Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 18, 2020 | Jun. 30, 2019 | |
Cover page. | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Transition Report | false | ||
Entity File Number | 001-36440 | ||
Entity Registrant Name | Avanos Medical, Inc. | ||
Entity Central Index Key | 0001606498 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 46-4987888 | ||
Entity Address, Address Line One | 5405 Windward Parkway | ||
Entity Address, Address Line Two | Suite 100 South | ||
Entity Address, City or Town | Alpharetta, | ||
Entity Address, State or Province | GA | ||
Entity Address, Postal Zip Code | 30004 | ||
City Area Code | 844 | ||
Local Phone Number | 428-2667 | ||
Title of 12(b) Security | Common Stock—$0.01 Par Value | ||
Trading Symbol | AVNS | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 2,076,443,618 | ||
Entity Common Stock, Shares Outstanding | 47,755,212 | ||
Documents Incorporated by Reference | Certain information contained in the definitive Proxy Statement for the Avanos Annual Meeting of Stockholders to be held on April 23, 2020 is incorporated by reference into Part III. |
Consolidated Income Statements
Consolidated Income Statements - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | |||
Net Sales | $ 697.6 | $ 652.3 | $ 611.6 |
Cost of products sold | 295.4 | 261.4 | 274.7 |
Gross Profit | 402.2 | 390.9 | 336.9 |
Research and development | 37.7 | 41.8 | 38.2 |
Selling and general expenses | 399.1 | 340.4 | 321.7 |
Other expense, net | 21.1 | 8.2 | 20.1 |
Operating (Loss) Income | (55.7) | 0.5 | (43.1) |
Interest income | 6.7 | 7.8 | 2.5 |
Interest expense | (15) | (26.4) | (31.6) |
Loss Before Income Taxes | (64) | (18.1) | (72.2) |
Income tax benefit | 18.1 | 9.6 | 40.1 |
Loss from Continuing Operations | (45.9) | (8.5) | (32.1) |
Income from discontinued operations, net of tax | 0 | 66 | 111.4 |
Net (Loss) Income | $ (45.9) | $ 57.5 | $ 79.3 |
Basic: | |||
Continuing operations (in dollars per share) | $ (0.96) | $ (0.18) | $ (0.69) |
Discontinued operations (in dollars per share) | 0 | 1.40 | 2.38 |
Basic (Loss) Earnings Per Share (in dollars per share) | (0.96) | 1.22 | 1.69 |
Diluted: | |||
Continuing operations (in dollars per share) | (0.96) | (0.18) | (0.69) |
Discontinued operations (in dollars per share) | 0 | 1.40 | 2.38 |
Diluted (Loss) Earnings Per Share (in dollars per share) | $ (0.96) | $ 1.22 | $ 1.69 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive (Loss) Income - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Net (Loss) Income | $ (45.9) | $ 57.5 | $ 79.3 |
Other Comprehensive Income (Loss), Net of Tax | |||
Defined benefit plans | (1.1) | 1 | 0.5 |
Unrealized currency translation adjustments | 2.8 | (2.7) | 17.1 |
Cash flow hedges | 0 | (0.7) | |
Cash flow hedges | (0.7) | 1.2 | |
Total Other Comprehensive Income (Loss), Net of Tax | 1.7 | (2.4) | 18.8 |
Comprehensive (Loss) Income | $ (44.2) | $ 55.1 | $ 98.1 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Current Assets | ||
Cash and cash equivalents | $ 205.3 | $ 384.5 |
Accounts receivable, net of allowances | 163.8 | 150.5 |
Inventories | 145.9 | 121.4 |
Prepaid and other current assets | 23.5 | 57.2 |
Total Current Assets | 538.5 | 713.6 |
Property, Plant and Equipment, net | 184.5 | 154.1 |
Operating Lease Right of Use Assets | 64 | |
Goodwill | 800.9 | 783.6 |
Other Intangible Assets, net | 184.3 | 168.2 |
Deferred Tax Assets | 16.1 | 6.3 |
Other Assets | 11.3 | 7.6 |
TOTAL ASSETS | 1,799.6 | 1,833.4 |
Current Liabilities | ||
Current portion of operating lease obligation | 14.7 | |
Trade accounts payable | 83 | 169.9 |
Accrued expenses | 114.8 | 94.4 |
Total Current Liabilities | 212.5 | 264.3 |
Long-Term Debt | 248.1 | 247.7 |
Operating Lease Obligation | 62.6 | |
Deferred Tax Liabilities | 0 | 4.4 |
Other Long-Term Liabilities | 11.2 | 19.8 |
Total Liabilities | 534.4 | 536.2 |
Commitments and Contingencies | ||
Stockholders’ Equity | ||
Preferred stock - $0.01 par value - authorized 20,000,000 shares, none issued | 0 | 0 |
Common stock - $0.01 par value - authorized 300,000,000 shares, 47,734,206 outstanding at December 31, 2019 and 47,444,340 outstanding at December 31, 2018 | 0.5 | 0.5 |
Additional paid-in capital | 1,593.9 | 1,578.1 |
Accumulated deficit | (288.3) | (242.4) |
Treasury stock | (8.9) | (5.3) |
Accumulated other comprehensive loss | (32) | (33.7) |
Total Stockholders’ Equity | 1,265.2 | 1,297.2 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 1,799.6 | $ 1,833.4 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
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) | 47,734,206 | 47,444,340 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity - USD ($) shares in Thousands, $ in Millions | Total | Common Stock Issued | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Treasury Stock | Accumulated Other Comprehensive Income (Loss) |
Balance (in shares) at Dec. 31, 2016 | 46,682 | 53 | ||||
Balance at beginning of period at Dec. 31, 2016 | $ 1,102.5 | $ 0.5 | $ 1,533.2 | $ (379.2) | $ (1.9) | $ (50.1) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (loss) income | 79.3 | 79.3 | ||||
Issuance of common stock upon the exercise or redemption of share-based awards (in shares) | 238 | |||||
Issuance of common stock upon the exercise or redemption of share-based awards | 4.7 | 4.7 | ||||
Stock-based compensation expense | 12.6 | 12.6 | ||||
Purchases of treasury stock (in shares) | 63 | |||||
Purchases of treasury stock | (2.5) | $ (2.5) | ||||
Other comprehensive income (loss), net of tax | 18.8 | 18.8 | ||||
Balance (in shares) at Dec. 31, 2017 | 46,920 | 116 | ||||
Balance at end of period at Dec. 31, 2017 | 1,215.4 | $ 0.5 | 1,550.5 | (299.9) | $ (4.4) | (31.3) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (loss) income | 57.5 | 57.5 | ||||
Issuance of common stock upon the exercise or redemption of share-based awards (in shares) | 524 | |||||
Issuance of common stock upon the exercise or redemption of share-based awards | 17.1 | 17.1 | ||||
Stock-based compensation expense | 10.5 | 10.5 | ||||
Purchases of treasury stock (in shares) | 16 | |||||
Purchases of treasury stock | (0.9) | $ (0.9) | ||||
Other comprehensive income (loss), net of tax | (2.4) | (2.4) | ||||
Balance (in shares) at Dec. 31, 2018 | 47,444 | 132 | ||||
Balance at end of period at Dec. 31, 2018 | 1,297.2 | $ 0.5 | 1,578.1 | (242.4) | $ (5.3) | (33.7) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net (loss) income | $ (45.9) | (45.9) | ||||
Issuance of common stock upon the exercise or redemption of share-based awards (in shares) | 156 | 290 | ||||
Issuance of common stock upon the exercise or redemption of share-based awards | $ 5.3 | 5.3 | ||||
Stock-based compensation expense | 10.5 | 10.5 | ||||
Purchases of treasury stock (in shares) | 74 | |||||
Purchases of treasury stock | (3.6) | $ (3.6) | ||||
Other comprehensive income (loss), net of tax | 1.7 | 1.7 | ||||
Balance (in shares) at Dec. 31, 2019 | 47,734 | 206 | ||||
Balance at end of period at Dec. 31, 2019 | $ 1,265.2 | $ 0.5 | $ 1,593.9 | $ (288.3) | $ (8.9) | $ (32) |
Consolidated Cash Flow Statemen
Consolidated Cash Flow Statements - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating Activities | |||
Net (loss) income | $ (45.9) | $ 57.5 | $ 79.3 |
Depreciation and amortization | 36.9 | 33.5 | 59.5 |
Stock-based compensation | 10.5 | 10.5 | 12.6 |
Net non-cash gain on Divestiture | 0 | (98.4) | 0 |
Net losses on asset dispositions | 0.6 | 1.5 | 3.3 |
Changes in operating assets and liabilities, net of acquisition | |||
Accounts receivable | (0.8) | 67.4 | (15.3) |
Inventories, net of allowance | (21.3) | (34.5) | (16.8) |
Prepaid expenses and other assets | 30.8 | (45.7) | (2.3) |
Accounts payable | (83.6) | (64) | 18.8 |
Accrued expenses | 15.3 | (66.6) | 11.3 |
Deferred income taxes and other | (17) | (6.8) | (6.2) |
Cash (Used in) Provided by Operating Activities | (74.5) | (145.6) | 144.2 |
Investing Activities | |||
Capital expenditures | (50.6) | (49.1) | (43.2) |
Acquisition of assets and businesses, net of cash acquired | (57.5) | (65.7) | 0 |
Proceeds from the Divestiture | 0 | 754.3 | 0 |
Proceeds from dispositions of property | 0 | 0 | 0.1 |
Cash (Used in) Provided by Investing Activities | (108.1) | 639.5 | (43.1) |
Financing Activities | |||
Debt repayments | (0.2) | (339) | 0 |
Debt issuance costs | 0 | (1.6) | 0 |
Purchase of treasury stock | (3.6) | (0.9) | (2.5) |
Proceeds from the exercise of stock options | 5.3 | 17.1 | 4.7 |
Cash Provided by (Used in) Financing Activities | 1.5 | (324.4) | 2.2 |
Effect of Exchange Rate Changes on Cash and Cash Equivalents | 1.9 | (4.7) | 2.7 |
(Decrease) Increase in Cash and Cash Equivalents | (179.2) | 164.8 | 106 |
Cash and Cash Equivalents - Beginning of Year | 384.5 | 219.7 | 113.7 |
Cash and Cash Equivalents - End of Year | 205.3 | 384.5 | 219.7 |
Supplemental Cash Flow Disclosure: | |||
Cash paid for income taxes | 8.4 | 96.6 | 21.4 |
Cash paid for interest | 16.7 | 20.6 | 28.7 |
Supplemental Noncash Disclosure | |||
Capital expenditures included in accounts payable or accrued expenses | $ 11.2 | $ 16.9 | $ 4.5 |
Accounting Policies
Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Accounting Policies | Accounting Policies 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 in more than 90 countries. References to “Avanos,” “Company,” “we,” “our” and “us” refer to Avanos Medical, Inc. and its consolidated subsidiaries. Principles of Consolidation The consolidated financial statements include our net assets, results of our operations and cash flows. All intercompany transactions and accounts within our consolidated businesses have been eliminated. The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Use of Estimates Preparation of 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. Actual results could differ from these estimates, and the effect of the change could be material to our financial statements. Changes in these estimates are recorded when known. Cash Equivalents Cash equivalents are short-term investments with an original maturity date of three months or less. We maintain cash balances and short-term investments in excess of insurable limits in a diversified group of major banks that are selected and monitored based on ratings by the major rating agencies in accordance with our treasury policy. Inventories and Distribution Costs Most U.S. inventories are valued at the lower of cost, using the Last-In, First-Out (“LIFO”) method, or market. The balance of the U.S. and non-U.S. inventories are valued at the lower of cost (determined on the First-In, First-Out (“FIFO”) or weighted-average cost methods) or market. Distribution costs are classified as cost of products sold. Property, Plant and Equipment and Depreciation Property, plant and equipment are stated at cost and depreciated on the straight-line method. Buildings are depreciated over their estimated useful lives, primarily 40 years . Machinery and equipment are depreciated over their estimated useful lives, primarily ranging from 16 to 20 years . Leasehold improvements are depreciated over the assets’ estimated useful lives, or the remaining lease term, whichever is shorter. Purchases of computer software, including external costs and certain internal costs (including payroll and payroll-related costs of employees) directly associated with developing significant computer software applications for internal use, are capitalized. Computer software costs are amortized on the straight-line method over the estimated useful life of the software, which is generally three to nine years . Depreciation expense is recorded in cost of products sold, research and development and selling and general expenses. Estimated useful lives are periodically reviewed, and when warranted, changes are made to them. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. An impairment loss would be indicated when estimated undiscounted future cash flows from the use and eventual disposition of an asset group, which are identifiable and largely independent of the cash flows of other asset groups, are less than the carrying amount of the asset group. Measurement of an impairment loss would be based on the excess of the carrying amount of the asset group over its fair value. Fair value is measured using discounted cash flows or independent appraisals, as appropriate. When property is sold or retired, the cost of the property and the related accumulated depreciation are removed from the consolidated balance sheet and any gain or loss on the transaction is included in income. Goodwill and Other Intangible Assets Goodwill is tested for impairment annually and whenever events and circumstances indicate that impairment may have occurred. The evaluation of goodwill involves comparing the current fair value of a reporting unit to its carrying value, including goodwill. We operate as a single operating segment with one reporting unit, and accordingly, our annual goodwill impairment test was based on an evaluation of the fair value of our Company as a whole, using a combination of income and market capitalization approaches. We completed the required annual goodwill impairment test as of July 1, 2019 , and the fair value was substantially in excess of net asset carrying value. Intangible assets with finite lives are amortized over their estimated useful lives and reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Estimated useful lives range from 7 to 30 years for trademarks, 7 to 17 years for patents and acquired technologies, and 2 to 16 years for other intangible assets. An impairment loss would be indicated when estimated undiscounted future cash flows from the use of the asset are less than its carrying amount. An impairment loss would be measured as the difference between the fair value (based on discounted future cash flows) and the carrying amount of the asset. Revenue Recognition and Accounts Receivable Sales revenue is recognized at the time of product shipment or delivery of our products to unaffiliated customers, depending on shipping terms. Accordingly, control of the products transfers to the customer in accordance with the transaction’s shipping terms. Sales revenue is recognized for the amount of consideration that we expect to be entitled to receive in exchange for our products. Sales are reported net of returns, rebates, incentives, each as described below, and freight allowed. Taxes imposed by governmental authorities on our revenue-producing activities with customers, such as sales taxes and value-added taxes, are excluded from net sales. We provide medical products to distributors or end-user customers under supply agreements under which customers may place purchase orders for a variety of our products at specified pricing over a specified term, usually three years . While our sales and marketing efforts are directed to hospitals or other healthcare providers, our products are generally sold through third-party distribution channels. Under our contracts with customers, our performance obligations are normally limited to shipment or delivery of products to a customer upon receipt of a purchase order. We bill our customers, depending on shipping terms, upon shipment or delivery of the products to the customer. Amounts billed are typically due within 30 days , with a 1% discount allowed for distributors if payments are made within 15 days . We estimate cash discounts based on historical experience and record the cash discounts as an allowance to trade receivables. The differences between estimated and actual cash discounts are normally not material. We allow for returns with a specified period of time following customers’ receipt of the goods and estimate an allowance to trade receivables for returns based on historical experience. The differences between estimated and actual returns are normally not material. Our contracts provide for forms of variable consideration including rebates, incentives and pricing tiers, each of which are described below: Rebates - We provide for rebates on gross sales to distributors for estimated historical differences between list prices and average end-user customer prices. We maintain a liability for the estimated rebates. Incentives - Incentives include fees paid to group purchasing organizations (“GPOs”) or distributors in conjunction with the sales of our products to end-user customers. We estimate our incentive liability based on historical experience. Differences between estimated and actual incentives are normally not material. Pricing tiers - In certain of our contracts, pricing is dependent on volumes purchased. Pricing is lower for customers who purchase higher volumes. Customers are placed in a pricing tier based on expected purchase volume, which is developed primarily using the customer’s purchase history. Depending on the customer’s purchases, we may move the customer up or down a tier. Pricing in the new pricing tier is applied to purchase orders prospectively. There are no retrospective adjustments based on movements between pricing tiers. See Note 5 , “Supplemental Balance Sheet Information” for disclosure of our allowances for cash discounts, sales returns and doubtful accounts, and accrued rebates and incentives as of December 31, 2019 and 2018 . As of December 31, 2019 , we had no single customer who individually accounted for more than 10% of our consolidated accounts receivable balance, and only one such customer as of December 31, 2018 . The provision for doubtful accounts was not material in each of the years ended December 31, 2019 , 2018 and 2017 . Foreign Currency Translation The income statements of foreign operations are translated into U.S. dollars at rates of exchange in effect each month. The balance sheets of these operations are translated at period-end exchange rates, and the differences from historical exchange rates are reflected as unrealized translation adjustments in other comprehensive income. Research and Development Research and development expenses are expensed as incurred. Research and development expenses consist primarily of salaries and related expenses for personnel, product trial costs, outside laboratory and license fees, the costs of laboratory equipment and facilities and asset write-offs for equipment that does not reach success in product manufacturing certifications. Stock-Based Compensation We have a stock-based Equity Participation Plan and an Outside Directors’ Compensation Plan that provide for awards of stock options, stock appreciation rights, restricted stock (and in certain limited cases, unrestricted stock), restricted stock units, performance units and cash awards to eligible employees (including officers who are employees), directors, advisors and consultants. Stock-based compensation is initially measured at the fair value of the awards on the grant date and is recognized in the financial statements over the period the employees are required to provide services in exchange for the awards. The fair value of option awards is measured on the grant date using a Black-Scholes option-pricing model. The fair value of time-based and some performance-based restricted share awards is based on the Avanos stock price at the grant date and the assessed probability of meeting future performance targets. For performance-based restricted share units for which vesting is conditioned upon achieving a measure of total shareholder return, fair value is measured using a Monte Carlo simulation. Generally, new shares are issued to satisfy vested restricted stock units and exercises of stock options. See Note 13 , “Stock-Based Compensation.” Income Taxes We account for income taxes under the asset and liability method of accounting, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Under this method, changes in tax rates and laws are recognized in income in the period such changes are enacted. The provision for federal, state, and foreign income taxes is calculated on income before income taxes based on current tax law and includes the cumulative effect of any changes in tax rates from those used previously in determining deferred tax assets and liabilities. Such provision differs from the amounts currently payable because certain items of income and expense are recognized in different reporting periods for financial reporting purposes than for income tax purposes. Recording the provision for income taxes requires management to make significant judgments and estimates for matters whose ultimate resolution may not become known until the final resolution of an examination by the Internal Revenue Service (IRS) or state and foreign agencies. If it is more likely than not that some portion, or all, of a deferred tax asset will not be realized, a valuation allowance is recognized. Recording liabilities for uncertain tax positions involves judgment in evaluating our tax positions and developing the best estimate of the taxes ultimately expected to be paid. We include any related tax penalties and interest in income tax expense. As of December 31, 2019 , we have accumulated undistributed earnings generated by our foreign subsidiaries of approximately $41.0 million . Certain earnings were previously subject to tax due to the one-time transition tax of the Act. Any additional impacts due with respect to the previously-taxed earnings, if repatriated, would generally be limited to foreign withholding tax, U.S. state income tax and the tax effect of certain foreign exchange adjustments. We intend, however, to indefinitely reinvest these earnings and expect future U.S. cash generation to be sufficient to meet U.S. cash needs. At this time, the determination of deferred tax liabilities on the amount of financial reporting over tax basis is not practicable. Employee Defined Benefit Plans We recognize the funded status of our defined benefit as an asset or a liability on our balance sheet. Actuarial gains or losses are a component of our other comprehensive income, which is then included in our accumulated other comprehensive income. Pension expenses are recognized over the period in which the employee renders service and becomes eligible to receive benefits. We make assumptions (including the discount rate and expected rate of return on plan assets) in computing the pension expense and obligations. Recently Adopted Pronouncements Effective January 1, 2019, we adopted Accounting Standards Update (“ASU”) No. 2016-02, Leases (“Topic 842”), using the transition method provided in ASU No. 2018-11, Leases (Topic 842) - Targeted Improvements, which allows for initial application on the date of adoption with recognition of a cumulative-effect adjustment, if applicable, to the opening balance of retained earnings. As of December 31, 2018, all our existing leases were operating leases, and accordingly, no adjustment to beginning retained earnings was required. In addition, we elected to use all available expedients allowed under ASU 2018-11. Other prior period amounts are not adjusted and continue to be reported under Topic 840, the previous lease guidance. Topic 842 replaces the former guidance in Topic 840 and requires the recognition of right-of-use (“ROU”) assets and liabilities for leases with terms of more than twelve months. The recognition, measurement and presentation of expenses and cash flows arising from leases depend primarily on its classification as a finance or an operating lease, with the classification criteria for distinguishing between the two types being similar to the classification for distinguishing between capital and operating leases under Topic 840. In addition to recognition of ROU assets and liabilities, disclosures regarding lease obligations are required to help financial statement users better understand the amount, timing and uncertainty of cash flows arising from leases. As a result of Topic 842 adoption, we have operating lease liabilities of $77.3 million and corresponding ROU assets of $64.0 million as of December 31, 2019 . For other disclosures regarding our lease obligations, see “Leases” in Note 6 herein. Effective January 1, 2019, we adopted ASU No. 2018-02, Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This ASU is intended to help companies reclassify certain stranded income tax effects in accumulated other comprehensive income (“AOCI”) resulting from the Tax Cuts and Jobs Act of 2017 (the “Act”), which was enacted in December 2017. ASU 2018-02 provides for the elimination of stranded tax effects of the Act by allowing reclassification of stranded tax effects from AOCI to retained earnings. We elected not to reclassify stranded tax effects from AOCI to retained earnings, and accordingly, adoption of this ASU did not have a material effect on our financial position, results of operations and cash flows. Recently Issued Pronouncements In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes . This ASU removes 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. This ASU is effective for annual periods and interim periods within those annual periods beginning after December 15, 2020, with early adoption permitted. We do not expect adoption of this ASU to have a material effect on our financial position, results of operations or cash flows. In May 2019, the FASB issued ASU No. 2019-05, Financial Instruments – Credit Losses (Topic 326): Target Transition Relief . This ASU provides transition relief for entities adopting the new credit losses standard ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326). Upon adoption of ASU No. 2016-13, an entity is allowed to irrevocably elect the fair value option on certain financial assets that were previously measured at amortized cost basis. ASU No. 2019-05 is effective concurrent with the adoption of ASU No. 2016-13. For entities that have adopted ASU No. 2016-13, the amendment in ASU No. 2019-05 are effective for annual periods and interim periods within those annual periods beginning after December 15, 2019, with early adoption permitted. For entities that elect the fair value option, the difference between the carrying amount and the fair value of the financial asset would be recognized through a cumulative-effect adjustment to opening retained earnings as of the date an entity adopted ASU No. 2016-13. Changes in fair value of that financial asset would subsequently be reported in current earnings. Certain disclosures are required. We do not expect adoption of this ASU to have a material effect on our financial position, results of operations or cash flows. In August 2018, the FASB issued ASU No. 2018-15, Intangibles – Goodwill and Other – Internal Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. This ASU is intended to reduce complexity by aligning the requirements for capitalizing implementation costs incurred in cloud-based arrangements with the requirements for capitalization of costs incurred to develop internal-use software. Any implementation costs in cloud-based arrangements would then be amortized over the term of the service contract. This ASU is effective for annual periods, and interim periods within those annual periods beginning after December 15, 2019, with early adoption permitted. We do not expect adoption of this ASU to have a material effect on our financial position, results of operations or cash flows. