Avanos Medical, Inc. Announces Fourth Quarter and Full-Year 2025 Results
Rhea-AI Summary
Avanos Medical (NYSE: AVNS) reported fourth-quarter and full-year 2025 results on Feb 24, 2026, with full-year net sales of $701.2M and adjusted diluted EPS of $0.94. The company delivered organic growth in strategic segments, recorded a $77.0M goodwill impairment, and expects $15–20M of incremental annualized savings by end of 2026.
Q4 net sales were $180.9M, adjusted EBITDA for the year was $86.8M, year-end cash totaled $89.8M, and net debt was $10.7M.
Positive
- Exceeded full-year revenue and hit top end of EPS guidance
- Transformation initiatives target $15–20M incremental annualized savings by end of 2026
- Net debt reduced to $10.7M as of Dec 31, 2025
Negative
- Recorded $77.0M goodwill impairment in Q2 tied to PM&R segment
- Adjusted EBITDA declined from $107.6M to $86.8M (≈19% drop)
- Adjusted diluted EPS declined from $1.35 to $0.94 (≈30% drop)
- Free cash flow fell from $82.9M to $43.1M in 2025
Key Figures
Market Reality Check
Peers on Argus
AVNS was down 1.49% pre‑results while close peers showed mixed moves: OFIX -2.3%, SIBN +1.96%, BVS +0.93%, CTKB +0.11%, ZIMV flat. Momentum scanners only flagged TNDM down ~4%, suggesting stock‑specific rather than a broad sector move.
Historical Context
| Date | Event | Sentiment | Move | Catalyst |
|---|---|---|---|---|
| Feb 16 | Earnings webcast | Neutral | +0.1% | Announced logistics and access details for the Feb 24 results webcast. |
| Feb 03 | Reimbursement update | Positive | -0.4% | CMS maintained NOPAIN Act payments and added Game Ready device coverage. |
| Jan 20 | Strategic partnership | Positive | +0.1% | Co‑marketing agreement with Siemens to integrate RFA with imaging systems. |
| Jan 07 | Conference presentation | Neutral | +4.8% | JP Morgan conference presentation and webcast for investors in San Francisco. |
| Nov 05 | Earnings results | Negative | -5.7% | Q3 2025 showed revenue growth but net loss and goodwill impairment commentary. |
Recent AVNS news has typically produced modest price reactions, with a larger selloff only on the Q3 2025 earnings release despite generally constructive operational updates elsewhere.
Over the last few months, AVNS news has centered on operations and investor outreach. A Q3 2025 release on Nov 5, 2025 showed higher sales but weaker profitability and drew a -5.66% reaction. Subsequent items – a JP Morgan conference appearance on Jan 7, 2026, a Siemens pain‑management collaboration on Jan 20, 2026, CMS reimbursement confirmation on Feb 3, 2026, and the Feb 24 earnings call webcast notice – all produced small moves, suggesting limited pre‑event repositioning into today’s results.
Market Pulse Summary
This announcement highlights modest top‑line growth to $701.2M, solid SNS performance, and progress on transformation initiatives targeting $15–20M in annualized savings by 2026. At the same time, adjusted EPS declined to $0.94 and free cash flow fell to $43.1M, following a $77.0M goodwill impairment earlier in 2025. Investors may watch execution on cost savings, PM&R profitability, and 2026 guidance of $0.90–$1.10 EPS relative to prior results.
Key Terms
adjusted ebitda financial
free cash flow financial
goodwill impairment financial
non-gaap financial measures financial
european union medical regulation ("eu mdr") regulatory
AI-generated analysis. Not financial advice.
- Exceeded full-year revenue and achieved the top end of full-year earnings-per-share guidance
- Delivered full-year organic growth of
6% in strategic segments - Expanded transformation initiatives expected to deliver
$15 $20 million
"I'm very pleased with our fourth quarter and full-year results, which demonstrate meaningful progress on our strategic priorities," said David Pacitti, Avanos' chief executive officer. Pacitti continued, "Our organic growth remains healthy and positions us well for 2026. Our tariff mitigation efforts are on track, and we're beginning to see the impact of our cost management initiatives. I'm proud of our team's focus and commitment."
