(State or other jurisdiction of incorporation) | (I.R.S. Employer Identification No.) | |||||||||||||||||||
(Address of principal executive offices) | (Zip code) |
Title of each class | Trading Symbol | Name of exchange on which registered | ||||||
☒ | Accelerated filer | ☐ | ||||||||||||
Non-accelerated filer | ☐ | Emerging growth company | ||||||||||||
Smaller reporting company |
Three Months Ended March 31, | |||||||||||
2021 | 2020 | ||||||||||
Net Sales | $ | $ | |||||||||
Cost of products sold | |||||||||||
Gross Profit | |||||||||||
Research and development | |||||||||||
Selling and general expenses | |||||||||||
Other expense, net | |||||||||||
Operating (Loss) Profit | ( | ||||||||||
Interest income | |||||||||||
Interest expense | ( | ( | |||||||||
Loss Before Income Taxes | ( | ( | |||||||||
Income tax benefit | |||||||||||
Net (Loss) Income | $ | ( | $ | ||||||||
(Loss) Earnings Per Share | |||||||||||
Basic | $ | ( | $ | ||||||||
Diluted | $ | ( | $ |
Three Months Ended March 31, | |||||||||||
2021 | 2020 | ||||||||||
Net (Loss) Income | $ | ( | $ | ||||||||
Other Comprehensive Loss, net of tax | |||||||||||
Unrealized currency translation adjustments | ( | ( | |||||||||
Defined benefit plans | |||||||||||
Cash flow hedges | ( | ||||||||||
Total Other Comprehensive Loss, net of tax | ( | ( | |||||||||
Comprehensive Loss | $ | ( | $ | ( |
March 31, 2021 | December 31, 2020 | ||||||||||
ASSETS | |||||||||||
Current Assets | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, net of allowances | |||||||||||
Income tax receivable | |||||||||||
Inventories | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total Current Assets | |||||||||||
Property, Plant and Equipment, net | |||||||||||
Operating Lease Right-of-Use Assets | |||||||||||
Goodwill | |||||||||||
Other Intangible Assets, net | |||||||||||
Deferred Tax Assets | |||||||||||
Other Assets | |||||||||||
TOTAL ASSETS | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Current Liabilities | |||||||||||
Current portion of operating lease liabilities | $ | $ | |||||||||
Trade accounts payable | |||||||||||
Accrued expenses | |||||||||||
Total Current Liabilities | |||||||||||
Long-Term Debt | |||||||||||
Operating Lease Liabilities | |||||||||||
Deferred Tax Liabilities | |||||||||||
Other Long-Term Liabilities | |||||||||||
Total Liabilities | |||||||||||
Commitments and Contingencies | |||||||||||
Stockholders’ Equity | |||||||||||
Preferred stock - $ | |||||||||||
Common stock - $ | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated deficit | ( | ( | |||||||||
Treasury stock | ( | ( | |||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Total Stockholders’ Equity | |||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ |
Three Months Ended March 31, | |||||||||||
2021 | 2020 | ||||||||||
Common Stock | $ | $ | |||||||||
Additional Paid-in Capital, beginning of period | |||||||||||
Exercise or redemption of share-based awards | |||||||||||
Stock-based compensation expense | |||||||||||
Additional Paid-in Capital, end of period | |||||||||||
Accumulated Deficit, beginning of period | ( | ( | |||||||||
Net (loss) income | ( | ||||||||||
Accumulated Deficit, end of period | ( | ( | |||||||||
Treasury Stock, beginning of period | ( | ( | |||||||||
Purchases of treasury stock | |||||||||||
Treasury Stock, end of period | ( | ( | |||||||||
Accumulated Other Comprehensive Loss, beginning of period | ( | ( | |||||||||
Other comprehensive loss, net of tax | ( | ( | |||||||||
Accumulated Other Comprehensive Loss, end of period | ( | ( | |||||||||
Total Stockholders’ Equity, end of period | $ | $ |
Three Months Ended March 31, | |||||||||||
2021 | 2020 | ||||||||||
Operating Activities | |||||||||||
Net (loss) income | $ | ( | $ | ||||||||
Depreciation and amortization | |||||||||||
Stock-based compensation expense | |||||||||||
Net loss on asset dispositions | |||||||||||
Changes in operating assets and liabilities, net of acquisition: | |||||||||||
Accounts receivable | |||||||||||
Inventories | ( | ||||||||||
Prepaid expenses and other assets | ( | ||||||||||
Accounts payable | ( | ( | |||||||||
Accrued expenses | ( | ( | |||||||||
Deferred income taxes and other | ( | ( | |||||||||
Cash Used in Operating Activities | ( | ( | |||||||||
Investing Activities | |||||||||||
Capital expenditures | ( | ( | |||||||||
Cash Used in Investing Activities | ( | ( | |||||||||
Financing Activities | |||||||||||
Revolving credit facility repayments | ( | ||||||||||
Proceeds from the exercise of stock options | |||||||||||
Cash Used in Financing Activities | ( | ||||||||||
Effect of Exchange Rate Changes on Cash and Cash Equivalents | ( | ( | |||||||||
Decrease in Cash and Cash Equivalents | ( | ( | |||||||||
Cash and Cash Equivalents - Beginning of Period | |||||||||||
Cash and Cash Equivalents - End of Period | $ | $ |
Three Months Ended March 31, | |||||||||||
2021 | 2020 | ||||||||||
Post divestiture restructuring plan | $ | $ | |||||||||
Integration and restructuring of business acquisitions | |||||||||||
2020 Restructuring | |||||||||||
Total Restructuring Costs | $ | $ |
Accrual | |||||
Balance, December 31, 2020 | $ | ||||
Charges and adjustments, net | |||||
Payments and other | ( | ||||
Balance, March 31, 2021 | $ |
March 31, 2021 | December 31, 2020 | ||||||||||
Accounts receivable | $ | $ | |||||||||
Allowances and doubtful accounts: | |||||||||||
Doubtful accounts | ( | ( | |||||||||
Sales discounts | ( | ( | |||||||||
Accounts receivable, net of allowances | $ | $ |
March 31, 2021 | December 31, 2020 | ||||||||||||||||||||||||||||||||||
LIFO | Non- LIFO | Total | LIFO | Non- LIFO | Total | ||||||||||||||||||||||||||||||
