AVNS - Earnings call transcript Q4 2021

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Operator

Hello welcome to the Avanos Fourth Quarter 2021 Earnings Conference Call. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] I would now like to turn the conference over to Mr. Scott Galovan. Mr. ahead. go please Galovan,

Scott Galovan

CEO; year and update you joining Fourth to Presenting will Joe Conference everyone, President Senior pleasure CFO. our and Quarter Then OrthogenRx, It's and quarter results our quarter and to Call. key priorities Joe Woody, be against will our welcome the with our business today Michael thanks XXXX morning XXXX fourth Greiner, our environment share us. acquisition on Vice our as for an for and begin my Earnings well and XX. on Michael XXXX. Good planning as Avanos XXXX and of review full recap which progress made inclusive January will objectives assumptions, closed of

presentation the available for today's We finish will call Investors avanos.com. of A on our website, the call Q&A. section is with

a comments As the could our given the Actual financial statements company, conditions related forward-looking No results. expected forward-looking as assurance to contain and those performance, in can materially be from economic future industry. our our statements. today to differ reminder, results

the could about described information that risk in factors risk see future filings release results, and please our with the more forward-looking today's factors statements press For influence and SEC.

and be comparable adjustments outlook. will adjusted on financial press referring we information to measures. and release has Additionally, GAAP The to results these reconciliations

turn I'll the Now call over to Joe.

Joe Woody

and to Thanks And quarter you XXXX. operational year our review us financial Scott. and everyone. for joining morning fourth full Good for results the thank

needs our focused our commercial by priorities. $X.XX Across summarize results While have staff it per and current patients are sales customers. challenging of enterprise, shortages the impacts of the adjusted with to We very outcomes we the from the of over getting we before relates earnings to our things will the back a for on operational with we the review our brought XXXX the for teams to the meet the continue diluted supply see environment surgeries, and hospital remain earned of I pandemic. to and and the our brief how elective on $XXX million begin of as quarter we responded that matter discussing share. dynamics as chain, achieved pandemic, pleased quarter

portfolio versus growing North over X% to in a Our the comparison strong growing fourth digestive quarter respiratory our delivered double Care tough franchise Chronic business quarter. our results fourth flat holding with last and America year's digits

by Acute with growing Our by Pain by was portfolio the our elective X% overall X%. X% little decline of in The a the franchise declining return of than over by declined our pain timing Acute primarily procedures. offset than less less portfolio the driven product interventional portfolio Pain Pain

Interventional With year, just expected full Digestive by Acute franchises health and grew XX%. over almost by X% respiratory Pain Pain XX%, our declining approximately XX% the Health, respectively. be to For and

improved margin permanent and be driven, We year for Michael primarily inflation on As headwinds a of we anticipate margins, being change across fourth margin headwinds in noted do fourth material in the quarter. industries XXXX We between XX% our inclusive basis persisted. these raw quarter, third gross remain few acquisition the availability, opportunities in to Unfortunately, our continued share quarter. related only costs last points quarter XX% in to of seen indicate gross our not most quarter profile XX our the the third we versus details our pandemic view improvement transitory, and assessment our some improvement XXXX. margins minutes. And full and that anticipated shipping are ultimately confident OrthogenRx a will structure. the gross for throughout operating versus to gross of

across fourth as of our quarter, progress margin the the year spending discipline of had planned not revenue gross team in controlled as as a we with as did SG&A expenses XX.X%. percentage we our much ended continued While the

XX% negatively margin that a to as full discussion the market have remain expenses our maintaining of impact year to be current our less environment we to provide XXXX. for a a than let's we SG&A of background, and percentage our profile that revenue XXXX SG&A on update half on priorities. range and With as an confident the Although on against move a committed progress will of the XXXX, first

product As revenue portfolio. we most earlier, mentioned solid across outcomes our delivered of

elective ON-Q most many depressed, procedures Although remains impacting mostly XXXX. of product franchise, being performed grew digits in of volume our families the double

minute, our anticipate Pain growth to for discuss and in leading portfolio between will more detail we As XXXX the X% organic perspective. be growth in way a a with Michael X% from

use from market tailwinds We franchises partners. for to As rates our product ease enhance see respiratory digestive our to to we and of historical Throughout anticipate return procedures favor. care improve the growth XXXX. will elective turning efficacy to in our our start XXXX, continue in we offerings and

