Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

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

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 (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Emerging growth company

☐

Smaller reporting company

☐

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

As of October 23, 2024, there were 45,956,997 shares of the registrant’s common stock outstanding.

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PART I – FINANCIAL INFORMATION

Item 1. Financial Statements			4

Unaudited Condensed Consolidated Income Statements for the Three and Nine Months Ended September 30, 2024 and 2023			4

Unaudited Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended Septe mber 30, 2024 and 2023			5

Unaudited Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023			6

Unaudited Condensed Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended September 30, 2024 and 2023			7

Unaudited Condensed Consolidated Cash Flow Statements for the N ine Months Ended September 30, 2024 and 2023			8

Notes to the Unaudited Condensed Consolidated Financial Statements			9

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			23

Item 3. Quantitative and Qualitative Disclosures About Market Risk			29

Item 4. Controls and Procedures			29

PART II – OTHER INFORMATION			30

Item 1. Legal Proceedings			30
Item 1A. Risk Factors			30
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			31
Item 3. Defaults Upon Senior Securities			31
Item 4. Mine Safety Disclosures			31
Item 5. Other Information			31
Item 6. Exhibits			32
Signatures			33

Information Concerning Forward-Looking Statements

This Quarterly Report on Form 10-Q (this “Form 10-Q”) contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are included throughout this Form 10-Q, including in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” 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,” “intend,” “predict,” “potential,” “project,” “estimate,” “anticipate,” “plan,” or “continue” and similar expressions, among others. The matters discussed in these forward-looking statements are based on the current plans and expectations of our management and are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected, anticipated or implied in the forward-looking statements. These factors include, but are not limited to:

•general economic conditions, particularly in the United States;

•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;

•fluctuations in global equity and fixed-income markets;

•our ability to successfully execute on or achieve the expected benefits of our restructuring initiative;

•supply chain issues and inflationary pressures;

•a resurgence of the ongoing COVID-19 pandemic;

•the competitive environment;

•the loss of current customers or the inability to obtain new customers;

•cybersecurity threats, including breaches of or cyberattacks on our information systems;

•the ongoing regional conflicts between Russia and Ukraine and in the Middle East;

•concentration of our manufacturing operations in Mexico;

•financial conditions affecting the banking system and the potential threats to the solvency of commercial banks

•litigation and enforcement actions;

•disruption in the supply of raw materials or the distribution of finished goods;

•price fluctuations in key commodities;

•fluctuations in currency exchange rates;

•changes in governmental regulations that are applicable to our business;

•our ability to realize the intended benefits of our restructuring initiatives or our divestiture, acquisition or merger transactions;

•changes in asset valuations, including write-downs of assets such as inventory, accounts receivable or other assets for impairment or other reasons; and

•any other matters described in Item 1A - “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023 (the “Form 10-K”) and Part II, Item 1A - “Risk Factors” in this Form 10-Q.

You are cautioned not to unduly rely on such forward-looking statements when evaluating the information in this Form 10-Q. Where, in any forward-looking statement, an expectation or belief as to future results or events is expressed, such expectation or belief is based on the current plans and expectations of our management and expressed in good faith, and is believed to have a reasonable basis. There can be no assurance that any such expectation or belief will be achieved or accomplished.

Any forward-looking statement made in this Form 10-Q speaks only as of the date of this report. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by applicable securities laws.


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PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

AVANOS MEDICAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED INCOME STATEMENTS

(in millions, except per share amounts)

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Net Sales	$	170.4	$	171.3	$	508.2	$	500.0
Cost of products sold	77.5		75.8		224.9		215.3
Gross Profit	92.9		95.5		283.3		284.7
Research and development	7.2		6.1		20.5		20.4
Selling and general expenses	74.3		78.7		238.8		260.5
Other (income) expense, net	(0.6)		9.5		1.7		10.8
Operating Income (Loss)	12.0		1.2		22.3		(7.0)
Interest income	0.7		0.9		4.3		1.9
Interest expense	(3.2)		(4.7)		(9.4)		(11.7)
Income (Loss) Before Income Taxes	9.5		(2.6)		17.2		(16.8)
Income tax provision	(3.6)		(6.2)		(6.5)		(4.1)
Income (Loss) from Continuing Operations	5.9		(8.8)		10.7		(20.9)
(Loss) Income from discontinued operations, net of tax	(1.6)		5.1		(5.5)		(51.4)
Net Income (Loss)	$	4.3	$	(3.7)	$	5.2	$	(72.3)

Basic Earnings (Loss) Per Share
Continuing operations	$	0.13	$	(0.19)	$	0.23	$	(0.45)
Discontinued operations	(0.03)		0.11		(0.12)		(1.10)
Basic Earnings (Loss) Per Share	$	0.10	$	(0.08)	$	0.11	$	(1.55)

Diluted Earnings (Loss) Per Share
Continuing operations	$	0.12	$	(0.19)	$	0.23	$	(0.45)
Discontinued operations	(0.03)		0.11		(0.12)		(1.10)
Diluted Earnings (Loss) Per Share	$	0.09	$	(0.08)	$	0.11	$	(1.55)

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.


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AVANOS MEDICAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in millions)

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Net Income (Loss)	$	4.3	$	(3.7)	$	5.2	$	(72.3)
Other Comprehensive Income (Loss), Net of Tax
Unrealized currency translation adjustments	0.3		(4.6)		(8.0)		2.8
Defined benefit plans	0.1		—		(0.1)		—
Cash flow hedges	0.2		—		(1.8)		—
Total Other Comprehensive Income (Loss), Net of Tax	0.6		(4.6)		(9.9)		2.8
Comprehensive Income (Loss)	$	4.9	$	(8.3)	$	(4.7)	$	(69.5)

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.


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AVANOS MEDICAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except share data)

(Unaudited)


	September 30, 2024		December 31, 2023
ASSETS
Current Assets
Cash and cash equivalents	$	89.0	$	87.7
Accounts receivable, net of allowances	131.9		142.8
Inventories	161.9		163.2
Prepaid and other current assets	15.9		28.8
Assets held for sale	73.9		64.5
Total Current Assets	472.6		487.0
Property, Plant and Equipment, net	109.5		117.2
Operating Lease Right-of-Use Assets	26.5		26.8
Goodwill	795.1		796.1
Other Intangible Assets, net	220.1		239.5
Deferred Tax Assets	6.6		6.5
Other Assets	25.8		19.3
TOTAL ASSETS	$	1,656.2	$	1,692.4
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities
Current portion of long-term debt	$	9.4	$	8.6
Current portion of operating lease liabilities	13.7		12.8
Trade accounts payable	54.2		56.3
Accrued expenses	82.7		93.2
Liabilities held for sale	52.9		63.7
Total Current Liabilities	212.9		234.6
Long-Term Debt	152.6		159.4
Operating Lease Liabilities	26.5		28.3
Deferred Tax Liabilities	23.9		23.8
Other Long-Term Liabilities	10.6		10.0
Total Liabilities	426.5		456.1

Commitments and Contingencies

Stockholders’ Equity
Preferred stock - $0.01 par value - authorized 20,000,000 shares, none issued	—		—
Common stock - $0.01 par value - authorized 300,000,000 shares, 45,954,931 outstanding as of September 30, 2024 and 46,174,337 outstanding as of December 31, 2023	0.5		0.5
Additional paid-in capital	1,674.7		1,663.6
Accumulated deficit	(309.7)		(314.9)
Treasury stock	(98.9)		(85.9)
Accumulated other comprehensive loss	(36.9)		(27.0)
Total Stockholders’ Equity	1,229.7		1,236.3
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,656.2	$	1,692.4

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.


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AVANOS MEDICAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

(in millions)

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Common Stock	$	0.5	$	0.5	$	0.5	$	0.5
Additional Paid-in Capital, beginning of period	1,671.5		1,654.9		1,663.6		1,646.4
Exercise or redemption of share-based awards	0.6		0.9		1.1		1.5
Stock-based compensation expense	2.6		3.9		10.0		11.8
Additional Paid-in Capital, end of period	1,674.7		1,659.7		1,674.7		1,659.7
Accumulated Deficit, beginning of period	(314.0)		(321.7)		(314.9)		(253.1)
Net income (loss)	4.3		(3.7)		5.2		(72.3)
Accumulated Deficit, end of period	(309.7)		(325.4)		(309.7)		(325.4)
Treasury Stock, beginning of period	(98.5)		(70.5)		(85.9)		(66.8)
Purchases of treasury stock	(0.4)		(9.2)		(13.0)		(12.9)
Treasury Stock, end of period	(98.9)		(79.7)		(98.9)		(79.7)
Accumulated Other Comprehensive Loss, beginning of period	(37.5)		(28.4)		(27.0)		(35.8)
Other comprehensive income (loss), net of tax	0.6		(4.6)		(9.9)		2.8
Accumulated Other Comprehensive Loss, end of period	(36.9)		(33.0)		(36.9)		(33.0)
Total Stockholders’ Equity, end of period	$	1,229.7	$	1,222.1	$	1,229.7	$	1,222.1

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.


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AVANOS MEDICAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED CASH FLOW STATEMENTS

(in millions)

(Unaudited)


	Nine Months Ended September 30,
	2024		2023
Operating Activities
Net income (loss)	$	5.2	$	(72.3)
Depreciation and amortization	34.4		34.6
Stock-based compensation expense	10.0		11.8
Goodwill impairment	—		59.1
Net loss on asset dispositions and impairments	0.4		1.1
Changes in operating assets and liabilities, net of acquisition:
Accounts receivable	(6.9)		30.0
Inventories	(5.9)		(6.6)
Prepaid expenses and other assets	7.7		0.2
Accounts payable	(1.2)		(16.0)
Accrued expenses	(3.7)		(19.7)
Deferred income taxes and other	2.8		(2.5)
Cash Provided by Operating Activities	42.8		19.7
Investing Activities
Capital expenditures	(13.0)		(11.9)
Proceeds from RH Divestiture post-closing settlement	2.1		—
Acquisition of assets and investments in businesses	—		(47.5)
Investment in Note Receivable	(9.0)		—
Cash Used in Investing Activities	(19.9)		(59.4)
Financing Activities

Secured debt repayments	(6.3)		(3.1)
Revolving credit facility proceeds	20.0		55.0
Revolving credit facility repayments	(20.0)		(20.0)
Purchases of treasury stock	(12.7)		(12.9)

Proceeds from the exercise of stock options	1.1		1.5
Payment of contingent consideration liabilities	(3.8)		—
Cash (Used in) Provided by Financing Activities	(21.7)		20.5
Effect of Exchange Rate Changes on Cash and Cash Equivalents	0.1		(1.4)
Increase (Decrease) in Cash and Cash Equivalents	1.3		(20.6)
Cash and Cash Equivalents - Beginning of Period	87.7		127.7
Cash and Cash Equivalents - End of Period	$	89.0	$	107.1

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.


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AVANOS MEDICAL, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Accounting Policies

Background and Basis of Presentation

Avanos Medical, Inc. is a medical technology company focused on delivering clinically superior medical device solutions that will help patients get back to the things that matter. Headquartered in Alpharetta, Georgia, we are 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. We develop, manufacture and market our recognized brands globally and hold leading market positions in multiple categories across our portfolio. References herein to “Avanos,” “the Company,” “we,” “our” and “us” refer to Avanos Medical, Inc. and its consolidated subsidiaries.

Interim Financial Statements

We prepared the accompanying unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and the instructions to the Quarterly Report on Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements, and the condensed consolidated financial statements in this Form 10-Q should be read in conjunction with the Form 10-K. Our unaudited interim condensed consolidated financial statements contain all necessary material adjustments, which are of a normal and recurring nature, to fairly state our financial condition, results of operations and cash flows for the periods presented.

Use of Estimates

Preparation of our condensed consolidated financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses during the reporting periods. Estimates are used in accounting for, among other things, certain amounts included in discontinued operations, certain amounts included in assets and liabilities held for sale, distributor rebate accruals, future cash flows associated with impairment testing for goodwill and long-lived assets, loss contingencies, and deferred tax assets and potential income tax assessments. Actual results could differ from these estimates, and the effect of any change could be material to our financial statements. Changes in these estimates are recorded when known.

Goodwill

We test goodwill for impairment annually or more frequently whenever events or circumstances more likely than not indicate that the fair value of the reporting unit may be below its carrying value. We operate as a single reportable operating segment with one reporting unit. The fair value of our reporting unit is estimated using a combination of income (discounted cash flow analysis) and market approaches. The income approach is dependent upon several assumptions regarding future periods such as sales growth and a terminal growth rate. A weighted average cost of capital (“WACC”) was used to discount future estimated cash flows to their present values. The WACC was based on externally observable data considering market participants’ cost of equity and debt, optimal capital structure and risk factors specific to us. The market approach estimates the value of our company using a market capitalization methodology.

We determined that the fair value of our reporting unit exceeded the net carrying amount in our most recent goodwill impairment test on July 1, 2024. However, there can be no assurance that the assumptions and estimates made for purposes of the annual goodwill impairment test will prove to be accurate. Volatility in the equity and debt markets, or increases in interest rates, could result in a higher discount rate. Changes in sales volumes, selling prices and costs of goods sold, and increases in interest rates could cause changes in our forecasted cash flows. Unfavorable changes in any of the factors described above, as well as a decline in our stock price, could result in a goodwill impairment charge in the future.

Hedging and Derivatives

All derivative instruments are recorded as assets or liabilities on the balance sheet at fair value. Changes in the fair value of

derivatives are either recorded in the income statement or other comprehensive income, as appropriate. The effective portion of

the gain or loss on derivatives designated as cash flow hedges is included in other comprehensive income in the period that

changes in fair value occur, and is reclassified to income in the same period that the hedged item affects income. Our policies allow the use of derivatives for risk management purposes and prohibit their use for speculation. Our policies also prohibit the use of any leveraged derivative instrument. Consistent with our policies, foreign currency derivative instruments are entered into with major financial institutions. At inception, we formally designate certain derivatives as cash flow hedges and establish how the effectiveness of these hedges will be assessed and measured. This process links the derivatives to the transactions they are hedging. See Note 11, “Derivative Financial Instruments,” for disclosures about derivative instruments and hedging activities.


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Recently Adopted Accounting Pronouncements

Effective January 1, 2023, we adopted ASU No. 2021-08, Business Combinations: Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This ASU pertains to acquired revenue contracts with customers in a business combination and addresses diversity in practice and inconsistency related to recognition of an acquired contract liability and payment terms and their effect on subsequent revenue recognized by the acquirer. Adoption of this ASU did not have a material effect on our financial position, results of operations or cash flows.

Recently Issued Accounting Pronouncements

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes: Improvement to Income Tax Disclosures. This ASU pertains to disaggregation of income tax disclosures and enhances annual income tax disclosures to address investor requests for more information about the tax risks and opportunities present in an entity’s worldwide operations. The two primary enhancements disaggregate existing income tax disclosures related to the effective tax rate reconciliation and income taxes paid, and requires entities to disclose a tabular reconciliation of expected tax and reported tax on income from continuing operations using both percentages and amounts, broken out into specific categories with certain reconciling items at or above 5% of the expected tax further broken out by nature and/or jurisdiction. Additionally, this ASU requires disclosure around income taxes paid (net of refunds received) broken out between federal, state, local and foreign, and income taxes paid (net of refunds received) to an individual jurisdiction when greater than 5% of total income taxes paid. This ASU will be effective for annual periods beginning after December 15, 2024, with early adoption permitted. Adoption of this ASU is not expected to have a material effect on our financial position, results of operations or cash flows.

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting: Improvements to Reportable Segment Disclosures. This ASU enhances segment reporting under Topic 280 by expanding the breadth and frequency of segment disclosures, and aims to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. This ASU will be effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. Adoption of this ASU will require us to expand our current disclosures around significant expenses and disclose an aggregate amount and composition of other segment items related to our single operating segment. On an annual basis, this ASU will require us to disclose the Chief Operating Decision Maker’s (CODM) title and position, as well as how the CODM uses each reported measure of segment profit or loss to assess performance and allocate resources to the segment. We will retrospectively adopt this ASU in the fiscal period ending December 31, 2024 as required by ASU No. 2023-07.

In August 2023, the FASB issued ASU No. 2023-05, Business Combinations: Joint Venture Formations. This ASU is intended to address diversity in practice regarding accounting and provide decision-useful information related to contributions made to joint ventures and requires entities that qualify as either a joint venture or a corporate joint venture to apply a new basis of accounting upon the formation of the joint venture. Specifically, the ASU provides that a joint venture or a corporate joint venture must initially measure its assets and liabilities at fair value on the formation date. This ASU will be effective for all newly formed joint venture entities with a formation date on or after January 1, 2025, with early adoption permitted. Joint ventures formed prior to the adoption date may elect to apply the new guidance retrospectively back to their original formation date. Adoption of this ASU is not expected to have a material effect on our financial position, results of operations or cash flows.

Note 2. Discontinued Operations

On June 7, 2023, we entered into a Purchase Agreement (“the Purchase Agreement”) by and among us and certain of our affiliates and SunMed Group Holdings, LLC (“Buyer”) pursuant to which Buyer agreed to purchase substantially all of the assets primarily relating to or primarily used in our Respiratory Health (“RH”) business (the “RH Divestiture”). On October 2, 2023, we closed the RH Divestiture for a total purchase price of $110 million in cash, subject to certain adjustments as provided in the Purchase Agreement based on the indebtedness and inventory transferred to Buyer at the closing and the chargebacks assumed by Buyer but that would otherwise have been payable by the Company and its subsidiaries on or after October 2, 2023 to distributors of the Company’s RH products located in the United States (the “Initial Closing”).

The RH Divestiture represents a key component of Avanos’ ongoing three-year transformation process, and is aimed at accelerating the Company’s efforts to focus its portfolio on markets where it is well positioned to succeed.

At or before the closing of the RH Divestiture, we and Buyer entered into various transition services agreements pursuant to which we, Buyer and each company’s respective affiliates provide to each other various transitional services, including, but not limited to, product manufacturing and distribution, facilities, order fulfillment, invoicing, quality assurance, regulatory support, audit support and other services. The services generally commenced on the closing date of the Divestiture and terminate no later than one to three years thereafter.


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We have also entered into distribution agreements with Buyer under which we will remain a limited risk distributor for RH products on Buyer’s behalf for sales outside of the United States. As a result, we had $6.6 million of RH products included in “Prepaid expenses and other current assets” in the accompanying consolidated balance sheet as of September 30, 2024, compared to $11.9 million as of December 31, 2023. While our agreements with Buyer allows for limited risk distributor (“LRD”) arrangements for up to three years from the date of the Purchase Agreement, we expect the LRD arrangements to terminate by the end of this year.

As a result of the RH Divestiture, the results of operations from our RH business are reported as “Net (Loss) Income from discontinued operations, net of tax” and the related assets and liabilities are classified as “held for sale” in the condensed consolidated financial statements.

Pursuant to an agreement under which we provide manufacturing services for the Buyer, certain manufacturing facilities and equipment did not transfer to the Buyer upon the Initial Closing, and remained in “Assets Held for Sale” as of September 30, 2024 with a corresponding liability representing our obligation to transfer the manufacturing facilities and equipment to the buyer at a later date. Likewise, the results of operations from these manufacturing operations continue to be classified as “Net Loss from discontinued operations, net of tax. On October 1, 2024, we finalized the RH Divestiture and completed the transfer of the manufacturing facilities and equipment to Buyer. Accordingly, we expect to finalize adjustments to our pretax loss on discontinued operations in the fourth quarter of 2024.

The following table summarizes the financial results of our discontinued operations for all periods presented herein (in millions):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Net Sales	$	10.5	$	31.1	$	41.0	$	93.9
Cost of products sold	15.9		19.9		47.4		57.8
Gross Profit	(5.4)		11.2		(6.4)		36.1
Research and development	—		0.2		—		0.8
Selling and general expenses	—		4.2		—		11.9
Pretax loss on classification as discontinued operations	—		—		—		72.3
Other (income) expense, net	(3.2)		0.1		1.1		0.3
(Loss) Income from discontinued operations before income taxes	(2.2)		6.7		(7.5)		(49.2)
Income tax benefit (provision) from discontinued operations	0.6		(1.6)		2.0		(2.2)
Net (Loss) Income from discontinued operations, net of tax	$	(1.6)	$	5.1	$	(5.5)	$	(51.4)

(Loss) Earnings Per Share
Basic	$	(0.03)	$	0.11	$	(0.12)	$	(1.10)
Diluted	$	(0.03)	$	0.11	$	(0.12)	$	(1.10)

In accordance with accounting principles generally accepted in the United States (“GAAP”), only expenses specifically identifiable and related to a business to be disposed may be allocated to discontinued operations. Accordingly, the cost of products sold, research and development, selling and general expenses and other expense, net in discontinued operations include expenses incurred directly to solely support our respiratory health business.


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Details on assets and liabilities classified as held for sale in the accompanying consolidated balance sheets are presented in the following table (in millions):


	September 30, 2024		December 31, 2023
Assets held for sale - discontinued operations
Inventories	$	28.2	$	17.5
Property, Plant and Equipment, net	43.0		43.9
Operating Lease Right-of-Use Assets	2.7		3.1
Total assets classified as held for sale	$	73.9	$	64.5
Liabilities held for sale - discontinued operations
Current Portion of Operating Lease Liabilities	$	0.7	$	0.8
Accrued expenses	51.3		61.3
Non-Current Operating Lease Liability	0.9		1.6
Total liabilities held for sale - discontinued operations	$	52.9	$	63.7

Assets and liabilities held for sale as of September 30, 2024 were classified as current since we expect the RH Divestiture to be completed within one year.

The following table provides operating and investing cash flow information for our discontinued operations (in millions):


	Nine Months Ended September 30,
	2024		2023
Operating Activities:
Depreciation and amortization	$	—	$	2.6
Stock-based compensation expense	—		0.1
Investing Activities:
Capital expenditures	0.6		3.1

Note 3. Restructuring Activities

Post-RH Divestiture Restructuring Plan

During 2024, we initiated a post-RH Divestiture restructuring plan (the “Plan”). The Plan is intended to align our organizational structure, distribution and operational footprint with our remaining business. We expect the Plan will be substantially complete by the end of 2025 and currently expect to incur between $10.0 million and $11.0 million of cash expenses, primarily for employee termination benefits. In the three and nine months ended September 30, 2024, we incurred $2.3 million and $6.4 million, respectively, of costs related to the Plan. These costs were included in “Cost of products sold” and “Selling and general expenses” in the accompanying condensed consolidated income statements.

Transformation Process

In January 2023, we initiated a three-year restructuring initiative intended to align the Company under a single commercial organization, rationalize our product portfolio, undertake additional cost management activities to enhance the Company’s operating profitability and pursue efficient capital allocation strategies (the “Transformation Process”). The RH Divestiture represents a key component of the three-year Transformation Process. We expect the Transformation Process will be substantially complete by the end of 2025.

In the three and nine months ended September 30, 2024, we incurred expenses of $0.7 million and $5.2 million, respectively, primarily related to employee severance and benefits costs in connection with the Transformation Process, compared to $4.3 million and $23.0 million in the three and nine months ended September 30, 2023. These costs were included in “Cost of products sold” and “Selling and general expenses” in the accompanying condensed consolidated income statements. Plan-to-


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date we have incurred expenses of $33.4 million in connection with the Transformation Process, which includes $28.1 million of cash expenses.

Restructuring Liability

Our liability for costs associated with our restructuring initiatives as of September 30, 2024 is summarized below (in millions):


	As of September 30, 2024
Beginning balance	$	2.3
Restructuring and transformation costs, excluding non-cash charges	10.3
Payments and adjustments, net	(9.2)
Ending balance	$	3.4

Note 4. Business Acquisition

Diros Technology

On June 17, 2023 we entered into a definitive agreement to acquire Diros Technology Inc. (“Diros”), a leading manufacturer of innovative radiofrequency ablation (“RFA”) products used to treat chronic pain conditions. On July 24, 2023, we closed the acquisition of Diros. The total purchase price paid in connection with our acquisition of Diros was $53.0 million, consisting of $2.5 million in cash paid upon entry into the definitive agreement and $50.5 million in cash paid at closing (subject to certain working capital and other adjustments), with up to an additional $7.0 million payable in contingent cash consideration based on achievement of certain performance objectives defined in the purchase agreement (the “Diros Acquisition”). The purchase price for the Diros Acquisition was funded by proceeds from our Revolving Credit Facility. The accompanying condensed consolidated income statement includes $4.6 million and $14.4 million of net sales from Diros for the three and nine months ended September 30, 2024, respectively. The accompanying condensed consolidated income statement includes $2.4 million of net sales from Diros since the acquisition date for the three and nine months ended September 30, 2023. In the three and nine months ended September 30, 2024, we incurred $1.5 million and $2.1 million of costs in connection with the Diros Acquisition, compared to $0.6 million and $0.9 million of costs in the three and nine months ended September 30, 2023, respectively. These costs are included in “Selling and general expenses,” In the nine months ended September 30, 2024, we made contingent consideration payments of $4.6 million and to date we have made contingent consideration payments of $6.1 million.

