SEC Company Response from AVANOS MEDICAL, INC. (AVNS) (CIK 0001606498) (AVNS) — Nov 23, 2021
AVANOS MEDICAL, INC. (AVNS) (CIK 0001606498)
Date: Nov. 23, 2021 · CIK: 0001606498 · Accession: 0001628280-21-024032
AI Filing Summary & Sentiment
File numbers found in text: 001-36440
Letter
VIA EDGAR and EMAIL Securities and Exchange Commission Division of Corporate Finance Office of Life Sciences Re: Avanos Medical, Inc. Form 10-K for the Fiscal Year Ended December 31, 2020 Filed February 19, 2021 File No. 001-36440
Dear Mr. Fay:
This letter is in response to the October 26, 2021 letter from the staff (the “Staff”) of the Securities Exchange Commission (the “Commission”). We appreciate the Commission allowing the Company an extension of time, until November 23, 2021 to respond to the Staff’s comments.
For convenience, the Staff’s comments are copied below, followed by the Company’s response.
As Staff Comment Nos. 1-3 are all related to Management’s Discussion and Analysis of Financial Condition and Results of Operations and Related Information (“MD&A”) in Item 7, the Company addresses all three together.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Related Information, page 20
Staff Comment No. 1
We note there is no discussion of operating expense line items for each period in MD&A. For example, selling and general expenses declined from $399.1 million to $332.6 million from 2019 to 2020, but there is no discussion of the reason for this decrease. Please revise your disclosure in future filings to comply with Item 303(b) of Regulation S-K, which sets forth "where the financial statements reflect material changes from period-to-period in one or more line items, including where material changes within a line item offset one another, describe the underlying reasons for these material changes in quantitative and qualitative terms." Please provide us your intended revised disclosure.
Staff Comment No. 2
We note you incurred $14.9 million, $56.3 million, and $9.2 million in post divestiture transition charges for the past three years, related to your April 2018 divestiture. Please describe to us in greater detail the nature of the charges for each of the years and quantify any significant components of the charges. Revise your disclosure in future filings, consistent with your response, as appropriate.
Staff Comment No. 3
We note you discuss Adjusted Gross Profit for 2020 vs. 2019, but not Gross Profit presented under GAAP for those periods. We do not believe this presentation complies with Item 10(e)(1)(i)(A) of Regulation S-K which requires “a presentation, with equal or greater prominence, of the most directly comparable financial measure or measures calculated and presented in accordance with GAAP.” Please revise in future filings. As part of your revised disclosures, describe the underlying reasons in quantitative and
Mr. Michael Fay
Securities and Exchange Commission
Page 2
qualitative terms, including further description and amounts related to the impact from product mix, write-off of obsolete inventory and higher costs associated with COVID-10 efforts.
Company Response:
The Company respectfully acknowledges the Staff’s comments and will include such discussion beginning with the Annual Report on Form 10-K for the year ended December 31, 2021, in substantially the form provided in Exhibit A.
Item 8. Financial Statements and Supplementary Data
Revenue Recognition and Accounts Receivable, page 34
Staff Comment No. 4
Please revise future filings to disclose qualitative and quantitative disclosure about the significant judgments and changes in judgments, including inputs and assumptions, related to your accounting for returns, rebates and incentives, as set forth in ASC 606-10-50-1(b), 50-17, and 50-20. Provide us your intended revised disclosure.
Company Response:
The Company respectfully acknowledges the Staff’s comment and will include such discussion beginning with the Annual Report on Form 10-K for the year ended December 31, 2021, in substantially the form provided in Exhibit B.
Staff Comment No. 5
We note that you disaggregate revenue attributable to Chronic Care and Pain Management in response to ASC 606-10-50-5. To help us better understand the basis for your presentation, please provide us the financial information (1) used to prepare the Fourth
Quarter 2020 Earnings Call presentation and (2) provided to your chief operating decision maker to evaluate your 4th quarter and annual 2020 results. In addition, please identify for us the unprofitable lines of business in which exiting was initiated, as referred to on page 19 and elsewhere.