Raw materials | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Work in process | |||||||||||||||||||||||||||||||||||
Finished goods | |||||||||||||||||||||||||||||||||||
Supplies and other | |||||||||||||||||||||||||||||||||||
Excess of FIFO or weighted-average cost over LIFO cost | ( | — | ( | ( | — | ( | |||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ |
March 31, 2021 | December 31, 2020 | ||||||||||
Land | $ | $ | |||||||||
Buildings | |||||||||||
Machinery and equipment | |||||||||||
Construction in progress | |||||||||||
Less accumulated depreciation | ( | ( | |||||||||
Total | $ | $ |
Goodwill | |||||
Balance, December 31, 2020 | $ | ||||
Currency translation adjustment | ( | ||||
Balance, March 31, 2021 | $ |
March 31, 2021 | December 31, 2020 | ||||||||||||||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||||||||||||||
Trademarks | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||
Patents and acquired technologies | ( | ( | |||||||||||||||||||||||||||||||||
Other | ( | ( | |||||||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | $ | $ | ( | $ |
Amount | ||||||||
Remainder of 2021 | $ | |||||||
2022 | ||||||||
2023 | ||||||||
2024 | ||||||||
2025 | ||||||||
Thereafter | ||||||||
Total | $ |
March 31, 2021 | December 31, 2020 | ||||||||||
Accrued rebates and customer incentives | $ | $ | |||||||||
Accrued salaries and wages | |||||||||||
Accrued taxes | |||||||||||
Other(a) | |||||||||||
Total | $ | $ |
March 31, 2021 | December 31, 2020 | ||||||||||
Taxes payable | $ | $ | |||||||||
Accrued compensation and benefits | |||||||||||
Other | |||||||||||
Total | $ | $ |
March 31, 2021 | December 31, 2020 | ||||||||||||||||||||||||||||
Fair Value Hierarchy Level | Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value | |||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||
Cash and cash equivalents | 1 | $ | $ | $ | $ | ||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||
Revolving credit facility | 2 |
Weighted-Average Interest Rate | Maturities | March 31, 2021 | December 31, 2020 | ||||||||||||||||||||
Revolving credit facility | % | 2023 | $ | $ |
Unrealized Translation | Cash Flow Hedges | Defined Benefit Pension Plans | Accumulated Other Comprehensive Loss | ||||||||||||||||||||
Balance, December 31, 2020 | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
Other comprehensive loss | ( | ( | |||||||||||||||||||||
Balance, March 31, 2021 | $ | ( | $ | $ | ( | $ | ( |
Three Months Ended March 31, | |||||||||||
2021 | 2020 | ||||||||||
Unrealized translation | $ | ( | $ | ( | |||||||
Defined benefit pension plans | |||||||||||
Tax effect | ( | ||||||||||
Defined benefit pension plans, net of tax | |||||||||||
Cash flow hedges | ( | ||||||||||
Tax effect | |||||||||||
Cash flow hedges, net of tax | ( | ||||||||||
Change in AOCI | $ | ( | $ | ( |
Three Months Ended March 31, | |||||||||||
2021 | 2020 | ||||||||||
Stock options | $ | $ | |||||||||
Time-based restricted share units | |||||||||||
Performance-based restricted share units | |||||||||||
Employee stock purchase plan | |||||||||||
Total stock-based compensation | $ | $ |
Three Months Ended March 31, | |||||||||||
2021 | 2020 | ||||||||||
Net (loss) income | $ | ( | $ | ||||||||
Weighted Average Shares Outstanding: | |||||||||||
Basic weighted average shares outstanding | |||||||||||
Dilutive effect of stock options and restricted share unit awards | |||||||||||
Diluted weighted average shares outstanding | |||||||||||
(Loss) Earnings Per Share: | |||||||||||
Basic | $ | ( | $ | ||||||||
Diluted | $ | ( | $ |
Three Months Ended March 31, | |||||||||||
2021 | 2020 | ||||||||||
Chronic care | $ | $ | |||||||||
Pain management | |||||||||||
Total Net Sales | $ | $ |
Three Months Ended March 31, | |||||||||||
2021 | 2020 | ||||||||||
Post divestiture restructuring plan | $ | 0.9 | $ | 0.5 | |||||||
Integration and restructuring of business acquisitions | — | 0.1 | |||||||||
2020 Restructuring | 0.2 | — | |||||||||
Total Restructuring Costs | $ | 1.1 | $ | 0.6 |
Three Months Ended March 31, | |||||||||||||||||||||||||||||
2021 | 2020 | Change | |||||||||||||||||||||||||||
Chronic care | $ | 121.1 | $ | 115.7 | 4.7 | % | |||||||||||||||||||||||
Pain management | 59.6 | 64.7 | (7.9) | ||||||||||||||||||||||||||
Net Sales | $ | 180.7 | $ | 180.4 | 0.2 | % | |||||||||||||||||||||||
Total | Volume | Pricing/Mix | Currency | Other | |||||||||||||||||||||||||
Net Sales - percentage change | — | % | 1 | % | (2) | % | 1 | % | — | % |
Three Months Ended March 31, | |||||||||||||||||
2021 | 2020 | Change | |||||||||||||||
Net Sales | |||||||||||||||||
North America | $ | 133.3 | $ | 138.6 | (3.8) | % | |||||||||||
Europe, Middle East and Africa | 29.6 | 26.1 | 13.4 | ||||||||||||||
Asia Pacific and Latin America | 17.8 | 15.7 | 13.4 | ||||||||||||||
Total Net Sales | $ | 180.7 | $ | 180.4 | 0.2 | % |
Three Months Ended March 31, | |||||||||||
2021 | 2020 | ||||||||||
Gross Profit, as reported | $ | 91.3 | $ | 102.1 | |||||||
COVID-19 related expenses | — | 0.4 | |||||||||
2020 Restructuring charges | 0.2 | — | |||||||||
Post divestiture restructuring charges | 0.9 | 0.5 | |||||||||
Post divestiture transition charges | 0.1 | 0.8 | |||||||||
Acquisition and integration-related charges | — | 0.1 | |||||||||
Intangibles amortization | 1.6 | 1.7 | |||||||||
Adjusted Gross Profit (non-GAAP) | $ | 94.1 | $ | 105.6 | |||||||
Gross profit margin, as reported | 50.5 | % | 56.6 | % | |||||||
Gross profit margin, as adjusted | 52.1 | % | 58.5 | % |
Three Months Ended March 31, | |||||||||||
2021 | 2020 | ||||||||||
Operating (Loss) Profit, as reported | $ | (12.4) | $ | 0.6 | |||||||
COVID-19 related expenses | — | 0.5 | |||||||||
2020 Restructuring charges | 0.2 | — | |||||||||