Under the acquisition method of accounting for business combinations, the purchase price paid is allocated to the underlying net assets in proportion to their respective fair values. Any excess of the purchase price over the estimated fair values is recorded as goodwill. Fair values of assets acquired and liabilities assumed are being determined using discounted cash flow analyses and the fair value of the contingent consideration is being estimated using a Monte Carlo simulation. Assumptions supporting the estimated fair values are based on facts and circumstances that existed on the valuation date. The purchase price allocation is shown in the table below (in millions):


Current assets, net of cash acquired	$	7.5
Current liabilities, excluding contingent consideration	(7.0)
Contingent consideration	(5.3)
Other noncurrent liabilities, net	(0.5)
Deferred tax liabilities	(8.1)
Identifiable intangible assets	29.6
Goodwill	33.4
Total	$	49.6


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The identifiable intangible assets relating to the Diros Acquisition include the following (in millions, except years):


	Identifiable Intangible Asset Amount		Weighted Average Useful Lives (Years)
Trade names and trademarks	$	2.9	15
Customer relationships	21.2		14
Developed technology and other	5.5		13
Total	$	29.6

Note 5. Supplemental Balance Sheet Information

Accounts Receivable

Accounts receivable consist of the following (in millions):


	September 30, 2024		December 31, 2023
Accounts receivable	$	137.3	$	134.0
Income tax receivable	—		14.1
Allowances and doubtful accounts:
Doubtful accounts	(4.8)		(5.1)
Sales discounts	(0.6)		(0.2)
Accounts receivable, net	$	131.9	$	142.8

Losses on receivables are estimated based on known troubled accounts and historical experience. Receivables are considered impaired and written off when it is probable that payments due will not be collected. Allowance for doubtful accounts was $0.1 million for the three months ended September 30, 2024 and $0.2 million for the nine months ended September 30, 2024, compared to a net benefit of $0.4 million and an expense of $0.2 million for the three and nine months ended September 30, 2023, respectively.

Inventories

Inventories at the lower of cost (determined on the FIFO method) or net realizable value consists of the following (in millions):


	September 30, 2024		December 31, 2023
Raw materials	$	47.4	$	50.3
Work in process	23.2		19.8
Finished goods	87.9		88.5
Supplies and other	3.4		4.6

Total Inventory	$	161.9	$	163.2

We incurred $2.8 million and $4.3 million of expense for inventory write-offs and obsolescence in the three and nine months ended September 30, 2024, compared to $2.0 million and $6.3 million in the three and nine months ended September 30, 2023, respectively.

Property, Plant and Equipment

Property, plant and equipment consists of the following (in millions):


	September 30, 2024		December 31, 2023
Land	$	1.2	$	1.3
Buildings and leasehold improvements	41.3		38.0
Machinery and equipment	185.4		182.8
Construction in progress	18.8		18.0

	246.7		240.1
Less accumulated depreciation	(137.2)		(122.9)

Total	$	109.5	$	117.2

Depreciation expense was $5.3 million and $15.6 million for the three and nine months ended September 30, 2024,


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respectively, compared to $4.8 million and $14.2 million for the three and nine months ended September 30, 2023, respectively.

Goodwill and Intangible Assets

The changes in the carrying amount of goodwill are as follows (in millions):


	Goodwill
Balance, December 31, 2023	$	796.1
Currency translation adjustment	(1.0)
Balance, September 30, 2024	$	795.1

Intangible assets subject to amortization consist of the following (in millions):


	September 30, 2024						December 31, 2023
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Trademarks	$	41.6	$	(29.7)	$	11.9	$	42.0	$	(28.8)	$	13.2
Patents and acquired technologies	248.5		(179.2)		69.3		248.6		(171.9)		76.7
Other	207.7		(68.8)		138.9		207.7		(58.1)		149.6
Total	$	497.8	$	(277.7)	$	220.1	$	498.3	$	(258.8)	$	239.5

Amortization expense for intangible assets is included in “Cost of products sold” and “Selling and general expenses” and was $6.4 million and $18.8 million for the three and nine months ended September 30, 2024, respectively, compared to $6.2 million and $17.8 million for the three and nine months ended September 30, 2023, respectively. As of September 30, 2024 we had unrealized currency translation adjustments of $0.3 million related to our acquired intangibles from the acquisition of Diros.

Amortization expense for the remainder of 2024, the following four years and thereafter is estimated as follows (in millions):


	Amount
Remainder of 2024	$	6.7
2025	25.0
2026	24.5
2027	22.8
2028	22.6
Thereafter	118.5
Total	$	220.1

Accrued Expenses

Accrued expenses consist of the following (in millions):


	September 30, 2024		December 31, 2023
Accrued rebates and customer incentives	$	23.6	$	17.7
Accrued salaries and wages	29.8		31.5
Accrued taxes and other	6.2		16.7
Other	23.1		27.3
Total	$	82.7	$	93.2


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Other Long-Term Liabilities

Other long-term liabilities consist of the following (in millions):


	September 30, 2024		December 31, 2023

Accrued compensation and benefits	$	6.7	$	5.9
Other	3.9		4.1
Total	$	10.6	$	10.0

Note 6. Fair Value Information

The following fair value information is based on a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The three levels in the hierarchy used to measure fair value are:

Level 1: Unadjusted quoted prices in active markets accessible at the reporting date for identical assets and liabilities.

Level 2: Quoted prices for similar assets or liabilities in active markets. Quoted prices for identical or similar assets and liabilities in markets that are not considered active or financial instruments for which all significant inputs are observable, either directly or indirectly.

Level 3: Prices or valuations that require inputs that are significant to the valuation and are unobservable.

A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The following table includes the fair value of our financial instruments for which disclosure of fair value is required (in millions):


		September 30, 2024				December 31, 2023
	Fair Value Hierarchy Level	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Assets
Cash and cash equivalents	1	$	89.0	$	89.0	$	87.7	$	87.7
Liabilities
Revolving Credit Facility	2	$	50.0	$	50.0	$	50.0	$	50.0
Term Loan Facility	2	112.0		112.0		118.0		118.0
Contingent consideration related to acquisition	3	—		—		5.3		5.3

Cash equivalents are recorded at cost, which approximates fair value due to their short-term nature. The fair value of amounts borrowed under our Revolving Credit Facility and Term Loan Facility approximates carrying value because borrowings are subject to a variable rate as described in Note 7, “Debt”.

Note 7. Debt

As of September 30, 2024 and December 31, 2023, our respective debt balances were as follows (in millions):


	Weighted-Average Interest Rate		Maturity	September 30, 2024		December 31, 2023
Revolving Credit Facility	6.83	%	2027	$	50.0	$	50.0
Term Loan Facility	6.81	%	2027	112.5		118.8
				162.5		168.8
Unamortized debt issuance costs				(0.5)		(0.8)
Current portion of long-term debt				(9.4)		(8.6)
Total Long-Term Debt, net				$	152.6	$	159.4

On June 24, 2022, we entered into a credit agreement (the “Credit Agreement”) with certain lenders which established credit facilities in an aggregate principal amount of $500.0 million, consisting of a five-year senior secured term loan of $125.0 million (the “Term Loan Facility”) and a five-year senior secured revolving credit facility allowing borrowings of up to $375.0 million, with a letter of credit sub-facility in an amount of $75.0 million (the “Revolving Credit Facility”). All obligations under the Credit Agreement and certain hedging agreements and cash management arrangements thereunder are: (i) guaranteed by each of the Company’s direct and indirect, existing and future, material wholly owned domestic subsidiaries (“Guarantors”) and


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(ii) secured by a first priority lien on substantially all the assets of the Company and the Guarantors. The Credit Agreement contains an accordion feature that allows us to incur incremental term loans under the Term Loan Facility or under new term loan facilities or to increase the amount of the commitments under the Revolving Credit Facility, including through the establishment of one or more tranches under the Revolving Credit Facility. The Credit Agreement will mature on June 24, 2027.

Borrowings under the Term Loan Facility and Revolving Credit Facility bear interest at our option at either: (i) an adjusted term secured overnight financing rate (“SOFR”), plus a margin ranging between 1.50% to 2.00% per annum, depending on our consolidated total leverage ratio; (ii) an adjusted daily simple SOFR rate, plus a margin ranging between 1.50% to 2.00% per annum, depending on our consolidated total leverage ratio; or (iii) a base rate (calculated as the greatest of (a) the prime rate, (b) the NYFRB rate (being the greater of the federal funds effective rate or the overnight bank funding rate) plus 0.50%, and (c) the one month adjusted term SOFR rate plus 1.00%), plus a margin ranging between 0.50% to 1.00% per annum, depending on our consolidated total leverage ratio. The unused portion of the Revolving Credit Facility will be subject to a commitment fee ranging between 0.20% to 0.25% per annum, depending on our consolidated total leverage ratio. Unamortized debt discount and issuance costs are being amortized to interest expense over the life of the Term Loan Facility using the interest method, resulting in an effective interest rate of 7.1% as of September 30, 2024.

The Credit Agreement requires compliance with certain customary operational and financial covenants. As of September 30, 2024, we were in compliance with these covenants. In addition, the Credit Agreement contains certain other customary limitations on our ability to, among other things: incur additional indebtedness; pay dividends on or repurchase or redeem our capital stock; make loans, investments and acquisitions; sell, transfer or otherwise dispose of assets; guarantee other obligations; create or grant liens; and enter into certain types of transactions with affiliates. Notwithstanding such limitations, the Credit Agreement allows us to pay dividends, repurchase stock and make investments up to an “Available Amount,” as defined in the Credit Agreement, provided no event of default has occurred and certain financial ratios have been achieved on a pro forma basis. We are permitted to prepay all or a portion of the Term Loan Facility and the Revolving Credit Facility at any time without premium or penalty.

Debt Payments

The Credit Agreement requires quarterly principal installment payments on the Term Loan Facility of 10% of the total principal borrowed for the first eight quarters following funding and then quarterly installment payments of 20% of the total principal borrowed, at which time the remaining unpaid principal amount of the Term Loan Facility is due and payable by the Company upon the maturity date of June 24, 2027. The current portion of the Term Loan Facility is $9.4 million. Interest is payable quarterly. We have the right to voluntarily prepay the Term Loan Facility in accordance with the terms of the Credit Agreement. Interest is payable at the same rates set forth above for the Revolving Credit Facility.

During the nine months ended September 30, 2024, we repaid $6.3 million of the Term Loan Facility. During the nine months ended September 30, 2024, we borrowed $20.0 million and repaid $20.0 million of the Revolving Credit Facility. As of September 30, 2024, we had letters of credit outstanding of $6.3 million.

As of September 30, 2024, the aggregate amounts of long-term debt that will mature during each of the next four years are as follows (in millions):


	Amount
Remainder of 2024	$	2.3
2025	9.4
2026	10.2
2027	140.6
2028	—
Total	$	162.5


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Note 8. Accumulated Other Comprehensive Income

The changes in the components of Accumulated Other Comprehensive Income (“AOCI”), net of tax, are as follows (in millions):


	Unrealized Currency Translation		Cash Flow Hedges		Defined Benefit Plans		Accumulated Other Comprehensive Loss
Balance, December 31, 2023	$	(27.0)	$	—	$	—	$	(27.0)
Other comprehensive loss	(8.0)		(1.8)		(0.1)		(9.9)
Balance, September 30, 2024	$	(35.0)	$	(1.8)	$	(0.1)	$	(36.9)

The net changes in the components of AOCI, including the tax effect, are as follows (in millions):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Unrealized currency translation	$	0.3	$	(4.6)	$	(8.0)	$	2.8
Defined benefit pension plans	0.1		—		(0.1)		—

Defined benefit pension plans, net of tax	0.1		—		(0.1)		—
Cash flow hedges	0.7		—		(1.3)		—
Tax effect	(0.5)		—		(0.5)		—
Cash flow hedges, net of tax	0.2		—		(1.8)		—
Change in AOCI	$	0.6	$	(4.6)	$	(9.9)	$	2.8

Note 9. Stock-Based Compensation

Stock-based compensation expense is included in “Cost of products sold,” “Research and development,” and “Sales and general expenses.” Stock-based compensation expense for the three and nine months ended September 30, 2024 and 2023 is shown in the table below (in millions):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Stock options	$	—	$	—	$	—	$	0.3
Time-based restricted share units	2.7		2.5		7.6		7.9
Performance-based restricted share units	(0.1)		1.3		2.3		3.4
Employee stock purchase plan	—		0.1		0.1		0.2
Total stock-based compensation	$	2.6	$	3.9	$	10.0	$	11.8

Note 10. Commitments and Contingencies

Legal Matters

We are subject to various legal proceedings, claims and governmental inspections, audits or investigations pertaining to issues such as contract disputes, product liability, tax matters, patents and trademarks, advertising, governmental regulations, employment and other matters. Under the terms of the distribution agreement we entered into with Kimberly-Clark Corporation (“Kimberly-Clark”) prior to our 2014 spin-off from Kimberly-Clark, legal proceedings, claims and other liabilities that are primarily related to our business are our responsibility and we are obligated to indemnify and hold Kimberly-Clark harmless for such matters.

Government Investigation

In June 2015, we were served with a subpoena from the Department of Veterans Affairs Office of the Inspector General (“VA OIG”) seeking information related to the design, manufacture, testing, sale and promotion of MicroCool and other surgical gowns produced by the Company. In July 2015, we became aware that the VA OIG subpoena and an earlier VA OIG subpoena served on Kimberly-Clark requesting information about gown sales to the federal government were related to a United States Department of Justice (“DOJ”) investigation. In May 2016, April 2017 and September 2018, we received additional subpoenas from the DOJ seeking further information related to the Company’s surgical gowns.


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On July 6, 2021, we entered into a Deferred Prosecution Agreement (“DPA”) with the DOJ that resolved their criminal investigation related to our MicroCool surgical gowns. Pursuant to the terms of the DPA, in July 2021 the Company made a payment of $22.2 million. The DPA term expired on July 7, 2024. Under the DPA, the DOJ has up to six months following the term’s expiration to seek dismissal of the case.

Patent Litigation

We operate in an industry characterized by extensive patent litigation. Competitors may claim that our products infringe upon their intellectual property. Resolution of patent litigation or other intellectual property claims is typically time consuming and costly and can result in significant damage awards and injunctions that could prevent the manufacture and sale of the affected products or require us to make significant royalty payments in order to continue selling the affected products.

At any given time, we may be involved as either a plaintiff or a defendant in a number of patent infringement actions, the outcomes of which may not be known for prolonged periods of time.

General

While we maintain general and professional liability, product liability and other insurance, our insurance policies may not cover all of these matters and may not fully cover liabilities arising out of these matters. In addition, we may be obligated to indemnify our directors and officers against these matters.

We record provisions in the consolidated financial statements for pending litigation when we determine that an unfavorable outcome is probable and the amount of the loss can be reasonably estimated. For any matters that are reasonably possible to result in loss and for which no possible loss or range of loss is disclosed in this Form 10-Q, management has determined that it is unable to estimate the possible loss or range of loss because, in each case, at least the following facts applied: (a) the matter is at an early stage of the proceedings; (b) the damages are indeterminate, unspecified or determined to be immaterial; and (c) significant factual issues have yet to be resolved. At present, although the results of litigation and claims cannot be predicted with certainty, we believe that the ultimate resolution of any pending legal proceeding to which we are a party will not have a material adverse effect on our business, financial condition, results of operations or liquidity.

Environmental Compliance

We are subject to federal, state and local environmental protection laws and regulations with respect to our business operations. We believe we are operating in compliance with, or are taking action aimed at ensuring compliance with, these laws and regulations. None of our compliance obligations with environmental protection laws and regulations, individually or in the aggregate, is expected to have a material adverse effect on our business, financial condition, results of operations or liquidity.

Note 11. Derivative Financial Instruments

During the second quarter of 2024, we began to enter into derivative instruments to hedge a portion of forecasted cash flows denominated in Mexican pesos. The derivative instruments used to manage these exposures are designated and qualify as cash flow hedges. The derivative liability for foreign exchange contracts was $2.1 million as of September 30, 2024 and is included in the condensed consolidated balance sheet in accrued expenses.

The effective portion of the gain or loss on a derivative instrument is initially recorded in AOCI, net of related income taxes, and recognized in earnings in the same period that the hedged exposure affects earnings. The loss recognized in earnings was not material in the three and nine months ended September 30, 2024. As of September 30, 2024, the aggregate notional values of outstanding foreign currency swap contracts designated as cash flow hedges were $17.8 million.

Note 12. Earnings Per Share (“EPS”)

Basic EPS is calculated by dividing net income by the weighted average number of common shares outstanding during each period. Diluted earnings per share is calculated by dividing net income by the number of common shares outstanding and the effect of all dilutive common stock equivalents outstanding during each period, as determined using the treasury stock method.


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The calculation of basic and diluted earnings (loss) per share for the three and nine months ended September 30, 2024 and 2023 is set forth in the following table (in millions, except per share amounts):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Net income (loss) from continuing operations	$	5.9	$	(8.8)	$	10.7	$	(20.9)
Net (loss) income from discontinued operations	(1.6)		5.1		(5.5)		(51.4)
Net income (loss)	$	4.3	$	(3.7)	$	5.2	$	(72.3)

Weighted Average Shares Outstanding:
Basic weighted average shares outstanding	46.0		46.8		46.0		46.7
Dilutive effect of stock options and restricted share unit awards	0.6		—		0.5		—
Diluted weighted average shares outstanding	46.6		46.8		46.5		46.7
Earnings (Loss) Per Share
Basic:
Continuing Operations	$	0.13	$	(0.19)	$	0.23	$	(0.45)
Discontinued Operations	(0.03)		0.11		(0.12)		(1.10)
Basic Earnings (Loss) Per Share	$	0.10	$	(0.08)	$	0.11	$	(1.55)

Diluted:
Continuing Operations	$	0.12	$	(0.19)	$	0.23	$	(0.45)
Discontinued Operations	(0.03)		0.11		(0.12)		(1.10)
Diluted Earnings (Loss) Per Share	$	0.09	$	(0.08)	$	0.11	$	(1.55)

Restricted share units (“RSUs”) contain provisions allowing for the equivalent of any dividends paid on common stock during the restricted period to be reinvested into additional RSUs at the then fair market value of the common stock on the date the dividends are paid. Such awards are to be included in the EPS calculation under the two-class method. Currently, we do not anticipate any cash dividends for the foreseeable future and our outstanding RSU awards are not material in comparison to our weighted average shares outstanding. Accordingly, all EPS amounts reflect shares as if they were fully vested and the disclosures associated with the two-class method are not presented herein.

For the three and nine months ended September 30, 2024, $1.0 million and $1.3 million of potentially dilutive stock options and RSU awards were excluded from the computation of earnings per share as their effect would have been anti-dilutive.

Note 13. Business and Products Information

We conduct our business in one operating and reportable segment that provides our medical device products to healthcare providers and patients globally with manufacturing facilities in the United States and Mexico.


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Avanos develops, manufactures and markets its recognized brands globally and holds leading market positions in multiple categories across its portfolio. Our management evaluates net sales by product category within our single reportable segment as follows (in millions):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Digestive Health	$	98.2	$	95.0	$	290.6	$	276.8
Pain Management and Recovery:
Surgical pain and recovery	30.3		34.1		93.8		103.6
Interventional pain	41.9		42.2		123.8		119.6
Total Pain Management and Recovery	72.2		76.3		217.6		223.2
Total Net Sales	$	170.4	$	171.3	$	508.2	$	500.0

Digestive Health is a portfolio of products such as our MIC-KEY enteral feeding tubes, Corpak patient feeding solutions and NeoMed neonatal and pediatric feeding solutions.

Pain Management and Recovery is a portfolio of products including:

•Surgical pain and recovery products such as ON-Q and ambIT surgical pain pumps and Game Ready cold and compression therapy systems; and

•Interventional pain solutions, which provide minimally invasive pain relief therapies, such as our COOLIEF pain therapy, OrthogenRx’s knee osteoarthritis HA pain relief injection products and Diros’ RFA products used to treat chronic pain conditions.

Liabilities for estimated returns, rebates and incentives are presented in the table below (in millions):


	September 30, 2024		December 31, 2023
Accrued rebates	$	13.7	$	10.4
Accrued customer incentives	9.9		7.3
Accrued rebates and customer incentives	23.6		17.7
Accrued sales returns(a)	0.1		0.1
Total estimated liabilities	$	23.7	$	17.8

__________________________________________________

(a)Accrued sales returns are included in “Other” in the accrued expenses table in Note 5, “Supplemental Balance Sheet Information”.

Due to the nature of our business, we receive purchase orders for products under supply agreements which are normally fulfilled within three to four weeks. Our performance obligations under purchase orders are satisfied and revenue is recognized at a point in time, which is upon shipment or upon delivery of our products, depending on shipping terms. Accordingly, we normally do not have transactions that give rise to material unfulfilled performance obligations.

Note 14. Share Repurchase Program

On July 28, 2023, the Board of Directors approved a new one-year program under which we may repurchase up to $25.0 million of our common stock. Repurchases under this program will be made from time to time at management’s discretion on the open market or through privately negotiated transactions in compliance with Rule 10b-18 under the Exchange Act, subject to market conditions, applicable legal requirements and other relevant factors. We have established a pre-arranged trading plan under Rule 10b5-1 of the Exchange Act in connection with this share repurchase program. This share repurchase program does not obligate us to purchase any particular amount of common stock and may be suspended, modified or discontinued by us without prior notice. In the third quarter of 2023, we repurchased $9.2 million of our common stock and during the fourth quarter of 2023, we repurchased an additional $5.8 million of our common stock.

For the nine months ended September 30, 2024, our repurchases of our common stock were as summarized in the table below.


	Shares Repurchased		Aggregate Purchase Price (in millions)		Average Price per Share		Amount Remaining in Program for Purchase (in millions)
	# of Shares	Program to Date
First quarter of 2024	342,680	1,085,333	$	6.7	$	19.45	$	3.3
Second quarter of 2024	169,571	1,254,904	$	3.3	$	19.67	$	—


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In addition to the share repurchase program, we withheld 140,539 shares of common stock for $2.7 million in taxes associated with stock-based compensation transactions for the nine months ended September 30, 2024.


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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Introduction

Avanos is a medical technology company focused on delivering clinically superior medical device solutions that help patients get back to the things that matter. We are 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. We develop, manufacture and market our recognized brands globally and hold leading market positions in multiple categories across our portfolio.

This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to provide investors with an understanding of our recent performance, and should be read in conjunction with the condensed consolidated financial statements contained in Item 1, “Financial Statements” in this Form 10-Q and our audited consolidated financial statements and related notes included in the Form 10-K. This MD&A contains forward-looking statements. Refer to “Information Concerning Forward-Looking Statements” at the beginning of this Form 10-Q for an explanation of these types of statements.

The following will be discussed and analyzed:

•Restructuring Activities;

•Divestiture of the Respiratory Health Business;

•Discontinued Operations;

•Business Acquisition;

•Results of Operations and Related Information;

•Liquidity and Capital Resources; and

•Critical Accounting Policies and Use of Estimates.

Restructuring Activities

Post-RH Divestiture Restructuring Plan

During 2024, we initiated a restructuring plan (the “Plan”) following the divestiture of our Respiratory Health (“RH”) business in the fourth quarter of 2023 (the “RH Divestiture”). The Plan is intended to align our organizational structure and operational footprint with our remaining business. We expect the Plan will be substantially complete by the end of 2025 and currently expect to incur between $10.0 million to $11.0 million of cash expenses, primarily for employee termination benefits. In the three and nine months ended September 30, 2024, we incurred $2.3 million and $6.4 million, respectively, of costs related to the Plan. These costs were included in “Selling and general expenses” in the accompanying condensed consolidated income statements.

Transformation Process

In January 2023, we initiated a three-year restructuring initiative pursuant to which we plan to: (i) combine our Chronic Care and Pain Management franchises into a single commercial organization focused on the Digestive Health and Pain Management & Recovery product categories; (ii) rationalize our product portfolio including certain low-margin, low-growth product categories through targeted divestitures; (iii) undertake additional cost management activities to enhance the Company’s operating profitability; and (iv) pursue efficient capital allocation strategies, including through acquisitions that meet the Company’s strategic and financial criteria (the “Transformation Process”).

By 2025, we expect total gross savings of between $45.0 million and $55.0 million compared to 2022, most of which will be achieved in 2024. We expect the Transformation Process will be substantially complete by the end of 2025.

We expect to incur up to $30.0 million of cash expenses in connection with the Transformation Process, consisting of between $9.0 million and $12.0 million of program management consulting and employee retention expenses, between $8.0 million and $11.0 million of expenses associated with manufacturing and supply chain improvements and portfolio rationalization; and the remainder for expenses associated with organization design and alignment and other related activities. These amounts include between $6.0 million and $8.0 million of employee severance and benefits costs. The accompanying condensed consolidated income statements for the three and nine months ended September 30, 2024 include costs of $0.7 million and $5.2 million, respectively, incurred in connection with the Transformation Process in “Selling and general expenses.”

Divestiture

On October 2, 2023, we closed the sale of our RH business to SunMed Group Holdings, LLC (“Buyer”) for a total purchase price of $110 million in cash, subject to certain adjustments as provided in the Purchase Agreement based on the indebtedness


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and inventory transferred to Buyer at the closing and the chargebacks assumed by Buyer but that would otherwise have been payable by the Company and its subsidiaries on or after October 2, 2023 to distributors of the Company’s RH products located in the United States.

The RH Divestiture represents a key component of the Transformation Process, and is aimed at accelerating the Company’s efforts to focus its portfolio on markets where it is well positioned to succeed.

In conjunction with the RH Divestiture, we and Buyer entered into various transition services agreements pursuant to which we, Buyer and each company’s respective affiliates will provide to each other various transitional services, including, but not limited to, product manufacturing and distribution, facilities, order fulfillment, invoicing, quality assurance, regulatory support, audit support and other services. The services generally commenced on the closing date of the RH Divestiture and terminate no later than one to three years thereafter.

On October 1, 2024, we finalized the RH Divestiture and completed the transfer of certain manufacturing facilities and equipment that had not transferred to Buyer upon the Initial Closing. Accordingly, we expect to finalize adjustments to our pretax loss on discontinued operations in the fourth quarter of 2024.

Discontinued Operations

As a result of the RH Divestiture, the results of operations from our RH business are reported as “(Loss) Income from discontinued operations, net of tax” and the related assets and liabilities are classified as “held for sale” in the condensed consolidated financial statements. Net sales from discontinued operations were $10.5 million and $41.0 million in the three and nine months ended September 30, 2024, compared to $31.1 million and $93.9 million in the three and nine months ended September 30, 2023.

Business Acquisition

See Note 4, “Business Acquisition” in Item 1 of this Form 10-Q for further details regarding the acquisition.