offerings us next our in our launched setting. strengthen our probe We've We Within CORTRAK that leadership and we have Surgical program Chronic portfolio, line, business, for also reusable drive of year. our continuing strategy of utilizing double-digit the XXXX NeoMed our continues. our This or we ambIT beyond. it continue the we anticipate with positive combined will Shifting For XXXX is capturing RF we Care, into care across levels. to of our generator and important the success released differentiator Pain XXXX. relates digestive separately ambIT Pro, QX, ambIT plus our seen franchise to accelerating started ON-Q in launch an standard record health user-friendly particular, products as new to growth procedures the app hardware sales which help CORPAK data in in to Ambulatory cooled to maintain successfully in trend will from across Center growth cooled year, a our last upgraded ASC and will generation our, collection with frequency tool COOLIEF, kits earlier radio that benefits new position see Block be solution this

anticipate As I respiratory our basically earlier, respiratory flat historical sales business rates and stated reflecting prior XXXX. tailwind, health were our the during we year given health growth pandemic

Although availability XXXX, needs we operating in we for objectives ability with our pleased and customers’ product our did for internal meet exceed our meet were very the gross and our targets margin not to year. improvement revenue for

attain we remained the outcomes. of towards we than those XX% with on greater year XXXX. confident the highest costs that focused Additionally, margins contained throughout only ROI EBITDA coupled a spending initiatives back with can focus gross half We with high margins during XX% and

cash generated $XX flow for and priority million the We settlements. our full demonstrate million XXXX ability free consistent of fourth of cash tax legal the third of to inclusive was Our a repeatable one-time and in year range $XX to quarter generate flow. for

which Excluding cash and of generating XXXX, those flow free in $XX repeatable Improved flow. exceed cash support million $XX we generated consistent normalized operating million. free results items, priority of this should will

for priority last XXXX capital Our deployment. on focused

with of which meaningfully line Our leverage M&A tuck-in pipeline remains footprint, would our healthy our synergies, targets, active generate enhance existing and a profile. we and growth in margin number top are improve potential dialogue engaged our

a providing care on This for portfolio of revenue anticipate for for this our with close Avanos In addition, achieving acquisition OA. one of as related acquisition. we and OrthogenRx treatment by living year healthcare strengthen objectives. our with XXXX $XX relationship XXXX we to options was Summarize knee patients fit continuum that is of our January will strategic towards critical move providers and our million XX OrthogenRx enhances for acquisition a longer-term further us Pain financial clear

supply chain stabilized our Product showed in portfolio planned improvements meaningful and We resilience. Our challenges with operations XXXX.

our leveraging cost ability We operating begin also demonstrated our expenses. fixed to

Additionally, with IP includes investigation, case all regards Clark to a our resolved the infringement we with remaining dispute litigation. Medtronic. outcome material Kimberly have This with the positive as well as DOJ indemnification

in improvements profile our strategy, objectives primary center demonstrating Our solid as the growth, cash material and around progresses margin delivering our organic free in ability year deliver meaningful our XXXX making to OrthogenRx flow. on gross

have million value. should share as on meaningfully $XXX well bolt-on consider as remain below execute We our capacity excess an to acquisitions of further intrinsic additional calculated available shares our repurchases of

given the progress XXXX. performance macro we key XXXX many support was uneven in of in our Although solid environment, our to initiatives will that advanced

Michael. Now over I'll to turn the call

Michael Greiner

Joe. Thanks,

our setting XXXX that have M&A up combine line for solid mid-single-digit against growth As top made initiatives a creation will with and progress well we are you noted, execution. meaningful value

flow Additionally, cash we consistent will show improved as generation. gross and free operating as margins well

Now compared let's X.X% review Total fourth a results. with last to up our begin sales of quarter million was of year. $XXX

quarter to the $XXX the quarter, Adjusting additional range As the full did higher any hospitalizations end carry catheters million have Despite our Health in prior by from continue market over any for of with year, closed a the meaningful a to to prior year, December, Omicron as tailwind, placing the line quarter. not constant do range the suction sales patients growth variant for achieved hospitals compared as discontinued care net on X.X% indicated the ventilators. Care impact X% X% Respiratory the net not from sales in notice the in before Maxter to increase the Chronic Health to year. of fourth currency XXXX for on flat compared a sales out We our sales the in of first to of QX tailwind Respiratory line their been facility. related firm, benefit growth. would did pandemic-related increasing in end with products throughout the until nor expect basis we XXXX, little We X% would increased year manufactured we excluding

experiencing to we relatively and Additionally, flu season. a Health. Digestive believe we normal cold Shifting are

see to almost resulting our technology in portfolio, additional to markets, NeoMed conversions growth. growth and Health continue from supply our continuation a XX% North XX%. of both America over We growth grew fourth ENFit strong of Digestive despite across our quarter international impeding Within constraints of