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. This ASU removes certain disclosure requirements regarding the amounts and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy and the policy for timing of transfers between the levels. The ASU also adds disclosure requirements regarding unrealized gains and losses included in Other Comprehensive Income for recurring Level 3 fair value measurements and regarding the range and weighted average of unobservable inputs used in Level 3 fair value measurements. This ASU is effective for annual periods and interim periods within those annual periods beginning after December 15, 2019. The removal of certain disclosures is to be applied retrospectively for all periods presented, but the additional required disclosures are to be prospectively applied, and early application is permitted. We do not expect any transfers between Level 1 and Level 2 of the fair value hierarchy, and as of December 31, 2019 , we have no assets or liabilities with fair value measurements in Level 3 of the fair value hierarchy. Accordingly, we do not expect adoption of this ASU to have a material effect on our financial position, results of operations or cash flows. |
Business Acquisitions
Business Acquisitions | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Business Acquisition | Business Acquisitions Endoclear LLC On September 19, 2019 , we acquired substantially all the assets of Endoclear, LLC (“Endoclear”). The initial purchase price was $3.5 million plus future contingent payments with an estimated fair value of $5.5 million , subject to certain adjustments as defined in the purchase agreement. Endoclear develops and markets airway management devices that are complementary to our existing respiratory health portfolio. Summit Medical Products, Inc. On August 7, 2019 , we acquired substantially all the assets of Summit Medical Products, Inc. (“Summit”) for $15.6 million plus future contingent payments with an estimated fair value of $1.7 million , subject to certain adjustments as defined in the purchase agreement. Summit develops and markets the ambIT® family of ambulatory electronic infusion pumps, with annual net sales of approximately $7.0 million . Net sales of ambIT® products for the period from August 7, 2019 through December 31, 2019 were approximately $3.3 million and are included in the accompanying consolidated income statement. NeoMed, Inc. On April 16, 2019 , we acquired a minority interest in NeoMed, Inc. (“NeoMed”) for $7.0 million . NeoMed is a market-leading medical device company that is focused on specialized feeding and medication dosing for low birth weight, neonatal and pediatric patients. On July 8, 2019 , we acquired all of the outstanding shares of NeoMed for a purchase price of $33.5 million , which includes the base purchase price of $28.0 million plus certain agreed-upon items at the closing date, net of cash acquired, and subsequently adjusted for certain items as defined in the purchase agreement. NeoMed’s net sales were $37.0 million in 2018 . NeoMed’s net sales for the period from July 8, 2019 through December 31, 2019 were $19.7 million and are included in the accompanying consolidated income statement. Cool Systems, Inc. On July 1, 2018 , we acquired Cool Systems, Inc. for $65.7 million , net of cash acquired, which was based on a purchase price of $65.0 million plus certain adjustments as provided in the purchase agreement. Cool Systems is marketed as Game Ready® and is hereinafter referred to as “Game Ready.” In the year ended December 31, 2019 , the purchase price allocation for Game Ready was finalized, resulting in a $1.9 million reduction of goodwill. Purchase Price Allocation We accounted for each of the acquisitions described above under the acquisition method of accounting for business combinations. Accordingly, the purchase price paid is allocated to the underlying net assets in proportion to their respective fair values. Any excess of the purchase price over the estimated fair values is recorded as goodwill. The allocation of the purchase price for each of the acquisitions described above is as follows (in millions): EndoClear (a) Summit (a) NeoMed (a)(b) Game Ready (c) Current assets acquired net of liabilities assumed $ 0.5 $ 0.5 $ 11.2 $ 8.8 Property, plant and equipment — 0.1 2.0 1.0 Identifiable intangible assets 4.0 16.3 16.1 40.0 Other noncurrent assets (liabilities), net — — 0.3 (0.3 ) Deferred tax liabilities — — (3.0 ) (0.2 ) Goodwill 4.5 0.4 13.9 18.7 Total $ 9.0 $ 17.3 $ 40.5 $ 68.0 _______________________________________________ (a) The EndoClear, Summit and NeoMed transactions closed during the third quarter of 2019. Accordingly, the purchase price allocations in the table above are preliminary. (b) The current assets acquired net of liabilities assumed in the NeoMed acquisition included $8.1 million of accounts receivable. (c) Game Ready was acquired on July 1, 2018 and the purchase price allocation was finalized on June 30, 2019. The identifiable intangible assets include the following (in millions): EndoClear Summit NeoMed Game Ready Weighted Average Useful Lives (Yrs) Trademarks $ 1.7 $ — $ 7.4 $ 6.7 16 Patents and acquired technologies 1.8 16.3 3.7 16.9 13 Other 0.5 — 5.0 16.4 12 Total $ 4.0 $ 16.3 $ 16.1 $ 40.0 The following unaudited pro forma financial information is presented in the table below for the years ended December 31, 2019 and 2018 as if the acquisitions had occurred on January 1 in the year preceding the respective acquisitions (in millions, except per share amounts): Year Ended December 31, 2019 2018 2017 Net sales $ 734.1 $ 716.4 $ 646.9 Net (loss) income (47.2 ) 54.7 75.9 Earnings per share: Basic $ (0.99 ) $ 1.16 $ 1.62 Diluted (0.99 ) 1.16 1.62 The pro forma financial information has been adjusted to include the effects of the acquisitions, including acquisition-related costs, amortization of acquired intangibles and related tax effects. The pro-forma financial information is not necessarily indicative of the results of operations that would have been achieved. We have initiated activities to integrate the assets and businesses acquired into our operations, which are described in Note 3, “Restructuring Activities.” We expect the integration of our acquisitions will be substantially complete by the end of 2020 . |
Restructuring
Restructuring | 12 Months Ended |
Dec. 31, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring Post-Divestiture Restructuring Plan In conjunction with the Divestiture, we began a multi-phase restructuring plan (the “Plan”) intended to align our organizational structure, information technology platform, supply chain and distribution channels to be more appropriate for the size and scale of our remaining Medical Devices business. Each phase of the restructuring plan is described below: Organizational Alignment : The first phase of the Plan aligned our organizational and management structure for our remaining Medical Devices business following the Divestiture. In the year ended December 31, 2019 , we incurred $2.7 million of costs, primarily for employee retention, severance and benefits, that are included in “Cost of products sold” and “Selling and general expenses” in the accompanying consolidated income statement. In the year ended December 31, 2018 , we incurred $9.3 million of costs. As of December 31, 2019 , this phase of the Plan was substantially complete. Plan-to-date expenses were $17.4 million , of which $10.5 million was for employee retention, severance and benefits and the remainder for third-party services and other costs. Information Technology Systems : In the second phase of the Plan, we migrated to an IT platform that is more appropriate for our business and size (the “ITS Plan”). In the year ended December 31, 2019 , we incurred $15.1 million of costs which are included in “Selling and general expenses” in the accompanying consolidated income statements compared to $6.4 million in the year ended December 31, 2018 . As of December 31, 2019 , the ITS Plan was complete. Plan-to-date, we incurred $21.5 million of costs that were expensed as incurred and $54.1 million of costs that were capitalized, including $5.0 million of capitalized internal labor costs and $2.2 million of capitalized interest. Cost Transformation : In June 2019 , the third and final phase of the Plan was approved. This third phase relates to optimizing the Company’s procurement, manufacturing, and supply chain operations (the “Cost Transformation”). The Company expects to incur between $11.0 million and $13.0 million to execute the Cost Transformation, primarily consulting and other expenses that will be expensed as incurred. The Company also expects to spend between $8.0 million to $12.0 million of incremental capital through 2021 in support of the Cost Transformation. The Company expects to complete the Cost Transformation by the end of 2021 . In the year ended December 31, 2019 , we have incurred $2.3 million of costs related to Cost Transformation. Integration of Business Acquisitions : During the third quarter of 2019 , we initiated activities to integrate the asset and business acquisitions described in Note 2 , “Business Acquisitions” into our operations, and where appropriate, re-align our organization accordingly. We expect to incur up to $17.0 million of costs, primarily for employee retention, severance and benefits and lease termination costs. In the year ended December 31, 2019 , we incurred $9.1 million for employee retention, severance and benefits. We expect the integration of our acquisitions will be substantially complete by the end of 2020 . Restructuring Liability We have a liability for employee retention, severance and benefits associated with our restructuring activities, which is summarized below (in millions): As of December 31, 2019 2018 Balance, beginning of year 5.7 5.4 Charges and adjustments, net 9.8 2.9 Payments (7.0 ) (2.6 ) Balance, end of year $ 8.5 $ 5.7 |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill We test goodwill for impairment annually (as of July 1) or more frequently whenever events or circumstances more likely than not indicate that the fair value of the reporting unit may be below its carrying amount. We operate as a single operating segment with one reporting unit, and accordingly, our annual goodwill impairment test was based on an evaluation of the fair value of our Company as a whole. We completed our annual impairment test as of July 1, 2019 , and based on a combination of income and market capitalization approaches, we determined that our fair value substantially exceeds the net carrying value of our reporting unit. The changes in the carrying amount of goodwill are as follows (in millions): Balance at December 31, 2017 $ 764.7 Goodwill acquired (a) 20.6 Currency translation adjustment (1.7 ) Balance at December 31, 2018 783.6 Goodwill acquired (b) 18.8 Purchase accounting adjustment (a) (1.9 ) Currency translation adjustment 0.4 Balance at December 31, 2019 $ 800.9 _____________________________________________ (a) We acquired $20.6 million of goodwill in conjunction with the acquisition of Game Ready as described in Note 2 , “Business Acquisitions.” This goodwill was subsequently reduced by $1.9 million after the purchase price allocation was finalized in the year ended December 31, 2019 . (b) We acquired $18.8 million of goodwill in conjunction with the acquisitions described in Note 2 , “Business Acquisitions.” |
Supplemental Balance Sheet Info
Supplemental Balance Sheet Information | 12 Months Ended |
Dec. 31, 2019 | |
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): As of December 31, 2019 2018 Accounts Receivable $ 166.8 $ 152.2 Allowances and doubtful accounts Doubtful accounts (2.7 ) (1.4 ) Sales discounts (0.3 ) (0.2 ) Sales returns — (0.1 ) Accounts receivable, net $ 163.8 $ 150.5 The provision for doubtful accounts and subsequent recoveries of bad debts were not material in each of the years ended December 31, 2019 , 2018 and 2017 . Inventories Inventories at the lower of cost (determined on the LIFO/FIFO or weighted-average cost methods) or market consists of the following (in millions): As of December 31, 2019 2018 LIFO Non- LIFO Total LIFO Non- LIFO Total Raw Materials $ 46.3 $ 2.9 $ 49.2 $ 39.6 $ 1.5 $ 41.1 Work in process 30.4 0.5 30.9 22.1 0.4 22.5 Finished goods 49.5 21.7 71.2 50.1 13.7 63.8 Supplies and other — 4.5 4.5 — 5.8 5.8 126.2 29.6 155.8 111.8 21.4 133.2 Excess of FIFO or weighted-average cost over LIFO cost (9.9 ) — (9.9 ) (11.8 ) — (11.8 ) Total $ 116.3 $ 29.6 $ 145.9 $ 100.0 $ 21.4 $ 121.4 The provision for obsolescence has not been material in each of the years ended December 31, 2019 , 2018 and 2017 . Property, Plant and Equipment Property, plant and equipment consists of the following (in millions): As of December 31, 2019 2018 Land $ 1.0 $ 0.9 Buildings and leasehold improvements 48.3 43.5 Machinery and equipment 215.0 141.2 Construction in progress 18.9 52.7 283.2 238.3 Less accumulated depreciation (98.7 ) (84.2 ) Total $ 184.5 $ 154.1 Property, plant and equipment includes $1.8 million and $1.5 million of interest that was capitalized in the years ended December 31, 2019 and 2018 , respectively. There were $11.2 million and $16.9 million of capital expenditures in accounts payable as of December 31, 2019 and 2018 , respectively. Depreciation expense was $16.9 million , $13.5 million and $18.8 million , respectively, in the years ended December 31, 2019 , 2018 and 2017 . Intangible Assets Intangible assets subject to amortization consist of the following (in millions): As of December 31, 2019 2018 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trademarks $ 90.9 $ (56.7 ) $ 34.2 $ 83.1 $ (52.2 ) $ 30.9 Patents and acquired technologies 281.1 (157.2 ) 123.9 259.5 (144.4 ) 115.1 Other 61.3 (35.1 ) 26.2 54.4 (32.2 ) 22.2 Total $ 433.3 $ (249.0 ) $ 184.3 $ 397.0 $ (228.8 ) $ 168.2 Amortization expense for intangible assets was $20.0 million , $20.0 million and $20.7 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. We estimate amortization expense for the next five years and beyond will be as follows (in millions): For the years ending December 31, 2020 $ 18.5 2021 17.0 2022 15.9 2023 15.3 2024 15.1 Thereafter 102.5 Total $ 184.3 Accrued Expenses Accrued expenses consist of the following (in millions): As of December 31, 2019 2018 Accrued rebates $ 51.1 $ 26.1 Accrued salaries and wages 23.6 27.0 Accrued taxes and other 3.2 6.5 Other 36.9 34.8 Total $ 114.8 $ 94.4 Other Long-Term Liabilities Other long-term liabilities consist of the following (in millions): As of December 31, 2019 2018 Taxes payable $ 0.4 $ 0.4 Accrued compensation benefits 5.4 4.3 Other 5.4 15.1 Total $ 11.2 $ 19.8 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | Leases Our lease obligations relate primarily to our principal executive offices along with various manufacturing, warehouse and distribution facilities located throughout the world. For leases with terms greater than twelve months, we record an ROU asset and corresponding lease obligation. As of December 31, 2019 , all our leasing arrangements were operating leases. Many of our leases include escalating rent payments, renewal options and termination options, which are considered in our determination of straight-line rent expense when appropriate. Many of our leases also include additional amounts for common area maintenance and taxes. We have elected not to separate lease and non-lease components in the determination of straight-line rent expense. For a majority of our leases, an implicit lease rate is not available. Accordingly, we use a rate that approximates our incremental secured borrowing rate. The table below summarizes information related to ROU assets and lease liabilities that are included in the accompanying consolidated balance sheet (dollars in millions): As of Assets Operating lease right-of-use assets $ 64.0 Liabilities Current portion of operating lease liabilities 14.7 Operating lease liabilities 62.6 Total Operating Lease Liabilities $ 77.3 Weighted average remaining lease term 7.3 years Weighted average discount rate 4.5 % The table below summarizes costs and cash flows arising from our lease arrangements for the year ended December 31, 2019 (in millions): Year Ended Operating lease cost $ 12.8 Short-term lease cost 2.7 Variable lease cost 2.0 Total lease cost $ 17.5 Cash paid for amounts included in the measurement of lease liabilities $ 16.9 Right-of-use assets obtained in exchange for new operating lease liabilities $ 19.7 The future minimum obligations under operating leases having non-cancelable terms in excess of one year for the next five years and beyond will be (in millions): For the years ending December 31, Amount 2020 $ 15.0 2021 14.4 2022 13.9 2023 11.8 2024 8.3 Thereafter 27.8 Future minimum obligations $ 91.2 |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations The results of operations from our former S&IP business are reported in the accompanying consolidated income statements as “Income from Discontinued Operations, net of tax” in the years ended December 31, 2018 and 2017 . The remaining business is managed with one operating segment, the Medical Devices business. The following table summarizes the financial results of our discontinued operations for the years ended December 31, 2018 and 2017 (in millions): Year Ended December 31, 2018 2017 Net Sales $ 351.1 $ 1,012.7 Cost of products sold 260.3 762.5 Research and development 1.1 2.9 Selling, general and other expenses 38.1 82.8 Gain on Divestiture (89.9 ) — Other expense (income), net 0.4 (1.6 ) Income from discontinued operations before income taxes 141.1 166.1 Tax provision from discontinued operations (75.1 ) (54.7 ) Income from discontinued operations, net of tax $ 66.0 $ 111.4 In accordance with GAAP, only expenses specifically identifiable and related to a business to be disposed may be allocated to discontinued operations. Accordingly, certain expenses that were historically presented as a component of the S&IP were kept in continuing operations. These expenses, on a pre-tax basis, were $37.0 million in the year ended December 31, 2018 and $115.8 million in 2017 . The following table provides operating and investing cash flow information for our discontinued operations (in millions): Year Ended December 31, 2018 2017 Operating Activities: Depreciation and amortization $ — 20.0 Stock-based compensation expense (1.5 ) 1.5 Investing Activities: Capital expenditures 2.9 19.9 Operating and investing cash flow information for the year ended December 31, 2018 represents activity from January 1, 2018 until the Divestiture closed on April 30, 2018 . |
Fair Value Information
Fair Value Information | 12 Months Ended |
Dec. 31, 2019 | |
