Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report: August 9, 2023

(Date of earliest event reported)

Commission file number 001-36440

AVANOS MEDICAL, INC.

(Exact name of registrant as specified in its charter)

Delaware

46-4987888

(State or other jurisdiction of incorporation)

(I.R.S. Employer Identification No.)

5405 Windward Parkway

Suite 100 South

Alpharetta,

Georgia

30004

(Address of principal executive offices)

(Zip code)

Registrant’s telephone number, including area code: (844) 428-2667

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of exchange on which registered
Common Stock - $0.01 Par Value	AVNS	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition

Avanos Medical, Inc. (the “Company”) announced its results of operations for the three and six months ended June 30, 2023 in a press release dated August 9, 2023. A copy of the press release is furnished herewith as Exhibit 99.1.

The information contained in Item 2.02 of this Current Report, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in Item 2.02 of this Current Report or Exhibit 99.1 shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise expressly stated in such filing.

Item 7.01 Regulation FD Disclosure.

On August 9, 2023, the Company presented and discussed a slide presentation regarding its results of operations for the three and six months ended June 30, 2023. A copy of such slide presentation is furnished as Exhibit 99.2 hereto and is incorporated herein by reference.

The information in Item 7.01 of this Current Report, including Exhibit 99.2 attached hereto, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that Section. The information in Item 7.01 of this Current Report or Exhibit 99.2 shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933 or the Exchange Act, except as otherwise expressly stated in such filing.

Item 9.01 Financial Statements and Exhibits

(d)Exhibits.


Exhibit No.						Description
99.1						Press release issued by Avanos Medical, Inc. on August 9, 2023
99.2						Presentation dated August 9, 2023
104						Cover Page Interactive Data File (embedded within the inline XBRL document)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

AVANOS MEDICAL, INC.

Date:

August 9, 2023

By:

/s/ Mojirade James

Mojirade James
Senior Vice President and General Counsel


						Investor Contact: Michael Greiner
						Avanos Medical, Inc.
						470-562-2692
						Investor.Relations@Avanos.com

						Media Contact: Katrine Kubis
						Avanos Medical, Inc.

						CorporateCommunications@Avanos.com

Avanos Medical, Inc. Announces Second Quarter 2023 Results

ALPHARETTA, Ga., August 9, 2023/PRNewswire/ -- Avanos Medical, Inc. (NYSE: AVNS) today reported second quarter 2023 financial results.

“We posted solid second quarter earnings, with Digestive Health continuing to deliver above-market growth and expanded margins,” stated Joe Woody, Avanos’s chief executive officer. Woody continued, “Separately, we continue to deliver on our transformation priorities and remain highly focused on implementing our new pain franchise strategy outlined at our Investor Day.”

Second Quarter 2023 Financial Highlights

•Total net sales from continuing operations were $169.4 million, a 0.9% decrease from the comparable prior year period, while total net sales, including the discontinued Respiratory Health (“RH”) business, were $199.8 million.

•Net loss from continuing operations for the quarter was $4.3 million, compared to net income from continuing operations of $4.8 million a year ago.

•Adjusted net income from continuing operations totaled $11.2 million, compared to net income of $12.5 million a year ago.

•Diluted loss per share from continuing operations was $0.09, compared to diluted earnings per share of $0.10 a year ago.

•Adjusted diluted earnings per share from continuing operations was $0.24, compared to $0.26 a year ago.

Operational and Business Highlights

In June, we announced an agreement to divest substantially all of the assets primarily related to or used in our RH business (the “Divestiture”). The Divestiture represents a key component of our ongoing transformation process and is aimed at accelerating our effort to focus our portfolio in markets where we believe we are well-positioned to succeed.

On July 24, we closed the acquisition of Diros Technologies, Inc. (“Diros”). Based in Toronto, Canada, Diros is at the forefront of radiofrequency ablation (“RFA”) technology. The addition of Diros’ unique RF TridentTM technology is expected to further enhance Avanos’ Pain Management and Recovery treatment options and complement our premium COOLIEF* Cooled Radiofrequency product offering.

On June 28, the UK’s National Institute for Health and Care Excellence (“NICE”) recommended the use of RFA for the treatment of osteoarthritic knee pain. NICE guidelines are important because they are evidence-based and are intended to drive quality and consistency in healthcare with the goal of enhancing patient outcomes. Although NICE guidelines

are specific to the UK, they are globally recognized as useful guidance for a wide variety of therapies. We anticipate that the release of these guidelines may help drive the development of similar guidelines for knee osteoarthritis RFA in other regions of the world, which is necessary to further improve the reimbursement landscape for this clinically important chronic pain procedure.

In January, we announced a three-year transformation initiative that is focused on four key priorities: optimizing our commercial organization; transforming our product portfolio; implementing cost management initiatives to enhance operating profitability; and continuing to efficiently deploy capital while maintaining a focused and disciplined approach to M&A (the “Transformation Process”). We anticipate that by 2025, this plan will ultimately result in savings of between $45 million and $55 million compared to 2022.

Second Quarter 2023 Operating Results From Continuing Operations

For the three months ended June 30, 2023, net sales totaled $169.4 million, a decrease of 0.9% compared to the prior year period, primarily due to lower volume in the Pain Management and Recovery portfolio, primarily from lower hyaluronic acid portfolio (“HA”) sales, partially offset by higher volume in the Digestive Health portfolio. Favorable pricing was mostly offset by unfavorable foreign currency translation effects.

As a result of the Divestiture, the RH business’s operating results are reflected as discontinued operations for all periods presented. Treating the RH business as discontinued operations results in significant shared overhead costs previously allocated to the RH business that are now included in continuing operations. Included in continuing operations are costs previously allocated to the RH business of $12.0 million in each of the three months ended June 30, 2023 and 2022.

Gross margin during the second quarter of 2023 was 57.7%, compared to 59.4% in the prior year period. Adjusted gross margin was 59.9% compared to 61.9% last year. Gross profit margin decreased primarily due to product mix and unfavorable currency exchange rates, partially offset by manufacturing efficiencies.

Selling and general expenses as a percentage of net sales was 54.9% for the second quarter of 2023, compared to 48.7% for the second quarter of 2022 primarily due to non-recurring expenses associated with our ongoing Transformation Process and expenses associated with the Divestiture.

Operating loss was $2.1 million, compared to operating profit of $10.1 million in the prior year period, primarily due to overall lower sales volume along with an increase in expenses related to the Transformation Process and the Divestiture. On an adjusted basis, operating profit totaled $18.4 million, compared to operating profit of $18.5 million a year ago.

