Condensed Consolidating Income and Comprehensive Income Statements |
AVANOS MEDICAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING INCOME AND COMPREHENSIVE INCOME STATEMENTS (in millions)
| | | | | | | | | | | | | | | | | | | | | | Three Months Ended June 30, 2018 | | Parent | | Guarantor Subsidiaries | | Non-Guarantor Subsidiaries | | Eliminations | | Consolidated | Net Sales | $ | — |
| | $ | 169.7 |
| | $ | 37.1 |
| | $ | (45.9 | ) | | $ | 160.9 |
| Cost of products sold | (0.8 | ) | | 89.4 |
| | 23.5 |
| | (45.9 | ) | | 66.2 |
| Gross Profit | 0.8 |
| | 80.3 |
| | 13.6 |
| | — |
| | 94.7 |
| Research and development | — |
| | 10.8 |
| | — |
| | — |
| | 10.8 |
| Selling and general expenses | 8.7 |
| | 59.6 |
| | 11.5 |
| | — |
| | 79.8 |
| Other income, net | (2.5 | ) | | (3.0 | ) | | (3.2 | ) | | 4.0 |
| | (4.7 | ) | Operating (Loss) Profit | (5.4 | ) | | 12.9 |
| | 5.3 |
| | (4.0 | ) | | 8.8 |
| Interest income | 1.4 |
| | 0.1 |
| | 1.8 |
| | (1.1 | ) | | 2.2 |
| Interest expense | (10.0 | ) | | (0.9 | ) | | (0.1 | ) | | 1.1 |
| | (9.9 | ) | (Loss) Income Before Income Taxes | (14.0 | ) | | 12.1 |
| | 7.0 |
| | (4.0 | ) | | 1.1 |
| Income tax benefit (provision) | 1.0 |
| | 1.9 |
| | (2.7 | ) | | — |
| | 0.2 |
| Equity in earnings of consolidated subsidiaries | 54.8 |
| | 132.1 |
| | — |
| | (186.9 | ) | | — |
| Net Income from Continuing Operations | 41.8 |
| | 146.1 |
| | 4.3 |
| | (190.9 | ) | | 1.3 |
| (Loss) Income from discontinued operations, net of tax | (6.5 | ) | | (66.8 | ) | | 107.3 |
| | — |
| | 34.0 |
| Net Income | 35.3 |
| | 79.3 |
| | 111.6 |
| | (190.9 | ) | | 35.3 |
| Total other comprehensive loss, net of tax | (10.3 | ) | | (5.7 | ) | | (8.8 | ) | | 14.5 |
| | (10.3 | ) | Comprehensive Income | $ | 25.0 |
| | $ | 73.6 |
| | $ | 102.8 |
| | $ | (176.4 | ) | | $ | 25.0 |
|
AVANOS MEDICAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING INCOME AND COMPREHENSIVE INCOME STATEMENTS (in millions)
| | | | | | | | | | | | | | | | | | | | | | Three Months Ended June 30, 2017 | | Parent | | Guarantor Subsidiaries | | Non-Guarantor Subsidiaries | | Eliminations | | Consolidated | Net Sales | $ | — |
| | $ | 163.8 |
| | $ | 80.6 |
| | $ | (95.3 | ) | | $ | 149.1 |
| Cost of products sold | — |
| | 96.0 |
| | 63.9 |
| | (95.3 | ) | | 64.6 |
| Gross Profit | — |
| | 67.8 |
| | 16.7 |
| | — |
| | 84.5 |
| Research and development | — |
| | 9.2 |
| | — |
| | — |
| | 9.2 |
| Selling and general expenses | 9.7 |
| | 61.6 |
| | 9.8 |
| | — |
| | 81.1 |
| Other expense and (income), net | 0.1 |
| | 9.2 |
| | (3.0 | ) | | — |
| | 6.3 |
| Operating (Loss) Income | (9.8 | ) | | (12.2 | ) | | 9.9 |
| | — |
| | (12.1 | ) | Interest income | 0.2 |
| | — |
| | 1.1 |
| | (0.8 | ) | | 0.5 |
| Interest expense | (8.0 | ) | | (0.5 | ) | | (0.1 | ) | | 0.8 |
| | (7.8 | ) | (Loss) Income Before Income Taxes | (17.6 | ) | | (12.7 | ) | | 10.9 |
| | — |
| | (19.4 | ) | Income tax benefit | 1.3 |
| | 5.3 |
| | 1.4 |
| | — |
| | 8.0 |
