Avanos Medical, Inc. Announces Fourth Quarter and Full-Year 2025 Results

• Exceeded full-year revenue and achieved the top end of full-year earnings-per-share guidance
• Delivered full-year organic growth of 6% in strategic segments
• Expanded transformation initiatives expected to deliver $15 to $20 million of incremental annualized savings by the end of 2026

ALPHARETTA, Ga., Feb. 24, 2026 /PRNewswire/ -- Avanos Medical, Inc. (NYSE:AVNS) today reported fourth quarter and full-year 2025 results.

"I'm very pleased with our fourth quarter and full-year results, which demonstrate meaningful progress on our strategic priorities," said David Pacitti, Avanos' chief executive officer. Pacitti continued, "Our organic growth remains healthy and positions us well for 2026. Our tariff mitigation efforts are on track, and we're beginning to see the impact of our cost management initiatives. I'm proud of our team's focus and commitment."

Fourth Quarter 2025 Highlights

• Total fourth quarter net sales were $180.9 million, a 0.7% increase from the prior year period.
• Operating income in the quarter was $2.5 million compared to operating loss of $418.5 million in the prior year period. On an adjusted basis, operating income was $22.6 million compared to $23.9 million a year ago.
• Net loss for the quarter was $1.3 million, compared to net loss of $397.0 million in the prior year period. On an adjusted basis, fourth quarter net income was $13.4 million compared to $20.0 million in the prior year.
• Fourth quarter diluted loss per share was $0.03 compared to diluted loss per share of $8.63 a year ago. On an adjusted basis, fourth quarter diluted earnings per share was $0.29 compared to $0.43 in the prior year.
• Adjusted EBITDA for the quarter was $28.0 million compared to $28.6 million in the prior year period.
• Fourth quarter free cash flow was $21.3 million compared to $53.1 million in the fourth quarter of last year.

Specialty Nutrition Systems Segment

• The Specialty Nutrition Systems ("SNS") segment delivered above-market results in the fourth quarter of 2025, achieving net sales of $115.1 million, an increase of 8.7% compared to the prior year period.
• Operating income in the SNS segment for the fourth quarter of 2025 was $20.5 million, or 17.8% of SNS net sales, a decrease of $4.5 million.

Pain Management and Recovery Segment

• Pain Management and Recovery ("PM&R") segment net sales for the fourth quarter of 2025 was $61.6 million, an increase of 1.3% compared to the prior year period.
• Operating income in the PM&R segment for the fourth quarter of 2025 was $5.2 million compared to $3.9 million last year.

Full-Year 2025 Highlights

• Net sales increased 1.9% to $701.2 million in 2025, compared to $687.8 million in 2024.
• Operating loss in 2025 was $61.6 million compared to operating loss of $396.2 million in the prior year. On an adjusted basis, operating profit was $67.1 million compared to $87.3 million in 2024.
• Net loss in 2025 was $72.9 million, compared to net loss of $386.3 million in the prior year.
• For the full-year, adjusted EBITDA totaled $86.8 million, compared to $107.6 million in the prior year.
• 2025 diluted loss per share was $1.57 compared to diluted loss per share of $8.40 in the prior year. On an adjusted basis, diluted earnings per share was $0.94 compared to $1.35 in 2024.
• 2025 year-to-date free cash flow was $43.1 million compared to $82.9 million in 2024.
• As of December 31, 2025, our net debt was $10.7 million compared to $27.0 million in the prior year.

Specialty Nutrition Systems Segment

• The SNS segment delivered above-market results in 2025, achieving net sales of $432.9 million, an increase of 9.2% compared to 2024.
• Operating income in the SNS segment in 2025 was $82.6 million, or 19% of SNS net sales, an increase of $1.8 million compared to 2024.

Pain Management and Recovery Segment

• PM&R segment net sales for 2025 was $237.8 million, an increase of 1.5% compared to 2024.
• Operating income in the PM&R segment for 2025 was $9.2 million compared to $2.7 million in 2024.

Non-Cash Goodwill Impairment

During the second quarter, due to downward pressure on our market capitalization, we assessed goodwill for impairment and recorded an impairment charge of $77.0 million associated with the PM&R segment.

Cash Flow and Balance Sheet

Cash from operations less capital expenditures, or free cash flow, for the fourth quarter of 2025 was $21.3 million, compared to $53.1 million a year ago. For 2025, free cash flow was $43.1 million, compared to $82.9 million in the prior year.

At year-end 2025, the Company's cash balance was $89.8 million compared to $107.7 million at year-end 2024. Total debt at the end of the fourth quarter totaled $100.5 million, consisting of borrowings on the Company's term loan facility.

Sale of HA Product Line

On July 31, 2025, we announced the divestiture of our HA product line to Channel-Markers Medical, LLC, a privately held company. This transaction aligns with our ongoing transformation, which is focused on advancing our strategic SNS and PM&R segments.

2026 Outlook

We expect 2026 net sales to be between $700 million and $720 million, and adjusted diluted earnings per share are expected to be between $0.90 and $1.10.