Adjusted EBITDA from continuing operations was $22.9 million in each of the three months ended June 30, 2023 and 2022.

First Six Months 2023 Operating Results From Continuing Operations

For the six months ended June 30, 2023, net sales totaled $328.7 million, a decrease of 0.5% compared to the prior year period, primarily due to lower volume in the Pain Management and Recovery portfolio (primarily lower HA sales), partially offset by continued strong demand for Digestive Health products. Favorable pricing was mostly offset by unfavorable foreign currency translation effects.

Gross margin for the six months ended June 30, 2023 was 57.6%, compared to 57.9% in the prior year period. Adjusted gross margin was 59.8% compared to 60.3% last year. Gross margin decreased primarily due to product mix partially offset by manufacturing efficiencies.

Selling and general expenses as a percentage of net sales was 55.3% for the six months ended June 30, 2023, compared to 51.3% for the prior year period, primarily due to expenses associated with our ongoing Transformation Process and the Divestiture.

Operating loss for the six months ended June 30, 2023 was $8.2 million, compared to operating profit of $6.1 million in the prior year period, primarily due to overall lower sales volume along with an increase in expenses related to the Transformation Process and the Divestiture. On an adjusted basis, operating profit totaled $29.6 million, compared to $23.0 million a year ago.

Shared overhead costs previously allocated to the RH business were $24.2 million in the six months ended June 30, 2023 compared to $25.0 million in the prior year period.

Adjusted EBITDA from continuing operations for the six months ended June 30, 2023 was $39.0 million, compared to $31.8 million in the prior year period.

Cash Flow and Balance Sheet

Cash from operations less capital expenditures, or free cash flow, for the second quarter was an outflow of $6.6 million, driven primarily by non-recurring cash expenses associated with our Transformation Process, compared to an inflow of $22.9 million a year ago. The Company’s cash balance at June 30, 2023 was $81.8 million, compared to $127.7 million at year-end 2022.

Total debt outstanding, net of unamortized discounts, was $209.5 million at June 30, 2023, compared to $232.5 million at December 31, 2022.

Discontinued Operations

Net sales from discontinued operations were $30.4 million and $62.8 million in the three and six months ended June 30, 2023, respectively, compared to $32.1 million and $70.2 million in the three and six months ended June 30, 2022, respectively. We expect a loss on the disposal of the RH business; accordingly, we recorded an impairment of $72.3 million against assets in the disposal group, which is included in “(Loss) income from discontinued operations, net of tax.”

2023 Outlook

For the second half of 2023, the Company anticipates low single-digit organic growth, adjusted gross margins greater than 59% and adjusted diluted earnings per share from continuing operations of between $1.05 and $1.15 for the year.

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 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.

•Expenses associated with European Union Medical Device Regulation (“EU MDR”) compliance.

•The amortization of intangible assets associated with prior business acquisitions.

•The tax effects of certain adjusting items.

•The benefit associated with the tax effects of the CARES Act.

•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 its 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 the Company’s 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 the Company’s 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. The conference call can be accessed live over the internet at https://avanos.investorroom.com or via telephone by dialing 877-240-5772 in the United States. A replay of the call will be available at noon ET today by calling 877-344-7529 in the United States and entering passcode 2670889. 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 technology company focused on delivering clinically superior solutions that will help patients get back to the things that matter. Headquartered in Alpharetta, Georgia, Avanos is committed to addressing some of today’s most important healthcare needs, including providing a vital lifeline for nutrition to patients from hospital to home, and reducing the use of opioids while helping patients move from surgery to recovery. Avanos develops, manufactures and markets its recognized brands globally and holds leading market positions in multiple categories across its portfolio. 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 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. 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. 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; shortage in drugs used in our Surgical Pain and Recovery products or other disruptions in our supply chain; the ongoing conflict between Russia and Ukraine; our ability to successfully execute on or achieve the expected benefits of the Transformation Process or our divestiture, acquisition or merger transactions; inflationary pressures; the effects of the recent financial conditions affecting the banking system and the potential threats to the

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 from third-party payors; a significant increase in product liability claims; the impact of investigative and legal proceedings and compliance risks; the impact of the federal legislation to reform the United States healthcare system; changes in financial markets; and changes in the competitive environment. The information contained herein 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-Q.

AVANOS MEDICAL, INC.

CONDENSED CONSOLIDATED INCOME STATEMENTS

(unaudited)

(in millions, except per share amounts)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net Sales	$	169.4	$	170.9	$	328.7	$	330.2
Cost of products sold	71.6		69.3		139.5		139.1
Gross Profit	97.8		101.6		189.2		191.1
Research and development expenses	6.8		7.6		14.3		14.9
Selling and general expenses	93.0		83.2		181.8		169.5
Other expense, net	0.1		0.7		1.3		0.6
Operating (Loss) Income	(2.1)		10.1		(8.2)		6.1
Interest income	0.5		0.2		1.0		0.2
Interest expense	(3.5)		(2.7)		(7.0)		(4.0)
(Loss) Income Before Income Taxes	(5.1)		7.6		(14.2)		2.3
Income tax benefit (provision)	0.8		(2.8)		2.1		(1.5)
(Loss) Income from Continuing Operations	(4.3)		4.8		(12.1)		0.8
(Loss) Income from discontinued operations, net of tax	(63.8)		7.7		(56.5)		17.1
Net (Loss) Income	$	(68.1)	$	12.5	$	(68.6)	$	17.9

Interest expense, net	$	3.0	$	2.5	$	6.0	$	3.8
Income tax (provision) benefit	(1.6)		5.5		(1.5)		7.4
Depreciation and amortization	11.5		11.6		23.6		22.7
EBITDA	$	(55.2)	$	32.1	$	(40.5)	$	51.8

(Loss) Earnings Per Share
Basic
Continuing operations	$	(0.09)	$	0.10	$	(0.26)	$	0.02
Discontinued operations	(1.37)		0.17		(1.21)		0.36
Basic Earnings (Loss) Per Share	$	(1.46)	$	0.27	$	(1.47)	$	0.38

Diluted
Continuing operations	$	(0.09)	$	0.10	$	(0.26)	$	0.01
Discontinued operations	$	(1.37)	0.16		(1.21)		0.36
Diluted Earnings (Loss) Per Share	$	(1.46)	$	0.26	$	(1.47)	$	0.37

Common Shares Outstanding
Basic	46.8		47.2		46.7		47.3
Diluted	46.8		47.6		46.7		47.7

AVANOS MEDICAL, INC.