Post divestiture restructuring charges | 0.9 | 0.5 | |||||||||
Post divestiture transition charges | — | 4.0 | |||||||||
Acquisition and integration-related charges | 0.4 | 1.8 | |||||||||
EU MDR Compliance | 0.2 | — | |||||||||
Litigation and legal | 22.5 | 2.2 | |||||||||
Intangibles amortization | 4.2 | 4.8 | |||||||||
Adjusted Operating Profit (non-GAAP) | $ | 16.0 | $ | 14.4 |
Exhibit Number | Description | |||||||
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 |
AVANOS MEDICAL, INC. | |||||||||||
(Registrant) | |||||||||||
May 7, 2021 | By: | /s/ Michael C. Greiner | |||||||||
Michael C. Greiner | |||||||||||
Senior Vice President and Chief Financial Officer | |||||||||||
(Principal Financial Officer) | |||||||||||
May 7, 2021 | By: | /s/ Renato Negro | |||||||||
Renato Negro | |||||||||||
Vice President and Controller | |||||||||||
(Principal Accounting Officer) |
Date: May 7, 2021 | /s/ Joseph F. Woody | |||||||
Joseph F. Woody Chief Executive Officer |
Date: May 7, 2021 | /s/ Michael C. Greiner | |||||||
Michael C. Greiner Chief Financial Officer |
Date: May 7, 2021 | /s/ Joseph F. Woody | |||||||
Joseph F. Woody Chief Executive Officer |
Date: May 7, 2021 | /s/ Michael C. Greiner | |||||||
Michael C. Greiner Chief Financial Officer |
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CONDENSED CONSOLIDATED INCOME STATEMENTS - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Income Statement [Abstract] | ||
Net Sales | $ 180.7 | $ 180.4 |
Cost of products sold | 89.4 | 78.3 |
Gross Profit | 91.3 | 102.1 |
Research and development | 8.3 | 9.4 |
Selling and general expenses | 73.4 | 91.1 |
Other expense, net | 22.0 | 1.0 |
Operating (Loss) Profit | (12.4) | 0.6 |
Interest income | 0.0 | 0.7 |
Interest expense | (0.8) | (4.3) |
Loss Before Income Taxes | (13.2) | (3.0) |
Income tax benefit | 5.6 | 6.7 |
Net (Loss) Income | $ (7.6) | $ 3.7 |
(Loss) Earnings Per Share | ||
Basic (in dollars per share) | $ (0.16) | $ 0.08 |
Diluted (in dollars per share) | $ (0.16) | $ 0.08 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Statement of Comprehensive Income [Abstract] | ||
Net (loss) income | $ (7.6) | $ 3.7 |
Other Comprehensive Loss, net of tax | ||
Unrealized currency translation adjustments | (4.2) | (15.0) |
Defined benefit plans | 0.0 | 0.2 |
Cash flow hedges | 0.0 | (0.1) |
Total Other Comprehensive Loss, net of tax | (4.2) | (14.9) |
Comprehensive Loss | $ (11.8) | $ (11.2) |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Mar. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
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) | 48,059,819 | 47,917,583 |
Accounting Policies |
3 Months Ended |
---|---|
Mar. 31, 2021 | |
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 breakthrough medical device solutions to improve patients’ quality of life. Headquartered in Alpharetta, Georgia, Avanos is committed to addressing some of today’s most important healthcare needs, such as reducing the use of opioids while helping patients move from surgery to recovery. We develop, manufacture and market clinically superior solutions around the globe. References to “Avanos,” “Company,” “we,” “our” and “us” refer to Avanos Medical, Inc. and its consolidated subsidiaries. Interim Financial Statements We prepared the accompanying 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 Quarterly Report on Form 10-Q should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2020. 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, 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. Our estimates are subject to uncertainties associated with the ongoing COVID-19 pandemic which has caused volatility and adverse effects in global markets. Accordingly, actual results could differ from these estimates, and the effect of the difference could be material to our financial statements. Changes in these estimates are recorded when known. Recently Adopted Accounting Pronouncements Effective January 1, 2021, we adopted Accounting Standards Update (“ASU”) No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This ASU removed certain exceptions for recognizing deferred taxes for investments, performing intraperiod allocation and calculating income taxes in interim periods. The ASU also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. 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 March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2020-04, Reference Rate Reform. This ASU was prompted by the planned cessation of the London Interbank Offer Rate (“LIBOR”), which is the reference rate for many debt agreements, including the credit agreement that governs our revolving credit facility that is described in Note 5, “Debt.” This ASU applies to contract modifications that replace a reference rate and contemporaneous modifications of other contract terms related to the replacement of the reference rate. Under this ASU, modifications to debt agreements may be accounted for by prospectively adjusting the effective interest rate. This ASU is effective as of March 12, 2020 through December 31, 2022 and may be applied as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. The adoption of this ASU is not expected to have a material effect on our financial position, results of operations or cash flows.
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Restructuring Activities |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring Activities | Restructuring Activities Our restructuring expenses for the three months ended March 31, 2021 and 2020 is summarized in the table below (in millions):