Fourth Quarter 2025 Highlights
- Total fourth quarter net sales were
$180.9 million 0.7% increase from the prior year period. - Operating income in the quarter was
$2.5 million $418.5 million $22.6 million $23.9 million - Net loss for the quarter was
$1.3 million $397.0 million $13.4 million $20.0 million - Fourth quarter diluted loss per share was
$0.03 $8.63 $0.29 $0.43 - Adjusted EBITDA for the quarter was
$28.0 million $28.6 million - Fourth quarter free cash flow was
$21.3 million $53.1 million
Specialty Nutrition Systems Segment
- The Specialty Nutrition Systems ("SNS") segment delivered above-market results in the fourth quarter of 2025, achieving net sales of
$115.1 million 8.7% compared to the prior year period. - Operating income in the SNS segment for the fourth quarter of 2025 was
$20.5 million 17.8% of SNS net sales, a decrease of$4.5 million
Pain Management and Recovery Segment
- Pain Management and Recovery ("PM&R") segment net sales for the fourth quarter of 2025 was
$61.6 million 1.3% compared to the prior year period. - Operating income in the PM&R segment for the fourth quarter of 2025 was
$5.2 million $3.9 million
Full-Year 2025 Highlights
- Net sales increased
1.9% to$701.2 million $687.8 million - Operating loss in 2025 was
$61.6 million $396.2 million $67.1 million $87.3 million - Net loss in 2025 was
$72.9 million $386.3 million - For the full-year, adjusted EBITDA totaled
$86.8 million $107.6 million - 2025 diluted loss per share was
$1.57 $8.40 $0.94 $1.35 - 2025 year-to-date free cash flow was
$43.1 million $82.9 million - As of December 31, 2025, our net debt was
$10.7 million $27.0 million
Specialty Nutrition Systems Segment
- The SNS segment delivered above-market results in 2025, achieving net sales of
$432.9 million 9.2% compared to 2024. - Operating income in the SNS segment in 2025 was
$82.6 million 19% of SNS net sales, an increase of$1.8 million
Pain Management and Recovery Segment
- PM&R segment net sales for 2025 was
$237.8 million 1.5% compared to 2024. - Operating income in the PM&R segment for 2025 was
$9.2 million $2.7 million
Non-Cash Goodwill Impairment
During the second quarter, due to downward pressure on our market capitalization, we assessed goodwill for impairment and recorded an impairment charge of
Cash Flow and Balance Sheet
Cash from operations less capital expenditures, or free cash flow, for the fourth quarter of 2025 was
At year-end 2025, the Company's cash balance was
Sale of HA Product Line
On July 31, 2025, we announced the divestiture of our HA product line to Channel-Markers Medical, LLC, a privately held company. This transaction aligns with our ongoing transformation, which is focused on advancing our strategic SNS and PM&R segments.
2026 Outlook
We expect 2026 net sales to be between
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 net income
- Adjusted diluted earnings per share
- Adjusted gross and operating profit
- Adjusted effective tax rate
- Adjusted selling, general and administrative expenses
- Adjusted EBITDA
- Free cash flow
These non-GAAP financial measures exclude the following items, as applicable, for the relevant time periods as indicated in the accompanying non-GAAP reconciliations to the comparable GAAP financial measures:
- 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 associated with European Union Medical Regulation ("EU MDR") compliance;
- The amortization of intangible assets associated with business acquisitions;
- Impairments of intangibles or goodwill;
- The amortization of intangible assets associated with prior 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 our GAAP financial measures. Management and the Company's Board of Directors use net sales on a constant currency basis, adjusted net income, adjusted diluted earnings per share, adjusted operating profit, adjusted EBITDA, and free cash flow to (a) evaluate the Company's historical and prospective financial performance and its performance relative to its competitors, (b) allocate resources and (c) measure the operational performance of the Company's business units and their managers. Management also believes that the use of an adjusted effective tax rate provides improved insight into the tax effects of the Company's ongoing business operations.
Additionally, the Compensation Committee of the Company's Board of Directors will use certain of the non-GAAP financial measures when setting and assessing achievement of incentive compensation goals. These goals are based, in part, on the Company's net sales on a constant currency basis and adjusted EBITDA, which will be determined by excluding certain items that are used in calculating these non-GAAP financial measures.
Our competitors may define these non-GAAP financial measures differently, and as a result, our measure of these non-GAAP financial measures may not be directly comparable to those of other companies. Items excluded from these non-GAAP financial measures are significant components in understanding and assessing financial performance. These non-GAAP financial measures are supplemental measures of operating performance that do not represent, and should not be considered in isolation or as an alternative to, or substitute for, the financial statement data presented in our consolidated financial statements as indicators of financial performance. These non-GAAP financial measures have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analysis of our results as reported under GAAP. We compensate for these limitations by relying primarily on our GAAP results and using these non-GAAP financial measures as supplemental information.
Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the attached financial tables.
Conference Call Webcast
Avanos Medical, Inc. will host a conference call today at 9 a.m. ET. To instantly join the conference by phone, use the following link to register close to the start time: https://emportal.ink/46QTVgQ. After registering, the system will call you and automatically connect you to the conference call. Alternatively, you may join the call by dialing 1-646-357-8785 or 1-800-836-8184 in
About Avanos Medical, Inc.
Avanos Medical (NYSE: AVNS) is a medical device company focused on delivering clinically superior breakthrough solutions that will help patients get back to the things that matter. Headquartered in
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, among others. 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; shortages in drugs used in our Surgical Pain and Recovery products or other disruptions in our supply chain; the ongoing conflicts between
AVANOS MEDICAL, INC. CONDENSED CONSOLIDATED INCOME STATEMENTS (unaudited) (in millions, except per share amounts) | |||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||
2025 | 2024 | 2025 | 2024 | ||||
Net Sales | $ 180.9 | $ 179.6 | $ 701.2 | $ 687.8 | |||
Cost of products sold | 94.9 | 81.6 | 347.3 | 306.5 | |||
Gross Profit | 86.0 | 98.0 | 353.9 | 381.3 | |||
Research and development expenses | 6.1 | 5.7 | 23.3 | 26.2 | |||
Selling and general expenses | 78.8 | 79.7 | 315.6 | 318.5 | |||
Goodwill and intangibles impairment | — | 436.7 | 77.0 | 436.7 | |||
Other (income) expense, net | (1.4) | (5.6) | (0.4) | (3.9) | |||
Operating Income (Loss) | 2.5 | (418.5) | (61.6) | (396.2) | |||
Interest income | 0.6 | 0.8 | 3.2 | 5.1 | |||
Interest expense | (1.9) | (2.8) | (7.8) | (12.2) | |||
Income (Loss) Before Income Taxes | 1.2 | (420.5) | (66.2) | (403.3) | |||
Income tax (provision) benefit | (2.5) | 23.5 | (6.7) | 17.0 | |||
Loss from Continuing Operations | (1.3) | (397.0) | (72.9) | (386.3) | |||
Loss from discontinued operations, net of tax | — | (0.3) | — | (5.8) | |||
Net Loss | $ (1.3) | $ (397.3) | $ (72.9) | $ (392.1) | |||
Interest expense, net | 1.3 | 2.0 | 4.6 | 7.1 | |||
Income tax benefit (provision) | 2.5 | (23.4) | 6.7 | (18.9) | |||
Depreciation and amortization | 9.9 | 11.1 | 38.9 | 45.5 | |||
EBITDA | $ 12.4 | $ (407.6) | $ (22.7) | $ (358.4) | |||
Loss Per Share | |||||||
Basic | |||||||
Continuing operations | $ (0.03) | $ (8.63) | $ (1.57) | $ (8.40) | |||
Discontinued operations | $ — | $ (0.01) | $ — | $ (0.13) | |||
Basic Loss Per Share | $ (0.03) | $ (8.64) | $ (1.57) | $ (8.53) | |||
Diluted | |||||||
Continuing operations | $ (0.03) | $ (8.63) | $ (1.57) | $ (8.40) | |||
Discontinued operations | $ — | $ (0.01) | $ — | $ (0.13) | |||
Diluted Loss Per Share | $ (0.03) | $ (8.64) | $ (1.57) | $ (8.53) | |||
Common Shares Outstanding | |||||||
Basic | 46.4 | 46.0 | 46.3 | 46.0 | |||
Diluted | 46.4 | 46.0 | 46.3 | 46.0 | |||
AVANOS MEDICAL, INC. NON-GAAP RECONCILIATIONS (unaudited) (in millions, except per share amounts) | |||||||||||
Three Months Ended December 31, 2025 | |||||||||||
As reported | Acquisition and Integration(a) | Post-RH Divestiture Restructuring | Intangibles Amortization | Tax Effects | As Adjusted Non-GAAP | ||||||