Discontinued Operations Summary

(unaudited)

(in millions, except per share amounts)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net Sales	$	30.4	$	32.1	$	62.8	$	70.2
Cost of products sold	18.6		17.3		37.9		38.3
Gross Profit	11.8		14.8		24.9		31.9
Research and development expenses	0.2		0.4		0.6		0.9
Selling, general and other expenses	3.9		4.0		7.9		8.0




Pretax loss on classification as discontinued operations	72.3		—		72.3		—

(Loss) Income from discontinued operations before income taxes	(64.6)		10.4		(55.9)		23.0
Income tax benefit (provision) from discontinued operations	0.8		(2.7)		(0.6)		(5.9)
(Loss) from discontinued operations, net of tax	$	(63.8)	$	7.7	$	(56.5)	$	17.1

(Loss) Earnings Per Share
Basic	$	(1.37)	$	0.17	$	(1.21)	$	0.36
Diluted	$	(1.37)	$	0.16	$	(1.21)	$	0.36

AVANOS MEDICAL, INC.

NON-GAAP RECONCILIATIONS

(unaudited)

(in millions)


	Gross Profit
	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
As reported	$	97.8		$	101.6		$	189.2		$	191.1
Acquisition and integration-related charges	—			0.7			—			1.4
Restructuring and transformation charges	0.1			—			0.1			—

Intangibles amortization	3.6			3.5			7.2			6.6
As adjusted non-GAAP	$	101.5		$	105.8		$	196.5		$	199.1
Gross profit margin, as reported	57.7		%	59.4		%	57.6		%	57.9		%
Gross profit margin, as adjusted	59.9		%	61.9		%	59.8		%	60.3		%


	Operating (Loss) Profit
	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
As reported	$	(2.1)	$	10.1	$	(8.2)	$	6.1
Acquisition and integration-related charges	0.3		1.0		1.8		2.8
Restructuring and transformation charges(a)	9.8		—		18.7		—
Divestiture related charges	3.7		—		3.7		—
EU MDR Compliance (b)	0.9		1.7		2.0		3.2
Intangibles amortization	5.8		5.7		11.6		10.9
As adjusted non-GAAP	$	18.4	$	18.5	$	29.6	$	23.0

__________________________________________________

(a) Expenses incurred for the Transformation Process are included in “Costs of products sold,” “Research and development,” and “Selling and general expenses”.

(b) In the three months ended June 30, 2023 and 2022, EU MDR Compliance related charges are included in “Selling and general expenses”.

AVANOS MEDICAL, INC.

NON-GAAP RECONCILIATIONS

(unaudited)

(in millions except per share amounts)


	(Loss) Income Before Taxes
	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
As reported	$	(5.1)	$	7.6	$	(14.2)	$	2.3
Acquisition and integration-related charges	0.3		1.0		1.8		2.8
Restructuring and transformation charges	9.8		—		18.7		—
Divestiture related charges	3.7		—		3.7		—
EU MDR Compliance	0.9		1.7		2.0		3.2
Intangibles amortization	5.8		5.7		11.6		10.9
Loss on extinguishment of debt	—		1.1		—		1.1
As adjusted non-GAAP	$	15.4	$	17.1	$	23.6	$	20.3


	Tax Provision
	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
As reported	$	0.8		$	(2.8)		$	2.1		$	(1.5)
Tax effects of adjusting items	(5.0)			(1.8)			(8.5)			(4.0)

As adjusted non-GAAP	$	(4.2)		$	(4.6)		$	(6.4)		$	(5.5)
Effective tax rate, as reported	15.7		%	36.8		%	14.8		%	65.2		%
Effective tax rate, as adjusted	27.0		%	27.0		%	27.0		%	27.0		%


	(Loss) Income from Continuing Operations
	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
As reported	$	(4.3)	$	4.8	$	(12.1)	$	0.8
Acquisition and integration-related charges	0.3		1.0		1.8		2.8
Restructuring and transformation charges	9.8		—		18.7		—
Divestiture related charges	3.7		—		3.7		—
EU MDR Compliance	0.9		1.7		2.0		3.2
Intangibles amortization	5.8		5.7		11.6		10.9
Loss on extinguishment of debt	—		1.1		—		1.1
Tax effects of adjusting items	(5.0)		(1.8)		(8.5)		(4.0)

As adjusted non-GAAP	$	11.2	$	12.5	$	17.2	$	14.8
Diluted (loss) earnings per share, as reported	$	(0.09)	$	0.10	$	(0.26)	$	0.02
Diluted earnings per share, as adjusted	$	0.24	$	0.26	$	0.37	$	0.31

AVANOS MEDICAL, INC.

NON-GAAP RECONCILIATIONS

(unaudited)

(in millions except per share amounts)


	(Loss) Income from Discontinued Operations, net of tax
	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
As reported	$	(63.8)	$	7.7	$	(56.5)	$	17.1
Estimated loss on divestiture	72.3		—		72.3		—
Intangibles amortization	0.3		0.5		0.8		1.0
Tax effects of adjusting items	(2.9)		(0.2)		(4.0)		(0.5)
As adjusted non-GAAP	$	5.9	$	8.0	$	12.6	$	17.6
Diluted (loss) earnings per share, as reported	$	(1.37)	$	0.16	$	(1.21)	$	0.36
Diluted earnings per share, as adjusted	$	0.13	$	0.17	$	0.27	$	0.37


	Net (Loss) Income
	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
As reported	$	(68.1)	$	12.5	$	(68.6)	$	17.9
Acquisition and integration-related charges	0.3		1.0		1.8		2.8
Restructuring and transformation charges	9.8		—		18.7		—
Divestiture related charges	3.7		—		3.7		—
Estimated loss on divestiture	72.3		—		72.3		—
EU MDR Compliance	0.9		1.7		2.0		3.2
Intangibles amortization	6.1		6.2		12.4		11.9
Loss on extinguishment of debt	—		1.1		—		1.1
Tax effects of adjusting items	(7.9)		(2.0)		(12.5)		(4.5)

As adjusted non-GAAP	$	17.1	$	20.5	$	29.8	$	32.4
Diluted (loss) earnings per share, as reported	$	(1.46)	$	0.26	$	(1.47)	$	0.37
Diluted earnings per share, as adjusted	$	0.37	$	0.43	$	0.64	$	0.68

AVANOS MEDICAL, INC.

