Avanos Medical (AVNS) came out with quarterly earnings of $0.43 per share, beating the Zacks Consensus Estimate of $0.40 per share. This compares to earnings of $0.36 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 7.50%. A quarter ago, it was expected that this medical technology company would post earnings of $0.36 per share when it actually produced earnings of $0.36, delivering no surprise.Over the last four quarters, the ...

Financial Performance - Fourth quarter net sales from continuing operations totaled $179.6 million, a 3.6% increase from the prior year[5] - For the full year, net sales from continuing operations increased 2.2% to $687.8 million[10] - Fourth quarter diluted loss per share from continuing operations was $8.63, compared to diluted earnings per share of $0.24 a year ago[5] - Adjusted EBITDA for the fourth quarter was $28.6 million, compared to $32.1 million in the prior year[9] - Free cash flow for the fourth quarter was $53.1 million, compared to an outflow of $3.4 million in the same quarter last year[15] - The company expects 2025 net sales to be between $665 million and $685 million, with adjusted diluted earnings per share expected to be between $1.05 to $1.25[18] - Operating loss in 2024 was $396.2 million, compared to operating profit of $4.2 million in the prior year[13] - The company reported a net loss of $397.3 million for the three months ended December 31, 2024, compared to a net income of $10.5 million in the same period of 2023[31] - The adjusted non-GAAP operating profit for the year ended December 31, 2024, was $79.6 million, a decrease of 21.4% from $101.1 million in 2023[40] - The company reported a total operating loss of $403.9 million for the year ended December 31, 2024, compared to a total loss of $46.8 million in 2023[40] Impairments and Charges - The company recorded a non-cash impairment charge of $436.7 million during the fourth quarter due to revised revenue and margin projections[14] - The company incurred a goodwill and intangibles impairment of $436.7 million for the year ended December 31, 2024[31] - Goodwill and intangibles impairment for the year ended December 31, 2024, amounted to $436.7 million, with no corresponding impairment reported in 2023[40] - The company incurred restructuring and transformation charges of $6.0 million for the three months ended December 31, 2024, compared to $5.2 million in the same period of 2023[37] - Acquisition and integration-related charges for the year ended December 31, 2024, were $4.2 million, up from $3.3 million in 2023[40] Sales and Revenue Breakdown - Digestive health segment reported net sales of $105.8 million for Q4 2024, an increase of 11.6% compared to $94.8 million in Q4 2023[58] - Total Pain Management and Recovery segment saw a decline in Q4 2024 net sales to $73.8 million, down 6.0% from $78.5 million in Q4 2023[58] - Total net sales for Q4 2024 reached $179.6 million, reflecting a 3.6% increase from $173.3 million in Q4 2023[58] - Year-to-date (YTD) total net sales for 2024 were $687.8 million, a 2.2% increase from $673.3 million in 2023[58] - The percentage change in net sales for QTD was driven by a volume increase of 6.2%, offset by a pricing/mix decline of 3.0%[58] - Interventional pain segment reported a slight increase in Q4 2024 net sales to $43.5 million, up 1.4% from $42.9 million in Q4 2023[58] - Surgical pain and recovery segment experienced a decline in Q4 2024 net sales to $30.3 million, down 14.9% from $35.6 million in Q4 2023[58] - The total pain management and recovery segment's YTD sales decreased to $291.4 million, down 3.4% from $301.7 million in 2023[58] Cash Flow and Debt - As of December 31, 2024, net debt was $27.0 million, down from $80.3 million in the prior year[5] - Cash provided by operating activities for the year ended December 31, 2024, was $100.7 million, up from $32.4 million in 2023[56] - The company had cash and cash equivalents of $107.7 million as of December 31, 2024, compared to $87.7 million in 2023[54] - Free cash flow for the three months ended December 31, 2024, was $53.1 million, compared to a negative free cash flow of $3.4 million in the same period of 2023[50] Margins and Expenses - Gross margin for 2024 was 55.4%, compared to 56.4% in 2023[11] - Gross profit for the same period was $98.0 million, compared to $95.0 million in 2023, reflecting a gross profit margin of 54.6%[31] - Selling, General and Administrative (SG&A) expenses for the three months ended December 31, 2024, were $79.7 million, up from $73.8 million in the same period of 2023[46] - SG&A as a percentage of revenue, as reported, was 44.4% for the three months ended December 31, 2024, compared to 40.9% in 2023[46] - The gross profit margin as adjusted for the year ended December 31, 2024, was 59.0%[35] Tax and Compliance - The effective tax rate for the year ended December 31, 2024, as reported, was 24.7%, compared to an effective tax rate of -4.9% for 2023[42] - The company expects continued focus on EU MDR compliance, with related costs of $6.2 million for the year ended December 31, 2024[44] - EU MDR Compliance related charges for the three months ended December 31, 2024, were $1.8 million, compared to $0.9 million in 2023[40]