Results of Operations and Related Information

Use of Non-GAAP Measures

In this section, we present “Adjusted operating profit,” which is a profitability measure that is not calculated in accordance with accounting principles generally accepted in the United States (“GAAP”) and is therefore referred to as non-GAAP financial measure. We provide this non-GAAP measure because we use it to measure our operational performance and provide greater insight into our ongoing business operations. This measure is not intended to be, and should not be, considered separately from, or an alternative to, the most directly comparable GAAP financial measures. A reconciliation of the non-GAAP measure to the most directly comparable GAAP financial measures is provided below under “Adjusted operating profit.”


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Net Sales

Our net sales are summarized in the following table for the three and nine months ended September 30, 2024 and 2023 (in millions):


	Three Months Ended September 30,							Nine Months Ended September 30,
	2024		2023			Change		2024			2023			Change
Digestive Health	$	98.2	$	95.0		3.4	%	$	290.6		$	276.8		5.0	%
Pain Management and Recovery:
Surgical pain and recovery	30.3		34.1			(11.1)	%	93.8			103.6			(9.5)	%
Interventional pain	41.9		42.2			(0.7)	%	123.8			119.6			3.5	%
Total Pain Management and Recovery	72.2		76.3			(5.4)	%	217.6			223.2			(2.5)	%
Total Net Sales	$	170.4	$	171.3		(0.5)	%	$	508.2		$	500.0		1.6	%

			Total			Volume		Pricing/Mix			Currency			Other(a)
Net sales - percentage change	QTD		(0.5)		%	2.4	%	(2.9)		%	(0.1)		%	0.1	%
Net sales - percentage change	YTD		1.6		%	3.6	%	(1.9)		%	(0.1)		%	—	%

______________________________

(a)Other includes rounding.

Product Category Descriptions

Digestive Health is a portfolio of products such as our MIC-KEY enteral feeding tubes, Corpak patient feeding solutions and NeoMed neonatal and pediatric feeding solutions.

Pain Management and Recovery is a portfolio of products including:

•Surgical pain and recovery products such as ON-Q and ambIT surgical pain pumps and Game Ready cold and compression therapy systems; and

•Interventional pain solutions, which provide minimally invasive pain relief therapies, such as our COOLIEF pain therapy, OrthogenRx’s knee osteoarthritis hyaluronic acid (“HA”) pain relief injection products and Diros’ RFA products used to treat chronic pain conditions.

Third Quarter of 2024 Compared to Third Quarter of 2023

For the three months ended September 30, 2024, net sales were $170.4 million, a decrease of 0.5% compared to the prior year period due to lower demand for our surgical pain products and lower demand and pricing for our HA products. This was partially offset by continued strong demand and volume in our Digestive Health portfolio, primarily from our NeoMed neonatal and pediatric feeding solutions, as well as continued demand for our Game Ready products and increased demand for Trident.

First Nine Months of 2024 Compared to the First Nine Months of 2023

For the nine months ended September 30, 2024, net sales were $508.2 million, an increase of 1.6% compared to the prior year period, primarily due to continued strong demand and volume in our Digestive Health portfolio and Game Ready products and increased demand for Trident. This was partially offset by lower demand and pricing for our HA products.

Net Sales by Geographic Region

Net sales by region is presented in the table below (in millions):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2024		2023		Change		2024		2023		Change
North America	$	134.3	$	136.4	(1.5)	%	$	403.0	$	401.0	0.5	%
Europe, Middle East and Africa	23.2		20.9		11.0		69.7		61.1		14.1
Asia Pacific and Latin America	12.9		14.0		(7.9)		35.5		37.9		(6.3)
Total net sales	$	170.4	$	171.3	(0.5)	%	$	508.2	$	500.0	1.6	%


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Gross Profit (in millions)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Net sales	$	170.4		$	171.3		$	508.2		$	500.0
Cost of products sold	77.5			75.8			224.9			215.3
Gross profit	92.9			95.5			283.3			284.7
Gross profit margin	54.5		%	55.8		%	55.7		%	56.9		%

Third Quarter of 2024 Compared to Third Quarter of 2023

For the three months ended September 30, 2024 compared to the prior year period, gross profit margin decreased primarily due to costs related to our restructuring initiatives and plant separation costs associated with the RH Divestiture, partially offset by favorable volume and product mix.

First Nine Months of 2024 Compared to the First Nine Months of 2023

For the nine months ended September 30, 2024 compared to the prior year period, gross profit margin decreased primarily due to costs related to our restructuring initiatives and plant separation costs associated with the RH Divestiture along with unfavorable pricing for our HA products, slightly offset by overall favorable product mix.

Research and Development (in millions)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Research and development	$	7.2		$	6.1		$	20.5		$	20.4
Percentage of net sales	4.2		%	3.6		%	4.0		%	4.1		%

Research and development consists primarily of compensation for personnel and expenses for product trial costs, outside laboratory and license fees, the cost of laboratory equipment and facilities and asset write-offs for equipment associated with unsuccessful product launches. Research and development has historically ranged between 4% and 6% of net sales.

Selling and General Expenses (in millions)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Selling and general expenses	$	74.3		$	78.7		$	238.8		$	260.5
Percentage of net sales	43.6		%	45.9		%	47.0		%	52.1		%

Selling and general expenses decreased in both the three and nine months ended September 30, 2024, as compared to the prior year periods, driven by savings realized from the execution on the Transformation Process and disciplined spending.

Other (Income) Expense, net (in millions):


	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Other (income) expense, net	$	(0.6)		$	9.5		$	1.7		$	10.8
Percentage of net sales	(0.4)		%	5.5		%	0.3		%	2.2		%

Other income was $0.6 million for the three months ended September 30, 2024 and other expense, net was $1.7 million for the nine months ended September 30, 2024, compared to other expense, net of $9.5 million and $10.8 million in the three and nine months ended September 30, 2023, respectively.


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Operating Profit (in millions)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Operating profit (loss)	$	12.0		$	1.2		$	22.3		$	(7.0)
Operating profit margin	7.0		%	0.7		%	4.4		%	(1.4)		%

The items previously described drove operating profit to $12.0 million and $22.3 million for the three and nine months ended September 30, 2024, respectively, compared to operating profit of $1.2 million and operating loss of $7.0 million for the three and nine months ended September 30, 2023, respectively.

Adjusted Operating Profit

A reconciliation of adjusted operating profit, a non-GAAP measure, to operating profit (loss) is provided in the table below (in millions):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Operating profit (loss), as reported (GAAP)	$	12.0	$	1.2	$	22.3	$	(7.0)
Acquisition and integration-related charges	1.6		0.6		4.1		2.4
Restructuring and transformation charges	0.7		4.3		5.2		23.0
Post-RH Divestiture transition charges	0.7		—		2.2		—
Post-RH Divestiture restructuring	2.3		—		6.4		—
Divestiture related	—		1.4		—		5.1
EU MDR Compliance	1.6		0.8		4.4		2.8
Litigation and legal	—		8.5		—		8.5
Intangibles amortization	6.4		6.2		18.8		17.8
Adjusted operating profit (non-GAAP)	$	25.3	$	23.0	$	63.4	$	52.6

The items noted in the table above are described below:

Acquisition and integration-related charges: Acquisition and integration-related charges were $1.6 million and $0.6 million for the three months ended September 30, 2024 and 2023 respectively, and $4.1 million and $2.4 million for the nine months ended September 30, 2024 and 2023, respectively. Expenses in the three and nine months ended September 30, 2024 were driven by the acquisition of Diros and expenses in the three and nine months ended September 30, 2023 were related to our acquisition of OrthogenRx, Inc.

Restructuring and transformation charges: In January 2023, we initiated the Transformation Process, a three-year restructuring initiative intended to align the Company under a single commercial organization, rationalize our product portfolio, undertake additional cost management activities to enhance the Company’s operating profitability and pursue efficient capital allocation strategies. In the three and nine months ended September 30, 2024 we incurred $0.7 million and $5.2 million, respectively, of expenses related to the Transformation Process, primarily for employee severance and benefits costs. In the three and nine months ended September 30, 2023 we incurred $4.3 million and $23.0 million, respectively, of expenses related to the Transformation Process, which consisted of costs associated with program management consulting and employee retention expenses and employee severance and benefits costs.

Post-RH Divestiture transition charges: In conjunction with the divestiture of our RH business, we incurred professional services fees, equipment write-offs and incremental labor charges of approximately $0.7 million and $2.2 million for the three and nine months ended September 30, 2024, respectively.

Post-RH Divestiture restructuring charges: We initiated a post-RH Divestiture restructuring plan intended to align our organizational structure and operational footprint with our remaining business. In the three and nine months ended September 30, 2024, we incurred expenses of $2.3 million and $6.4 million, respectively, related to the Plan, which primarily consisted of employee severance and benefits costs.

Divestiture-Related Charges: In conjunction with the divestiture of our RH business, we incurred accounting, legal and other professional fees of approximately $1.4 million and $5.1 million for the three and nine months ended September 30, 2023.

EU MDR Compliance: The European Union Medical Device Regulation (the “EU MDR”) brings significant new requirements for our medical devices sold in the European Union. Incremental costs associated with EU MDR compliance are primarily


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related to re-certification of our products under the enhanced standards. We incurred $1.6 million and $4.4 million of costs for EU MDR compliance for the three and nine months ended September 30, 2024, respectively, and $0.8 million and $2.8 million of costs for EU MDR compliance for the three and nine months ended September 30, 2023, respectively. In early 2023, the deadlines for compliance were extended after compliance was proceeding slower than expected by the European Commission due to a number of factors including insufficient capacity for timely issuance of device certifications under the new requirements. We expect the activities associated with EU MDR compliance will be substantially complete by the end of 2025.

Litigation and legal: We incurred no costs for litigation matters in the three and nine months ended September 30, 2024. In the three and nine months ended September 30, 2023, we accrued $8.5 million for litigation matters. This expense was for a settlement related to a customer claim and is included in “Other expense, net”.

Intangibles amortization: Intangibles amortization is related primarily to intangibles acquired in business acquisitions and was $6.4 million and $18.8 million for the three and nine months ended September 30, 2024, respectively, and $6.2 million and $17.8 million for the three and nine months ended September 30, 2023, respectively.

Interest Expense

Interest expense consists of interest accrued and amortization of debt issuance costs on our revolving credit facility net of interest capitalized on long-term capital projects. See Note 7, “Debt” in Item 1 of this Form 10-Q. Interest expense was $3.2 million and $9.4 million for the three and nine months ended September 30, 2024, respectively, compared to $4.7 million and $11.7 million in the three and nine months ended September 30, 2023, respectively. Our outstanding debt balances, net of unamortized discounts, were $162.0 million and $168.0 million as of September 30, 2024 and December 31, 2023, respectively.

Income Taxes

The income tax provision was $3.6 million and $6.5 million, respectively, in the three and nine months ended September 30, 2024, compared to an income tax provision of $6.2 million and $4.1 million in the three and nine months ended September 30, 2023, respectively. Our effective tax rate was 37.9% and 37.8% in the three and nine months ended September 30, 2024, respectively. For the three and nine months ended September 30, 2023, our effective tax rate was (238.5)% and (24.4)%, respectively.

Liquidity and Capital Resources

General

Our primary sources of liquidity are cash on hand provided by operating activities and amounts available with our Revolving Credit Facility under our Credit Agreement. We expect our operating cash flow will be sufficient to meet our working capital requirements and fund capital expenditures in the next twelve months. In addition, with our borrowing capacity, we expect to have the ability to fund capital expenditures and other investments necessary to grow our business for the foreseeable future for both our domestic and international operations.

As of September 30, 2024, $43.0 million of our $89.0 million of cash and cash equivalents was held by foreign subsidiaries. We consider the undistributed earnings of our foreign subsidiaries to be indefinitely reinvested overseas and currently do not have plans to repatriate such earnings. We do not expect restrictions on repatriation of cash held outside of the United States to have a material effect on our overall liquidity, financial condition or results of operations for the foreseeable future.

Cash and cash equivalents increased by $1.3 million to $89.0 million as of September 30, 2024, compared to $87.7 million as of December 31, 2023. The increase was primarily driven by $42.8 million of cash provided by operations and $20.0 million in proceeds from our revolving credit facility. This was partially offset by $13.0 million of capital expenditures, a 9.0 million investment in a note receivable, payments of $6.3 million on our term loan, payments of $20.0 million on our revolving credit facility and $12.7 million used to repurchase shares of our common stock.

In the prior year, cash and cash equivalents decreased by $20.6 million to $107.1 million as of September 30, 2023. The decrease was primarily driven by $47.5 million used to purchase Diros, $11.9 million of capital expenditures, payments of $20.0 million on our revolving credit facility and $12.9 million used to repurchase shares of our common stock. This was partially offset by $19.7 million of cash generated from operating activities and $55.0 million in proceeds from our revolving credit facility.

Long-Term Debt


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each of the Company’s direct and indirect, existing and future, material wholly owned domestic subsidiaries (“Guarantors”) and (ii) secured by a first priority lien on substantially all the assets of the Company and the Guarantors. The Credit Agreement contains an accordion feature that allows us to incur incremental term loans under the Term Loan Facility or under new term loan facilities or to increase the amount of the commitments under the Revolving Credit Facility, including through the establishment of one or more tranches under the Revolving Credit Facility. The Credit Agreement will mature on June 24, 2027.

See Note 7, “Debt” in Item 1 of this Form 10-Q for further details regarding our debt agreements.

Critical Accounting Policies and Use of Estimates

Our financial statements are prepared by applying certain accounting policies. See Note 1, “Accounting Policies” in Item 8, “Financial Statements and Supplementary Data” in the Form 10-K, which describes our most significant accounting policies. In addition, our critical accounting policies and estimates are presented under the caption “Critical Accounting Policies and Use of Estimates” in Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operation” in the Form 10-K. Certain of these policies require management to make estimates or assumptions that may prove inaccurate or be subject to variations that may significantly affect our reported results and financial position for the period or in future periods. Management views these policies as critical accounting policies. See Note 1, “Accounting Policies” in Item 1 of this Form 10-Q for updates to our critical accounting policies and a discussion of recent accounting pronouncements. In the three and nine months ended September 30, 2024, there were no significant changes to our critical accounting estimates from those disclosed in Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operation” in the Form 10-K.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes regarding our market risk position from the information provided under Item 7A – “Quantitative and Qualitative Disclosures About Market Risk” in the Form 10-K.

Item 4. Controls and Procedures

With the participation of management, our Chief Executive Officer (principal executive officer) and our Senior Vice President, and Chief Financial Officer (principal financial officer) carried out an evaluation, pursuant to Rule 13a-15(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, our Chief Executive Officer and our Senior Vice President and Chief Financial Officer concluded that our disclosure controls and procedures were operating effectively as of September 30, 2024.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the three months ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.


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PART II – OTHER INFORMATION

Item 1. Legal Proceedings

We are subject to various legal proceedings, claims and governmental inspections, audits or investigations pertaining to issues such as contract disputes, product liability, tax matters, patents and trademarks, advertising, governmental regulations, employment and other matters. At present, although the results of litigation and claims cannot be predicted with certainty, we believe that the ultimate resolution of any pending legal proceeding to which we are a party will not have a material adverse effect on our business, financial condition, results of operations or liquidity.

Item 1A. Risk Factors

There have been no material changes to the risk factors described in Part I, Item 1A, “Risk Factors,” of the Form 10-K, except as follows:

We are subject to political, economic and regulatory risks associated with doing business outside of the United States.

Most of our manufacturing facilities are located outside the United States in Mexico. In addition, we use contract manufacturers outside the United States from time to time and source many of our raw materials and components from foreign suppliers, including suppliers in China and Mexico. We distribute and sell our products globally. In 2023, approximately 20% of our net sales were generated outside of North America and we expect this percentage will grow over time. Our operations outside of the United States are subject to risks that are inherent in conducting business internationally, including compliance with both United States and foreign laws and regulations that apply to our international operations. These laws and regulations include robust data privacy requirements, labor relations laws that may impede employer flexibility, tax laws, anti-competition regulations, import, customs and trade restrictions, export requirements, economic sanction laws, environmental, health and safety laws, anti-bribery laws such as the U.S. Foreign Corrupt Practices Act and similar anti-bribery laws in other jurisdictions. Given the high level of complexity of these laws, there is a risk that some provisions may be violated inadvertently or through fraudulent or negligent behavior of individual employees, our failure to comply with certain formal documentation requirements or otherwise. In addition, these laws are subject to changes, which may require additional resources or make it more difficult for us to comply with these laws. Violations of the laws and regulations governing our international operations could result in fines or criminal sanctions against us, our officers or our employees, and prohibitions on the conduct of our business. Any such violations could include prohibitions on our ability to manufacture or distribute our products in one or more countries and could have a material adverse effect on our reputation, our brand, our international expansion efforts, our ability to attract and retain employees, our business, results of operations, financial condition and cash flows. Our success depends, in part, on our ability to anticipate and prevent or mitigate these risks and manage difficulties as they arise.

We are subject to tariffs and taxes in the United States and numerous foreign jurisdictions, and we may be subject to trade protection measures that are being contemplated or implemented by the United States and other governments around the world, as well as potential disruptions in trade agreements, such as the exit of the United Kingdom from the EU. For example, during 2024 the United States announced increased tariffs on a Chinese-sourced component of certain of our products. While we have received an extension on the effectiveness of such tariffs, we are exploring options to identify a longer-term solution to such tariffs (although there can be no assurance that we will succeed in such efforts). In addition, changes in the United States government following the 2024 presidential and congressional elections may result in changes to United States trade policies and tariffs, and may cause other countries to react to such changes.

These developments, measures and disruptions may result in new or higher tariffs, import-export restrictions and taxes. Changes in, or revised interpretations of import-export laws or international trade agreements, along with new or increased tariffs, trade restrictions or taxation on income earned or goods manufactured outside the United States may have a material adverse effect on our business, financial condition, results of operations and cash flows.

In addition to the foregoing, engaging in international business inherently involves a number of other difficulties and risks, including:

•different local medical practices, product preferences and product requirements,

•price and currency controls and exchange rate fluctuations,

•cost and availability of international shipping channels,

•longer payment cycles in certain countries other than the United States,

•minimal or diminished protection of intellectual property in certain countries,


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•uncertainties regarding judicial systems, including difficulties in enforcing agreements through certain non-U.S. legal systems,

•political instability and actual or anticipated military or political conflicts, expropriation of assets, economic instability and the impact on interest rates, inflation and the credit worthiness of our customers, and

•difficulties and costs of staffing and managing non-U.S. operations

These risks and difficulties, individually or in the aggregate, could have a material adverse effect on our business, results of operations, financial condition and cash flows.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable

Item 3. Defaults Upon Senior Securities

Not applicable

Item 4. Mine Safety Disclosures

Not applicable

Item 5. Other Information

On October 29, 2024, the Compensation Committee of the Board of Directors approved an amendment to the Company’s Executive Severance Plan (the “Executive Severance Plan”) pursuant to which the payout multiple payable to Executive Participants (as that term is defined in the Executive Severance Plan) under the Executive Severance Plan (other than the Company’s Chief Executive Officer) following a Qualified Termination of Employment (as that term is defined in the Executive Severance Plan) has been increased from one and one-half to two times the sum of the Executive Participant’s annual base salary and target full annual cash incentive award for the year in which the Qualified Termination of Employment occurs. The other elements of the cash payment to which Executive Participants would be entitled under the Executive Severance Plan upon a Qualified Termination of Employment remain unchanged.


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Item 6. Exhibits

(a)Exhibits


Exhibit Number						Description
3.1						Second Amended and Restated Certificate of Incorporation of the Company, incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed on May 6, 2020
3.2						Sixth Amended and Restated Bylaws of the Company, incorporated by reference to Exhibit 3.2 of the Company’s Current Report on Form 8-K filed on May 6, 2020
4.1						First Amendment dated June 26, 2024 to Credit Agreement dated June 24, 2022 by and among Avanos Medical, Inc., the guarantors party thereto, the lenders party thereto, JPMorgan Chase Bank, N.A. (“JPM”) as administrative agent, MUFG Bank, Ltd. (“MUFG”), PNC Bank, National Association (“PNC”) and U.S. Bank National Association (“U.S. Bank”) as co-syndication agents, and JPM, MUFG, PNC and U.S. Bank as joint lead arrangers and joint bookrunners, filed herewith
10.1*						Avanos Medical, Inc. Executive Severance Plan, amended and restated as of October 29, 2024, filed herewith
31(a)						Section 302 CEO Certification, filed herewith
31(b)						Section 302 CFO Certification, filed herewith
32(a)**						Section 906 CEO Certification, furnished herewith
32(b)**						Section 906 CFO Certification, furnished herewith
101.INS						XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
101.SCH						XBRL Taxonomy Extension Schema Document
101.CAL						XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF						XBRL Taxonomy Extension Definition Linkbase Document
101.LAB						XBRL Taxonomy Extension Label Linkbase Document
101.PRE						XBRL Taxonomy Extension Presentation Linkbase Document
104						Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

* Management contracts, compensatory plans or arrangements

** The certifications attached as Exhibit 32(a) and 32(b) that accompany this Form 10-Q are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of Avanos Medical, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Form 10-Q, irrespective of any general incorporation language contained in such filing.


Table of Contents

SIGNATURES

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 thereunto duly authorized.


	AVANOS MEDICAL, INC.
	(Registrant)

October 30, 2024	By:	/s/ Warren J. Machan
		Warren J. Machan
		Interim Chief Financial Officer
		(Principal Financial Officer)

October 30, 2024	By:	/s/ John J. Hurley
		John J. Hurley
		Controller
		(Principal Accounting Officer)

Exhibit 4.1

FIRST AMENDMENT TO CREDIT AGREEMENT

This FIRST AMENDMENT TO CREDIT AGREEMENT (this “First Amendment”) dated as of June 26, 2024, is by and among AVANOS MEDICAL, INC., a Delaware corporation (the “Borrower”), THE LENDERS PARTY HERETO and JPMORGAN CHASE BANK, N.A., as Administrative Agent for the Lenders (in such capacity “Agent”).

WHEREAS, the Borrower, the Guarantors, the Lenders party thereto and the Agent entered into that certain Credit Agreement dated as of June 24, 2022 (as amended and in effect immediately prior to the effectiveness of this First Amendment, the “Credit Agreement”; the Credit Agreement, as amended by this First Amendment, the “Amended Credit Agreement”);

WHEREAS, the Agent, the Required Lenders and the Borrower seek to modify certain terms and provisions of the Credit Agreement as set forth herein; and

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties hereto hereby agree as follows:

Section 1. Definitions. Capitalized terms used in this First Amendment and not otherwise defined herein shall have the respective meanings given such terms in the Amended Credit Agreement.

Section 2. Specific Amendment to Credit Agreement. Section 7.05(j) of the Credit Agreement is hereby restated in its entirety as follows:

(j) the repurchase, redemption or other acquisition for value of Equity Interests of the Borrower; provided that the aggregate Restricted Payments made under this Section 7.05(j) do not exceed (i) repurchases, redemptions and acquisitions to be made pursuant to the stock redemption program that was commenced prior to the Closing Date plus (ii) $75,000,000 during the term of this Agreement;

Section 3. Conditions Precedent. The effectiveness of this First Amendment is subject to the satisfaction of each of the following conditions (the date such conditions are satisfied is referred to herein as the “First Amendment Effective Date”):

(a) Receipt by the Agent of counterparts of this First Amendment duly executed by the Borrower and Required Lenders;

(b) Payment of all reasonable fees, costs and expenses of the Agent invoiced at least one Business Day prior to the First Amendment Effective Date including, without limitation, the fees and expenses set forth in Section 7 hereof.

Section 4. Representations. The Borrower represents and warrants to the Agent and the Lenders party hereto that:

(a) Authorization. The Borrower has full power, authority and legal right to make, deliver and perform all of its respective obligations hereunder and under the Amended Credit Agreement, and to enter into this First Amendment. This First Amendment has been duly executed and delivered on behalf of the Borrower. The Amended Credit Agreement constitutes a legal, valid and binding obligation of each Loan Party enforceable against such Loan Party in accordance with its terms, except as enforceability may be limited by Debtor Relief Laws and by general principles of equity.

Exhibit 4.1

(b) Compliance with Laws, etc. The execution and delivery by the Borrower of this First Amendment and performance by each Loan Party of the Amended Credit Agreement do not (i) contravene the terms of any such Person’s Organizational Documents, (ii) conflict with or result in any breach or contravention of, or the creation of any Lien under (other than as permitted by Section 7.01 of the Amended Credit Agreement) (x) any material order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject or (y) any material agreement to which such Person is a party or (iii) violate any material Law; except with respect to any conflict, breach, violation or contravention referred to in clause (ii) or (iii), to the extent that such conflict, breach, violation or contravention would not reasonably be expected to have a Material Adverse Effect.

(c) No Default. No Default or Event of Default has occurred and is continuing as of the date hereof nor will exist immediately after giving effect to this First Amendment.

Section 5. Reaffirmation of Representations; Liens and Obligations of Loan Parties. Without limiting Section 4 hereof, the Borrower hereby (i) certifies that as of the date hereof, the representations and warranties of the Loan Parties contained in the Loan Documents are true and correct in all material respects (except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date), (ii) ratifies and reaffirms the Liens granted to the Agent for the benefit of the Lenders under the Amended Credit Agreement and each other Loan Document and confirms and agrees that such Liens hereafter secure all of the Obligations and (iii) acknowledges and reaffirms its Obligations and its continuing obligations owing to the Agent and the Lenders under each of the Loan Documents including, without limitation, the Security Agreement. By executing this First Amendment, the Borrower hereby acknowledges, consents and agrees that all of the Loan Parties’ obligations and liabilities under the Guaranty contained in the Amended Credit Agreement, contingent or otherwise, remain in full force and effect, and that the execution and delivery of this First Amendment shall not alter, amend, reduce or modify its obligations and liability under the Guaranty or any of the other Loan Documents to which it is a party except as expressly set forth herein.

Section 6. Certain References; Effect.