NON-GAAP RECONCILIATIONS

(unaudited)

(in millions, except per share amounts)


	EBITDA
	Three Months Ended June 30, 2023						Three Months Ended June 30, 2022
	Continuing Operations		Discontinued Operations		Total		Continuing Operations		Discontinued Operations		Total
Net (loss) income	$	(4.3)	$	(63.8)	$	(68.1)	$	4.8	$	7.7	$	12.5
Interest expense, net	3.0		—		3.0		2.5		—		2.5
Income tax (provision) benefit	(0.8)		(0.8)		(1.6)		2.8		2.7		5.5
Depreciation	4.5		0.9		5.4		4.4		1.0		5.4
Amortization	5.8		0.3		6.1		5.7		0.5		6.2
EBITDA	8.2		(63.4)		(55.2)		20.2		11.9		32.1
Acquisition and integration-related charges	0.3		—		0.3		1.0		—		1.0
Restructuring and transformation charges	9.8		—		9.8		—		—		—
Divestiture related charges	3.7		—		3.7		—		—		—
Estimated loss on divestiture	—		72.3		72.3		—		—		—
EU MDR Compliance	0.9		—		0.9		1.7		—		1.7




Adjusted EBITDA	$	22.9	$	8.9	$	31.8	$	22.9	$	11.9	$	34.8


	EBITDA
	Six Months Ended June 30, 2023						Six Months Ended June 30, 2022
	Continuing Operations		Discontinued Operations		Total		Continuing Operations		Discontinued Operations		Total
Net (loss) income	$	(12.1)	$	(56.5)	$	(68.6)	$	0.8	$	17.1	$	17.9
Interest expense, net	6.0		—		6.0		3.8		—		3.8
Income tax (provision) benefit	(2.1)		0.6		(1.5)		1.5		5.9		7.4
Depreciation	9.4		1.8		11.2		8.8		2.0		10.8
Amortization	11.6		0.8		12.4		10.9		1.0		11.9
EBITDA	12.8		(53.3)		(40.5)		25.8		26.0		51.8
Acquisition and integration-related charges	1.8		—		1.8		2.8		—		2.8
Restructuring and transformation charges	18.7		—		18.7		—		—		—
Divestiture related charges	3.7		—		3.7		—		—		—
Estimated loss on divestiture	—		72.3		72.3		—		—		—
EU MDR Compliance	2.0		—		2.0		3.2		—		3.2




Adjusted EBITDA	$	39.0	$	19.0	$	58.0	$	31.8	$	26.0	$	57.8

AVANOS MEDICAL, INC.

NON-GAAP RECONCILIATIONS

(unaudited)

(in millions except per share amounts)


	Free Cash Flow
	Three Months Ended June 30,				Three Months Ended June 30,
	2023		2022		2023		2022
Cash (used in) provided by operating activities	$	(2.6)	$	27.0	$	(9.4)	$	28.8
Capital expenditures	(4.0)		(4.1)		(8.0)		(9.1)
Free Cash Flow	$	(6.6)	$	22.9	$	(17.4)	$	19.7

2023 OUTLOOK


	Estimated Range
Diluted earnings per share (GAAP)	$	(1.21)	to	$	(0.77)
Intangibles amortization	0.37		to	0.37
Restructuring and transformation charges	0.42		to	0.35
EU MDR compliance	0.16		to	0.13
Divestiture related charges	0.16		to	0.13
Estimated loss on divestiture	1.23		to	1.01
Other	(0.08)		to	(0.07)
Adjusted diluted earnings per share (non-GAAP)	$	1.05	to	$	1.15

AVANOS MEDICAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(in millions)


	June 30, 2023		December 31, 2022
ASSETS
Current Assets
Cash and cash equivalents	$	81.8	$	127.7
Accounts receivable, net	152.3		167.9
Inventories	148.3		132.3
Prepaid and other current assets	15.8		13.9
Assets held for sale	108.7		58.0
Total Current Assets	506.9		499.8
Property, Plant and Equipment, net	122.6		118.6
Operating Lease Right-of-Use Assets	29.1		27.5
Goodwill	762.6		760.3
Other Intangible Assets, net	222.6		234.2
Deferred Tax Assets	4.4		4.6
Other Assets	18.5		17.6
Assets Held for Sale	—		124.3
TOTAL ASSETS	$	1,666.7	$	1,786.9

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Current portion of long-term debt	$	6.2	$	6.2
Current portion of operating lease liabilities	13.5		12.0
Trade accounts payable	65.4		67.9
Accrued expenses	72.7		98.9
Liabilities held for sale	2.7		0.8
Total Current Liabilities	160.5		185.8
Long-Term Debt	203.3		226.3
Operating Lease Liabilities	30.9		32.5
Deferred Tax Liabilities	21.8		25.4
Other Long-Term Liabilities	15.4		23.5
Liabilities Held for Sale	—		2.2
TOTAL LIABILITIES	431.9		495.7
Stockholders’ Equity	1,234.8		1,291.2
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,666.7	$	1,786.9

AVANOS MEDICAL, INC.

CONDENSED CONSOLIDATED CASH FLOW STATEMENTS

(unaudited)

(in millions)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Operating Activities
Net (loss) income	$	(68.1)	$	12.5	$	(68.6)	$	17.9
Depreciation and amortization	11.5		11.6		23.6		22.7
Goodwill impairment	59.1		—		59.1		—
Changes in operating assets and liabilities, net of acquisition	(13.4)		(1.2)		(32.7)		(19.3)
Deferred income taxes and other	8.3		4.1		9.2		7.5
Cash (Used in) Provided by Operating Activities	(2.6)		27.0		(9.4)		28.8
Investing Activities
Capital expenditures	(4.0)		(4.1)		(8.0)		(9.1)
Acquisition of assets and investments in businesses	(2.5)		—		(2.5)		(116.7)
Cash Used in Investing Activities	(6.5)		(4.1)		(10.5)		(125.8)
Financing Activities
Proceeds from issuance of secured debt	—		125.0		—		250.0
Secured debt repayments	(1.5)		(125.0)		(3.1)		(125.0)
Revolving credit facility proceeds	—		130.0		—		150.0
Revolving credit facility repayments	—		(130.0)		(20.0)		(150.0)
Payments of debt issuance costs	—		(2.3)		—		(2.9)
Purchase of treasury stock	(2.6)		(14.7)		(3.7)		(34.1)
Proceeds from the exercise of stock options	—		0.1		0.6		0.8
Cash (Used in) Provided by Financing Activities	(4.1)		(16.9)		(26.2)		88.8
Effect of Exchange Rate Changes on Cash and Cash Equivalents	(0.7)		(3.8)		0.2		(3.8)
Decrease in Cash and Cash Equivalents	(13.9)		2.2		(45.9)		(12.0)
Cash and Cash Equivalents - Beginning of Period	95.7		104.3		127.7		118.5
Cash and Cash Equivalents - End of Period	$	81.8	$	106.5	$	81.8	$	106.5

AVANOS MEDICAL, INC.