ON-Q, by Pain performance Interventional behind our to sales, Management. delivered offset $X We driven across of million million in Pain headwinds portfolio. prior partially by $XX Moving continued year strong

was variant in on growth elective impacts brought procedures, noted, Joe Omicron and shortages. staff hampered the with from return QX a in coupled slowdown by As

offset ON-Q as an PainBlock partner growth We Pro, expansion had these the disproportionately Pain While in channel the losses was into ASC. effect with across primarily impacts and therapy. inpatient impacted portfolio, partially these

benefit improvement of We to and elective recovery. the drive sequential tailwind first are anticipated move as quarter forward, into an procedure well from positioned XXXX these we initiatives of

Ready to million our strong business within exceeding we our half growth to constraints back we Game demand expect Additionally, material continue the first demand, with headwinds, in orders have ability Despite market work of XXXX. $X and these meet impacted XXXX. backlog in end able to at the the supply and be of to temporarily raw experience shortages down

minus points compared Adjusted Moving down or the XX gross income just to to margin under year. decreased statement. basis XX% last

given to to year year, internal not existing earlier, We the the with margin gross our although some macro last material savings did the higher progression, chain progress in of the was by challenges costs margin and environment. were projections meet persistent both margin we during manufacturing supply inflationary Compared gross on offset inclusive of fourth the able through these As costs. gross pleased are for our impacted transportation quarter. we indicated raw pressure, inflationary through

Looking a towards improve to expect operations margin steadily implementing are of take we throughout to XXXX, range gross we begin adjusted to efforts as continue hold.

global higher remains cognizant unable of inflationary chain However, a we these timing factors disruptive. when are And begin we will predict of remain to to soften. that also the environment supply

of work as back availability challenge we our raw remains existing material order. Additionally, certain a components rolling the through

sales $XX earned EBITDA year $XX in Adjusted totaled and totaled the ago, to totaled million a earlier. income gross as earnings compared turning net to to were million operating we unfavorable offset lower Adjusted prior per metrics. spend and year. $X.XX last a the year. profit compared across financial some SG&A million partially million R&D $XX XX% to line by of versus margin, increase $XX compared prior noted we diluted Now adjusted $XX Higher bottom $XX and million Adjusted year. million share,

Our adjusted of was approximately quarter the past contributed EPS strategies enhanced planning benefit. for $X.XX fourth that with

Turning to flows table. the balance sheet and cash

$XXX with strategic outstanding continues and over us with flexibility of of the we of Our on post million our balance strength remains for provide acquisition and currently us program. OrthogenRx to sheet have million cash as of debt the share closing repurchase completion $XXX hand, a

capacity to pro our maximum forma their of through EBITDA acquisition, Given we capital allocation over priorities. post have utilize $XXX million

with of portfolio. earlier, across full grew delivery As X.X% noted we year on most a our basis, solid

we perspective plant in the as and and a Additionally, remain to managed performance. have R&D To with have inconsistent both we that compared with of to on an was products. year costs, regard SG&A remarks, ago, just to year. costs, chain, partially prepared primarily offset cost throughout noted regards higher and due impact, freight supply over to a environment raw structure our uncertain inflation materials we XX% labor XX.X% gross margin our cost the availability throughout from and Adjusted

achieve tax Finally, to year with earlier. as we quarter adjusted were benefit $X.XX the noted of the pleased in EPS around for $X.XX fourth of favorable