(a) Each reference to the Credit Agreement in any of the Loan Documents shall be deemed to be a reference to the Amended Credit Agreement. This First Amendment shall be deemed to be a “Loan Document” under the Amended Credit Agreement.

(b) Except as expressly herein amended, the terms and conditions of the Credit Agreement and the other Loan Documents remain unchanged and continue to be in full force and effect. The Amended Credit Agreement is hereby ratified and confirmed in all respects. The Agent and the Lenders reserve all rights, privileges and remedies under the Loan Documents. The consent, acknowledgment and amendments contained herein shall be deemed to have prospective application only, unless otherwise specifically stated herein.

Section 7. Fees and Expenses. The Borrower shall reimburse the Agent upon demand for all reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees) incurred by the Agent in connection with the preparation, negotiation, and execution of this First Amendment and the other agreements and documents executed and delivered in connection herewith.

Section 8. Entire Agreement. This First Amendment and the other Loan Documents embody the entire agreement between the parties and supersede all prior agreements and understandings, if any, relating to the subject matter hereof. This First Amendment represents the final agreement among the

Exhibit 4.1

parties and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements of the parties.

Section 9. Benefits. This First Amendment shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns.

Section 10. GOVERNING LAW. THIS FIRST AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ANY CONFLICTS PROVISIONS THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).

Section 11. Effect. Nothing in this First Amendment shall limit, impair or constitute a waiver of the rights, powers or remedies available to the Agent or the Lenders under the Amended Credit Agreement or any other Loan Document.

Section 12. Counterparts. Delivery of an executed counterpart of a signature page of this First Amendment that is an Electronic Signature transmitted by telecopy, emailed .pdf or any other electronic means that reproduces an image of an actual executed signature page shall be effective as delivery of a manually executed counterpart of this First Amendment. The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to this First Amendment shall be deemed to include Electronic Signatures, deliveries or the keeping of records in any electronic form (including deliveries by telecopy, emailed .pdf or any other electronic means that reproduces an image of an actual executed signature page), each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be; provided that nothing herein shall require the Agent to accept Electronic Signatures in any form or format without its prior written consent and pursuant to procedures approved by it; provided further that, without limiting the foregoing, (i) to the extent the Agent has agreed to accept any Electronic Signature, the Agent and each of the Lenders shall be entitled to rely on such Electronic Signature purportedly given by or on behalf of the Borrower or any other Loan Party without further verification thereof and without any obligation to review the appearance or form of any such Electronic Signature and (ii) upon the request of the Agent or any Lender, any Electronic Signature shall be promptly followed by a manually executed counterpart.

[Signatures Commence on Next Page]

Exhibit 4.1

IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to Credit Agreement to be executed as of the date first above written.

Borrower:

AVANOS MEDICAL, INC.

By: /s/ JASON PICKETT

Name: Jason Pickett

Title: Vice President, Tax and Treasurer

Exhibit 4.1

JPMORGAN CHASE BANK, N.A., as Agent and a Lender

By: /s/ HELEN D. DAVIS

Name: Helen D. Davis

Title: Authorized Signer

Exhibit 4.1

MUFG BANK, LTD., as a Lender

By: /s/ DOMINIC YUNG

Name: Dominic Yung

Title: Director

Exhibit 4.1

PNC Bank, National Association, as a Lender

By: /s/ AMY TALIA

Name: Amy Tallia

Title: SVP

Exhibit 4.1

U.S. BANK NATIONAL ASSOCIATION, as a Lender

By: /s/ CHRISTIAN PELLICCI

Name: Christian Pellicci

Title: Assistant Vice President

Exhibit 4.1

ING CAPTIAL LLC, as a Lender

By: /s/ TIM VAN DEN BERG

Name: Tim van den Berg

Title: Director

By: /s/ STEPHEN FARRELLY

Name: Stephen Farrelly

Title: Managing Director

Exhibit 4.1

Regions Bank, as a Lender

By: /s/ JOHN LEVESQUE

Name: John Levesque

Title: Managing Director

Exhibit 4.1

MORGAN STANLEY BANK, N.A., as a Lender

By: /s/ RIKIN PANDYA

Name: Rikin Pandya

Title: Authorized Signatory

Exhibit 4.1

UBS AG, Stamford Branch, as a Lender

By: /s/ Peter Hazoglou

Name: Peter Hazoglou

Title: Authorized Signatory

By: /s/ ANTHONY N. JOSPEH

Name: Anthony N. Joseph

Title: Associate Director

AVANOS MEDICAL, INC.

EXECUTIVE SEVERANCE PLAN

Amended and Restated as of October 29, 2024

1. Preamble and Statement of Purpose. The purpose of this Plan is to assure the Corporation that it will have the continued dedication of, and the availability of objective advice and counsel from, key executives of the Corporation notwithstanding the possibility, threat or occurrence of a change of control of the Corporation.

In the event the Corporation receives any proposal from a third person concerning a possible business combination with the Corporation, or acquisition of the Corporation’s equity securities, or otherwise considers or pursues a transaction that could lead to a change of control, the Committee believes it imperative that the Corporation and the Board of Directors of the Corporation (the “Board”) be able to rely upon key executives to continue in their positions and be available for advice, if requested, without concern that those individuals might be distracted by the personal uncertainties and risks created by such a possibility.

Should the Corporation receive or consider any such proposal or transaction, in addition to their regular duties, such key executives may be called upon to assist in the assessment of the proposal or transaction, to advise management and the Board as to whether the proposal or transaction would be in the best interests of the Corporation and its stockholders, and to take such other actions as the Board might determine to be appropriate.

2. Definitions. As used in this Plan, the following terms shall have the following respective meanings.

(a) Annual Bonus Amount: For any Participant, the target full annual cash incentive awards for the Participant under the Avanos Medical, Inc. Management Achievement Award Program or any successor or additional plan (the “Bonus Program”), for the year in which the Relevant Date occurs, without regard to any otherwise-applicable proration.

(b) Cause: The term “Cause” shall mean any of the following:

(i) the commission by the Participant of a felony;

(ii) the Participant’s dishonesty, habitual neglect or incompetence in the management of the affairs of the Corporation; or

(iii) the refusal or failure by the Participant to act in accordance with any lawful directive or order of the Corporation, or an act or failure to act

by the Participant which is in bad faith and which is detrimental to the Corporation; or

(iv) the Participant’s material breach of any employment, severance, restrictive covenant agreement, or similar agreement, with the Corporation or a Subsidiary.

(c) Change of Control: “Change of Control” means and includes the occurrence of any one of the following events but shall specifically exclude a public offering of any class or series of the Corporation’s equity securities pursuant to a registration statement filed by the Corporation under the Securities Act of 1933:

(i) during any consecutive 12-month period, individuals who, at the beginning of such period, constitute the Board (the “Incumbent Directors”) cease for any reason to constitute at least a majority of such Board, provided that any person becoming a director after the beginning of such 12-month period and whose election or nomination for election was approved by a vote of at least a majority of the Incumbent Directors then on the Board shall be an Incumbent Director; provided, however, that no individual initially elected or nominated as a director of the Corporation as a result of an actual or threatened election contest with respect to the election or removal of directors (“Election Contest”) or other actual or threatened solicitation of proxies or consents by or on behalf of any Person other than the Board (“Proxy Contest”), including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest, shall be deemed an Incumbent Director; or

(ii) any individual, entity or group, within the meaning of Section 3(a)(9) of the Securities Exchange Act of 1934 (the “Exchange Act”) and as used in Section 13(d)(3) or 14(d)(2) of the Exchange Act (a “Person”), other than a broker, underwriter or financial institution that acquires such shares as part of a firm commitment or similar underwriting or distribution process pursuant to which the subject shares of stock are being held for further distribution (an “Underwriter”), becomes a “Beneficial Owner” under the meaning given such term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act, directly or indirectly, of either (A) 30% or more of the then-outstanding shares of common stock of the Corporation (“Corporation Common Stock”) or (B) securities of the Corporation representing 30% or more of the combined voting power of the Corporation’s then outstanding securities eligible to vote for the election of directors (the “Corporation Voting Securities”); provided, however, that for purposes of this subsection (ii), the following acquisitions of Corporation Common Stock or Corporation Voting Securities shall not constitute a Change of Control: (w) an acquisition directly (or indirectly through Underwriters) from the Corporation, (x) an acquisition by the Corporation or a Subsidiary, (y) an acquisition

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by any employee benefit plan (or related trust) sponsored or maintained by the Corporation or any Subsidiary, or (z) an acquisition pursuant to a Non-Qualifying Transaction (as defined in subsection (iii) below); or

(iii) the consummation of a reorganization, merger, consolidation, statutory share exchange or similar form of corporate transaction involving the Corporation or a Subsidiary (a “Reorganization”), or the sale or other disposition of all or substantially all of the Corporation’s assets (a “Sale”) or the acquisition of assets or stock of another corporation or other entity (an “Acquisition”), unless immediately following such Reorganization, Sale or Acquisition: (A) all or substantially all of the individuals and entities who were the Beneficial Owners, respectively, of the outstanding Corporation Common Stock and outstanding Corporation Voting Securities immediately prior to such Reorganization, Sale or Acquisition beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the entity resulting from such Reorganization, Sale or Acquisition (including, without limitation, an entity which as a result of such transaction owns the Corporation or all or substantially all of the Corporation’s assets or stock either directly or through one or more subsidiaries, the “Surviving Entity”) in substantially the same proportions as their ownership, immediately prior to such Reorganization, Sale or Acquisition, of the outstanding Corporation Common Stock and the outstanding Corporation Voting Securities, as the case may be, and (B) no person (other than (x) the Corporation or any Subsidiary, (y) the Surviving Entity or its ultimate parent entity, or (z) any employee benefit plan (or related trust) sponsored or maintained by any of the foregoing) is the Beneficial Owner, directly or indirectly, of 30% or more of the total common stock or 30% or more of the total voting power of the outstanding voting securities eligible to elect directors of the Surviving Entity, and (C) at least a majority of the members of the board of directors of the Surviving Entity were Incumbent Directors at the time of the Board’s approval of the execution of the initial agreement providing for such Reorganization, Sale or Acquisition (any Reorganization, Sale or Acquisition which satisfies all of the criteria specified in (A), (B) and (C) above shall be deemed to be a “Non-Qualifying Transaction”); or

(iv) approval by the stockholders of the Corporation of a complete liquidation or dissolution of the Corporation.

(d) Code: The Internal Revenue Code of 1986, as amended.

(e) Committee: The Compensation Committee of the Board.

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(f) Corporation: Avanos Medical, Inc. and any successor thereto that assumes this Plan pursuant to Section 14 below.

(g) Discretionary Participant: Any Participant who is not an executive officer of the Corporation.

(h) Eligible Employee: Those key executives and other officers of the Corporation and its Subsidiaries who are from time to time designated by the Committee as, or who pursuant to criteria established by the Board or the Committee are, eligible to participate in this Plan.

(i) Equity Plans: The Avanos Medical, Inc. Equity Participation Plan, the Avanos Medical, Inc. 2021 Long Term Incentive Plan, as amended, and any successor or additional plans under which a Participant receives stock options, restricted stock, RSUs (as defined below) or other equity-based compensation.

(j) Executive Participant: A Participant who is an executive officer of the Corporation.

(k) Excise Tax: The excise tax imposed by Section 4999 of the Code, together with any interest or penalties imposed with respect to such excise tax.

(l) Fair Market Value: With respect to any publicly traded equity security, the reported closing price of such security on the relevant date as reported on the composite list used by The Wall Street Journal for reporting stock prices, or, if no such sale shall have been made on that day, on the last preceding day on which there was such a sale; and with respect to any other property, the fair market value thereof as determined by the Committee in good faith.

(m) Good Reason: Termination by the Participant for “Good Reason” shall mean the Separation from Service during the two-year time period following the initial existence (without the Participant’s express written consent) of any one of the following conditions:

(i) A material diminution in the Participant’s base compensation.

(ii) A material diminution in the Participant’s authority, duties or responsibilities.

(iii) A material diminution in the authority, duties, or responsibilities of the supervisor to whom the Participant is required to report, including a requirement that a Participant report to a corporate officer or employee instead of reporting directly to the Board.

(iv) A material diminution in the budget over which the Participant retains authority.

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(v) A change, by more than 50 miles, in the geographic location at which the Participant must perform the services.

(vi) Any other action or inaction that constitutes a material breach by the Corporation of any agreement under which the Participant provides services.

The Participant must provide notice to the Corporation of the existence of any of the above conditions within a period not to exceed 90 days of the initial existence of the condition, upon the notice of which the Corporation must be provided a period of at least 30 days during which it may remedy the condition. In the event the Corporation remedies such condition during such period, “Good Reason” shall not be deemed to exist with respect to such condition.

The Participant’s right to terminate the Participant’s employment for Good Reason shall not be affected by the Participant’s incapacity due to physical or mental illness.

(n) Multiplier: For the Chief Executive Officer of the Corporation, two and one-half; for an Executive Participant other than the Chief Executive Officer, two, and for a Discretionary Participant, one.

(o) Net After Tax Receipt: The Value of a Payment, net of all taxes imposed on a Participant with respect thereto under Sections 1 and 4999 of the Code, under Section 3121 of the Code, and any state and local income taxes, determined by applying the highest marginal rate under Section 1 of the Code which applied to the Participant’s taxable income for the immediately preceding taxable year.

(p) Participant: An Eligible Employee who is designated as a Participant in this Plan by the Committee. The Participants as of October 29, 2024 are provided on Exhibit A to this Plan, which shall be updated from time to time. For purposes of this Plan, the Committee shall be permitted to designate groups of Eligible Employees by job title as Participants without the need to identify any individual Participant by name.

(q) Payment: Any payment or distribution in the nature of compensation (within the meaning of Section 280G(b)(2) of the Code) to or for the benefit of a Participant, whether paid or payable pursuant to this Plan or otherwise.

(r) Qualified Termination of Employment: The Participant’s Separation from Service either (i) within the two (2) year period following a Change of Control of the Corporation (A) by the Corporation without Cause or, (B) by the Participant with Good Reason, or (ii) by the Corporation without Cause before a Change of Control, if a Change of Control occurs within one year after such Separation from Service and it is reasonably demonstrated by the Participant that such Separation from Service was at the request of a third party that had taken steps reasonably calculated to effect a Change of Control or otherwise arose in connection with or in anticipation of a Change of Control.

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(s) Reduced Amount: With respect to a Participant, the greatest aggregate amount of Separation Payments which (a) is less than the sum of all Separation Payments and (b) results in aggregate Net After Tax Receipts which are equal to or greater than the Net After Tax Receipts which would result if the Participant were paid the sum of all Separation Payments.

(t) Relevant Date: In the case of a Qualified Termination of Employment as described in clause (ii) of the definition of “Qualified Termination of Employment,” the date of such Qualified Termination of Employment and, in all other cases, the date of the Change of Control.

(u) RSUs. Time-based restricted share units and/or performance-based restricted share units.

(v) Separation from Service: Termination of employment with the Corporation or a Subsidiary. A Separation from Service also will be deemed to have occurred if the Participant’s services with the Corporation or a Subsidiary is reduced to an annual rate that is 20 percent or less of the services rendered, on average, during the immediately preceding three years of employment (or if employed less than three years, such lesser period). A Separation from Service shall not be deemed to have occurred where a Participant transfers employment between the Company and a Subsidiary or between Subsidiaries.

(w) Separation Payment: With respect to a Participant, a Payment paid or payable to the Participant pursuant to this Plan (disregarding Section 11 of this Plan).

(x) Severance Period: For an Executive Participant, the period of two years beginning on the date of the Qualified Termination of Employment

(y) Subsidiary: Any domestic or foreign corporation at least twenty percent (20%) of whose shares normally entitled to vote in electing directors is owned directly or indirectly by the Corporation or by other Subsidiaries, provided, however, that “at least fifty percent (50%)” shall replace “at least twenty percent (20%)” where there is not a legitimate business criteria for using such lower percentage.

(z) Value: With respect to a Payment, the economic present value of a Payment as of the date of the change of control for purposes of Section 280G of the Code, as determined by the Accounting Firm using the discount rate required by Section 280G(d)(4) of the Code.

3. Participation. An Eligible Employee shall become a Participant on the date he or she is designated as a Participant by the Committee, or such other time as the Committee may determine in its discretion. A Participant shall cease to be a Participant in the Plan upon the earlier of (i) the Participant’s Separation from Service that is not a Qualified Termination of Employment, or (ii) the termination of the Plan in accordance with its terms.

4. Separation from Service of Participants. Nothing in this Plan shall be deemed to entitle a Participant to continued employment with the Corporation and its Subsidiaries,

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and the rights of the Corporation to terminate a Participant’s service shall continue as fully as though this Plan were not in effect, provided that any Qualified Termination of Employment shall entitle the Participant to the benefits herein provided. In addition, nothing in this Plan shall be deemed to entitle a Participant under this Plan to any rights, or to payments under this Plan, with respect to any plan or program in which the Participant was not a participant prior to a Qualified Termination of Employment.

5. Payments Upon Qualified Termination of Employment. In the event of a Qualified Termination of Employment of a Participant, a lump sum cash payment shall be made to such Participant as compensation for services rendered, in an amount or amounts (subject to any applicable payroll or other taxes required to be withheld) equal to the sum of the amounts specified in subsections (a) through (e) below (the “Severance Payments”):

(a) Salary Plus Incentive Compensation. A lump sum amount equal to the Multiplier times the sum of (a) the Participant’s annual base salary at the rate in effect immediately prior to the Relevant Date or, if higher, immediately before the Qualified Termination of Employment and (b) the Annual Bonus Amount.

(b) Prorated Final Year Bonus. If the Qualified Termination of Employment occurs after March 31 of a given year, a lump sum amount equal to (i) the annual cash incentive award that would have been payable to the Participant, for the year in which the Qualified Termination of Employment occurs, under the Bonus Program in which the Participant was a participant on the Relevant Date if the Participant had remained employed for the entire for the entire calendar year, and assuming that performance was achieved at the target level of performance, multiplied by (ii) a fraction, the numerator of which is the number of days worked by the Participant during such final year and the denominator of which is 365.

(c) Stock Options. All stock options that were granted to the Participant under any of the Equity Plans, including but not limited to any substitute plans adopted prior to the Relevant Date (or any successor or additional plan), and were outstanding both on the Relevant Date and immediately before the Qualified Termination of Employment, shall vest and become exercisable and the Qualified Termination of Employment of the Participant shall be deemed a “Retirement” for purposes of exercising the stock options under the terms of the Equity Plans and the applicable award agreements.

(d) RSUs. All RSUs that were granted to the Participant under any of the Equity Plans, including but not limited to any substitute plans adopted prior to the Relevant Date (or any successor or additional plan), and were outstanding both on the Relevant Date and immediately before the Qualified Termination of Employment, shall become fully vested upon the Qualified Termination of Employment. For purposes of any RSU subject to performance conditions, such RSU will be deemed earned at the target level.

(e) Employer Portion of Retirement Plan Benefits. With respect to an Executive Participant only, a lump sum amount equal to the Participant’s maximum matching contribution under the Avanos Medical, Inc. 401(k) Plan (the “401(k) Plan”) (or any successor or additional plans) and the Avanos Medical, Inc. Supplemental Retirement 401(k) Plan (or any successor or additional plans) (individually the “Supplemental 401(k)

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Plan” and collectively, the “Retirement Benefit Plans”) to which the Participant would have been entitled if he or she had remained employed by the Corporation for the Severance Period at the rate of annual compensation specified in Section 5(a) above except that the Annual Bonus Amount shall be treated as earned for the year in which separation occurred and the balance of the Severance Period and no award actually earned in, and paid for, the year in which termination occurred shall be considered.

(f) Medical and Dental Benefits. A lump sum amount equal to (a) the amount of the monthly premiums that the Participant would be required to pay, if he or she elected “COBRA” continuation coverage under the medical and dental plans of the Corporation in which the Participant was participating immediately before the Qualified Termination of Employment, based upon the premium rates in effect as of the date of the Qualified Termination of Employment, times (b) the Multiplier, times (c) twelve.

The Severance Payments shall be made within 60 days following the later of the date of the Qualified Termination of Employment or the date of the Change of Control, subject to Section 16. Notwithstanding anything in this Section 5 to the contrary, any amounts which are payable under this Plan with respect to amounts which the Participant would have been entitled to receive under a deferred compensation plan required to meet the requirements of Section 409A of the Code and the regulations promulgated thereunder, shall be payable at the dates and in such amounts as would have been payable to the Participant under the terms of the deferred compensation plan.

6. Separation Agreement and Release. No Participant shall be entitled to receive Severance Benefits hereunder unless such Participant executes a Separation Agreement and Full and Final Release of Claims (the “Separation Agreement”), in the form attached hereto as Exhibit B, within the period specified for such individual therein and such Participant does not revoke such Separation Agreement in writing within the 7-day period following the date on which it is executed. The Employer shall provide the Separation Agreement to the Participant promptly following the date of the Qualified Termination of Employment.

6. No Payments on Other Termination of Employment. In the event a Participant’s employment terminates in any way that does not constitute a Qualified Termination of Employment, no benefits shall be payable to the Participant under this Plan.

7. Other Terms and Conditions. Where appearing in this Plan, the masculine shall include the feminine and the plural shall include the singular, unless the context clearly indicates otherwise.

8. Non-Assignability. Each Participant’s rights under this Plan shall be non-transferable except by will or by the laws of descent and distribution.

9. Unfunded Plan. The Plan shall be unfunded. Neither the Corporation nor the Board shall be required to segregate any assets that may at any time be represented by benefits under the Plan. Neither the Corporation nor the Board shall be deemed to be a trustee of any amounts to be paid under the Plan. Any liability of the Corporation to any Participant with respect to any benefit shall be based solely upon any contractual obligations created by the Plan; no such obligation shall be deemed to be secured by any pledge or any encumbrance on any property of the Corporation.

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10. Certain Reduction of Payments by the Corporation.

(a) Anything in this Plan to the contrary notwithstanding, in the event a reputable certified public accounting firm designated by the Corporation (the “Accounting Firm”) shall determine that receipt of all Payments would subject a Participant to tax under Section 4999 of the Code, it shall determine whether some amount of Payments would meet the definition of a “Reduced Amount.” If the Accounting Firm determines that there is a Reduced Amount, the aggregate Payments shall be reduced to such Reduced Amount. The reduction of the Payments, if applicable, shall be made by first reducing cash Payments and then, to the extent necessary, reducing those Payments having the next highest ratio of Parachute Value to actual present value of such Payments as of the date of the Change of Control, as determined by the Accounting Firm. For purposes of this Section 11, present value shall be determined in accordance with Section 280G(d)(4) of the Code, and the “Parachute Value” of a Payment means the present value as of the date of the change of control of the portion of such Payment that constitutes a “parachute payment” under Section 280G(b)(2) of the Code, as determined by the Accounting Firm for purposes of determining whether and to what extent the Excise Tax will apply to such Payment. All fees payable to the Accounting Firm with respect to this Section 11 shall be paid solely by the Corporation.

(b) If the Accounting Firm determines that aggregate Separation Payments should be reduced to the Reduced Amount, the Corporation shall promptly give the Participant notice to that effect and a copy of the detailed calculation thereof. All determinations made by the Accounting Firm under this Section 11 shall be binding upon the Corporation and the Participant and shall be made as promptly as practicable. Following such determination, the Corporation shall pay to or distribute for the benefit of the Participant such Separation Payments as are then due to the Participant under Section 5 of this Plan and shall promptly pay to or distribute for the benefit of the Participant in the future such Separation Payments as become due to the Participant under this Plan. Notwithstanding the prior sentence, such determination by the Accounting Firm shall be made within 60 days of the later of the Qualified Termination of Employment of the Participant or the date of the Change of Control.

(c) While it is the intention of the Corporation to reduce the amounts payable or distributable to a Participant hereunder only if the aggregate Net After Tax Receipts to the Participant would thereby be increased, as a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that amounts will have been paid or distributed by the Corporation to or for the benefit of a Participant pursuant to this Plan which should not have been so paid or distributed (“Overpayment”) or that additional amounts which will have not been paid or distributed by the Corporation to or for the benefit of a Participant pursuant to this Plan could have been so paid or distributed (“Underpayment”), in each case, consistent with the calculation of the Reduced Amount hereunder. In the event that the Accounting Firm determines that an Overpayment has been made, based upon the assertion of a deficiency by the Internal Revenue Service against the Corporation or the Participant which the Accounting Firm believes has a high probability of success, the Participant shall repay any such benefit to the Corporation together with interest at the applicable federal rate provided for in Section 7872(f)(2) of the Code; provided, however, that no such interest

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shall be deemed to have been incurred and no amount shall be payable by a Participant to the Corporation if and to the extent such repayment would not either reduce the amount on which the Participant is subject to tax under Section 1 and Section 4999 of the Code or generate a refund of such taxes. In the event that the Accounting Firm, based upon controlling precedent or substantial authority, determines that an Underpayment has occurred, any such Underpayment shall be promptly paid by the Corporation to or for the benefit of the Participant together with interest at the applicable federal rate provided for in Section 7872(f)(2) of the Code, but no later than March 15 of the year after the year in which the Underpayment is determined to exist, which is when the legally binding right to such Underpayment arises. Notwithstanding anything in this Plan to the contrary, the payment will be conditioned upon the Overpayment or Underpayment meeting the requirements of Section 409A of the Code and the regulations promulgated thereunder.

11. No Duty to Mitigate. In no event shall any Participant be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Participant under any of the provisions of this Plan, and such amounts shall not be reduced whether or not the Participant obtains other employment.

12. Termination and Amendment of this Plan. The Committee shall have the power at any time, in its discretion, to amend, abandon or terminate this Plan, in whole or in part, except that no such amendment, abandonment or termination shall adversely affect the rights of, or the benefits payable to, any Participant under the Plan unless such amendment, abandonment or termination is agreed to in a writing signed by the Participant and the Corporation. Notwithstanding the foregoing, the Committee may modify the Plan at any time without the Participants' consent to comply with the requirements of Section 409A of the Code and any other rule, regulation, or statute, as determined by the Committee in its sole and absolute discretion.