Net Sales | $ 180.9 | $ — | $ — | $ — | $ — | $ 180.9 | |||||
Cost of products sold | 94.9 | — | (9.0) | (1.6) | — | 84.3 | |||||
Gross Profit | 86.0 | — | 9.0 | 1.6 | — | 96.6 | |||||
Gross Profit Margin | 47.5 % | 53.4 % | |||||||||
Research and development expenses | 6.1 | — | (0.5) | — | — | 5.6 | |||||
Selling and general expenses | 78.8 | (0.6) | (4.5) | (2.9) | — | 70.8 | |||||
SG&A as a percentage of revenue | 43.6 % | 39.1 % | |||||||||
Other (income) expense, net | (1.4) | (0.5) | (0.5) | — | — | (2.4) | |||||
Operating Income | 2.5 | 1.1 | 14.5 | 4.5 | — | 22.6 | |||||
Interest income | 0.6 | — | — | — | — | 0.6 | |||||
Interest expense | (1.9) | — | — | — | — | (1.9) | |||||
Income Before Income Taxes | 1.2 | 1.1 | 14.5 | 4.5 | — | 21.3 | |||||
Income tax provision | (2.5) | — | — | — | (5.4) | (7.9) | |||||
Effective Tax Rate | (208.3) % | (37.1) % | |||||||||
Net (Loss) Income | $ (1.3) | $ 1.1 | $ 14.5 | $ 4.5 | $ (5.4) | $ 13.4 | |||||
Diluted (loss) earnings per share | $ (0.03) | $ 0.29 | |||||||||
____________________________ | |
(a) | In the year ended December 31, 2025, |
AVANOS MEDICAL, INC. NON-GAAP RECONCILIATIONS (unaudited) (in millions, except per share amounts) | |||||||||||||||||||
Three Months Ended December 31, 2024 | |||||||||||||||||||
As reported | Acquisition & Integration | Restructuring & Transform. | Post-RH Divestiture Transition | Post-RH Divestiture Restructuring | Goodwill & Intangibles Impairment | EU MDR Compliance | Intangibles Amortization | Tax Effects | As Adjusted Non-GAAP | ||||||||||
Net Sales | $ 179.6 | $ — | $ — | $ — | $ — | $ — | $ — | $ — | $ — | $ 179.6 | |||||||||
Cost of products sold | 81.6 | — | (1.3) | (0.4) | (2.1) | — | — | (3.6) | — | 74.2 | |||||||||
Gross Profit | 98.0 | — | 1.3 | 0.4 | 2.1 | — | — | 3.6 | — | 105.4 | |||||||||
Gross Profit Margin | 54.6 % | 58.7 % | |||||||||||||||||
Research and development | 5.7 | — | — | — | — | — | — | — | — | 5.7 | |||||||||
Selling and general | 79.7 | (0.1) | 0.4 | (0.2) | (0.4) | — | (1.8) | (2.8) | — | 74.8 | |||||||||
SG&A as a percentage of revenue | 44.4 % | 41.6 % | |||||||||||||||||
Goodwill and intangibles impairment | 436.7 | — | — | — | — | (436.7) | — | — | — | — | |||||||||
Other (income) expense, net | (5.6) | — | 6.9 | (0.3) | — | — | — | — | — | 1.0 | |||||||||
Operating (Loss) Income | (418.5) | 0.1 | (6.0) | 0.9 | 2.5 | 436.7 | 1.8 | 6.4 | — | 23.9 | |||||||||
Interest income | 0.8 | — | — | — | — | — | — | — | — | 0.8 | |||||||||
Interest expense | (2.8) | — | — | — | — | — | — | — | — | (2.8) | |||||||||
(Loss) Income Before Income Taxes | (420.5) | 0.1 | (6.0) | 0.9 | 2.5 | 436.7 | 1.8 | 6.4 | — | 21.9 | |||||||||
Income tax benefit (provision) | 23.5 | — | — | — | — | — | — | — | (25.4) | (1.9) | |||||||||
Effective tax rate | (5.6) % | (8.7) % | |||||||||||||||||
Net (Loss) Income from Continuing Operations | (397.0) | 0.1 | (6.0) | 0.9 | 2.5 | 436.7 | 1.8 | 6.4 | (25.4) | 20.0 | |||||||||
Loss from Discontinued Operations, net of tax | (0.3) | — | — | — | — | — | — | — | — | (0.3) | |||||||||
