Avanos Medical, Inc. Reports Preliminary Q4 And FY23 Financial Results; Revises Preliminary 2024 Revenue Outlook; Sees Q4 Revenue $170M-$173M Vs $179.27M Est.; FY23 Revenue $670M-$673M Vs $679.27M Est. ; FY24 Revenue $685M-$705M Vs $714.43M Est.

Author: Benzinga Newsdesk | January 04, 2024 09:35am

Avanos Medical, Inc. (NYSE:AVNS) today reported selected, unaudited preliminary financial results for the fourth quarter and full-year ended December 31, 2023 and revised its preliminary revenue outlook for 2024.

Preliminary Unaudited Financial Results

For the fourth quarter ended December 31, 2023, Avanos Medical, Inc. (the "Company") expects net sales in the range of $170 million to $173 million, a decrease of approximately 6.5% to 4.5% compared to the same period in 2022, with net sales for the year ended December 31, 2023 anticipated to be in the range of $670 million to $673 million.

Net sales for the fourth quarter were lower than expected due to:

• Underperformance by the Company's hyaluronic acid ("HA") pain relief injection products, primarily as a result of continued pricing pressure due to the Medicare reimbursement changes. The Company estimates that net sales for the HA product line will be slightly above $10 million for the fourth quarter of 2023, which is approximately $4 million lower than anticipated.
• Lower than anticipated sales across the Company's North America Digestive Health products, primarily due to a major distributor's ordering pattern change.
• North America Pain Management and Recovery sales, while improved, were below internal expectations.

The Company anticipates that the lower than expected net sales will negatively impact adjusted gross margin, adjusted EBITDA margin and adjusted earnings per share for the fourth quarter and the full year. The Company is currently unable to quantify the overall impact on these measures.

"Although we are disappointed with our fourth quarter sales results, we were pleased with the execution of our three- year transformation initiative throughout 2023, which we believe positions us strongly for 2025," stated Joe Woody, Avanos' chief executive officer. "We are maintaining the 2025 financial objectives that we laid out at our Investor Day in June, and I look forward to updating investors on our overall progress next Monday at the JP Morgan Healthcare Conference."

Revised Preliminary 2024 Revenue Outlook

The Company is updating its previous revenue guidance for the year ending December 31, 2024. For 2024, the Company now expects net sales in the range of $685 million to $705 million, reflecting continued HA market dynamics. The Company will provide additional information regarding its outlook for 2024 on the conference call it will host to discuss its financial results for the quarter and year ended December 31, 2023, which is currently scheduled for February 20, 2024.

The Company does not plan to release preliminary financial information on an ongoing basis. The financial information presented above is preliminary, is based on information available to management as of the date of this press release, and is subject to further changes upon completion of the Company's standard quarter and year-end closing procedures. This update does not present all necessary information for an understanding of the Company's financial condition as of the date of this press release or its results of operations for the quarter and year ended December 31, 2023. As the Company completes its quarter-end and year-end financial close processes and finalizes its financial statements for the quarter and year ended December 31, 2023, it will be required to make significant judgments in a number of areas. It is possible that  the Company may identify items that require it to make adjustments to the preliminary financial information set forth above and those changes could be material. The Company does not intend to update such financial information prior to release of its financial statement information for the quarter and year ended December 31, 2023, which is currently scheduled for February 20, 2024.

Posted In: AVNS