13. Successors. The Corporation shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of its business and/or assets to assume expressly and agree to perform this Plan in the same manner and to the same extent that the Corporation would be required to perform them if no such succession had taken place.

14. Interpretation of the Plan. The Committee shall have sole and absolute authority to interpret and construe the terms of this Plan. Any interpretations, rules, decisions, or constructions by the Committee shall be final and binding on all Participants.

15. Tax Treatment. The Participant shall be solely responsible for tax consequences of any payment under the Plan. It is intended that the payments and benefits provided under the Plan shall either be exempt from the application of, or comply with, the requirements of Section 409A of the Code. The Plan shall be construed in a manner that effects such intent. Nevertheless, the tax treatment of the benefits provided under the Plan is not warranted or guaranteed. Neither the Corporation nor its respective directors, officers, employees or advisers (other than in his or her capacity as a Participant) shall be held liable for any taxes, interest, penalties or other monetary amounts owed by any Participant or other taxpayer as a result of the Plan.

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Notwithstanding anything in the Plan to the contrary, to the extent that any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code (“Non-Exempt Deferred Compensation”) would otherwise be payable or distributable under the Plan by reason of the occurrence of the Participant’s termination of employment, such Non-Exempt Deferred Compensation will not be payable or distributable to the Participant by reason of such circumstance unless the circumstances giving rise to such termination of employment meet any description or definition of “separation from service” in Section 409A of the Code and applicable regulations (without giving effect to any elective provisions that may be available under such definition). If this provision prevents the payment or distribution of any Non-Exempt Deferred Compensation, such payment or distribution shall be made on the date, if any, on which an event occurs that constitutes a Section 409A-compliant “separation from service.” Each payment of Severance Benefits pursuant to this Plan shall be considered a separate payment, as described in Treas. Reg. Section 1.409A-2(b)(2), for purposes of Section 409A of the Code.

Whenever in this Plan a payment or benefit is conditioned on the Participant’s execution of a Separation Agreement, the Separation Agreement must be executed and all revocation periods shall have expired in accordance with terms set forth therein, but in no case later than sixty (60) days after the date of the Qualified Termination of Employment; failing which such payment or benefit shall be forfeited. If such payment or benefit constitutes Non-Exempt Deferred Compensation, then such payment or benefit (including any installment payments) that would have otherwise been payable during such 60-day period shall be accumulated and paid on the 60th day after the date of the Qualified Termination of Employment provided such release shall have been executed and such revocation periods shall have expired. If such payment or benefit is exempt from Section 409A of the Code, the Corporation may elect to make or commence payment at any time during such 60-day period.

17. Indemnification. If litigation shall be brought by a Participant to enforce any provision contained in this Plan and at least one claim in such litigation is adjudicated in the Participant’s favor, the Corporation hereby agrees to indemnify the Participant for the Participant’s reasonable attorney's fees and disbursements incurred in such litigation, and hereby agrees to pay prejudgment interest on any money judgment obtained by the Participant calculated at Citibank's (or any successor entity) prime rate of interest in effect from time to time from the date that payment(s) to the Participant should have been made under this Plan. The reimbursement of an attorney's fees and disbursements incurred in such litigation will be made on or before the last day of the calendar year following the calendar year in which the expense was incurred.

18. Payment Obligations Absolute. The Corporation's obligation to pay a Participant the Severance Benefits provided in this Plan shall be absolute and unconditional and shall not be affected by any circumstances, including without limitation, any set-off, counterclaim, recoupment, defense or other right which the Corporation may have against the Participant or anyone else. All amounts payable by the Corporation hereunder shall be paid without notice or demand.

19. Effective Date. This Plan became effective on November 1, 2014, was amended and restated on October 26, 2016, and was further amended and restated on October 25, 2017, October 27, 2020, March 4, 2022, February 14, 2023 and October 29, 2024.

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Exhibit A

AVANOS MEDICAL, INC.

Executive Severance Plan

As of October 29, 2024

List of Participants


Name			Type of Participant
Michael Greiner			Executive Participant*
Mojirade James			Executive Participant
Kerr Holbrook			Executive Participant
Sig Delgado			Executive Participant
Scott Galovan			Executive Participant
Vinny Sastri			Executive Participant
Chip Zimliki			Executive Participant
John Cato			Executive Participant
Katrine Kubis			Executive Participant

* Mr. Greiner was appointed to the position of Interim Chief Executive Officer on October 28, 2024. He will remain an Executive Participant for purposes of the Plan while he remains in that position.

Exhibit B

AVANOS MEDICAL, INC.

SEPARATION AGREEMENT AND

FULL AND FINAL RELEASE OF CLAIMS

This Separation Agreement and Full and Final Release of Claims (“Agreement”) is made and entered into between _____________ (“Executive”) and Avanos Medical, Inc., a Delaware corporation (the “Corporation”)

1. SEPARATION FROM EMPLOYMENT. Executive’s employment is being terminated and Executive’s last day on the payroll is ______, 20__ (the “Separation Date”).

2. SEVERANCE PLAN. Executive agrees and understands that the consideration described in Paragraph 2 of this Agreement is provided through the Avanos Medical, Inc. Amended and Restated Executive Severance Plan (the “Plan”), which also requires the execution of this Agreement as a condition to the payment of benefits under the Plan.

3. CONSIDERATION. In consideration of Executive’s decision to enter into this Agreement, following the Corporation’s receipt of this Agreement executed by the Executive and the expiration of the seven (7) day period within which the Executive may revoke Executive’s acceptance of this Agreement as explained below (and provided Executive has not exercised such right of revocation), the Corporation will provide Executive with the following:

(1)A lump sum separation payment in the aggregate amount of $____, less ordinary tax withholding and all required deductions, which amount is the sum of (i) $____ in satisfaction of the severance payment pursuant to Section 5(a) of the Plan, (ii) $____ in satisfaction of the prorated final year bonus pursuant to Section 5(b) of the Plan, (iii) $____ in satisfaction of the retirement plan benefits pursuant to Section 5(d) of the Plan, and (iv) $____ in satisfaction of the medical and dental benefits pursuant to Section 5(e) of the Plan.

(2)Any outstanding and unvested stock options held by Executive shall be fully vested and exercisable, and Executive’s termination of employment shall be treated as a retirement for purposes of exercising the stock options under the terms of the relevant equity incentive plans and award agreements. [NOTE: this applies only with respect to stock options that are outstanding on both the Relevant Date (as defined in the Plan) and immediately before the Executive’s termination of employment.]

(3)Any outstanding and unvested time-based restricted share units and/or performance-based restricted share units held by Executive shall be fully vested, with any performance-based restricted share unit being deemed earned at the target level. [NOTE: this applies only with respect to RSUs that are outstanding

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on both the Relevant Date as defined in the Plan) and immediately before the Executive’s termination of employment.]

Executive further acknowledges that tax withholdings may be applied to the above payments as determined by the Corporation in its sole discretion. Executive agrees that, except for the amounts withheld, Executive shall be fully responsible for paying any taxes, interest, penalties, or other amounts due on the above payments and the Corporation makes no representation as to the tax treatment of any consideration under this Agreement. All above payments will be made as soon as administratively feasible after the Separation Date or the date this Agreement becomes final and binding, whichever is later.

4. VACATION PAY. Whether or not Executive executes this Agreement, Executive will be paid for any unused vacation due to Executive according to the Corporation’s vacation policy currently in effect and as required by law.

5. FULL AND FINAL RELEASE. In consideration of the payments being provided to Executive above, Executive, for Executive, Executive’s attorneys, heirs, executors, administrators, successors and assigns, fully, finally and forever releases and discharges the Corporation, all parent, subsidiary, related and affiliated companies, as well as its and their successors, assigns, officers, owners, directors, agents, representatives, attorneys, and employees (all of whom are referred to throughout this Agreement as the “Released Parties”), of and from all claims, demands, actions, causes of action, suits, damages, losses, and expenses, whether known or unknown, of any and every nature whatsoever, as a result of actions or omissions occurring through the execution date of this Agreement. Specifically included in this waiver and release are, among other things, any and all claims of alleged employment discrimination, either as a result of the separation of Executive’s employment or otherwise, any claims under any severance pay plan of the Released Parties, the Age Discrimination in Employment Act, the Older Workers Benefit Protection Act, Title VII of the Civil Rights Act of 1964, the Family and Medical Leave Act (FMLA), the Americans with Disabilities Act, the Worker Adjustment and Retraining Notification (WARN) Act, the Uniformed Services Employment and Reemployment Rights Act (USERRA), the Ledbetter Fair Pay Act, the Genetic Information Nondiscrimination Act of 2008, the Internal Revenue Code (IRC), the US tax code, the Employee Retirement Income Security Act (ERISA), any other federal, state or local statute, rule, ordinance, or regulation, as well as any claims for alleged wrongful discharge, negligent or intentional infliction of emotional distress, breach of contract, fraud, defamation, or any other unlawful behavior, the existence of which is specifically denied by the Released Parties.

Executive hereby expressly waives all rights Executive might have under any laws including, without limitation, Section 1542 of the Civil Code of the State of California, which states as follows:

A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by Executive must have materially affected his or her settlement with the debtor.

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Thus, notwithstanding the provisions of any law, including without limitation, Section 1542 of the Civil Code of the State of California, and for the purpose of implementing a full and complete release and discharge of the Released Parties, Executive expressly acknowledges that this Agreement is intended to include in its effect, without limitation, all claims that Executive does not know or suspect to exist in Executive’s favor at the time Executive executes this Agreement, and that this Agreement contemplates the extinguishment of any such claims.

The above release does not waive any rights or claims that (a) may arise after the date on which Executive executes this Agreement; (b) cannot lawfully be released under applicable law, including, but not limited to, unemployment benefits and workers’ compensation claims, (c) constitute an award to Executive from or by a Government Agency for providing information. In addition, nothing in this Agreement is intended to waive any vested right that Executive may have under any pension, 401(k) plan or other benefit plan provided by the Released Parties, and nothing in this Agreement shall prohibit Executive from enforcing such rights.

6. NON-INTERFERENCE. Nothing in this Agreement shall be construed to prohibit Executive from filing a charge or participating in any investigation or proceeding before any federal, state or local agency or commission including, but not limited to, the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, and the Securities and Exchange Commission (collectively, “Government Agencies”). In addition, nothing in this Agreement shall limit Executive’s ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Corporation. This Agreement does not limit Executive’s right to receive an award for information provided to any Government Agencies regarding any violation of any Securities and Exchange Commission regulation or financial fraud or misconduct. Notwithstanding the foregoing, to the maximum extent permitted by law, Executive waives Executive’s right to recover damages as a result of any charge or lawsuit filed by Executive or by anyone else on Executive’s behalf, including a class or collective action, whether or not Executive is named in such proceeding. Furthermore, pursuant to the federal Defend Trade Secrets Act of 2016, Executive shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made (1) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney, in each case, solely for the purpose of reporting or investigating a suspected violation of law or (2) in a complaint or other document filed in a lawsuit or proceeding, if such filings are made under seal.

7. NO OTHER CLAIMS. Executive understands that Executive is releasing claims about which Executive may not know anything at the time Executive executes this Agreement. Executive represents and warrants that Executive has (a) filed no claims, lawsuits, charges, grievances, or causes of action of any kind against the Released Parties and, to the best of the Executive’s knowledge, Executive possesses no such claims (including Fair Labor Standards Act (“FLSA”) and worker’s compensation claims) that Executive has not already disclosed to the Released Parties; (b) received any and all compensation (including overtime compensation), meal periods, and rest periods to which Executive may have been entitled, and

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Executive is not currently aware of any facts or circumstances constituting a violation by the Released Parties of the FLSA or other applicable wage, hour, meal period, and/or rest period laws that Executive has not already disclosed to the Released Parties; and (c) not suffered any work-related injury or illness within the twelve (12) months preceding Executive’s execution of this Agreement, and Executive is not currently aware of any facts or circumstances that would give rise to a worker’s compensation claim against the Released Parties that Executive has not already disclosed to the Released Parties.

8. DUTY TO COOPERATE. Executive agrees to be available on a reasonable basis to assist the Released Parties with any investigation, claim, suit, or other proceeding that is pending or threatened by or against the Released Parties. Executive further agrees to promptly inform the Corporation’s General Counsel if Executive is requested to: (a) testify in connection with or otherwise become involved in any claim against the Released Parties; or (b) assist with or participate in any investigation of the Released Parties. The Corporation’s General Counsel may be contacted via mail at the following address: General Counsel, Avanos Medical, Inc., 5405 Windward Parkway, Alpharetta, Georgia 30004.

9. RESTRICTIVE COVENANTS. Executive acknowledges and agrees that he or she has received good and valuable consideration for entering into this Agreement. Executive acknowledges and agrees that he or she has been provided and entrusted with Confidential Information (as that term is defined below), including highly confidential customer information that is subject to extensive measures to maintain its secrecy within the Corporation, is not known in the trade or disclosed to the public, and would materially harm the Corporation’s legitimate business interests if it was disclosed or used in violation of this Agreement. Executive also acknowledges and agrees that he or she has been provided and entrusted with access to the Corporation’s customer and employee relationships and goodwill. Executive further acknowledges and agrees that the Corporation’s Confidential Information, customer and employee relationships, and goodwill are valuable assets of the Corporation and are legitimate business interests that are properly subject to protection through the covenants contained in this Agreement.

(i) Potential Unfair Competition. Executive acknowledges and agrees that as a result of his or her employment with the Corporation, his or her knowledge of and access to Confidential Information, and his or her relationships with the Corporation’s customers and employees, Executive would have an unfair competitive advantage if Executive were to engage in activities in violation of this Agreement.

(ii) No Undue Hardship. Executive acknowledges and agrees that he or she possesses marketable skills and abilities that will enable him or her to find suitable employment without violating the covenants set forth in this Agreement.

(iii) Voluntary Execution. Executive acknowledges and affirms that he or she is executing this Agreement voluntarily, that he or she has read this Agreement carefully and had a full and reasonable opportunity to consider this Agreement (including an

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opportunity to consult with legal counsel), and that he or she has not been pressured or in any way coerced, threatened or intimidated into signing this Agreement.

(iv) Restriction on Disclosure and Use of Confidential Information. Executive agrees that Executive shall not, directly or indirectly, use any Confidential Information on Executive’s own behalf or on behalf of any Person other than the Corporation, or reveal, divulge, or disclose any Confidential Information to any Person not expressly authorized by the Corporation to receive such Confidential Information. This obligation shall remain in effect for as long as the information or materials in question retain their status as Confidential Information. Executive further agrees that he or she shall fully cooperate with the Corporation in maintaining the Confidential Information to the extent permitted by law. The parties acknowledge and agree that this Agreement is not intended to, and does not, alter either the Corporation’s rights or Executive’s obligations under any state or federal statutory or common law regarding trade secrets and unfair trade practices. Anything herein to the contrary notwithstanding, Executive shall not be restricted from disclosing information that is required to be disclosed by law, court order or other valid and appropriate legal process; provided, however, that in the event such disclosure is required by law, Executive shall provide the Corporation with prompt notice of such requirement so that the Corporation may seek an appropriate protective order prior to any such required disclosure by Executive.

For purposes of this Agreement, “Confidential Information” means any and all data and information relating to the Corporation, its activities, business, or clients that (i) was disclosed to Executive or of which Executive became aware as a consequence of his or her employment with the Corporation; (ii) has value to the Corporation; and (iii) is not generally known outside of the Corporation. “Confidential Information” shall include, but is not limited to the following types of information regarding, related to, or concerning the Corporation: trade secrets; financial plans and data; management planning information; business plans; operational methods; market studies; marketing plans or strategies; pricing information; product development techniques or plans; customer lists; customer files, data and financial information; details of customer contracts; current and anticipated customer requirements; identifying and other information pertaining to business referral sources; past, current and planned research and development; computer aided systems, software, strategies and programs; business acquisition plans; management organization and related information (including, without limitation, data and other information concerning the compensation and benefits paid to officers, directors, employees and management); personnel and compensation policies; new personnel acquisition plans; and other similar information. “Confidential Information” also includes combinations of information or materials which individually may be generally known outside of the Corporation, but for which the nature, method, or procedure for combining such information or materials is not generally known outside of the Corporation. In addition to data and information relating to the Corporation, “Confidential Information” also includes any and all data and information relating to or concerning a third party that otherwise meets the definition set forth above, that was provided or made available to the Corporation by such third party, and that the

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Corporation has a duty or obligation to keep confidential. This definition shall not limit any definition of “confidential information” or any equivalent term under state or federal law. “Confidential Information” shall not include information that has become generally available to the public by the act of one who has the right to disclose such information without violating any right or privilege of the Corporation.

(v) Non-Solicitation of Protected Customers. Executive agrees that during the two (2) year period following the Separation Date, he or she shall not, without the prior written consent of the Corporation, directly or indirectly, on his or her own behalf or as a principal, owner, employee, representative or agent of any Person, solicit, divert, take away, or attempt to solicit, divert, or take away a Protected Customer for the purpose of engaging in, providing, or selling any activities, products, or services of the type conducted, authorized, offered, or provided by the Corporation as of the Separation Date, or during the two (2) years immediately prior to such date.

For purposes of this Agreement, “Protected Customer” means any person or entity to whom the Corporation has sold its products or services or actively solicited to sell its products or services, and with whom Executive has had Material Contact on behalf of the Corporation during his or her employment with the Corporation, and “Material Contact” means contact between Executive and a customer or potential customer of the Corporation (i) with whom or which Executive had dealings on behalf of the Corporation; (ii) whose dealings with the Corporation were coordinated or supervised by Executive; (iii) about whom Executive obtained Confidential Information in the ordinary course of business as a result of his or her employment with the Corporation; or (iv) who receives products or services of the Corporation, the sale or provision of which results or resulted in compensation, commissions, or earnings for Executive within the two (2) years prior to the Separation Date.

(vi) Non-Recruitment of Employees. Executive agrees that during the two (2) year period following the Separation Date, he or she shall not, without the prior written consent of the Corporation, directly or indirectly, whether on his or her own behalf or as a principal, owner, employee, representative or agent of any person or entity, solicit or induce or attempt to solicit or induce any employee of the Corporation to terminate his or her employment relationship with the Corporation or to enter into employment with Executive or any other person or entity.

(vii) Rights and Remedies Upon Breach. The parties specifically acknowledge and agree that the remedy at law for any breach of the covenants provided in this Section 9 (the “Restrictive Covenants”) will be inadequate, and that in the event Executive breaches, or threatens to breach, any of the Restrictive Covenants, the Corporation shall have the right and remedy, without the necessity of proving actual damage or posting any bond, to enjoin, preliminarily and permanently, Executive from violating or threatening to violate the Restrictive Covenants and to have the Restrictive Covenants specifically enforced by any court of competent jurisdiction, it being agreed that any breach or threatened breach of the Restrictive Covenants would cause irreparable injury to the

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Corporation and that money damages would not provide an adequate remedy to the Corporation. Executive understands and agrees that if he or she violates any of the obligations set forth in the Restrictive Covenants, the period of restriction applicable to each obligation violated shall cease to run during the pendency of any litigation over such violation, provided that such litigation was initiated during the period of restriction. Such rights and remedies shall be in addition to, and not in lieu of, any other rights and remedies available to the Corporation at law or in equity. Executive understands and agrees that, if the parties become involved in legal action regarding the enforcement of the Restrictive Covenants and if the Corporation prevails in such legal action, the Corporation will be entitled, in addition to any other remedy, to recover from Executive its reasonable costs and attorneys’ fees incurred in enforcing such covenants. The Corporation’s ability to enforce its rights under the Restrictive Covenants or applicable law against Executive shall not be impaired in any way by the existence of a claim or cause of action on the part of Executive based on, or arising out of, this Agreement or any other event or transaction.

(viii) Severability and Modification of Covenants. Executive acknowledges and agrees that each of the Restrictive Covenants is reasonable and valid in time and scope and in all other respects. The parties agree that it is their intention that the Restrictive Covenants be enforced in accordance with their terms to the maximum extent permitted by law. Each of the Restrictive Covenants shall be considered and construed as a separate and independent covenant. Should any part or provision of any of the Restrictive Covenants be held invalid, void, or unenforceable, such invalidity, voidness, or unenforceability shall not render invalid, void, or unenforceable any other part or provision of this Agreement or such Restrictive Covenant. If any of the provisions of the Restrictive Covenants should ever be held by a court of competent jurisdiction to exceed the scope permitted by the applicable law, such provision or provisions shall be automatically modified to such lesser scope as such court may deem just and proper for the reasonable protection of the Corporation’s legitimate business interests and may be enforced by the Corporation to that extent in the manner described above and all other provisions of this Agreement shall be valid and enforceable.

10. NON-DISPARAGEMENT. Executive agrees that Executive has not and will not (including during the time period while this Agreement was under consideration by Executive) make any defamatory or maliciously disparaging statements about the Released Parties, the Released Parties’ products or services, or the Released Parties’ representatives or employees to current, former or prospective customers or suppliers, to the media, or to other members of the public. Nothing in this Agreement shall be deemed to preclude Executive from providing truthful testimony or information pursuant to subpoena, court order, or similar legal process, or from providing truthful information to government or regulatory agencies.

11. NON-ADMISSION OF LIABILITY OR WRONGFUL CONDUCT. This Agreement shall not be construed as an admission by the Released Parties of any liability or acts of wrongdoing or discrimination, nor shall it be considered to be evidence of such liability, wrongdoing, or discrimination.

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12. TERMINATION OF EMPLOYMENT RELATIONSHIP. Except as set forth above, Executive and the Released Parties agree as a matter of intent that this Agreement terminates all aspects of the employment relationship between them.

13. CONFIDENTIALITY. The nature and terms of this Agreement are strictly confidential and they have not been and shall not be disclosed by Executive at any time to any person other than Executive’s lawyer, Executive’s accountant, Executive’s immediate family, or the Securities and Exchange Commission without the prior written consent of an officer of the Corporation, except as necessary in any legal proceedings directly related to the provisions and terms of this Agreement, to prepare and file income tax forms, or pursuant to court order after reasonable notice to the Corporation.

14. RETURN OF COMPANY PROPERTY. Executive understands and agrees that all Company Information and Business Ideas (as defined in the Confidentiality, Nonsolicitation and Assignment of Business Ideas Agreement) is the exclusive property of the Corporation and that Executive has no rights in or to the Company Information upon the termination of employment. Executive represents that Executive has delivered to the Corporation:

(a) all originals and electronic and paper copies of all documents and records that may contain Company Information, regardless of where such documents and records are stored including, but not limited to, on USB drives, external hard drives, and/or any cloud-based storage (for which Executive provided any necessary passwords);

(b) property of any nature that relates to Company Information or Business Ideas, including, but not limited to, business activities, customers or prospective customers of the Corporation, whether prepared by Executive or others; and

(c) property of any nature whatsoever that was in Executive’s possession, custody or control, and that is the property of the Corporation (e.g., cellular phones, credit cards, computer or other equipment)

Executive further represents that, after returning any electronic copies of documents, records or data to the Corporation, Executive has deleted any remaining electronic versions from personal electronic devices (e.g., personal computers, phones, tablets).

Executive has provided to the Corporation a signed declaration stating that all Company Information, documents, data and other property has been returned and all Company Information and electronic data has been deleted from personal electronic devices (e.g., personal computers, phones, tablets).

15. CHOICE OF FORUM AND GOVERNING LAW. This Agreement shall be governed and construed as to both substantive and procedural matters in accordance with the

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laws of the State of Georgia, without regard to the conflict of laws principles thereof. Executive agrees that any claim or dispute Executive may have against the Corporation or the Released Parties that is released by, or relates to the enforceability of, this Agreement must be resolved by a court located in Fulton County, Georgia. Executive agrees to submit to personal jurisdiction and venue in the Superior Court of Fulton County, State of Georgia for the purpose of litigating all such claims or disputes.

16. SEVERABILITY. The provisions of this Agreement are severable, and if any part of this Agreement is found by a court of law to be unenforceable, the remainder of the Agreement will continue to be valid and effective.

17. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement between Executive and the Corporation concerning the subject matter of this Agreement and Executive’s employment with and separation from the Corporation and the events leading thereto and associated therewith. Any prior agreements between or directly involving Executive and any of the Released Parties concerning the subject matter of this Agreement and Executive’s relationship with the Corporation are superseded by the terms of this Agreement and thus are rendered null and void with the exception of any noncompetition, confidentiality, nonsolicitation and/or assignment of business ideas agreements or any prior agreements between the parties related to inventions, business ideas, and confidentiality of corporate information, which remain intact, including, but not limited to, those provided to Executive with this Agreement.

18. NO OTHER PROMISES. Executive affirms that the only consideration for Executive signing this Agreement is that set forth in Paragraph 2, that no other promise or agreement of any kind has been made to or with Executive by any person or entity to cause Executive to execute this document, and that Executive fully understands the meaning and intent of this Agreement, including but not limited to, its final and binding effect.

19. REVIEW AND REVOCATION PERIODS. Executive acknowledges that Executive is hereby advised to consult with an attorney before signing this Agreement. Executive further acknowledges that Executive has been given [CHOOSE, depending on age of employee and whether part of group termination program:] twenty-one (21) or forty-five (45) days from the time that Executive receives this Agreement to consider whether to sign it. If Executive has signed this Agreement before the end of this [CHOOSE:] twenty-one (21) or forty-five (45) day period, it is because Executive freely chose to do so after carefully considering its terms. Finally, Executive shall have seven (7) days from the date Executive signs this Agreement to revoke this Agreement by delivering written notice within the seven (7) day period to the following Corporation contact:

General Counsel

Avanos Medical, Inc.