Net (Loss) Income | $ (397.3) | $ 0.1 | $ (6.0) | $ 0.9 | $ 2.5 | $ 436.7 | $ 1.8 | $ 6.4 | $ (25.4) | $ 19.7 | |||||||||
Diluted (loss) earnings per share: | |||||||||||||||||||
Continuing Operations | $ (8.63) | $ 0.43 | |||||||||||||||||
Discontinued Operations | $ (0.01) | $ (0.01) | |||||||||||||||||
Diluted (loss) earnings per share | $ (8.64) | $ 0.42 | |||||||||||||||||
AVANOS MEDICAL, INC. NON-GAAP RECONCILIATIONS (unaudited) (in millions, except per share amounts) | |||||||||||||||
Year Ended December 31, 2025 | |||||||||||||||
As reported | Acquisition and Integration | Post-RH Divestiture Restructuring | Goodwill and Intangibles Impairment | Litigation and Legal | Intangibles Amortization | Tax effects | As Adjusted Non-GAAP | ||||||||
Net Sales | $ 701.2 | $ — | $ — | $ — | $ — | $ — | $ — | $ 701.2 | |||||||
Cost of products sold | 347.3 | — | (19.5) | — | — | (9.5) | — | 318.3 | |||||||
Gross Profit | 353.9 | — | 19.5 | — | — | 9.5 | — | 382.9 | |||||||
Gross Profit Margin | 50.5 % | 54.6 % | |||||||||||||
Research and development expenses | 23.3 | — | (0.5) | — | — | — | — | 22.8 | |||||||
Selling and general expenses | 315.6 | (1.0) | (10.2) | — | — | (9.7) | — | 294.7 | |||||||
SG&A as a percentage of Net Sales | 45.0 % | 42.0 % | |||||||||||||
Goodwill and intangibles impairment | 77.0 | — | — | (77.0) | — | — | — | — | |||||||
Other (income) expense, net | (0.4) | (0.5) | (2.2) | — | 1.4 | — | — | (1.7) | |||||||
Operating (Loss) Income | (61.6) | 1.5 | 32.4 | 77.0 | (1.4) | 19.2 | — | 67.1 | |||||||
Interest income | 3.2 | — | — | — | — | — | — | 3.2 | |||||||
Interest expense | (7.8) | — | — | — | — | — | — | (7.8) | |||||||
(Loss) Income Before Income Taxes | (66.2) | 1.5 | 32.4 | 77.0 | (1.4) | 19.2 | — | 62.5 | |||||||
Income tax provision | (6.7) | — | — | — | — | — | (12.4) | (19.1) | |||||||
Effective tax rate | 10.1 % | (30.6) % | |||||||||||||
Net (Loss) Income | $ (72.9) | $ 1.5 | $ 32.4 | $ 77.0 | $ (1.4) | $ 19.2 | $ (12.4) | $ 43.4 | |||||||
Diluted (loss) earnings per share | $ (1.57) | $ 0.94 | |||||||||||||
AVANOS MEDICAL, INC. NON-GAAP RECONCILIATIONS (unaudited) (in millions, except per share amounts) | |||||||||||||||||||
Year Ended December 31, 2024 | |||||||||||||||||||
As reported | Acquisition and Integration | Restructuring and Transform. | Post-RH Divestiture Transition | Post-RH Divestiture Restructuring | Goodwill and intangibles impairment | EU MDR compliance | Intangibles amortization | Tax effects of adjusting items | As Adjusted Non-GAAP | ||||||||||
Net Sales | $ 687.8 | $ — | $ — | $ — | $ — | $ — | $ — | $ — | $ — | $ 687.8 | |||||||||
Cost of products sold | 306.5 | (0.1) | (3.0) | (1.8) | (5.1) | — | (0.2) | (14.3) | — | 282.0 | |||||||||
Gross Profit | 381.3 | 0.1 | 3.0 | 1.8 | 5.1 | — | 0.2 | 14.3 | — | 405.8 | |||||||||
Gross profit margin | 55.4 % | 59.0 % | |||||||||||||||||
Research and development expenses | 26.2 | (0.1) | 0.2 | — | — | — | — | — | — | 26.3 | |||||||||
Selling and general expenses | 318.5 | (1.4) | (3.0) | (0.8) | (3.8) | — | (6.0) | (10.9) | — | 292.6 | |||||||||
SG&A as a percentage of net sales | 46.3 % | 42.5 % | |||||||||||||||||
Goodwill and intangibles impairment | 436.7 | — | — | — | — | (436.7) | — | — | — | — | |||||||||
