEMENT

This SEPARATION AND CONSULTING AGREEMENT (this “Agreement”) is made and entered into as of October 28, 2024 by and between Avanos Medical, Inc. (together with its subsidiaries, the “Company”) and Joseph F. Woody (“Employee”). The Company and Employee are collectively referred to herein as the “Parties.”

RECITALS:

WHEREAS, Employee is currently employed by the Company as Chief Executive Officer;

WHEREAS, the Company and Employee have agreed that Employee’s employment with the Company will end on October 28, 2024 (the “Separation Date”), following which Employee shall be engaged as a consultant of the Company until April 30, 2025 (the “Consulting Termination Date”); and

WHEREAS, the Company and Employee desire to set forth the Parties’ respective rights and obligations with respect to the termination of Employee’s employment and subsequent service as a consultant with the Company;

NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements set forth herein, and for the good and valuable consideration set forth herein, the adequacy of which is hereby specifically acknowledged, the Parties, intending to be legally bound, hereby agree as follows:

1. Separation from Employment. Employee’s separation from employment will be effective as of the Separation Date. From the date of this Agreement until the Separation Date, Employee agrees to continue his employment with the Company in his current position and role, and to provide any additional cooperation, assistance, and/or training requested by the Company to transition his work, responsibilities, files, and systems, as determined in the Company’s sole discretion. In exchange, and subject to Section 2 below, Employee will remain employed with the Company until the Separation Date and will continue to receive his current compensation and benefits in effect on the date of this Agreement through and including the Separation Date.

2. Termination Prior to Separation Date. Nothing in this Agreement shall limit the Company’s ability to terminate Employee’s employment prior to the Separation Date for Cause, as defined in the Company’s Executive Severance Plan, as amended (“Cause”). The Company agrees that it shall not terminate Employee’s employment prior to the Separation Date other than for Cause. In the event Employee resigns or is terminated for Cause prior to the Separation Date, (a) he will only be entitled to receive (i) all accrued but unpaid salary through his last day actually worked for the Company, (ii) any unused vacation due to Employee as of his last day actually worked for the Company according to the Company’s vacation policy currently in effect and as required by law, and (iii) reimbursement for any unreimbursed business expenses properly incurred by Employee in accordance with Company policy prior to his last day actually worked for the Company, (b) Employee will not be entitled to the other benefits set forth in this Agreement, (c) the consulting engagement described in Section 8 below shall not commence, and

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(d) the Company shall not be obligated to provide any of the compensation set forth in Section 11.

3. Payment Following Separation Date. If Employee remains employed by the Company through the Separation Date, to the extent not already paid to Employee, within thirty (30) days of the Separation Date, the Company shall pay to Employee (i) all accrued but unpaid base salary through the Separation Date, (ii) any unused vacation due to Employee as of the Separation Date according to the Company’s vacation policy currently in effect and as required by law, and (iii) reimbursement for any unreimbursed business expenses properly incurred by Employee in accordance with Company policy prior to the Separation Date (collectively, the “Accrued Benefits”). Employee shall be entitled to all vested benefits under any tax qualified pension plan of the Company. Employee will receive by separate letter information regarding his rights regarding continuation of health insurance under Section 4980B of the Internal Revenue Code (“COBRA”), and to the extent that Employee has such rights, nothing in this Agreement will change or impair those rights.

4. Acknowledgement of Payment of Wages. By signing below, Employee agrees and acknowledges that he has been paid all outstanding wages through and including the date of his most recent paycheck, less customary and applicable payroll deductions. Employee further confirms and agrees that he has received all wages, commissions, reimbursements, payments, or other benefits to which he is entitled as a result of his employment with the Company, other than those that have not yet become due pursuant to the Company’s normal payroll schedule.

5. Separation Benefits.

(a) In consideration of Employee’s promises contained in this Agreement (including, without limitation, the release of claims and covenant not to sue contained in the Release Agreement and the Supplemental Release), and subject to the terms and conditions of this Agreement, the Company hereby agrees to: (i) pay to Employee his 2024 annual bonus, which shall be determined based upon the Company’s actual performance against applicable goals established by the Compensation Committee of the Board of Directors of the Company and which shall be paid to Employee in 2025 at the same time that the Company pays 2024 annual bonuses to its senior executives; (ii) pay one hundred percent (100%) of Employee’s monthly COBRA premiums for a period of twelve (12) months following the Separation Date; (iii) provide Employee with the consulting engagement described in Section 8 below (which will result in the continued vesting of Employee’s Outstanding Equity Awards, as defined below during the Consulting Period in accordance with their terms); and (iv) treat Employee’s separation at the end of the Consulting Period as a “Retirement” for purposes of the Outstanding Equity Awards.

(b) The payments and benefits described in Sections 5(a) are collectively referred to herein as the “Separation Benefits.” Except for the Accrued Benefits and the Separation Benefits, to the extent earned by Employee, no compensation or other amounts or benefits will be payable by the Company to Employee in connection with the termination of his employment by the Company. The Parties acknowledge and agree that the Separation Benefits exceed any and all actions, pay, and benefits that the Company might otherwise have owed to Employee by contract or law, and that such payments and benefits constitute good, valuable, and sufficient consideration for Employee’s release and agreements herein. The Company’s provision of the Separation Benefits, to the extent earned by Employee, will discharge all

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obligations of the Company to Employee in connection with his employment by the Company and in connection with the claims released by Employee pursuant to the Release Agreement (as that term is defined below).

(d) This Agreement shall be interpreted and administered in a manner so that any amount or benefit payable hereunder shall be paid or provided in a manner that is either exempt from or compliant with the requirements Section 409A of the Internal Revenue Code of 1986, as amended, and applicable Internal Revenue Service guidance and Treasury Regulations issued thereunder (the “Code”). Nevertheless, the tax treatment of the Accrued Benefits, the Separation Benefits, or the Consulting Benefits (as defined below) to the extent earned by Employee, is not warranted or guaranteed. Neither the Company nor its directors, officers, employees or advisers (other than Employee) shall be held liable for any taxes, interest, penalties or other monetary amounts owed by the Employee as a result of the application of Section 409A of the Code. Regardless of any action the Company takes with respect to any or all taxes, the ultimate liability for all taxes payable with respect to this Agreement shall remain Employee’s responsibility and may exceed the amount actually withheld by the Company.

6. Tax Withholding. Payment of the Separation Benefits (other than the Consulting Fees) will be subject to reduction to satisfy: (i) all federal, state and local employment and withholding tax obligations to the extent required by law and (ii) any other payroll reductions deemed appropriate by the Company.

7. Eligibility. To be eligible for the Separation Benefits:

(a) Employee must continue to perform Employee’s assigned duties and responsibilities in a satisfactory fashion through the Separation Date and must continue to perform the Consulting Services following the Separation Date and through the Consulting Termination Date as set forth herein.

(b) Employee must remain in the employ of the Company through the Separation Date. In the event Employee is terminated by the Company for Cause or Employee resigns prior to such date, the Company shall not be obligated to pay the Separation Benefits.

(c) Employee must execute a Full and Final Release of Claims and Covenant Not to Sue (the “Release Agreement”), in the form attached hereto as Exhibit A, within the period specified therein (but not before the Separation Date) and must not revoke such Release Agreement in writing within the seven (7)-day period following the date on which it is executed.

(d) Employee must execute a Supplemental Release, in the form attached hereto as Exhibit B, on (but not before) the Consulting Termination Date or within seven (7) days after the Consulting Termination Date, and must not revoke such Supplemental Release in writing within the seven (7)-day period following the date on which it is executed.

(e) Employee must fully honor his obligations under the Confidentiality, Non-Solicitation and Assignment of Business Ideas Agreement between Employee and the Company, dated on or about June 26, 2017 (the “Confidentiality Agreement”).

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The Company’s obligation to make the payments and provide the benefits constituting the Separation Benefits shall cease upon Employee’s material breach of any of these eligibility requirements or any other of his continuing contractual obligations to the Company.

8. Engagement as an Independent Contractor; Consulting Services. The Company hereby engages Employee as an independent contractor effective as of the Separation Date, and Employee hereby accepts such engagement as an independent contractor, upon the terms and conditions set forth in this Agreement. Employee shall manage, perform, and provide such professional consulting services and advice (the “Consulting Services”) as the Company may reasonably request from time to time during the Consulting Period (as defined below); provided that the Company’s request shall not interfere with Employee’s pursuit or acceptance of other employment or services (including self-employment). During the Consulting Period, Employee shall: (a) perform the Consulting Services in a professional, ethical, and competent manner; (b) take no actions that Employee in good faith believes will in any way damage the business or public image or reputation of the Company or its affiliates; (c) abide by the Company’s and then-current policies or guidelines in all material respects while at the Company’s facilities or performing the Consulting Services; and (d) not engage in any actions that would create a conflict of interest with the interests of the Company.

9. Independent Contractor Relationship. The Parties acknowledge and intend that the relationship of Employee to the Company under this Agreement shall be that of an independent contractor. In performing the Consulting Services under this Agreement, Employee shall undertake the Consulting Services according to Employee’s own means and methods of work, which shall be in the exclusive charge and control of Employee, and which shall not be subject to the control or supervision of the Company, except as to the objectives of those Consulting Services. Employee shall determine Employee’s own working hours and schedule and shall not be subject to the Company’s personnel policies and procedures as to hours and schedule. Employee shall be entirely and solely responsible for Employee’s actions or inactions and the actions or inactions of any agents, employees or subcontractors, if any, while performing Consulting Services hereunder. Employee shall not, in any form or fashion, maintain, hold out, represent, state or imply to any other individual or entity that an employer/employee relationship exists between the Company and Employee. Employee is not granted, nor shall Employee represent that he is or has been granted, any right or authority to make any representation or warranty or assume or create any obligation or responsibility, express or implied, for, on behalf or in the name of the Company, to incur debts for the Company, or to bind the Company in any manner whatsoever.