5405 Windward Parkway

Alpharetta, Georgia 30004

-9-

If Executive does not revoke this Agreement, this Agreement will become effective and irrevocable by Executive on the eighth day after Executive has executed it. If Executive elects not to sign this Agreement within [CHOOSE:] twenty-one (21) or forty-five (45) days from the date that Executive receives this Agreement or if the Executive revokes the Agreement during the foregoing applicable revocation period, this Agreement shall not become effective and the offer to enter into this Agreement shall terminate and expire automatically.

[DELETE PARAGRAPH 20 AND RENUMBER PARAGRAPH 21 & 22 UNLESS EMPLOYEE IS AGE 40+ AND PART OF GROUP TERMINATION PROGRAM]

20. REDUCTION-IN-FORCE. Pursuant to the Age Discrimination in Employment Act, additional information regarding the employment termination program that resulted in Executive’s separation is contained in Exhibit A.

21. LEGALLY BINDING AGREEMENT. Executive understands and acknowledges that this Agreement is final and binding following the seven (7) day revocation period provided in this Agreement.

22. REPRESENTATION AND WARRANTY OF UNDERSTANDING. By signing below, Executive represents and warrants that Executive: (a) has carefully read and understands the terms of this Agreement; (b) is entering into this Agreement knowingly, voluntarily and of Executive’s own free will; and (c) understands its terms and significance and intends to abide by its provisions without exception.

Date:

Executive Name

AVANOS MEDICAL, INC.

Date: By:

-10-

Exhibit 31(a)

CERTIFICATIONS

I, Michael C. Greiner, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Avanos Medical, Inc. (the “registrant”);

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: October 30, 2024						/s/ Michael C. Greiner
						Michael C. Greiner Interim Chief Executive Officer (Principal Executive Officer)

Exhibit 31(b)

CERTIFICATIONS

I, Warren J. Machan, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Avanos Medical, Inc. (the “registrant”);

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: October 30, 2024						/s/ Warren J. Machan
						Warren J. Machan Interim Chief Financial Officer (Principal Financial Officer)

Exhibit 32(a)

Certification of Chief Executive Officer

Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code

I, Michael C. Greiner, Interim Chief Executive Officer of Avanos Medical, Inc., certify that, to my knowledge:

(1)the Form 10-Q, filed with the Securities and Exchange Commission on October 30, 2024 (“accompanied report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)the information contained in the accompanied report fairly presents, in all material respects, the financial condition and results of operations of Avanos Medical, Inc.


Date: October 30, 2024						/s/ Michael C. Greiner
						Michael C. Greiner Interim Chief Executive Officer (Principal Executive Officer)

Exhibit 32(b)

Certification of Chief Financial Officer

Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code

I, Warren J. Machan, Interim Chief Financial Officer of Avanos Medical, Inc., certify that, to my knowledge:

(2)the information contained in the accompanied report fairly presents, in all material respects, the financial condition and results of operations of Avanos Medical, Inc.


Date: October 30, 2024						/s/ Warren J. Machan
						Warren J. Machan Interim Chief Financial Officer (Principal Financial Officer)

Cover - shares	9 Months Ended
Cover - shares	Sep. 30, 2024	Oct. 23, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2024
Document Transition Report	false
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
Title of 12(b) Security	Common Stock - $0.01 Par Value
Trading Symbol	AVNS
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		45,956,997
Entity Central Index Key	0001606498
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus (Q1,Q2,Q3,FY)	Q3
Amendment Flag	false

CONDENSED CONSOLIDATED INCOME STATEMENTS - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Income Statement [Abstract]
Net Sales	$ 170.4	$ 171.3	$ 508.2	$ 500.0
Cost of products sold	77.5	75.8	224.9	215.3
Gross Profit	92.9	95.5	283.3	284.7
Research and development	7.2	6.1	20.5	20.4
Selling and general expenses	74.3	78.7	238.8	260.5
Other (income) expense, net	(0.6)	9.5	1.7	10.8
Operating Income (Loss)	12.0	1.2	22.3	(7.0)
Interest income	0.7	0.9	4.3	1.9
Interest expense	(3.2)	(4.7)	(9.4)	(11.7)
Income (Loss) Before Income Taxes	9.5	(2.6)	17.2	(16.8)
Income tax provision	(3.6)	(6.2)	(6.5)	(4.1)
Income (Loss) from Continuing Operations	5.9	(8.8)	10.7	(20.9)
(Loss) Income from discontinued operations, net of tax	(1.6)	5.1	(5.5)	(51.4)
Net Income (Loss)	$ 4.3	$ (3.7)	$ 5.2	$ (72.3)
Basic Earnings (Loss) Per Share
Continuing operations- basic (in dollars per share)	$ 0.13	$ (0.19)	$ 0.23	$ (0.45)
Discontinued operations- basic (in dollars per share)	(0.03)	0.11	(0.12)	(1.10)
Basic Earnings (Loss) Per Share (in dollars per share)	0.10	(0.08)	0.11	(1.55)
Diluted Earnings (Loss) Per Share
Continuing operations- diluted (in dollars per share)	0.12	(0.19)	0.23	(0.45)
Discontinued operations- diluted (in dollars per share)	(0.03)	0.11	(0.12)	(1.10)
Diluted Earnings (Loss) Per Share (in dollars per share)	$ 0.09	$ (0.08)	$ 0.11	$ (1.55)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Statement of Comprehensive Income [Abstract]
Net Income (Loss)	$ 4.3	$ (3.7)	$ 5.2	$ (72.3)
Other Comprehensive Income (Loss), Net of Tax
Unrealized currency translation adjustments	0.3	(4.6)	(8.0)	2.8
Defined benefit plans	0.1	0.0	(0.1)	0.0
Cash flow hedges	0.2	0.0	(1.8)	0.0
Total Other Comprehensive Income (Loss), Net of Tax	0.6	(4.6)	(9.9)	2.8
Comprehensive Income (Loss)	$ 4.9	$ (8.3)	$ (4.7)	$ (69.5)

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Sep. 30, 2024	Dec. 31, 2023
Current Assets
Cash and cash equivalents	$ 89.0	$ 87.7
Accounts receivable, net of allowances	131.9	142.8
Inventories	161.9	163.2
Prepaid and other current assets	15.9	28.8
Assets held for sale	73.9	64.5
Total Current Assets	472.6	487.0
Property, Plant and Equipment, net	109.5	117.2
Operating Lease Right-of-Use Assets	26.5	26.8
Goodwill	795.1	796.1
Other Intangible Assets, net	220.1	239.5
Deferred Tax Assets	6.6	6.5
Other Assets	25.8	19.3
TOTAL ASSETS	1,656.2	1,692.4
Current Liabilities
Current portion of long-term debt	9.4	8.6
Current portion of operating lease liabilities	13.7	12.8
Trade accounts payable	54.2	56.3
Accrued expenses	82.7	93.2
Liabilities held for sale	52.9	63.7
Total Current Liabilities	212.9	234.6
Long-Term Debt	152.6	159.4
Operating Lease Liabilities	26.5	28.3
Deferred Tax Liabilities	23.9	23.8
Other Long-Term Liabilities	10.6	10.0
Total Liabilities	426.5	456.1
Commitments and Contingencies
Stockholders’ Equity
Preferred stock - $0.01 par value - authorized 20,000,000 shares, none issued	0.0	0.0
Common stock - $0.01 par value - authorized 300,000,000 shares, 45,954,931 outstanding as of September 30, 2024 and 46,174,337 outstanding as of December 31, 2023	0.5	0.5
Additional paid-in capital	1,674.7	1,663.6
Accumulated deficit	(309.7)	(314.9)
Treasury stock	(98.9)	(85.9)
Accumulated other comprehensive loss	(36.9)	(27.0)
Total Stockholders’ Equity	1,229.7	1,236.3
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 1,656.2	$ 1,692.4

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	20,000,000	20,000,000
Preferred stock, shares issued (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	300,000,000	300,000,000
Common stock, shares outstanding (in shares)	45,954,931	46,174,337

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - USD ($) $ in Millions	Total	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Treasury Stock	Accumulated Other Comprehensive Loss
Beginning balance at Dec. 31, 2022			$ 1,646.4	$ (253.1)	$ (66.8)	$ (35.8)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise or redemption of share-based awards			1.5
Stock-based compensation expense			11.8
Net income (loss)	$ (72.3)			(72.3)
Purchases of treasury stock					(12.9)
Other comprehensive income (loss), net of tax	2.8					2.8
Ending balance at Sep. 30, 2023	1,222.1	$ 0.5	1,659.7	(325.4)	(79.7)	(33.0)
Beginning balance at Jun. 30, 2023			1,654.9	(321.7)	(70.5)	(28.4)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise or redemption of share-based awards			0.9
Stock-based compensation expense			3.9
Net income (loss)	(3.7)			(3.7)
Purchases of treasury stock					(9.2)
Other comprehensive income (loss), net of tax	(4.6)					(4.6)
Ending balance at Sep. 30, 2023	1,222.1	0.5	1,659.7	(325.4)	(79.7)	(33.0)
Beginning balance at Dec. 31, 2023	1,236.3		1,663.6	(314.9)	(85.9)	(27.0)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise or redemption of share-based awards			1.1
Stock-based compensation expense			10.0
Net income (loss)	5.2			5.2
Purchases of treasury stock					(13.0)
Other comprehensive income (loss), net of tax	(9.9)					(9.9)
Ending balance at Sep. 30, 2024	1,229.7	0.5	1,674.7	(309.7)	(98.9)	(36.9)
Beginning balance at Jun. 30, 2024			1,671.5	(314.0)	(98.5)	(37.5)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Exercise or redemption of share-based awards			0.6
Stock-based compensation expense			2.6
Net income (loss)	4.3			4.3
Purchases of treasury stock					(0.4)
Other comprehensive income (loss), net of tax	0.6					0.6
Ending balance at Sep. 30, 2024	$ 1,229.7	$ 0.5	$ 1,674.7	$ (309.7)	$ (98.9)	$ (36.9)

CONDENSED CONSOLIDATED CASH FLOW STATEMENTS - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Operating Activities
Net income (loss)	$ 5.2	$ (72.3)
Depreciation and amortization	34.4	34.6
Stock-based compensation expense	10.0	11.8
Goodwill impairment	0.0	59.1
Net loss on asset dispositions and impairments	0.4	1.1
Changes in operating assets and liabilities, net of acquisition:
Accounts receivable	(6.9)	30.0
Inventories	(5.9)	(6.6)
Prepaid expenses and other assets	7.7	0.2
Accounts payable	(1.2)	(16.0)
Accrued expenses	(3.7)	(19.7)
Deferred income taxes and other	2.8	(2.5)
Cash Provided by Operating Activities	42.8	19.7
Investing Activities
Capital expenditures	(13.0)	(11.9)
Proceeds from RH Divestiture post-closing settlement	2.1	0.0
Acquisition of assets and investments in businesses	0.0	(47.5)
Investment in Note Receivable	(9.0)	0.0
Cash Used in Investing Activities	(19.9)	(59.4)
Financing Activities
Secured debt repayments	(6.3)	(3.1)
Revolving credit facility proceeds	20.0	55.0
Revolving credit facility repayments	(20.0)	(20.0)
Purchases of treasury stock	(12.7)	(12.9)
Proceeds from the exercise of stock options	1.1	1.5
Payment of contingent consideration liabilities	(3.8)	0.0
Cash (Used in) Provided by Financing Activities	(21.7)	20.5
Effect of Exchange Rate Changes on Cash and Cash Equivalents	0.1	(1.4)
Increase (Decrease) in Cash and Cash Equivalents	1.3	(20.6)
Cash and Cash Equivalents - Beginning of Period	87.7	127.7
Cash and Cash Equivalents - End of Period	$ 89.0	$ 107.1

Accounting Policies	9 Months Ended
Accounting Policies	Sep. 30, 2024
Accounting Policies [Abstract]
Accounting Policies	Accounting Policies Background and Basis of Presentation Avanos Medical, Inc. is a medical technology company focused on delivering clinically superior medical device solutions that will help patients get back to the things that matter. Headquartered in Alpharetta, Georgia, we are 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. We develop, manufacture and market our recognized brands globally and hold leading market positions in multiple categories across our portfolio. References herein to “Avanos,” “the Company,” “we,” “our” and “us” refer to Avanos Medical, Inc. and its consolidated subsidiaries. Interim Financial Statements We prepared the accompanying unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and the instructions to the Quarterly Report on Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements, and the condensed consolidated financial statements in this Form 10-Q should be read in conjunction with the Form 10-K. Our unaudited interim condensed consolidated financial statements contain all necessary material adjustments, which are of a normal and recurring nature, to fairly state our financial condition, results of operations and cash flows for the periods presented. Use of Estimates Preparation of our condensed consolidated financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses during the reporting periods. Estimates are used in accounting for, among other things, certain amounts included in discontinued operations, certain amounts included in assets and liabilities held for sale, distributor rebate accruals, future cash flows associated with impairment testing for goodwill and long-lived assets, loss contingencies, and deferred tax assets and potential income tax assessments. Actual results could differ from these estimates, and the effect of any change could be material to our financial statements. Changes in these estimates are recorded when known. Goodwill We test goodwill for impairment annually or more frequently whenever events or circumstances more likely than not indicate that the fair value of the reporting unit may be below its carrying value. We operate as a single reportable operating segment with one reporting unit. The fair value of our reporting unit is estimated using a combination of income (discounted cash flow analysis) and market approaches. The income approach is dependent upon several assumptions regarding future periods such as sales growth and a terminal growth rate. A weighted average cost of capital (“WACC”) was used to discount future estimated cash flows to their present values. The WACC was based on externally observable data considering market participants’ cost of equity and debt, optimal capital structure and risk factors specific to us. The market approach estimates the value of our company using a market capitalization methodology. We determined that the fair value of our reporting unit exceeded the net carrying amount in our most recent goodwill impairment test on July 1, 2024. However, there can be no assurance that the assumptions and estimates made for purposes of the annual goodwill impairment test will prove to be accurate. Volatility in the equity and debt markets, or increases in interest rates, could result in a higher discount rate. Changes in sales volumes, selling prices and costs of goods sold, and increases in interest rates could cause changes in our forecasted cash flows. Unfavorable changes in any of the factors described above, as well as a decline in our stock price, could result in a goodwill impairment charge in the future. Hedging and Derivatives All derivative instruments are recorded as assets or liabilities on the balance sheet at fair value. Changes in the fair value of derivatives are either recorded in the income statement or other comprehensive income, as appropriate. The effective portion of the gain or loss on derivatives designated as cash flow hedges is included in other comprehensive income in the period that changes in fair value occur, and is reclassified to income in the same period that the hedged item affects income. Our policies allow the use of derivatives for risk management purposes and prohibit their use for speculation. Our policies also prohibit the use of any leveraged derivative instrument. Consistent with our policies, foreign currency derivative instruments are entered into with major financial institutions. At inception, we formally designate certain derivatives as cash flow hedges and establish how the effectiveness of these hedges will be assessed and measured. This process links the derivatives to the transactions they are hedging. See Note 11, “Derivative Financial Instruments,” for disclosures about derivative instruments and hedging activities. Recently Adopted Accounting Pronouncements Effective January 1, 2023, we adopted ASU No. 2021-08, Business Combinations: Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This ASU pertains to acquired revenue contracts with customers in a business combination and addresses diversity in practice and inconsistency related to recognition of an acquired contract liability and payment terms and their effect on subsequent revenue recognized by the acquirer. Adoption of this ASU did not have a material effect on our financial position, results of operations or cash flows. Recently Issued Accounting Pronouncements In December 2023, the FASB issued ASU No. 2023-09, Income Taxes: Improvement to Income Tax Disclosures. This ASU pertains to disaggregation of income tax disclosures and enhances annual income tax disclosures to address investor requests for more information about the tax risks and opportunities present in an entity’s worldwide operations. The two primary enhancements disaggregate existing income tax disclosures related to the effective tax rate reconciliation and income taxes paid, and requires entities to disclose a tabular reconciliation of expected tax and reported tax on income from continuing operations using both percentages and amounts, broken out into specific categories with certain reconciling items at or above 5% of the expected tax further broken out by nature and/or jurisdiction. Additionally, this ASU requires disclosure around income taxes paid (net of refunds received) broken out between federal, state, local and foreign, and income taxes paid (net of refunds received) to an individual jurisdiction when greater than 5% of total income taxes paid. This ASU will be effective for annual periods beginning after December 15, 2024, with early adoption permitted. Adoption of this ASU is not expected to have a material effect on our financial position, results of operations or cash flows. In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting: Improvements to Reportable Segment Disclosures. This ASU enhances segment reporting under Topic 280 by expanding the breadth and frequency of segment disclosures, and aims to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. This ASU will be effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. Adoption of this ASU will require us to expand our current disclosures around significant expenses and disclose an aggregate amount and composition of other segment items related to our single operating segment. On an annual basis, this ASU will require us to disclose the Chief Operating Decision Maker’s (CODM) title and position, as well as how the CODM uses each reported measure of segment profit or loss to assess performance and allocate resources to the segment. We will retrospectively adopt this ASU in the fiscal period ending December 31, 2024 as required by ASU No. 2023-07. In August 2023, the FASB issued ASU No. 2023-05, Business Combinations: Joint Venture Formations. This ASU is intended to address diversity in practice regarding accounting and provide decision-useful information related to contributions made to joint ventures and requires entities that qualify as either a joint venture or a corporate joint venture to apply a new basis of accounting upon the formation of the joint venture. Specifically, the ASU provides that a joint venture or a corporate joint venture must initially measure its assets and liabilities at fair value on the formation date. This ASU will be effective for all newly formed joint venture entities with a formation date on or after January 1, 2025, with early adoption permitted. Joint ventures formed prior to the adoption date may elect to apply the new guidance retrospectively back to their original formation date. Adoption of this ASU is not expected to have a material effect on our financial position, results of operations or cash flows.

Discontinued Operations

9 Months Ended

Sep. 30, 2024

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

The following table summarizes the financial results of our discontinued operations for all periods presented herein (in millions):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Net Sales	$	10.5	$	31.1	$	41.0	$	93.9
Cost of products sold	15.9		19.9		47.4		57.8
Gross Profit	(5.4)		11.2		(6.4)		36.1
Research and development	—		0.2		—		0.8
Selling and general expenses	—		4.2		—		11.9
Pretax loss on classification as discontinued operations	—		—		—		72.3
Other (income) expense, net	(3.2)		0.1		1.1		0.3
(Loss) Income from discontinued operations before income taxes	(2.2)		6.7		(7.5)		(49.2)
Income tax benefit (provision) from discontinued operations	0.6		(1.6)		2.0		(2.2)
Net (Loss) Income from discontinued operations, net of tax	$	(1.6)	$	5.1	$	(5.5)	$	(51.4)

(Loss) Earnings Per Share
Basic	$	(0.03)	$	0.11	$	(0.12)	$	(1.10)
Diluted	$	(0.03)	$	0.11	$	(0.12)	$	(1.10)

Details on assets and liabilities classified as held for sale in the accompanying consolidated balance sheets are presented in the following table (in millions):


	September 30, 2024		December 31, 2023
Assets held for sale - discontinued operations
Inventories	$	28.2	$	17.5
Property, Plant and Equipment, net	43.0		43.9
Operating Lease Right-of-Use Assets	2.7		3.1
Total assets classified as held for sale	$	73.9	$	64.5
Liabilities held for sale - discontinued operations
Current Portion of Operating Lease Liabilities	$	0.7	$	0.8
Accrued expenses	51.3		61.3
Non-Current Operating Lease Liability	0.9		1.6
Total liabilities held for sale - discontinued operations	$	52.9	$	63.7

Assets and liabilities held for sale as of September 30, 2024 were classified as current since we expect the RH Divestiture to be completed within one year.

The following table provides operating and investing cash flow information for our discontinued operations (in millions):


	Nine Months Ended September 30,
	2024		2023
Operating Activities:
Depreciation and amortization	$	—	$	2.6
Stock-based compensation expense	—		0.1
Investing Activities:
Capital expenditures	0.6		3.1

Restructuring Activities

9 Months Ended

Sep. 30, 2024

Restructuring and Related Activities [Abstract]

Restructuring Activities

Post-RH Divestiture Restructuring Plan

Transformation Process

date we have incurred expenses of $33.4 million in connection with the Transformation Process, which includes $28.1 million of cash expenses.

Restructuring Liability

Our liability for costs associated with our restructuring initiatives as of September 30, 2024 is summarized below (in millions):


	As of September 30, 2024
Beginning balance	$	2.3
Restructuring and transformation costs, excluding non-cash charges	10.3
Payments and adjustments, net	(9.2)
Ending balance	$	3.4

Business Acquisition

9 Months Ended

Sep. 30, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

Business Acquisition

Diros Technology


Current assets, net of cash acquired	$	7.5
Current liabilities, excluding contingent consideration	(7.0)
Contingent consideration	(5.3)
Other noncurrent liabilities, net	(0.5)
Deferred tax liabilities	(8.1)
Identifiable intangible assets	29.6
Goodwill	33.4
Total	$	49.6

The identifiable intangible assets relating to the Diros Acquisition include the following (in millions, except years):


	Identifiable Intangible Asset Amount		Weighted Average Useful Lives (Years)
Trade names and trademarks	$	2.9	15
Customer relationships	21.2		14
Developed technology and other	5.5		13
Total	$	29.6

Supplemental Balance Sheet Information

9 Months Ended

Sep. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Supplemental Balance Sheet Information

Accounts Receivable

Accounts receivable consist of the following (in millions):


	September 30, 2024		December 31, 2023
Accounts receivable	$	137.3	$	134.0
Income tax receivable	—		14.1
Allowances and doubtful accounts:
Doubtful accounts	(4.8)		(5.1)
Sales discounts	(0.6)		(0.2)
Accounts receivable, net	$	131.9	$	142.8

Inventories

Inventories at the lower of cost (determined on the FIFO method) or net realizable value consists of the following (in millions):


	September 30, 2024		December 31, 2023
Raw materials	$	47.4	$	50.3
Work in process	23.2		19.8
Finished goods	87.9		88.5
Supplies and other	3.4		4.6

Total Inventory	$	161.9	$	163.2

Property, Plant and Equipment

Property, plant and equipment consists of the following (in millions):


	September 30, 2024		December 31, 2023
Land	$	1.2	$	1.3
Buildings and leasehold improvements	41.3		38.0
Machinery and equipment	185.4		182.8
Construction in progress	18.8		18.0

	246.7		240.1
Less accumulated depreciation	(137.2)		(122.9)

Total	$	109.5	$	117.2

Depreciation expense was $5.3 million and $15.6 million for the three and nine months ended September 30, 2024,

respectively, compared to $4.8 million and $14.2 million for the three and nine months ended September 30, 2023, respectively.

Goodwill and Intangible Assets

The changes in the carrying amount of goodwill are as follows (in millions):


	Goodwill
Balance, December 31, 2023	$	796.1
Currency translation adjustment	(1.0)
Balance, September 30, 2024	$	795.1

Intangible assets subject to amortization consist of the following (in millions):


	September 30, 2024						December 31, 2023
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Trademarks	$	41.6	$	(29.7)	$	11.9	$	42.0	$	(28.8)	$	13.2
Patents and acquired technologies	248.5		(179.2)		69.3		248.6		(171.9)		76.7
Other	207.7		(68.8)		138.9		207.7		(58.1)		149.6
Total	$	497.8	$	(277.7)	$	220.1	$	498.3	$	(258.8)	$	239.5

Amortization expense for the remainder of 2024, the following four years and thereafter is estimated as follows (in millions):


	Amount
Remainder of 2024	$	6.7
2025	25.0
2026	24.5
2027	22.8
2028	22.6
Thereafter	118.5
Total	$	220.1

Accrued Expenses

Accrued expenses consist of the following (in millions):


	September 30, 2024		December 31, 2023
Accrued rebates and customer incentives	$	23.6	$	17.7
Accrued salaries and wages	29.8		31.5
Accrued taxes and other	6.2		16.7
Other	23.1		27.3
Total	$	82.7	$	93.2

Other Long-Term Liabilities

Other long-term liabilities consist of the following (in millions):


	September 30, 2024		December 31, 2023

Accrued compensation and benefits	$	6.7	$	5.9
Other	3.9		4.1
Total	$	10.6	$	10.0

Fair Value Information

9 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

Fair Value Information

Level 1: Unadjusted quoted prices in active markets accessible at the reporting date for identical assets and liabilities.

Level 3: Prices or valuations that require inputs that are significant to the valuation and are unobservable.