Joe objectives in flow. strategy, its OrthogenRx centered our our As inflationary on the our of solid cash coronavirus and improvements deliver indicated, The unpredictable. primary XXXX like in delivering and gross to margin remain growth, our headwinds impact profile knock-on free making around organic demonstrating material effects meaningful ability

and raw our overall on year. desired should elective Organic has low OrthogenRx currency execution forward end million constant range of X% in with step The the toward in grow materials of positioned a return $XX However, X% accessing XXXX material of continued terms our to in financial deliver with this this meaningful well procedures. XXXX assumes delivering with and net unevenness difficulty us sales profile. to sales

profile we increase range margin to impact XX% XX% and sequentially gross and margins around to gross capturing expenses the uncertainty costs. that distribution compared anticipate are given expected OrthogenRx, XXXX. the with end to will inflation positive of range, of Operating in annual Our of improve the lower

invest of expectation with return on investment. domestically clear a and We will internationally

increase a remain slightly the XXXX cash million half percentage operating to not drive capital raw exceed with XX% as operating we of year growth material our order. XXXX, being our However, flow back above should will reduce and existing while anticipate margin Free year, as will support likely leveraging XX%. below inventory sales first SG&A we favorable and structure. of as help expense We for the sales of shortages $XX do working the full in for

by growth with and cost expect historical volume been softer quarter duration the of past with the performance. We being has results to driven savings consistent as sequential earnings year quarterly versus see sales meaningfully first

range EPS to diluted from As adjusted a $X.XX result, should $X.XX.

we progress much please XXXX questions. flow our ability and that successful great deliver XXXX. confident in made beyond, improvement remain to our operating are margin ourselves set necessary have We us. drive we cash behind of more our to now towards consistent results XXXX is and Operator, in steps a for up excited uncertainty open take look strategy execute to and gross the as for the and and to We line

Operator

Stephens. question Yes, And comes Chris thank Cooley you. first from Instructions] with [Operator the

Chris Cooley

question in One help maybe with you strong there there here two more the And OrthogenRx morning, bit Good and you think a addition the a just there of out pretty be us a the and guess, if in the of parse taking maybe questions gross guide. million. lift of little appreciate more specifically Michael, today. bit I $XX natural would contribution the margin. just start, here, little parts revenue that a may to

a of be these explicitly incremental it think guess, as it, margin? out, macro kind the look headwinds about as you when from called stands OrthogenRx, feel could anticipating the So and perspective then a sorry, it's much get business to talked some parse hope gross that I that contribution maybe And not would versus the cost and got And we kind through growth base I – we how at much then but EPS quick of similarly, the from acquisition, the underlying about initiatives? while just helpful Thanks. a guide, I'm from business how then work from we of can it base I've of us better savings you're help the out of the for would getting you components follow-up.

Michael Greiner

but those it one, again. if I'll try Chris. get just miss I Great, each question. Thanks of in, ask to the for

gross margin. the So I'll start with

year quick way of XX% is think give But of increase margin, around about our way XX% best what uplift range, a the going about low think not integrate, that that, that do XX% one specifics of a for goes to margin that may an as with have the the XX% end would we're on. one which think that not because to is from to how OrthogenRx the this I want over year can to sure profile we're to right, it range OrthogenRx. reasons, of from the be we we and of exactly impact majority gross

of more with remarks. work lessening XX%, some a other inflationary uplift and we of As efforts margin, get good hopefully, gross of standpoint, on of some the commented we're is doing in XX% towards the that the cost we the normal tailwinds things get organic majority a because prepared goods sold in we'd pressures in from plus,

X% gross million piece. the guide, it. week about $XX So months X%, we plus revenue that that one be absolute that margin When XX obviously an we to assumes own the think the would is number would

million. $X.X for Maxter revenue of to So actual million guide excludes organic results The Maxter $XX facility. our of X% X%

our of organic guide of off revenue based organic So is $XXX million from XXXX.

piece. we the in on helps XX%, that to clarify will we margin, acquisition that of period then guide be that gross hopefully, believe achieve from we be if work we OrthogenRx own that, to a XXXX will the – organic gross the So it. because on the $XX of end for uplift actual OrthogenRx we majority year. organic we that low million revenue intend implement will will that because the the margin, that of achieve majority of this that a towards get as be And

Chris Cooley

to as guidance clarify when just – then I well, I about And perspective, range. think an the contribution from EPS just just again, guess, earnings

Michael Greiner

Yes.

that... we're going to provide So not

Chris Cooley

estimated the at at XXXX's closing. you Okay. my December, want OrthogenRx. Fair that paid million make just the time around was I revenues. $XXX believe there X.Xx I acquisition of behind It assumptions enough. to follow-on, sure your end understand I just or I middle guess Understood. And for of then the

when much of about the think kind makes sense we pretty so that timing. And

Just thinking growth what curious a though rate that perspective going forward? about from for you're business

Michael Greiner

The accretive No, organic our rate to Yes. line question. moderately is top growth. it to great we expect be growth –

Chris Cooley

Okay. Thank you get back I in will very much queue. for clarifying that.