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): Fair Value Hierarchy Level December 31, 2019 December 31, 2018 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Assets Cash and cash equivalents 1 $ 205.3 $ 205.3 $ 384.5 $ 384.5 Liabilities Senior unsecured notes 1 248.1 254.5 247.7 250.9 Cash equivalents are recorded at cost, which approximates fair value due to their short-term nature. The fair value of our senior unsecured notes is determined using observable market prices based on trading activity on a primary exchange. For the years ended December 31, 2019 and 2018 , there were no transfers among Level 1, 2 or 3 fair value determinations. Transfers between levels occur when there are changes in the observability of inputs. Changes between levels are assumed to occur at the beginning of the year. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Debt As of December 31, 2019 and 2018 , our debt balances were as follows (in millions): Weighted- Average Interest Rate Maturities As of December 31, 2019 2018 Senior Unsecured Notes 6.25% 2022 249.8 250.0 Unamortized Debt Discounts and Issuance Costs (1.7 ) (2.3 ) Total Debt, net $ 248.1 $ 247.7 Senior Unsecured Notes The Senior Unsecured Notes (“Notes”) will mature on October 15, 2022 and interest accrues at a rate of 6.25% per annum payable semi-annually in arrears on April 15 and October 15 of each year. The Notes are guaranteed, jointly and severally, by each of our domestic subsidiaries that guarantees the Senior Credit Facilities. Unamortized debt discount and issuance costs are being amortized to interest expense over the life of the credit agreement using the interest method, resulting in an effective interest rate of 6.51% as of December 31, 2019 . Following a divestiture of significant assets, such as the Divestiture, the credit agreement allows re-investment of the net proceeds into the business through acquisition of another business or through capital expenditures for a period of one year following the divestiture. We were required to offer to redeem a portion of the Notes at par value to the extent re-investments were not made by May 1, 2019 . Accordingly, $130.5 million of the Notes were offered for redemption in the second quarter of 2019 , of which $0.2 million were redeemed. Revolving Credit Facility We have a senior secured revolving credit facility (“Revolving Credit Facility”) that matures on October 30, 2023 which 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 under the Revolving Credit Facility will 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 our Revolving Credit Facility will be 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 and (ii) 0.375% 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 December 31, 2019 , we had no borrowings outstanding and letters of credit of $0.7 million issued under the Revolving Credit Facility. Debt Covenants The Revolving Credit Facility and the Notes are subject to similar covenants that, among other things, limit our ability and the ability of certain of our subsidiaries to: • incur additional indebtedness, guarantee indebtedness or issue disqualified stock or, in the case of our restricted subsidiaries, preferred stock; • pay dividends on, repurchase or make distributions in respect of our capital stock; • make certain investments or acquisitions; • sell, transfer or otherwise convey certain assets; • create liens; • enter into agreements restricting certain subsidiaries’ ability to pay dividends or make other intercompany transfers; • consolidate, merge, sell or otherwise dispose of all or substantially all of our and our subsidiaries’ assets; • enter into transactions with affiliates; and • prepay certain kinds of indebtedness. Pursuant to the restrictive covenants that limit our ability to pay dividends, we have the ability to pay dividends, repurchase stock and make investments up to an “Available Amount,” as defined in the credit agreement governing the Senior Credit Facilities, provided that we are in compliance with all required covenants, there are no events of default and upon meeting certain financial ratios. As of December 31, 2019 , we were in compliance with all of our debt covenants. As of December 31, 2019 , our repayment requirements in the next five years includes the $249.8 million Notes due on October 15, 2022 . |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Our income taxes are calculated using the asset and liability method of accounting, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. The provision for income taxes includes federal, state and foreign taxes currently payable and those deferred because of net operating losses and temporary differences between the consolidated financial statements and tax bases of assets and liabilities. The components of (loss) income before income taxes, and the provision (benefit) for income taxes are as follows (in millions): Year Ended December 31, 2019 2018 2017 Loss before income taxes United States $ (61.8 ) $ (20.7 ) $ (76.2 ) Foreign (2.2 ) 2.6 4.0 Total (64.0 ) (18.1 ) (72.2 ) Income tax provision (benefit): Current: United States (3.6 ) (13.6 ) (27.4 ) State (0.3 ) (0.5 ) (4.6 ) Foreign 0.8 0.8 1.4 Total (3.1 ) (13.3 ) (30.6 ) Deferred: United States (11.6 ) 0.7 (9.0 ) State (3.2 ) 3.5 (0.4 ) Foreign (0.2 ) (0.5 ) (0.1 ) Total (15.0 ) 3.7 (9.5 ) Total income tax benefit $ (18.1 ) $ (9.6 ) $ (40.1 ) On December 22, 2017 , new federal tax reform, the Tax Cuts and Jobs Act (the “Act”), was enacted in the United States, resulting in significant changes from previous tax law. The new legislation reduced the federal corporate income tax rate to 21% from 35% effective January 1, 2018 . In the fourth quarter of 2017 , we recorded a provisional estimate of a net $10.0 million benefit related to the Act. The provisional estimate included a $16.0 million benefit related to the re-measurement of certain deferred tax assets and liabilities based on the rates at which they are expected to reverse offset by a $7.0 million one-time transition tax expense on the mandatory deemed repatriation of cumulative foreign earnings of $101 million . We also recorded a $1.0 million benefit related to the treatment of current year cash dividends in relation to the repatriation tax. On December 22, 2017 , Staff Accounting Bulletin No. 118 (“SAB 118”) was issued to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Act. In accordance with SAB 118, we determined the provisional estimates recorded in December 2017 were reasonable estimates through September 30, 2018 . Furthermore, during the fourth quarter of 2018 we recorded discrete tax benefits of $3.9 million related to new guidance issued during 2018 and certain tax planning actions taken in anticipation of the Act. As of December 31, 2018 , our accounting for the Act was complete. The Act subjects a U.S. shareholder to tax on Global Intangible Low Tax Income (“GILTI”) earned by certain foreign subsidiaries. The FASB Staff Q&A, Topic 740, No. 5, Accounting for GILTI, states that an entity can make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or to provide for the tax expense related to GILTI in the year the tax is incurred as a period expense only. The Company has elected to provide for the tax expense related to GILTI in the year the tax is incurred as a period expense. As of December 31, 2019 , we have accumulated undistributed earnings generated by our foreign subsidiaries of approximately $41.0 million . Certain earnings were previously subject to tax due to the one-time transition tax of the Act. Any additional impacts due with respect to the previously-taxed earnings, if repatriated, would generally be limited to foreign withholding tax, U.S. state income tax and the tax effect of certain foreign exchange adjustments. We intend, however, to indefinitely reinvest these earnings and expect future U.S. cash generation to be sufficient to meet U.S. cash needs. At this time, the determination of deferred tax liabilities on the amount of financial reporting over tax basis is not practicable. Major differences between the federal statutory rate and the effective tax rate are as follows: Year Ended December 31, 2019 2018 2017 Federal statutory rate 21.0 % 21.0 % 35.0 % Rate of state income taxes, net of federal tax benefit 4.5 (2.4 ) 4.5 Statutory rate other than U.S. statutory rate (2.0 ) (1.4 ) 0.1 Foreign derived intangible income 5.5 — — Foreign tax credit carryback 1.9 — — Valuation allowance (1.8 ) (10.6 ) (1.1 ) Uncertain tax positions — 13.8 — Transaction related expenses — (3.9 ) — GILTI inclusion — (1.6 ) — Nondeductible officer’s compensation (1.0 ) (2.7 ) 0.1 U.S. federal research and development credit 3.1 11.4 3.0 Share based compensation windfall tax deduction (0.2 ) 8.5 — Impacts of U.S. federal tax reform — 21.7 14.2 Other, net (2.7 ) (0.8 ) (0.2 ) Effective tax rate 28.3 % 53.0 % 55.6 % The following is a summary of the significant components of the Company’s deferred tax assets and liabilities (in millions): As of December 31, 2019 2018 Deferred tax assets Accrued liabilities $ 12.9 $ 15.5 Interest limitation 2.9 — Stock-based compensation 6.9 7.8 Net Operating Losses 27.5 9.2 Operating Lease Right of Use Asset 12.8 — Other 4.9 5.3 67.9 37.8 Valuation allowance (3.4 ) (3.3 ) Total deferred tax assets 64.5 34.5 Deferred tax liabilities Intangibles, net 22.6 18.7 Operating Lease Obligations 9.4 — Inventories 4.8 1.8 Property, plant and equipment, net 10.9 11.4 Other 0.7 0.7 Total deferred tax liabilities 48.4 32.6 Net deferred tax assets (liabilities) $ 16.1 $ 1.9 Valuation allowances increased $0.1 million during the year ended December 31, 2019 . Valuation allowances at the end of 2019 and 2018 primarily relate to tax credits and income tax loss carryforwards. Realization of income tax loss carryforwards is dependent on generating sufficient taxable income prior to expiration of these carryforwards. Although realization is not assured, we believe it is more likely than not that all of the deferred tax assets, net of applicable valuation allowances, will be realized. The amount of the deferred tax assets considered realizable could be reduced or increased due to changes in the tax environment or if estimates of future taxable income change during the carryforward period. At December 31, 2019 , we have credit carryforwards for federal income tax purposes of $2.0 million , all of which will expire between 2023 and 2028 . We also have net operating loss carryforwards for federal income tax purposes of $93.0 million , of which $28.5 million will expire between 2027 and 2037 . The remaining net operating losses are available for carryforward indefinitely. At December 31, 2019 , we have credit carryforwards for state income tax purposes of $3.3 million , of which $2.0 million will expire in 2025 . The rest will expire between 2026 and 2028 . We also have net operating loss carryforwards for state income tax purposes of $78.0 million , some of which will expire between 2020 and 2034 and others that will remain available for carryforward indefinitely. We also have certain foreign subsidiaries with net operating loss carryforwards for income tax purposes of $19.7 million , of which $2.3 million will expire in 2020 and $3.4 million will expire in 2029 . The remaining net operating losses are available for carryforward indefinitely. A reconciliation of the beginning and ending amount of unrecognized tax benefit is as follows (in millions): As of December 31, 2019 2018 Beginning of year $ 0.5 $ 2.7 Gross increases for tax positions of prior years — — Gross decreases for tax positions of prior years — — Decreases for settlements with taxing authorities — (0.5 ) Decreases for lapse of the applicable statute of limitations — (1.7 ) End of year $ 0.5 $ 0.5 The amount, if recognized, that would affect our effective tax rate as of December 31, 2019 and 2018 is $0.4 million for both years. We classify interest and penalties on uncertain tax benefits as income tax expense. As of December 31, 2019 and 2018 , before any tax benefits, we had $0.3 million and $0.2 million , respectively of accrued interest and penalties on unrecognized tax benefits. During the next twelve months , we do not expect the resolution of any tax audits which could potentially reduce unrecognized tax benefits by a material amount. In addition, an expiration of the statute of limitations for a tax year in which we have recorded uncertain tax benefits will occur in the next twelve months . Federal and state income tax returns are generally subject to examination for a period of three to five years |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans Defined Contribution Plans Eligible employees participate in our defined contribution plans. Our 401(k) plan and supplemental plan provide for a matching contribution of a U.S. employee’s contributions and accruals, subject to predetermined limits. Avanos also has defined contribution pension plans for certain employees outside the U.S. in which eligible employees may participate. We recognized $8.4 million , $7.6 million and $7.4 million , respectively, of expense for our matching contributions to the 401(k) plan in the years ended December 31, 2019 , 2018 and 2017 , respectively. Our matching contributions to the 401(k) plan are recognized in cost of products sold, research and development and selling and general expenses in our consolidated income statements. Defined Benefit Plans Certain plans in our international operations are our direct obligation, and therefore, the related funded status has been recorded within our consolidated balance sheet. These plans are primarily unfunded and the aggregated projected benefit obligation was $4.3 million and $2.8 million as of December 31, 2019 and 2018 , respectively. Net periodic pension cost for the years ended December 31, 2019 , 2018 and 2017 was $0.5 million , $0.6 million and $0.6 million , respectively. Over the next ten years, we expect gross benefit payments to be $1.1 million in total for the years 2020 through 2024 , and $1.7 million in total for the years 2025 through 2029 . |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Income The changes in the components of Accumulated Other Comprehensive Income (“AOCI”), net of tax, are as follows (in millions): Unrealized Translation Cash Flow Hedges Defined Benefit Pension Plans Accumulated Other Comprehensive Income Balance, December 31, 2016 $ (48.7 ) $ (0.4 ) $ (1.0 ) $ (50.1 ) Other comprehensive income 17.1 1.2 0.5 18.8 Balance, December 31, 2017 (31.6 ) 0.8 (0.5 ) (31.3 ) Other comprehensive (loss) income (2.7 ) (0.7 ) 1.0 (2.4 ) Balance, December 31, 2018 (34.3 ) 0.1 0.5 (33.7 ) Other comprehensive income (loss) 2.8 — (1.1 ) 1.7 Balance, December 31, 2019 $ (31.5 ) $ 0.1 $ (0.6 ) $ (32.0 ) The net changes in the components of AOCI, including the tax effect, are as follows (in millions): Year Ended December 31, 2019 2018 2017 Unrealized translation $ 2.8 $ (2.7 ) $ 17.1 Defined benefit pension plans (1.4 ) 1.2 0.6 Tax effect 0.3 (0.2 ) (0.1 ) Defined benefit pension plans, net of tax (1.1 ) 1.0 0.5 Cash flow hedges — (1.0 ) 1.5 Tax effect — 0.3 (0.3 ) Cash flow hedges, net of tax — (0.7 ) 1.2 Change in AOCI $ 1.7 $ (2.4 ) $ 18.8 |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The Avanos Medical, Inc. Equity Participation Plan and the Avanos Medical, Inc. Outside Directors’ Compensation Plan (together, the “Equity Plans”) provide for awards of stock options, stock appreciation rights, restricted stock (and in certain limited cases, unrestricted stock), restricted stock units, performance units and cash awards to eligible employees (including officers who are employees), directors, advisors and consultants of Avanos or its subsidiaries. A maximum of 4.9 million shares of Avanos common stock may be issued under the Equity Plans, and there are 1.4 million shares remaining available for issuance as of December 31, 2019 . Aggregate stock-based compensation expense under the Equity Plans was $10.4 million , $10.5 million and $12.6 million for the years ended December 31, 2019 , 2018 and 2017 , respectively, which includes amounts allocated to discontinued operations in 2018 and 2017 . See Note 7 for stock-based compensation included in discontinued operations in 2018 and 2017 . Stock-based compensation expense described by award type below refers to expense in continuing operations only. Stock-based compensation expense is included in cost of sales, research and development expenses and selling and general expenses. Stock Options Stock options are granted at an exercise price equal to the fair market value of our common stock on the date of grant. Stock options are generally subject to graded vesting whereby options vest 30% at the end of each of the first two 12-month periods following the grant and 40% at the end of the third 12-month period and have a term of 10 years . The fair value of stock option awards was determined using a Black-Scholes option-pricing model utilizing a range of assumptions related to volatility, risk-free interest rate, expected term and dividend yield. Expected volatility was based on historical weekly closing stock price volatility for a peer group of companies. The risk-free interest rate was based on the U.S. Treasury yield curve in effect at the time of grant. The expected term was based on historical observed settlement behavior. The dividend yield was based on the expectation that no dividends are expected to be paid on our common stock. The weighted-average fair value of options granted in the years ended December 31, 2019 , 2018 and 2017 was $11.60 , $13.69 , and $9.07 , respectively, based on the following assumptions: Year Ended December 31, 2019 2018 2017 Volatility 30% 26% 24% to 25% Risk-free rate 2.3% 2.7% 1.7% to 1.8% Expected term (Years) 4 4 5 Dividend Yield 0% 0% 0% Stock-based compensation expense related to stock options was $2.9 million , $2.8 million and $3.0 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. A summary of stock option activity is presented below: Shares (in thousands) Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in millions) Outstanding at December 31, 2018 1,328 $ 40.75 Granted 272 43.59 Exercises (156 ) 33.35 Forfeitures (151 ) 45.37 Outstanding at December 31, 2019 1,293 $ 41.70 6.4 $ 0.5 Vested and exercisable at December 31, 2019 707 $ 39.58 5.2 $ — The following table summarizes information about options outstanding as of December 31, 2019 : Options Outstanding Options Exercisable Range of Exercise Prices Shares (in thousands) Weighted-Average Remaining Contractual Term (Years) Shares (in thousands) Weighted-Average Exercise Price $25.00 to $35.00 153 5.1 153 $ 30.32 $35.00 to $45.00 710 6.9 298 37.85 $45.00+ 430 6.1 256 47.13 1,293 6.4 707 $ 39.58 In the year ended December 31, 2019 , options with an aggregate intrinsic value of $1.4 million were exercised. The tax effects for exercises in 2019 were not material. In the year ended December 31, 2018 , options with an intrinsic value of $11.7 million were exercised resulting in an excess tax benefit of $1.8 million , and in the year ended December 31, 2017 , options with an intrinsic value of $1.4 million were exercised resulting in an excess tax benefit of $0.4 million . For stock options outstanding at December 31, 2019 , we expect to recognize an additional $3.5 million of expense over the remaining average service period of one year . Restricted Share Units Restricted shares, time-vested restricted share units and performance-based restricted share units granted to employees and directors are valued at the closing market price of our common stock on the grant date with vesting conditions determined upon approval of the award. Stock-based compensation expense related to restricted stock units was $3.7 million , $4.8 million and $3.3 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. A summary of restricted share unit activity is presented below: Shares (in thousands) Weighted Average Fair Value Outstanding at December 31, 2018 304 $ 40.51 Granted 153 40.09 Vested (82 ) 36.81 Forfeited (36 ) 42.63 Outstanding at December 31, 2019 339 $ 41.00 For restricted share units outstanding at December 31, 2019 , we expect to recognize an additional $4.6 million of expense over the remaining average service period of one year . We also issue restricted share units for which vesting is conditioned on meeting a defined measure of total shareholder return (“TSR units”) over a restricted period of three years . Total shareholder return is measured as our stock price performance over the restricted period compared to defined group of peer companies. The expense recognition for TSR units differs from awards with service or performance conditions in that the expense is recognized over the restricted period regardless of whether the total shareholder return target is met or not, while expense for awards with service and performance conditions is recognized based on the number of awards expected to vest. The fair value of TSR units is determined using a Monte Carlo simulation with a volatility assumption based on the average stock-price volatility for a peer group of companies over the restricted period. The volatility assumption was 29% for awards granted in 2019 , and 27% for awards granted in 2018 and 25% for awards granted in 2017 . The weighted average fair value per TSR unit was $52.36 , $69.41 and $42.24 for awards granted in 2019 , 2018 and 2017 , respectively. Stock-based compensation expense related to TSR units was $3.8 million , $4.4 million and $4.8 million for the years ended December 31, 2019 , 2018 and 2017 , respectively. A summary of TSR unit activity is presented below. Shares (in thousands) Weighted Average Fair Value Outstanding at December 31, 2018 453 $ 47.57 Granted 128 52.36 Vested (130 ) 38.43 Forfeited (84 ) 48.93 Outstanding at December 31, 2019 367 $ 52.18 For TSR units outstanding at December 31, 2019 , we expect to recognize an additional $6.8 million of expense over the weighted average remaining restricted period of one year . Employee Stock Purchase Plan The Avanos Medical, Inc. Employee Stock Purchase Plan (“ESPP”) allows for employee contributions to purchase shares of the Company’s common stock at a 15% discount off the closing price at the end of each offering periods. The ESPP is available to all employees meeting eligibility requirements as defined in the ESPP. The first offering period of the newly-established ESPP ended on December 31, 2019 , and future offering periods will generally be six month periods ending on June 30 and December 31 of each year. Employees may contribute up to 25% of their compensation, subject to a maximum of $25,000 into the ESPP each year. A maximum of 1 million common shares may be issued under the ESPP. For the year ended December 31, 2019 , we recognized $0.1 million |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Matters We are subject to various legal proceedings, claims and governmental inspections, audits or investigations pertaining to issues such as contract disputes, product liability, tax matters, patents and trademarks, advertising, governmental regulations, employment and other matters, including the matters described below. 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 (“Indemnification Obligation”). For the years ended December 31, 2019 , 2018 and 2017 , we have incurred $22.5 million , $15.6 million and $20.5 million , respectively, related to these matters. Surgical Gown Litigation and Related Matters Bahamas Surgery Center We have an Indemnification Obligation for the matter styled Bahamas Surgery Center, LLC v. Kimberly-Clark Corporation and Halyard Health, Inc., No. 2:14-cv-08390-DMG-SH (C.D. Cal.) ( “Bahamas” ), filed on October 29, 2014. In that case, the plaintiff brought a putative class action asserting claims for common law fraud (affirmative misrepresentation and fraudulent concealment) and violation of California’s Unfair Competition Law (“UCL”) in connection with our marketing and sale of MicroCool surgical gowns. On April 7, 2017, a jury returned a verdict for the plaintiff, finding that Kimberly-Clark was liable for $4 million in compensatory damages (not including prejudgment interest) and $350 million in punitive damages, and that Avanos was liable for $0.3 million in compensatory damages (not including prejudgment interest) and $100 million in punitive damages. Subsequently, the court also ruled on the plaintiff’s UCL claim and request for injunctive relief. The court found in favor of the plaintiff on the UCL claim but denied the plaintiff’s request for restitution. The court also denied the plaintiff’s request for injunctive relief. On May 25, 2017, we filed post-trial motions seeking, among other things to have the award of punitive damages reduced. On April 11, 2018, the court issued an Amended Judgment in favor of the plaintiff and against us and Kimberly-Clark that substantially reduced the punitive damages awards. The judgment against us is now $0.4 million in compensatory damages and pre-judgment interest and $1.3 million in punitive damages. The judgment against Kimberly-Clark is $3.9 million in compensatory damages, $2.3 million in pre-judgment interest and $19.4 million in punitive damages. On April 12, 2018, we filed a notice of appeal to the Ninth Circuit Court of Appeals. We intend to continue our vigorous defense of the Bahamas matter. Kimberly-Clark Corporation We have notified Kimberly-Clark that we have reserved our rights to challenge any purported obligation to indemnify Kimberly-Clark for the punitive damages awarded against them. In connection with our reservation of rights, on May 1, 2017, we filed a complaint in the matter styled Halyard Health, Inc. v. Kimberly-Clark Corporation , Case No. BC659662 (County of Los Angeles, Superior Court of California). In that case, we seek a declaratory judgment that we have no obligation, under the Distribution Agreement or otherwise, to indemnify, pay, reimburse, assume, or otherwise cover punitive damages assessed against Kimberly-Clark in the Bahamas matter, or any Expenses or Losses (as defined in the distribution agreement) associated with an award of punitive damages. On May 2, 2017, Kimberly-Clark filed a complaint in the matter styled Kimberly-Clark Corporation v. Halyard Health, Inc., Case No. 2017-0332-AGB (Court of Chancery of the State of Delaware). In that case, Kimberly-Clark seeks a declaratory judgment that (1) we must indemnify them for all damages, including punitive damages, assessed against them in the Bahamas matter, (2) we have anticipatorily and materially breached the Distribution Agreement by our failure to indemnify them, and (3) we are estopped from asserting, or have otherwise waived, any claim that we are not required to indemnify them for all damages, including punitive damages, that may be awarded in the Bahamas matter. On May 26, 2017, we moved to dismiss or stay Kimberly-Clark’s Delaware complaint, and on June 16, 2017, Kimberly-Clark moved for summary judgment. On September 12, 2017, the Delaware court granted our motion to stay Kimberly-Clark’s complaint and therefore did not take any action on Kimberly-Clark’s motion for summary judgment. On May 30, 2018, Kimberly-Clark moved to quash service of summons we served on Kimberly-Clark in California for lack of personal jurisdiction. On December 12, 2018, the court granted Kimberly-Clark’s motion. On December 18, 2018, we filed a notice of appeal to the California Court of Appeal. On December 6, 2019, the appellate court affirmed the lower court’s ruling, finding that it did not have personal jurisdiction over Kimberly-Clark. We intend to continue our vigorous defense of the matter. 