10. Term of the Agreement and Engagement; Termination. The term of Employee’s engagement with the Company as independent contractor under this Agreement shall begin on October 29, 2024 and continue until April 30, 2025 (the “Consulting Period”). Following the end of the Consulting Period, Employee’s engagement with the Company under this Agreement shall automatically terminate. In addition, the Company may only terminate Employee’s engagement hereunder during the Consulting Period with Cause. Employee’s engagement hereunder shall terminate automatically upon Employee’s death during the Consulting Period, in which case, the Company shall pay any earned but unpaid Consulting Fee (as defined below) to Employee’s estate and reimburse any outstanding expenses incurred in accordance with this Agreement and shall have no further obligations under this Agreement. Upon proper termination of this Agreement, Employee shall be entitled to payment of any earned but unpaid

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compensation for the Consulting Services as of the termination date, and Employee shall not be entitled to any additional or future compensation or any benefits whatsoever. Employee acknowledges and agrees that, as an independent contractor, he is not entitled to receive unemployment insurance benefits.

11. Consulting Compensation and Expenses.

a. Compensation. During the Consulting Period, the Company will pay Employee a monthly fee equal $84,618.10 (the “Consulting Fees”). In addition, the Parties acknowledge that the following equity awards from the Company to Employee remain outstanding as of the date of this Agreement: 137,147 restricted stock units granted March 6, 2024; 137,147 performance share units granted March 6, 2024; 57,987 restricted stock units granted March 6, 2023, 86,547 performance share units granted March 6, 2023; 27,518 restricted stock units granted March 4, 2022; and 57,552 performance share units granted March 4, 2022 (collectively, the “Outstanding Equity Awards”). During the Consulting Period, Employee shall be considered to be in continuous service to the Company for purposes of, and shall be eligible for continued vesting of, the Outstanding Equity Awards pursuant to the terms thereof. Upon completion of the Consulting Period, unless the terminated by the Company for Cause, Employee’s cessation of Consulting Services shall be deemed to constitute his “Retirement” for purposes of the Outstanding Equity Awards. The Consulting Fees and the treatment of the Outstanding Equity Awards are collectively referred to as the “Consulting Benefits.”

b. Taxes and Employee Benefits. During the Consulting Period, Employee shall be serving as an independent contractor of the Company, and therefore unless required by law, the Company shall not deduct any federal, state or local taxes or other withholdings from any sums paid Employee hereunder, and Employee hereby agrees to indemnify and hold harmless the Company and each of its affiliates from any liability for any and all federal, state and local taxes or assessments of any kind arising out of any payment made by the Company to Employee hereunder. Employee shall be responsible for all tax reporting, tax payments, withholdings, insurance and other payments, expenses and filings required to be made or paid by Employee or Employee’s agents or employees. Further, neither Employee nor any of Employee’s agents or employees on account of having rendered Consulting Services hereunder shall be entitled to any benefits provided by the Company to any of its employees, including, without limitation, any retirement plan, insurance program, disability plan, medical benefits plan or any other fringe benefit program sponsored and maintained by the Company for its employees. In respect of all consulting services Employee performs hereunder, the Company shall pay all of Employee’s reasonable out-of-pocket expenses in connection therewith, promptly upon Employee’s presentation to the Company of an invoice specifying the amount and purpose of the expense, together with reasonable documentation of such expense.

12. Protection of Confidential Information; Use of Company Materials. Employee agrees that he will abide by the terms of the Confidentiality Agreement with respect to any Confidential Information (as defined in the Confidentiality Agreement) he learns in connection with providing the Consulting Services under this Agreement. Employee acknowledges and agrees that any and all materials provided by the Company to Employee that are to be used in connection with Employee’s provision of the Consulting Services under this Agreement are the property of the Company and may not be used outside of the scope, terms, and conditions of this Agreement or in providing services to or on behalf of any person or entity other than the Company. Employee agrees that he will immediately return all such materials to the Company

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on or prior to the end of the Consulting Period, or at any other time the Company requests such return.

13. Entire Agreement. This Agreement, the Release Agreement and the Supplemental Release together embody the entire agreement of the Parties relating to the subject matter of this Agreement and supersede all prior agreements, oral or written, regarding the subject matter hereof and as to Separation Benefits to be paid to Employee. No amendment or modification of this Agreement will be valid or binding upon the Parties unless made in writing and signed by the Parties.

14. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the state of Georgia without regard to conflicts of law principles thereof.

15. Enforcement. The provisions of this Agreement shall be deemed severable, and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. It is understood and agreed that no failure or delay by Company or Employee in exercising any right, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder.

16. Acknowledgement. Employee agrees that he has read all the terms of this Agreement and understands those terms. Employee is signing this Agreement of his own free will in exchange for the Separation Benefits, to the extent earned by Employee, to be paid to Employee.

[Signature page follows]

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IN WITNESS HEREOF, Company and Employee have each executed this Agreement as of the date first above written.

AVANOS MEDICAL, INC., on behalf of itself and its subsidiaries


By: /s/ Michael C. Greiner		October 28, 2024
	Name: Michael C. Greiner Title: Interim Chief Executive Officer	Date


			/s/ Joseph F. Woody						October 29, 2024
			Joseph F. Woody						Date

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EXHIBIT A

AVANOS MEDICAL, INC.

FULL AND FINAL RELEASE OF CLAIMS AND COVENANT NOT TO SUE

This Full and Final Release of Claims and Covenant not to Sue (“Agreement”) is made and entered into between Joseph F. Woody (“Employee”) and Avanos Medical, Inc., a Delaware corporation (the “Company”).

1. SEPARATION FROM EMPLOYMENT. Employee’s employment is being terminated and Employee’s last day on the payroll is October 28, 2024 (the “Separation Date”).

2. SEPARATION BENEFITS. Employee agrees and understands that the consideration described in Section 3 of this Agreement is provided through a Separation and Consulting Agreement between Employee and the Company (the “Separation Agreement”), which also requires the execution of this Agreement as a condition to the payment of benefits under the Separation Agreement.

3. CONSIDERATION. In consideration of Employee’s decision to enter into the Separation Agreement, following the Company’s receipt of this Agreement executed by the Employee and the expiration of the seven (7) day period within which the Employee may revoke Employee’s acceptance of this Agreement as explained below (and provided Employee has not exercised such right of revocation), and subject to the terms and conditions of the Separation Agreement, the Company will provide Employee with the Separation Benefits described in Section 5(a) of the Separation Agreement.

Employee further acknowledges the Separation Benefits (other than the Consulting Fees) will be subject to reduction to satisfy: (i) all federal, state and local employment and withholding tax obligations to the extent required by law and (ii) any other payroll reductions deemed appropriate by the Company. Employee agrees that, except for the amounts withheld, Employee shall be fully responsible for paying any taxes, interest, penalties, or other amounts due on the above payments and the Company makes no representation as to the tax treatment of any consideration under this Agreement or the Separation Agreement. All above payments will be made as provided in the Separation Agreement, provided this Agreement becomes final and binding.

4. ACKNOWLEDGEMENT REGARDING PAYMENTS AND BENEFITS. Employee acknowledges and agrees that he has been paid all wages and accrued benefits to which he is entitled through the date of execution of this Agreement. Other than the payments set forth in this Agreement, the parties hereto agree that the Company owes no additional amounts to Employee for wages, back pay, severance pay, bonuses, damages, accrued vacation, benefits, insurance, sick leave, other leave, or any other reason.

5. FULL AND FINAL RELEASE. In consideration of the payments being provided to Employee above, Employee, for Employee, Employee’s attorneys, heirs, executors,

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administrators, successors and assigns, fully, finally and forever releases and discharges the Company, all parent, subsidiary, related and affiliated companies, as well as its and their successors, assigns, officers, owners, directors, agents, representatives, attorneys, and employees (all of whom are referred to throughout this Agreement as the “Released Parties”), of and from all claims, demands, actions, causes of action, suits, damages, losses, and expenses, whether known or unknown, of any and every nature whatsoever, as a result of actions or omissions occurring through the execution date of this Agreement. Specifically included in this waiver and release are, among other things, any and all claims of alleged employment discrimination, either as a result of the separation of Employee’s employment or otherwise, any claims under any severance pay plan of the Released Parties, the Age Discrimination in Employment Act, the Older Workers Benefit Protection Act, Title VII of the Civil Rights Act of 1964, the Family and Medical Leave Act (FMLA), the Americans with Disabilities Act, the Worker Adjustment and Retraining Notification (WARN) Act, the Uniformed Services Employment and Reemployment Rights Act (USERRA), the Ledbetter Fair Pay Act, the Genetic Information Nondiscrimination Act of 2008, the Internal Revenue Code (IRC), the US tax code, the Employee Retirement Income Security Act (ERISA), any other federal, state or local statute, rule, ordinance, or regulation, as well as any claims for alleged wrongful discharge, negligent or intentional infliction of emotional distress, breach of contract, fraud, defamation, or any other unlawful behavior, the existence of which is specifically denied by the Released Parties.