SELECTED BUSINESS AND PRODUCTS DATA

(unaudited)

(in millions)


	Three Months Ended June 30,							Six Months Ended June 30,
	2023		2022			Change		2023			2022			Change
Digestive Health	$	93.0	$	80.2		16.0	%	$	181.8		$	161.6		12.5	%
Pain Management and Recovery:
Surgical pain and recovery	$	34.8	$	41.2		(15.5)	%	$	69.5		$	79.9		(13.0)	%
Interventional pain	41.6		49.5			(16.0)	%	77.4			88.7			(12.7)	%
Total Pain Management and Recovery	76.4		90.7			(15.8)	%	146.9			168.6			(12.9)	%
Total Net Sales	$	169.4	$	170.9		(0.9)	%	$	328.7		$	330.2		(0.5)	%

			Total			Volume		Pricing/Mix			Currency			Other
Net sales - percentage change	QTD		(0.9)		%	(1.1)	%	0.9		%	(0.6)		%	(0.1)	%
Net sales - percentage change	YTD		(0.5)		%	(0.5)	%	1.1		%	(0.8)		%	(0.3)	%

Q2 2023 Earnings Presentation August 9th, 2023 Getting patients back to the things that matter.

Chief Executive Officer 2 Joe Woody Michael Greiner Senior Vice President, CFO & Chief Transformation Officer Business Progress Against 2023 Priorities Q2 Results & 2023 Planning Environment

3 FORWARD-LOOKING INFORMATION NON-GAAP FINANCIAL MEASURES Certain matters in this presentation, including expectations and planning assumptions, any comments about our expected performance, and any estimates, projections, or statements relating to our business plans, objectives, acquisitions and transformation initiatives, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and are based upon current plans and management’s expectations and beliefs concerning future events impacting the Company. These statements are subject to risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in such statements, including risks related to the ongoing COVID-19 pandemic, competition, market demand, cost savings and reductions, raw material, energy, and other input costs, supply chain disruptions (including availability of drugs used in our Acute Pain products), inflation, the ongoing conflict between Russia and Ukraine, our ability to successfully execute on or achieve the expected benefits of our transformation initiative, the success of acquisitions and divestitures, the effects of the recent financial conditions affecting the banking system and the potential threats to the solvency of commercial banks, economic conditions, currency exchange risks, human capital risks, cyber risks, intellectual property risks, and legislative and regulatory actions. There can be no assurance that these future events will occur as anticipated or that the Company’s results will be as estimated. Forward-looking statements speak only as of the date they were made, and we undertake no obligation to publicly update them. For a more complete listing and description of these and other factors that could cause the Company’s future results to differ materially from those expressed in any forward-looking statements, see the Company’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. This presentation includes financial measures that have not been calculated in accordance with accounting principles generally accepted in the U.S., or GAAP. The company provides these non-GAAP financial measures as supplemental information to its GAAP financial measures. Management believes that such non-GAAP financial measures enhance investors’ understanding and analysis of the Company’s performance. As such, results and outlook have been adjusted to exclude certain items for relevant time periods as indicated in the non-GAAP reconciliations to the comparable GAAP financial measures included in this presentation and posted on our website (www.avanos.com/investors). These non-GAAP financial measures should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP.

4 Reflections on Performance • Overall results exceeded our expectations • Continue to experience strong demand in our Digestive Health product portfolio • Improving supply chain environment • Remain focused on getting patients back to the things that matter as we meet customer needs

5 • Achieved net sales of $169 million. Excluding currency and the impact of products no longer sold, organic growth was favorable 2.6% • Generated $0.24 of adjusted diluted EPS and almost $23 million of adjusted EBITDA • Adjusted gross margins at 59.9% and SG&A as a percentage of revenue 45.1% Second Quarter Performance Continuing Operations

6 • Digestive Health revenue up close to 17% (constant currency sales) • Strong NeoMed execution contributed nearly 50% of total growth • Above market growth from CORTRAK guided tube placement; record quarter capital sales $80 $93 Q2 2022 Q2 2023 Strong Quarter for Digestive Health Digestive Health Sales Millions Continuing Operations

Pain portfolio remains challenged 7 • Pain Management down 11% (constant currency / normalized sales) • Surgical pain pump businesses flat • Supply challenges persist and will continue through 2023 • HA 3-shot (TriVisc) sales in line with our internal expectations and long-term strategy $86 $76 Q2 2022 Q2 2023 * Sales chart exclude portfolio rationalization impacts Pain Management & Recovery Sales * Millions Continuing Operations

Strategic & Commercial Optimization 1 Transform the Product Portfolio 2 Additional Cost Management Initiatives to Enhance Operating Profitability 3 Continued Efficient Capital Allocation Strategies to Expand Return on Invested Capital 4 DELIVERING VALUE TO ALL STAKEHOLDERS 8 Optimization Portfolio Cost Management Capital Allocation Priorities for Reimagining Our Business

9 Priorities for Reimagining Our Business • Transformation agenda remains on track • Improved Pain Management & Recovery go-to-market strategy • Capital allocation priorities toward tuck-in M&A and share repurchase

Q2 2023 Results Michael Greiner Senior Vice President, CFO & Chief Transformation Officer

11 $203 $200 Q2 2022 Q2 2023 $35 $32 Q2 2022 Q2 2023 $171 $169 Q2 2022 Q2 2023 $23 $23 Q2 2022 Q2 2023 Second Quarter Performance 17.1% 15.9% TOTAL CONTINUING OPERATIONS Sales Adj. EBITDA Sales Adj. EBITDA Millions Millions Millions Millions 13.4% 13.5%

