The following is a summary of the Avanos Medical, Inc. (AVNS) Q4 2023 Earnings Call Transcript:
Financial Performance:
Avanos Medical reported Q4 net sales of $173.3 million and full-year sales of $673 million.
The company's gross margin was 58.6% for the quarter and 59.1% for the full year.
SG&A expenses represented 38.9% of revenue for Q4.
Full-year, adjusted EBITDA was $99 million, representing an improvement to 14.7% compared to 13.3% in 2022.
Earnings per share were $0.36 for Q4 and $1.03 for the year.
As of year-end, Avanos had $88 million cash on hand and $168 million of debt outstanding.
The company repurchased $15 million worth of shares in the second half of 2023.
Business Progress:
The company successfully reduced backorders to less than $2 million by the end of 2023.
Avanos Medical is progressing with its transformation priorities, including strategic and commercial optimization, portfolio transformation, operational profitability enhancement, and ROIC improvement.
Future growth is anticipated from the digestive health portfolio, with expectations of mid to high single-digit organic growth.
The company plans to focus on digestion health and pain management, business process efficiency, cost management, and capital allocation for investment return in 2024.
Revenue for 2024 is projected to be between $685 million and $705 million, with an organic revenue goal of $750 million by 2025. The company aims for a gross margin between 59.5% and 60.5% and an EPS between $1.30 and $1.45 for 2024.
Avanos Medical aims to reduce SG&A expenses to between 41% and 42% of revenue in 2024 and expects to generate free cash flow of about $100 million in 2025.
The company expects steady mid-single-digit organic growth for 2024 and 2025.
More details: Avanos Medical IR
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