Post-Divestiture Restructuring Plan In the fourth quarter of 2018, we began a three-phase restructuring plan (the “Plan”) intended to align our organizational structure, information technology platform and supply chain and distribution channels (“Cost Transformation”) to be more appropriate for the size and scale of our business. Only the final phase of the plan, Cost Transformation, remains in progress. We expect to incur between $11.0 million and $13.0 million of costs to execute the Cost Transformation, primarily consulting and other expenses that will be expensed as incurred. The Company also expects to spend up to $7.0 million of incremental capital through 2021 and expects to complete the Cost Transformation by the end of 2021. Expenses incurred for Cost Transformation are included in “Cost of products sold.” Plan-to-date we have incurred $6.0 million of costs that were expensed as incurred and $3.5 million of costs that were capitalized. Integration and Restructuring of Business Acquisitions During the third quarter of 2019, we initiated activities to integrate recent asset and business acquisitions into our operations, and where appropriate, re-align our organization accordingly. Costs incurred were primarily for employee retention, severance and benefits and lease termination costs. Cumulative plan expenses were $9.6 million, included in “Selling and general expenses,” primarily for employee retention, severance, benefits and “Other expense, net” for right-of-use asset impairment. The integration of our acquisitions was substantially complete by the end of 2020. 2020 Restructuring In the fourth quarter of 2020, we initiated activities to reduce the size of our senior leadership team, consolidate certain operations within our pain management franchise, exit unprofitable lines of business and reduce the size of our office space to align with expected requirements following the COVID-19 pandemic. We expect to incur up to $33.0 million of costs, primarily for operating lease right-of-use impairments or lease terminations, impairment of intangible and other assets and employee severance and benefits. Plan-to-date, we have incurred $27.8 million of expenses, which are included in “Cost of products sold,” “Selling and general expenses” and “Other expense, net.” We expect to substantially complete this restructuring by the end of 2021. Restructuring Liability We have a liability for employee retention, severance, benefits and other costs associated with our restructuring activities, which is summarized below (in millions):
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Supplemental Balance Sheet Information |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Balance Sheet Information | Supplemental Balance Sheet Information Accounts Receivable Accounts receivable consist of the following (in millions):
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. Our provision for doubtful accounts was a net benefit of $0.4 million in the three months ended March 31, 2021. Inventories Inventories at the lower of cost (determined on the LIFO/FIFO or weighted-average cost methods) or market consist of the following (in millions):
Property, Plant and Equipment Property, plant and equipment consists of the following (in millions):
Depreciation expense was $5.5 million for the three months ended March 31, 2021 compared to $5.8 million for the three months ended March 31, 2020. Goodwill and Intangible Assets The changes in the carrying amount of goodwill are as follows (in millions):
Intangible assets subject to amortization consist of the following (in millions):
Amortization expense for intangible assets was $4.2 million for the three months ended March 31, 2021 compared to $4.8 million for the three months ended March 31, 2020. We estimate amortization expense for the remainder of 2021 and the following four years and beyond will be (in millions):
Accrued Expenses Accrued expenses consist of the following (in millions):
__________________________________________________ (a)As of March 31, 2021, “Other” includes amounts accrued pursuant to a potential resolution of a matter with the U.S. Department of Justice, as described in “Commitments and Contingencies” in Note 8 to these condensed consolidated financial statements. Other Long-Term Liabilities Other long-term liabilities consist of the following (in millions):
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Fair Value Information |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Information | 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):
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt As of March 31, 2021 and December 31, 2020, our debt balances were as follows (in millions):
Our senior secured revolving credit facility (“Revolving Credit Facility”) matures on October 30, 2023 and allows for borrowings up to $250.0 million, with a letter of credit sub-facility in an amount of $75.0 million and a swingline sub-facility in an amount of $25.0 million. Borrowings bear interest, at our option, at either (i) a reserve-adjusted LIBOR rate, plus a margin ranging between 1.50% to 2.25% per annum, depending on our consolidated total leverage ratio, or (ii) the base rate plus a margin ranging between 0.50% to 1.25% per annum, depending on our consolidated total leverage ratio. The unused portion of the Revolving Credit Facility is subject to a commitment fee equal to (i) 0.25% per annum, when our consolidated total leverage ratio is less than 2.25 to 1.00 or (ii) 0.38% per annum, otherwise. To the extent we remain in compliance with certain financial covenants in our credit agreement, we have the ability to access our Revolving Credit Facility. As of March 31, 2021, we had $175.0 million of borrowings and letters of credit of $1.2 million outstanding under the Revolving Credit Facility.