		September 30, 2024				December 31, 2023
	Fair Value Hierarchy Level	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Assets
Cash and cash equivalents	1	$	89.0	$	89.0	$	87.7	$	87.7
Liabilities
Revolving Credit Facility	2	$	50.0	$	50.0	$	50.0	$	50.0
Term Loan Facility	2	112.0		112.0		118.0		118.0
Contingent consideration related to acquisition	3	—		—		5.3		5.3

Debt

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

Debt

As of September 30, 2024 and December 31, 2023, our respective debt balances were as follows (in millions):


	Weighted-Average Interest Rate		Maturity	September 30, 2024		December 31, 2023
Revolving Credit Facility	6.83	%	2027	$	50.0	$	50.0
Term Loan Facility	6.81	%	2027	112.5		118.8
				162.5		168.8
Unamortized debt issuance costs				(0.5)		(0.8)
Current portion of long-term debt				(9.4)		(8.6)
Total Long-Term Debt, net				$	152.6	$	159.4

Debt Payments

As of September 30, 2024, the aggregate amounts of long-term debt that will mature during each of the next four years are as follows (in millions):


	Amount
Remainder of 2024	$	2.3
2025	9.4
2026	10.2
2027	140.6
2028	—
Total	$	162.5

Accumulated Other Comprehensive Income

9 Months Ended

Sep. 30, 2024

Equity [Abstract]

Accumulated Other Comprehensive Income

The changes in the components of Accumulated Other Comprehensive Income (“AOCI”), net of tax, are as follows (in millions):


	Unrealized Currency Translation		Cash Flow Hedges		Defined Benefit Plans		Accumulated Other Comprehensive Loss
Balance, December 31, 2023	$	(27.0)	$	—	$	—	$	(27.0)
Other comprehensive loss	(8.0)		(1.8)		(0.1)		(9.9)
Balance, September 30, 2024	$	(35.0)	$	(1.8)	$	(0.1)	$	(36.9)

The net changes in the components of AOCI, including the tax effect, are as follows (in millions):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Unrealized currency translation	$	0.3	$	(4.6)	$	(8.0)	$	2.8
Defined benefit pension plans	0.1		—		(0.1)		—

Defined benefit pension plans, net of tax	0.1		—		(0.1)		—
Cash flow hedges	0.7		—		(1.3)		—
Tax effect	(0.5)		—		(0.5)		—
Cash flow hedges, net of tax	0.2		—		(1.8)		—
Change in AOCI	$	0.6	$	(4.6)	$	(9.9)	$	2.8

Stock-Based Compensation

9 Months Ended

Sep. 30, 2024

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Stock options	$	—	$	—	$	—	$	0.3
Time-based restricted share units	2.7		2.5		7.6		7.9
Performance-based restricted share units	(0.1)		1.3		2.3		3.4
Employee stock purchase plan	—		0.1		0.1		0.2
Total stock-based compensation	$	2.6	$	3.9	$	10.0	$	11.8

Commitments and Contingencies	9 Months Ended
Commitments and Contingencies	Sep. 30, 2024
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Legal Matters We are subject to various legal proceedings, claims and governmental inspections, audits or investigations pertaining to issues such as contract disputes, product liability, tax matters, patents and trademarks, advertising, governmental regulations, employment and other matters. Under the terms of the distribution agreement we entered into with Kimberly-Clark Corporation (“Kimberly-Clark”) prior to our 2014 spin-off from Kimberly-Clark, legal proceedings, claims and other liabilities that are primarily related to our business are our responsibility and we are obligated to indemnify and hold Kimberly-Clark harmless for such matters. Government Investigation In June 2015, we were served with a subpoena from the Department of Veterans Affairs Office of the Inspector General (“VA OIG”) seeking information related to the design, manufacture, testing, sale and promotion of MicroCool and other surgical gowns produced by the Company. In July 2015, we became aware that the VA OIG subpoena and an earlier VA OIG subpoena served on Kimberly-Clark requesting information about gown sales to the federal government were related to a United States Department of Justice (“DOJ”) investigation. In May 2016, April 2017 and September 2018, we received additional subpoenas from the DOJ seeking further information related to the Company’s surgical gowns. On July 6, 2021, we entered into a Deferred Prosecution Agreement (“DPA”) with the DOJ that resolved their criminal investigation related to our MicroCool surgical gowns. Pursuant to the terms of the DPA, in July 2021 the Company made a payment of $22.2 million. The DPA term expired on July 7, 2024. Under the DPA, the DOJ has up to six months following the term’s expiration to seek dismissal of the case. Patent Litigation We operate in an industry characterized by extensive patent litigation. Competitors may claim that our products infringe upon their intellectual property. Resolution of patent litigation or other intellectual property claims is typically time consuming and costly and can result in significant damage awards and injunctions that could prevent the manufacture and sale of the affected products or require us to make significant royalty payments in order to continue selling the affected products. At any given time, we may be involved as either a plaintiff or a defendant in a number of patent infringement actions, the outcomes of which may not be known for prolonged periods of time. General While we maintain general and professional liability, product liability and other insurance, our insurance policies may not cover all of these matters and may not fully cover liabilities arising out of these matters. In addition, we may be obligated to indemnify our directors and officers against these matters. We record provisions in the consolidated financial statements for pending litigation when we determine that an unfavorable outcome is probable and the amount of the loss can be reasonably estimated. For any matters that are reasonably possible to result in loss and for which no possible loss or range of loss is disclosed in this Form 10-Q, management has determined that it is unable to estimate the possible loss or range of loss because, in each case, at least the following facts applied: (a) the matter is at an early stage of the proceedings; (b) the damages are indeterminate, unspecified or determined to be immaterial; and (c) significant factual issues have yet to be resolved. At present, although the results of litigation and claims cannot be predicted with certainty, we believe that the ultimate resolution of any pending legal proceeding to which we are a party will not have a material adverse effect on our business, financial condition, results of operations or liquidity. Environmental Compliance We are subject to federal, state and local environmental protection laws and regulations with respect to our business operations. We believe we are operating in compliance with, or are taking action aimed at ensuring compliance with, these laws and regulations. None of our compliance obligations with environmental protection laws and regulations, individually or in the aggregate, is expected to have a material adverse effect on our business, financial condition, results of operations or liquidity.

Derivative Financial Instruments	9 Months Ended
Derivative Financial Instruments	Sep. 30, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Derivative Financial Instruments	Derivative Financial Instruments During the second quarter of 2024, we began to enter into derivative instruments to hedge a portion of forecasted cash flows denominated in Mexican pesos. The derivative instruments used to manage these exposures are designated and qualify as cash flow hedges. The derivative liability for foreign exchange contracts was $2.1 million as of September 30, 2024 and is included in the condensed consolidated balance sheet in accrued expenses. The effective portion of the gain or loss on a derivative instrument is initially recorded in AOCI, net of related income taxes, and recognized in earnings in the same period that the hedged exposure affects earnings. The loss recognized in earnings was not material in the three and nine months ended September 30, 2024. As of September 30, 2024, the aggregate notional values of outstanding foreign currency swap contracts designated as cash flow hedges were $17.8 million.

Earnings Per Share ("EPS")

9 Months Ended

Sep. 30, 2024

Earnings Per Share [Abstract]

Earnings Per Share (“EPS”)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Net income (loss) from continuing operations	$	5.9	$	(8.8)	$	10.7	$	(20.9)
Net (loss) income from discontinued operations	(1.6)		5.1		(5.5)		(51.4)
Net income (loss)	$	4.3	$	(3.7)	$	5.2	$	(72.3)

Weighted Average Shares Outstanding:
Basic weighted average shares outstanding	46.0		46.8		46.0		46.7
Dilutive effect of stock options and restricted share unit awards	0.6		—		0.5		—
Diluted weighted average shares outstanding	46.6		46.8		46.5		46.7
Earnings (Loss) Per Share
Basic:
Continuing Operations	$	0.13	$	(0.19)	$	0.23	$	(0.45)
Discontinued Operations	(0.03)		0.11		(0.12)		(1.10)
Basic Earnings (Loss) Per Share	$	0.10	$	(0.08)	$	0.11	$	(1.55)

Diluted:
Continuing Operations	$	0.12	$	(0.19)	$	0.23	$	(0.45)
Discontinued Operations	(0.03)		0.11		(0.12)		(1.10)
Diluted Earnings (Loss) Per Share	$	0.09	$	(0.08)	$	0.11	$	(1.55)

Business and Products Information

9 Months Ended

Sep. 30, 2024

Segment Reporting [Abstract]

Business and Products Information


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Digestive Health	$	98.2	$	95.0	$	290.6	$	276.8
Pain Management and Recovery:
Surgical pain and recovery	30.3		34.1		93.8		103.6
Interventional pain	41.9		42.2		123.8		119.6
Total Pain Management and Recovery	72.2		76.3		217.6		223.2
Total Net Sales	$	170.4	$	171.3	$	508.2	$	500.0

Digestive Health is a portfolio of products such as our MIC-KEY enteral feeding tubes, Corpak patient feeding solutions and NeoMed neonatal and pediatric feeding solutions.

Pain Management and Recovery is a portfolio of products including:

•Surgical pain and recovery products such as ON-Q and ambIT surgical pain pumps and Game Ready cold and compression therapy systems; and

Liabilities for estimated returns, rebates and incentives are presented in the table below (in millions):


	September 30, 2024		December 31, 2023
Accrued rebates	$	13.7	$	10.4
Accrued customer incentives	9.9		7.3
Accrued rebates and customer incentives	23.6		17.7
Accrued sales returns(a)	0.1		0.1
Total estimated liabilities	$	23.7	$	17.8

__________________________________________________

(a)Accrued sales returns are included in “Other” in the accrued expenses table in Note 5, “Supplemental Balance Sheet Information”.

Share Repurchase Program

9 Months Ended

Sep. 30, 2024

Equity [Abstract]

Share Repurchase Program

For the nine months ended September 30, 2024, our repurchases of our common stock were as summarized in the table below.


	Shares Repurchased		Aggregate Purchase Price (in millions)		Average Price per Share		Amount Remaining in Program for Purchase (in millions)
	# of Shares	Program to Date
First quarter of 2024	342,680	1,085,333	$	6.7	$	19.45	$	3.3
Second quarter of 2024	169,571	1,254,904	$	3.3	$	19.67	$	—

Accounting Policies (Policies)	9 Months Ended
Accounting Policies (Policies)	Sep. 30, 2024
Accounting Policies [Abstract]
Background and Basis of Presentation	Background and Basis of Presentation Avanos Medical, Inc. is a medical technology company focused on delivering clinically superior medical device solutions that will help patients get back to the things that matter. Headquartered in Alpharetta, Georgia, we are 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. We develop, manufacture and market our recognized brands globally and hold leading market positions in multiple categories across our portfolio. References herein to “Avanos,” “the Company,” “we,” “our” and “us” refer to Avanos Medical, Inc. and its consolidated subsidiaries. Interim Financial Statements We prepared the accompanying unaudited condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and the instructions to the Quarterly Report on Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements, and the condensed consolidated financial statements in this Form 10-Q should be read in conjunction with the Form 10-K. Our unaudited interim condensed consolidated financial statements contain all necessary material adjustments, which are of a normal and recurring nature, to fairly state our financial condition, results of operations and cash flows for the periods presented.
Use of Estimates	Use of Estimates Preparation of our condensed consolidated financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of net sales and expenses during the reporting periods. Estimates are used in accounting for, among other things, certain amounts included in discontinued operations, certain amounts included in assets and liabilities held for sale, distributor rebate accruals, future cash flows associated with impairment testing for goodwill and long-lived assets, loss contingencies, and deferred tax assets and potential income tax assessments. Actual results could differ from these estimates, and the effect of any change could be material to our financial statements. Changes in these estimates are recorded when known.
Goodwill	Goodwill We test goodwill for impairment annually or more frequently whenever events or circumstances more likely than not indicate that the fair value of the reporting unit may be below its carrying value. We operate as a single reportable operating segment with one reporting unit. The fair value of our reporting unit is estimated using a combination of income (discounted cash flow analysis) and market approaches. The income approach is dependent upon several assumptions regarding future periods such as sales growth and a terminal growth rate. A weighted average cost of capital (“WACC”) was used to discount future estimated cash flows to their present values. The WACC was based on externally observable data considering market participants’ cost of equity and debt, optimal capital structure and risk factors specific to us. The market approach estimates the value of our company using a market capitalization methodology. We determined that the fair value of our reporting unit exceeded the net carrying amount in our most recent goodwill impairment test on July 1, 2024. However, there can be no assurance that the assumptions and estimates made for purposes of the annual goodwill impairment test will prove to be accurate. Volatility in the equity and debt markets, or increases in interest rates, could result in a higher discount rate. Changes in sales volumes, selling prices and costs of goods sold, and increases in interest rates could cause changes in our forecasted cash flows. Unfavorable changes in any of the factors described above, as well as a decline in our stock price, could result in a goodwill impairment charge in the future.
Hedging and Derivatives	Hedging and Derivatives All derivative instruments are recorded as assets or liabilities on the balance sheet at fair value. Changes in the fair value of derivatives are either recorded in the income statement or other comprehensive income, as appropriate. The effective portion of the gain or loss on derivatives designated as cash flow hedges is included in other comprehensive income in the period that changes in fair value occur, and is reclassified to income in the same period that the hedged item affects income. Our policies allow the use of derivatives for risk management purposes and prohibit their use for speculation. Our policies also prohibit the use of any leveraged derivative instrument. Consistent with our policies, foreign currency derivative instruments are entered into with major financial institutions. At inception, we formally designate certain derivatives as cash flow hedges and establish how the effectiveness of these hedges will be assessed and measured. This process links the derivatives to the transactions they are hedging.
Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements	Recently Adopted Accounting Pronouncements Effective January 1, 2023, we adopted ASU No. 2021-08, Business Combinations: Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This ASU pertains to acquired revenue contracts with customers in a business combination and addresses diversity in practice and inconsistency related to recognition of an acquired contract liability and payment terms and their effect on subsequent revenue recognized by the acquirer. Adoption of this ASU did not have a material effect on our financial position, results of operations or cash flows. Recently Issued Accounting Pronouncements In December 2023, the FASB issued ASU No. 2023-09, Income Taxes: Improvement to Income Tax Disclosures. This ASU pertains to disaggregation of income tax disclosures and enhances annual income tax disclosures to address investor requests for more information about the tax risks and opportunities present in an entity’s worldwide operations. The two primary enhancements disaggregate existing income tax disclosures related to the effective tax rate reconciliation and income taxes paid, and requires entities to disclose a tabular reconciliation of expected tax and reported tax on income from continuing operations using both percentages and amounts, broken out into specific categories with certain reconciling items at or above 5% of the expected tax further broken out by nature and/or jurisdiction. Additionally, this ASU requires disclosure around income taxes paid (net of refunds received) broken out between federal, state, local and foreign, and income taxes paid (net of refunds received) to an individual jurisdiction when greater than 5% of total income taxes paid. This ASU will be effective for annual periods beginning after December 15, 2024, with early adoption permitted. Adoption of this ASU is not expected to have a material effect on our financial position, results of operations or cash flows. In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting: Improvements to Reportable Segment Disclosures. This ASU enhances segment reporting under Topic 280 by expanding the breadth and frequency of segment disclosures, and aims to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. This ASU will be effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. Adoption of this ASU will require us to expand our current disclosures around significant expenses and disclose an aggregate amount and composition of other segment items related to our single operating segment. On an annual basis, this ASU will require us to disclose the Chief Operating Decision Maker’s (CODM) title and position, as well as how the CODM uses each reported measure of segment profit or loss to assess performance and allocate resources to the segment. We will retrospectively adopt this ASU in the fiscal period ending December 31, 2024 as required by ASU No. 2023-07. In August 2023, the FASB issued ASU No. 2023-05, Business Combinations: Joint Venture Formations. This ASU is intended to address diversity in practice regarding accounting and provide decision-useful information related to contributions made to joint ventures and requires entities that qualify as either a joint venture or a corporate joint venture to apply a new basis of accounting upon the formation of the joint venture. Specifically, the ASU provides that a joint venture or a corporate joint venture must initially measure its assets and liabilities at fair value on the formation date. This ASU will be effective for all newly formed joint venture entities with a formation date on or after January 1, 2025, with early adoption permitted. Joint ventures formed prior to the adoption date may elect to apply the new guidance retrospectively back to their original formation date. Adoption of this ASU is not expected to have a material effect on our financial position, results of operations or cash flows.

Discontinued Operations (Tables)

9 Months Ended

Sep. 30, 2024

Discontinued Operations and Disposal Groups [Abstract]

Summary of Financial Results of Discontinued Operations

The following table summarizes the financial results of our discontinued operations for all periods presented herein (in millions):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Net Sales	$	10.5	$	31.1	$	41.0	$	93.9
Cost of products sold	15.9		19.9		47.4		57.8
Gross Profit	(5.4)		11.2		(6.4)		36.1
Research and development	—		0.2		—		0.8
Selling and general expenses	—		4.2		—		11.9
Pretax loss on classification as discontinued operations	—		—		—		72.3
Other (income) expense, net	(3.2)		0.1		1.1		0.3
(Loss) Income from discontinued operations before income taxes	(2.2)		6.7		(7.5)		(49.2)
Income tax benefit (provision) from discontinued operations	0.6		(1.6)		2.0		(2.2)
Net (Loss) Income from discontinued operations, net of tax	$	(1.6)	$	5.1	$	(5.5)	$	(51.4)

(Loss) Earnings Per Share
Basic	$	(0.03)	$	0.11	$	(0.12)	$	(1.10)
Diluted	$	(0.03)	$	0.11	$	(0.12)	$	(1.10)

Details on assets and liabilities classified as held for sale in the accompanying consolidated balance sheets are presented in the following table (in millions):


	September 30, 2024		December 31, 2023
Assets held for sale - discontinued operations
Inventories	$	28.2	$	17.5
Property, Plant and Equipment, net	43.0		43.9
Operating Lease Right-of-Use Assets	2.7		3.1
Total assets classified as held for sale	$	73.9	$	64.5
Liabilities held for sale - discontinued operations
Current Portion of Operating Lease Liabilities	$	0.7	$	0.8
Accrued expenses	51.3		61.3
Non-Current Operating Lease Liability	0.9		1.6
Total liabilities held for sale - discontinued operations	$	52.9	$	63.7

The following table provides operating and investing cash flow information for our discontinued operations (in millions):


	Nine Months Ended September 30,
	2024		2023
Operating Activities:
Depreciation and amortization	$	—	$	2.6
Stock-based compensation expense	—		0.1
Investing Activities:
Capital expenditures	0.6		3.1

Restructuring Activities (Tables)

9 Months Ended

Sep. 30, 2024

Restructuring and Related Activities [Abstract]

Summary of Accrual and Payment Activity

Our liability for costs associated with our restructuring initiatives as of September 30, 2024 is summarized below (in millions):


	As of September 30, 2024
Beginning balance	$	2.3
Restructuring and transformation costs, excluding non-cash charges	10.3
Payments and adjustments, net	(9.2)
Ending balance	$	3.4

Business Acquisition (Tables)

9 Months Ended

Sep. 30, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

Summary of Purchase Price Allocation

The purchase price allocation is shown in the table below (in millions):


Current assets, net of cash acquired	$	7.5
Current liabilities, excluding contingent consideration	(7.0)
Contingent consideration	(5.3)
Other noncurrent liabilities, net	(0.5)
Deferred tax liabilities	(8.1)
Identifiable intangible assets	29.6
Goodwill	33.4
Total	$	49.6

Summary of Identifiable Intangible Assets

The identifiable intangible assets relating to the Diros Acquisition include the following (in millions, except years):


	Identifiable Intangible Asset Amount		Weighted Average Useful Lives (Years)
Trade names and trademarks	$	2.9	15
Customer relationships	21.2		14
Developed technology and other	5.5		13
Total	$	29.6

Supplemental Balance Sheet Information (Tables)

9 Months Ended

Sep. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Summary of Accounts Receivable

Accounts receivable consist of the following (in millions):


	September 30, 2024		December 31, 2023
Accounts receivable	$	137.3	$	134.0
Income tax receivable	—		14.1
Allowances and doubtful accounts:
Doubtful accounts	(4.8)		(5.1)
Sales discounts	(0.6)		(0.2)
Accounts receivable, net	$	131.9	$	142.8

Summary of Inventories

Inventories at the lower of cost (determined on the FIFO method) or net realizable value consists of the following (in millions):


	September 30, 2024		December 31, 2023
Raw materials	$	47.4	$	50.3
Work in process	23.2		19.8
Finished goods	87.9		88.5
Supplies and other	3.4		4.6

Total Inventory	$	161.9	$	163.2

Summary of Property, Plant and Equipment

Property, plant and equipment consists of the following (in millions):


	September 30, 2024		December 31, 2023
Land	$	1.2	$	1.3
Buildings and leasehold improvements	41.3		38.0
Machinery and equipment	185.4		182.8
Construction in progress	18.8		18.0

	246.7		240.1
Less accumulated depreciation	(137.2)		(122.9)

Total	$	109.5	$	117.2

Summary of Changes in the Carrying Amount of Goodwill

The changes in the carrying amount of goodwill are as follows (in millions):


	Goodwill
Balance, December 31, 2023	$	796.1
Currency translation adjustment	(1.0)
Balance, September 30, 2024	$	795.1

Summary of Intangible Assets Subject to Amortization

Intangible assets subject to amortization consist of the following (in millions):


	September 30, 2024						December 31, 2023
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Trademarks	$	41.6	$	(29.7)	$	11.9	$	42.0	$	(28.8)	$	13.2
Patents and acquired technologies	248.5		(179.2)		69.3		248.6		(171.9)		76.7
Other	207.7		(68.8)		138.9		207.7		(58.1)		149.6
Total	$	497.8	$	(277.7)	$	220.1	$	498.3	$	(258.8)	$	239.5

Summary of Estimated Amortization Expense

Amortization expense for the remainder of 2024, the following four years and thereafter is estimated as follows (in millions):


	Amount
Remainder of 2024	$	6.7
2025	25.0
2026	24.5
2027	22.8
2028	22.6
Thereafter	118.5
Total	$	220.1

Summary of Accrued Expenses

Accrued expenses consist of the following (in millions):


	September 30, 2024		December 31, 2023
Accrued rebates and customer incentives	$	23.6	$	17.7
Accrued salaries and wages	29.8		31.5
Accrued taxes and other	6.2		16.7
Other	23.1		27.3
Total	$	82.7	$	93.2

Liabilities for estimated returns, rebates and incentives are presented in the table below (in millions):


	September 30, 2024		December 31, 2023
Accrued rebates	$	13.7	$	10.4
Accrued customer incentives	9.9		7.3
Accrued rebates and customer incentives	23.6		17.7
Accrued sales returns(a)	0.1		0.1
Total estimated liabilities	$	23.7	$	17.8

__________________________________________________

(a)Accrued sales returns are included in “Other” in the accrued expenses table in Note 5, “Supplemental Balance Sheet Information”.

Summary of Other Long-Term Liabilities

Other long-term liabilities consist of the following (in millions):


	September 30, 2024		December 31, 2023

Accrued compensation and benefits	$	6.7	$	5.9
Other	3.9		4.1
Total	$	10.6	$	10.0

Fair Value Information (Tables)

9 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

Summary of Fair Value of Financial Instruments

The following table includes the fair value of our financial instruments for which disclosure of fair value is required (in millions):


		September 30, 2024				December 31, 2023
	Fair Value Hierarchy Level	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Assets
Cash and cash equivalents	1	$	89.0	$	89.0	$	87.7	$	87.7
Liabilities
Revolving Credit Facility	2	$	50.0	$	50.0	$	50.0	$	50.0
Term Loan Facility	2	112.0		112.0		118.0		118.0
Contingent consideration related to acquisition	3	—		—		5.3		5.3

Debt (Tables)

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

Summary of Debt Balances

As of September 30, 2024 and December 31, 2023, our respective debt balances were as follows (in millions):


	Weighted-Average Interest Rate		Maturity	September 30, 2024		December 31, 2023
Revolving Credit Facility	6.83	%	2027	$	50.0	$	50.0
Term Loan Facility	6.81	%	2027	112.5		118.8
				162.5		168.8
Unamortized debt issuance costs				(0.5)		(0.8)
Current portion of long-term debt				(9.4)		(8.6)
Total Long-Term Debt, net				$	152.6	$	159.4

Summary of Maturities of Long-Term Debt

As of September 30, 2024, the aggregate amounts of long-term debt that will mature during each of the next four years are as follows (in millions):


	Amount
Remainder of 2024	$	2.3
2025	9.4
2026	10.2
2027	140.6
2028	—
Total	$	162.5

Accumulated Other Comprehensive Income (Tables)

9 Months Ended

Sep. 30, 2024

Equity [Abstract]

Summary of Changes in the Components of Accumulated Other Comprehensive Income

The changes in the components of Accumulated Other Comprehensive Income (“AOCI”), net of tax, are as follows (in millions):


	Unrealized Currency Translation		Cash Flow Hedges		Defined Benefit Plans		Accumulated Other Comprehensive Loss
Balance, December 31, 2023	$	(27.0)	$	—	$	—	$	(27.0)
Other comprehensive loss	(8.0)		(1.8)		(0.1)		(9.9)
Balance, September 30, 2024	$	(35.0)	$	(1.8)	$	(0.1)	$	(36.9)

The net changes in the components of AOCI, including the tax effect, are as follows (in millions):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Unrealized currency translation	$	0.3	$	(4.6)	$	(8.0)	$	2.8
Defined benefit pension plans	0.1		—		(0.1)		—

Defined benefit pension plans, net of tax	0.1		—		(0.1)		—
Cash flow hedges	0.7		—		(1.3)		—
Tax effect	(0.5)		—		(0.5)		—
Cash flow hedges, net of tax	0.2		—		(1.8)		—
Change in AOCI	$	0.6	$	(4.6)	$	(9.9)	$	2.8

Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2024

Share-Based Payment Arrangement [Abstract]

Summary of Stock-Based Compensation Expense


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Stock options	$	—	$	—	$	—	$	0.3
Time-based restricted share units	2.7		2.5		7.6		7.9
Performance-based restricted share units	(0.1)		1.3		2.3		3.4
Employee stock purchase plan	—		0.1		0.1		0.2
Total stock-based compensation	$	2.6	$	3.9	$	10.0	$	11.8

Earnings Per Share ("EPS") (Tables)

9 Months Ended

Sep. 30, 2024

Earnings Per Share [Abstract]

Summary of Calculation of Basic and Diluted Earnings Per Share


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Net income (loss) from continuing operations	$	5.9	$	(8.8)	$	10.7	$	(20.9)
Net (loss) income from discontinued operations	(1.6)		5.1		(5.5)		(51.4)
Net income (loss)	$	4.3	$	(3.7)	$	5.2	$	(72.3)

Weighted Average Shares Outstanding:
Basic weighted average shares outstanding	46.0		46.8		46.0		46.7
Dilutive effect of stock options and restricted share unit awards	0.6		—		0.5		—
Diluted weighted average shares outstanding	46.6		46.8		46.5		46.7
Earnings (Loss) Per Share
Basic:
Continuing Operations	$	0.13	$	(0.19)	$	0.23	$	(0.45)
Discontinued Operations	(0.03)		0.11		(0.12)		(1.10)
Basic Earnings (Loss) Per Share	$	0.10	$	(0.08)	$	0.11	$	(1.55)

Diluted:
Continuing Operations	$	0.12	$	(0.19)	$	0.23	$	(0.45)
Discontinued Operations	(0.03)		0.11		(0.12)		(1.10)
Diluted Earnings (Loss) Per Share	$	0.09	$	(0.08)	$	0.11	$	(1.55)

Business and Products Information (Tables)

9 Months Ended

Sep. 30, 2024

Segment Reporting [Abstract]

Summary of Net Sales by Product Category

Our management evaluates net sales by product category within our single reportable segment as follows (in millions):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Digestive Health	$	98.2	$	95.0	$	290.6	$	276.8
Pain Management and Recovery:
Surgical pain and recovery	30.3		34.1		93.8		103.6
Interventional pain	41.9		42.2		123.8		119.6
Total Pain Management and Recovery	72.2		76.3		217.6		223.2
Total Net Sales	$	170.4	$	171.3	$	508.2	$	500.0

Summary of Accrued Expenses

Accrued expenses consist of the following (in millions):


	September 30, 2024		December 31, 2023
Accrued rebates and customer incentives	$	23.6	$	17.7
Accrued salaries and wages	29.8		31.5
Accrued taxes and other	6.2		16.7
Other	23.1		27.3
Total	$	82.7	$	93.2

Liabilities for estimated returns, rebates and incentives are presented in the table below (in millions):


	September 30, 2024		December 31, 2023
Accrued rebates	$	13.7	$	10.4
Accrued customer incentives	9.9		7.3
Accrued rebates and customer incentives	23.6		17.7
Accrued sales returns(a)	0.1		0.1
Total estimated liabilities	$	23.7	$	17.8

__________________________________________________

(a)Accrued sales returns are included in “Other” in the accrued expenses table in Note 5, “Supplemental Balance Sheet Information”.