Notwithstanding the provisions of any law, and for the purpose of implementing a full and complete release and discharge of the Released Parties, Employee expressly acknowledges that this Agreement is intended to include in its effect, without limitation, all claims that Employee does not know or suspect to exist in Employee’s favor at the time Employee executes this Agreement, and that this Agreement contemplates the extinguishment of any such claims.

The above release does not waive any rights or claims that (a) may arise after the date on which Employee executes this Agreement; (b) cannot lawfully be released under applicable law, including, but not limited to, unemployment benefits and workers’ compensation claims, (c) constitute an award to Employee from or by a Government Agency for providing information. In addition, nothing in this Agreement is intended to waive any vested right that Employee may have under any pension, 401(k) plan or other benefit plan provided by the Released Parties, and nothing in this Agreement shall prohibit Employee from enforcing such rights. Further, the above release shall not apply to any obligation of the Company pursuant to the Separation Agreement, any rights in the nature of indemnification which Employee may have, any rights that Employee may have to obtain contribution in the event of the entry of judgment against Employee as a result of any act or failure to act for which both Employee and the Company are jointly responsible or any vested benefit to which Employee is entitled under the Company’s employee benefit plans.

6. COVENANT NOT TO SUE. Except as expressly set forth in Section 7 below, Employee further hereby AGREES NOT TO FILE A LAWSUIT or other legal claim or charge to assert against any of the Released Parties any claim released by this Agreement.

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7. NON-INTERFERENCE. Nothing in this Agreement shall be construed to prohibit Employee from filing a charge or participating in any investigation or proceeding before any federal, state or local agency or commission including, but not limited to, the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, and the Securities and Exchange Commission (collectively, “Government Agencies”). In addition, nothing in this Agreement shall limit Employee’s ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Company. This Agreement does not limit Employee’s right to receive an award for information provided to any Government Agencies regarding any violation of any Securities and Exchange Commission regulation or financial fraud or misconduct. Notwithstanding the foregoing, to the maximum extent permitted by law, Employee waives Employee’s right to recover damages as a result of any charge or lawsuit filed by Employee or by anyone else on Employee’s behalf, including a class or collective action, whether or not Employee is named in such proceeding. Furthermore, pursuant to the federal Defend Trade Secrets Act of 2016, Employee shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made (1) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney, in each case, solely for the purpose of reporting or investigating a suspected violation of law or (2) in a complaint or other document filed in a lawsuit or proceeding, if such filings are made under seal.

8. NO OTHER CLAIMS. Employee understands that Employee is releasing claims about which Employee may not know anything at the time Employee executes this Agreement. Employee represents and warrants that Employee has (a) filed no claims, lawsuits, charges, grievances, or causes of action of any kind against the Released Parties and, to the best of the Employee’s knowledge, Employee possesses no such claims (including Fair Labor Standards Act (“FLSA”) and worker’s compensation claims) that Employee has not already disclosed to the Released Parties; (b) received any and all compensation (including overtime compensation), meal periods, and rest periods to which Employee may have been entitled, and Employee is not currently aware of any facts or circumstances constituting a violation by the Released Parties of the FLSA or other applicable wage, hour, meal period, and/or rest period laws that Employee has not already disclosed to the Released Parties; and (c) not suffered any work-related injury or illness within the twelve (12) months preceding Employee’s execution of this Agreement, and Employee is not currently aware of any facts or circumstances that would give rise to a worker’s compensation claim against the Released Parties that Employee has not already disclosed to the Released Parties.

9. DUTY TO COOPERATE. Employee agrees to be available on a reasonable basis to assist the Released Parties with any investigation, claim, suit, or other proceeding that is pending or threatened by or against the Released Parties. Employee further agrees to promptly inform the Company’s General Counsel if Employee is requested to: (a) testify in connection with or otherwise become involved in any claim against the Released Parties; or (b) assist with or participate in any investigation of the Released Parties. The Company’s General Counsel may be

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contacted via mail at the following address: General Counsel, Avanos Medical, Inc., 5405 Windward Parkway, Alpharetta, Georgia 30004.

10. NON-DISPARAGEMENT. Employee agrees that Employee has not and will not (including during the time period while this Agreement was under consideration by Employee) make any defamatory or maliciously disparaging statements about the Released Parties, the Released Parties’ products or services, or the Released Parties’ representatives or employees to current, former or prospective customers or suppliers or other business relations, to the media, or to other members of the public. Nothing in this Agreement shall be deemed to preclude the Company or Employee from providing truthful testimony or information pursuant to subpoena, court order, or similar legal process, or from providing truthful information to Government Agencies. The Company will not (including during the time period while this Agreement was under consideration by Employee), and will instruct the Company’s board of directors and the senior management team of the Company not to, make any defamatory or maliciously disparaging statements about Employee to current, former or prospective employers or other business relations, to the media, or to other members of the public. In addition, the Company and Employee agree to comply with and communicate with members of the public consistent with a communications plan developed by the Company regarding the announcement of Employee’s separation; provided, that the Company shall provide Employee with an opportunity to review and comment on, and will consider in good faith any reasonable comments from Employee on, such communications plan.

11. NON-ADMISSION OF LIABILITY OR WRONGFUL CONDUCT. This Agreement shall not be construed as an admission by the Released Parties of any liability or acts of wrongdoing or discrimination, nor shall it be considered to be evidence of such liability, wrongdoing, or discrimination.

12. TERMINATION OF EMPLOYMENT RELATIONSHIP. Except as set forth above, Employee and the Released Parties agree as a matter of intent that, this Agreement terminates all aspects of the employment relationship between them.

13. RETURN OF COMPANY PROPERTY. Employee understands and agrees that all Company Information and Business Ideas (as defined in the Confidentiality, Nonsolicitation and Assignment of Business Ideas Agreement between Employee and the Company) is the exclusive property of the Company and that Employee has no rights in or to the Company Information upon the termination of employment. Employee represents that Employee shall deliver to the Company by the expiration of the Consulting Period:

(a) all originals and electronic and paper copies of all documents and records that may contain Company Information in his possession, regardless of where such documents and records are stored including, but not limited to, on USB drives, external hard drives, and/or any cloud-based storage (for which Employee provided any necessary passwords);

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(b) all property of any nature that relates to Company Information or Business Ideas in his possession, including, but not limited to, business activities, customers or prospective customers of the Company, whether prepared by Employee or others; and

(c) all property of any nature whatsoever that is in Employee’s possession, custody or control, and that is the property of the Company (e.g. cellular phones, credit cards, computer or other equipment).

Employee further represents that, after returning any electronic copies of documents, records or data to the Company, Employee has made good faith efforts to delete any remaining electronic versions from personal electronic devices (e.g. personal computers, phones, tablets).

14. GOVERNING LAW; CHOICE OF FORUM. This Agreement shall be governed and construed as to both substantive and procedural matters in accordance with the laws of the State of Georgia, without regard to the conflict of laws principles thereof. Employee agrees that any claim or dispute Employee may have against the Company must be resolved by a court located in Fulton County, Georgia. Employee agrees to submit to personal jurisdiction and venue in the Superior Court of Fulton County, State of Georgia for the purpose of litigating all claims or disputes between the Company and Employee.

15. SEVERABILITY. The provisions of this Agreement are severable, and if any part of this Agreement is found by a court of law to be unenforceable, the remainder of the Agreement will continue to be valid and effective.

16. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement between Employee and the Company concerning the subject matter of this Agreement and Employee’s employment with and separation from the Company and the events leading thereto and associated therewith. Any prior agreements between or directly involving Employee and any of the Released Parties concerning the subject matter of this Agreement and Employee’s relationship with the Company are superseded by the terms of this Agreement and thus are rendered null and void with the exception of the Confidentiality, Nonsolicitation and Assignment of Business Ideas Agreement between Employee and the Company and any other noncompetition, confidentiality, nonsolicitation and/or assignment of business ideas agreements or any prior agreements between the parties related to inventions, business ideas, and confidentiality of corporate information, which remain intact, including, but not limited to, those provided to Employee with this Agreement.

17. NO OTHER PROMISES. Employee affirms that the only consideration for Employee signing this Agreement is that set forth in Section 2, that no other promise or agreement of any kind has been made to or with Employee by any person or entity to cause Employee to execute this document, and that Employee fully understands the meaning and intent of this Agreement, including but not limited to, its final and binding effect.

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18. REVIEW AND REVOCATION PERIODS. Employee acknowledges that Employee is hereby advised to consult with an attorney before signing this Agreement. Employee further acknowledges that Employee has been given twenty-one (21) days from the time that Employee receives this Agreement to consider whether to sign it, as provided by the Age Discrimination in Employment Act of 1967, as amended (ADEA). If Employee has signed this Agreement before the end of this twenty-one (21) day period, it is because Employee freely chose to do so after carefully considering its terms. Employee may not sign this Agreement prior to the Separation Date. Finally, Employee shall have seven (7) days from the date Employee signs this Agreement to revoke this Agreement by delivering written notice within the seven (7) day period to the following Company contact:

General Counsel

Avanos Medical, Inc.

5405 Windward Parkway

Alpharetta, Georgia 30004

If Employee does not revoke this Agreement, this Agreement will become effective and irrevocable by Employee on the eighth day after Employee has executed it. If Employee elects not to sign this Agreement within twenty-one (21) days from the date that Employee receives this Agreement or if the Employee revokes the Agreement during the foregoing applicable revocation period, this Agreement shall not become effective and the offer to enter into this Agreement shall terminate and expire automatically.

19. LEGALLY BINDING AGREEMENT. Employee understands and acknowledges that this Agreement is final and binding following the seven (7) day revocation period provided in this Agreement.