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Accumulated Other Comprehensive Income |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Income The changes in the components of AOCI, net of tax, are as follows (in millions):
The changes in the components of AOCI, including the tax effect, are as follows (in millions):
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Stock-Based Compensation |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense for the three months ended March 31, 2021 and 2020 is shown in the table below (in millions):
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Commitments and Contingencies |
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Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies 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 the spin-off, 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. For the three months ended March 31, 2021 and 2020, we incurred $22.5 million and $2.2 million, respectively, for these matters which is included in “Other expense, net.” 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 Company surgical gowns, and, in July 2015, we also became aware that the subpoena and an earlier VA OIG subpoena served on Kimberly-Clark requesting information about gown sales to the federal government are 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 Company gowns. The Company is cooperating with the DOJ investigation, including engaging in discussions with the DOJ beginning in March 2021 about a potential resolution of this matter that would provide for a total monetary payment in the amount of $22.2 million. An accrual has been recorded related to the potential resolution. If finalized, the resolution would resolve all aspects of the DOJ investigation described above. Patent Litigation We operate in an industry characterized by extensive patent litigation and 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. On November 4, 2019, we filed the matter styled Avanos Medical Sales LLC v Medtronic Sofamor Danek USA, Inc., et al. (No. 2:19-cv-02754-JMP-TMP (W.D. Tenn.)), alleging that Medtronic’s manufacture, marketing, sale, and importation of the Accurian system infringes certain claims of U.S. Patent 8,822,755. Medtronic’s motion to dismiss was denied. On June 1, 2020, Medtronic petitioned the U.S. Patent and Trademark Office (“USPTO”) for an inter partes review (“IPR”) of the patent at issue in the litigation. On October 23, 2020, the USPTO instituted an IPR. The IPR will not affect Avanos’s ability to manufacture, market or sell the products covered by the underlying patent. We will continue to vigorously prosecute and defend the litigation and IPR. 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 report, 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) early stage of the proceedings; (b) indeterminate (or unspecified) damages; and (c) significant factual issues yet to be resolved, or such amounts have been determined to be immaterial. At present, although the results of litigation and claims cannot be predicted with certainty, we believe that the ultimate resolution of these matters will not materially impact our liquidity, access to capital markets or ability to conduct our daily operations. As of March 31, 2021, we have an accrued liability for the matters described herein, and reasonably possible losses have been disclosed. The accrued liability is included in “Accrued Expenses” in the accompanying condensed consolidated balance sheet. Our estimate of these liabilities is based on facts and circumstances existing at this time, along with other variables. Factors that may affect our estimate include, but are not limited to: (i) changes in the number of lawsuits filed against us, including the potential for similar, duplicate or “copycat” lawsuits filed in multiple jurisdictions, including lawsuits that bring causes or action or allege violations of law with regard to additional products; (ii) changes in the legal costs of defending such claims; (iii) changes in the nature of the lawsuits filed against us; (iv) changes in the applicable law governing any legal claims against us; (v) a determination that our assumptions used in estimating the liability are no longer reasonable; and (vi) the uncertainties associated with the judicial process, including adverse judgments rendered by courts or juries. Thus, the actual amount of these liabilities for existing and future claims could be materially different than the accrued amount. Additionally, the above matters, regardless of the outcome, could disrupt our business and result in substantial costs and diversion of management attention. Environmental Compliance We are subject to federal, state and local environmental protection laws and regulations with respect to our business operations and are operating in compliance with, or 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.
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Earnings Per Share ("EPS") |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share (“EPS”) | 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 weighted average 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. The calculation of basic and diluted earnings per share for the three months ended March 31, 2021 and 2020 is set forth in the following table (in millions, except per share amounts):
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 months ended March 31, 2021, 1.1 million of potentially dilutive stock options and restricted share unit awards were excluded from the computation of earnings per share as their effect would have been anti-dilutive.
