The following is a summary of the Avanos Medical Inc. (AVNS) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Avanos reported Q3 revenue of approximately $170 million from continuing operations.

• Adjusted diluted earnings per share were $0.36, and adjusted EBITDA from continuing operations was about $31 million, nearly 18% of adjusted EBITDA margin.

• The company anticipates Q4 revenue in the range of $175 million to $180 million, with an adjusted gross margin of approximately 59% and adjusted diluted earnings per share between $0.38 and $0.43.

Business Progress:

• The company successfully completed the conveyance of 2 respiratory health plans to AirLife and continued efforts to rightsize cost structure enhancing operating profitability.

• Avanos is focused on its transformation plan involving portfolio optimization and commercial operations refocusing.

• Notable product performance includes strong quarters from the Digestive Health and Game Ready portfolios, as well as the integration of Diros acquisition.

Opportunities:

• Avanos is capitalizing on strong demand for ENFit conversions in North America and expects this to continue supporting above-market growth for its Digestive Health portfolio.

• The company is pursuing strategic M&A opportunities aligned with its return criteria and is considering opportunistic share repurchases.

Risks:

• Experienced setbacks in the surgical pain portfolio, particularly with the ON-Q product line due to supplier constraints and execution issues affecting performance.

• Anticipates slight headwinds into Q4 due to transient challenges affecting third-quarter performance.

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