12 Adjusted gross margin 270 bps lower compared to second quarter of 2022 • Unfavorable impact of currency and unfavorable product mix • Sequential improvement of 30 bps compared to first quarter of this year Adjusted Gross Profit and SG&A $121 $113 Q2 2022 Q2 2023 Adjusted Gross Profit Millions 59.4% margin 56.7% margin $82 $80 Q2 2022 Q2 2023 Adjusted SG&A Millions 40.6% sales 40.0% sales Total Like last year, our SG&A margin profile will improve throughout the year • SG&A spend decreased by 2% inclusive of inflation • Remain committed to leverage our operational cost structure with annualized SG&A profile less than 40%

13 Adjusted gross margin 200 bps lower compared to second quarter of 2022 • Unfavorable impact of currency and unfavorable product mix • Anticipate gross margin at approximately 60% throughout 2023 EBITDA Margin in line with 2022 $106 $102 Q2 2022 Q2 2023 Adjusted Gross Profit Millions 61.9% margin 59.9% margin $79 $76 Q2 2022 Q2 2023 Adjusted SG&A Millions 46.1% sales 45.1% sales Continuing Operations Like last year, our SG&A margin profile will improve throughout the year • Sequential improvement of 280 bps compared to first quarter of this year

Discontinued Operations Impact 14 Discontinued Operations ~$140 to $148 ~$100 to $110 $19 ~$21 (Millions) ~$40 Discontinued Operations impact in 2023 STRANDED COSTS MITIGATION IMPACT TO OUR 2023 ADJUSTED EBITDA • On a non-burdened basis, Respiratory Health is estimated to contribute approximately $40 million of adjusted EBITDA for 2023 • Stranded costs partially offset by TSA agreements with AirLife through 2024 • We estimate remaining dis-synergies post 2025 between $10 to $15 million

2023 Guidance adjusted for divestiture 15 Continuing Operations Revenue (in millions) Adj. Gross Margin SG&A % Adj. EBITDA (in millions) Adj. Diluted EPS Q1 $159 59.6% 47.9% $16 $0.13 Q2 $169 59.9% 45.1% $23 $0.24 H1 $329 59.8% 46.5% $39 $0.37 H2 $345 - $355 59.0 - 60.0% 40.5 - 41.5% $60 - $70 $0.70 - $0.80 FY $675 - $685 59.5 - 60.0% 43.0 - 44.0% $100 - $110 $1.05 - $1.15 Low single-digit organic growthSales EBITDA margin expansion ~100 bpsMargins $1.05 - $1.15 Adjusted Diluted EPS 2023 GUIDANCE

2024 Preliminary Outlook & 2025 Targets 16 Continuing Operations Mid single-digit organic growthSales EBITDA margin expansionMargins $1.40 - $1.65 Adjusted Diluted EPS Revenue (in millions) Adj. Gross Margin SG&A % Adj. EBITDA (in millions) Adj. Diluted EPS 23FY $675 - $685 59.5 – 60.0% 43 – 44% $100 - $110 $1.05 - $1.15 24FY $705 - $725 ~60% 40 – 42% $120 - $140 $1.40 - $1.65 25 Target ~750M exc. new M&A 60 – 61% 38 – 39% $155 - $170 $1.90 - $2.10 25 Target numbers as highlighted during our Investor Day in June with an Adjusted EBITDA target of 20 to 21% 2024 OUTLOOK

MSD organic growth Margin expansion +400-500 bps EBITDA margin FCF generation >$100M FCF ~60% FCF conversion Increased ROIC From 5.8% to >8% ROIC Building Value Creation into 2025 and Beyond 17

Thank You

APPENDICES Non-GAAP Reconciliations

NON-GAAP RECONCILIATIONS In mi l l ions Gross Profit Three Months Ended June 30, 2023 Three Months Ended June 30, 2022 Continuing Operations Discontinued Operations Total Continuing Operations Discontinued Operations Total As reported $ 97.8 $ 11.8 $ 109.6 $ 101.6 $ 14.8 $ 116.4 Acquisition and integration-related charges — — — 0.7 — 0.7 Restructuring and transformation charges 0.1 — 0.1 — — — Intangibles Amortization 3.6 — 3.6 3.5 — 3.5 As adjusted, non-GAAP $ 101.5 $ 11.8 $ 113.3 $ 105.8 $ 14.8 $ 120.6 Gross profit margin, as reported 57.7 % 38.8 % 54.9 % 59.4 % 46.1 % 57.3 % Gross profit margin, as adjusted 59.9 % 38.8 % 56.7 % 61.9 % 46.1 % 59.4 % Gross Profit Six Months Ended June 30, 2023 Six Months Ended June 30, 2022 Continuing Operations Discontinued Operations Total Continuing Operations Discontinued Operations Total As reported $ 189.2 $ 24.9 $ 214.1 $ 191.1 $ 31.9 $ 223.0 Acquisition and integration-related charges — — — 1.4 — 1.4 Restructuring and transformation charges 0.1 — 0.1 — — — Intangibles Amortization 7.2 — 7.2 6.6 — 6.6 As adjusted, non-GAAP $ 196.5 $ 24.9 $ 221.4 $ 199.1 $ 31.9 $ 231.0 Gross profit margin, as reported 57.6 % 39.6 % 54.7 % 57.9 % 45.4 % 55.7 % Gross profit margin, as adjusted 59.8 % 39.6 % 56.6 % 60.3 % 45.4 % 57.7 % 20

NON-GAAP RECONCILIATIONS In mi l l ions Operating (Loss) Profit Three Months Ended June 30, 2023 Three Months Ended June 30, 2022 Continuing Operations Discontinued Operations Total Continuing Operations Discontinued Operations Total As reported $ (2.1) $ 7.7 $ 5.6 $ 10.1 $ 10.4 $ 20.5 Acquisition and integration-related charges 0.3 — 0.3 1.0 — 1.0 Restructuring and transformation charges 9.8 — 9.8 — — — Divestiture related charges 3.7 — 3.7 — — — EU MDR Compliance 0.9 — 0.9 1.7 — 1.7 Intangibles Amortization 5.8 0.3 6.1 5.7 0.5 6.2 As adjusted, non-GAAP $ 18.4 $ 8.0 $ 26.4 $ 18.5 $ 10.9 $ 29.4 Operating (Loss) Profit Six Months Ended June 30, 2023 Six Months Ended June 30, 2022 Continuing Operations Discontinued Operations Total Continuing Operations Discontinued Operations Total As reported $ (8.2) $ 16.4 $ 8.2 $ 6.1 $ 23.0 $ 29.1 Acquisition and integration-related charges 1.8 — 1.8 2.8 — 2.8 Restructuring and transformation charges 18.7 — 18.7 — — — Divestiture related charges 3.7 — 3.7 — — — EU MDR Compliance 2.0 — 2.0 3.2 — 3.2 Intangibles Amortization 11.6 0.8 12.4 10.9 1.0 11.9 As adjusted, non-GAAP $ 29.6 $ 17.2 $ 46.8 $ 23.0 $ 24.0 $ 47.0 21