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Business and Products Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business and Products Information | Business and Products Information We conduct our business in one operating and reportable segment that provides our medical device products to healthcare professionals and patients in more than 90 countries with manufacturing facilities in the United States, Mexico, France and Tunisia. We provide a portfolio of innovative product offerings focused on pain management and chronic care to improve patient outcomes and reduce the cost of care. Our management evaluates net sales by product category within our single reportable segment as follows (in millions):
Chronic care is a portfolio of products that include (i) digestive health products such as our Mic-Key enteral feeding tubes, Corpak patient feeding solutions and NeoMed neonatal and pediatric feeding solutions and (ii) respiratory health products such as closed airway suction systems and other airway management devices under the Ballard, Microcuff and Endoclear brands. Pain management is a portfolio of non-opioid pain solutions including (i) acute pain products such as On-Q and ambIT surgical pain pumps and Game Ready cold and compression therapy systems and (ii) interventional pain solutions, which provide minimally invasive pain relieving therapies, such as our Coolief pain therapy. 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 to unaffiliated customers, depending on shipping terms. Accordingly, we normally do not have transactions that give rise to material unfulfilled performance obligations.
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Accounting Policies (Policies) |
3 Months Ended |
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Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Background and Basis of Presentation and Interim Financial Statements | Background and Basis of Presentation Avanos Medical, Inc. is a medical technology company focused on delivering clinically superior breakthrough medical device solutions to improve patients’ quality of life. Headquartered in Alpharetta, Georgia, Avanos is committed to addressing some of today’s most important healthcare needs, such as reducing the use of opioids while helping patients move from surgery to recovery. We develop, manufacture and market clinically superior solutions around the globe. References to “Avanos,” “Company,” “we,” “our” and “us” refer to Avanos Medical, Inc. and its consolidated subsidiaries. Interim Financial Statements We prepared the accompanying 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 Quarterly Report on Form 10-Q should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2020. 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.
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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, 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. Our estimates are subject to uncertainties associated with the ongoing COVID-19 pandemic which has caused volatility and adverse effects in global markets. Accordingly, actual results could differ from these estimates, and the effect of the difference could be material to our financial statements. Changes in these estimates are recorded when known.
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Recently Adopted Accounting Pronouncements/Recently Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements Effective January 1, 2021, we adopted Accounting Standards Update (“ASU”) No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This ASU removed certain exceptions for recognizing deferred taxes for investments, performing intraperiod allocation and calculating income taxes in interim periods. The ASU also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. 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 March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2020-04, Reference Rate Reform. This ASU was prompted by the planned cessation of the London Interbank Offer Rate (“LIBOR”), which is the reference rate for many debt agreements, including the credit agreement that governs our revolving credit facility that is described in Note 5, “Debt.” This ASU applies to contract modifications that replace a reference rate and contemporaneous modifications of other contract terms related to the replacement of the reference rate. Under this ASU, modifications to debt agreements may be accounted for by prospectively adjusting the effective interest rate. This ASU is effective as of March 12, 2020 through December 31, 2022 and may be applied as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. The adoption of this ASU is not expected to have a material effect on our financial position, results of operations or cash flows.
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Restructuring Activities (Tables) |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of accrual and payment activity | Our restructuring expenses for the three months ended March 31, 2021 and 2020 is summarized in the table below (in millions):
We have a liability for employee retention, severance, benefits and other costs associated with our restructuring activities, which is summarized below (in millions):
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Supplemental Balance Sheet Information (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of accounts receivable | Accounts receivable consist of the following (in millions):
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Schedule of inventories | Inventories at the lower of cost (determined on the LIFO/FIFO or weighted-average cost methods) or market consist of the following (in millions):
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Schedule of property, plant and equipment | Property, plant and equipment consists of the following (in millions):
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Schedule of changes in the carrying amount of goodwill by business segment | The changes in the carrying amount of goodwill are as follows (in millions):
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Schedule of intangible assets subject to amortization | Intangible assets subject to amortization consist of the following (in millions):
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Schedule of estimated amortization expense | We estimate amortization expense for the remainder of 2021 and the following four years and beyond will be (in millions):
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Schedule of accrued expenses | Accrued Expenses Accrued expenses consist of the following (in millions):
__________________________________________________ (a)As of March 31, 2021, “Other” includes amounts accrued pursuant to a potential resolution of a matter with the U.S. Department of Justice, as described in “Commitments and Contingencies” in Note 8 to these condensed consolidated financial statements.