Other (income) expense, net | (3.9) | (2.6) | 6.6 | (0.5) | — | — | — | — | — | (0.4) | |||||||||
Operating (Loss) Income | (396.2) | 4.2 | (0.8) | 3.1 | 8.9 | 436.7 | 6.2 | 25.2 | — | 87.3 | |||||||||
Interest income | 5.1 | — | — | — | — | — | — | — | — | 5.1 | |||||||||
Interest expense | (12.2) | — | — | — | — | — | — | — | — | (12.2) | |||||||||
(Loss) Income Before Income Taxes | (403.3) | 4.2 | (0.8) | 3.1 | 8.9 | 436.7 | 6.2 | 25.2 | — | 80.2 | |||||||||
Income tax benefit (provision) | 17.0 | — | — | — | — | — | — | — | (34.6) | (17.6) | |||||||||
Effective tax rate | (4.2) % | (21.9) % | |||||||||||||||||
Net (Loss) Income from Continuing Operations | (386.3) | 4.2 | (0.8) | 3.1 | 8.9 | 436.7 | 6.2 | 25.2 | (34.6) | 62.6 | |||||||||
Loss from Discontinued Operations, net of tax | (5.8) | — | — | — | — | — | — | — | — | (5.8) | |||||||||
Net (Loss) Income | $ (392.1) | $ 4.2 | $ (0.8) | $ 3.1 | $ 8.9 | $ 436.7 | $ 6.2 | $ 25.2 | $ (34.6) | $ 56.8 | |||||||||
Diluted (loss) earnings per share: | |||||||||||||||||||
Continuing Operations | $ (8.40) | $ 1.35 | |||||||||||||||||
Discontinued Operations | $ (0.13) | $ (0.13) | |||||||||||||||||
Diluted (loss) earnings per share | $ (8.53) | $ 1.22 | |||||||||||||||||
AVANOS MEDICAL, INC. NON-GAAP RECONCILIATIONS (unaudited) (in millions, except per share amounts) | |||||||
EBITDA | |||||||
Three Months Ended December 31, 2025 | Three Months Ended December 31, 2024 | ||||||
Continuing | Discontinued Operations | Total | |||||
Net loss | $ (1.3) | $ (397.0) | $ (0.3) | $ (397.3) | |||
Interest expense, net | 1.3 | 2.0 | — | 2.0 | |||
Income tax benefit (provision) | 2.5 | (23.5) | 0.1 | (23.4) | |||
Depreciation | 5.4 | 4.7 | — | 4.7 | |||
Amortization | 4.5 | 6.4 | — | 6.4 | |||
EBITDA | 12.4 | (407.4) | (0.2) | (407.6) | |||
Acquisition and integration-related charges | 1.1 | 0.1 | — | 0.1 | |||
Restructuring and transformation charges | — | (6.0) | — | (6.0) | |||
Post-RH Divestiture transition charges | — | 0.9 | — | 0.9 | |||
Post-RH Divestiture restructuring | 14.5 | 2.5 | — | 2.5 | |||
Goodwill and intangibles impairment | — | 436.7 | — | 436.7 | |||
EU MDR Compliance | — | 1.8 | — | 1.8 | |||
Adjusted EBITDA | $ 28.0 | $ 28.6 | $ (0.2) | $ 28.4 | |||
EBITDA | |||||||
Year Ended | Year Ended December 31, 2024 | ||||||
Continuing | Disc. Operations | Total | |||||
Net loss income | $ (72.9) | $ (386.3) | $ (5.8) | $ (392.1) | |||
Interest expense, net | 4.6 | 7.1 | — | 7.1 | |||
Income tax benefit (provision) | 6.7 | (17.0) | (1.9) | (18.9) | |||
Depreciation | 19.7 | 20.3 | — | 20.3 | |||
Amortization | 19.2 | 25.2 | — | 25.2 | |||
EBITDA | (22.7) | (350.7) | (7.7) | (358.4) | |||
Acquisition and integration-related charges | 1.5 | 4.2 | — | 4.2 | |||
Restructuring and transformation charges | — | (0.8) | — | (0.8) | |||
Post-RH Divestiture transition charges | — | 3.1 | — | 3.1 | |||
Post-RH Divestiture restructuring | 32.4 | 8.9 | — | 8.9 | |||
Goodwill and intangibles impairment | 77.0 | 436.7 | — | 436.7 | |||
EU MDR Compliance | — | 6.2 | — | 6.2 | |||
Litigation and legal | (1.4) | — | — | — | |||
Adjusted EBITDA | $ 86.8 | $ 107.6 | $ (7.7) | $ 99.9 | |||