| Equity in earnings of consolidated subsidiaries | 28.2 |
| | 9.9 |
| | — |
| | (38.1 | ) | | — |
| Net Income (Loss) from Continuing Operations | 11.9 |
| | 2.5 |
| | 12.3 |
| | (38.1 | ) | | (11.4 | ) | Income from discontinued operations, net of tax | 5.2 |
| | 19.2 |
| | 4.1 |
| | — |
| | 28.5 |
| Net Income | 17.1 |
| | 21.7 |
| | 16.4 |
| | (38.1 | ) | | 17.1 |
| Total other comprehensive income, net of tax | 5.1 |
| | 3.4 |
| | 5.2 |
| | (8.6 | ) | | 5.1 |
| Comprehensive Income | $ | 22.2 |
| | $ | 25.1 |
| | $ | 21.6 |
| | $ | (46.7 | ) | | $ | 22.2 |
|
AVANOS MEDICAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING INCOME AND COMPREHENSIVE INCOME STATEMENTS (in millions)
| | | | | | | | | | | | | | | | | | | | | | Six Months Ended June 30, 2018 | | Parent | | Guarantor Subsidiaries | | Non-Guarantor Subsidiaries | | Eliminations | | Consolidated | Net Sales | $ | — |
| | $ | 343.0 |
| | $ | 112.0 |
| | $ | (137.7 | ) | | $ | 317.3 |
| Cost of products sold | (0.8 | ) | | 173.9 |
| | 96.1 |
| | (137.7 | ) | | 131.5 |
| Gross Profit | 0.8 |
| | 169.1 |
| | 15.9 |
| | — |
| | 185.8 |
| Research and development | — |
| | 20.7 |
| | — |
| | — |
| | 20.7 |
| Selling and general expenses | 20.6 |
| | 122.0 |
| | 23.6 |
| | — |
| | 166.2 |
| Other (income) and expense, net | (2.2 | ) | | 1.2 |
| | (5.9 | ) | | 4.0 |
| | (2.9 | ) | Operating (Loss) Income | (17.6 | ) | | 25.2 |
| | (1.8 | ) | | (4.0 | ) | | 1.8 |
| Interest income | 1.8 |
| | 0.1 |
| | 3.2 |
| | (1.9 | ) | | 3.2 |
| Interest expense | (18.9 | ) | | (1.6 | ) | | (0.1 | ) | | 1.9 |
| | (18.7 | ) | (Loss) Income Before Income Taxes | (34.7 | ) | | 23.7 |
| | 1.3 |
| | (4.0 | ) | | (13.7 | ) | Income tax benefit (provision) | 8.9 |
| | (1.3 | ) | | (3.9 | ) | | — |
| | 3.7 |
| Equity in earnings of consolidated subsidiaries | 87.8 |
| | 140.6 |
| | — |
| | (228.4 | ) | | — |
| Net Income (Loss) from Continuing Operations | 62.0 |
| | 163.0 |
| | (2.6 | ) | | (232.4 | ) | | (10.0 | ) | (Loss) Income from discontinued operations, net of tax | (6.5 | ) | | (49.9 | ) | | 121.9 |
| | — |
| | 65.5 |
| Net Income | 55.5 |
| | 113.1 |
| | 119.3 |
| | (232.4 | ) | | 55.5 |
| Total other comprehensive (loss) income, net of tax | (0.8 | ) | | 2.8 |
| | (0.7 | ) | | (2.1 | ) | | (0.8 | ) | Comprehensive Income | $ | 54.7 |
| | $ | 115.9 |
| | $ | 118.6 |
| | $ | (234.5 | ) | | $ | 54.7 |
|
AVANOS MEDICAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING INCOME AND COMPREHENSIVE INCOME STATEMENTS (in millions)
| | | | | | | | | | | | | | | | | | | | | | Six Months Ended June 30, 2017 | | Parent | | Guarantor Subsidiaries | | Non-Guarantor Subsidiaries | | Eliminations | | Consolidated | Net Sales | $ | — |
| | $ | 325.9 |
| | $ | 145.2 |
| | $ | (176.3 | ) | | $ | 294.8 |
| Cost of products sold | — |
| | 180.9 |
| | 124.2 |
| | (176.3 | ) | | 128.8 |
| Gross Profit | — |
| | 145.0 |
| | 21.0 |
| | — |
| | 166.0 |
| Research and development | — |
| | 16.5 |
| | — |
| | — |
| | 16.5 |
