Avanos Medical (AVNS) Q4 2024 earnings summary

Executive summary

• Achieved strong Q4 and full-year performance, led by Enteral Feeding growth and completion of the respiratory health business divestiture, serving over two million patients in 2024.

• Completed obligations under DOJ deferred prosecution agreement in January.

• Transformation efforts continue, focusing on portfolio optimization, cost management, and capital allocation.

• Reported a net loss for the year due to a $437M non-cash impairment charge.

Financial highlights

• Q4 sales from continuing operations: $180M, up 5% year-over-year; full-year sales: $688M, up 3.3%.

• Q4 adjusted diluted EPS: $0.43 (up 19% YoY); full-year adjusted EPS: $1.35 (up 31% YoY).

• Q4 adjusted EBITDA: $32M; full-year adjusted EBITDA: $108M.

• Q4 adjusted gross margin: ~59%; full-year adjusted gross margin: 59%.

• Free cash flow for 2024 was $83M, up from $14.6M in 2023; net debt reduced to $27M.

Outlook and guidance

• 2025 net sales expected between $665M-$685M; adjusted diluted EPS guidance: $1.05-$1.25.

• Specialty Nutrition Systems segment to grow mid-single digits organically; Pain Management and Recovery segment flat to low single-digit growth.

• Corporate and Other segment to decline over 20%.

• Currency headwinds expected to impact revenue by ~100 bps; annual effective tax rate anticipated at ~27%.

• Margin expansion targeted for 2026 after a pause in 2025 due to market and currency headwinds.