Avanos Medical, Inc. Announces First Quarter 2026 Results
Rhea-AI Summary
Avanos (NYSE: AVNS) reported Q1 2026 results and agreed to be acquired by affiliates of American Industrial Partners for an enterprise value of $1.272 billion. Q1 net sales were $182.2 million (up 8.8%). Specialty Nutrition Systems sales rose by $22.9 million to $124.0 million. GAAP net income was $5.1 million; adjusted net income was $10.6 million. Cash used in operations was an outflow of $12.3 million, and total debt was $98.2 million as of March 31, 2026.
Positive
- SNS net sales up by $22.9 million to $124.0 million
- Adjusted EBITDA essentially stable at $21.8 million
- AIP acquisition agreement values company at $1.272 billion enterprise value
Negative
- GAAP net income declined to $5.1 million from $6.6 million
- Cash used in operations was an outflow of $12.3 million
- Free cash flow outflow of $16.6 million versus prior inflow
- PM&R segment posted an operating loss of $1.8 million
News Market Reaction – AVNS
In the May 5 session, AVNS gained 0.16%, reflecting a mild positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
Key Figures
Previous Earnings Reports
| Date | Event | Sentiment | 24h Move | Catalyst |
|---|---|---|---|---|
| Nov 05 | Q3 2025 earnings | Positive | -5.7% | Sales growth, raised 2025 guidance, double-digit SNS volume, but shares fell. |
| Aug 05 | Q2 2025 earnings | Negative | -12.1% | Goodwill impairment drove large net loss despite modest sales growth. |
| May 06 | Q1 2025 earnings | Positive | +5.4% | Revenue and EPS improved year over year with solid SNS growth. |
| Feb 26 | FY 2024 results | Neutral | +0.4% | Revenue growth and higher adjusted EPS offset by large impairment-driven loss. |
| Oct 30 | Q3 2024 earnings | Negative | -17.9% | Sales decline versus target and outlook reset despite EBITDA improvement. |
24h Move is the share-price change in the day after each event; other market factors may also have contributed.
Recent earnings releases often produced negative or muted share reactions, with only one clear divergence where positive earnings coincided with a selloff.
Over the last several earnings cycles, Avanos reported steady net sales growth but with periodic losses driven by impairment charges and mixed segment performance. Prior earnings on Nov 5, 2025, Aug 5, 2025, and May 6, 2025 highlighted strong Specialty Nutrition Systems growth alongside challenges elsewhere, often followed by share declines. The Q4 and full-year updates on Feb 26, 2025 and Q3 2024 results on Oct 30, 2024 showed similar mixed outcomes. Today’s Q1 2026 report continues this pattern of solid topline with uneven profitability and cash trends.
Key Terms
adjusted net income financial
adjusted EBITDA financial
free cash flow financial
non-GAAP financial measures financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
- Delivered double-digit organic growth led by Specialty Nutrition Systems segment
- Generated
$0.11 $0.22 - On April 14, 2026, announced the execution of a definitive agreement to be acquired by certain affiliates of American Industrial Partners ("AIP") in an all-cash offer at an enterprise value of
$1
"Building off our strong 2025 results, we delivered solid first quarter performance led by double-digit organic revenue growth in our Specialty Nutrition Systems segment," said David Pacitti, Avanos' chief executive officer. Pacitti continued, "Our overall execution this quarter was positive, and I'm very pleased with the steady progress we're making against each of our strategic imperatives."
First Quarter 2026 Highlights
- Total net sales were
$182.2 million 8.8% increase from the comparable prior year period. - Net income was
$5.1 million $6.6 million - Adjusted net income was
$10.6 million $12.0 million - Diluted earnings per share was
$0.11 $0.14 - Adjusted diluted earnings per share was
$0.22 $0.26 - Adjusted EBITDA was
$21.8 million $21.6 million
Specialty Nutrition Systems Segment
- The Specialty Nutrition Systems ("SNS") segment delivered above-market results in the first quarter of 2026, achieving net sales of
$124.0 million $22.9 million - Operating income in the SNS segment for the three months ended March 31, 2026 was
$23.1 million 18.6% of SNS net sales, an increase of$2.0 million
Pain Management & Recovery Segment
- Pain Management and Recovery ("PM&R") segment net sales for the first quarter of 2026 were
$56.3 million - Operating loss in the PM&R segment for the first quarter of 2026 was
$1.8 million $0.2 million
Cash Flow and Balance Sheet
Cash used in operations for the three months ended March 31, 2026 was
As of March 31, 2026, the Company's cash balance was
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
- Adjusted gross and operating income;
- Adjusted income before taxes;
- Adjusted effective tax rate;
- Adjusted net income;
- Adjusted diluted earnings per share;
- Adjusted selling, general and administrative expenses;
- 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 of the Company's respiratory health business;
- Expenses or recoveries associated with certain litigation matters;
- The amortization of intangible assets associated with business acquisitions;
- The tax effects of certain adjusting items; and
- 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 income, 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.