AVANOS MEDICAL, INC. NON-GAAP RECONCILIATIONS (unaudited) (in millions, except per share amounts) | |||||||
Free Cash Flow | |||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||
2025 | 2024 | 2025 | 2024 | ||||
Cash provided by operating activities | $ 28.2 | $ 57.9 | $ 74.7 | $ 100.7 | |||
Capital expenditures | (6.9) | (4.8) | (31.6) | (17.8) | |||
Free Cash Flow | $ 21.3 | $ 53.1 | $ 43.1 | $ 82.9 | |||
2026 OUTLOOK | |||
Estimated Range | |||
Diluted earnings per share (GAAP) | $ 0.48 | to | $ 0.73 |
Intangibles amortization | 0.28 | to | 0.26 |
Restructuring and transformation charges | 0.08 | to | 0.06 |
Other | 0.06 | to | 0.05 |
Adjusted diluted earnings per share (non-GAAP) | $ 0.90 | to | $ 1.10 |
AVANOS MEDICAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (in millions) | |||
As of December 31, | |||
2025 | 2024 | ||
ASSETS | |||
Current Assets | |||
Cash and cash equivalents | $ 89.8 | $ 107.7 | |
Accounts receivable, net of allowances | 103.8 | 132.8 | |
Inventories | 148.0 | 138.8 | |
Prepaid expenses and other current assets | 13.8 | 14.1 | |
Total Current Assets | 355.4 | 393.4 | |
Property, Plant and Equipment, net | 113.4 | 110.7 | |
Operating Lease Right of Use Assets | 27.6 | 34.1 | |
Goodwill | 394.9 | 455.6 | |
Other Intangible Assets, net | 117.8 | 112.3 | |
Deferred Tax Assets | 33.1 | 24.9 | |
Other Assets | 31.5 | 23.2 | |
TOTAL ASSETS | $ 1,073.7 | $ 1,154.2 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Current Liabilities | |||
Current portion of long-term debt | $ 10.2 | $ 9.4 | |
Current portion of operating lease obligation | 8.2 | 10.9 | |
Trade accounts payable | 55.5 | 54.3 | |
Accrued expenses | 91.3 | 91.3 | |
Total Current Liabilities | 165.2 | 165.9 | |
Long-Term Debt | 90.3 | 125.3 | |
Operating Lease Obligation | 20.4 | 24.6 | |
Deferred Tax Liabilities | 6.1 | 5.5 | |
Other Long-Term Liabilities | 13.5 | 4.4 | |
TOTAL LIABILITIES | 295.5 | 325.7 | |
Stockholders' Equity | 778.2 | 828.5 | |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 1,073.7 | $ 1,154.2 | |
AVANOS MEDICAL, INC. CONDENSED CONSOLIDATED CASH FLOW STATEMENTS (unaudited) (in millions) | |||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||
2025 | 2024 | 2025 | 2024 | ||||
Operating Activities | |||||||
Net loss | $ (1.3) | $ (397.3) | $ (72.9) | $ (392.1) | |||
Depreciation and amortization | 9.9 | 11.1 | 38.9 | 45.5 | |||
Goodwill and intangibles impairment | — | 436.7 | 77.0 | 436.7 | |||
Net loss on asset dispositions | 3.6 | 0.8 | 9.3 | 1.2 | |||
Changes in operating assets and liabilities | 24.5 | 45.0 | 20.2 | 35.0 | |||
Deferred income taxes and other | (8.5) | (38.4) | 2.2 | (25.6) | |||
Cash Provided by Operating Activities | 28.2 | 57.9 | 74.7 | 100.7 | |||
Investing Activities | |||||||
Capital expenditures | (6.9) | (4.8) | (31.6) | (17.8) | |||
Proceeds from the sale of assets | — | — | 4.0 | — | |||
Proceeds from RH divestiture post-closing settlement | — | — | — | 2.1 | |||
Acquisition of assets and businesses, net of cash acquired | 0.3 | — | (28.0) | — | |||
Investments in non-affiliates | (0.2) | (2.8) | (5.0) | (11.8) | |||
Cash Used in Investing Activities | (6.8) | (7.6) | (60.6) | (27.5) | |||
Financing Activities | |||||||