Non-GAAP Financial Measures

This press release and the accompanying tables include the following financial measures that have not been calculated in accordance with accounting principles generally accepted in the U.S., or GAAP, and are therefore referred to as non-GAAP financial measures:

• Adjusted net income
• Adjusted diluted earnings per share
• Adjusted gross and operating profit
• Adjusted effective tax rate
• Adjusted selling, general and administrative expenses
• Adjusted EBITDA
• Free cash flow

These non-GAAP financial measures exclude the following items, as applicable, for the relevant time periods as indicated in the accompanying non-GAAP reconciliations to the comparable GAAP financial measures:

• Certain acquisition and integration charges related to acquisitions;
• Expenses associated with restructuring and transformation activities, including the divestiture of the Company's respiratory health business;
• Expenses associated with European Union Medical Regulation ("EU MDR") compliance;
• The amortization of intangible assets associated with business acquisitions;
• Impairments of intangibles or goodwill;
• The amortization of intangible assets associated with prior business acquisitions.
• The tax effects of certain adjusting items; and
• The positive or negative effect of changes in currency exchange rates during the year.

The Company provides these non-GAAP financial measures as supplemental information to our GAAP financial measures. Management and the Company's Board of Directors use net sales on a constant currency basis, adjusted net income, adjusted diluted earnings per share, adjusted operating profit, adjusted EBITDA, and free cash flow to (a) evaluate the Company's historical and prospective financial performance and its performance relative to its competitors, (b) allocate resources and (c) measure the operational performance of the Company's business units and their managers. Management also believes that the use of an adjusted effective tax rate provides improved insight into the tax effects of the Company's ongoing business operations.

Additionally, the Compensation Committee of the Company's Board of Directors will use certain of the non-GAAP financial measures when setting and assessing achievement of incentive compensation goals. These goals are based, in part, on the Company's net sales on a constant currency basis and adjusted EBITDA, which will be determined by excluding certain items that are used in calculating these non-GAAP financial measures.

Our competitors may define these non-GAAP financial measures differently, and as a result, our measure of these non-GAAP financial measures may not be directly comparable to those of other companies. Items excluded from these non-GAAP financial measures are significant components in understanding and assessing financial performance. These non-GAAP financial measures are supplemental measures of operating performance that do not represent, and should not be considered in isolation or as an alternative to, or substitute for, the financial statement data presented in our consolidated financial statements as indicators of financial performance. These non-GAAP financial measures have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analysis of our results as reported under GAAP. We compensate for these limitations by relying primarily on our GAAP results and using these non-GAAP financial measures as supplemental information.

Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the attached financial tables.

Conference Call Webcast

Avanos Medical, Inc. will host a conference call today at 9 a.m. ET. To instantly join the conference by phone, use the following link to register close to the start time: https://emportal.ink/46QTVgQ. After registering, the system will call you and automatically connect you to the conference call. Alternatively, you may join the call by dialing 1-646-357-8785 or 1-800-836-8184 in the United States. A simultaneous webcast of the call and presentation will be accessible via the Investors section of the Avanos Medical website, https://avanos.investorroom.com. A replay of the call will be available at noon ET today by calling 1-646-517-4150 or 1-888-660-6345 in the United States and entering passcode 71930#. A webcast of the call will also be archived in the Investors section on the Avanos website.

About Avanos Medical, Inc.

Avanos Medical (NYSE:AVNS) is a medical device company focused on delivering clinically superior breakthrough solutions that will help patients get back to the things that matter. Headquartered in Alpharetta, Georgia, Avanos is committed to creating the next generation of innovative healthcare solutions which will address our most important healthcare needs, such as reducing the use of opioids while helping patients move from surgery to recovery. Avanos develops, manufactures and markets its recognized brands in more than 90 countries. For more information, visit www.avanos.com and follow Avanos Medical on Twitter (@AvanosMedical), LinkedIn and Facebook.

Forward-Looking Statements

This press release contains information that includes or is based on "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that do not relate solely to historical or current facts, and can generally be identified by the use of words such as "may", "believe", "will", "expect", "project", "estimate", "anticipate", "plan", or "continue" and similar expressions, among others. Forward-looking statements are based on the current plans and expectations of management and are subject to various risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in such statements. Such factors include, but are not limited to: weakening of economic conditions that could adversely affect the level of demand for our products; pricing pressures generally, including cost-containment measures that could adversely affect the price of or demand for our products; shortages in drugs used in our Surgical Pain and Recovery products or other disruptions in our supply chain; the ongoing conflicts between Russia and Ukraine and in the Middle East; the impact of tariffs imposed to date; new or increased tariffs or other trade restrictions; our ability to successfully execute on or achieve the expected benefits of the transformation initiative or our divestiture, acquisition or merger transactions; inflationary pressures; rising interest rates; financial conditions affecting the banking system and the potential threats to solvency of commercial banks; changes in foreign exchange markets; legislative and regulatory actions; unanticipated issues arising in connection with clinical studies and otherwise that affect U.S. Food and Drug Administration approval of new products; changes in reimbursement levels or reimbursement coverage from third-party payors; product liability claims; the impact of investigative and legal proceedings and compliance risks; the impact of the federal legislation to reform the U.S. healthcare system; changes in financial markets; and changes in the competitive environment. The information contained in this press release speaks only as of the date of this release, and we undertake no obligation to update forward-looking statements, except as may be required by the securities laws. Additional information concerning these and other factors that may impact future results is contained in our filings with the U.S. Securities and Exchange Commission, including our most recent Form 10-K and Quarterly Reports on Form 10-Q.