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
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; our inability to complete our pending merger with certain affiliates of American Industrial Partners on the anticipated terms or timeline, or at all; potential adverse effects on our business and operations due to the pendency of the merger; shortage in drugs used in our Surgical Pain and Recovery products or other disruptions in our supply chain; the ongoing regional conflicts between
Additional information concerning these and other factors that may impact future results is contained in our filings with the
AVANOS MEDICAL, INC. CONDENSED CONSOLIDATED INCOME STATEMENTS (unaudited) (in millions, except per share amounts) | |||
Three Months Ended March 31, | |||
2026 | 2025 | ||
Net Sales | $ 182.2 | $ 167.5 | |
Cost of products sold | 88.0 | 77.7 | |
Gross Profit | 94.2 | 89.8 | |
Research and development expenses | 5.2 | 5.4 | |
Selling and general expenses | 77.7 | 75.7 | |
Other expense (income), net | 2.4 | (1.6) | |
Operating Income | 8.9 | 10.3 | |
Interest income | 0.2 | 1.5 | |
Interest expense | (1.5) | (2.1) | |
Income before income taxes | 7.6 | 9.7 | |
Income tax provision | (2.5) | (3.1) | |
Net Income | $ 5.1 | $ 6.6 | |
Interest expense, net | $ 1.3 | $ 0.6 | |
Income tax provision | 2.5 | 3.1 | |
Depreciation and amortization | 10.2 | 9.6 | |
EBITDA | $ 19.1 | $ 19.9 | |
Earnings Per Share | |||
Basic | $ 0.11 | $ 0.14 | |
Diluted | 0.11 | 0.14 | |
Common Shares Outstanding | |||
Basic | 46.5 | 46.1 | |
Diluted | 47.5 | 46.7 | |
AVANOS MEDICAL, INC. NON-GAAP RECONCILIATIONS (unaudited) (in millions, except per share amounts) | |||||||||||
Three Months Ended March 31, 2026 | |||||||||||
As reported | Acquisition and | Post-RH Restructuring | Intangibles | Tax effects | As Adjusted | ||||||
Net Sales | $ 182.2 | $ — | $ — | $ — | $ — | $ 182.2 | |||||
Cost of products sold | 88.0 | — | (1.5) | (1.6) | — | 84.9 | |||||
Gross Profit | 94.2 | — | 1.5 | 1.6 | — | 97.3 | |||||
Gross Profit Margin | 51.7 % | 53.4 % | |||||||||
Research and development expenses | 5.2 | — | — | — | — | 5.2 | |||||
Selling and general expenses | 77.7 | (0.4) | (0.3) | (3.0) | — | 74.0 | |||||
SG&A as a percentage of Net Sales | 42.6 % | 40.6 % | |||||||||
Other expense, net | 2.4 | (0.5) | — | — | — | 1.9 | |||||
Operating Income | 8.9 | 0.9 | 1.8 | 4.6 | — | 16.2 | |||||
Interest income | 0.2 | — | — | — | — | 0.2 | |||||
Interest expense | (1.5) | — | — | — | — | (1.5) | |||||
Income before income taxes | 7.6 | 0.9 | 1.8 | 4.6 | — | 14.9 | |||||
Income tax provision | (2.5) | — | — | — | (1.8) | (4.3) | |||||
Effective tax rate | 32.9 % | 28.9 % | |||||||||
Net Income | $ 5.1 | $ 0.9 | $ 1.8 | $ 4.6 | $ (1.8) | $ 10.6 | |||||
Diluted Earnings Per Share | $ 0.11 | $ 0.22 | |||||||||
AVANOS MEDICAL, INC. NON-GAAP RECONCILIATIONS (unaudited) (in millions, except per share amounts) | |||||||||||||
Three Months Ended March 31, 2025 | |||||||||||||