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. Shahinian On October 12, 2016, after the DOJ and various States declined to intervene, a qui tam matter was unsealed and a complaint was subsequently served on us in a matter styled U.S. ex rel. Shahinian, et al. v. Kimberly-Clark Corporation, No. 2:14-cv-08313-JAK-JPR (C. D. Cal.) (“ Shahinian” ), filed on October 27, 2014. The case alleges, among other things, violations of the federal and various state False Claims Acts in connection with the marketing and sale of certain surgical gowns. On March 8, 2017, Kimberly-Clark moved to dismiss the Shahinian complaint, and on July 14, 2017, the California court granted Kimberly-Clark’s motion. The plaintiff then filed a second amended complaint, and on August 11, 2017, Kimberly-Clark moved to dismiss that one as well. The plaintiff then filed a third amended complaint. On January 18, 2018, Kimberly-Clark moved to dismiss that one too. On September 30, 2018, the court granted Kimberly-Clark’s motion with prejudice. On November 13, 2018, Shahinian filed a notice of appeal to the Ninth Circuit Court of Appeals. We may have an Indemnification Obligation for the Shahinian matter under the distribution agreement with Kimberly-Clark and have notified Kimberly-Clark that we reserve our rights to challenge the obligation to indemnify Kimberly-Clark for any damages or penalties which are not indemnifiable under applicable law or public policy. We intend to continue our vigorous defense of the matter. Kromenaker On March 17, 2017, the DOJ submitted a filing declining to intervene in another qui tam matter, and the complaint was unsealed and subsequently served on Kimberly-Clark and Avanos. That matter is styled U.S. ex rel. Kromenaker v. Kimberly-Clark Corporation and Halyard Health, Inc., No. 1:15-cv-04413-SCJ (N. D. Ga.) (“Kromenaker”), filed on December 21, 2015. In that case, the plaintiff alleges, among other things, violations of the federal False Claims Act in connection with the marketing and sale of certain products, including feminine hygiene products, surgical gowns and endotracheal tubes. On June 12, 2017, Kimberly-Clark and Avanos moved to dismiss the complaint. On August 21, 2017, Kromenaker filed an amended complaint, and Kimberly-Clark and Avanos filed motions to dismiss it. On March 27, 2019, the court granted Kimberly-Clark’s and our motion to dismiss. On April 24, 2019, Kromenaker filed a motion with the trial court seeking to have the court alter, amend, or vacate the dismissal. On January 14, 2020, the court denied Kromenaker’s motion, effectively dismissing the case. We may have an Indemnification Obligation for certain parts of this matter under the distribution agreement with Kimberly-Clark and have notified Kimberly-Clark that we reserve our rights to challenge the obligation to indemnify Kimberly-Clark for any damages or penalties which are not indemnifiable under applicable law or public policy. We intend to continue our vigorous defense of this matter. Jackson We were served with a complaint in a matter styled Jackson v. Halyard Health, Inc., Robert E. Abernathy, Steven E. Voskuil, et al., No. 1:16-cv-05093-LTS (S.D.N.Y.), filed on June 28, 2016. In that case, the plaintiff brings a putative class action against the Company, our former Chief Executive Officer, our former Chief Financial Officer and other defendants, asserting claims for violations of the Securities Exchange Act, Sections 10(b) and 20(a). The plaintiff alleges that the defendants made misrepresentations and failed to disclose certain information about the safety and effectiveness of our MicroCool gowns and thereby artificially inflated the Company’s stock prices during the respective class periods. The alleged class period for purchasers of Kimberly-Clark securities who subsequently received Avanos securities is February 25, 2013 to October 21, 2014, and the alleged class period for purchasers of Avanos securities is October 21, 2014 to April 29, 2016. On February 16, 2017, we moved to dismiss the case. On March 30, 2018, the court granted our motion to dismiss and entered judgment in our favor. On April 27, 2018, the plaintiff filed a Motion for Relief from the Judgment and for Leave to Amend. On April 1, 2019, the court denied the plaintiff’s motion. On May 1, 2019, Jackson appealed the dismissal of the action to the 2nd Circuit Court of Appeals. We intend to continue our vigorous defense of this matter. Richardson, Chiu and Pick We were also served with a complaint in a matter styled Margaret C. Richardson Trustee of the Survivors Trust Dated 6/12/84 for the Benefit of the H&M Richardson Revocable Trust v. Robert E. Abernathy, Steven E. Voskuil, et al., No. 1:16-cv-06296 (S. D. N. Y.) ( “Richardson” ), filed on August 9, 2016. In that case, the plaintiff sues derivatively on behalf of Avanos Medical, Inc., and alleges that the defendants breached their fiduciary duty, were unjustly enriched, and violated Section 14(A) of the Securities and Exchange Act in connection with our marketing and sale of MicroCool gowns. We were also served with a complaint in a matter styled Kai Chiu v. Robert E. Abernathy, Steven E. Voskuil, et al , No. 2:16-cv-08768 (C.D. Cal.), filed on November 23, 2016. In that case, the plaintiff sues derivatively on behalf of Avanos Medical, Inc., and makes allegations and brings causes of action similar to those in Richardson , but the plaintiff also adds causes of action for abuse of control, gross mismanagement, and waste of corporate assets. We were also served with a complaint in a matter styled Lukas Pick v. Robert E. Abernathy, Steven E. Voskuil, et al. No. e:18-cv-00295 (D. Del.), filed on February 21, 2018. In that case, the plaintiff sues derivatively on behalf of Avanos Medical, Inc., and makes allegations and brings causes of action similar to those in Richardson and Chiu. We intend to continue our vigorous defense of this matter. 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. 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 December 31, 2019 , 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 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. |
Earnings Per Share ("EPS")
Earnings Per Share ("EPS") | 12 Months Ended |
Dec. 31, 2019 | |
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 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 EPS for each of the three years ended December 31, 2019 , 2018 and 2017 is set forth in the following table (in millions, except per share amounts): Year Ended December 31, 2019 2018 2017 Loss from continuing operations $ (45.9 ) $ (8.5 ) $ (32.1 ) Income from discontinued operations, net of tax — 66.0 111.4 Net (loss) income $ (45.9 ) $ 57.5 $ 79.3 Weighted Average Shares Outstanding: Basic weighted average shares outstanding 47.6 47.2 46.8 Dilutive effect of stock options and restricted share unit awards — — — Diluted weighted average shares outstanding 47.6 47.2 46.8 Earnings (Loss) Per Share: Basic: Continuing Operations $ (0.96 ) $ (0.18 ) $ (0.69 ) Discontinued Operations — 1.40 2.38 Basic (Loss) Earnings Per Share $ (0.96 ) $ 1.22 $ 1.69 Diluted: Continuing operations $ (0.96 ) $ (0.18 ) $ (0.69 ) Discontinued operations — 1.40 2.38 Diluted (Loss) Earnings Per Share $ (0.96 ) $ 1.22 $ 1.69 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 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 year ended December 31, 2019 , 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. |
Business and Products Informati
Business and Products Information | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [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 providers and patients in more than 90 countries with manufacturing facilities in the United States, Mexico, France, Germany and Tunisia. We provide a portfolio of innovative product offerings focused on pain management and respiratory and digestive health 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): Year Ended December 31, 2019 2018 2017 Chronic care $ 413.7 $ 386.0 $ 360.8 Pain management 283.9 266.3 250.8 Total Net Sales $ 697.6 $ 652.3 $ 611.6 Chronic care is focused on (i) digestive health products such as our Mic-Key enteral feeding tubes and Corpak patient feeding solutions and (ii) respiratory health products such as our Ballard closed airway suction systems and oral care kits. Pain management is focused on non-opioid 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 provides minimally invasive pain relieving therapies, such as our Coolief pain therapy. For the year ended December 31, 2019 , 2018 and 2017 , net sales to external customers in the United States were $481 million , $457 million and $467 million , respectively. Globally, no single customer accounted for 10% or more of our consolidated net sales in the year ended December 31, 2019 . Net sales to one customer accounted for approximately 10% of consolidated net sales in each of the years ended December 31, 2018 and 2017 , respectively. Due to the nature of our business, we receive purchase orders for products under supply agreements which are normally fulfilled within three to four weeks. Our performance obligations under purchase orders are satisfied and revenue is recognized at a point in time, which is upon shipment or upon delivery of our products, depending on shipping terms. Accordingly, we normally do not have transactions that give rise to material unfulfilled performance obligations. Property, plant and equipment held domestically and in foreign countries is as follows (in millions): As of December 31, 2019 2018 Domestic $ 123.1 $ 97.3 Foreign 61.4 56.8 Total Property, Plant and Equipment $ 184.5 $ 154.1 |
Supplemental Guarantor Financia
Supplemental Guarantor Financial Information | 12 Months Ended |
Dec. 31, 2019 | |
Condensed Financial Information Disclosure [Abstract] | |
Supplemental Guarantor Financial Information | Supplemental Guarantor Financial Information In October 2014 , Avanos Medical, Inc. (referred to below as “Parent”) issued the Notes (described in Note 9 , “Debt”). The Notes are guaranteed, jointly and severally by each of our domestic subsidiaries that guarantees the Senior Credit Facilities (each, a “Guarantor Subsidiary” and collectively, the “Guarantor Subsidiaries”). The guarantees are full and unconditional, subject to certain customary release provisions as defined in the Indenture dated October 17, 2014 . Each Guarantor Subsidiary is directly or indirectly 100% -owned by Avanos Medical, Inc. Each of the guarantees of the Notes is a general unsecured obligation of each Guarantor and ranks equally in right of payment with all existing and future indebtedness and all other obligations (except subordinated indebtedness) of each Guarantor. The following condensed consolidating balance sheets as of December 31, 2019 and 2018 and the condensed consolidating statements of income and cash flows for the years ended December 31, 2019 , 2018 and 2017 provide condensed consolidating financial information for Avanos Medical, Inc. (“Parent”), the Guarantor Subsidiaries on a combined basis, the Non-Guarantor Subsidiaries on a combined basis and the Parent and its subsidiaries on a consolidating basis. The Parent and the Guarantor Subsidiaries use the equity method of accounting to reflect ownership interests in subsidiaries which are eliminated upon consolidation. Eliminating entries in the following condensed consolidating financial information represent adjustments to (i) eliminate intercompany transactions between or among the Parent, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries and (ii) eliminate the investments in subsidiaries. AVANOS MEDICAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING INCOME AND COMPREHENSIVE INCOME STATEMENTS (in millions) Year Ended December 31, 2019 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Net Sales $ — $ 654.0 $ 132.0 $ (88.4 ) $ 697.6 Cost of products sold — 283.6 100.2 (88.4 ) 295.4 Gross Profit — 370.4 31.8 — 402.2 Research and development expenses — 37.7 — — 37.7 Selling and general expenses 32.3 326.4 40.4 — 399.1 Other expense (income), net 1.1 31.5 (11.5 ) — 21.1 Operating (Loss) Profit (33.4 ) (25.2 ) 2.9 — (55.7 ) Interest income 4.7 0.1 5.0 (3.1 ) 6.7 Interest expense (17.3 ) (0.5 ) (0.3 ) 3.1 (15.0 ) (Loss) Income Before Income Taxes (46.0 ) (25.6 ) 7.6 — (64.0 ) Income tax benefit (provision) 11.3 9.5 (2.7 ) — 18.1 Equity in earnings of consolidated subsidiaries (11.2 ) 2.9 — 8.3 — Net (Loss) Income (45.9 ) (13.2 ) 4.9 8.3 (45.9 ) Total other comprehensive income, net of tax 1.7 2.1 0.1 (2.2 ) 1.7 Comprehensive (Loss) Income $ (44.2 ) $ (11.1 ) $ 5.0 $ 6.1 $ (44.2 ) AVANOS MEDICAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING INCOME AND COMPREHENSIVE INCOME STATEMENTS (in millions) Year Ended December 31, 2018 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Net Sales $ — $ 646.8 $ 178.6 $ (173.1 ) $ 652.3 Cost of products sold — 290.0 144.5 (173.1 ) 261.4 Gross Profit — 356.8 34.1 — 390.9 Research and development expenses — 41.8 — — 41.8 Selling and general expenses 38.8 261.0 40.6 — 340.4 Other expense (income), net (1.5 ) 16.8 (8.7 ) 1.6 8.2 Operating (Loss) Profit (37.3 ) 37.2 2.2 (1.6 ) 0.5 Interest income 4.3 0.2 7.3 (4.0 ) 7.8 Interest expense (27.5 ) (2.7 ) (0.2 ) 4.0 (26.4 ) (Loss) Income Before Income Taxes (60.5 ) 34.7 9.3 (1.6 ) (18.1 ) Income tax benefit (provision) 6.8 11.1 (8.3 ) — 9.6 Equity in earnings of consolidated subsidiaries 117.7 139.5 — (257.2 ) — Income (Loss) from Continuing Operations 64.0 185.3 1.0 (258.8 ) (8.5 ) (Loss) Income from discontinued operations, net of tax (6.5 ) (49.4 ) 121.9 — 66.0 Net Income 57.5 135.9 122.9 (258.8 ) 57.5 Total other comprehensive (loss) income, net of tax (2.4 ) 3.4 (3.4 ) — (2.4 ) Comprehensive Income $ 55.1 $ 139.3 $ 119.5 $ (258.8 ) $ 55.1 AVANOS MEDICAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING INCOME AND COMPREHENSIVE INCOME STATEMENTS (in millions) Year Ended December 31, 2017 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Net Sales $ — $ 679.2 $ 306.9 $ (374.5 ) $ 611.6 Cost of products sold — 385.7 263.5 (374.5 ) 274.7 Gross Profit — 293.5 43.4 — 336.9 Research and development expenses — 38.2 — — 38.2 Selling and general expenses 29.9 249.7 42.1 — 321.7 Other (income) expense, net 0.7 34.5 (15.1 ) — 20.1 Operating (Loss) Income (30.6 ) (28.9 ) 16.4 — (43.1 ) Interest income 0.9 0.1 4.5 (3.0 ) 2.5 Interest expense (32.3 ) (2.2 ) (0.1 ) 3.0 (31.6 ) (Loss) Income Before Income Taxes (62.0 ) (31.0 ) 20.8 — (72.2 ) Income tax benefit (provision) 20.0 23.2 (3.1 ) — 40.1 Equity in earnings of consolidated subsidiaries 125.1 32.6 — (157.7 ) — Income (Loss) from Continuing Operations 83.1 24.8 17.7 (157.7 ) (32.1 ) (Loss) Income from discontinued operations, net of tax (3.8 ) 86.0 29.2 — 111.4 Net Income 79.3 110.8 46.9 (157.7 ) 79.3 Total other comprehensive income, net of tax 18.8 13.1 18.3 (31.4 ) 18.8 Comprehensive Income $ 98.1 $ 123.9 $ 65.2 $ (189.1 ) $ 98.1 AVANOS MEDICAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING BALANCE SHEETS (in millions) As of December 31, 2019 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated ASSETS Current Assets Cash and cash equivalents $ 118.9 $ 31.0 $ 55.4 $ — $ 205.3 Accounts receivable, net 15.7 1,139.0 202.9 (1,193.8 ) 163.8 Inventories — 132.4 13.5 — 145.9 Prepaid and other current assets 5.9 14.8 2.8 — 23.5 Total Current Assets 140.5 1,317.2 274.6 (1,193.8 ) 538.5 Property, Plant and Equipment, Net — 157.9 26.6 — 184.5 Operating Lease Right of Use Assets — 53.5 10.5 — 64.0 Investment in Consolidated Subsidiaries 2,436.6 328.2 — (2,764.8 ) — Goodwill 4.9 780.6 15.4 — 800.9 Other Intangible Assets, net — 176.6 7.7 — 184.3 Other Assets 22.6 3.1 1.7 — 27.4 TOTAL ASSETS $ 2,604.6 $ 2,817.1 $ 336.5 $ (3,958.6 ) $ 1,799.6 LIABILITIES AND EQUITY Current Liabilities Current portion of operating lease liabilities $ — $ 12.1 $ 2.6 $ — $ 14.7 Trade accounts payable $ 1,021.6 $ 237.8 $ 17.4 $ (1,193.8 ) $ 83.0 Accrued expenses 64.1 36.5 14.2 — 114.8 Total Current Liabilities 1,085.7 286.4 34.2 (1,193.8 ) 212.5 Long-Term Debt 248.1 — — — 248.1 Operating Lease Obligation — 54.2 8.4 — 62.6 Other Long-Term Liabilities 5.6 1.8 3.8 — 11.2 Total Liabilities 1,339.4 342.4 46.4 (1,193.8 ) 534.4 Total Equity 1,265.2 2,474.7 290.1 (2,764.8 ) 1,265.2 TOTAL LIABILITIES AND EQUITY $ 2,604.6 $ 2,817.1 $ 336.5 $ (3,958.6 ) $ 1,799.6 AVANOS MEDICAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING BALANCE SHEETS (in millions) As of December 31, 2018 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated ASSETS Current Assets Cash and cash equivalents $ 303.9 $ 29.3 $ 51.3 $ — $ 384.5 Accounts receivable, net 4.5 1,257.3 212.1 (1,323.4 ) 150.5 Inventories — 106.2 15.2 — 121.4 Prepaid and other current assets 1.1 23.8 34.2 (1.9 ) 57.2 Total Current Assets 309.5 1,416.6 312.8 (1,325.3 ) 713.6 Property, Plant and Equipment, Net — 132.6 21.5 — 154.1 Investment in Consolidated Subsidiaries 2,404.2 234.7 — (2,638.9 ) — Goodwill — 758.7 24.9 — 783.6 Other Intangible Assets, net — 159.8 8.4 — 168.2 Other Assets 1.6 10.8 1.5 — 13.9 TOTAL ASSETS $ 2,715.3 $ 2,713.2 $ 369.1 $ (3,964.2 ) $ 1,833.4 LIABILITIES AND EQUITY Current Liabilities Trade accounts payable $ 1,160.7 $ 268.2 $ 52.4 $ (1,311.4 ) $ 169.9 Accrued expenses 8.2 77.3 22.8 (13.9 ) 94.4 Total Current Liabilities 1,168.9 345.5 75.2 (1,325.3 ) 264.3 Long-Term Debt 247.7 — — — 247.7 Other Long-Term Liabilities 1.5 20.0 2.7 — 24.2 Total Liabilities 1,418.1 365.5 77.9 (1,325.3 ) 536.2 Total Equity 1,297.2 2,347.7 291.2 (2,638.9 ) 1,297.2 TOTAL LIABILITIES AND EQUITY $ 2,715.3 $ 2,713.2 $ 369.1 $ (3,964.2 ) $ 1,833.4 AVANOS MEDICAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in millions) Year Ended December 31, 2019 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Operating Activities Cash Provided by (Used in) Operating Activities $ 29.3 $ (114.9 ) $ 11.1 $ — $ (74.5 ) Investing Activities Capital expenditures — (44.4 ) (6.2 ) — (50.6 ) Acquisition of business, net of cash acquired (57.5 ) — — — (57.5 ) Intercompany contributions — 160.6 0.2 (160.8 ) — Cash (Used in) Provided by Investing Activities (57.5 ) 116.2 (6.0 ) (160.8 ) (108.1 ) Financing Activities Intercompany contributions (158.3 ) — (2.5 ) 160.8 — Debt repayments (0.2 ) — — — (0.2 ) Purchase of treasury stock (3.6 ) — — — (3.6 ) Proceeds and excess tax benefits from the exercise of stock options 5.3 — — — 5.3 Cash (Used in) Provided by Financing Activities (156.8 ) — (2.5 ) 160.8 1.5 Effect of Exchange Rate on Cash and Cash Equivalents — 0.4 1.5 — 1.9 (Decrease) Increase in Cash and Cash Equivalents (185.0 ) 1.7 4.1 — (179.2 ) Cash and Cash Equivalents, Beginning of Period 303.9 29.3 51.3 — 384.5 Cash and Cash Equivalents, End of Period $ 118.9 $ 31.0 $ 55.4 $ — $ 205.3 AVANOS MEDICAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in millions) Year Ended December 31, 2018 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Operating Activities Cash (Used in) Provided by Operating Activities $ (75.1 ) $ (73.9 ) $ 3.4 $ — $ (145.6 ) Investing Activities Capital expenditures — (40.5 ) (8.6 ) — (49.1 ) Acquisition of business, net of cash acquired (65.7 ) — — — (65.7 ) Proceeds from the Divestiture 540.0 9.1 205.2 — 754.3 Dividend received from subsidiaries — 233.5 — (233.5 ) — Intercompany contributions — (115.2 ) 0.6 114.6 — Cash Provided by Investing Activities 474.3 86.9 197.2 (118.9 ) 639.5 Financing Activities Intercompany contributions 114.6 — — (114.6 ) — Debt repayments (339.0 ) — — — (339.0 ) Debt issuance costs (1.6 ) — — — (1.6 ) Purchase of treasury stock (0.9 ) — — — (0.9 ) Proceeds and excess tax benefits from the exercise of stock options 17.1 — — — 17.1 Cash dividends paid to Guarantor — — (233.5 ) 233.5 — Cash Used in Financing Activities (209.8 ) — (233.5 ) 118.9 (324.4 ) Effect of Exchange Rate on Cash and Cash Equivalents — 0.3 (5.0 ) — (4.7 ) Increase in Cash and Cash Equivalents 189.4 13.3 (37.9 ) — 164.8 Cash and Cash Equivalents, Beginning of Period 114.5 16.0 89.2 — 219.7 Cash and Cash Equivalents, End of Period $ 303.9 $ 29.3 $ 51.3 $ — $ 384.5 AVANOS MEDICAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in millions) Year Ended December 31, 2017 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Operating Activities Cash (Used in) Provided by Operating Activities $ (43.3 ) $ 137.2 $ 50.3 $ — $ 144.2 Investing Activities Capital expenditures — (32.4 ) (10.8 ) — (43.2 ) Proceeds from property dispositions — 0.1 — — 0.1 Intercompany contributions — (98.8 ) — 98.8 — Cash Used in Investing Activities — (131.1 ) (10.8 ) 98.8 (43.1 ) Financing Activities Intercompany contributions 101.4 — (2.6 ) (98.8 ) — Purchase of treasury stock (2.5 ) — — — (2.5 ) Proceeds and excess tax benefits from the exercise of stock options 4.7 — — — 4.7 Cash Provided by (Used in) Financing Activities 103.6 — (2.6 ) (98.8 ) 2.2 Effect of Exchange Rate on Cash and Cash Equivalents — 0.4 2.3 — 2.7 Increase in Cash and Cash Equivalents 60.3 6.5 39.2 — 106.0 Cash and Cash Equivalents, Beginning of Period 54.2 9.5 50.0 — 113.7 Cash and Cash Equivalents, End of Period $ 114.5 $ 16.0 $ 89.2 $ — $ 219.7 |
Accounting Policies (Policies)
Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
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 in more than 90 countries. References to “Avanos,” “Company,” “we,” “our” and “us” refer to Avanos Medical, Inc. and its consolidated subsidiaries. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include our net assets, results of our operations and cash flows. All intercompany transactions and accounts within our consolidated businesses have been eliminated. The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). |
Use of Estimates | Use of Estimates Preparation of 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. Actual results could differ from these estimates, and the effect of the change could be material to our financial statements. Changes in these estimates are recorded when known. |
Cash Equivalents | Cash Equivalents Cash equivalents are short-term investments with an original maturity date of three months or less. We maintain cash balances and short-term investments in excess of insurable limits in a diversified group of major banks that are selected and monitored based on ratings by the major rating agencies in accordance with our treasury policy. |
Inventories and Distribution Costs | Inventories and Distribution Costs Most U.S. inventories are valued at the lower of cost, using the Last-In, First-Out (“LIFO”) method, or market. The balance of the U.S. and non-U.S. inventories are valued at the lower of cost (determined on the First-In, First-Out (“FIFO”) or weighted-average cost methods) or market. Distribution costs are classified as cost of products sold. |
Property, Plant and Equipment and Depreciation | Property, Plant and Equipment and Depreciation Property, plant and equipment are stated at cost and depreciated on the straight-line method. Buildings are depreciated over their estimated useful lives, primarily 40 years . Machinery and equipment are depreciated over their estimated useful lives, primarily ranging from 16 to 20 years . Leasehold improvements are depreciated over the assets’ estimated useful lives, or the remaining lease term, whichever is shorter. Purchases of computer software, including external costs and certain internal costs (including payroll and payroll-related costs of employees) directly associated with developing significant computer software applications for internal use, are capitalized. Computer software costs are amortized on the straight-line method over the estimated useful life of the software, which is generally three to nine years . Depreciation expense is recorded in cost of products sold, research and development and selling and general expenses. Estimated useful lives are periodically reviewed, and when warranted, changes are made to them. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. An impairment loss would be indicated when estimated undiscounted future cash flows from the use and eventual disposition of an asset group, which are identifiable and largely independent of the cash flows of other asset groups, are less than the carrying amount of the asset group. Measurement of an impairment loss would be based on the excess of the carrying amount of the asset group over its fair value. Fair value is measured using discounted cash flows or independent appraisals, as appropriate. When property is sold or retired, the cost of the property and the related accumulated depreciation are removed from the consolidated balance sheet and any gain or loss on the transaction is included in income. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill is tested for impairment annually and whenever events and circumstances indicate that impairment may have occurred. The evaluation of goodwill involves comparing the current fair value of a reporting unit to its carrying value, including goodwill. We operate as a single operating segment with one reporting unit, and accordingly, our annual goodwill impairment test was based on an evaluation of the fair value of our Company as a whole, using a combination of income and market capitalization approaches. We completed the required annual goodwill impairment test as of July 1, 2019 , and the fair value was substantially in excess of net asset carrying value. Intangible assets with finite lives are amortized over their estimated useful lives and reviewed for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Estimated useful lives range from 7 to 30 years for trademarks, 7 to 17 years for patents and acquired technologies, and 2 to 16 years for other intangible assets. An impairment loss would be indicated when estimated undiscounted future cash flows from the use of the asset are less than its carrying amount. An impairment loss would be measured as the difference between the fair value (based on discounted future cash flows) and the carrying amount of the asset. |