Operator

Thank question you. KeyBanc. And with Mishan Matthew the from next

Matthew Mishan

move up Chris' some there accounted taking questions. that it's growth I just there you question guess, on Great. I shot? wanted we be follow rate, And the to in, on pay And attention some to mean that how I for single being in for – for to Is thank to are reimbursed? to? the need that for changes things to need headwinds just there – OrthogenRx,

Joe Woody

Woody. take I'll that. Joe It's Matt, maybe

way bit about attention trajectory of want think that We force, run yes, a while. maintain for north and to But that still changes, to time. stand-alone sort our we're the can said, growth modeled prepared of which we're next I we to fully to but and sort think have like rates, of we think is change current paying little there's it on. a half goes the we they're could that feel be reimbursement growth. to can Michael direct this going of – we to it's are rate as utilization growth Nonetheless, the our the in we second over year. sales going of our into on year, And that add accretive mean that for be

Matthew Mishan

is to – from I XX% half the bump way XX%. Is you're trajectory, to from to gross wanted OrthogenRx, not make the correct. that the the just all I the XX% correct? saying XX% Excellent. margin – understood sure of half from is of What

Michael Greiner

That's right. Exactly.

Matthew Mishan

R&D in to Okay. And those to start where year. What and work? you and the are some SG&A were of you dollars some are investments then putting making investments you said

Michael Greiner

we activities delaying margins. or started with comfortable of as and choices back gross year, we that stopping and year, made to marketing the felt R&D selling last So headwinds We doing. half continued see the around

our mentioned quarter we have on our well long-term we didn't this would a think that as think call disruption investment profile. in I third

us, with make we in. are up we the loosen put as enter the sure wanted other benefit investments acquisition, back those OrthogenRx As obviously opportunities into to that we this to we as believe of for year far things starting

launches selling of and couple marketing and have from We want have and a to delayed initiatives, have in for million we some there. key opportunity we year. R&D we last also back continue we adding of this we're to then that that invest So small some NeoMed behind year the

last but of spread of related last we to that, put kind the in it's of around it's year. primarily that So months to four off things six delaying

Matthew Mishan

cash down Okay. lump EBITDA, flowing core? bringing And some Is moving Are were question there just like free you're of flow pieces $XX that there some just million. last on from there where that in? the sums

Michael Greiner

No.

million that's core. $XX of So

In million, assumes in not have we addition those receivables, Act still That That other receivables. then to $XX receivables. in addition some the inventory. secure we and $XX a tax core. $XX $XX of were million would the million if tax lingering million to heavy is that, CARES be It with to is headwind also tax the

potential So differently, in if well. chains we and/or may way, different inventory our as supply there slightly a react upside some manage be

is this So doesn't all include some potential core and upside. it

Matthew Mishan

Okay. very much. Thank you

Michael Greiner

Thank you.

Operator

Instructions] Rick next question Thank the comes And Stifel. you. from Wise [Operator with

Rick Wise

Good morning, trends. to Michael. going recent Maybe Joe. just back Hi,

And elective some December about early maybe of of of just you your was the you emphasizing I you newspapers, wasn't on more January the we're that see some lessening your through assume as we're signs starting the year? are in seeing COVID underpin headwinds, in impacted X/X what procedure basically to actually are now are quarter, specifically were the seeing encouraging – by what reading the that COVID sort business, the headwinds? optimism front You

Joe Woody

December, would has we've reported everybody as that February, January, generally, I into a of if bit I the in to do other any be into green Rick, that still half, in the impacting. you have shoots, is QX in seeing we think Yes, of and and terms we're better getting don't certainly will. issues a or as piece affected little QX elective say considering second variants that's procedures, of going better probably emerged

component. to The level hospitals quickly. get a of is space that's to the spoken again, have go done staff looking others there as fruition and back everyone as to And coming majority I think we that and moved the like to better. orthopedic debate. shortage through big think as start anticipated are level, always pandemic. I bolus come as quickly especially get But the of the feel to in the it's a do there's normalized need soon hasn't to, and Omicron a pretty throughout going procedures, normalized now

as we quarter, think and exit in the I ON-Q, an little the see know. start The on on impact you will so we primarily a business, biggest our COOLIEF and uptick as is less probably of to bit Chronic Care business.