As reported | Acquisition and | Post-RH Restructuring | Litigation and | Intangibles | Tax effects | As Adjusted | |||||||
Net Sales | $ 167.5 | $ — | $ — | $ — | $ — | $ — | $ 167.5 | ||||||
Cost of products sold | 77.7 | — | (2.3) | — | (2.9) | — | 72.5 | ||||||
Gross Profit | 89.8 | — | 2.3 | — | 2.9 | — | 95.0 | ||||||
Gross Profit Margin | 53.6 % | 56.7 % | |||||||||||
Research and development expenses | 5.4 | — | — | — | — | — | 5.4 | ||||||
Selling and general expenses | 75.7 | — | (0.8) | — | (2.2) | — | 72.7 | ||||||
SG&A as a percentage of Net Sales | 45.2 % | 43.4 % | |||||||||||
Other income, net | (1.6) | — | — | 1.4 | — | — | (0.2) | ||||||
Operating Income | 10.3 | — | 3.1 | (1.4) | 5.1 | — | 17.1 | ||||||
Interest income | 1.5 | — | — | — | — | — | 1.5 | ||||||
Interest expense | (2.1) | — | — | — | — | — | (2.1) | ||||||
Income before income taxes | 9.7 | — | 3.1 | (1.4) | 5.1 | — | 16.5 | ||||||
Income tax provision | (3.1) | — | — | — | — | (1.4) | (4.5) | ||||||
Effective tax rate | 32.0 % | 27.3 % | |||||||||||
Net Income | $ 6.6 | $ — | $ 3.1 | $ (1.4) | $ 5.1 | $ (1.4) | $ 12.0 | ||||||
Diluted Earnings Per Share | $ 0.14 | $ 0.26 | |||||||||||
AVANOS MEDICAL, INC. NON-GAAP RECONCILIATIONS (unaudited) (in millions) | |||
EBITDA | |||
Three Months Ended March 31, | |||
2026 | 2025 | ||
Net income | $ 5.1 | $ 6.6 | |
Interest expense, net | 1.3 | 0.6 | |
Income tax provision | 2.5 | 3.1 | |
Depreciation | 5.6 | 4.5 | |
Amortization | 4.6 | 5.1 | |
EBITDA | 19.1 | 19.9 | |
Acquisition and integration-related charges | 0.9 | — | |
Post-RH Divestiture restructuring | 1.8 | 3.1 | |
Litigation and legal | — | (1.4) | |
Adjusted EBITDA | $ 21.8 | $ 21.6 | |
AVANOS MEDICAL, INC. NON-GAAP RECONCILIATIONS (unaudited) (in millions except per share amounts) | |||
Free Cash Flow | |||
Three Months Ended March 31, | |||
2026 | 2025 | ||
Cash (used in) provided by operating activities | $ (12.3) | $ 25.7 | |
Capital expenditures | (4.3) | (6.7) | |
Free Cash Flow | $ (16.6) | $ 19.0 | |
AVANOS MEDICAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (in millions) | |||
March 31, | December 31, | ||
ASSETS | |||
Current Assets | |||
Cash and cash equivalents | $ 65.6 | $ 89.8 | |
Accounts receivable, net | 103.0 | 103.8 | |
Inventories | 141.3 | 148.0 | |
Prepaid and other current assets | 15.1 | 13.8 | |
Total Current Assets | 325.0 | 355.4 | |
Property, Plant and Equipment, net | 111.2 | 113.4 | |
Operating Lease Right-of-Use Assets | 39.3 | 27.6 | |
Goodwill | 394.0 | 394.9 | |
Other Intangible Assets, net | 114.7 | 117.8 | |
Deferred Tax Assets | 33.0 | 33.1 | |
Other Assets | 32.9 | 31.5 | |
TOTAL ASSETS | $ 1,050.1 | $ 1,073.7 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Current Liabilities | |||
Current portion of long-term debt | $ 10.9 | $ 10.2 | |
Current portion of operating lease liabilities | 10.4 | 8.2 | |
Trade accounts payable | 52.3 | 55.5 | |