Revenue Recognition and Accounts Receivable | Revenue Recognition and Accounts Receivable Sales revenue is recognized at the time of product shipment or delivery of our products to unaffiliated customers, depending on shipping terms. Accordingly, control of the products transfers to the customer in accordance with the transaction’s shipping terms. Sales revenue is recognized for the amount of consideration that we expect to be entitled to receive in exchange for our products. Sales are reported net of returns, rebates, incentives, each as described below, and freight allowed. Taxes imposed by governmental authorities on our revenue-producing activities with customers, such as sales taxes and value-added taxes, are excluded from net sales. We provide medical products to distributors or end-user customers under supply agreements under which customers may place purchase orders for a variety of our products at specified pricing over a specified term, usually three years . While our sales and marketing efforts are directed to hospitals or other healthcare providers, our products are generally sold through third-party distribution channels. Under our contracts with customers, our performance obligations are normally limited to shipment or delivery of products to a customer upon receipt of a purchase order. We bill our customers, depending on shipping terms, upon shipment or delivery of the products to the customer. Amounts billed are typically due within 30 days , with a 1% discount allowed for distributors if payments are made within 15 days . We estimate cash discounts based on historical experience and record the cash discounts as an allowance to trade receivables. The differences between estimated and actual cash discounts are normally not material. We allow for returns with a specified period of time following customers’ receipt of the goods and estimate an allowance to trade receivables for returns based on historical experience. The differences between estimated and actual returns are normally not material. Our contracts provide for forms of variable consideration including rebates, incentives and pricing tiers, each of which are described below: Rebates - We provide for rebates on gross sales to distributors for estimated historical differences between list prices and average end-user customer prices. We maintain a liability for the estimated rebates. Incentives - Incentives include fees paid to group purchasing organizations (“GPOs”) or distributors in conjunction with the sales of our products to end-user customers. We estimate our incentive liability based on historical experience. Differences between estimated and actual incentives are normally not material. Pricing tiers - In certain of our contracts, pricing is dependent on volumes purchased. Pricing is lower for customers who purchase higher volumes. Customers are placed in a pricing tier based on expected purchase volume, which is developed primarily using the customer’s purchase history. Depending on the customer’s purchases, we may move the customer up or down a tier. Pricing in the new pricing tier is applied to purchase orders prospectively. There are no retrospective adjustments based on movements between pricing tiers. |
Foreign Currency Translation | Foreign Currency Translation The income statements of foreign operations are translated into U.S. dollars at rates of exchange in effect each month. The balance sheets of these operations are translated at period-end exchange rates, and the differences from historical exchange rates are reflected as unrealized translation adjustments in other comprehensive income. |
Research and Development | Research and Development Research and development expenses are expensed as incurred. Research and development expenses consist primarily of salaries and related expenses for personnel, product trial costs, outside laboratory and license fees, the costs of laboratory equipment and facilities and asset write-offs for equipment that does not reach success in product manufacturing certifications. |
Stock-Based Compensation | Stock-Based Compensation |
Income Taxes | Income Taxes We account for income taxes under the asset and liability method of accounting, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Under this method, changes in tax rates and laws are recognized in income in the period such changes are enacted. The provision for federal, state, and foreign income taxes is calculated on income before income taxes based on current tax law and includes the cumulative effect of any changes in tax rates from those used previously in determining deferred tax assets and liabilities. Such provision differs from the amounts currently payable because certain items of income and expense are recognized in different reporting periods for financial reporting purposes than for income tax purposes. Recording the provision for income taxes requires management to make significant judgments and estimates for matters whose ultimate resolution may not become known until the final resolution of an examination by the Internal Revenue Service (IRS) or state and foreign agencies. If it is more likely than not that some portion, or all, of a deferred tax asset will not be realized, a valuation allowance is recognized. Recording liabilities for uncertain tax positions involves judgment in evaluating our tax positions and developing the best estimate of the taxes ultimately expected to be paid. We include any related tax penalties and interest in income tax expense. As of December 31, 2019 , we have accumulated undistributed earnings generated by our foreign subsidiaries of approximately $41.0 million . Certain earnings were previously subject to tax due to the one-time transition tax of the Act. Any additional impacts due with respect to the previously-taxed earnings, if repatriated, would generally be limited to foreign withholding tax, U.S. state income tax and the tax effect of certain foreign exchange adjustments. We intend, however, to indefinitely reinvest these earnings and expect future U.S. cash generation to be sufficient to meet U.S. cash needs. At this time, the determination of deferred tax liabilities on the amount of financial reporting over tax basis is not practicable. |
Employee Defined Benefit Plans | Employee Defined Benefit Plans We recognize the funded status of our defined benefit as an asset or a liability on our balance sheet. Actuarial gains or losses are a component of our other comprehensive income, which is then included in our accumulated other comprehensive income. Pension expenses are recognized over the period in which the employee renders service and becomes eligible to receive benefits. We make assumptions (including the discount rate and expected rate of return on plan assets) in computing the pension expense and obligations. |
Recently Adopted Pronouncements and Recently Issued Pronouncements | Recently Adopted Pronouncements Effective January 1, 2019, we adopted Accounting Standards Update (“ASU”) No. 2016-02, Leases (“Topic 842”), using the transition method provided in ASU No. 2018-11, Leases (Topic 842) - Targeted Improvements, which allows for initial application on the date of adoption with recognition of a cumulative-effect adjustment, if applicable, to the opening balance of retained earnings. As of December 31, 2018, all our existing leases were operating leases, and accordingly, no adjustment to beginning retained earnings was required. In addition, we elected to use all available expedients allowed under ASU 2018-11. Other prior period amounts are not adjusted and continue to be reported under Topic 840, the previous lease guidance. Topic 842 replaces the former guidance in Topic 840 and requires the recognition of right-of-use (“ROU”) assets and liabilities for leases with terms of more than twelve months. The recognition, measurement and presentation of expenses and cash flows arising from leases depend primarily on its classification as a finance or an operating lease, with the classification criteria for distinguishing between the two types being similar to the classification for distinguishing between capital and operating leases under Topic 840. In addition to recognition of ROU assets and liabilities, disclosures regarding lease obligations are required to help financial statement users better understand the amount, timing and uncertainty of cash flows arising from leases. As a result of Topic 842 adoption, we have operating lease liabilities of $77.3 million and corresponding ROU assets of $64.0 million as of December 31, 2019 . For other disclosures regarding our lease obligations, see “Leases” in Note 6 herein. Effective January 1, 2019, we adopted ASU No. 2018-02, Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This ASU is intended to help companies reclassify certain stranded income tax effects in accumulated other comprehensive income (“AOCI”) resulting from the Tax Cuts and Jobs Act of 2017 (the “Act”), which was enacted in December 2017. ASU 2018-02 provides for the elimination of stranded tax effects of the Act by allowing reclassification of stranded tax effects from AOCI to retained earnings. We elected not to reclassify stranded tax effects from AOCI to retained earnings, and accordingly, adoption of this ASU did not have a material effect on our financial position, results of operations and cash flows. Recently Issued Pronouncements In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes . This ASU removes 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. This ASU is effective for annual periods and interim periods within those annual periods beginning after December 15, 2020, with early adoption permitted. We do not expect adoption of this ASU to have a material effect on our financial position, results of operations or cash flows. In May 2019, the FASB issued ASU No. 2019-05, Financial Instruments – Credit Losses (Topic 326): Target Transition Relief . This ASU provides transition relief for entities adopting the new credit losses standard ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326). Upon adoption of ASU No. 2016-13, an entity is allowed to irrevocably elect the fair value option on certain financial assets that were previously measured at amortized cost basis. ASU No. 2019-05 is effective concurrent with the adoption of ASU No. 2016-13. For entities that have adopted ASU No. 2016-13, the amendment in ASU No. 2019-05 are effective for annual periods and interim periods within those annual periods beginning after December 15, 2019, with early adoption permitted. For entities that elect the fair value option, the difference between the carrying amount and the fair value of the financial asset would be recognized through a cumulative-effect adjustment to opening retained earnings as of the date an entity adopted ASU No. 2016-13. Changes in fair value of that financial asset would subsequently be reported in current earnings. Certain disclosures are required. We do not expect adoption of this ASU to have a material effect on our financial position, results of operations or cash flows. In August 2018, the FASB issued ASU No. 2018-15, Intangibles – Goodwill and Other – Internal Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract. This ASU is intended to reduce complexity by aligning the requirements for capitalizing implementation costs incurred in cloud-based arrangements with the requirements for capitalization of costs incurred to develop internal-use software. Any implementation costs in cloud-based arrangements would then be amortized over the term of the service contract. This ASU is effective for annual periods, and interim periods within those annual periods beginning after December 15, 2019, with early adoption permitted. We do not expect adoption of this ASU to have a material effect on our financial position, results of operations or cash flows. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement. This ASU removes certain disclosure requirements regarding the amounts and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy and the policy for timing of transfers between the levels. The ASU also adds disclosure requirements regarding unrealized gains and losses included in Other Comprehensive Income for recurring Level 3 fair value measurements and regarding the range and weighted average of unobservable inputs used in Level 3 fair value measurements. This ASU is effective for annual periods and interim periods within those annual periods beginning after December 15, 2019. The removal of certain disclosures is to be applied retrospectively for all periods presented, but the additional required disclosures are to be prospectively applied, and early application is permitted. We do not expect any transfers between Level 1 and Level 2 of the fair value hierarchy, and as of December 31, 2019 , we have no assets or liabilities with fair value measurements in Level 3 of the fair value hierarchy. Accordingly, we do not expect adoption of this ASU to have a material effect on our financial position, results of operations or cash flows. |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Schedule of purchase price allocation | The allocation of the purchase price for each of the acquisitions described above is as follows (in millions): EndoClear (a) Summit (a) NeoMed (a)(b) Game Ready (c) Current assets acquired net of liabilities assumed $ 0.5 $ 0.5 $ 11.2 $ 8.8 Property, plant and equipment — 0.1 2.0 1.0 Identifiable intangible assets 4.0 16.3 16.1 40.0 Other noncurrent assets (liabilities), net — — 0.3 (0.3 ) Deferred tax liabilities — — (3.0 ) (0.2 ) Goodwill 4.5 0.4 13.9 18.7 Total $ 9.0 $ 17.3 $ 40.5 $ 68.0 _______________________________________________ (a) The EndoClear, Summit and NeoMed transactions closed during the third quarter of 2019. Accordingly, the purchase price allocations in the table above are preliminary. (b) The current assets acquired net of liabilities assumed in the NeoMed acquisition included $8.1 million of accounts receivable. (c) Game Ready was acquired on July 1, 2018 and the purchase price allocation was finalized on June 30, 2019. |
Schedule of identifiable intangible assets | The identifiable intangible assets include the following (in millions): EndoClear Summit NeoMed Game Ready Weighted Average Useful Lives (Yrs) Trademarks $ 1.7 $ — $ 7.4 $ 6.7 16 Patents and acquired technologies 1.8 16.3 3.7 16.9 13 Other 0.5 — 5.0 16.4 12 Total $ 4.0 $ 16.3 $ 16.1 $ 40.0 |
Schedule of pro forma information | The following unaudited pro forma financial information is presented in the table below for the years ended December 31, 2019 and 2018 as if the acquisitions had occurred on January 1 in the year preceding the respective acquisitions (in millions, except per share amounts): Year Ended December 31, 2019 2018 2017 Net sales $ 734.1 $ 716.4 $ 646.9 Net (loss) income (47.2 ) 54.7 75.9 Earnings per share: Basic $ (0.99 ) $ 1.16 $ 1.62 Diluted (0.99 ) 1.16 1.62 |
Restructuring (Tables)
Restructuring (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Restructuring and Related Activities [Abstract] | |
Summary of accrual and payment activity | We have a liability for employee retention, severance and benefits associated with our restructuring activities, which is summarized below (in millions): As of December 31, 2019 2018 Balance, beginning of year 5.7 5.4 Charges and adjustments, net 9.8 2.9 Payments (7.0 ) (2.6 ) Balance, end of year $ 8.5 $ 5.7 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of changes in carrying amount of goodwill by business segment | The changes in the carrying amount of goodwill are as follows (in millions): Balance at December 31, 2017 $ 764.7 Goodwill acquired (a) 20.6 Currency translation adjustment (1.7 ) Balance at December 31, 2018 783.6 Goodwill acquired (b) 18.8 Purchase accounting adjustment (a) (1.9 ) Currency translation adjustment 0.4 Balance at December 31, 2019 $ 800.9 _____________________________________________ (a) We acquired $20.6 million of goodwill in conjunction with the acquisition of Game Ready as described in Note 2 , “Business Acquisitions.” This goodwill was subsequently reduced by $1.9 million after the purchase price allocation was finalized in the year ended December 31, 2019 . (b) We acquired $18.8 million of goodwill in conjunction with the acquisitions described in Note 2 |
Supplemental Balance Sheet In_2
Supplemental Balance Sheet Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of accounts receivable | Accounts receivable consist of the following (in millions): As of December 31, 2019 2018 Accounts Receivable $ 166.8 $ 152.2 Allowances and doubtful accounts Doubtful accounts (2.7 ) (1.4 ) Sales discounts (0.3 ) (0.2 ) Sales returns — (0.1 ) Accounts receivable, net $ 163.8 $ 150.5 |
Schedule of inventories | Inventories at the lower of cost (determined on the LIFO/FIFO or weighted-average cost methods) or market consists of the following (in millions): As of December 31, 2019 2018 LIFO Non- LIFO Total LIFO Non- LIFO Total Raw Materials $ 46.3 $ 2.9 $ 49.2 $ 39.6 $ 1.5 $ 41.1 Work in process 30.4 0.5 30.9 22.1 0.4 22.5 Finished goods 49.5 21.7 71.2 50.1 13.7 63.8 Supplies and other — 4.5 4.5 — 5.8 5.8 126.2 29.6 155.8 111.8 21.4 133.2 Excess of FIFO or weighted-average cost over LIFO cost (9.9 ) — (9.9 ) (11.8 ) — (11.8 ) Total $ 116.3 $ 29.6 $ 145.9 $ 100.0 $ 21.4 $ 121.4 |
Schedule of property, plant and equipment | Property, plant and equipment consists of the following (in millions): As of December 31, 2019 2018 Land $ 1.0 $ 0.9 Buildings and leasehold improvements 48.3 43.5 Machinery and equipment 215.0 141.2 Construction in progress 18.9 52.7 283.2 238.3 Less accumulated depreciation (98.7 ) (84.2 ) Total $ 184.5 $ 154.1 Property, plant and equipment held domestically and in foreign countries is as follows (in millions): As of December 31, 2019 2018 Domestic $ 123.1 $ 97.3 Foreign 61.4 56.8 Total Property, Plant and Equipment $ 184.5 $ 154.1 |
Schedule of intangible assets subject to amortization | Intangible assets subject to amortization consist of the following (in millions): As of December 31, 2019 2018 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trademarks $ 90.9 $ (56.7 ) $ 34.2 $ 83.1 $ (52.2 ) $ 30.9 Patents and acquired technologies 281.1 (157.2 ) 123.9 259.5 (144.4 ) 115.1 Other 61.3 (35.1 ) 26.2 54.4 (32.2 ) 22.2 Total $ 433.3 $ (249.0 ) $ 184.3 $ 397.0 $ (228.8 ) $ 168.2 |
Schedule of estimated amortization expense for the next five years and beyond | We estimate amortization expense for the next five years and beyond will be as follows (in millions): For the years ending December 31, 2020 $ 18.5 2021 17.0 2022 15.9 2023 15.3 2024 15.1 Thereafter 102.5 Total $ 184.3 |
Schedule of accrued expenses | Accrued expenses consist of the following (in millions): As of December 31, 2019 2018 Accrued rebates $ 51.1 $ 26.1 Accrued salaries and wages 23.6 27.0 Accrued taxes and other 3.2 6.5 Other 36.9 34.8 Total $ 114.8 $ 94.4 |
Schedule of other long-term liabilities | Other long-term liabilities consist of the following (in millions): As of December 31, 2019 2018 Taxes payable $ 0.4 $ 0.4 Accrued compensation benefits 5.4 4.3 Other 5.4 15.1 Total $ 11.2 $ 19.8 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
ROU assets and lease liabilities presented on the balance sheet | The table below summarizes information related to ROU assets and lease liabilities that are included in the accompanying consolidated balance sheet (dollars in millions): As of Assets Operating lease right-of-use assets $ 64.0 Liabilities Current portion of operating lease liabilities 14.7 Operating lease liabilities 62.6 Total Operating Lease Liabilities $ 77.3 Weighted average remaining lease term 7.3 years Weighted average discount rate 4.5 % |
Cost and cash flows arising form lease arrangements | The table below summarizes costs and cash flows arising from our lease arrangements for the year ended December 31, 2019 (in millions): Year Ended Operating lease cost $ 12.8 Short-term lease cost 2.7 Variable lease cost 2.0 Total lease cost $ 17.5 Cash paid for amounts included in the measurement of lease liabilities $ 16.9 Right-of-use assets obtained in exchange for new operating lease liabilities $ 19.7 |
Future minimum obligations under operating leases | The future minimum obligations under operating leases having non-cancelable terms in excess of one year for the next five years and beyond will be (in millions): For the years ending December 31, Amount 2020 $ 15.0 2021 14.4 2022 13.9 2023 11.8 2024 8.3 Thereafter 27.8 Future minimum obligations $ 91.2 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Financial results of discontinued operations | The following table provides operating and investing cash flow information for our discontinued operations (in millions): Year Ended December 31, 2018 2017 Operating Activities: Depreciation and amortization $ — 20.0 Stock-based compensation expense (1.5 ) 1.5 Investing Activities: Capital expenditures 2.9 19.9 The following table summarizes the financial results of our discontinued operations for the years ended December 31, 2018 and 2017 (in millions): Year Ended December 31, 2018 2017 Net Sales $ 351.1 $ 1,012.7 Cost of products sold 260.3 762.5 Research and development 1.1 2.9 Selling, general and other expenses 38.1 82.8 Gain on Divestiture (89.9 ) — Other expense (income), net 0.4 (1.6 ) Income from discontinued operations before income taxes 141.1 166.1 Tax provision from discontinued operations (75.1 ) (54.7 ) Income from discontinued operations, net of tax $ 66.0 $ 111.4 |
Fair Value Information (Tables)
Fair Value Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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): Fair Value Hierarchy Level December 31, 2019 December 31, 2018 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Assets Cash and cash equivalents 1 $ 205.3 $ 205.3 $ 384.5 $ 384.5 Liabilities Senior unsecured notes 1 248.1 254.5 247.7 250.9 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of debt balances | As of December 31, 2019 and 2018 , our debt balances were as follows (in millions): Weighted- Average Interest Rate Maturities As of December 31, 2019 2018 Senior Unsecured Notes 6.25% 2022 249.8 250.0 Unamortized Debt Discounts and Issuance Costs (1.7 ) (2.3 ) Total Debt, net $ 248.1 $ 247.7 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Components of income (loss) before income taxes, and provision (benefit) for income taxes | The components of (loss) income before income taxes, and the provision (benefit) for income taxes are as follows (in millions): Year Ended December 31, 2019 2018 2017 Loss before income taxes United States $ (61.8 ) $ (20.7 ) $ (76.2 ) Foreign (2.2 ) 2.6 4.0 Total (64.0 ) (18.1 ) (72.2 ) Income tax provision (benefit): Current: United States (3.6 ) (13.6 ) (27.4 ) State (0.3 ) (0.5 ) (4.6 ) Foreign 0.8 0.8 1.4 Total (3.1 ) (13.3 ) (30.6 ) Deferred: United States (11.6 ) 0.7 (9.0 ) State (3.2 ) 3.5 (0.4 ) Foreign (0.2 ) (0.5 ) (0.1 ) Total (15.0 ) 3.7 (9.5 ) Total income tax benefit $ (18.1 ) $ (9.6 ) $ (40.1 ) |