Rick Wise

just a Right, naive cost, it's maybe But multiple obviously, it right. And a detailing question, you're little your bit. ways.

supply pressures et it? shortages, unfolding? about Your extent your are Are along? with Just talking – to able are cetera. costs you are that product rising, negotiating customers how Are to you chain, – To them? what is you pass all

Joe Woody

Yes.

mean, majority opportunity year. issues think there's products – IDN I versus as experience and quickly. the that is will do little bit But difficulty I we example, do I go. struggle that's material base. come some the everyone of think it on will consumer compensation to with us. a pieces devices inflationary of a medical for that that raw think can for what throughout an us And increase the company pass an probably and more the And GPO is going for I remain some some then price the

companies IDNs along going that as then understanding have – increases of to do plans we'll we this think a this all device renegotiate roll us, we just some raw think general that that from contracts, we well. I get medical of into benefit. we are to there's can And year, but So be pass as general some some material transportation, not the some and GPOs and looking

Rick Wise

in absolutely most last clearly straight you're acquisition. ahead a multiple compelling spot that you've continue captured And which highlighting M&A working Great. terms and of is that things. for just been recently, me, you've Joe, OrthogenRx, activities on your on And

color you're any are what, the as And where, Are in? fit Any about As you it's half. how more second than hoping it's you you're confident? this to about first thinking year, color – on incremental optimistic? half as going in

Joe Woody

near Yes. across mean, that year that looking I have we're talking we say two and we're at, both business. term. looking Chronic sure. very would about the exited the we that I the Pain bolt-ons three and Care business were

You things. time never these can

type do So the the I one or but XXXX call necessarily been first additional will on. we we've wouldn't leave bolt-ons working for and we'll we think variety that what two But I half, it certainly, can. with of

impact some meaningful for us that $X and are is be billion But larger a think realistic. on million. cash and we're things flow going see is bigger probably $X from position to deal I we're a can business. have start delivering to billion, larger that a I would for several and then greater out we today do be the the laying and Obviously, hundred It be there not what in benefit first, in here to generation what deal doesn't that execute to can do XXXX. would us good have a

two larger see So another year or one looking just at then probably next something this year. I and

Rick Wise

The sneak more, outlook, apologize, in one I I I ask. And forecast. if $XX million the OrthogenRx could Okay. revenue to growth meant

had this growth great you in so offsets? not the I've year XXXX, What how think about answer. hit much. impacted a grow? Just Thank next? And asked get – does haven't it headwind? given and or does it help getting reimbursement How are that how With been me we said understand and because differently, do

Joe Woody

you Yes. Rick. Thank

that is For from good competitors ASP. good as in also, reduce, is versus they're a way but spot we at And a the ASPs coming us. us, is, there's larger get base smaller One And the this stand we're to generally, bases. two looking spot. CMS some are that things looking a our have of at the in now. going They're that definitely we're benefit

reduction when on so growth, that reimbursement. our in of or this still speak we Avanos Michael call, contemplate would a And even north off said

to all this margins going think in, growth and built still to be accretive accretive it's to our we've So we and our as well.

Rick Wise

helpful. Very you. Thank

Operator

you. next Stanley. comes the Ranieri from with Morgan And Drew Thank question

Drew Ranieri

Hi, questions. the for taking Joe Thanks and Michael.

– of your the mix bit little is on there? Rick the that OrthogenRx largely just about about the ability you a kind maybe about drive and to a thinking markets and expanding Just injection OrthogenRx Can Is all talk how of three benefit growth? injections? this customer more a mean growth I five five had. follow-up base? is three to question the moving components you're Or just it of

Joe Woody

So if Ultimately, that's pretty But we choose a sales of injection, think growth, single reminder, a able want into will be sort group. things. growth to our couple the we put of force. – we but develop existing this about in a you just to the future. the if to One, from we good

there's So expansion we're there the for and so together an products. growth that selling both opportunity