20. REPRESENTATION AND WARRANTY OF UNDERSTANDING. By signing below, Employee represents and warrants that Employee: (a) has carefully read and understands the terms of this Agreement; (b) is entering into this Agreement knowingly, voluntarily and of Employee’s own free will; and (c) understands its terms and significance and intends to abide by its provisions without exception.

Date: October 29, 2024 /s/ Joseph F. Woody

Joseph F. Woody

AVANOS MEDICAL, INC.

Date: October 28, 2024 By: /s/ Michael C. Greiner

Name: Michael C. Greiner

Title: Interim Chief Executive Officer

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EXHIBIT B

AVANOS MEDICAL, INC.

SUPPLEMENTAL RELEASE OF CLAIMS

This Supplemental Release of Claims (the “Supplemental Release”) is made and entered into by Joseph F. Woody (“Employee”) on the date provided below. Capitalized terms not otherwise defined herein shall have the meanings set forth in the Separation and Consulting Agreement dated as of October 28, 2024 by and between Avanos Medical, Inc. (together with its subsidiaries, the “Company”) and Employee (the “Separation Agreement”) and/or the Full and Final Release of Claims and Covenant Not to Sue by and between Avanos Medical, Inc. and the Employee dated as of October 28, 2024 (the “Release Agreement”). Employee must sign this Supplemental Release on (but not before) the Consulting Termination Date or within seven (7) days after the Consulting Termination Date.

1. FULL AND FINAL RELEASE. In consideration of the Separation Benefits provided to Employee pursuant to the Separation Agreement and/or the Release Agreement, Employee, for Employee, Employee’s attorneys, heirs, executors, administrators, successors and assigns, fully, finally and forever releases and discharges the Released Parties of and from all claims, demands, actions, causes of action, suits, damages, losses, and expenses, whether known or unknown, of any and every nature whatsoever, as a result of actions or omissions occurring on or after the date Employee signed the Release Agreement through the execution date of this Supplemental Release. Specifically included in this waiver and release are, among other things, any and all claims of alleged employment discrimination, either as a result of the separation of Employee’s employment or otherwise, any claims under any severance pay plan of the Released Parties, the Age Discrimination in Employment Act, the Older Workers Benefit Protection Act, Title VII of the Civil Rights Act of 1964, the Family and Medical Leave Act (FMLA), the Americans with Disabilities Act, the Worker Adjustment and Retraining Notification (WARN) Act, the Uniformed Services Employment and Reemployment Rights Act (USERRA), the Ledbetter Fair Pay Act, the Genetic Information Nondiscrimination Act of 2008, the Internal Revenue Code (IRC), the US tax code, the Employee Retirement Income Security Act (ERISA), any other federal, state or local statute, rule, ordinance, or regulation, as well as any claims for alleged wrongful discharge, negligent or intentional infliction of emotional distress, breach of contract, fraud, defamation, or any other unlawful behavior, the existence of which is specifically denied by the Released Parties.

Notwithstanding the provisions of any law, and for the purpose of implementing a full and complete release and discharge of the Released Parties, Employee expressly acknowledges that this Supplemental Release is intended to include in its effect, without limitation, all claims that Employee does not know or suspect to exist in Employee’s favor at the time Employee executes this Supplemental Release, and that this Supplemental Release contemplates the extinguishment of any such claims.

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The above release does not waive any rights or claims that (a) may arise after the date on which Employee executes this Supplemental Release; (b) cannot lawfully be released under applicable law, including, but not limited to, unemployment benefits and workers’ compensation claims, (c) constitute an award to Employee from or by a Government Agency for providing information. In addition, nothing in this Supplemental Release is intended to waive any vested right that Employee may have under any pension, 401(k) plan or other benefit plan provided by the Released Parties, and nothing in this Supplemental Release shall prohibit Employee from enforcing such rights. Further, the above release shall not apply to any obligation of the Company pursuant to the Separation Agreement, any rights in the nature of indemnification which Employee may have, any rights that Employee may have to obtain contribution in the event of the entry of judgment against Employee as a result of any act or failure to act for which both Employee and the Company are jointly responsible or any vested benefit to which Employee is entitled under the Company’s employee benefit plans.

2. COVENANT NOT TO SUE. Except as expressly set forth in Section 3 below, Employee further hereby AGREES NOT TO FILE A LAWSUIT or other legal claim or charge to assert against any of the Released Parties any claim released by this Supplemental Release.

3. NON-INTERFERENCE. Nothing in this Supplemental Release shall be construed to prohibit Employee from filing a charge or participating in any investigation or proceeding before any Government Agencies. In addition, nothing in this Supplemental Release shall limit Employee’s ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Company. This Supplemental Release does not limit Employee’s right to receive an award for information provided to any Government Agencies regarding any violation of any Securities and Exchange Commission regulation or financial fraud or misconduct. Notwithstanding the foregoing, to the maximum extent permitted by law, Employee waives Employee’s right to recover damages as a result of any charge or lawsuit filed by Employee or by anyone else on Employee’s behalf, including a class or collective action, whether or not Employee is named in such proceeding. Furthermore, pursuant to the federal Defend Trade Secrets Act of 2016, Employee shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made (1) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney, in each case, solely for the purpose of reporting or investigating a suspected violation of law or (2) in a complaint or other document filed in a lawsuit or proceeding, if such filings are made under seal.

4. NO OTHER CLAIMS. Employee understands that Employee is releasing claims about which Employee may not know anything at the time Employee executes this Supplemental Release. Employee represents and warrants that Employee has (a) filed no claims, lawsuits, charges, grievances, or causes of action of any kind against the Released Parties and, to the best of the Employee’s knowledge, Employee possesses no such claims (including Fair Labor Standards Act (“FLSA”) and worker’s compensation claims) that Employee has not already disclosed to the Released Parties; (b) received any and all compensation (including overtime compensation), meal periods, and rest periods to which Employee may have been entitled, and

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Employee is not currently aware of any facts or circumstances constituting a violation by the Released Parties of the FLSA or other applicable wage, hour, meal period, and/or rest period laws that Employee has not already disclosed to the Released Parties; and (c) not suffered any work-related injury or illness within the twelve (12) months preceding Employee’s execution of this Supplemental Release, and Employee is not currently aware of any facts or circumstances that would give rise to a worker’s compensation claim against the Released Parties that Employee has not already disclosed to the Released Parties.

5. REVIEW AND REVOCATION PERIODS. Employee acknowledges that Employee is hereby advised to consult with an attorney before signing this Supplemental Release. Employee further acknowledges that Employee has been given twenty-one (21) days from the time that Employee receives this Supplemental Release to consider whether to sign it, as provided by the Age Discrimination in Employment Act of 1967, as amended (ADEA). If Employee has signed this Supplemental Release before the end of this twenty-one (21) day period, it is because Employee freely chose to do so after carefully considering its terms. Employee may not sign this Supplemental Release prior to the Consulting Termination Date. Finally, Employee shall have seven (7) days from the date Employee signs this Supplemental Release to revoke this Supplemental Release by delivering written notice within the seven (7) day period to the following Company contact:

General Counsel

Avanos Medical, Inc.

5405 Windward Parkway

Alpharetta, Georgia 30004

If Employee does not revoke this Supplemental Release, this Supplemental Release will become effective and irrevocable by Employee on the eighth day after Employee has executed it. If Employee elects not to sign this Supplemental Release within seven (7) days from the Consulting Termination Date or if the Employee revokes the Supplemental Release during the foregoing applicable revocation period, this Supplemental Release shall not become effective and the offer to enter into this Supplemental Release shall terminate and expire automatically.

6. LEGALLY BINDING AGREEMENT. Employee understands and acknowledges that this Supplemental Release is final and binding following the seven (7) day revocation period provided in this Supplemental Release.

7. REPRESENTATION AND WARRANTY OF UNDERSTANDING. By signing below, Employee represents and warrants that Employee: (a) has carefully read and understands the terms of this Supplemental Release; (b) is entering into this Supplemental Release knowingly, voluntarily and of Employee’s own free will; and (c) understands its terms and significance and intends to abide by its provisions without exception.

Date:

Joseph F. Woody

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						5405 Windward Parkway
						Alpharetta, GA 30004

						T 1-844-428-2667
						www.avanos.com

October 28, 2024

Mr Michael Greiner

Delivered via Hand Delivery

Re: Amendment to December, 2019 Offer Letter

Michael,

Based on discussions with the Board of Directors, this amendment memorializes the changes to your December 12, 2019 offer letter that have gone into effect.

Role

Effective as of the close of business on October 28, 2024, you were appointed Interim Chief Executive Officer of Avanos Medical, Inc. (the “Company”) reporting to the Company’s Board of Directors. If the Board appoints you Chief Executive Officer after it concludes its search, a new offer letter will be issued to outline the details of the new role. If the Chief Executive Officer role is not offered to you, you will be eligible to return to the Chief Financial Officer and Chief Transformation Officer role that you held prior to this date.

Compensation

During the period in which you are Interim Chief Executive Officer, and effective as of October 29th, your compensation will be as follows:

Base Salary

Your starting salary will be $600,000 per year and is subject to applicable withholdings and deductions. In addition, you will receive a stipend of $83,333 per month during the time you are in the interim role. Consistent with our practices for salaried officers, your salary will be paid semi-monthly on the 15th and last working day of the month.