Major differences between federal statutory rate and effective tax rate | Major differences between the federal statutory rate and the effective tax rate are as follows: Year Ended December 31, 2019 2018 2017 Federal statutory rate 21.0 % 21.0 % 35.0 % Rate of state income taxes, net of federal tax benefit 4.5 (2.4 ) 4.5 Statutory rate other than U.S. statutory rate (2.0 ) (1.4 ) 0.1 Foreign derived intangible income 5.5 — — Foreign tax credit carryback 1.9 — — Valuation allowance (1.8 ) (10.6 ) (1.1 ) Uncertain tax positions — 13.8 — Transaction related expenses — (3.9 ) — GILTI inclusion — (1.6 ) — Nondeductible officer’s compensation (1.0 ) (2.7 ) 0.1 U.S. federal research and development credit 3.1 11.4 3.0 Share based compensation windfall tax deduction (0.2 ) 8.5 — Impacts of U.S. federal tax reform — 21.7 14.2 Other, net (2.7 ) (0.8 ) (0.2 ) Effective tax rate 28.3 % 53.0 % 55.6 % |
Summary of significant components of deferred tax assets and liabilities | The following is a summary of the significant components of the Company’s deferred tax assets and liabilities (in millions): As of December 31, 2019 2018 Deferred tax assets Accrued liabilities $ 12.9 $ 15.5 Interest limitation 2.9 — Stock-based compensation 6.9 7.8 Net Operating Losses 27.5 9.2 Operating Lease Right of Use Asset 12.8 — Other 4.9 5.3 67.9 37.8 Valuation allowance (3.4 ) (3.3 ) Total deferred tax assets 64.5 34.5 Deferred tax liabilities Intangibles, net 22.6 18.7 Operating Lease Obligations 9.4 — Inventories 4.8 1.8 Property, plant and equipment, net 10.9 11.4 Other 0.7 0.7 Total deferred tax liabilities 48.4 32.6 Net deferred tax assets (liabilities) $ 16.1 $ 1.9 |
Reconciliation of beginning and ending amount of unrecognized tax benefit | A reconciliation of the beginning and ending amount of unrecognized tax benefit is as follows (in millions): As of December 31, 2019 2018 Beginning of year $ 0.5 $ 2.7 Gross increases for tax positions of prior years — — Gross decreases for tax positions of prior years — — Decreases for settlements with taxing authorities — (0.5 ) Decreases for lapse of the applicable statute of limitations — (1.7 ) End of year $ 0.5 $ 0.5 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Schedule of changes in the components of accumulated other comprehensive income | The changes in the components of Accumulated Other Comprehensive Income (“AOCI”), net of tax, are as follows (in millions): Unrealized Translation Cash Flow Hedges Defined Benefit Pension Plans Accumulated Other Comprehensive Income Balance, December 31, 2016 $ (48.7 ) $ (0.4 ) $ (1.0 ) $ (50.1 ) Other comprehensive income 17.1 1.2 0.5 18.8 Balance, December 31, 2017 (31.6 ) 0.8 (0.5 ) (31.3 ) Other comprehensive (loss) income (2.7 ) (0.7 ) 1.0 (2.4 ) Balance, December 31, 2018 (34.3 ) 0.1 0.5 (33.7 ) Other comprehensive income (loss) 2.8 — (1.1 ) 1.7 Balance, December 31, 2019 $ (31.5 ) $ 0.1 $ (0.6 ) $ (32.0 ) The net changes in the components of AOCI, including the tax effect, are as follows (in millions): Year Ended December 31, 2019 2018 2017 Unrealized translation $ 2.8 $ (2.7 ) $ 17.1 Defined benefit pension plans (1.4 ) 1.2 0.6 Tax effect 0.3 (0.2 ) (0.1 ) Defined benefit pension plans, net of tax (1.1 ) 1.0 0.5 Cash flow hedges — (1.0 ) 1.5 Tax effect — 0.3 (0.3 ) Cash flow hedges, net of tax — (0.7 ) 1.2 Change in AOCI $ 1.7 $ (2.4 ) $ 18.8 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of assumptions used in weighted-average fair value of options granted | The weighted-average fair value of options granted in the years ended December 31, 2019 , 2018 and 2017 was $11.60 , $13.69 , and $9.07 , respectively, based on the following assumptions: Year Ended December 31, 2019 2018 2017 Volatility 30% 26% 24% to 25% Risk-free rate 2.3% 2.7% 1.7% to 1.8% Expected term (Years) 4 4 5 Dividend Yield 0% 0% 0% |
Summary of stock option activity | A summary of stock option activity is presented below: Shares (in thousands) Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (Years) Aggregate Intrinsic Value (in millions) Outstanding at December 31, 2018 1,328 $ 40.75 Granted 272 43.59 Exercises (156 ) 33.35 Forfeitures (151 ) 45.37 Outstanding at December 31, 2019 1,293 $ 41.70 6.4 $ 0.5 Vested and exercisable at December 31, 2019 707 $ 39.58 5.2 $ — |
Schedule of options outstanding by exercise prices | The following table summarizes information about options outstanding as of December 31, 2019 : Options Outstanding Options Exercisable Range of Exercise Prices Shares (in thousands) Weighted-Average Remaining Contractual Term (Years) Shares (in thousands) Weighted-Average Exercise Price $25.00 to $35.00 153 5.1 153 $ 30.32 $35.00 to $45.00 710 6.9 298 37.85 $45.00+ 430 6.1 256 47.13 1,293 6.4 707 $ 39.58 |
Summary of restricted share unit activity | A summary of restricted share unit activity is presented below: Shares (in thousands) Weighted Average Fair Value Outstanding at December 31, 2018 304 $ 40.51 Granted 153 40.09 Vested (82 ) 36.81 Forfeited (36 ) 42.63 Outstanding at December 31, 2019 339 $ 41.00 |
Summary of total shareholders return unit activity | A summary of TSR unit activity is presented below. Shares (in thousands) Weighted Average Fair Value Outstanding at December 31, 2018 453 $ 47.57 Granted 128 52.36 Vested (130 ) 38.43 Forfeited (84 ) 48.93 Outstanding at December 31, 2019 367 $ 52.18 |
Earnings Per Share ("EPS") (Tab
Earnings Per Share ("EPS") (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted earnings per share | The calculation of basic and diluted EPS for each of the three years ended December 31, 2019 , 2018 and 2017 is set forth in the following table (in millions, except per share amounts): Year Ended December 31, 2019 2018 2017 Loss from continuing operations $ (45.9 ) $ (8.5 ) $ (32.1 ) Income from discontinued operations, net of tax — 66.0 111.4 Net (loss) income $ (45.9 ) $ 57.5 $ 79.3 Weighted Average Shares Outstanding: Basic weighted average shares outstanding 47.6 47.2 46.8 Dilutive effect of stock options and restricted share unit awards — — — Diluted weighted average shares outstanding 47.6 47.2 46.8 Earnings (Loss) Per Share: Basic: Continuing Operations $ (0.96 ) $ (0.18 ) $ (0.69 ) Discontinued Operations — 1.40 2.38 Basic (Loss) Earnings Per Share $ (0.96 ) $ 1.22 $ 1.69 Diluted: Continuing operations $ (0.96 ) $ (0.18 ) $ (0.69 ) Discontinued operations — 1.40 2.38 Diluted (Loss) Earnings Per Share $ (0.96 ) $ 1.22 $ 1.69 |
Business and Products Informa_2
Business and Products Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Net sales by product category | Our management evaluates net sales by product category within our single reportable segment as follows (in millions): Year Ended December 31, 2019 2018 2017 Chronic care $ 413.7 $ 386.0 $ 360.8 Pain management 283.9 266.3 250.8 Total Net Sales $ 697.6 $ 652.3 $ 611.6 |
Property, plant and equipment held domestically and in foreign countries | Property, plant and equipment consists of the following (in millions): As of December 31, 2019 2018 Land $ 1.0 $ 0.9 Buildings and leasehold improvements 48.3 43.5 Machinery and equipment 215.0 141.2 Construction in progress 18.9 52.7 283.2 238.3 Less accumulated depreciation (98.7 ) (84.2 ) Total $ 184.5 $ 154.1 Property, plant and equipment held domestically and in foreign countries is as follows (in millions): As of December 31, 2019 2018 Domestic $ 123.1 $ 97.3 Foreign 61.4 56.8 Total Property, Plant and Equipment $ 184.5 $ 154.1 |
Supplemental Guarantor Financ_2
Supplemental Guarantor Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Condensed Financial Information Disclosure [Abstract] | |
Condensed Consolidating Income and Comprehensive Income Statements | , INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING INCOME AND COMPREHENSIVE INCOME STATEMENTS (in millions) Year Ended December 31, 2019 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Net Sales $ — $ 654.0 $ 132.0 $ (88.4 ) $ 697.6 Cost of products sold — 283.6 100.2 (88.4 ) 295.4 Gross Profit — 370.4 31.8 — 402.2 Research and development expenses — 37.7 — — 37.7 Selling and general expenses 32.3 326.4 40.4 — 399.1 Other expense (income), net 1.1 31.5 (11.5 ) — 21.1 Operating (Loss) Profit (33.4 ) (25.2 ) 2.9 — (55.7 ) Interest income 4.7 0.1 5.0 (3.1 ) 6.7 Interest expense (17.3 ) (0.5 ) (0.3 ) 3.1 (15.0 ) (Loss) Income Before Income Taxes (46.0 ) (25.6 ) 7.6 — (64.0 ) Income tax benefit (provision) 11.3 9.5 (2.7 ) — 18.1 Equity in earnings of consolidated subsidiaries (11.2 ) 2.9 — 8.3 — Net (Loss) Income (45.9 ) (13.2 ) 4.9 8.3 (45.9 ) Total other comprehensive income, net of tax 1.7 2.1 0.1 (2.2 ) 1.7 Comprehensive (Loss) Income $ (44.2 ) $ (11.1 ) $ 5.0 $ 6.1 $ (44.2 ) AVANOS MEDICAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING INCOME AND COMPREHENSIVE INCOME STATEMENTS (in millions) Year Ended December 31, 2018 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Net Sales $ — $ 646.8 $ 178.6 $ (173.1 ) $ 652.3 Cost of products sold — 290.0 144.5 (173.1 ) 261.4 Gross Profit — 356.8 34.1 — 390.9 Research and development expenses — 41.8 — — 41.8 Selling and general expenses 38.8 261.0 40.6 — 340.4 Other expense (income), net (1.5 ) 16.8 (8.7 ) 1.6 8.2 Operating (Loss) Profit (37.3 ) 37.2 2.2 (1.6 ) 0.5 Interest income 4.3 0.2 7.3 (4.0 ) 7.8 Interest expense (27.5 ) (2.7 ) (0.2 ) 4.0 (26.4 ) (Loss) Income Before Income Taxes (60.5 ) 34.7 9.3 (1.6 ) (18.1 ) Income tax benefit (provision) 6.8 11.1 (8.3 ) — 9.6 Equity in earnings of consolidated subsidiaries 117.7 139.5 — (257.2 ) — Income (Loss) from Continuing Operations 64.0 185.3 1.0 (258.8 ) (8.5 ) (Loss) Income from discontinued operations, net of tax (6.5 ) (49.4 ) 121.9 — 66.0 Net Income 57.5 135.9 122.9 (258.8 ) 57.5 Total other comprehensive (loss) income, net of tax (2.4 ) 3.4 (3.4 ) — (2.4 ) Comprehensive Income $ 55.1 $ 139.3 $ 119.5 $ (258.8 ) $ 55.1 AVANOS MEDICAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING INCOME AND COMPREHENSIVE INCOME STATEMENTS (in millions) Year Ended December 31, 2017 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Net Sales $ — $ 679.2 $ 306.9 $ (374.5 ) $ 611.6 Cost of products sold — 385.7 263.5 (374.5 ) 274.7 Gross Profit — 293.5 43.4 — 336.9 Research and development expenses — 38.2 — — 38.2 Selling and general expenses 29.9 249.7 42.1 — 321.7 Other (income) expense, net 0.7 34.5 (15.1 ) — 20.1 Operating (Loss) Income (30.6 ) (28.9 ) 16.4 — (43.1 ) Interest income 0.9 0.1 4.5 (3.0 ) 2.5 Interest expense (32.3 ) (2.2 ) (0.1 ) 3.0 (31.6 ) (Loss) Income Before Income Taxes (62.0 ) (31.0 ) 20.8 — (72.2 ) Income tax benefit (provision) 20.0 23.2 (3.1 ) — 40.1 Equity in earnings of consolidated subsidiaries 125.1 32.6 — (157.7 ) — Income (Loss) from Continuing Operations 83.1 24.8 17.7 (157.7 ) (32.1 ) (Loss) Income from discontinued operations, net of tax (3.8 ) 86.0 29.2 — 111.4 Net Income 79.3 110.8 46.9 (157.7 ) 79.3 Total other comprehensive income, net of tax 18.8 13.1 18.3 (31.4 ) 18.8 Comprehensive Income $ 98.1 $ 123.9 $ 65.2 $ (189.1 ) $ 98.1 |
Condensed Consolidating Balance Sheets | , INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING BALANCE SHEETS (in millions) As of December 31, 2019 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated ASSETS Current Assets Cash and cash equivalents $ 118.9 $ 31.0 $ 55.4 $ — $ 205.3 Accounts receivable, net 15.7 1,139.0 202.9 (1,193.8 ) 163.8 Inventories — 132.4 13.5 — 145.9 Prepaid and other current assets 5.9 14.8 2.8 — 23.5 Total Current Assets 140.5 1,317.2 274.6 (1,193.8 ) 538.5 Property, Plant and Equipment, Net — 157.9 26.6 — 184.5 Operating Lease Right of Use Assets — 53.5 10.5 — 64.0 Investment in Consolidated Subsidiaries 2,436.6 328.2 — (2,764.8 ) — Goodwill 4.9 780.6 15.4 — 800.9 Other Intangible Assets, net — 176.6 7.7 — 184.3 Other Assets 22.6 3.1 1.7 — 27.4 TOTAL ASSETS $ 2,604.6 $ 2,817.1 $ 336.5 $ (3,958.6 ) $ 1,799.6 LIABILITIES AND EQUITY Current Liabilities Current portion of operating lease liabilities $ — $ 12.1 $ 2.6 $ — $ 14.7 Trade accounts payable $ 1,021.6 $ 237.8 $ 17.4 $ (1,193.8 ) $ 83.0 Accrued expenses 64.1 36.5 14.2 — 114.8 Total Current Liabilities 1,085.7 286.4 34.2 (1,193.8 ) 212.5 Long-Term Debt 248.1 — — — 248.1 Operating Lease Obligation — 54.2 8.4 — 62.6 Other Long-Term Liabilities 5.6 1.8 3.8 — 11.2 Total Liabilities 1,339.4 342.4 46.4 (1,193.8 ) 534.4 Total Equity 1,265.2 2,474.7 290.1 (2,764.8 ) 1,265.2 TOTAL LIABILITIES AND EQUITY $ 2,604.6 $ 2,817.1 $ 336.5 $ (3,958.6 ) $ 1,799.6 AVANOS MEDICAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING BALANCE SHEETS (in millions) As of December 31, 2018 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated ASSETS Current Assets Cash and cash equivalents $ 303.9 $ 29.3 $ 51.3 $ — $ 384.5 Accounts receivable, net 4.5 1,257.3 212.1 (1,323.4 ) 150.5 Inventories — 106.2 15.2 — 121.4 Prepaid and other current assets 1.1 23.8 34.2 (1.9 ) 57.2 Total Current Assets 309.5 1,416.6 312.8 (1,325.3 ) 713.6 Property, Plant and Equipment, Net — 132.6 21.5 — 154.1 Investment in Consolidated Subsidiaries 2,404.2 234.7 — (2,638.9 ) — Goodwill — 758.7 24.9 — 783.6 Other Intangible Assets, net — 159.8 8.4 — 168.2 Other Assets 1.6 10.8 1.5 — 13.9 TOTAL ASSETS $ 2,715.3 $ 2,713.2 $ 369.1 $ (3,964.2 ) $ 1,833.4 LIABILITIES AND EQUITY Current Liabilities Trade accounts payable $ 1,160.7 $ 268.2 $ 52.4 $ (1,311.4 ) $ 169.9 Accrued expenses 8.2 77.3 22.8 (13.9 ) 94.4 Total Current Liabilities 1,168.9 345.5 75.2 (1,325.3 ) 264.3 Long-Term Debt 247.7 — — — 247.7 Other Long-Term Liabilities 1.5 20.0 2.7 — 24.2 Total Liabilities 1,418.1 365.5 77.9 (1,325.3 ) 536.2 Total Equity 1,297.2 2,347.7 291.2 (2,638.9 ) 1,297.2 TOTAL LIABILITIES AND EQUITY $ 2,715.3 $ 2,713.2 $ 369.1 $ (3,964.2 ) $ 1,833.4 |
Condensed Consolidating Statements of Cash Flows | , INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in millions) Year Ended December 31, 2019 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Operating Activities Cash Provided by (Used in) Operating Activities $ 29.3 $ (114.9 ) $ 11.1 $ — $ (74.5 ) Investing Activities Capital expenditures — (44.4 ) (6.2 ) — (50.6 ) Acquisition of business, net of cash acquired (57.5 ) — — — (57.5 ) Intercompany contributions — 160.6 0.2 (160.8 ) — Cash (Used in) Provided by Investing Activities (57.5 ) 116.2 (6.0 ) (160.8 ) (108.1 ) Financing Activities Intercompany contributions (158.3 ) — (2.5 ) 160.8 — Debt repayments (0.2 ) — — — (0.2 ) Purchase of treasury stock (3.6 ) — — — (3.6 ) Proceeds and excess tax benefits from the exercise of stock options 5.3 — — — 5.3 Cash (Used in) Provided by Financing Activities (156.8 ) — (2.5 ) 160.8 1.5 Effect of Exchange Rate on Cash and Cash Equivalents — 0.4 1.5 — 1.9 (Decrease) Increase in Cash and Cash Equivalents (185.0 ) 1.7 4.1 — (179.2 ) Cash and Cash Equivalents, Beginning of Period 303.9 29.3 51.3 — 384.5 Cash and Cash Equivalents, End of Period $ 118.9 $ 31.0 $ 55.4 $ — $ 205.3 AVANOS MEDICAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in millions) Year Ended December 31, 2018 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Operating Activities Cash (Used in) Provided by Operating Activities $ (75.1 ) $ (73.9 ) $ 3.4 $ — $ (145.6 ) Investing Activities Capital expenditures — (40.5 ) (8.6 ) — (49.1 ) Acquisition of business, net of cash acquired (65.7 ) — — — (65.7 ) Proceeds from the Divestiture 540.0 9.1 205.2 — 754.3 Dividend received from subsidiaries — 233.5 — (233.5 ) — Intercompany contributions — (115.2 ) 0.6 114.6 — Cash Provided by Investing Activities 474.3 86.9 197.2 (118.9 ) 639.5 Financing Activities Intercompany contributions 114.6 — — (114.6 ) — Debt repayments (339.0 ) — — — (339.0 ) Debt issuance costs (1.6 ) — — — (1.6 ) Purchase of treasury stock (0.9 ) — — — (0.9 ) Proceeds and excess tax benefits from the exercise of stock options 17.1 — — — 17.1 Cash dividends paid to Guarantor — — (233.5 ) 233.5 — Cash Used in Financing Activities (209.8 ) — (233.5 ) 118.9 (324.4 ) Effect of Exchange Rate on Cash and Cash Equivalents — 0.3 (5.0 ) — (4.7 ) Increase in Cash and Cash Equivalents 189.4 13.3 (37.9 ) — 164.8 Cash and Cash Equivalents, Beginning of Period 114.5 16.0 89.2 — 219.7 Cash and Cash Equivalents, End of Period $ 303.9 $ 29.3 $ 51.3 $ — $ 384.5 AVANOS MEDICAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in millions) Year Ended December 31, 2017 Parent Guarantor Subsidiaries Non-Guarantor Subsidiaries Eliminations Consolidated Operating Activities Cash (Used in) Provided by Operating Activities $ (43.3 ) $ 137.2 $ 50.3 $ — $ 144.2 Investing Activities Capital expenditures — (32.4 ) (10.8 ) — (43.2 ) Proceeds from property dispositions — 0.1 — — 0.1 Intercompany contributions — (98.8 ) — 98.8 — Cash Used in Investing Activities — (131.1 ) (10.8 ) 98.8 (43.1 ) Financing Activities Intercompany contributions 101.4 — (2.6 ) (98.8 ) — Purchase of treasury stock (2.5 ) — — — (2.5 ) Proceeds and excess tax benefits from the exercise of stock options 4.7 — — — 4.7 Cash Provided by (Used in) Financing Activities 103.6 — (2.6 ) (98.8 ) 2.2 Effect of Exchange Rate on Cash and Cash Equivalents — 0.4 2.3 — 2.7 Increase in Cash and Cash Equivalents 60.3 6.5 39.2 — 106.0 Cash and Cash Equivalents, Beginning of Period 54.2 9.5 50.0 — 113.7 Cash and Cash Equivalents, End of Period $ 114.5 $ 16.0 $ 89.2 $ — $ 219.7 |
Accounting Policies - Backgrou
Accounting Policies - Background and Basis of Presentation (Details) | Dec. 31, 2019country |
Accounting Policies [Abstract] | |
Number of countries entity provides medical device products (more than) | 90 |
Accounting Policies - Property
Accounting Policies - Property, Plant and Equipment and Depreciation (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Buildings | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 40 years |
Machinery and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 16 years |
Machinery and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 20 years |
Computer software costs | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Computer software costs | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 9 years |
Accounting Policies - Goodwill
Accounting Policies - Goodwill and Other Intangible Assets (Details) | 12 Months Ended |
Dec. 31, 2019reporting_unit | |
Finite-Lived Intangible Assets [Line Items] | |
Number of reporting units | 1 |
Trademarks | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 7 years |
Trademarks | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 30 years |
Patents and acquired technologies | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 7 years |
Patents and acquired technologies | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 17 years |
Other intangible assets | Minimum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 2 years |
Other intangible assets | Maximum | |
Finite-Lived Intangible Assets [Line Items] | |
Estimated useful life | 16 years |
Accounting Policies - Revenue
Accounting Policies - Revenue Recognition and Accounts Receivable (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019USD ($)customer | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Supply agreement term | 3 years | ||
Amounts billed, payment term | 30 days | ||
Amounts billed, discount percentage if paid within discount term | 1.00% | ||
Amounts billed, payment term to receive discount percentage | 15 days | ||
Provision for doubtful accounts | $ | $ 0 | $ 0 | $ 0 |
Accounts receivable | Customer concentration risk | Largest customer | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Number of major customers | customer | 0 |
Accounting Policies - Income T
Accounting Policies - Income Taxes (Details) $ in Millions | Dec. 31, 2019USD ($) |
Accounting Policies [Abstract] | |
Accumulated undistributed earnings generated by foreign subsidiareis | $ 41 |
Accounting Policies - Leases (
Accounting Policies - Leases (Details) $ in Millions | Dec. 31, 2019USD ($) |
Accounting Policies [Abstract] | |
Operating lease liabilities | $ 77.3 |
ROU assets | $ 64 |
Business Acquisitions - Narrat
Business Acquisitions - Narrative (Details) - USD ($) $ in Millions | Sep. 19, 2019 | Aug. 07, 2019 | Jul. 08, 2019 | Apr. 16, 2019 | Jul. 01, 2018 | Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2019 |
Business Acquisition [Line Items] | ||||||||
Purchase Price | $ 33.5 | |||||||
Reduction of goodwill | $ (1.9) | |||||||
NeoMed, Inc. | ||||||||
Business Acquisition [Line Items] | ||||||||
Payment to acquire a minority interest | $ 7 | |||||||
Endoclear, LLC | ||||||||
Business Acquisition [Line Items] | ||||||||
Consideration transferred | $ 3.5 | |||||||
Future estimated payments | $ 5.5 | |||||||
Summit Medical Products, Inc. | ||||||||
Business Acquisition [Line Items] | ||||||||
Consideration transferred | $ 15.6 | |||||||
Future estimated payments | $ 1.7 | |||||||
Approximate net annual sales | 7 | |||||||
Net loss | $ 3.3 | |||||||
CoolSystems, Inc. referred to as Game Ready | ||||||||
Business Acquisition [Line Items] | ||||||||
Consideration transferred | $ 65.7 | |||||||
Purchase Price | $ 65 | |||||||
Reduction of goodwill | (1.9) | |||||||
NeoMed, Inc. | ||||||||
Business Acquisition [Line Items] | ||||||||
Consideration transferred | $ 28 | |||||||
Approximate net annual sales | $ 37 | |||||||
Net loss | $ 19.7 |
Business Acquisitions - Purcha
Business Acquisitions - Purchase Price Allocation (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Sep. 19, 2019 | Aug. 07, 2019 | Jul. 08, 2019 | Dec. 31, 2018 | Jul. 01, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | |||||||
Goodwill | $ 800.9 | $ 783.6 | $ 764.7 | ||||
EndoClear | |||||||
Business Acquisition [Line Items] | |||||||
Current assets acquired net of liabilities assumed | $ 0.5 | ||||||
Property, plant and equipment | 0 | ||||||
Identifiable intangible assets | 4 | ||||||
Other noncurrent assets (liabilities), net | 0 | ||||||
Deferred tax liabilities | 0 | ||||||
Goodwill | 4.5 | ||||||
Total | $ 9 | ||||||
Summit | |||||||
Business Acquisition [Line Items] | |||||||
Current assets acquired net of liabilities assumed | $ 0.5 | ||||||
Property, plant and equipment | 0.1 | ||||||
Identifiable intangible assets | 16.3 | ||||||
Other noncurrent assets (liabilities), net | 0 | ||||||
Deferred tax liabilities | 0 | ||||||
Goodwill | 0.4 | ||||||
Total | $ 17.3 | ||||||
NeoMed | |||||||
Business Acquisition [Line Items] | |||||||
Current assets acquired net of liabilities assumed | $ 11.2 | ||||||
Property, plant and equipment | 2 | ||||||
Identifiable intangible assets | 16.1 | ||||||
Other noncurrent assets (liabilities), net | 0.3 | ||||||
Deferred tax liabilities | (3) | ||||||
Goodwill | 13.9 | ||||||
Total | 40.5 | ||||||
Current assets acquired net of liabilities assumed, accounts receivable | $ 8.1 | ||||||
CoolSystems, Inc. referred to as Game Ready | |||||||
Business Acquisition [Line Items] | |||||||
Current assets acquired net of liabilities assumed | $ 8.8 | ||||||
Property, plant and equipment | 1 | ||||||
Identifiable intangible assets | 40 | ||||||
Other noncurrent assets (liabilities), net | (0.3) | ||||||
Deferred tax liabilities | (0.2) | ||||||
Goodwill | 18.7 | ||||||
Total | $ 68 |
Business Acquisitions - Schedu
Business Acquisitions - Schedule of Acquired Finite-Lived Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2019 | Sep. 19, 2019 | Aug. 07, 2019 | Jul. 08, 2019 | Jul. 01, 2018 | |
Trademarks | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Weighted Average Useful Lives (Yrs) | 16 years | ||||
Patents and acquired technologies | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Weighted Average Useful Lives (Yrs) | 13 years | ||||
Other | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Weighted Average Useful Lives (Yrs) | 12 years | ||||
EndoClear | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Identifiable intangible assets | $ 4 | ||||
EndoClear | Trademarks | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
EndoClear | 1.7 | ||||
EndoClear | Patents and acquired technologies | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
EndoClear | 1.8 | ||||
EndoClear | Other | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
EndoClear | $ 0.5 | ||||
Summit | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Identifiable intangible assets | $ 16.3 | ||||
Summit | Trademarks | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
EndoClear | 0 | ||||
Summit | Patents and acquired technologies | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
EndoClear | 16.3 | ||||
Summit | Other | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
EndoClear | $ 0 | ||||
NeoMed | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Identifiable intangible assets | $ 16.1 | ||||