| Selling and general expenses | 19.7 |
| | 125.6 |
| | 20.6 |
| | — |
| | 165.9 |
| Other expense and (income), net | 0.3 |
| | 18.8 |
| | (5.8 | ) | | — |
| | 13.3 |
| Operating (Loss) Profit | (20.0 | ) | | (15.9 | ) | | 6.2 |
| | — |
| | (29.7 | ) | Interest income | 0.4 |
| | — |
| | 2.1 |
| | (1.6 | ) | | 0.9 |
| Interest expense | (15.8 | ) | | (1.1 | ) | | (0.1 | ) | | 1.6 |
| | (15.4 | ) | (Loss) Income Before Income Taxes | (35.4 | ) | | (17.0 | ) | | 8.2 |
| | — |
| | (44.2 | ) | Income tax benefit | 2.5 |
| | 14.5 |
| | 0.9 |
| | — |
| | 17.9 |
| Equity in earnings of consolidated subsidiaries | 52.1 |
| | 13.0 |
| | — |
| | (65.1 | ) | | — |
| Net Income (Loss) from Continuing Operations | 19.2 |
| | 10.5 |
| | 9.1 |
| | (65.1 | ) | | (26.3 | ) | Income from discontinued operations, net of tax | 10.7 |
| | 35.7 |
| | 9.8 |
| | — |
| | 56.2 |
| Net Income | 29.9 |
| | 46.2 |
| | 18.9 |
| | (65.1 | ) | | 29.9 |
| Total other comprehensive income, net of tax | 15.8 |
| | 11.9 |
| | 14.9 |
| | (26.8 | ) | | 15.8 |
| Comprehensive Income | $ | 45.7 |
| | $ | 58.1 |
| | $ | 33.8 |
| | $ | (91.9 | ) | | $ | 45.7 |
|
|
Condensed Consolidating Balance Sheet |
AVANOS MEDICAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING BALANCE SHEETS (in millions)
| | | | | | | | | | | | | | | | | | | | | | As of June 30, 2018 | | Parent | | Guarantor Subsidiaries | | Non-Guarantor Subsidiaries | | Eliminations | | Consolidated | ASSETS | | | | | | | | | | Current Assets | | | | | | | | | | Cash and cash equivalents | $ | 109.9 |
| | $ | 77.7 |
| | $ | 292.0 |
| | $ | — |
| | $ | 479.6 |
| Restricted cash | 51.5 |
| | — |
| | — |
| | — |
| | 51.5 |
| Accounts receivable, net of allowances | 2.2 |
| | 1,074.7 |
| | 208.7 |
| | (1,096.4 | ) | | 189.2 |
| Inventories | — |
| | 92.9 |
| | 14.9 |
| | — |
| | 107.8 |
| Prepaid expenses and other current assets | 11.9 |
| | 15.8 |
| | 29.2 |
| | (8.5 | ) | | 48.4 |
| Total Current Assets | 175.5 |
| | 1,261.1 |
| | 544.8 |
| | (1,104.9 | ) | | 876.5 |
| Property, Plant and Equipment, net | — |
| | 104.5 |
| | 19.0 |
| | — |
| | 123.5 |
| Investment in Consolidated Subsidiaries | 2,303.7 |
| | 475.7 |
| | — |
| | (2,779.4 | ) | | — |
| Goodwill | — |
| | 738.1 |
| | 25.7 |
| | — |
| | 763.8 |
| Other Intangible Assets, net | — |
| | 130.6 |
| | 8.9 |
| | — |
| | 139.5 |
| Other Assets | 0.1 |
| | 9.6 |
| | 4.4 |
| | — |
| | 14.1 |
| TOTAL ASSETS | $ | 2,479.3 |
| | $ | 2,719.6 |
| | $ | 602.8 |
| | $ | (3,884.3 | ) | | $ | 1,917.4 |
| | | | | | | | | | | LIABILITIES AND EQUITY | | | | | | | | | | Current Liabilities | | | | | | | | | | Trade accounts payable | $ | 930.6 |
| | $ | 286.1 |
| | $ | 46.7 |
| | $ | (1,086.5 | ) | | $ | 176.9 |
| Accrued expenses | 6.4 |
| | 160.0 |
| | 27.9 |
| | (18.4 | ) | | 175.9 |
| Total Current Liabilities | 937.0 |
| | 446.1 |
| | 74.6 |
| | (1,104.9 | ) | | 352.8 |
| Long-Term Debt | 247.4 |
| | — |
| | — |
| | — |
| | 247.4 |
| Other Long-Term Liabilities | 8.3 |
| | 18.8 |