Long-Term Incentive Compensation

Effective on October 29th and in accordance with ther terms and conditions of the Avanos Equity Participation Plan, a special grant of $1,000,000 will be issued to you. The grant will consist of TRSU’s with a 12 month vesting schedule, except that in the event of a without cause termination, full vesting of the TRSU’s would occur. Should you be appointed Chief Executive Officer, a new offer letter with compensation details will be provided.

Future annual long-term incentive target grant amounts, along with the grant type and mix, are subject to change by the Board of Directors and the Compensation Committee in their discretion. The complete terms and conditions of Avanos’ Equity Participation Plan are set forth in Avanos’ plan document.

All other terms, of your original offer letter, except as noted herein, remain in effect.

I believe this captures the totality of the changes discussed with you. If you have any questions, please feel free to contact me directly.

Regards,

/s/ Gary D. Blackford

Gary D. Blackford

Chairman

To indicate your acceptance of this amendment and its terms and conditions, please sign in the space provided below.

ACCEPTED:

/s/ Michael Greiner

Michael Greiner

October 29, 2024


						Investor Contact: Michael Greiner
						Avanos Medical, Inc.
						470-562-2692
						Investor.Relations@Avanos.com

						Media Contact: Katrine Kubis
						Avanos Medical, Inc.

						CorporateCommunications@Avanos.com

Avanos Medical, Inc. Announces Third Quarter 2024 Results, retirement of CEO

ALPHARETTA, Ga., October 30, 2024/PRNewswire/ -- Avanos Medical, Inc. (NYSE: AVNS) today reported third quarter 2024 financial results and announced the retirement of its CEO, Joe Woody.

Gary Blackford, Avanos Board Chairman, noted “Joe has decided to retire after leading Avanos for the past seven years. Joe has agreed to assist the Company in the transition of leadership, and will continue to consult with the Company through April of next year. Avanos is better positioned financially and organizationally today to achieve its longer-term value creation goals because of Joe’s leadership these past seven years and we thank him.” Blackford continued, “We are also pleased to announce that Michael Greiner has agreed to serve as interim CEO for Avanos. As Avanos’ CFO and Chief Transformation Officer, Michael has demonstrated his ability to deliver consistent results against our three-year transformation plan and he is well positioned to step in as interim CEO.”

Third Quarter 2024 Financial Highlights

•Total net sales from continuing operations were $170.4 million, a 0.5% decrease from the comparable prior year period.

•Net income from continuing operations was $5.9 million, compared to net loss from continuing operations of $8.8 million a year ago.

•Adjusted net income from continuing operations totaled $16.7 million, compared to $14.0 million a year ago.

•Diluted earnings per share from continuing operations was $0.12, compared to diluted loss per share of $0.19 a year ago.

•Adjusted diluted earnings per share from continuing operations was $0.36, compared to $0.30 a year ago.

•Adjusted EBITDA was $30.6 million, compared to $27.8 million a year ago.

“Although we are pleased with our transformation progress, we fell short in the third quarter of our stated objective of mid-single-digit organic growth, which also negatively impacted gross profit margin for the quarter,” said Michael Greiner, Avanos’ interim chief executive officer. “We had a few strong pockets of sales performance for the quarter, including continued execution in our digestive health business and double digit growth for Game Ready and IVP. However, underperformance in our surgical pain category, particularly ON-Q, negatively impacted our overall sales performance.”

Third Quarter 2024 Operating Results From Continuing Operations

For the three months ended September 30, 2024, net sales totaled $170.4 million, a decrease of 0.5% compared to the prior year period, due to lower demand for our surgical pain and hyaluronic acid (“HA”) products and lower pricing on our HA products. This was partially offset by continued strong demand and volume in our Digestive Health portfolio, primarily from our NeoMed neonatal and pediatric feeding solutions, as well as continued demand for our Game Ready product and increased demand for our Trident product.

Gross margin during the third quarter of 2024 was 54.5%, compared to 55.8% in the prior year period. Adjusted gross margin was 58.0% compared to 58.2% last year. Gross profit margin decreased primarily due to costs related to our restructuring initiatives and plant separation costs associated with the divestiture of our respiratory health (“RH”) business (the “Divestiture”). In addition, lower pricing for our HA products was partially offset by favorable volume and product mix.

Selling and general expenses as a percentage of net sales was 43.6% for the third quarter of 2024, compared to 45.9% for the third quarter of 2023. On an adjusted basis, selling and general expenses as a percentage of net sales was 39.8% for the third quarter of 2024, compared to 41.6% for the third quarter of 2023. Selling and general expenses decreased primarily due to savings realized from the execution on our ongoing three-year transformation process (the “Transformation Process”) and disciplined spending.

Operating profit in the third quarter of 2024 was $12.0 million, compared to $1.2 million in the prior year period, primarily due to lower selling and general expenses related to the execution on Transformation Process and restructuring priorities. On an adjusted basis, operating profit totaled $25.3 million, compared to $23.0 million a year ago.

Adjusted EBITDA from continuing operations was $30.6 million in the three months ended September 30, 2024, compared to $27.8 million in the three months ended September 30, 2023.

First Nine Months of 2024 Operating Results From Continuing Operations

For the nine months ended September 30, 2024, net sales were $508.2 million, an increase of 1.6% compared to the prior year period, primarily due to strong demand for our Digestive Health and Game Ready products. This was partially offset by lower demand and pricing for our HA products.

Gross margin was 55.7%, compared to 56.9% last year. Adjusted gross margin was 59.1% compared to 59.2% last year and was impacted by the same items noted above for the third quarter.

Selling and general expenses as a percentage of net sales were 47.0% for the nine months ended September 30, 2024, compared to 52.1% for the prior year period. The decrease was primarily due to disciplined spending, partially offset by non-recurring expenses associated with the Transformation Process and the Divestiture. On an adjusted basis, selling and general expenses as a percentage of net sales was 42.9% for the first nine months of 2024, compared to 44.8% in the prior year period.

Operating profit was $22.3 million, compared to an operating loss of $7.0 million in the prior year period, primarily due to increased demand for our Digestive Health products and lower selling and general costs, partially offset by lower volume and pricing of our HA products. On an adjusted basis, operating profit was $63.4 million compared to $52.6 million a year ago.

Net income from continuing operations for the nine months ended September 30, 2024 was $10.7 million, compared to net loss from continuing operations of $20.9 million a year ago.

Adjusted EBITDA for the nine months ended September 30, 2024 was $79.0 million, compared to $66.8 million in the prior year period.

Cash Flow and Balance Sheet

Cash flow from operations for the third quarter was $23.0 million, compared to $29.1 million a year ago.

Cash from operations less capital expenditures, or free cash flow, for the third quarter was $20.0 million, driven primarily by cash flow provided by operating activities, compared to $25.2 million a year ago. The Company’s cash balance at September 30, 2024 was $89.0 million, compared to $87.7 million at year-end 2023.

Total debt outstanding, net of unamortized discounts, was $162.0 million at September 30, 2024, compared to $168.0 million at December 31, 2023.

Discontinued Operations

Net sales from discontinued operations were $10.5 million in the three months ended September 30, 2024, compared to $31.1 million in the three months ended September 30, 2023. Net sales from discontinued operations were $41.0 million in the nine months ended September 30, 2024, compared to $93.9 million in the nine months ended September 30, 2023.

2024 Outlook

For the year, the Company anticipates revenue from continuing operations of between $683 million and $688 million, adjusted gross margin from continuing operations of approximately 59.0% and adjusted diluted earnings per share from continuing operations of between $1.30 and $1.35.

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; and

•Free cash flow.

These non-GAAP financial measures exclude the following items, as applicable, for the relevant time periods as indicated in the accompanying non-GAAP reconciliations to the comparable GAAP financial measures:

•Certain acquisition and integration charges related to acquisitions.

•Expenses associated with restructuring and transformation activities, including the Divestiture in the fourth quarter of 2023.

•Expenses associated with European Union Medical Device Regulation (“EU MDR”) compliance.

•The amortization of intangible assets associated with prior business acquisitions.

•The tax effects of certain adjusting items.

•The benefit associated with the 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 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 the Company’s ongoing business operations.

Additionally, the compensation committee of the Company’s board of directors will use certain of the non-GAAP financial measures when setting and assessing achievement of incentive compensation goals. These goals are based, in part, on the Company’s net sales on a constant currency basis and adjusted EBITDA, which will be determined by excluding certain items that are used in calculating these non-GAAP financial measures.

Our competitors may define these non-GAAP financial measures differently, and as a result, our measure of these non-GAAP financial measures may not be directly comparable to those of other companies. Items excluded from these non-GAAP financial measures are significant components in understanding and assessing financial performance. These non-GAAP financial measures are supplemental measures of operating performance that do not represent, and should not be considered in isolation or as an alternative to, or substitute for, the financial statement data presented in the Company’s consolidated financial statements as indicators of financial performance. These non-GAAP financial measures have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analysis of the Company’s results as reported under GAAP. We compensate for these limitations by relying primarily on our GAAP results and using these non-GAAP financial measures as supplemental information.

Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the attached financial tables.

Conference Call Webcast

Avanos Medical, Inc. will host a conference call today at 9 a.m. ET. The conference call can be accessed live over the internet at https://avanos.investorroom.com or via telephone by dialing 800-836-8184 in the United States. A replay of the call will be available at noon ET today by calling 888-660-6345 in the United States and entering passcode 38787#. 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 technology company focused on delivering clinically superior solutions that will help patients get back to the things that matter. Headquartered in Alpharetta, Georgia, Avanos is committed to addressing some of today’s most important healthcare needs, including providing a vital lifeline for nutrition to patients from hospital to home, and reducing the use of opioids while helping patients move from surgery to recovery. Avanos develops, manufactures and markets its recognized brands globally and holds leading market positions in multiple categories across its portfolio. For more information, visit www.avanos.com and follow Avanos Medical on X (@AvanosMedical), LinkedIn and Facebook.