NON-GAAP RECONCILIATIONS In mi l l ions (Loss) Income Before Taxes Three Months Ended June 30, 2023 Three Months Ended June 30, 2022 Continuing Operations Discontinued Operations Total Continuing Operations Discontinued Operations Total As reported $ (5.1) $ (64.6) $ (69.7) $ 7.6 $ 10.4 $ 18.0 Acquisition and integration-related charges 0.3 — 0.3 1.0 — 1.0 Restructuring and transformation charges 9.8 — 9.8 — — — Divestiture related charges 3.7 — 3.7 — — — EU MDR Compliance 0.9 — 0.9 1.7 — 1.7 Intangibles Amortization 5.8 0.3 6.1 5.7 0.5 6.2 Estimated loss on divestiture — 72.3 72.3 — — — Loss on extinguishment of debt — — — 1.1 — 1.1 As adjusted, non-GAAP $ 15.4 $ 8.0 $ 23.4 $ 17.1 $ 10.9 $ 28.0 (Loss) Income Before Taxes Six Months Ended June 30, 2023 Six Months Ended June 30, 2022 Continuing Operations Discontinued Operations Total Continuing Operations Discontinued Operations Total As reported $ (14.2) $ (55.9) $ (70.1) $ 2.3 $ 23.0 $ 25.3 Acquisition and integration-related charges 1.8 — 1.8 2.8 — 2.8 Restructuring and transformation charges 18.7 — 18.7 — — — Divestiture related charges 3.7 — 3.7 — — — EU MDR Compliance 2.0 — 2.0 3.2 — 3.2 Intangibles Amortization 11.6 0.8 12.4 10.9 1.0 11.9 Estimated loss on divestiture — 72.3 72.3 — — — Loss on extinguishment of debt — — — 1.1 — 1.1 As adjusted, non-GAAP $ 23.6 $ 17.2 $ 40.8 $ 20.3 $ 24.0 $ 44.3 22

NON-GAAP RECONCILIATIONS In mi l l ions Tax Provision Six Months Ended June 30, 2023 Six Months Ended June 30, 2022 Continuing Operations Discontinued Operations Total Continuing Operations Discontinued Operations Total As reported $ 2.1 $ (0.6) $ 1.5 $ (1.5) $ (5.9) $ (7.4) Tax effects of adjusting items (8.5) (4.0) (12.5) (4.0) (0.5) (4.5) As adjusted non-GAAP $ (6.4) $ (4.6) $ (11.0) $ (5.5) $ (6.4) $ (11.9) Effective tax rate, as reported 14.8 % (1.1)% 2.1 % 65.2 % 25.7 % 29.2 % Effective tax rate, as adjusted 27.0 % 27.0 % 27.0 % 27.0 % 26.7 % 26.9 % Tax Provision Three Months Ended June 30, 2023 Three Months Ended June 30, 2022 Continuing Operations Discontinued Operations Total Continuing Operations Discontinued Operations Total As reported $ 0.8 $ 0.8 $ 1.6 $ (2.8) $ (2.7) $ (5.5) Tax effects of adjusting items (5.0) (2.9) (7.9) (1.8) (0.2) (2.0) As adjusted non-GAAP $ (4.2) $ (2.1) $ (6.3) $ (4.6) $ (2.9) $ (7.5) Effective tax rate, as reported 15.7 % 1.2 % 2.3 % 36.8 % 26.0 % 30.6 % Effective tax rate, as adjusted 27.0 % 26.3 % 26.8 % 27.0 % 26.8 % 26.9 % 23

NON-GAAP RECONCILIATIONS In mi l l ions , except per share amounts Net (Loss) Income Three Months Ended June 30, 2023 Three Months Ended June 30, 2022 Continuing Operations Discontinued Operations Total Continuing Operations Discontinued Operations Total As reported $ (4.3) $ (63.8) $ (68.1) $ 4.8 $ 7.7 $ 12.5 Acquisition and integration-related charges 0.3 — 0.3 1.0 — 1.0 Restructuring and transformation charges 9.8 — 9.8 — — — Divestiture related charges 3.7 — 3.7 — — — Estimated loss on divestiture — 72.3 72.3 — — — EU MDR Compliance 0.9 — 0.9 1.7 — 1.7 Amortization of intangibles 5.8 0.3 6.1 5.7 0.5 6.2 Loss on extinguishment of debt — — — 1.1 — 1.1 Tax effects of adjusting items (5.0) (2.9) (7.9) (1.8) (0.2) (2.0) As adjusted, non-GAAP $ 11.2 $ 5.9 $ 17.1 $ 12.5 $ 8.0 $ 20.5 Diluted loss (earnings) per share, as reported $ (0.09) $ (1.37) $ (1.46) $ 0.10 $ 0.16 $ 0.26 Diluted earnings per share, as adjusted $ 0.24 $ 0.13 $ 0.37 $ 0.26 $ 0.17 $ 0.43 24

NON-GAAP RECONCILIATIONS In mi l l ions , except per share amounts Net (Loss) Income Six Months Ended June 30, 2023 Six Months Ended June 30, 2022 Continuing Operations Discontinued Operations Total Continuing Operations Discontinued Operations Total As reported $ (12.1) $ (56.5) $ (68.6) $ 0.8 $ 17.1 $ 17.9 Acquisition and integration-related charges 1.8 — 1.8 2.8 — 2.8 Restructuring and transformation charges 18.7 — 18.7 — — — Divestiture related charges 3.7 — 3.7 — — — Estimated loss on divestiture — 72.3 72.3 — — — EU MDR Compliance 2.0 — 2.0 3.2 — 3.2 Amortization of intangibles 11.6 0.8 12.4 10.9 1.0 11.9 Loss on extinguishment of debt — — — 1.1 — 1.1 Tax effects of adjusting items (8.5) (4.0) (12.5) (4.0) (0.5) (4.5) As adjusted, non-GAAP $ 17.2 $ 12.6 $ 29.8 $ 14.8 $ 17.6 $ 32.4 Diluted loss (earnings) per share, as reported $ (0.26) $ (1.21) $ (1.47) $ 0.01 $ 0.36 $ 0.37 Diluted earnings per share, as adjusted $ 0.37 $ 0.27 $ 0.64 $ 0.31 $ 0.37 $ 0.68 25