Accrued expenses | 57.6 | 91.3 | |
Total Current Liabilities | 131.2 | 165.2 | |
Long-Term Debt | 87.3 | 90.3 | |
Operating Lease Liabilities | 29.8 | 20.4 | |
Deferred Tax Liabilities | 5.6 | 6.1 | |
Other Long-Term Liabilities | 14.1 | 13.5 | |
TOTAL LIABILITIES | 268.0 | 295.5 | |
Stockholders' Equity | 782.1 | 778.2 | |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 1,050.1 | $ 1,073.7 | |
AVANOS MEDICAL, INC. CONDENSED CONSOLIDATED CASH FLOW STATEMENTS (unaudited) (in millions) | |||
Three Months Ended March 31, | |||
2026 | 2025 | ||
Operating Activities | |||
Net income | $ 5.1 | $ 6.6 | |
Depreciation and amortization | 10.2 | 9.6 | |
Loss on asset dispositions | 0.1 | 0.2 | |
Changes in operating assets and liabilities, net of acquisition | (32.4) | 5.4 | |
Deferred income taxes and other | 4.7 | 3.9 | |
Cash (Used in) Provided by Operating Activities | (12.3) | 25.7 | |
Investing Activities | |||
Capital expenditures | (4.3) | (6.7) | |
Investment in non-affiliates | (3.4) | (2.4) | |
Cash Used in Investing Activities | (7.7) | (9.1) | |
Financing Activities | |||
Secured debt repayments | (2.3) | (2.3) | |
Revolving credit facility repayments | — | (25.0) | |
Purchases of treasury stock | (1.3) | (2.2) | |
Proceeds from the exercise of stock options | 0.4 | 0.4 | |
Cash Used in Financing Activities | (3.2) | (29.1) | |
Effect of Exchange Rate Changes on Cash and Cash Equivalents | (1.0) | 1.8 | |
Decrease in Cash and Cash Equivalents | (24.2) | (10.7) | |
Cash and Cash Equivalents - Beginning of Period | 89.8 | 107.7 | |
Cash and Cash Equivalents - End of Period | $ 65.6 | $ 97.0 | |
AVANOS MEDICAL, INC. SELECTED BUSINESS SEGMENT DATA (unaudited) (in millions) | |||||||||
Three Months Ended March 31, | |||||||||
2026 | 2025 | Change | |||||||
Specialty Nutrition Systems: | |||||||||
Enteral feeding | $ 84.6 | $ 74.5 | 13.6 % | ||||||
Neonate solutions | 39.4 | 26.6 | 48.1 % | ||||||
Total Specialty Nutrition Systems | 124.0 | 101.1 | 22.7 % | ||||||
Pain Management & Recovery: | |||||||||
Surgical pain and recovery | 21.8 | 24.5 | (11.0) % | ||||||
Radiofrequency Ablation | 34.5 | 31.7 | 8.8 % | ||||||
Total Pain Management & Recovery | 56.3 | 56.2 | 0.2 % | ||||||
Corporate and Other | 1.9 | 10.2 | (81.4) % | ||||||
Total Net Sales | $ 182.2 | $ 167.5 | 8.8 % | ||||||
Operating Income (Loss) | |||||||||
Specialty Nutrition Systems | $ 23.1 | $ 21.1 | 9.5 % | ||||||
Pain Management & Recovery | (1.8) | 0.2 | N.M. | ||||||
Corporate and Other | (12.4) | (11.0) | N.M. | ||||||
Total Operating Income | $ 8.9 | $ 10.3 | N.M. | ||||||
Net sales - percentage change (YTD) | Total | Volume | Pricing/Mix | Currency | Other(a) | ||||
Specialty Nutrition Systems | 22.7 % | 19.0 % | 1.4 % | 2.8 % | (0.5) % | ||||
Pain Management & Recovery | 0.2 % | 3.2 % | 0.1 % | 1.0 % | (4.1) % | ||||
Corporate and Other | (81.4) % | (81.4) % | — % | — % | — % | ||||
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SOURCE Avanos Medical