Forward-Looking Statements

This press release contains information that includes or is based on “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that do not relate solely to historical or current facts, and can generally be identified by the use of words such as “may,” “believe,” “will,” “expect,” “project,” “estimate,” “anticipate,” “plan” or “continue” and similar expressions. Forward-looking statements are based on the current plans and expectations of management and are subject to various risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in such statements. Such factors include, but are not limited to: weakening of economic conditions that could adversely affect the level of demand for our products; pricing pressures generally, including cost-containment measures that could adversely affect the price of or demand for our products; shortage in drugs used in our Surgical Pain and Recovery products or other disruptions in our supply chain; the ongoing regional conflicts between Russia and Ukraine and in the Middle East; our ability to successfully execute on or achieve the expected benefits of our transformation initiative or our divestiture, acquisition or merger transactions; inflationary pressures; financial conditions affecting the banking system and the potential threats to the solvency of commercial banks; changes in foreign exchange markets; legislative and regulatory actions; unanticipated issues arising in connection with clinical studies and otherwise that affect U.S. Food and Drug Administration approval of new products; changes in reimbursement levels from third-party payors; a significant increase in product liability claims; the impact of investigative and legal proceedings and compliance risks; the impact of the federal legislation to reform the United States healthcare system; changes in financial markets; and changes in the competitive environment. The information contained herein speaks only as of the date of this release and we undertake no obligation to update forward-looking statements, except as may be required by the securities laws.

Additional information concerning these and other factors that may impact future results is contained in our filings with the U.S. Securities and Exchange Commission, including our most recent Form 10-Q.

AVANOS MEDICAL, INC.

CONDENSED CONSOLIDATED INCOME STATEMENTS

(unaudited)

(in millions, except per share amounts)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Net Sales	$	170.4	$	171.3	$	508.2	$	500.0
Cost of products sold	77.5		75.8		224.9		215.3
Gross Profit	92.9		95.5		283.3		284.7
Research and development expenses	7.2		6.1		20.5		20.4
Selling and general expenses	74.3		78.7		238.8		260.5
Other (income) expense, net	(0.6)		9.5		1.7		10.8
Operating Income (Loss)	12.0		1.2		22.3		(7.0)
Interest income	0.7		0.9		4.3		1.9
Interest expense	(3.2)		(4.7)		(9.4)		(11.7)
Income (Loss) Before Income Taxes	9.5		(2.6)		17.2		(16.8)
Income tax provision	(3.6)		(6.2)		(6.5)		(4.1)
Income (Loss) from Continuing Operations	5.9		(8.8)		10.7		(20.9)
(Loss) Income from discontinued operations, net of tax	(1.6)		5.1		(5.5)		(51.4)
Net Income (Loss)	$	4.3	$	(3.7)	$	5.2	$	(72.3)

Interest expense, net	$	2.5	$	3.8	$	5.1	$	9.8
Income tax provision	3.0		7.8		4.5		6.3
Depreciation and amortization	11.7		11.0		34.4		34.6
EBITDA	$	21.5	$	18.9	$	49.2	$	(21.6)

Earnings (Loss) Per Share
Basic
Continuing operations	$	0.13	$	(0.19)	$	0.23	$	(0.45)
Discontinued operations	(0.03)		0.11		(0.12)		(1.10)
Basic Earnings (Loss) Per Share	$	0.10	$	(0.08)	$	0.11	$	(1.55)

Diluted
Continuing operations	$	0.12	$	(0.19)	$	0.23	$	(0.45)
Discontinued operations	(0.03)		0.11		(0.12)		(1.10)
Diluted Earnings (Loss) Per Share	$	0.09	$	(0.08)	$	0.11	$	(1.55)

Common Shares Outstanding
Basic	46.0		46.8		46.0		46.7
Diluted	46.6		46.8		46.5		46.7

AVANOS MEDICAL, INC.

Discontinued Operations Summary

(unaudited)

(in millions, except per share amounts)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Net Sales	$	10.5	$	31.1	$	41.0	$	93.9
Cost of products sold	15.9		19.9		47.4		57.8
Gross Profit	(5.4)		11.2		(6.4)		36.1
Research and development expenses	—		0.2		—		0.8
Selling, general and other expenses	—		4.2		—		11.9
Pretax loss on classification as discontinued operations	—		—		—		72.3
Other (income) expense, net	(3.2)		0.1		1.1		0.3
(Loss) Income from discontinued operations before income taxes	(2.2)		6.7		(7.5)		(49.2)
Income tax benefit (provision) from discontinued operations	0.6		(1.6)		2.0		(2.2)
(Loss) Income from discontinued operations, net of tax	$	(1.6)	$	5.1	$	(5.5)	$	(51.4)

(Loss) Earnings Per Share
Basic	$	(0.03)	$	0.11	$	(0.12)	$	(1.10)
Diluted	$	(0.03)	$	0.11	$	(0.12)	$	(1.10)

AVANOS MEDICAL, INC.

NON-GAAP RECONCILIATIONS

(unaudited)

(in millions)


	Gross Profit
	Three Months Ended September 30, 2024									Three Months Ended September 30, 2023
	Continuing Operations			Discontinued Operations			Total			Continuing Operations			Discontinued Operations			Total
As reported	$	92.9		$	(5.4)		$	87.5		$	95.5		$	11.2		$	106.7

Restructuring and transformation charges	0.7			—			0.7			0.6			—			0.6
Post-RH Divestiture transition charges	0.6			—			0.6			—			—			—
Post-RH Divestiture restructuring	0.8			—			0.8			—			—			—
EU MDR Compliance	0.2			—			0.2			—			—			—
Intangibles amortization	3.7			—			3.7			3.6			—			3.6
As adjusted non-GAAP	$	98.9		$	(5.4)		$	93.5		$	99.7		$	11.2		$	110.9
Gross profit margin, as reported	54.5		%	(51.4)		%	48.4		%	55.8		%	36.0		%	52.7		%
Gross profit margin, as adjusted	58.0		%	(51.4)		%	51.7		%	58.2		%	36.0		%	54.8		%


	Gross Profit
	Nine Months Ended September 30, 2024									Nine Months Ended September 30, 2023
	Continuing Operations			Discontinued Operations			Total			Continuing Operations			Discontinued Operations			Total
As reported	$	283.3		$	(6.4)		$	276.9		$	284.7		$	36.1		$	320.8
Acquisition and integration-related charges	0.1			—			0.1			—			—			—
Restructuring and transformation charges	1.7			—			1.7			0.6			—			0.6
Post-RH Divestiture transition charges	1.4			—			1.4			—			—			—
Post-RH Divestiture restructuring	3.0			—			3.0			—			—			—
EU MDR Compliance	0.2			—			0.2			—			—			—
Intangibles amortization	10.7			—			10.7			10.8			—			10.8
As adjusted non-GAAP	$	300.4		$	(6.4)		$	294.0		$	296.1		$	36.1		$	332.2
Gross profit margin, as reported	55.7		%	(15.6)		%	50.4		%	56.9		%	38.4		%	54.0		%
Gross profit margin, as adjusted	59.1		%	(15.6)		%	53.5		%	59.2		%	38.4		%	55.9		%

AVANOS MEDICAL, INC.

NON-GAAP RECONCILIATIONS

(unaudited)

(in millions)


	Operating Profit (Loss)
	Three Months Ended September 30, 2024						Three Months Ended September 30, 2023
	Continuing Operations		Discontinued Operations		Total		Continuing Operations		Discontinued Operations		Total
As reported	$	12.0	$	(2.2)	$	9.8	$	1.2	$	6.7	$	7.9
Acquisition and integration-related charges	1.6		—		1.6		0.6		—		0.6
Restructuring and transformation charges	0.7		—		0.7		4.3		—		4.3
Post-RH Divestiture transition charges	0.7		—		0.7		—		—		—
Post-RH Divestiture restructuring	2.3		—		2.3		—		—		—
Divestiture related	—		—		—		1.4		0.8		2.2

EU MDR Compliance	1.6		—		1.6		0.8		—		0.8
Litigation and legal	—		—		—		8.5		—		8.5
Intangibles amortization	6.4		—		6.4		6.2		—		6.2
As adjusted non-GAAP	$	25.3	$	(2.2)	$	23.1	$	23.0	$	7.5	$	30.5


	Operating Profit (Loss)
	Nine Months Ended September 30, 2024						Nine Months Ended September 30, 2023
	Continuing Operations		Discontinued Operations		Total		Continuing Operations		Discontinued Operations		Total
As reported	$	22.3	$	(7.5)	$	14.8	$	(7.0)	$	(49.2)	$	(56.2)
Acquisition and integration-related charges	4.1		—		4.1		2.4		—		2.4
Restructuring and transformation charges	5.2		—		5.2		23.0		—		23.0
Post-RH Divestiture transition charges	2.2		—		2.2		—		—		—
Post-RH Divestiture restructuring	6.4		—		6.4		—		—		—
Divestiture related	—		—		—		5.1		0.8		5.9
Estimated loss on Divestiture	—		—		—		—		72.3		72.3
EU MDR Compliance	4.4		—		4.4		2.8		—		2.8
Litigation and legal	—		—		—		8.5		—		8.5
Intangibles amortization	18.8		—		18.8		17.8		0.8		18.6
As adjusted non-GAAP	$	63.4	$	(7.5)	$	55.9	$	52.6	$	24.7	$	77.3

AVANOS MEDICAL, INC.