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Schedule of other long-term liabilities | Other long-term liabilities consist of the following (in millions):
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Fair Value Information (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule 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):
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Debt (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of debt balances | As of March 31, 2021 and December 31, 2020, our debt balances were as follows (in millions):
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Accumulated Other Comprehensive Income (Tables) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes in the components of accumulated other comprehensive income | The changes in the components of AOCI, net of tax, are as follows (in millions):
The changes in the components of AOCI, including the tax effect, are as follows (in millions):
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Stock-Based Compensation (Tables) |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of stock-based compensation expense | Stock-based compensation expense for the three months ended March 31, 2021 and 2020 is shown in the table below (in millions):
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Earnings Per Share ("EPS") (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Calculation of basic and diluted earnings per share | The calculation of basic and diluted earnings per share for the three months ended March 31, 2021 and 2020 is set forth in the following table (in millions, except per share amounts):
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Business and Products Information (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of net sales by product category | Our management evaluates net sales by product category within our single reportable segment as follows (in millions):
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Restructuring Activities - Restructuring Expense (Details) - USD ($) $ in Millions |
3 Months Ended | |
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Mar. 31, 2021 |
Mar. 31, 2020 |
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Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $ 1.1 | $ 0.6 |
Integration and restructuring of business acquisitions | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 0.0 | 0.1 |
2020 Restructuring | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 0.2 | 0.0 |
Post-Divestiture Restructuring Plan | Post divestiture restructuring plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $ 0.9 | $ 0.5 |
Restructuring Activities - Accrual and Payment Activity (Details) - Multi-year restructuring plan - Employee severance and benefits $ in Millions |
3 Months Ended |
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Mar. 31, 2021
USD ($)
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Restructuring Reserve [Roll Forward] | |
Beginning balance | $ 7.2 |
Charges and adjustments, net | 1.1 |
Payments and other | (7.0) |
Ending balance | $ 1.3 |
Supplemental Balance Sheet Information - Accounts Receivable (Details) - USD ($) $ in Millions |
3 Months Ended | |
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Mar. 31, 2021 |
Dec. 31, 2020 |
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SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Accounts receivable | $ 109.5 | $ 113.2 |
Provision (benefit) for doubtful accounts | (0.4) | |
Doubtful accounts | ||
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Allowances and doubtful accounts | (3.9) | (4.4) |
Sales discounts | ||
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Allowances and doubtful accounts | (0.3) | (0.2) |
Accounts receivable, net of allowances | $ 105.3 | $ 108.6 |
Supplemental Balance Sheet Information - Inventories (Details) - USD ($) $ in Millions |
Mar. 31, 2021 |
Dec. 31, 2020 |
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LIFO | ||
Raw materials | $ 46.3 | $ 43.9 |
Work in process | 32.6 | 32.2 |
Finished goods | 67.4 | 73.5 |
Supplies and other | 0.0 | 0.0 |
Inventory, gross | 146.3 | 149.6 |
Excess of FIFO or weighted-average cost over LIFO cost | (6.5) | (7.5) |
Inventories, net | 139.8 | 142.1 |
Non- LIFO | ||
Raw materials | 3.0 | 3.1 |
Work in process | 0.1 | 0.1 |
Finished goods | 16.0 | 16.9 |
Supplies and other | 6.3 | 6.7 |
Inventory, gross | 25.4 | 26.8 |
Inventories, net | 25.4 | 26.8 |
Inventory, Net | ||
Raw materials | 49.3 | 47.0 |
Work in process | 32.7 | 32.3 |
Finished goods | 83.4 | 90.4 |
Supplies and other | 6.3 | 6.7 |
Inventory, gross | 171.7 | 176.4 |
Excess of FIFO or weighted-average cost over LIFO cost | (6.5) | (7.5) |
Inventory, net | $ 165.2 | $ 168.9 |
Supplemental Balance Sheet Information - Property, Plant and Equipment (Details) - USD ($) $ in Millions |
3 Months Ended | ||
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Mar. 31, 2021 |
Mar. 31, 2020 |
Dec. 31, 2020 |
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Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 291.9 | $ 289.4 | |
Less accumulated depreciation | (118.5) | (114.1) | |
Total | 173.4 | 175.3 | |
Depreciation expense | 5.5 | $ 5.8 | |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 1.1 | 1.1 | |
Buildings | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 46.7 | 46.8 | |
Machinery and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 219.6 | 218.2 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 24.5 | $ 23.3 |
Supplemental Balance Sheet Information - Schedule of Goodwill (Details) $ in Millions |
3 Months Ended |
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Mar. 31, 2021
USD ($)
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Goodwill [Roll Forward] | |
Beginning balance | $ 802.5 |
Currency translation adjustment | (0.4) |
Ending balance | $ 802.1 |
Supplemental Balance Sheet Information - Schedule of Intangible Assets (Details) - USD ($) $ in Millions |
3 Months Ended | ||
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Mar. 31, 2021 |
Mar. 31, 2020 |
Dec. 31, 2020 |