Company Response:
In response to prior comments on November 26, 2019 and December 20, 2019, we explained that the Company discloses revenue aggregated at the Chronic Care and Pain Management portfolio levels and acknowledged that each portfolio contains two smaller product categories within each portfolio and described each category and provided a matrix that demonstrated that the reported level of aggregation was appropriate. Accordingly, per your request, we are providing materials used in the preparation for our fourth quarter 2020 earnings presentation and materials provided to our chief operating decision maker that we believe support that conclusion.
However, also in response to comments received in your December 20, 2019 letter, we agreed to (i) disclose the percentage of net sales for each product category in compliance with the guidance in Item 101 of Regulation S-K, and (ii) continue to re-evaluate for further disaggregation as our product portfolio and business grows or evolves. With the addition of acquired products in both our Chronic Care and Pain Management portfolios in 2019, and with the percentage of net sales by product category already disclosed in our Annual Reports on Form 10-K, we will begin to include tabular presentation of revenue by each of the product categories within each of the Chronic Care and Pain Management portfolios beginning with our Annual Report on Form 10-K and continuing with each subsequent Quarterly Report on Form 10-Q. This revised disclosure will appear in our “Business and Products Information” footnote. In addition, the disclosure of products that account for greater than 10% of our consolidated net sales will be included in the descriptions of the product categories below the tabular presentation. The tabular presentation of disaggregated revenue will also appear in our MD&A, earnings releases and other investor presentation materials. This will allow for certain comments made in investor materials such as “mid-single digit growth” pertaining to a specific product to be better correlated to actual revenue data in our disclosure. We believe this is improved disclosure but also believe any further disaggregation potentially represents a competitive risk to our business.
The unprofitable lines of business that we exited were not material to the business, but had their own manufacturing facilities, resulting in high exit and disposal costs.
The disclosure in our “Business and Products Information” will be in substantially the form as presented in Exhibit C, with the same tabular presentation appearing in our MD&A, earnings release and other investor presentation materials. The materials you requested supporting our level of disaggregation, which are subject to confidential treatment, are being provided to you separately.
Mr. Michael Fay
Securities and Exchange Commission
Page 3
If you have any further questions or comments regarding the Company’s response to the Staff’s comments, please contact me at (470) 448-5000 or via email at michael.greiner@avanos.com.
Avanos Medical, Inc.
By: /s/ Michael C. Greiner
Michael C. Greiner Senior Vice President and Chief Financial Officer
EXHIBIT A
Introduction
The following proposed Management’s Discussion and Analysis beginning with “Gross Profit” reflects the following changes:
•Removes the adjusted gross profit non-GAAP reconciliation and only presents gross profit in a tabular format on a GAAP basis.
•Adds a tabular presentations of R&D expenses, selling and general expenses, other expense, net and operating profit (loss). Each is followed by discussion of significant changes.
•Moves the adjusted operating profit (loss) non-GAAP reconciliation below the discussion of GAAP operating profit, providing greater prominence to GAAP-basis operating profit.
•Expands the explanation of adjusting items in the adjusted operating profit (loss) including post divestiture transition charges.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations and Related Information
Gross Profit (in millions)
Year Ended December 31,
2021 2020 2019
Net sales $ — $ 714.8 $ 697.6
Cost of products sold — 341.5 295.4
Gross profit — 373.3 402.2
Gross profit margin — % 52.2 % 57.7 %
Cost of products sold increased from $341.5 million to $___ million primarily driven by higher freight costs, including air freight, associated with shipping products from China to the United States and delays in returning our manufacturing operations to pre-pandemic efficiency levels. In addition, we recorded inventory allowances of $__ million, which includes $__ million for inventory associated with restructuring activities, $__ million for Halyard-branded inventory and $__ million for inventory obsolescence. Accordingly, In the year ended December 31, 2021, gross profit margin, decreased from 52.2% to ___%.
In the year ended December 31, 2020, our gross profit margin decreased to 52.2% from 57.7% in 2019 primarily due the pandemic-driven shift in demand for products that earn lower margins along with $4.9 million of incremental costs associated with our response to the COVID-19 pandemic and manufacturing inefficiencies driven by the COVID-19 pandemic. In addition, we recorded inventory allowances of $8.8 million, which includes $5.7 million for Halyard-branded products and $3.1 million for obsolescence.