| | 3.5 |
| | — |
| | 30.6 |
| Total Liabilities | 1,192.7 |
| | 464.9 |
| | 78.1 |
| | (1,104.9 | ) | | 630.8 |
| Total Equity | 1,286.6 |
| | 2,254.7 |
| | 524.7 |
| | (2,779.4 | ) | | 1,286.6 |
| TOTAL LIABILITIES AND EQUITY | $ | 2,479.3 |
| | $ | 2,719.6 |
| | $ | 602.8 |
| | $ | (3,884.3 | ) | | $ | 1,917.4 |
|
AVANOS MEDICAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING BALANCE SHEETS (in millions)
| | | | | | | | | | | | | | | | | | | | | | As of December 31, 2017 | | Parent | | Guarantor Subsidiaries | | Non-Guarantor Subsidiaries | | Eliminations | | Consolidated | ASSETS | | | | | | | | | | Current Assets | | | | | | | | | | Cash and cash equivalents | $ | 114.5 |
| | $ | 16.0 |
| | $ | 89.2 |
| | $ | — |
| | $ | 219.7 |
| Accounts receivable, net of allowances | 1.1 |
| | 623.0 |
| | 266.3 |
| | (687.4 | ) | | 203.0 |
| Inventories | — |
| | 76.0 |
| | 15.1 |
| | — |
| | 91.1 |
| Prepaid expenses and other current assets | 0.6 |
| | 11.7 |
| | 2.1 |
| | — |
| | 14.4 |
| Assets held for sale | 0.3 |
| | 546.7 |
| | 85.5 |
| | — |
| | 632.5 |
| Total Current Assets | 116.5 |
| | 1,273.4 |
| | 458.2 |
| | (687.4 | ) | | 1,160.7 |
| Property, Plant and Equipment, net | — |
| | 92.9 |
| | 17.0 |
| | — |
| | 109.9 |
| Investment in Consolidated Subsidiaries | 2,154.3 |
| | 403.2 |
| | — |
| | (2,557.5 | ) | | — |
| Goodwill | — |
| | 738.1 |
| | 26.6 |
| | — |
| | 764.7 |
| Other Intangible Assets, net | — |
| | 139.5 |
| | 9.4 |
| | — |
| | 148.9 |
| Other Assets | 0.3 |
| | 6.0 |
| | 5.4 |
| | — |
| | 11.7 |
| TOTAL ASSETS | $ | 2,271.1 |
| | $ | 2,653.1 |
| | $ | 516.6 |
| | $ | (3,244.9 | ) | | $ | 2,195.9 |
| | | | | | | | | | | LIABILITIES AND EQUITY | | | | | | | | | | Current Liabilities | | | | | | | | | | Current portion of long-term debt | $ | 39.8 |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 39.8 |
| Trade accounts payable | 454.0 |
| | 347.0 |
| | 49.8 |
| | (679.6 | ) | | 171.2 |
| Accrued expenses | 11.6 |
| | 113.9 |
| | 27.4 |
| | (8.0 | ) | | 144.9 |
| Liabilities held for sale | — |
| | 7.8 |
| | 26.1 |
| | — |
| | 33.9 |
| Total Current Liabilities | 505.4 |
| | 468.7 |
| | 103.3 |
| | (687.6 | ) | | 389.8 |
| Long-Term Debt | 541.1 |
| | — |
| | — |
| | — |
| | 541.1 |
| Other Long-Term Liabilities | 9.2 |
| | 36.1 |
| | 4.3 |
| | — |
| | 49.6 |
| Total Liabilities | 1,055.7 |
| | 504.8 |
| | 107.6 |
| | (687.6 | ) | | 980.5 |
| Total Equity | 1,215.4 |
| | 2,148.3 |
| | 409.0 |
| | (2,557.3 | ) | | 1,215.4 |
| TOTAL LIABILITIES AND EQUITY | $ | 2,271.1 |
| | $ | 2,653.1 |
| | $ | 516.6 |
| | $ | (3,244.9 | ) | | $ | 2,195.9 |
|
|
Condensed Consolidating Statements of Cash Flows |
AVANOS MEDICAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in millions)
| | | | | | | | | | | | | | | | | | | | | | Six Months Ended June 30, 2018 | | Parent | | Guarantor Subsidiaries | | Non-Guarantor Subsidiaries | | Eliminations | | Consolidated | Operating Activities | | | | | | | | | | Cash (Used in) Provided by Operating Activities | $ | (114.2 | ) | | $ | 31.3 |