I think call various where of it's spread that so there COOLIEF, a over different a then Interventional relief going route and them points with of that not time. because a on physicians, a period pain of we we out in different additionally, other in clinics the if thing have single is lot we is is pain And product, this call that the with be to believe the that better interested Pain, are we think work to think injection, basis. that oftentimes, five a three percentage very are of to a good long

or runway growth for So not good also we single. develop feel of and to us whether like would contemplate think longer-term to there's we a a

one current feel have require to would of don't what in we're or about our talking we injection projections So like being rate or a there. north the growth us runway the

Drew Ranieri

And product a and little the combined more then kind with I on strategy COOLIEF, mean strategy, fit-in how bit this OrthogenRx of does with COOLIEF. just maybe

just or the were cannibalization kind I this think between developing some two be you. could uplifts potentially that first HA, COOLIEF products? if data Thank there curious was sales for but COOLIEF there you of

Joe Woody

I ways. to think going it's help ultimately, both

when our group selling think Surgical surgeon then clinics the So Orthogen on COOLIEF interventional orthopedic Ambulatory is and start about currently that Centers. to XXXX and direct group, and calling we offices pain

working and can another approach to Centers. you fact COOLIEF-related the that think Ambulatory on So also externally about Surgical we're something for internally

away, effective, of to a of interesting and go we're in as the don't on I disappear. think in to certain I lot there's of there's OA that They're different in They're develop corticosteroids. think don't treating here. but to going cycle HA I kind think not knee. market going with that that So viewpoints total, treatment. We've is modalities but which of time spend going usually a are an seen

then either now hyaluronic frequency two that investments we acid we're considering cooled other so sort of and and looking are innovation at there acquisitions. potential have technologies And or RF, open forays for

moves So and and I to It weight pathway. an patient it about and to and a on of then the actually HA. or the going lose steroids seeing to Advils going sort with sort and looking to opportunity be kind think of in at exercise, then Aleves of and to starts there's

So I for think that it's build a good to we can where us competency. place a be

Drew Ranieri

it. Got

Michael. And about I be this. and rate how sorry authorization have And kind you. one that if for Thank tax I'm XXXX's thinking one sorry, share million count repurchase missed last just given you we should But outstanding? the of $XX

Michael Greiner

was you And guys planning The one-time likely the down then was closure share nature XX%, the would tax of opportunity last XX% the There onetime rate, rate of think kind we quarter repeat. remains and appropriate. around Yes. still rate. count won't the in that Maxter flat, XX% getting Normalized XXXX discrete in and are had strategy that the the in versus XX%, a from tax into I good had, year. XXXX slightly kind we fourth that opportunity

Drew Ranieri

you. Thank

Operator

have Stephens. from Cooley And question we another you. Chris with Thank

Chris Cooley

you Thank follow-up. taking for the

presentations, of evaluation growth we of prior Just forward. provide you course have in the year. of as and maybe about additional quick mentioned one cash other existing to potential the generation business one those for going I in an think portfolio today? Are have help portfolio assets there year? some growth it you capital of monetization see and of the the have these enter comfortable with as a alternatively, margin to capital for opportunities enhance new thoughts Thank as your you on you the as more the we here the update Or and you. profile tuck-ins? Any prune some and result, know do

Joe Woody

was I And kind us. think we more exit. decided something dilutive is a good terms in I for and Maxter to we saw about of gross to example think think there's that margin opportunity of

metrics forward looking honed the us our the alongside aren't the on I continuously of specific. go other more or there's at to of strategy. the portfolio and would strategy beneficial attractive And and other think a in opportunities driving the that sell business we're and some to that part us be getting SKUs and portions that we're for of

So there's more I should us, come. benefit future a of that And M&A or that, I as well. to think, think, M&A on on future opportunities

Chris Cooley

you. Thank

Operator

for I closing concludes comments. the turn like Joe any to And session. floor this the would Woody question-and-answer to

Joe Woody

and I'm in to about environment. creating an and interest us free confident given into with value we that for detailed, and growth, in products you execution with flow going is to certainly margin everybody to committed to anticipate the deliver all continue this. portfolio more like attractive continued and very and just of XXXX market-leading talking Thank XXXX position the for we've certainly pleased We're shareholder thank begin Avanos, the positive we're XXXX forward as markets, commitment. uncertain cash I'd expansion sales to you. our look to combined on

Operator

presentation. conference Thank you for has you. Thank today's concluded. The attending now

may disconnect You lines. now your

Avanos Medical (AVNS) 23 Feb 222021 Q4 Earnings call transcript