Research and Development (in millions)
Year Ended December 31,
2021 2020 2019
Research and development $ — $ 34.9 $ 37.7
Percentage of net sales — % 4.9 % 5.4 %
Research and development consists primarily of compensation for personnel and expenses for product trial costs, outside laboratory and license fees, the cost of laboratory equipment and facilities and asset write-offs for equipment associated with unsuccessful product launches. Research and development has historically been between 4% and 6% of net sales.
Selling and General Expenses (in millions)
Year Ended December 31,
2021 2020 2019
Selling and general expenses $ — $ 332.6 $ 399.1
Percentage of net sales — % 46.5 % 57.2 %
Selling and general expenses decreased from $332.6 million in 2020 to $___ million in 2021. In 2021, savings were realized from the restructuring activities undertaken in 2020 and continued discipline over spending throughout 2021. As described previously under “Restructuring Activities,” the savings realized include lower compensation costs as we reduced the size of our senior leadership team and lower operating costs as we consolidated certain operations within the pain management franchise and reduced our office space footprint. Selling and general expenses included $__ million of restructuring expenses in 2021 compared to $5.0 million in 2020.
In the year ended December 31, 2020, selling and general expenses decreased from $399.1 million in 2019 to $332.6 million in 2020. The decrease was driven by lower post divestiture separation costs, which were $7.7 million in 2020 compared to $53.1 million in 2019. Restructuring costs included in selling and general expenses were $4.9 million in 2020 compared to $17.2 million in 2019. The remainder of the decrease was driven by lower travel and other expenses associated with business activities curtailed or restricted during the COVID-19 pandemic.
Other Expense, net (in millions)
Year Ended December 31,
2021 2020 2019
Other expense, net $ — $ 51.9 $ 21.1
Percentage of net sales — % 7.3 % 3.0 %
Other expense, net decreased from $51.9 million in 2020 to $__ million in 2021 primarily due to lower restructuring costs. In 2020, other expense included $20.0 million of restructuring costs associated with our 2020 Restructuring as described under “Restructuring Activities.” Other expense, net also includes litigation and legal costs of $__ million and $27.5 million in the years ended December 31, 2021 and 2020 respectively. Legal and litigation costs were incurred for matters described in “Commitments and Contingencies” in Note __ to the consolidated financial statements in Item 8.
Other expense, net increased from $21.1 million in 2019 to $51.9 million primarily due to $20.0 million of restructuring costs in 2020. Legal and litigation costs in 2019 were $15.6 million.
Operating Profit (Loss) (in millions)
Year Ended December 31,
2021 2020 2019
Operating profit (loss) $ — $ (46.1) $ (55.7)
Operating profit margin — % (6.4) % (8.0) %
The items previously described drove operating profit to $__ million in the year ended December 31, 2021 compared operating losses of $46.1 million and $55.7, respectively, in the years ended December 31, 2020 and 2019.
Adjusted Operating Profit (Loss)
A reconciliation of adjusted operating profit (loss), a non-GAAP measure, to operating profit (loss) is provided in the table below, (in millions):
Year Ended December 31,
2021 2020 2019
Operating (Loss) Profit, as reported (GAAP) $ — $ (46.1) $ (55.7)
COVID-19 related expenses — 7.9 —
2020 Restructuring charges — 27.6 —
Post divestiture restructuring charges — 2.2 20.2
Post divestiture transition charges — 14.9 56.3
Acquisition and integration-related charges — 12.5 13.1
EU MDR Compliance — — —
Litigation and legal — 27.5 22.5
Intangibles amortization — 19.4 20.0
Adjusted operating profit (non-GAAP) $ — $ 65.9 $ 76.4
Adjusting items in the preceding table are described below:
COVID-19 related expenses: As a result of the COVID-19 pandemic, we incurred incremental expenses for additional personal protective equipment for our manufacturing employees, sanitation at our facilities and other costs.