Secured debt repayments | (2.4) | (2.3) | (9.4) | (8.6) | |||
Revolving credit facility proceeds | — | — | — | 20.0 | |||
Revolving credit facility repayments | — | (25.0) | (25.0) | (45.0) | |||
Purchase of treasury stock | (0.3) | (0.1) | (3.3) | (12.8) | |||
Proceeds from the exercise of stock options | — | — | 0.7 | 1.1 | |||
Payment of contingent consideration liabilities | — | — | — | (3.8) | |||
Cash Used in Financing Activities | (2.7) | (27.4) | (37.0) | (49.1) | |||
Effect of Exchange Rate Changes on Cash and Cash Equivalents | 0.6 | (4.2) | 5.0 | (4.1) | |||
Increase (Decrease) in Cash and Cash Equivalents | 19.3 | 18.7 | (17.9) | 20.0 | |||
Cash and Cash Equivalents - Beginning of Period | 70.5 | 89.0 | 107.7 | 87.7 | |||
Cash and Cash Equivalents - End of Period | $ 89.8 | $ 107.7 | $ 89.8 | $ 107.7 | |||
AVANOS MEDICAL, INC. SELECTED BUSINESS SEGMENT DATA (unaudited) (in millions) | |||||||||||
Three Months Ended December 31, | Year Ended December 31, | ||||||||||
2025 | 2024 | Change | 2025 | 2024 | Change | ||||||
Specialty Nutrition Systems: | |||||||||||
Enteral feeding | $ 83.0 | $ 75.0 | 10.7 % | $ 314.7 | $ 289.7 | 8.6 % | |||||
Neonate solutions | 32.1 | 30.9 | 3.9 % | 118.2 | 106.7 | 10.8 % | |||||
Total Specialty Nutrition Systems | 115.1 | 105.9 | 8.7 % | 432.9 | 396.4 | 9.2 % | |||||
Pain Management and Recovery: | |||||||||||
Surgical pain and recovery | 24.7 | 26.7 | (7.5) % | 98.8 | 108.0 | (8.5) % | |||||
Radiofrequency ablation | 36.9 | 34.1 | 8.2 % | 139.0 | 126.2 | 10.1 % | |||||
Total Pain Management and Recovery | 61.6 | 60.8 | 1.3 % | 237.8 | 234.2 | 1.5 % | |||||
Corporate and Other | 4.2 | 12.9 | (67.4) % | 30.5 | 57.2 | (46.7) % | |||||
Total Net Sales | $ 180.9 | $ 179.6 | 0.7 % | $ 701.2 | $ 687.8 | 1.9 % | |||||
Operating Income (Loss) | |||||||||||
Specialty Nutrition Systems | 20.5 | 25.0 | (18.0) % | 82.6 | 80.8 | 2.2 % | |||||
Pain Management and Recovery | 5.2 | 3.9 | 33.3 % | 9.2 | 2.7 | N.M. | |||||
Corporate and Other(a) | (23.2) | (447.4) | N.M. | (153.4) | (479.7) | N.M. | |||||
Total Operating Income (Loss) | $ 2.5 | N.M. | $ (61.6) | N.M. | |||||||
Net Sales - percentage change - QTD | Total | Volume(a) | Pricing/Mix | Currency | Other(b) | ||||||
Specialty Nutrition Systems | 8.7 % | 7.9 % | 0.5 % | 0.8 % | (0.5) % | ||||||
Pain Management and Recovery | 1.3 % | 1.0 % | 0.2 % | 0.2 % | (0.1) % | ||||||
Corporate and Other | (67.4) % | 5.4 % | — % | — % | (72.8) % | ||||||
Net Sales - percentage change - YTD | Total | Volume(a) | Pricing/Mix | Currency | Other(b) | ||||||
Specialty Nutrition Systems | 9.2 % | 9.0 % | 0.4 % | 0.5 % | (0.7) % | ||||||
Pain Management and Recovery | 1.5 % | 1.9 % | 0.3 % | 0.2 % | (0.9) % | ||||||
Corporate and Other | (46.7) % | (7.0) % | (9.5) % | — % | (30.2) % | ||||||
______________________________ | |
N.M.: Not Meaningful | |
(a) | Corporate and Other operating loss for the year ended December 31, 2025 includes |
(b) | Other includes the effects of our withdrawal from certain revenue streams that did not meet our return criteria and rounding. |
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SOURCE Avanos Medical
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