Core Viewpoint - Avanos Medical, Inc. reported a challenging financial performance for the fourth quarter and full year of 2024, with significant losses attributed to transformation initiatives and impairment charges, while maintaining a focus on organic growth and cash flow generation [2][19]. Financial Highlights - Fourth quarter net sales reached $179.6 million, a 3.6% increase year-over-year, driven by strong performance in the digestive health portfolio and interventional pain portfolio [5][10]. - For the full year 2024, net sales from continuing operations increased by 2.2% to $687.8 million [11]. - The company generated $83 million in free cash flow for the year, with fourth quarter free cash flow of $53.1 million, a significant improvement from an outflow of $3.4 million in the previous year [2][15]. Operating Results - The gross margin for the fourth quarter was 54.6%, slightly down from 54.8% a year ago, while the adjusted gross margin improved to 58.7% [6][11]. - Operating loss for the fourth quarter was $418.5 million, compared to an operating profit of $11.2 million in the same quarter of 2023, primarily due to a goodwill impairment charge of $436.7 million [8][14]. - Adjusted EBITDA for the fourth quarter was $28.6 million, down from $32.1 million in the prior year [8]. Earnings Per Share - Fourth quarter diluted loss per share from continuing operations was $8.63, compared to earnings of $0.24 per share a year ago [10]. - For the full year, diluted loss per share from continuing operations was $8.40, compared to a loss of $0.21 in 2023, while adjusted diluted earnings per share improved to $1.35 from $1.03 [10][13]. Cash Flow and Balance Sheet - As of December 31, 2024, the company's cash balance was $107.7 million, up from $87.7 million at the end of 2023, with total debt of $134.7 million [16]. - Net debt decreased to $27 million from $80.3 million in the prior year, reflecting improved cash flow management [10]. 2025 Outlook - The company expects net sales for 2025 to be between $665 million and $685 million, with adjusted diluted earnings per share projected between $1.05 and $1.25 [18][19]. - The guidance reflects anticipated challenges in certain product categories and currency headwinds, with a commitment to long-term strategy and margin improvement [19].

Core Points - Avanos Medical, Inc. will host a conference call on February 26, 2025, at 9 a.m. ET to discuss its financial results and business highlights for Q4 and full year 2024 [1] - A news release detailing the financial results will be issued before the market opens on the same day [1] - The call will be led by Michael Greiner, interim CEO, and Scott Galovan, senior VP of strategy and corporate development [1] Access Information - Participants can join the conference call by registering through a provided link or by dialing specific phone numbers [2] - A simultaneous webcast will be available on the Avanos Medical website, with a replay accessible within two hours after the call [3] Company Overview - Avanos Medical is a medical technology company focused on providing clinically superior medical device solutions [4] - The company aims to address significant healthcare needs, including nutrition support for patients and reducing opioid use during recovery [4] - Avanos develops, manufactures, and markets its products globally, holding leading market positions in various categories [4]

Company Overview - Avanos Medical (AVNS) shares increased by 7.2% to $16.95, with a notable trading volume, contrasting with a 0.7% loss over the past four weeks [1] - The company is experiencing growing market optimism due to its strategic positioning in the medical device sector, impressive revenue growth, and consistent profitability [2] Financial Performance - Avanos is expected to report quarterly earnings of $0.40 per share, reflecting an 11.1% year-over-year increase, with revenues projected at $177.72 million, a 2.6% rise from the previous year [3] - The consensus EPS estimate for Avanos has remained unchanged over the last 30 days, indicating stability in earnings expectations [4] Market Sentiment - The recent surge in Avanos' stock price is attributed to increased demand for its advanced medical solutions and ongoing investments in product innovation [2] - Investors are optimistic about Avanos' ability to capture market share and drive future earnings growth as the healthcare sector prioritizes innovative and cost-effective solutions [2] Industry Context - Avanos Medical is part of the Zacks Medical - Instruments industry, which includes other companies like Alcon (ALC), that also experienced a stock increase of 2.7% [4] - Alcon's consensus EPS estimate has seen a slight decrease of 0.4% over the past month, indicating a stable outlook similar to Avanos [5]