NeoMed | Trademarks | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
EndoClear | 7.4 | ||||
NeoMed | Patents and acquired technologies | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
EndoClear | 3.7 | ||||
NeoMed | Other | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
EndoClear | $ 5 | ||||
CoolSystems, Inc. referred to as Game Ready | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Identifiable intangible assets | $ 40 | ||||
CoolSystems, Inc. referred to as Game Ready | Trademarks | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
EndoClear | 6.7 | ||||
CoolSystems, Inc. referred to as Game Ready | Patents and acquired technologies | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
EndoClear | 16.9 | ||||
CoolSystems, Inc. referred to as Game Ready | Other | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
EndoClear | $ 16.4 |
Business Acquisitions - Sche_2
Business Acquisitions - Schedule of Pro Forma Information (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Business Combinations [Abstract] | |||
Net sales | $ 734.1 | $ 716.4 | $ 646.9 |
Net (loss) income | $ (47.2) | $ 54.7 | $ 75.9 |
Earnings per share: | |||
Basic (in dollars per share) | $ (0.99) | $ 1.16 | $ 1.62 |
Diluted (in dollars per share) | $ (0.99) | $ 1.16 | $ 1.62 |
Restructuring - Narrative (Det
Restructuring - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | 25 Months Ended | ||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | |
Restructuring Cost and Reserve [Line Items] | ||||||
Interest expense | $ 15 | $ 26.4 | $ 31.6 | |||
EndoClear, LLC, Summit Medical Products, Inc., NeoMed, Inc. And CoolSystems, Inc. | Employee Severance And Lease Termination | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Costs incurred | 9.1 | |||||
Costs expected to incur | $ 17 | |||||
Initial Phase | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Costs incurred | 2.7 | 9.3 | $ 17.4 | |||
Initial Phase | Employee Severance and Benefits | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Costs incurred | $ 10.5 | |||||
ITS Plan | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Costs incurred | 21.5 | $ 6.4 | ||||
Restructuring, amounts capitalized | 54.1 | |||||
Internal labor costs capitalized | 5 | |||||
Interest expense | 2.2 | |||||
Multi-Year Restructuring Plan, Third Phase | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Costs incurred | 2.3 | |||||
Multi-Year Restructuring Plan, Third Phase | Minimum | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Costs expected to incur | $ 11 | |||||
Incremental capital costs | 8 | |||||
Multi-Year Restructuring Plan, Third Phase | Maximum | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Costs expected to incur | 13 | |||||
Incremental capital costs | $ 12 | |||||
Selling and general expenses | ITS Plan | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Costs incurred | $ 15.1 |
Restructuring - Accrual and Pa
Restructuring - Accrual and Payment Activity (Details) - Employee Severance and Benefits - Initial Phase - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Restructuring Reserve [Roll Forward] | ||
Balance, beginning of year | $ 5.7 | $ 5.4 |
Charges and adjustments, net | 9.8 | 2.9 |
Payments | (7) | (2.6) |
Balance, end of year | $ 8.5 | $ 5.7 |
Goodwill - Schedule of Goodwil
Goodwill - Schedule of Goodwill (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2019USD ($)reporting_unit | Dec. 31, 2018USD ($) | |
Goodwill [Line Items] | ||
Number of reporting units | reporting_unit | 1 | |
Goodwill [Roll Forward] | ||
Balance at beginning of period | $ 783.6 | $ 764.7 |
Goodwill acquired | 18.8 | 20.6 |
Currency translation adjustment | 0.4 | (1.7) |
Purchase accounting adjustment | (1.9) | |
Balance at end of period | 800.9 | $ 783.6 |
CoolSystems, Inc. referred to as Game Ready | ||
Goodwill [Roll Forward] | ||
Purchase accounting adjustment | $ (1.9) |
Supplemental Balance Sheet In_3
Supplemental Balance Sheet Information - Accounts receivable (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Accounts Receivable | $ 166.8 | $ 152.2 |
Accounts receivable, net | 163.8 | 150.5 |
Doubtful accounts | ||
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Allowances and doubtful accounts | (2.7) | (1.4) |
Sales discounts | ||
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Allowances and doubtful accounts | (0.3) | (0.2) |
Sales returns | ||
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Allowances and doubtful accounts | $ 0 | $ (0.1) |
Supplemental Balance Sheet In_4
Supplemental Balance Sheet Information - Inventories (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
LIFO | ||
Raw Materials | $ 46.3 | $ 39.6 |
Work in process | 30.4 | 22.1 |
Finished goods | 49.5 | 50.1 |
Supplies and other | 0 | 0 |
Inventories, gross | 126.2 | 111.8 |
Excess of FIFO or weighted-average cost over LIFO cost | (9.9) | (11.8) |
Inventories, net | 116.3 | 100 |
Non- LIFO | ||
Raw Materials | 2.9 | 1.5 |
Work in process | 0.5 | 0.4 |
Finished goods | 21.7 | 13.7 |
Supplies and other | 4.5 | 5.8 |
Inventories, gross | 29.6 | 21.4 |
Inventories, net | 29.6 | 21.4 |
Total | ||
Raw Materials | 49.2 | 41.1 |
Work in process | 30.9 | 22.5 |
Finished goods | 71.2 | 63.8 |
Supplies and other | 4.5 | 5.8 |
Inventories, gross | 155.8 | 133.2 |
Excess of FIFO or weighted-average cost over LIFO cost | (9.9) | (11.8) |
Inventories | $ 145.9 | $ 121.4 |
Supplemental Balance Sheet In_5
Supplemental Balance Sheet Information - Property, Plant and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | $ 283.2 | $ 238.3 | |
Less accumulated depreciation | (98.7) | (84.2) | |
Total | 184.5 | 154.1 | |
Accumulated Capitalized Interest Costs | 1.8 | 1.5 | |
Capital expenditures in accounts payable | 11.2 | 16.9 | $ 4.5 |
Depreciation expense | 16.9 | 13.5 | $ 18.8 |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 1 | 0.9 | |
Buildings and leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 48.3 | 43.5 | |
Machinery and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 215 | 141.2 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Property, plant and equipment, gross | 18.9 | 52.7 | |
Accounts Payable | |||
Property, Plant and Equipment [Line Items] | |||
Capital expenditures in accounts payable | $ 11.2 | $ 16.9 |
Supplemental Balance Sheet In_6
Supplemental Balance Sheet Information - Schedule of Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 433.3 | $ 397 | |
Accumulated Amortization | (249) | (228.8) | |
Net Carrying Amount | 184.3 | 168.2 | |
Amortization expense for intangible assets | 20 | 20 | $ 20.7 |
Trademarks | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 90.9 | 83.1 | |
Accumulated Amortization | (56.7) | (52.2) | |
Net Carrying Amount | 34.2 | 30.9 | |
Patents and acquired technologies | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 281.1 | 259.5 | |
Accumulated Amortization | (157.2) | (144.4) | |
Net Carrying Amount | 123.9 | 115.1 | |
Other | |||
Finite-Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | 61.3 | 54.4 | |
Accumulated Amortization | (35.1) | (32.2) | |
Net Carrying Amount | $ 26.2 | $ 22.2 |
Supplemental Balance Sheet In_7
Supplemental Balance Sheet Information - Schedule of Estimated Amortization Expense (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2020 | $ 18.5 | |
2021 | 17 | |
2022 | 15.9 | |
2023 | 15.3 | |
2024 | 15.1 | |
Thereafter | 102.5 | |
Net Carrying Amount | $ 184.3 | $ 168.2 |
Supplemental Balance Sheet In_8
Supplemental Balance Sheet Information - Accrued Expenses (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accrued rebates | $ 51.1 | $ 26.1 |
Accrued salaries and wages | 23.6 | 27 |
Accrued taxes and other | 3.2 | 6.5 |
Other | 36.9 | 34.8 |
Total | $ 114.8 | $ 94.4 |
Supplemental Balance Sheet In_9
Supplemental Balance Sheet Information - Other Long-Term Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Taxes payable | $ 0.4 | $ 0.4 |
Accrued compensation benefits | 5.4 | 4.3 |
Other | 5.4 | 15.1 |
Total | $ 11.2 | $ 19.8 |
Leases - Summary of ROU Assets
Leases - Summary of ROU Assets and Lease Liabilities (Details) $ in Millions | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
Operating Lease Right of Use Assets | $ 64 |
Current portion of operating lease obligation | 14.7 |
Operating Lease Obligation | 62.6 |
Total Operating Lease Liabilities | $ 77.3 |
Weighted average remaining lease term | 7 years 3 months 18 days |
Weighted average discount rate | 4.50% |
Leases - Summary of Cost and Ca
Leases - Summary of Cost and Cash Flows From Lease Agreements (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 12.8 |
Short-term lease cost | 2.7 |
Variable lease cost | 2 |
Total lease cost | 17.5 |
Cash paid for amounts included in the measurement of lease liabilities | 16.9 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 19.7 |
Leases - Future Minimum Obligat
Leases - Future Minimum Obligations Under Operating Leases (Details) $ in Millions | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
2020 | $ 15 |
2021 | 14.4 |
2022 | 13.9 |
2023 | 11.8 |
2024 | 8.3 |
Thereafter | 27.8 |
Future minimum obligations | $ 91.2 |
Discontinued Operations - Narr
Discontinued Operations - Narrative (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019USD ($)segment | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Number of operating segments | segment | 1 | ||
Expenses presented as component of S&IP kept in continuing operations | $ 55.7 | $ (0.5) | $ 43.1 |
S&IP Business | Continuing Operations | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Expenses presented as component of S&IP kept in continuing operations | $ 37 | $ 115.8 |
Discontinued Operations - Fina
Discontinued Operations - Financial Results of Discontinued Operations (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Gain on Divestiture | $ 0 | $ (98.4) | $ 0 |
Income from discontinued operations, net of tax | $ 0 | 66 | 111.4 |
S&IP Business | Discontinued operations, held for sale | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Net Sales | 351.1 | 1,012.7 | |
Cost of products sold | 260.3 | 762.5 | |
Research and development | 1.1 | 2.9 | |
Selling, general and other expenses | 38.1 | 82.8 | |
Gain on Divestiture | (89.9) | 0 | |
Other expense (income), net | 0.4 | (1.6) | |
Income from discontinued operations before income taxes | 141.1 | 166.1 | |
Tax provision from discontinued operations | (75.1) | (54.7) | |
Income from discontinued operations, net of tax | $ 66 | $ 111.4 |
Discontinued Operations - Oper
Discontinued Operations - Operating and Investing Cash Flow Information of Discontinued Operations (Details) - S&IP Business - Discontinued operations, held for sale - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Operating Activities | ||
Depreciation and amortization | $ 0 | $ 20 |
Stock-based compensation expense | (1.5) | 1.5 |
Investing Activities | ||
Capital expenditures | $ 2.9 | $ 19.9 |
Fair Value Information (Details
Fair Value Information (Details) - Level 1 - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Carrying Amount | ||
Assets | ||
Cash and cash equivalents | $ 205.3 | $ 384.5 |
Liabilities | ||
Senior unsecured notes | 248.1 | 247.7 |
Estimated Fair Value | ||
Assets | ||
Cash and cash equivalents | 205.3 | 384.5 |
Liabilities | ||
Senior unsecured notes | $ 254.5 | $ 250.9 |
Debt - Schedule of Debt Balanc
Debt - Schedule of Debt Balances (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Total Debt, net | $ 248.1 | $ 247.7 |
Senior Unsecured Notes | 6.25% Senior Notes | ||
Debt Instrument [Line Items] | ||
Weighted- Average Interest Rate | 6.25% | |
Debt | $ 249.8 | 250 |
Unamortized Debt Discounts and Issuance Costs | $ (1.7) | $ (2.3) |
Debt - Senior Unsecured Notes
Debt - Senior Unsecured Notes (Details) - 6.25% Senior Notes - Senior Unsecured Notes - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Jun. 30, 2019 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | ||
Weighted average interest rate | 6.25% | |
Effective interest rate | 6.51% | |
Notes offered for redemption | $ 130.5 | |
Notes redeemed | $ 0.2 |
Debt - Senior Secured Term Loa
Debt - Senior Secured Term Loan and Revolving Credit Facility (Details) - Term loan facility | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Secured line of credit | Revolving credit facility | |
Debt Instrument [Line Items] | |
Borrowing capacity | $ 250,000,000 |
Senior secured term loan | Revolving credit facility | |
Debt Instrument [Line Items] | |
Unused capacity, commitment fee percentage | 0.375% |
Consolidated total leverage ratio (less than) | 2.25 |
Amount outstanding | $ 0 |
Senior secured term loan | Revolving credit facility | Leverage Ratio, less than 2.25 | |
Debt Instrument [Line Items] | |
Unused capacity, commitment fee percentage | 0.25% |
Senior secured term loan | Revolving credit facility | LIBOR | Minimum | |
Debt Instrument [Line Items] | |
Basis spread on variable rate | 1.50% |
Senior secured term loan | Revolving credit facility | LIBOR | Maximum | |
Debt Instrument [Line Items] | |
Basis spread on variable rate | 2.25% |
Senior secured term loan | Revolving credit facility | Base rate | Minimum | |
Debt Instrument [Line Items] | |
Basis spread on variable rate | 0.50% |
Senior secured term loan | Revolving credit facility | Base rate | Maximum | |
Debt Instrument [Line Items] | |
Basis spread on variable rate | 1.25% |
Senior secured term loan | Letter of credit | |
Debt Instrument [Line Items] | |
Borrowing capacity | $ 75,000,000 |
Amount outstanding | 700,000 |
Senior secured term loan | Swingline sub-facility | |
Debt Instrument [Line Items] | |
Borrowing capacity | $ 25,000,000 |
Debt - Debt Covenants (Details
Debt - Debt Covenants (Details) $ in Millions | Dec. 31, 2019USD ($) |
Debt Disclosure [Abstract] | |
Repayment requirements in next five years | $ 249.8 |
Income Taxes - Provision for I
Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Loss before income taxes | |||
United States | $ (61.8) | $ (20.7) | $ (76.2) |
Foreign | (2.2) | 2.6 | 4 |
Loss Before Income Taxes | (64) | (18.1) | (72.2) |
Current: | |||
United States | (3.6) | (13.6) | (27.4) |
State | (0.3) | (0.5) | (4.6) |
Foreign | 0.8 | 0.8 | 1.4 |
Total | (3.1) | (13.3) | (30.6) |
Deferred: | |||
United States | (11.6) | 0.7 | (9) |
State | (3.2) | 3.5 | (0.4) |
Foreign | (0.2) | (0.5) | (0.1) |
Total | (15) | 3.7 | (9.5) |
Total income tax benefit | $ (18.1) | $ (9.6) | $ (40.1) |
Income Taxes - Additional Info
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Tax cuts and jobs act of 2017, provisional income tax benefit | $ 10 | ||
Tax cuts and jobs act of 2017, provisional benefit, change in tax rate | 16 | ||
Tax cuts and jobs act of 2017, provisional income tax expense, transition tax for accumulated foreign earnings | 7 | ||
Repatriation of cumulative foreign earnings | 101 | ||
Tax cuts and jobs act of 2017, provision income tax benefit, current year cash dividends | $ 1 | ||
Tax cuts and jobs act of 2017, discrete tax benefit | $ (3.9) | ||
Accumulated undistributed earnings generated by foreign subsidiareis | 41 | ||
Valuation allowance increase | (0.1) | ||
Tax Credit Carryforward [Line Items] | |||
Operating loss carryforwards | 19.7 | ||
Amount that would affect effective tax rate | 0.4 | $ 0.4 | |
Accrued interest and penalties on unrecognized tax benefits | 0.3 | $ 0.2 | |
Expiring tax credit carryforwards, next twelve months | |||
Tax Credit Carryforward [Line Items] | |||
Operating loss carryforwards | 2.3 | ||
Expiring tax credit carryforwards, year ten | |||
Tax Credit Carryforward [Line Items] | |||
Operating loss carryforwards | 3.4 | ||
Federal income tax purposes | |||
Tax Credit Carryforward [Line Items] | |||
Credit carryforwards | 2 | ||
Operating loss carryforwards | 93 | ||
Federal income tax purposes | Expiring tax credit carryforwards | |||
Tax Credit Carryforward [Line Items] | |||
Operating loss carryforwards | 28.5 | ||
State income tax purposes | |||
Tax Credit Carryforward [Line Items] | |||
Credit carryforwards | 3.3 | ||
Operating loss carryforwards | 78 | ||
State income tax purposes | Expiring tax credit carryforwards | |||
Tax Credit Carryforward [Line Items] | |||
Credit carryforwards | $ 2 |
Income Taxes - Reconciliation
Income Taxes - Reconciliation of Federal Statutory Rate and Effective Rate (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory rate | 21.00% | 21.00% | 35.00% |
Rate of state income taxes, net of federal tax benefit | 4.50% | (2.40%) | 4.50% |
Statutory rate other than U.S. statutory rate | (2.00%) | (1.40%) | 0.10% |
Foreign derived intangible income | 5.50% | 0.00% | 0.00% |
Foreign tax credit carryback | 1.90% | 0.00% | 0.00% |
Valuation allowance | (1.80%) | (10.60%) | (1.10%) |
Uncertain tax positions | 0 | 0.138 | 0 |
Transaction related expenses | 0.00% | (3.90%) | 0.00% |
GILTI inclusion | 0.00% | (1.60%) | 0.00% |
Nondeductible officer’s compensation | (1.00%) | (2.70%) | 0.10% |
U.S. federal research and development credit | 3.10% | 11.40% | 3.00% |
Share based compensation windfall tax deduction | (0.20%) | 8.50% | 0.00% |
Impacts of U.S. federal tax reform | 0.00% | 21.70% | 14.20% |
Other, net | (2.70%) | (0.80%) | (0.20%) |
Effective tax rate | 28.30% | 53.00% | 55.60% |
Income Taxes - Components of D
Income Taxes - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets | ||
Accrued liabilities | $ 12.9 | $ 15.5 |
Interest limitation | 2.9 | 0 |
Stock-based compensation | 6.9 | 7.8 |
Net Operating Losses | 27.5 | 9.2 |
Operating Lease Right of Use Asset | 12.8 | |
Other | 4.9 | 5.3 |
Deferred tax assets, gross | 67.9 | 37.8 |
Valuation allowance | (3.4) | (3.3) |
Total deferred tax assets | 64.5 | 34.5 |
Deferred tax liabilities | ||
Intangibles, net | 22.6 | 18.7 |
Operating Lease Obligations | 9.4 | |
Inventories | 4.8 | 1.8 |
Property, plant and equipment, net | 10.9 | 11.4 |
Other | 0.7 | 0.7 |
Total deferred tax liabilities | 48.4 | 32.6 |
Net deferred tax assets (liabilities) | $ 16.1 | $ 1.9 |
Income Taxes - Reconciliatio_2
Income Taxes - Reconciliation of Unrecognized Tax Benefit (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Beginning of year | $ 0.5 | $ 2.7 |
Gross increases for tax positions of prior years | 0 | 0 |
Gross decreases for tax positions of prior years | 0 | 0 |
Decreases for settlements with taxing authorities | 0 | (0.5) |
Decreases for lapse of the applicable statute of limitations | 0 | (1.7) |
End of year | $ 0.5 | $ 0.5 |
Employee Benefit Plans - Defin
Employee Benefit Plans - Defined Contribution Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |||
Contributions made | $ 8.4 | $ 7.6 | $ 7.4 |
Employee Benefit Plans - Def_2
Employee Benefit Plans - Defined Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |||
Aggregated projected benefit obligation | $ 4.3 | $ 2.8 | |
Net periodic pension cost | 0.5 | $ 0.6 | $ 0.6 |
Expected gross benefit payments for the years 2019 through 2023 | 1.1 | ||
Gross benefit payments for the years 2024 through 2028 | $ 1.7 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income - Changes in Components of Accumulated Other Comprehensive Income, net of tax (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Balance at beginning of period | $ 1,297.2 | $ 1,215.4 | $ 1,102.5 |
Other comprehensive income (loss) | 1.7 | (2.4) | 18.8 |
Balance at end of period | 1,265.2 | 1,297.2 | 1,215.4 |
Unrealized Translation | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Balance at beginning of period | (34.3) | (31.6) | (48.7) |
Other comprehensive income (loss) | 2.8 | (2.7) | 17.1 |
Balance at end of period | (31.5) | (34.3) | (31.6) |
Cash Flow Hedges | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Balance at beginning of period | 0.1 | 0.8 | (0.4) |
Other comprehensive income (loss) | 0 | (0.7) | 1.2 |
Balance at end of period | 0.1 | 0.1 | 0.8 |
Defined Benefit Pension Plans | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Balance at beginning of period | 0.5 | (0.5) | (1) |
Other comprehensive income (loss) | (1.1) | 1 | 0.5 |
Balance at end of period | (0.6) | 0.5 | (0.5) |
Accumulated Other Comprehensive Income | |||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |||
Balance at beginning of period | (33.7) | (31.3) | (50.1) |
Other comprehensive income (loss) | 1.7 | (2.4) | 18.8 |
Balance at end of period | $ (32) | $ (33.7) | $ (31.3) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income - Net Changes in Components of AOCI, Including Tax Effect (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Equity [Abstract] | |||
Unrealized translation | $ 2.8 | $ (2.7) | $ 17.1 |
Defined benefit pension plans | (1.4) | 1.2 | 0.6 |
Tax effect | 0.3 | (0.2) | (0.1) |
Defined benefit pension plans, net of tax | (1.1) | 1 | 0.5 |
Cash flow hedges | 0 | ||
Cash flow hedges | (1) | 1.5 | |
Tax effect | 0 | ||
Tax effect | 0.3 | (0.3) | |
Cash flow hedges, net of tax | 0 | (0.7) | |
Cash flow hedges, net of tax | 1.2 | ||
Total Other Comprehensive Income (Loss), Net of Tax | $ 1.7 | $ (2.4) | $ 18.8 |
Stock-Based Compensation - Add
Stock-Based Compensation - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares authorized (in shares) | 4,900,000 | ||
Shares remaining available for issuance (in shares) | 1,400,000 | ||
Share-based compensation expense | $ 10,500,000 | $ 12,600,000 | |
Intrinsic value of options | $ 1,400,000 | 11,700,000 | 1,400,000 |
Excess tax benefit of options exercised | $ 1,800,000 | $ 400,000 | |
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expiration period | 10 years | ||
Weighted-average fair value of options granted (in dollars per share) | $ 11.60 | $ 13.69 | $ 9.07 |
Costs not yet recognized | $ 3,500,000 | ||
Costs not yet recognized, period for recognition | 1 year | ||
Volatility | 30.00% | 26.00% | |
Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Costs not yet recognized | $ 4,600,000 | ||
Costs not yet recognized, period for recognition | 1 year | ||
Shares granted (in dollars per share) | $ 40.09 | ||
Total shareholder return restricted share units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Costs not yet recognized | $ 6,800,000 | ||
Costs not yet recognized, period for recognition | 1 year | ||
Vesting period | 3 years | ||
Volatility | 29.00% | 27.00% | 25.00% |
Shares granted (in dollars per share) | $ 52.36 | $ 69.41 | $ 42.24 |
Employee Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares authorized (in shares) | 1,000,000 | ||
Share-based compensation expense | $ 100,000 | ||
Employee stock purchase plan, discount off closing price at the end of each offering period | 15.00% | ||
Employee stock purchase plan, offering period | 6 months | ||
Employee stock purchase plan, maximum contribution percentage per year | 25.00% | ||
Employee stock purchase plan, maximum amount of salary each employee can contribute | $ 25,000 | ||
First 12-month period | Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 30.00% | ||
Second 12-month period | Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 30.00% | ||
Third 12-month period | Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 40.00% | ||
Continuing Operations | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ 10,400,000 | ||
Continuing Operations | Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | 2,900,000 | $ 2,800,000 | $ 3,000,000 |
Continuing Operations | Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | 3,700,000 | 4,800,000 | 3,300,000 |
Continuing Operations | Total shareholder return restricted share units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ 3,800,000 | $ 4,400,000 | $ 4,800,000 |
Stock-Based Compensation - Ass
Stock-Based Compensation - Assumptions (Details) - Stock Options | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Volatility | 30.00% | 26.00% |
Risk-free rate | 2.30% | 2.70% |
Expected term (Years) | 4 years | 5 years |
Dividend Yield (as a percent) | 0.00% | 0.00% |
Volatility, minimum | 24.00% | |
Volatility, maximum | 25.00% | |
Risk-free rate, minimum | 1.70% | |
Risk-free rate, maximum | 1.80% |
Stock-Based Compensation - Sto
Stock-Based Compensation - Stock Option Activity (Details) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended |
Dec. 31, 2019USD ($)$ / sharesshares | |
Shares | |
Outstanding at beginning of period (in shares) | shares | 1,328 |
Granted (in shares) | shares | 272 |
Exercises (in shares) | shares | (156) |
Forfeitures (in shares) | shares | (151) |
Outstanding at end of period (in shares) | shares | 1,293 |
Vested and exercisable (in shares) | shares | 707 |
Weighted- Average Exercise Price | |