2020 Restructuring Charges: As previously described under “Restructuring Activities,” these charges were incurred with certain initiatives undertaken in response to the COVID-19 pandemic. As of December 31, 2021, restructuring activities associated with the 2020 Restructuring were substantially complete.
Post divestiture restructuring charges: As previously described under “Restructuring Activities,” these charges were associated with a multi-phase restructuring plan intended to align our organizational structure, IT platform, supply chain and distribution channels to be more appropriate for our business following the divestiture. As of December 31, 2021, restructuring activities associated with the Plan were substantially complete.
Post divestiture transition costs: Transition costs included costs incurred to separate our IT systems and incremental costs related to transition services agreements in place with the buyer of the divested business that ran into 2020. Rebranding costs, including registration of our products under the “Avanos” brand in every jurisdiction in which we do business around the globe continued into 2021. All transition-related activities and costs were substantially complete by the end of 2021.
Acquisition and integration-related charges: In 2021, acquisition and integration-related charges were primarily for the integration of acquisitions into our systems and operations. In 2020 and 2019, acquisition and integration-related charges included $0.5 million and $9.1 million of restructuring costs as previously described under “Restructuring Activ
Show Raw Text
CORRESP 1 filename1.htm Document Avanos Medical, Inc. 5405 Windward Parkway Suite 100 South Alpharetta, GA 30004 November 23, 2021 VIA EDGAR and EMAIL Mr. Michael Fay Securities and Exchange Commission Division of Corporate Finance Office of Life Sciences 100 F Street NE Washington, D.C. 205479 Re: Avanos Medical, Inc. Form 10-K for the Fiscal Year Ended December 31, 2020 Filed February 19, 2021 File No. 001-36440 Dear Mr. Fay: This letter is in response to the October 26, 2021 letter from the staff (the “Staff”) of the Securities Exchange Commission (the “Commission”). We appreciate the Commission allowing the Company an extension of time, until November 23, 2021 to respond to the Staff’s comments. For convenience, the Staff’s comments are copied below, followed by the Company’s response. As Staff Comment Nos. 1-3 are all related to Management’s Discussion and Analysis of Financial Condition and Results of Operations and Related Information (“MD&A”) in Item 7, the Company addresses all three together. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Related Information, page 20 Staff Comment No. 1 We note there is no discussion of operating expense line items for each period in MD&A. For example, selling and general expenses declined from $399.1 million to $332.6 million from 2019 to 2020, but there is no discussion of the reason for this decrease. Please revise your disclosure in future filings to comply with Item 303(b) of Regulation S-K, which sets forth "where the financial statements reflect material changes from period-to-period in one or more line items, including where material changes within a line item offset one another, describe the underlying reasons for these material changes in quantitative and qualitative terms." Please provide us your intended revised disclosure. Staff Comment No. 2 We note you incurred $14.9 million, $56.3 million, and $9.2 million in post divestiture transition charges for the past three years, related to your April 2018 divestiture. Please describe to us in greater detail the nature of the charges for each of the years and quantify any significant components of the charges. Revise your disclosure in future filings, consistent with your response, as appropriate. Staff Comment No. 3 We note you discuss Adjusted Gross Profit for 2020 vs. 2019, but not Gross Profit presented under GAAP for those periods. We do not believe this presentation complies with Item 10(e)(1)(i)(A) of Regulation S-K which requires “a presentation, with equal or greater prominence, of the most directly comparable financial measure or measures calculated and presented in accordance with GAAP.” Please revise in future filings. As part of your revised disclosures, describe the underlying reasons in quantitative and Mr. Michael Fay Securities and Exchange Commission Page 2 qualitative terms, including further description and amounts related to the impact from product mix, write-off of obsolete inventory and higher costs associated with COVID-10 efforts. Company Response: The Company respectfully acknowledges the Staff’s comments and will include such discussion beginning with the Annual Report on Form 10-K for the year ended December 31, 2021, in substantially the form provided in Exhibit A. Item 8. Financial Statements and Supplementary Data Revenue Recognition and Accounts Receivable, page 34 Staff Comment No. 4 Please revise future filings to disclose qualitative and quantitative disclosure about the significant judgments and changes in judgments, including