Core Viewpoint - Avanos Medical, Inc. is positioned for growth due to its strong product line and focus on research and development, despite facing macroeconomic challenges and foreign exchange volatility [1][12][13] Company Performance - For the year-to-date period, Avanos' stock has decreased by 29.8%, while the industry rose by 3.5% and the S&P 500 grew by 12.1% [1] - The company reported a market capitalization of $744.5 million and an earnings yield of 10.7%, which is favorable compared to the industry's negative yield [2] Growth Drivers - Avanos has a solid product portfolio, particularly in Digestive Health and Pain Management, which includes products like MIC-KEY enteral feeding tubes and non-opioid pain solutions [3] - The Digestive Health segment showed strength with double-digit growth in the NeoMed product line and strong demand for ENFit conversions in North America [4][10] - The legacy enteral feeding business maintained healthy growth, and the company anticipates continued above-market growth due to product innovations and global market expansion [5] Sales and Revenue Insights - In Q3 2024, net sales decreased by 0.5% to $170.4 million, but organic sales increased by 1.1% despite unfavorable foreign currency translation effects [14] - The Pain Management and Recovery segment saw normalized organic sales rise approximately 1%, with growth in ambIT partially offsetting supplier constraints affecting On-Q growth [6] Research and Development Focus - Avanos is committed to R&D, with expenses increasing by 18% year over year to $7.2 million in Q3 2024, aiming to enhance product efficiency and security [9] Future Outlook - The Zacks Consensus Estimate for Avanos' earnings in 2025 has improved by nearly 3% to $1.73 per share, with first-quarter 2025 revenue estimates at $173.5 million, indicating a 4.5% year-over-year improvement [15]

Group 1 - Avanos Medical, Inc. (AVNS) has been added to the Zacks Rank 5 (Strong Sell) List, with a 5% downward revision in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - Atlanta Braves Holdings, Inc. (BATRK) is also on the Zacks Rank 5 (Strong Sell) List, experiencing a significant 187.1% downward revision in the Zacks Consensus Estimate for its current year earnings over the last 60 days [1] - Elevance Health, Inc. (ELV) has seen a 10.9% downward revision in the Zacks Consensus Estimate for its current year earnings over the last 60 days [2]

Core Viewpoint - Avanos Medical, Inc. will have its interim CEO, Michael Greiner, participate in an analyst-led fireside chat at the Stifel 2024 Healthcare Conference on November 19, 2024 [1] Company Overview - Avanos Medical, Inc. is a medical technology company headquartered in Alpharetta, Georgia, focused on delivering clinically superior medical device solutions [3] - The company addresses critical healthcare needs, including providing nutrition support for patients transitioning from hospital to home and reducing opioid use during recovery [3] - Avanos develops, manufactures, and markets recognized brands globally, holding leading market positions across multiple categories [3]

Core Viewpoint - Avanos Medical, Inc. has received confirmation from the Centers for Medicare and Medicaid Services (CMS) regarding the inclusion of its ON-Q and ambIT infusion pumps under the Non-Opioids Prevent Addiction in the Nation (NOPAIN) Act, allowing for separate Medicare reimbursement starting January 1, 2025 [1][3][6]. Group 1: NOPAIN Act Implementation - The NOPAIN Act, part of the Consolidated Appropriation Act of 2023, aims to enhance patient access to non-opioid pain management solutions by providing additional Medicare reimbursement for qualifying non-opioid drugs and devices [2]. - CMS has confirmed that the ON-Q and ambIT infusion pumps meet the qualifying requirements for separate payment under the NOPAIN Act, marking a significant milestone for Avanos Medical [3][4]. - The payment limitation for both the ON-Q and ambIT infusion systems is set at up to $2,284.98, with unique HCPCS codes assigned for claim submissions starting January 1, 2025 [5]. Group 2: Impact on Pain Management - The NOPAIN Act mandates separate payment for qualified non-opioid treatments through December 31, 2027, when provided with a covered surgical procedure, aiming to reduce opioid reliance in postoperative care [6]. - The ON-Q and ambIT devices are the first and only infusion pain pumps included under this policy, which is part of a broader strategy by CMS to combat the opioid crisis [6]. - Avanos Medical's interim CEO highlighted the effectiveness of the ON-Q and ambIT pumps in reducing opioid use post-surgery, supported by clinical trials and peer-reviewed data [7].

Core Insights - Avanos Medical, Inc. has launched the CORGRIP SR Nasogastric/Nasointestinal Tube Retention System, enhancing its Enteral Feeding portfolio [1][2] - The new system is designed to reduce the risk of dislodgement and complications associated with nasal tube replacement, offering advantages over traditional tape methods [2][3] Product Features - The CORGRIP SR system features a monofilament thread and includes a yellow tipped retrieval catheter with a hollow tip, color-coded clips, printed centimeter markings, and a unique orange opening tool [2] - Research indicates that 40%-63% of feeding tubes secured with tape can become inadvertently dislodged, while using a bridle significantly reduces this incidence [3] Company Overview - Avanos Medical is a medical technology company headquartered in Alpharetta, Georgia, focused on delivering clinically superior solutions for patient care [4] - The company aims to address critical healthcare needs, including providing nutrition to patients and reducing opioid use during recovery [4]