Outstanding at beginning of period (in dollars per share) | $ / shares | $ 40.75 |
Granted (in dollars per share) | $ / shares | 43.59 |
Exercises (in dollars per share) | $ / shares | 33.35 |
Forfeitures (in dollars per share) | $ / shares | 45.37 |
Outstanding at end of period (in dollars per share) | $ / shares | 41.70 |
Vested and exercisable (in dollars per share) | $ / shares | $ 39.58 |
Weighted-Average Remaining Contractual Term and Aggregate Intrinsic Value | |
Outstanding, Weighted-Average Remaining Contractual Term | 6 years 4 months 24 days |
Outstanding, Aggregate Intrinsic Value | $ | $ 0.5 |
Vested and exercisable, Weighted-Average Remaining Contractual Term | 5 years 2 months 12 days |
Vested and exercisable, Aggregate Intrinsic Value | $ | $ 0 |
Stock-Based Compensation - Opt
Stock-Based Compensation - Options Outstanding, by Exercise Price Range (Details) shares in Thousands | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Options Outstanding (in shares) | shares | 1,293 |
Weighted-Average Remaining Contractual Term (Years) | 6 years 4 months 24 days |
Options Exercisable (in shares) | shares | 707 |
Weighted Average Exercise Price (in dollars per share) | $ 39.58 |
$25.00 to $35.00 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Range of Exercise Prices, minimum (in dollars per share) | 25 |
Range of Exercise Prices, maximum (in dollars per share) | $ 35 |
Options Outstanding (in shares) | shares | 153 |
Weighted-Average Remaining Contractual Term (Years) | 5 months 3 days |
Options Exercisable (in shares) | shares | 153 |
Weighted Average Exercise Price (in dollars per share) | $ 30.32 |
$35.00 to $45.00 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Range of Exercise Prices, minimum (in dollars per share) | 35 |
Range of Exercise Prices, maximum (in dollars per share) | $ 45 |
Options Outstanding (in shares) | shares | 710 |
Weighted-Average Remaining Contractual Term (Years) | 6 years 10 months 24 days |
Options Exercisable (in shares) | shares | 298 |
Weighted Average Exercise Price (in dollars per share) | $ 37.85 |
$45.00 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Range of Exercise Prices, minimum (in dollars per share) | $ 45 |
Options Outstanding (in shares) | shares | 430 |
Weighted-Average Remaining Contractual Term (Years) | 6 years 1 month 6 days |
Options Exercisable (in shares) | shares | 256 |
Weighted Average Exercise Price (in dollars per share) | $ 47.13 |
Stock-Based Compensation - Res
Stock-Based Compensation - Restricted Stock Units Activity (Details) - Restricted Stock Units shares in Thousands | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Shares | |
Outstanding at beginning of period (in shares) | shares | 304 |
Granted (in shares) | shares | 153 |
Vested (in shares) | shares | (82) |
Forfeited (in shares) | shares | (36) |
Outstanding at end of period (in shares) | shares | 339 |
Weighted Average Fair Value | |
Outstanding at beginning of the period (in dollars per share) | $ / shares | $ 40.51 |
Granted (in dollars per share) | $ / shares | 40.09 |
Vested (in dollars per share) | $ / shares | 36.81 |
Forfeited (in dollars per share) | $ / shares | 42.63 |
Outstanding at beginning of the period (in dollars per share) | $ / shares | $ 41 |
Stock-Based Compensation - TSR
Stock-Based Compensation - TSR Unit Activity (Details) - Total shareholder return restricted share units - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Shares | |||
Outstanding at beginning of period (in shares) | 453 | ||
Granted (in shares) | 128 | ||
Vested (in shares) | (130) | ||
Forfeited (in shares) | (84) | ||
Outstanding at end of period (in shares) | 367 | 453 | |
Weighted Average Fair Value | |||
Outstanding at beginning of the period (in dollars per share) | $ 47.57 | ||
Granted (in dollars per share) | 52.36 | $ 69.41 | $ 42.24 |
Vested (in dollars per share) | 38.43 | ||
Forfeited (in dollars per share) | 48.93 | ||
Outstanding at beginning of the period (in dollars per share) | $ 52.18 | $ 47.57 |
Commitments and Contingencies
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Millions | May 25, 2017 | Apr. 07, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Loss Contingencies [Line Items] | |||||
Incurred legal expense accrual | $ 22.5 | $ 15.6 | $ 20.5 | ||
Class action, compensatory damages | Judicial ruling | Bahamas Surgery Center | |||||
Loss Contingencies [Line Items] | |||||
Compensatory damages awarded to plaintiff | $ 0.4 | $ 0.3 | |||
Class action, compensatory damages | Judicial ruling | Kimberly-Clark Corporation | Bahamas Surgery Center | |||||
Loss Contingencies [Line Items] | |||||
Compensatory damages awarded to plaintiff | 3.9 | 4 | |||
Class action, punitive damages | Judicial ruling | Bahamas Surgery Center | |||||
Loss Contingencies [Line Items] | |||||
Compensatory damages awarded to plaintiff | 1.3 | 100 | |||
Class action, punitive damages | Judicial ruling | Kimberly-Clark Corporation | Bahamas Surgery Center | |||||
Loss Contingencies [Line Items] | |||||
Compensatory damages awarded to plaintiff | 19.4 | $ 350 | |||
Class action, pre-judgement interest | Judicial ruling | Kimberly-Clark Corporation | Bahamas Surgery Center | |||||
Loss Contingencies [Line Items] | |||||
Compensatory damages awarded to plaintiff | $ 2.3 |
Earnings Per Share ("EPS") - C
Earnings Per Share ("EPS") - Calculation of basic and diluted earnings per share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |||
Loss from continuing operations | $ (45.9) | $ (8.5) | $ (32.1) |
Income from discontinued operations, net of tax | 0 | 66 | 111.4 |
Net (loss) income | $ (45.9) | $ 57.5 | $ 79.3 |
Weighted Average Shares Outstanding: | |||
Basic weighted average shares outstanding (in shares) | 47.6 | 47.2 | 46.8 |
Dilutive effect of stock options and restricted share unit awards (in shares) | 0 | 0 | 0 |
Diluted weighted average shares outstanding (in shares) | 47.6 | 47.2 | 46.8 |
Basic: | |||
Continuing operations (in dollars per share) | $ (0.96) | $ (0.18) | $ (0.69) |
Discontinued operations (in dollars per share) | 0 | 1.40 | 2.38 |
Basic (Loss) Earnings Per Share (in dollars per share) | (0.96) | 1.22 | 1.69 |
Diluted: | |||
Continuing operations (in dollars per share) | (0.96) | (0.18) | (0.69) |
Discontinued operations (in dollars per share) | 0 | 1.40 | 2.38 |
Diluted (Loss) Earnings Per Share (in dollars per share) | $ (0.96) | $ 1.22 | $ 1.69 |
Dilutive securities excluded from computation of earnings per share (in shares) | 1.1 |
Business and Products Informa_3
Business and Products Information - Narrative (Details) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019USD ($)customercountrysegment | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Concentration Risk [Line Items] | |||
Number of operating segments | segment | 1 | ||
Number of reportable segments | segment | 1,000,000 | ||
Number of countries entity provides medical device products (more than) | country | 90 | ||
Net sales | $ | $ 697.6 | $ 652.3 | $ 611.6 |
Customer concentration risk | Net sales | Largest customer | |||
Concentration Risk [Line Items] | |||
Number of major customers | customer | 1 | ||
Percentage of total net sales | 10.00% | ||
United States | |||
Concentration Risk [Line Items] | |||
Net sales | $ | $ 481 | $ 457 | $ 467 |
Business and Products Informa_4
Business and Products Information - Disaggregated Revenue (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | |||
Net sales | $ 697.6 | $ 652.3 | $ 611.6 |
Chronic care | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | 413.7 | 386 | 360.8 |
Pain management | |||
Disaggregation of Revenue [Line Items] | |||
Net sales | $ 283.9 | $ 266.3 | $ 250.8 |
Business and Products Informa_5
Business and Products Information - Property, plant and equipment (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, net | $ 184.5 | $ 154.1 |
Domestic | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, net | 123.1 | 97.3 |
Foreign | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, net | $ 61.4 | $ 56.8 |
Supplemental Guarantor Financ_3
Supplemental Guarantor Financial Information - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Condensed Financial Information Disclosure [Abstract] | |
Ownership percentage | 100.00% |
Supplemental Guarantor Financ_4
Supplemental Guarantor Financial Information - Condensed Consolidating Income and Comprehensive Income Statements (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Condensed Income Statements, Captions [Line Items] | |||
Net Sales | $ 697.6 | $ 652.3 | $ 611.6 |
Cost of products sold | 295.4 | 261.4 | 274.7 |
Gross Profit | 402.2 | 390.9 | 336.9 |
Research and development expenses | 37.7 | 41.8 | 38.2 |
Selling and general expenses | 399.1 | 340.4 | 321.7 |
Other expense (income), net | 21.1 | 8.2 | 20.1 |
Operating (Loss) Income | (55.7) | 0.5 | (43.1) |
Interest income | 6.7 | 7.8 | 2.5 |
Interest expense | (15) | (26.4) | (31.6) |
Loss Before Income Taxes | (64) | (18.1) | (72.2) |
Income tax benefit (provision) | 18.1 | 9.6 | 40.1 |
Equity in earnings of consolidated subsidiaries | 0 | 0 | 0 |
Loss from Continuing Operations | (45.9) | (8.5) | (32.1) |
(Loss) Income from discontinued operations, net of tax | 0 | 66 | 111.4 |
Net (Loss) Income | (45.9) | 57.5 | 79.3 |
Total other comprehensive income, net of tax | 1.7 | (2.4) | 18.8 |
Comprehensive (Loss) Income | (44.2) | 55.1 | 98.1 |
Eliminations | |||
Condensed Income Statements, Captions [Line Items] | |||
Net Sales | (88.4) | (173.1) | (374.5) |
Cost of products sold | (88.4) | (173.1) | (374.5) |
Gross Profit | 0 | 0 | 0 |
Research and development expenses | 0 | 0 | 0 |
Selling and general expenses | 0 | 0 | 0 |
Other expense (income), net | 0 | 1.6 | 0 |
Operating (Loss) Income | 0 | (1.6) | 0 |
Interest income | (3.1) | (4) | (3) |
Interest expense | 3.1 | 4 | 3 |
Loss Before Income Taxes | 0 | (1.6) | 0 |
Income tax benefit (provision) | 0 | 0 | 0 |
Equity in earnings of consolidated subsidiaries | 8.3 | (257.2) | (157.7) |
Loss from Continuing Operations | (258.8) | (157.7) | |
(Loss) Income from discontinued operations, net of tax | 0 | 0 | |
Net (Loss) Income | 8.3 | (258.8) | (157.7) |
Total other comprehensive income, net of tax | (2.2) | 0 | (31.4) |
Comprehensive (Loss) Income | 6.1 | (258.8) | (189.1) |
Parent | Reportable legal entities | |||
Condensed Income Statements, Captions [Line Items] | |||
Net Sales | 0 | 0 | 0 |
Cost of products sold | 0 | 0 | 0 |
Gross Profit | 0 | 0 | 0 |
Research and development expenses | 0 | 0 | 0 |
Selling and general expenses | 32.3 | 38.8 | 29.9 |
Other expense (income), net | 1.1 | (1.5) | 0.7 |
Operating (Loss) Income | (33.4) | (37.3) | (30.6) |
Interest income | 4.7 | 4.3 | 0.9 |
Interest expense | (17.3) | (27.5) | (32.3) |
Loss Before Income Taxes | (46) | (60.5) | (62) |
Income tax benefit (provision) | 11.3 | 6.8 | 20 |
Equity in earnings of consolidated subsidiaries | (11.2) | 117.7 | 125.1 |
Loss from Continuing Operations | 64 | 83.1 | |
(Loss) Income from discontinued operations, net of tax | (6.5) | (3.8) | |
Net (Loss) Income | (45.9) | 57.5 | 79.3 |
Total other comprehensive income, net of tax | 1.7 | (2.4) | 18.8 |
Comprehensive (Loss) Income | (44.2) | 55.1 | 98.1 |
Guarantor Subsidiaries | Reportable legal entities | |||
Condensed Income Statements, Captions [Line Items] | |||
Net Sales | 654 | 646.8 | 679.2 |
Cost of products sold | 283.6 | 290 | 385.7 |
Gross Profit | 370.4 | 356.8 | 293.5 |
Research and development expenses | 37.7 | 41.8 | 38.2 |
Selling and general expenses | 326.4 | 261 | 249.7 |
Other expense (income), net | 31.5 | 16.8 | 34.5 |
Operating (Loss) Income | (25.2) | 37.2 | (28.9) |
Interest income | 0.1 | 0.2 | 0.1 |
Interest expense | (0.5) | (2.7) | (2.2) |
Loss Before Income Taxes | (25.6) | 34.7 | (31) |
Income tax benefit (provision) | 9.5 | 11.1 | 23.2 |
Equity in earnings of consolidated subsidiaries | 2.9 | 139.5 | 32.6 |
Loss from Continuing Operations | 185.3 | 24.8 | |
(Loss) Income from discontinued operations, net of tax | (49.4) | 86 | |
Net (Loss) Income | (13.2) | 135.9 | 110.8 |
Total other comprehensive income, net of tax | 2.1 | 3.4 | 13.1 |
Comprehensive (Loss) Income | (11.1) | 139.3 | 123.9 |
Non-Guarantor Subsidiaries | Reportable legal entities | |||
Condensed Income Statements, Captions [Line Items] | |||
Net Sales | 132 | 178.6 | 306.9 |
Cost of products sold | 100.2 | 144.5 | 263.5 |
Gross Profit | 31.8 | 34.1 | 43.4 |
Research and development expenses | 0 | 0 | 0 |
Selling and general expenses | 40.4 | 40.6 | 42.1 |
Other expense (income), net | (11.5) | (8.7) | (15.1) |
Operating (Loss) Income | 2.9 | 2.2 | 16.4 |
Interest income | 5 | 7.3 | 4.5 |
Interest expense | (0.3) | (0.2) | (0.1) |
Loss Before Income Taxes | 7.6 | 9.3 | 20.8 |
Income tax benefit (provision) | (2.7) | (8.3) | (3.1) |
Equity in earnings of consolidated subsidiaries | 0 | 0 | 0 |
Loss from Continuing Operations | 1 | 17.7 | |
(Loss) Income from discontinued operations, net of tax | 121.9 | 29.2 | |
Net (Loss) Income | 4.9 | 122.9 | 46.9 |
Total other comprehensive income, net of tax | 0.1 | (3.4) | 18.3 |
Comprehensive (Loss) Income | $ 5 | $ 119.5 | $ 65.2 |
Supplemental Guarantor Financ_5
Supplemental Guarantor Financial Information - Condensed Consolidating Balance Sheets (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Current Assets | ||||
Cash and cash equivalents | $ 205.3 | $ 384.5 | ||
Accounts receivable, net | 163.8 | 150.5 | ||
Inventories | 145.9 | 121.4 | ||
Prepaid and other current assets | 23.5 | 57.2 | ||
Total Current Assets | 538.5 | 713.6 | ||
Property, Plant and Equipment, net | 184.5 | 154.1 | ||
Operating Lease Right of Use Assets | 64 | |||
Investment in Consolidated Subsidiaries | 0 | 0 | ||
Goodwill | 800.9 | 783.6 | $ 764.7 | |
Other Intangible Assets, net | 184.3 | 168.2 | ||
Other Assets | 27.4 | 13.9 | ||
TOTAL ASSETS | 1,799.6 | 1,833.4 | ||
Current Liabilities | ||||
Current portion of operating lease obligation | 14.7 | |||
Trade accounts payable | 83 | 169.9 | ||
Accrued expenses | 114.8 | 94.4 | ||
Total Current Liabilities | 212.5 | 264.3 | ||
Long-Term Debt | 248.1 | 247.7 | ||
Operating Lease Obligation | 62.6 | |||
Other Long-Term Liabilities | 11.2 | 24.2 | ||
Total Liabilities | 534.4 | 536.2 | ||
Total Stockholders’ Equity | 1,265.2 | 1,297.2 | $ 1,215.4 | $ 1,102.5 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 1,799.6 | 1,833.4 | ||
Eliminations | ||||
Current Assets | ||||
Cash and cash equivalents | 0 | 0 | ||
Accounts receivable, net | (1,193.8) | (1,323.4) | ||
Inventories | 0 | 0 | ||
Prepaid and other current assets | 0 | (1.9) | ||
Total Current Assets | (1,193.8) | (1,325.3) | ||
Property, Plant and Equipment, net | 0 | 0 | ||
Operating Lease Right of Use Assets | 0 | |||
Investment in Consolidated Subsidiaries | (2,764.8) | (2,638.9) | ||
Goodwill | 0 | 0 | ||
Other Intangible Assets, net | 0 | 0 | ||
Other Assets | 0 | 0 | ||
TOTAL ASSETS | (3,958.6) | (3,964.2) | ||
Current Liabilities | ||||
Current portion of operating lease obligation | 0 | |||
Trade accounts payable | (1,193.8) | (1,311.4) | ||
Accrued expenses | 0 | (13.9) | ||
Total Current Liabilities | (1,193.8) | (1,325.3) | ||
Long-Term Debt | 0 | 0 | ||
Operating Lease Obligation | 0 | |||
Other Long-Term Liabilities | 0 | 0 | ||
Total Liabilities | (1,193.8) | (1,325.3) | ||
Total Stockholders’ Equity | (2,764.8) | (2,638.9) | ||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | (3,958.6) | (3,964.2) | ||
Parent | Reportable legal entities | ||||
Current Assets | ||||
Cash and cash equivalents | 118.9 | 303.9 | ||
Accounts receivable, net | 15.7 | 4.5 | ||
Inventories | 0 | 0 | ||
Prepaid and other current assets | 5.9 | 1.1 | ||
Total Current Assets | 140.5 | 309.5 | ||
Property, Plant and Equipment, net | 0 | 0 | ||
Operating Lease Right of Use Assets | 0 | |||
Investment in Consolidated Subsidiaries | 2,436.6 | 2,404.2 | ||
Goodwill | 4.9 | 0 | ||
Other Intangible Assets, net | 0 | 0 | ||
Other Assets | 22.6 | 1.6 | ||
TOTAL ASSETS | 2,604.6 | 2,715.3 | ||
Current Liabilities | ||||
Current portion of operating lease obligation | 0 | |||
Trade accounts payable | 1,021.6 | 1,160.7 | ||
Accrued expenses | 64.1 | 8.2 | ||
Total Current Liabilities | 1,085.7 | 1,168.9 | ||
Long-Term Debt | 248.1 | 247.7 | ||
Operating Lease Obligation | 0 | |||
Other Long-Term Liabilities | 5.6 | 1.5 | ||
Total Liabilities | 1,339.4 | 1,418.1 | ||
Total Stockholders’ Equity | 1,265.2 | 1,297.2 | ||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 2,604.6 | 2,715.3 | ||
Guarantor Subsidiaries | Reportable legal entities | ||||
Current Assets | ||||
Cash and cash equivalents | 31 | 29.3 | ||
Accounts receivable, net | 1,139 | 1,257.3 | ||
Inventories | 132.4 | 106.2 | ||
Prepaid and other current assets | 14.8 | 23.8 | ||
Total Current Assets | 1,317.2 | 1,416.6 | ||
Property, Plant and Equipment, net | 157.9 | 132.6 | ||
Operating Lease Right of Use Assets | 53.5 | |||
Investment in Consolidated Subsidiaries | 328.2 | 234.7 | ||
Goodwill | 780.6 | 758.7 | ||
Other Intangible Assets, net | 176.6 | 159.8 | ||
Other Assets | 3.1 | 10.8 | ||
TOTAL ASSETS | 2,817.1 | 2,713.2 | ||
Current Liabilities | ||||
Current portion of operating lease obligation | 12.1 | |||
Trade accounts payable | 237.8 | 268.2 | ||
Accrued expenses | 36.5 | 77.3 | ||
Total Current Liabilities | 286.4 | 345.5 | ||
Long-Term Debt | 0 | 0 | ||
Operating Lease Obligation | 54.2 | |||
Other Long-Term Liabilities | 1.8 | 20 | ||
Total Liabilities | 342.4 | 365.5 | ||
Total Stockholders’ Equity | 2,474.7 | 2,347.7 | ||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 2,817.1 | 2,713.2 | ||
Non-Guarantor Subsidiaries | Reportable legal entities | ||||
Current Assets | ||||
Cash and cash equivalents | 55.4 | 51.3 | ||
Accounts receivable, net | 202.9 | 212.1 | ||
Inventories | 13.5 | 15.2 | ||
Prepaid and other current assets | 2.8 | 34.2 | ||
Total Current Assets | 274.6 | 312.8 | ||
Property, Plant and Equipment, net | 26.6 | 21.5 | ||
Operating Lease Right of Use Assets | 10.5 | |||
Investment in Consolidated Subsidiaries | 0 | 0 | ||
Goodwill | 15.4 | 24.9 | ||
Other Intangible Assets, net | 7.7 | 8.4 | ||
Other Assets | 1.7 | 1.5 | ||
TOTAL ASSETS | 336.5 | 369.1 | ||
Current Liabilities | ||||
Current portion of operating lease obligation | 2.6 | |||
Trade accounts payable | 17.4 | 52.4 | ||
Accrued expenses | 14.2 | 22.8 | ||
Total Current Liabilities | 34.2 | 75.2 | ||
Long-Term Debt | 0 | 0 | ||
Operating Lease Obligation | 8.4 | |||
Other Long-Term Liabilities | 3.8 | 2.7 | ||
Total Liabilities | 46.4 | 77.9 | ||
Total Stockholders’ Equity | 290.1 | 291.2 | ||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ 336.5 | $ 369.1 |
Supplemental Guarantor Financ_6
Supplemental Guarantor Financial Information - Condensed Consolidating Statements of Cash Flow (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating Activities | |||
Cash Provided by (Used in) Operating Activities | $ (74.5) | $ (145.6) | $ 144.2 |
Investing Activities | |||
Capital expenditures | (50.6) | (49.1) | (43.2) |
Acquisition of assets and businesses, net of cash acquired | (57.5) | (65.7) | 0 |
Proceeds from the Divestiture | 0 | 754.3 | 0 |
Dividend received from subsidiaries | 0 | 0 | 0.1 |
Intercompany contributions | 0 | 0 | 0 |
Cash (Used in) Provided by Investing Activities | (108.1) | 639.5 | (43.1) |
Financing Activities | |||
Intercompany contributions | 0 | 0 | 0 |
Debt repayments | (0.2) | (339) | 0 |
Debt issuance costs | 0 | (1.6) | 0 |
Purchase of treasury stock | (3.6) | (0.9) | (2.5) |
Proceeds and excess tax benefits from the exercise of stock options | 5.3 | 17.1 | 4.7 |
Cash dividends paid to Guarantor | 0 | ||
Cash Provided by (Used in) Financing Activities | 1.5 | (324.4) | 2.2 |
Effect of Exchange Rate on Cash and Cash Equivalents | 1.9 | (4.7) | 2.7 |
(Decrease) Increase in Cash and Cash Equivalents | (179.2) | 164.8 | 106 |
Cash and Cash Equivalents - Beginning of Year | 384.5 | 219.7 | 113.7 |
Cash and Cash Equivalents - End of Year | 205.3 | 384.5 | 219.7 |
Eliminations | |||
Operating Activities | |||
Cash Provided by (Used in) Operating Activities | 0 | 0 | 0 |
Investing Activities | |||
Capital expenditures | 0 | 0 | 0 |
Acquisition of assets and businesses, net of cash acquired | 0 | 0 | |
Proceeds from the Divestiture | 0 | ||
Dividend received from subsidiaries | (233.5) | 0 | |
Intercompany contributions | (160.8) | 114.6 | 98.8 |
Cash (Used in) Provided by Investing Activities | (160.8) | (118.9) | 98.8 |
Financing Activities | |||
Intercompany contributions | 160.8 | (114.6) | (98.8) |
Debt repayments | 0 | 0 | |
Debt issuance costs | 0 | ||
Purchase of treasury stock | 0 | 0 | 0 |
Proceeds and excess tax benefits from the exercise of stock options | 0 | 0 | 0 |
Cash dividends paid to Guarantor | 233.5 | ||
Cash Provided by (Used in) Financing Activities | 160.8 | 118.9 | (98.8) |
Effect of Exchange Rate on Cash and Cash Equivalents | 0 | 0 | 0 |
(Decrease) Increase in Cash and Cash Equivalents | 0 | 0 | 0 |
Cash and Cash Equivalents - Beginning of Year | 0 | 0 | 0 |
Cash and Cash Equivalents - End of Year | 0 | 0 | 0 |
Parent | Reportable legal entities | |||
Operating Activities | |||
Cash Provided by (Used in) Operating Activities | 29.3 | (75.1) | (43.3) |
Investing Activities | |||
Capital expenditures | 0 | 0 | 0 |
Acquisition of assets and businesses, net of cash acquired | (57.5) | (65.7) | |
Proceeds from the Divestiture | 540 | ||
Dividend received from subsidiaries | 0 | 0 | |
Intercompany contributions | 0 | 0 | 0 |
Cash (Used in) Provided by Investing Activities | (57.5) | 474.3 | 0 |
Financing Activities | |||
Intercompany contributions | (158.3) | 114.6 | 101.4 |
Debt repayments | (0.2) | (339) | |
Debt issuance costs | (1.6) | ||
Purchase of treasury stock | (3.6) | (0.9) | (2.5) |
Proceeds and excess tax benefits from the exercise of stock options | 5.3 | 17.1 | 4.7 |
Cash dividends paid to Guarantor | 0 | ||
Cash Provided by (Used in) Financing Activities | (156.8) | (209.8) | 103.6 |
Effect of Exchange Rate on Cash and Cash Equivalents | 0 | 0 | 0 |
(Decrease) Increase in Cash and Cash Equivalents | (185) | 189.4 | 60.3 |
Cash and Cash Equivalents - Beginning of Year | 303.9 | 114.5 | 54.2 |
Cash and Cash Equivalents - End of Year | 118.9 | 303.9 | 114.5 |
Guarantor Subsidiaries | Reportable legal entities | |||
Operating Activities | |||
Cash Provided by (Used in) Operating Activities | (114.9) | (73.9) | 137.2 |
Investing Activities | |||
Capital expenditures | (44.4) | (40.5) | (32.4) |
Acquisition of assets and businesses, net of cash acquired | 0 | 0 | |
Proceeds from the Divestiture | 9.1 | ||
Dividend received from subsidiaries | 233.5 | 0.1 | |
Intercompany contributions | 160.6 | (115.2) | (98.8) |
Cash (Used in) Provided by Investing Activities | 116.2 | 86.9 | (131.1) |
Financing Activities | |||
Intercompany contributions | 0 | 0 | 0 |
Debt repayments | 0 | 0 | |
Debt issuance costs | 0 | ||
Purchase of treasury stock | 0 | 0 | 0 |
Proceeds and excess tax benefits from the exercise of stock options | 0 | 0 | 0 |
Cash dividends paid to Guarantor | 0 | ||
Cash Provided by (Used in) Financing Activities | 0 | 0 | 0 |
Effect of Exchange Rate on Cash and Cash Equivalents | 0.4 | 0.3 | 0.4 |
(Decrease) Increase in Cash and Cash Equivalents | 1.7 | 13.3 | 6.5 |
Cash and Cash Equivalents - Beginning of Year | 29.3 | 16 | 9.5 |
Cash and Cash Equivalents - End of Year | 31 | 29.3 | 16 |
Non-Guarantor Subsidiaries | Reportable legal entities | |||
Operating Activities | |||
Cash Provided by (Used in) Operating Activities | 11.1 | 3.4 | 50.3 |
Investing Activities | |||
Capital expenditures | (6.2) | (8.6) | (10.8) |
Acquisition of assets and businesses, net of cash acquired | 0 | 0 | |
Proceeds from the Divestiture | 205.2 | ||
Dividend received from subsidiaries | 0 | 0 | |
Intercompany contributions | 0.2 | 0.6 | 0 |
Cash (Used in) Provided by Investing Activities | (6) | 197.2 | (10.8) |
Financing Activities | |||
Intercompany contributions | (2.5) | 0 | (2.6) |
Debt repayments | 0 | 0 | |
Debt issuance costs | 0 | ||
Purchase of treasury stock | 0 | 0 | 0 |
Proceeds and excess tax benefits from the exercise of stock options | 0 | 0 | 0 |
Cash dividends paid to Guarantor | (233.5) | ||
Cash Provided by (Used in) Financing Activities | (2.5) | (233.5) | (2.6) |
Effect of Exchange Rate on Cash and Cash Equivalents | 1.5 | (5) | 2.3 |
(Decrease) Increase in Cash and Cash Equivalents | 4.1 | (37.9) | 39.2 |
Cash and Cash Equivalents - Beginning of Year | 51.3 | 89.2 | 50 |
Cash and Cash Equivalents - End of Year | $ 55.4 | $ 51.3 | $ 89.2 |