On July 31, 2024, Avanos Medical Inc (AVNS, Financial) released its 8-K filing detailing its financial performance for the second quarter of 2024. Avanos Medical Inc is a United States-based company that develops and sells medical devices and related services globally. The company has combined its Chronic Care and Pain Management franchises into a single commercial organization focused on Digestive Health and Pain Management and Recovery product categories.
Performance Overview
Avanos Medical Inc (AVNS, Financial) reported total net sales from continuing operations of $171.7 million for Q2 2024, a 1.4% increase from the comparable prior year period, slightly exceeding the analyst estimate of $170.67 million. The company achieved a net income from continuing operations of $4.3 million, a significant improvement compared to a net loss of $4.3 million in the same period last year. Adjusted net income from continuing operations totaled $15.8 million, up from $11.2 million a year ago.
Key Financial Metrics
Here are some key financial metrics from the earnings report:
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Total Net Sales | $171.7 million | $169.4 million |
| Net Income from Continuing Operations | $4.3 million | $(4.3) million |
| Adjusted Net Income from Continuing Operations | $15.8 million | $11.2 million |
| Diluted Earnings Per Share from Continuing Operations | $0.09 | $(0.09) |
| Adjusted Diluted Earnings Per Share from Continuing Operations | $0.34 | $0.24 |
| Adjusted EBITDA | $26.8 million | $22.9 million |
Operational Highlights
Avanos Medical Inc (AVNS, Financial) saw strong demand in its Digestive Health portfolio, particularly from its NeoMed neonatal and pediatric feeding solutions, as well as continued demand for Game Ready products. However, this was partially offset by reduced demand for hyaluronic acid (HA) products. The company's gross margin for Q2 2024 was 55.7%, down from 57.7% in the prior year period, primarily due to costs related to its three-year transformation initiative and plant separation costs associated with the divestiture of its respiratory health business.
Cost Management and Profitability
Selling and general expenses as a percentage of net sales decreased to 47.1% for Q2 2024 from 54.9% in Q2 2023, driven by savings from the company's Transformation Process and disciplined spending. Operating profit for the quarter was $6.3 million, compared to an operating loss of $2.1 million in the prior year period. On an adjusted basis, operating profit totaled $21.8 million, up from $18.4 million a year ago.
Cash Flow and Balance Sheet
Free cash flow for Q2 2024 was an inflow of $21.9 million, compared to an outflow of $6.6 million a year ago. The company's cash balance at the end of June 2024 was $92.2 million, up from $87.7 million at the end of 2023. Total debt outstanding was $175.1 million, compared to $168.0 million at the end of 2023.
Outlook
For the full year 2024, Avanos Medical Inc (AVNS, Financial) anticipates revenue from continuing operations to be between $685 million and $705 million, with adjusted gross margins between 59.5% and 60.5%, and adjusted diluted earnings per share from continuing operations between $1.30 and $1.45.
“We are pleased with our second quarter results and the cumulative progress we have made at the mid-year point,” said Joe Woody, Avanos’s chief executive officer. “Digestive Health continues to lead in delivering high-single digit growth while Pain Management and Recovery performance is improving with quarter-over-quarter sequential growth, and we are seeing meaningful progress on our other transformation objectives, all of which are expected to support mid-single digit growth for the remainder of the year. We are proud of these accomplishments and pleased that our solutions have been utilized to treat over 900,000 patients so far this year.”
For more detailed information, readers can access the full 8-K filing.
Explore the complete 8-K earnings release (here) from Avanos Medical Inc for further details.