Share Repurchase Program (Tables)

9 Months Ended

Sep. 30, 2024

Equity [Abstract]

Summary of Class of Treasury Stock

For the nine months ended September 30, 2024, our repurchases of our common stock were as summarized in the table below.


	Shares Repurchased		Aggregate Purchase Price (in millions)		Average Price per Share		Amount Remaining in Program for Purchase (in millions)
	# of Shares	Program to Date
First quarter of 2024	342,680	1,085,333	$	6.7	$	19.45	$	3.3
Second quarter of 2024	169,571	1,254,904	$	3.3	$	19.67	$	—

Accounting Policies - Narratives (Details)	9 Months Ended
Accounting Policies - Narratives (Details)	Sep. 30, 2024 segment
Accounting Policies [Abstract]
Number of operating segments	1
Number of reporting units	1

Discontinued Operations - Narratives (Details) - USD ($) $ in Millions			9 Months Ended
	Oct. 02, 2023	Jun. 07, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds from divestiture of businesses			$ 2.1	$ 0.0
Prepaid and other current assets			15.9		$ 28.8
RH Business
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds from divestiture of businesses	$ 110.0
Transformation process term (in years)		3 years
RH Business \| Disposed of by sale
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Prepaid and other current assets			$ 6.6		$ 11.9
RH Business \| Minimum
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Transition services agreement, term (in years)		1 year
RH Business \| Maximum
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Transition services agreement, term (in years)		3 years

Discontinued Operations - Schedule of Income (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract]
Net (Loss) Income from discontinued operations, net of tax	$ (1.6)	$ 5.1	$ (5.5)	$ (51.4)
(Loss) Earnings Per Share
Basic (in dollars per share)	$ (0.03)	$ 0.11	$ (0.12)	$ (1.10)
Diluted (in dollars per share)	$ (0.03)	$ 0.11	$ (0.12)	$ (1.10)
RH Business \| Disposed of by sale
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract]
Net Sales	$ 10.5	$ 31.1	$ 41.0	$ 93.9
Cost of products sold	15.9	19.9	47.4	57.8
Gross Profit	(5.4)	11.2	(6.4)	36.1
Research and development	0.0	0.2	0.0	0.8
Selling and general expenses	0.0	4.2	0.0	11.9
Pretax loss on classification as discontinued operations	0.0	0.0	0.0	72.3
Other (income) expense, net	(3.2)	0.1	1.1	0.3
(Loss) Income from discontinued operations before income taxes	(2.2)	6.7	(7.5)	(49.2)
Income tax benefit (provision) from discontinued operations	0.6	(1.6)	2.0	(2.2)
Net (Loss) Income from discontinued operations, net of tax	$ (1.6)	$ 5.1	$ (5.5)	$ (51.4)
(Loss) Earnings Per Share
Basic (in dollars per share)	$ (0.03)	$ 0.11	$ (0.12)	$ (1.10)
Diluted (in dollars per share)	$ (0.03)	$ 0.11	$ (0.12)	$ (1.10)

Discontinued Operations - Schedule of Balance Sheet (Details) - RH Business - Disposed of by sale - USD ($) $ in Millions	Sep. 30, 2024	Dec. 31, 2023
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Inventories	$ 28.2	$ 17.5
Property, Plant and Equipment, net	43.0	43.9
Operating Lease Right-of-Use Assets	2.7	3.1
Total assets classified as held for sale	73.9	64.5
Current Portion of Operating Lease Liabilities	0.7	0.8
Accrued expenses	51.3	61.3
Non-Current Operating Lease Liability	0.9	1.6
Total liabilities held for sale - discontinued operations	$ 52.9	$ 63.7

Discontinued Operations- Schedule of Cashflow (Details) - Disposed of by sale - RH Business - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Operating Activities:
Depreciation and amortization	$ 0.0	$ 2.6
Stock-based compensation expense	0.0	0.1
Investing Activities:
Capital expenditures	$ 0.6	$ 3.1

Restructuring Activities - Narratives (Details) - USD ($) $ in Millions		1 Months Ended	3 Months Ended		9 Months Ended
	Jun. 07, 2023	Jan. 31, 2023	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Restructuring Cost and Reserve [Line Items]
Term of restructuring initiative (in years)		3 years
RH Business
Restructuring Cost and Reserve [Line Items]
Transformation process term (in years)	3 years
Post-RH Divestiture Restructuring Plan
Restructuring Cost and Reserve [Line Items]
Costs incurred			$ 2.3		$ 6.4
Post-RH Divestiture Restructuring Plan \| Minimum
Restructuring Cost and Reserve [Line Items]
Costs expected to incur			10.0		10.0
Post-RH Divestiture Restructuring Plan \| Maximum
Restructuring Cost and Reserve [Line Items]
Costs expected to incur			11.0		11.0
Transformation Process \| Maximum
Restructuring Cost and Reserve [Line Items]
Costs expected to incur		$ 30.0
Program Management Consulting and Employee Retention
Restructuring Cost and Reserve [Line Items]
Costs incurred			0.7	$ 4.3	5.2	$ 23.0
Program Management Consulting and Employee Retention \| Minimum
Restructuring Cost and Reserve [Line Items]
Costs expected to incur			9.0		9.0
Program Management Consulting and Employee Retention \| Maximum
Restructuring Cost and Reserve [Line Items]
Costs expected to incur			12.0		12.0
Manufacturing and Supply Chain Improvements \| Minimum
Restructuring Cost and Reserve [Line Items]
Costs expected to incur			8.0		8.0
Manufacturing and Supply Chain Improvements \| Maximum
Restructuring Cost and Reserve [Line Items]
Costs expected to incur			11.0		11.0
Organizational Design Alignment and Other Related Activities \| Minimum
Restructuring Cost and Reserve [Line Items]
Costs expected to incur			6.0		6.0
Organizational Design Alignment and Other Related Activities \| Maximum
Restructuring Cost and Reserve [Line Items]
Costs expected to incur			8.0		8.0
Program Management Consulting and Employee Retention Expenses And Employee Severance and Benefits
Restructuring Cost and Reserve [Line Items]
Costs expected to incur			28.1		28.1
Costs incurred			$ 33.4		$ 33.4

Restructuring Activities - Accrual and Payment Activity (Details) - Employee severance and benefits - Multi-year restructuring plan, initial phase $ in Millions	9 Months Ended
	Sep. 30, 2024 USD ($)
Restructuring Reserve [Roll Forward]
Beginning balance	$ 2.3
Restructuring and transformation costs, excluding non-cash charges	10.3
Payments and adjustments, net	(9.2)
Ending balance	$ 3.4

Business Acquisition - Narratives (Details) - USD ($) $ in Millions			3 Months Ended		9 Months Ended		15 Months Ended
	Jul. 24, 2023	Jun. 17, 2023	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024
Business Acquisition [Line Items]
Net Sales			$ 170.4	$ 171.3	$ 508.2	$ 500.0
Payment of contingent consideration liabilities					4.6		$ 6.1
Diros Technology Inc
Business Acquisition [Line Items]
Consideration transferred	$ 53.0
Payments to acquire businesses, gross	50.5	$ 2.5
Future estimated payments	$ 7.0
Net Sales			4.6	2.4	14.4	2.4
Business acquisition, transaction costs			$ 1.5	$ 0.6	$ 2.1	$ 0.9

Business Acquisition - Purchase Price Allocation (Details) - USD ($) $ in Millions	Sep. 30, 2024	Dec. 31, 2023	Jul. 24, 2023
Business Acquisition [Line Items]
Goodwill	$ 795.1	$ 796.1
Diros Technology Inc
Business Acquisition [Line Items]
Current assets, net of cash acquired			$ 7.5
Current liabilities, excluding contingent consideration			(7.0)
Contingent consideration			(5.3)
Other noncurrent liabilities, net			(0.5)
Deferred tax liabilities			(8.1)
Identifiable intangible assets			29.6
Goodwill			33.4
Total			$ 49.6

Business Acquisition - Identifiable Intangible Assets (Details) - Diros Technology Inc $ in Millions	Jul. 24, 2023 USD ($)
Business Acquisition [Line Items]
Identifiable Intangible Asset Amount	$ 29.6
Trade names and trademarks
Business Acquisition [Line Items]
Identifiable Intangible Asset Amount	$ 2.9
Weighted Average Useful Lives (Years)	15 years
Customer relationships
Business Acquisition [Line Items]
Identifiable Intangible Asset Amount	$ 21.2
Weighted Average Useful Lives (Years)	14 years
Developed technology and other
Business Acquisition [Line Items]
Identifiable Intangible Asset Amount	$ 5.5
Weighted Average Useful Lives (Years)	13 years

Supplemental Balance Sheet Information - Accounts Receivable (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items]
Accounts receivable	$ 137.3		$ 137.3		$ 134.0
Income tax receivable	0.0		0.0		14.1
Accounts receivable, net	131.9		131.9		142.8
Provision (reversal) for doubtful accounts	0.1	$ (0.4)	0.2	$ 0.2
Doubtful accounts
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items]
Allowances and doubtful accounts	(4.8)		(4.8)		(5.1)
Sales discounts
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items]
Allowances and doubtful accounts	$ (0.6)		$ (0.6)		$ (0.2)

Supplemental Balance Sheet Information - Inventories (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Inventory, Net
Raw materials	$ 47.4		$ 47.4		$ 50.3
Work in process	23.2		23.2		19.8
Finished goods	87.9		87.9		88.5
Supplies and other	3.4		3.4		4.6
Total Inventory	161.9		161.9		$ 163.2
Inventory obsolescence	$ 2.8	$ 2.0	$ 4.3	$ 6.3

Supplemental Balance Sheet Information - Property, Plant and Equipment (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 246.7		$ 246.7		$ 240.1
Less accumulated depreciation	(137.2)		(137.2)		(122.9)
Total	109.5		109.5		117.2
Depreciation expense	5.3	$ 4.8	15.6	$ 14.2
Land
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	1.2		1.2		1.3
Buildings and leasehold improvements
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	41.3		41.3		38.0
Machinery and equipment
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	185.4		185.4		182.8
Construction in progress
Property, Plant and Equipment [Line Items]
Property, plant and equipment, gross	$ 18.8		$ 18.8		$ 18.0

Supplemental Balance Sheet Information - Goodwill (Details) $ in Millions	9 Months Ended
	Sep. 30, 2024 USD ($)
Goodwill [Roll Forward]
Beginning balance	$ 796.1
Currency translation adjustment	(1.0)
Ending balance	$ 795.1

Supplemental Balance Sheet Information - Intangible Assets (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	$ 497.8		$ 497.8		$ 498.3
Accumulated Amortization	(277.7)		(277.7)		(258.8)
Net Carrying Amount	220.1		220.1		239.5
Amortization expense for intangible assets	6.4	$ 6.2	18.8	$ 17.8
Unrealized currency translation adjustments			(0.3)
Trademarks
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	41.6		41.6		42.0
Accumulated Amortization	(29.7)		(29.7)		(28.8)
Net Carrying Amount	11.9		11.9		13.2
Patents and acquired technologies
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	248.5		248.5		248.6
Accumulated Amortization	(179.2)		(179.2)		(171.9)
Net Carrying Amount	69.3		69.3		76.7
Other
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount	207.7		207.7		207.7
Accumulated Amortization	(68.8)		(68.8)		(58.1)
Net Carrying Amount	$ 138.9		$ 138.9		$ 149.6

Supplemental Balance Sheet Information - Estimated Amortization Expense (Details) - USD ($) $ in Millions	Sep. 30, 2024	Dec. 31, 2023
Estimated Amortization Expense
Remainder of 2024	$ 6.7
2025	25.0
2026	24.5
2027	22.8
2028	22.6
Thereafter	118.5
Net Carrying Amount	$ 220.1	$ 239.5

Supplemental Balance Sheet Information - Accrued Expenses (Details) - USD ($) $ in Millions	Sep. 30, 2024	Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accrued rebates and customer incentives	$ 23.6	$ 17.7
Accrued salaries and wages	29.8	31.5
Accrued taxes and other	6.2	16.7
Other	23.1	27.3
Total	$ 82.7	$ 93.2

Supplemental Balance Sheet Information - Other Long-Term Liabilities (Details) - USD ($) $ in Millions	Sep. 30, 2024	Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Accrued compensation and benefits	$ 6.7	$ 5.9
Other	3.9	4.1
Total	$ 10.6	$ 10.0

Fair Value Information (Details) - USD ($) $ in Millions	Sep. 30, 2024	Dec. 31, 2023	Sep. 30, 2023	Dec. 31, 2022
Assets
Cash and cash equivalents	$ 89.0	$ 87.7	$ 107.1	$ 127.7
Level 1 \| Carrying Amount
Assets
Cash and cash equivalents	89.0	87.7
Level 1 \| Estimated Fair Value
Assets
Cash and cash equivalents	89.0	87.7
Level 2 \| Carrying Amount \| Revolving Credit Facility
Liabilities
Long-term debt, fair value	50.0	50.0
Level 2 \| Carrying Amount \| Term Loan Facility
Liabilities
Long-term debt, fair value	112.0	118.0
Level 2 \| Estimated Fair Value \| Revolving Credit Facility
Liabilities
Long-term debt, fair value	50.0	50.0
Level 2 \| Estimated Fair Value \| Term Loan Facility
Liabilities
Long-term debt, fair value	112.0	118.0
Level 3 \| Carrying Amount
Liabilities
Contingent consideration related to acquisition	0.0	5.3
Level 3 \| Estimated Fair Value
Liabilities
Contingent consideration related to acquisition	$ 0.0	$ 5.3

Debt - Summary of Debt (Details) - USD ($) $ in Millions	Sep. 30, 2024	Dec. 31, 2023
Debt Instrument [Line Items]
Total Long-Term Debt, net	$ 162.5	$ 168.8
Unamortized debt issuance costs	(0.5)	(0.8)
Current portion of long-term debt	(9.4)	(8.6)
Total Long-Term Debt, net	$ 152.6	159.4
Revolving Credit Facility \| Unsecured debt
Debt Instrument [Line Items]
Weighted-Average Interest Rate	6.83%
Total Long-Term Debt, net	$ 50.0	50.0
Term Loan Facility \| Unsecured debt
Debt Instrument [Line Items]
Weighted-Average Interest Rate	6.81%
Total Long-Term Debt, net	$ 112.5	$ 118.8

Debt - Narratives (Details) - USD ($)		9 Months Ended
Debt - Narratives (Details) - USD ($)	Jun. 24, 2022	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Debt Instrument [Line Items]
Current portion of long-term debt		$ 9,400,000		$ 8,600,000
Repayment of credit facility		20,000,000.0	$ 20,000,000.0
Revolving credit facility proceeds		$ 20,000,000.0	$ 55,000,000.0
First Eight Quarters
Debt Instrument [Line Items]
Quarterly installment payments (as percent)		10.00%
Subsequent To First Eight Quarters
Debt Instrument [Line Items]
Quarterly installment payments (as percent)		20.00%
Letter of Credit
Debt Instrument [Line Items]
Letters of credit outstanding		$ 6,300,000
Unsecured debt \| Revolving Credit Facility
Debt Instrument [Line Items]
Repayment of credit facility		20,000,000.0
Unsecured debt \| Term Loan Facilities
Debt Instrument [Line Items]
Repayment of credit facility		$ 6,300,000
Credit Agreement
Debt Instrument [Line Items]
Borrowing capacity	$ 500,000,000.0
Credit Agreement \| Secured overnight financing rate (SOFR) \| Variable rate component three
Debt Instrument [Line Items]
Basis spread on variable rate (as percent)	1.00%
Credit Agreement \| Fed funds effective rate overnight index rate swap
Debt Instrument [Line Items]
Basis spread on variable rate (as percent)	0.50%
Credit Agreement \| Minimum \| Secured overnight financing rate (SOFR) \| Variable rate component one
Debt Instrument [Line Items]
Basis spread on variable rate (as percent)	1.50%
Credit Agreement \| Minimum \| Secured overnight financing rate (SOFR) \| Variable rate component two
Debt Instrument [Line Items]
Basis spread on variable rate (as percent)	1.50%
Credit Agreement \| Minimum \| Base rate
Debt Instrument [Line Items]
Basis spread on variable rate (as percent)	0.50%
Credit Agreement \| Maximum \| Secured overnight financing rate (SOFR) \| Variable rate component one
Debt Instrument [Line Items]
Basis spread on variable rate (as percent)	2.00%
Credit Agreement \| Maximum \| Secured overnight financing rate (SOFR) \| Variable rate component two
Debt Instrument [Line Items]
Basis spread on variable rate (as percent)	2.00%
Credit Agreement \| Maximum \| Base rate
Debt Instrument [Line Items]
Basis spread on variable rate (as percent)	1.00%
Term Loan Facility \| Senior Secured Term Loan
Debt Instrument [Line Items]
Debt instrument, term (in years)	5 years
Face amount of debt	$ 125,000,000.0
Effective interest rate (as percent)		7.10%
Senior Secured Revolving Credit Facility \| Line of Credit \| Revolving Credit Facility
Debt Instrument [Line Items]
Borrowing capacity	$ 375,000,000.0
Debt instrument, term (in years)	5 years
Senior Secured Revolving Credit Facility \| Line of Credit \| Revolving Credit Facility \| Minimum
Debt Instrument [Line Items]
Line of credit facility, commitment fee percentage	0.20%
Senior Secured Revolving Credit Facility \| Line of Credit \| Revolving Credit Facility \| Maximum
Debt Instrument [Line Items]
Line of credit facility, commitment fee percentage	0.25%
Senior Secured Revolving Credit Facility \| Line of Credit \| Letter of Credit
Debt Instrument [Line Items]
Borrowing capacity	$ 75,000,000.0

Debt - Maturities of Long-Term Debt (Details) - USD ($) $ in Millions	Sep. 30, 2024	Dec. 31, 2023
Debt Disclosure [Abstract]
Remainder of 2024	$ 2.3
2025	9.4
2026	10.2
2027	140.6
2028	0.0
Total	$ 162.5	$ 168.8

Accumulated Other Comprehensive Income - Changes During the Period (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance			$ 1,236.3
Other comprehensive loss	$ 0.6	$ (4.6)	(9.9)	$ 2.8
Ending balance	1,229.7	1,222.1	1,229.7	1,222.1
Unrealized Currency Translation
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance			(27.0)
Other comprehensive loss			(8.0)
Ending balance	(35.0)		(35.0)
Cash Flow Hedges
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance			0.0
Other comprehensive loss			(1.8)
Ending balance	(1.8)		(1.8)
Defined Benefit Plans
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance			0.0
Other comprehensive loss			(0.1)
Ending balance	(0.1)		(0.1)
Accumulated Other Comprehensive Loss
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	(37.5)	(28.4)	(27.0)	(35.8)
Other comprehensive loss	0.6	(4.6)	(9.9)	2.8
Ending balance	$ (36.9)	$ (33.0)	$ (36.9)	$ (33.0)

Accumulated Other Comprehensive Income - Net Changes in Components of AOCI, Including Tax Effect (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Equity [Abstract]
Unrealized currency translation	$ 0.3	$ (4.6)	$ (8.0)	$ 2.8
Defined benefit pension plans	0.1	0.0	(0.1)	0.0
Defined benefit pension plans, net of tax	0.1	0.0	(0.1)	0.0
Cash flow hedges	0.7	0.0	(1.3)	0.0
Tax effect	(0.5)	0.0	(0.5)	0.0
Cash flow hedges, net of tax	0.2	0.0	(1.8)	0.0
Total Other Comprehensive Income (Loss), Net of Tax	$ 0.6	$ (4.6)	$ (9.9)	$ 2.8

Stock-Based Compensation (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
Stock-Based Compensation (Details) - USD ($) $ in Millions	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation	$ 2.6	$ 3.9	$ 10.0	$ 11.8
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation	0.0	0.0	0.0	0.3
Time-based restricted share units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation	2.7	2.5	7.6	7.9
Performance-based restricted share units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation	(0.1)	1.3	2.3	3.4
Employee stock purchase plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation	$ 0.0	$ 0.1	$ 0.1	$ 0.2

Commitments and Contingencies (Details) $ in Millions	Jul. 06, 2021 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Loss contingency accrual, payments	$ 22.2

Derivative Financial Instruments (Details) - Foreign exchange forward $ in Millions	Sep. 30, 2024 USD ($)
Derivative [Line Items]
Derivative liability	$ 2.1
Cash flow hedging \| Designated as hedging instrument
Derivative [Line Items]
Derivative, notional amount	$ 17.8

Earnings Per Share ("EPS") (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Earnings Per Share [Abstract]
Net income (loss) from continuing operations	$ 5.9	$ (8.8)	$ 10.7	$ (20.9)
Net (loss) income from discontinued operations	(1.6)	5.1	(5.5)	(51.4)
Net Income (Loss)	$ 4.3	$ (3.7)	$ 5.2	$ (72.3)
Weighted Average Shares Outstanding:
Basic weighted average shares outstanding (in shares)	46.0	46.8	46.0	46.7
Dilutive effect of stock options and restricted share unit awards (in shares)	0.6	0.0	0.5	0.0
Diluted weighted average shares outstanding (in shares)	46.6	46.8	46.5	46.7
Earnings (Loss) Per Share
Continuing operations- basic (in dollars per share)	$ 0.13	$ (0.19)	$ 0.23	$ (0.45)
Discontinued operations- basic (in dollars per share)	(0.03)	0.11	(0.12)	(1.10)
Basic Earnings (Loss) Per Share (in dollars per share)	0.10	(0.08)	0.11	(1.55)
Diluted Earnings (Loss) Per Share
Continuing operations- diluted (in dollars per share)	0.12	(0.19)	0.23	(0.45)
Discontinued operations- diluted (in dollars per share)	(0.03)	0.11	(0.12)	(1.10)
Diluted Earnings (Loss) Per Share (in dollars per share)	$ 0.09	$ (0.08)	$ 0.11	$ (1.55)
Dilutive securities excluded from computation of earnings per share (in shares)	1.0		1.3

Business and Products Information - Narratives (Details)	9 Months Ended
	Sep. 30, 2024 segment
Segment Reporting [Abstract]
Number of operating segments	1
Number of reportable segments	1

Business and Products Information - Net Sales by Product Category (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Disaggregation of Revenue [Line Items]
Total Net Sales	$ 170.4	$ 171.3	$ 508.2	$ 500.0
Digestive Health
Disaggregation of Revenue [Line Items]
Total Net Sales	98.2	95.0	290.6	276.8
Total Pain Management and Recovery
Disaggregation of Revenue [Line Items]
Total Net Sales	72.2	76.3	217.6	223.2
Surgical pain and recovery
Disaggregation of Revenue [Line Items]
Total Net Sales	30.3	34.1	93.8	103.6
Interventional pain
Disaggregation of Revenue [Line Items]
Total Net Sales	$ 41.9	$ 42.2	$ 123.8	$ 119.6

Business and Products Information - Accrued Liabilities (Details) - USD ($) $ in Millions	Sep. 30, 2024	Dec. 31, 2023
Segment Reporting [Abstract]
Accrued rebates	$ 13.7	$ 10.4
Accrued customer incentives	9.9	7.3
Accrued rebates and customer incentives	23.6	17.7
Accrued sales returns	0.1	0.1
Total estimated liabilities	$ 23.7	$ 17.8

Share Repurchase Program - Narratives (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
	Jul. 28, 2023	Dec. 31, 2023	Sep. 30, 2023	Sep. 30, 2024
Equity [Abstract]
Repurchase program period (in years)	1 year
Stock repurchase program, authorized amount	$ 25.0
Value of common stock repurchased		$ 5.8	$ 9.2
Shares withheld for tax withholding obligation (in shares)				140,539
Stock issued, value, stock options exercised, net of tax benefit (expense)				$ 2.7

Share Repurchase Program - Summary of Treasury Stock (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Jun. 30, 2024	Mar. 31, 2024
Equity [Abstract]
Shares Repurchased (in shares)	169,571	342,680
Shares repurchased, program to date (in shares)	1,254,904	1,085,333
Aggregate Purchase Price (in millions)	$ 3.3	$ 6.7
Average Price Per Share (in dollars per share)	$ 19.67	$ 19.45
Amount Remaining in Program for Purchase (in millions)	$ 0.0	$ 3.3

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