NON-GAAP RECONCILIATIONS

(unaudited)

(in millions)


	Income (Loss) Before Taxes
	Three Months Ended September 30, 2024						Three Months Ended September 30, 2023
	Continuing Operations		Discontinued Operations		Total		Continuing Operations		Discontinued Operations		Total
As reported	$	9.5	$	(2.2)	$	7.3	$	(2.6)	$	6.7	$	4.1
Acquisition and integration-related charges	1.6		—		1.6		0.6		—		0.6
Restructuring and transformation charges	0.7		—		0.7		4.3		—		4.3
Post-RH Divestiture transition charges	0.7		—		0.7		—		—		—
Post-RH Divestiture restructuring	2.3		—		2.3		—		—		—
Divestiture related	—		—		—		1.4		0.8		2.2

EU MDR Compliance	1.6		—		1.6		0.8		—		0.8
Litigation and legal	—		—		—		8.5		—		8.5
Intangibles amortization	6.4		—		6.4		6.2		—		6.2
As adjusted non-GAAP	$	22.8	$	(2.2)	$	20.6	$	19.2	$	7.5	$	26.7


	Income (Loss) Before Taxes
	Nine Months Ended September 30, 2024						Nine Months Ended September 30, 2023
	Continuing Operations		Discontinued Operations		Total		Continuing Operations		Discontinued Operations		Total
As reported	$	17.2	$	(7.5)	$	9.7	$	(16.8)	$	(49.2)	$	(66.0)
Acquisition and integration-related charges	4.1		—		4.1		2.4		—		2.4
Restructuring and transformation charges	5.2		—		5.2		23.0		—		23.0
Post-RH Divestiture transition charges	2.2		—		2.2		—		—		—
Post-RH Divestiture restructuring	6.4		—		6.4		—		—		—
Divestiture related	—		—		—		5.1		0.8		5.9
Estimated loss on Divestiture	—		—		—		—		72.3		72.3
EU MDR Compliance	4.4		—		4.4		2.8		—		2.8
Litigation and legal	—		—		—		8.5		—		8.5
Intangibles amortization	18.8		—		18.8		17.8		0.8		18.6
As adjusted non-GAAP	$	58.3	$	(7.5)	$	50.8	$	42.8	$	24.7	$	67.5

AVANOS MEDICAL, INC.

NON-GAAP RECONCILIATIONS

(unaudited)

(in millions)


	Tax (Provision) Benefit
	Three Months Ended September 30, 2024									Three Months Ended September 30, 2023
	Continuing Operations			Discontinued Operations			Total			Continuing Operations			Discontinued Operations			Total
As reported	$	(3.6)		$	0.6		$	(3.0)		$	(6.2)		$	(1.6)		$	(7.8)
Tax effects of adjusting items	(2.5)			—			(2.5)			1.0			(0.4)			0.6

As adjusted non-GAAP	$	(6.1)		$	0.6		$	(5.5)		$	(5.2)		$	(2.0)		$	(7.2)
Effective tax rate, as reported	37.9		%	27.3		%	41.1		%	(238.5)		%	23.9		%	190.2		%
Effective tax rate, as adjusted	26.8		%	27.3		%	26.7		%	27.0		%	26.7		%	26.9		%


	Tax (Provision) Benefit
	Nine Months Ended September 30, 2024									Nine Months Ended September 30, 2023
	Continuing Operations			Discontinued Operations			Total			Continuing Operations			Discontinued Operations			Total
As reported	$	(6.5)		$	2.0		$	(4.5)		$	(4.1)		$	(2.2)		$	(6.3)
Tax effects of adjusting items	(9.2)			—			(9.2)			(7.5)			(4.4)			(11.9)
As adjusted non-GAAP	$	(15.7)		$	2.0		$	(13.7)		$	(11.6)		$	(6.6)		$	(18.2)
Effective tax rate, as reported	37.8		%	26.7		%	46.4		%	(24.4)		%	(4.5)		%	(9.5)		%
Effective tax rate, as adjusted	26.9		%	26.7		%	27.0		%	27.0		%	26.7		%	26.9		%

AVANOS MEDICAL, INC.

NON-GAAP RECONCILIATIONS

(unaudited)

(in millions except per share amounts)


	Net Income (Loss)
	Three Months Ended September 30, 2024						Three Months Ended September 30, 2023
	Continuing Operations		Discontinued Operations		Total		Continuing Operations		Discontinued Operations		Total
As reported	$	5.9	$	(1.6)	$	4.3	$	(8.8)	$	5.1	$	(3.7)
Acquisition and integration-related charges	1.6		—		1.6		0.6		—		0.6
Restructuring and transformation charges	0.7		—		0.7		4.3		—		4.3
Post-RH Divestiture transition charges	0.7		—		0.7		—		—		—
Post-RH Divestiture restructuring	2.3		—		2.3		—		—		—
Divestiture related	—		—		—		1.4		0.8		2.2

EU MDR Compliance	1.6		—		1.6		0.8		—		0.8
Litigation and legal	—		—		—		8.5		—		8.5
Intangibles amortization	6.4		—		6.4		6.2		—		6.2
Tax effects of adjusting items	(2.5)		—		(2.5)		1.0		(0.4)		0.6

As adjusted non-GAAP	$	16.7	$	(1.6)	$	15.1	$	14.0	$	5.5	$	19.5
Diluted earnings (loss) per share, as reported	$	0.12	$	(0.03)	$	0.09	$	(0.19)	$	0.11	$	(0.08)
Diluted earnings (loss) per share, as adjusted	$	0.36	$	(0.03)	$	0.33	$	0.30	$	0.12	$	0.42


	Net Income (Loss)
	Nine Months Ended September 30, 2024						Nine Months Ended September 30, 2023
	Continuing Operations		Discontinued Operations		Total		Continuing Operations		Discontinued Operations		Total
As reported	$	10.7	$	(5.5)	$	5.2	$	(20.9)	$	(51.4)	$	(72.3)
Acquisition and integration-related charges	4.1		—		4.1		2.4		—		2.4
Restructuring and transformation charges	5.2		—		5.2		23.0		—		23.0
Post-RH Divestiture transition charges	2.2		—		2.2		—		—		—
Post-RH Divestiture restructuring	6.4		—		6.4		—		—		—
Divestiture related	—		—		—		5.1		0.8		5.9
Estimated loss on Divestiture	—		—		—		—		72.3		72.3
EU MDR Compliance	4.4		—		4.4		2.8		—		2.8
Litigation and legal	—		—		—		8.5		—		8.5
Intangibles amortization	18.8		—		18.8		17.8		0.8		18.6
Tax effects of adjusting items	(9.2)		—		(9.2)		(7.5)		(4.4)		(11.9)
As adjusted non-GAAP	$	42.6	$	(5.5)	$	37.1	$	31.2	$	18.1	$	49.3
Diluted earnings (loss) per share, as reported	$	0.23	$	(0.12)	$	0.11	$	(0.45)	$	(1.10)	$	(1.55)
Diluted earnings (loss) per share, as adjusted	$	0.92	$	(0.12)	$	0.80	$	0.67	$	0.39	$	1.06

AVANOS MEDICAL, INC.

NON-GAAP RECONCILIATIONS

(unaudited)

(in millions except per share amounts)


	Selling, General and Administrative Expenses
	Three Months Ended September 30, 2024									Three Months Ended September 30, 2023
	Continuing Operations			Discontinued Operations			Total			Continuing Operations			Discontinued Operations			Total
As reported	$	74.3		$	—		$	74.3		$	78.7		$	4.2		$	82.9
Acquisition and integration-related charges	(0.7)			—			(0.7)			(0.6)			—			(0.6)
Restructuring and transformation charges	—			—			—			(2.1)			—			(2.1)
Post-RH Divestiture transition charges	(0.1)			—			(0.1)			—			—			—
Post-RH Divestiture restructuring	(1.5)			—			(1.5)			—			—			—
Divestiture related	—			—			—			(1.4)			(0.8)			(2.2)
EU MDR Compliance	(1.4)			—			(1.4)			(0.8)			—			(0.8)
Intangibles amortization	(2.7)			—			(2.7)			(2.6)			—			(2.6)
As adjusted non-GAAP	$	67.9		$	—		$	67.9		$	71.2		$	3.4		$	74.6
SG&A as a percentage of revenue, as reported	43.6		%	—		%	41.1		%	45.9		%	13.5		%	41.0		%
SG&A as a percentage of revenue, as adjusted	39.8		%	—		%	37.5		%	41.6		%	10.9		%	36.9		%


	Selling, General and Administrative Expenses
	Nine Months Ended September 30, 2024									Nine Months Ended September 30, 2023
	Continuing Operations			Discontinued Operations			Total			Continuing Operations			Discontinued Operations			Total
As reported	$	238.8		$	—		$	238.8		$	260.5		$	11.9		$	272.4
Acquisition and integration-related charges	(1.3)			—			(1.3)			(1.0)			—			(1.0)
Restructuring and transformation charges	(3.4)			—			(3.4)			(20.5)			—			(20.5)
Post-RH Divestiture transition charges	(0.6)			—			(0.6)			—			—			—
Post-RH Divestiture restructuring	(3.4)			—			(3.4)			—			—			—
Divestiture related	—			—			—			(5.1)			(0.8)			(5.9)
EU MDR Compliance	(4.2)			—			(4.2)			(2.8)			—			(2.8)
Intangibles amortization	(8.1)			—			(8.1)			(7.0)			(0.8)			(7.8)
As adjusted non-GAAP	$	217.8		$	—		$	217.8		$	224.1		$	10.3		$	234.4
SG&A as a percentage of revenue, as reported	47.0		%	—		%	43.5		%	52.1		%	12.7		%	45.9		%
SG&A as a percentage of revenue, as adjusted	42.9		%	—		%	39.7		%	44.8		%	11.0		%	39.5		%

AVANOS MEDICAL, INC.

