Avanos Medical Inc (AVNS) Reports Q3 2023 Earnings: Net Sales Dip by 0.6%
Avanos Medical Inc (NYSE:AVNS) reports Q3 2023 net sales of $171.3 million, a decrease of 0.6% from the prior year period.
The company's net loss from continuing operations for the quarter was $8.8 million, compared to net income from continuing operations of $11.0 million a year ago.
Adjusted net income from continuing operations totaled $14.0 million, compared to $11.5 million a year ago.
Free cash flow for the quarter exceeded $25 million.
On November 1, 2023, Avanos Medical Inc (NYSE:AVNS) released its third quarter 2023 financial results. The company reported a slight decrease in net sales from continuing operations, which totaled $171.3 million, a 0.6% decrease from the comparable prior year period. The net loss from continuing operations for the quarter was $8.8 million, compared to net income from continuing operations of $11.0 million a year ago.
Financial Highlights and Business Updates
Despite the decrease in net sales, Avanos Medical Inc (NYSE:AVNS) reported strong free cash flow generation in excess of $25 million. The company's adjusted net income from continuing operations totaled $14.0 million, compared to $11.5 million a year ago. The diluted loss per share from continuing operations was $0.19, compared to diluted earnings per share of $0.23 a year ago.
Avanos's CEO, Joe Woody, expressed satisfaction with the quarter's results, especially the above-market growth in the Digestive Health markets. He stated,
We believe we are poised to sustain the momentum in Digestive Health and we are also confident that our strategy for the Pain Management and Recovery business will lead to sustainable growth as we enter 2024."
During the quarter, Avanos completed the sale of substantially all of the assets primarily related to its RH business, a key component of its ongoing transformation process. The company also closed the acquisition of Diros Technology, Inc., a leader in radiofrequency ablation technology, to enhance its Pain Management and Recovery treatment options.
Operating Results and Balance Sheet
Avanos's gross margin during the third quarter of 2023 was 55.8%, compared to 58.2% in the prior year period. The decrease was primarily due to product mix, partially offset by slightly favorable currency exchange rates and manufacturing efficiencies. Selling and general expenses as a percentage of net sales was 45.9% for the third quarter of 2023, compared to 45.4% for the third quarter of 2022.
The company's total debt outstanding, net of unamortized discounts, was $264.5 million at the end of September 2023, compared to $232.5 million at the end of 2022. The cash balance at the end of September 2023 was $107.1 million, compared to $127.7 million at year-end 2022.
Outlook for 2023
For the full year, Avanos anticipates revenue between $675 million and $685 million from continuing operations, adjusted gross margins greater than 59%, and adjusted diluted earnings per share from continuing operations of between $1.05 and $1.15.
Explore the complete 8-K earnings release (here) from Avanos Medical Inc for further details.
This article first appeared on GuruFocus.