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Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 433.7 | $ 434.3 | |
Accumulated Amortization | (280.1) | (276.6) | |
Net Carrying Amount | 153.6 | 157.7 | |
Amortization expense for intangible assets | 4.2 | $ 4.8 | |
Trademarks | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 90.9 | 90.9 | |
Accumulated Amortization | (61.9) | (61.2) | |
Net Carrying Amount | 29.0 | 29.7 | |
Patents and acquired technologies | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 281.5 | 282.0 | |
Accumulated Amortization | (179.4) | (177.2) | |
Net Carrying Amount | 102.1 | 104.8 | |
Other | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 61.3 | 61.4 | |
Accumulated Amortization | (38.8) | (38.2) | |
Net Carrying Amount | $ 22.5 | $ 23.2 |
Supplemental Balance Sheet Information - Schedule of Estimated Amortization Expense (Details) - USD ($) $ in Millions |
Mar. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Estimated Amortization Expense | ||
Remainder of 2020 | $ 12.3 | |
2021 | 16.1 | |
2022 | 15.2 | |
2023 | 15.1 | |
2024 | 14.6 | |
Thereafter | 80.3 | |
Net Carrying Amount | $ 153.6 | $ 157.7 |
Supplemental Balance Sheet Information - Accrued Expenses (Details) - USD ($) $ in Millions |
Mar. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued rebates and customer incentives | $ 19.4 | $ 22.5 |
Accrued salaries and wages | 21.3 | 36.0 |
Accrued taxes | 3.4 | 2.7 |
Other | 36.2 | 22.0 |
Total | $ 80.3 | $ 83.2 |
Supplemental Balance Sheet Information - Other Long-Term Liabilities (Details) - USD ($) $ in Millions |
Mar. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Taxes payable | $ 0.4 | $ 0.4 |
Accrued compensation and benefits | 5.6 | 5.8 |
Other | 4.9 | 4.8 |
Total | $ 10.9 | $ 11.0 |
Fair Value Information (Details) - USD ($) $ in Millions |
Mar. 31, 2021 |
Dec. 31, 2020 |
Mar. 31, 2020 |
Dec. 31, 2019 |
---|---|---|---|---|
Assets | ||||
Cash and cash equivalents | $ 100.1 | $ 111.5 | $ 187.7 | $ 205.3 |
Level 1 | Carrying Amount | ||||
Assets | ||||
Cash and cash equivalents | 100.1 | 111.5 | ||
Level 1 | Estimated Fair Value | ||||
Assets | ||||
Cash and cash equivalents | 100.1 | 111.5 | ||
Level 2 | Carrying Amount | ||||
Liabilities | ||||
Revolving credit facility | 175.0 | 180.0 | ||
Level 2 | Estimated Fair Value | ||||
Liabilities | ||||
Revolving credit facility | $ 175.0 | $ 180.0 |
Debt - Schedule of Debt (Details) - Revolving credit facility - USD ($) $ in Millions |
Mar. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Debt Instrument [Line Items] | ||
Weighted-Average Interest Rate | 1.64% | |
Revolving credit facility | $ 175.0 | $ 180.0 |
Accumulated Other Comprehensive Income (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | $ 1,256.5 | |
Other comprehensive loss | (4.2) | $ (14.9) |
Ending balance | 1,252.6 | 1,256.5 |
Unrealized Translation | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (27.7) | |
Other comprehensive loss | (4.2) | |
Ending balance | (31.9) | |
Cash Flow Hedges | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | 0.0 | |
Other comprehensive loss | 0.0 | |
Ending balance | 0.0 | |
Defined Benefit Pension Plans | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (0.4) | |
Other comprehensive loss | 0.0 | |
Ending balance | (0.4) | |
Accumulated Other Comprehensive Loss | ||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||
Beginning balance | (28.1) | (32.0) |
Other comprehensive loss | (4.2) | |
Ending balance | $ (32.3) | $ (46.9) |
Accumulated Other Comprehensive Income - Net Changes in Components of AOCI, Including Tax Effect (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Equity [Abstract] | ||
Unrealized translation | $ (4.2) | $ (15.0) |
Defined benefit pension plans | 0.0 | 0.3 |
Tax effect | 0.0 | (0.1) |
Defined benefit pension plans, net of tax | 0.0 | 0.2 |
Cash flow hedges | 0.0 | (0.1) |
Tax effect | 0.0 | 0.0 |
Cash flow hedges, net of tax | 0.0 | (0.1) |
Change in AOCI | $ (4.2) | $ (14.9) |
Stock-Based Compensation - Stock-Based Compensation Expense (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 3.1 | $ 2.5 |
Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | 0.6 | 0.6 |
Time-based restricted share units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | 1.8 | 0.9 |
Performance-based restricted share units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | 0.6 | 0.9 |
Employee stock purchase plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share-based compensation expense | $ 0.1 | $ 0.1 |
Commitments and Contingencies (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Commitments and Contingencies Disclosure [Abstract] | ||
Legal expense and settlement accrual | $ 22.5 | $ 2.2 |
Loss contingency accrual | $ 22.2 |
Earnings Per Share ("EPS") (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Earnings Per Share [Abstract] | ||
Net (loss) income | $ (7.6) | $ 3.7 |
Weighted Average Shares Outstanding: | ||
Basic weighted average shares outstanding (in shares) | 48.0 | 47.8 |
Dilutive effect of stock options and restricted share unit awards (in shares) | 0.0 | 0.2 |
Diluted weighted average shares outstanding (in shares) | 48.0 | 48.0 |
(Loss) Earnings Per Share | ||
Basic (in dollars per share) | $ (0.16) | $ 0.08 |
Diluted (in dollars per share) | $ (0.16) | $ 0.08 |
Dilutive securities excluded from computation of earnings per share (in shares) | 1.1 |
Business and Products Information - Narrative (Details) |
3 Months Ended |
---|---|
Mar. 31, 2021
segment
country
| |
Segment Reporting [Abstract] | |
Number of operating segments | 1 |
Number of reportable segments | 1 |
Number of countries entity provides goods to | country | 90 |
Business and Products Information - Net Sales by Product Category (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Disaggregation of Revenue [Line Items] | ||
Total Net Sales | $ 180.7 | $ 180.4 |
Chronic care | ||
Disaggregation of Revenue [Line Items] | ||
Total Net Sales | 121.1 | 115.7 |
Pain management | ||
Disaggregation of Revenue [Line Items] | ||
Total Net Sales | $ 59.6 | $ 64.7 |
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