NON-GAAP RECONCILIATIONS

(unaudited)

(in millions)


	EBITDA
	Three Months Ended September 30, 2024						Three Months Ended September 30, 2023
	Continuing Operations		Discontinued Operations		Total		Continuing Operations		Discontinued Operations		Total
Net income (loss)	$	5.9	$	(1.6)	$	4.3	$	(8.8)	$	5.1	$	(3.7)
Interest expense, net	2.5		—		2.5		3.8		—		3.8
Income tax provision (benefit)	3.6		(0.6)		3.0		6.2		1.6		7.8
Depreciation	5.3		—		5.3		4.8		—		4.8
Amortization	6.4		—		6.4		6.2		—		6.2
EBITDA	23.7		(2.2)		21.5		12.2		6.7		18.9
Acquisition and integration-related charges	1.6		—		1.6		0.6		—		0.6
Restructuring and transformation charges	0.7		—		0.7		4.3		—		4.3
Post-RH Divestiture transition charges	0.7		—		0.7		—		—		—
Post-RH Divestiture restructuring	2.3		—		2.3		—		—		—
Divestiture related	—		—		—		1.4		0.8		2.2

EU MDR Compliance	1.6		—		1.6		0.8		—		0.8
Litigation and legal	—		—		—		8.5		—		8.5
Adjusted EBITDA	$	30.6	$	(2.2)	$	28.4	$	27.8	$	7.5	$	35.3


	EBITDA
	Nine Months Ended September 30, 2024						Nine Months Ended September 30, 2023
	Continuing Operations		Discontinued Operations		Total		Continuing Operations		Discontinued Operations		Total
Net income (loss)	$	10.7	$	(5.5)	$	5.2	$	(20.9)	$	(51.4)	$	(72.3)
Interest expense, net	5.1		—		5.1		9.8		—		9.8
Income tax provision (benefit)	6.5		(2.0)		4.5		4.1		2.2		6.3
Depreciation	15.6		—		15.6		14.2		1.8		16.0
Amortization	18.8		—		18.8		17.8		0.8		18.6
EBITDA	56.7		(7.5)		49.2		25.0		(46.6)		(21.6)
Acquisition and integration-related charges	4.1		—		4.1		2.4		—		2.4
Restructuring and transformation charges	5.2		—		5.2		23.0		—		23.0
Post-RH Divestiture transition charges	2.2		—		2.2		—		—		—
Post-RH Divestiture restructuring	6.4		—		6.4		—		—		—
Divestiture related	—		—		—		5.1		0.8		5.9
Estimated loss on Divestiture	—		—		—		—		72.3		72.3
EU MDR Compliance	4.4		—		4.4		2.8		—		2.8
Litigation and legal	—		—		—		8.5		—		8.5
Adjusted EBITDA	$	79.0	$	(7.5)	$	71.5	$	66.8	$	26.5	$	93.3

AVANOS MEDICAL, INC.

NON-GAAP RECONCILIATIONS

(unaudited)

(in millions except per share amounts)


	Free Cash Flow
	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Cash provided by operating activities	$	23.0	$	29.1	$	42.8	$	19.7
Capital expenditures	(3.0)		(3.9)		(13.0)		(11.9)
Free Cash Flow	$	20.0	$	25.2	$	29.8	$	7.8

2024 OUTLOOK


	Estimated Range
Diluted earnings per share (GAAP)	$	0.46	to	$	0.56
Intangibles amortization	0.39		to	0.38
Restructuring and transformation charges	0.08		to	0.07
Post RH-Divestiture transition charges	0.20		to	0.18
Other	0.17		to	0.16
Adjusted diluted earnings per share (non-GAAP)	$	1.30	to	$	1.35

AVANOS MEDICAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(in millions)


	September 30, 2024		December 31, 2023
ASSETS
Current Assets
Cash and cash equivalents	$	89.0	$	87.7
Accounts receivable, net	131.9		142.8
Inventories	161.9		163.2
Prepaid and other current assets	15.9		28.8
Assets held for sale	73.9		64.5
Total Current Assets	472.6		487.0
Property, Plant and Equipment, net	109.5		117.2
Operating Lease Right-of-Use Assets	26.5		26.8
Goodwill	795.1		796.1
Other Intangible Assets, net	220.1		239.5
Deferred Tax Assets	6.6		6.5
Other Assets	25.8		19.3
TOTAL ASSETS	$	1,656.2	$	1,692.4

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Current portion of long-term debt	$	9.4	$	8.6
Current portion of operating lease liabilities	13.7		12.8
Trade accounts payable	54.2		56.3
Accrued expenses	82.7		93.2
Liabilities held for sale	52.9		63.7
Total Current Liabilities	212.9		234.6
Long-Term Debt	152.6		159.4
Operating Lease Liabilities	26.5		28.3
Deferred Tax Liabilities	23.9		23.8
Other Long-Term Liabilities	10.6		10.0
TOTAL LIABILITIES	426.5		456.1
Stockholders’ Equity	1,229.7		1,236.3
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,656.2	$	1,692.4

AVANOS MEDICAL, INC.

CONDENSED CONSOLIDATED CASH FLOW STATEMENTS

(unaudited)

(in millions)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Operating Activities
Net income (loss)	$	4.3	$	(3.7)	$	5.2	$	(72.3)
Depreciation and amortization	11.7		11.0		34.4		34.6
Goodwill impairment	—		—		—		59.1
Loss on asset dispositions	0.1		1.1		0.4		1.1
Changes in operating assets and liabilities, net of acquisition	3.7		20.6		(10.0)		(12.1)
Deferred income taxes and other	3.2		0.1		12.8		9.3
Cash Provided by Operating Activities	23.0		29.1		42.8		19.7
Investing Activities
Capital expenditures	(3.0)		(3.9)		(13.0)		(11.9)
Proceeds from RH Divestiture post-closing settlement	—		—		2.1		—
Acquisition of assets and investments in businesses	—		(45.0)		—		(47.5)
Investment in Note Receivable	(9.0)		—		(9.0)		—
Cash Used in Investing Activities	(12.0)		(48.9)		(19.9)		(59.4)
Financing Activities

Secured debt repayments	(3.2)		—		(6.3)		(3.1)
Revolving credit facility proceeds	—		55.0		20.0		55.0
Revolving credit facility repayments	(10.0)		—		(20.0)		(20.0)

Purchase of treasury stock	(0.1)		(9.2)		(12.7)		(12.9)
Proceeds from the exercise of stock options	0.6		0.9		1.1		1.5
Payment of contingent consideration liabilities	(3.3)		—		(3.8)		—
Cash (Used in) Provided by Financing Activities	(16.0)		46.7		(21.7)		20.5
Effect of Exchange Rate Changes on Cash and Cash Equivalents	1.8		(1.6)		0.1		(1.4)
(Decrease) Increase in Cash and Cash Equivalents	(3.2)		25.3		1.3		(20.6)
Cash and Cash Equivalents - Beginning of Period	92.2		81.8		87.7		127.7
Cash and Cash Equivalents - End of Period	$	89.0	$	107.1	$	89.0	$	107.1

AVANOS MEDICAL, INC.

SELECTED BUSINESS AND PRODUCTS DATA

(unaudited)

(in millions)


	Three Months Ended September 30,							Nine Months Ended September 30,
	2024		2023			Change		2024			2023			Change
Digestive Health	$	98.2	$	95.0		3.4	%	$	290.6		$	276.8		5.0	%
Pain Management and Recovery:
Surgical pain and recovery	$	30.3	$	34.1		(11.1)	%	$	93.8		$	103.6		(9.5)	%
Interventional pain	41.9		42.2			(0.7)	%	123.8			119.6			3.5	%
Total Pain Management and Recovery	72.2		76.3			(5.4)	%	217.6			223.2			(2.5)	%
Total Net Sales	$	170.4	$	171.3		(0.5)	%	$	508.2		$	500.0		1.6	%

			Total			Volume		Pricing/Mix			Currency			Other(a)
Net sales - percentage change	QTD		(0.5)		%	2.4	%	(2.9)		%	(0.1)		%	0.1	%
Net sales - percentage change	YTD		1.6		%	3.6	%	(1.9)		%	(0.1)		%	—	%

______________________________

(a)Other includes rounding

Cover Page Cover Page	Oct. 28, 2024
Cover [Abstract]
Document Type	8-K
Document Period End Date	Oct. 28, 2024
Entity File Number	001-36440
Entity Registrant Name	AVANOS MEDICAL, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	46-4987888
Entity Address, Address Line One	5405 Windward Parkway
Entity Address, Address Line Two	Suite 100 South
Entity Address, City or Town	Alpharetta,
Entity Address, State or Province	GA
Entity Address, Postal Zip Code	30004
City Area Code	844
Local Phone Number	428-2667
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock - $0.01 Par Value
Trading Symbol	AVNS
Security Exchange Name	NYSE
Entity Emerging Growth Company	false
Entity Central Index Key	0001606498
Amendment Flag	false