| | $ | 12.5 |
| | $ | — |
| | $ | (70.4 | ) | Investing Activities | | | | | | | | | | Capital expenditures | — |
| | (15.0 | ) | | (5.7 | ) | | — |
| | (20.7 | ) | Proceeds from the Divestiture | 521.6 |
| | 9.0 |
| | 203.9 |
| | — |
| | 734.5 |
| Intercompany contributions | — |
| | 36.3 |
| | — |
| | (36.3 | ) | | — |
| Cash Provided by Investing Activities | 521.6 |
| | 30.3 |
| | 198.2 |
| | (36.3 | ) | | 713.8 |
| Financing Activities | | | | | | | | | | Intercompany contributions | (32.3 | ) | | — |
| | (4.0 | ) | | 36.3 |
| | — |
| Debt repayments | (339.0 | ) | | — |
| | — |
| | — |
| | (339.0 | ) | Purchase of treasury stock | (0.6 | ) | | — |
| | — |
| | — |
| | (0.6 | ) | Proceeds from the exercise of stock options | 11.4 |
| | — |
| | — |
| | — |
| | 11.4 |
| Cash Used in Financing Activities | (360.5 | ) | | — |
| | (4.0 | ) | | 36.3 |
| | (328.2 | ) | Effect of Exchange Rate on Cash, Cash Equivalents and Restricted Cash | — |
| | 0.1 |
| | (3.9 | ) | | — |
| | (3.8 | ) | Increase in Cash, Cash Equivalents and Restricted Cash | 46.9 |
| | 61.7 |
| | 202.8 |
| | — |
| | 311.4 |
| Cash and Cash Equivalents, Beginning of Period | 114.5 |
| | 16.0 |
| | 89.2 |
| | — |
| | 219.7 |
| Cash, Cash Equivalents and Restricted Cash, End of Period | $ | 161.4 |
| | $ | 77.7 |
| | $ | 292.0 |
| | $ | — |
| | $ | 531.1 |
|
AVANOS MEDICAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS (in millions)
| | | | | | | | | | | | | | | | | | | | | | Six Months Ended June 30, 2017 | | Parent | | Guarantor Subsidiaries | | Non-Guarantor Subsidiaries | | Eliminations | | Consolidated | Operating Activities | | | | | | | | | | Cash (Used in) Provided by Operating Activities | $ | (21.1 | ) | | $ | 73.7 |
| | $ | 4.1 |
| | $ | — |
| | $ | 56.7 |
| Investing Activities | | | | | | | | | | Capital expenditures | — |
| | (13.0 | ) | | (3.6 | ) | | — |
| | (16.6 | ) | Proceeds from property dispositions | — |
| | 0.1 |
| | — |
| | — |
| | 0.1 |
| Intercompany contributions | — |
| | (55.1 | ) | | — |
| | 55.1 |
| | — |
| Cash Used in Investing Activities | — |
| | (68.0 | ) | | (3.6 | ) | | 55.1 |
| | (16.5 | ) | Financing Activities | | | | | | | | | | Intercompany contributions | 57.8 |
| | — |
| | (2.7 | ) | | (55.1 | ) | | — |
| Purchase of treasury stock | (2.0 | ) | | — |
| | — |
| | — |
| | (2.0 | ) | Proceeds from the exercise of stock options | 0.8 |
| | — |
| | — |
| | — |
| | 0.8 |
| Cash Provided by (Used in) Financing Activities | 56.6 |
| | — |
| | (2.7 | ) | | (55.1 | ) | | (1.2 | ) | Effect of Exchange Rate on Cash and Cash Equivalents | — |
| | 0.3 |
| | 1.8 |
| | — |
| | 2.1 |
| Increase (Decrease) in Cash and Cash Equivalents | 35.5 |
| | 6.0 |
| | (0.4 | ) | | — |
| | 41.1 |
| Cash and Cash Equivalents, Beginning of Period | 54.2 |
| | 9.5 |
| | 50.0 |
| | — |
| | 113.7 |
| Cash and Cash Equivalents, End of Period | $ | 89.7 |
| | $ | 15.5 |
| | $ | 49.6 |
| | $ | — |
| | $ | 154.8 |
|
|