NON-GAAP RECONCILIATIONS In mi l l ions , except per share amounts Selling, General and Administrative Expense Three Months Ended June 30, 2023 Three Months Ended June 30, 2022 Continuing Operations Discontinued Operations Total Continuing Operations Discontinued Operations Total As reported $ 93.0 $ 3.8 $ 96.8 $ 83.2 $ 3.9 $ 87.1 Acquisition and integration-related charges (0.3) — (0.3) (0.4) — (0.4) Restructuring and transformation charges (9.5) — (9.5) — — — Divestiture related charges (3.7) — (3.7) — — — EU MDR Compliance (0.9) — (0.9) (1.7) — (1.7) Intangibles Amortization (2.2) (0.3) (2.5) (2.1) (0.5) (2.6) As adjusted, non-GAAP $ 76.4 $ 3.5 $ 79.9 $ 79.0 $ 3.4 $ 82.4 SG&A as a percentage of revenue, as reported 54.9 % 12.5 % 48.4 % 48.7 % 12.1 % 42.9 % SG&A as a percentage of revenue, as adjusted 45.1 % 11.5 % 40.0 % 46.2 % 10.6 % 40.6 % Selling, General and Administrative Expense Six Months Ended June 30, 2023 Six Months Ended June 30, 2022 Continuing Operations Discontinued Operations Total Continuing Operations Discontinued Operations Total As reported $ 181.8 $ 7.7 $ 189.5 $ 169.5 $ 7.7 $ 177.2 Acquisition and integration-related charges (0.4) — (0.4) (1.4) — (1.4) Restructuring and transformation charges (18.4) — (18.4) — — — Divestiture related charges (3.7) — (3.7) — — — EU MDR Compliance (2.0) — (2.0) (3.3) — (3.3) Intangibles Amortization (4.4) (0.8) (5.2) (4.3) (1.0) (5.3) As adjusted, non-GAAP $ 152.9 $ 6.9 $ 159.8 $ 160.5 $ 6.7 $ 167.2 SG&A as a percentage of revenue, as reported 55.3 % 12.3 % 48.4 % 51.3 % 11.0 % 44.3 % SG&A as a percentage of revenue, as adjusted 46.5 % 11.0 % 40.8 % 48.6 % 9.6 % 41.8 % 26

NON-GAAP RECONCILIATIONS In mi l l ions , except per share amounts EBITDA Three Months Ended June 30, 2023 Three Months Ended June 30, 2022 Continuing Operations Discontinued Operations Total Continuing Operations Discontinued Operations Total Net (loss) income $ (4.3) $ (63.8) $ (68.1) $ 4.8 $ 7.7 $ 12.5 Interest expense, net 3.0 — 3.0 2.5 — 2.5 Income tax (provision) benefit (0.8) (0.8) (1.6) 2.8 2.7 5.5 Depreciation 4.5 0.9 5.4 4.4 1.0 5.4 Amortization 5.8 0.3 6.1 5.7 0.5 6.2 EBITDA 8.2 (63.4) (55.2) 20.2 11.9 32.1 Acquisition and integration-related charges 0.3 — 0.3 1.0 — 1.0 Restructuring and transformation charges 9.8 — 9.8 — — — Divestiture related charges 3.7 — 3.7 — — — Estimated loss on divestiture — 72.3 72.3 — — — EU MDR Compliance 0.9 — 0.9 1.7 — 1.7 Adjusted EBITDA $ 22.9 $ 8.9 $ 31.8 $ 22.9 $ 11.9 $ 34.8 27

NON-GAAP RECONCILIATIONS In mi l l ions , except per share amounts EBITDA Six Months Ended June 30, 2023 Six Months Ended June 30, 2022 Continuing Operations Discontinued Operations Total Continuing Operations Discontinued Operations Total Net (loss) income $ (12.1) $ (56.5) $ (68.6) $ 0.8 $ 17.1 $ 17.9 Interest expense, net 6.0 — 6.0 3.8 — 3.8 Income tax (provision) benefit (2.1) 0.6 (1.5) 1.5 5.9 7.4 Depreciation 9.4 1.8 11.2 8.8 2.0 10.8 Amortization 11.6 0.8 12.4 10.9 1.0 11.9 EBITDA 12.8 (53.3) (40.5) 25.8 26.0 51.8 Acquisition and integration-related charges 1.8 — 1.8 2.8 — 2.8 Restructuring and transformation charges 18.7 — 18.7 — — — Divestiture related charges 3.7 — 3.7 — — — Estimated loss on divestiture — 72.3 72.3 — — — EU MDR Compliance 2.0 — 2.0 3.2 — 3.2 Adjusted EBITDA $ 39.0 $ 19.0 $ 58.0 $ 31.8 $ 26.0 $ 57.8 28

NON-GAAP RECONCILIATIONS In mi l l ions , except per share amounts Free Cash Flow Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Cash provided by (used in) operating activities $ (2.6) $ 27.0 $ (9.4) $ 28.8 Capital expenditures (4.0) (4.1) (8.0) (9.1) Free Cash Flow $ (6.6) $ 22.9 $ (17.4) $ 19.7 2023 Outlook Estimated Range Diluted earnings per share (GAAP) $ (1.21) to $ (0.77) Intangibles amortization 0.37 to 0.37 Restructuring and transformation 0.42 to 0.35 EU Medical Device Regulation 0.16 to 0.13 Divestiture related charges 0.16 to 0.13 Estimated loss on divestiture 1.23 to 1.01 Other (0.08) to (0.07) Adjusted diluted earnings per share (non-GAAP) $ 1.05 to $ 1.15 Continuing Operations 29

Cover Page Cover Page	Aug. 09, 2023
Cover [Abstract]
Document Type	8-K
Document Period End Date	Aug. 09, 2023
Entity File Number	001-36440
Entity Registrant Name	AVANOS MEDICAL, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	46-4987888
Entity Address, Address Line One	5405 Windward Parkway
Entity Address, Address Line Two	Suite 100 South
Entity Address, City or Town	Alpharetta,
Entity Address, State or Province	GA
Entity Address, Postal Zip Code	30004
City Area Code	844
Local Phone Number	428-2667
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock - $0.01 Par Value
Trading Symbol	AVNS
Security Exchange Name	NYSE
Entity Emerging Growth Company	false
Entity Central Index Key	0001606498
Amendment Flag	false