inputs and assumptions, related to your accounting for returns, rebates and incentives, as set forth in ASC 606-10-50-1(b), 50-17, and 50-20. Provide us your intended revised disclosure. Company Response: The Company respectfully acknowledges the Staff’s comment and will include such discussion beginning with the Annual Report on Form 10-K for the year ended December 31, 2021, in substantially the form provided in Exhibit B. Staff Comment No. 5 We note that you disaggregate revenue attributable to Chronic Care and Pain Management in response to ASC 606-10-50-5. To help us better understand the basis for your presentation, please provide us the financial information (1) used to prepare the Fourth Quarter 2020 Earnings Call presentation and (2) provided to your chief operating decision maker to evaluate your 4th quarter and annual 2020 results. In addition, please identify for us the unprofitable lines of business in which exiting was initiated, as referred to on page 19 and elsewhere. Company Response: In response to prior comments on November 26, 2019 and December 20, 2019, we explained that the Company discloses revenue aggregated at the Chronic Care and Pain Management portfolio levels and acknowledged that each portfolio contains two smaller product categories within each portfolio and described each category and provided a matrix that demonstrated that the reported level of aggregation was appropriate. Accordingly, per your request, we are providing materials used in the preparation for our fourth quarter 2020 earnings presentation and materials provided to our chief operating decision maker that we believe support that conclusion. However, also in response to comments received in your December 20, 2019 letter, we agreed to (i) disclose the percentage of net sales for each product category in compliance with the guidance in Item 101 of Regulation S-K, and (ii) continue to re-evaluate for further disaggregation as our product portfolio and business grows or evolves. With the addition of acquired products in both our Chronic Care and Pain Management portfolios in 2019, and with the percentage of net sales by product category already disclosed in our Annual Reports on Form 10-K, we will begin to include tabular presentation of revenue by each of the product categories within each of the Chronic Care and Pain Management portfolios beginning with our Annual Report on Form 10-K and continuing with each subsequent Quarterly Report on Form 10-Q. This revised disclosure will appear in our “Business and Products Information” footnote. In addition, the disclosure of products that account for greater than 10% of our consolidated net sales will be included in the descriptions of the product categories below the tabular presentation. The tabular presentation of disaggregated revenue will also appear in our MD&A, earnings releases and other investor presentation materials. This will allow for certain comments made in investor materials such as “mid-single digit growth” pertaining to a specific product to be better correlated to actual revenue data in our disclosure. We believe this is improved disclosure but also believe any further disaggregation potentially represents a competitive risk to our business. The unprofitable lines of business that we exited were not material to the business, but had their own manufacturing facilities, resulting in high exit and disposal costs. The disclosure in our “Business and Products Information” will be in substantially the form as presented in Exhibit C, with the same tabular presentation appearing in our MD&A, earnings release and other investor presentation materials. The materials you requested supporting our level of disaggregation, which are subject to confidential treatment, are being provided to you separately. Mr. Michael Fay Securities and Exchange Commission Page 3 If you have any further questions or comments regarding the Company’s response to the Staff’s comments, please contact me at (470) 448-5000 or via email at michael.greiner@avanos.com. Avanos Medical, Inc. By: /s/ Michael C. Greiner Michael C. Greiner Senior Vice President and Chief Financial Officer EXHIBIT A Introduction The following proposed Management’s Discussion and Analysis beginning with “Gross Profit” reflects the following changes: •Removes the adjusted gross profit non-GAAP reconciliation and only presents gross profit in a tabular format on a GAAP basis. •Adds a tabular presentations of R&D expenses, selling and general expenses, other expense, net and operating profit (loss). Each is followed by discussion of significant changes. •Moves the adjusted operating profit (loss) non-GAAP reconciliation below the discussion of GAAP operating profit, providing greater prominence to GAAP-basis operating profit. •Expands the explanation of adjusting items in the adjusted operating profit (loss) including post divestiture transition charges. ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations and Related Information Gross Profit (in millions) Year Ended December 31, 2021 2020 2019 Net sales $ — $ 714.8 $ 697.6 Cost of products sold — 341.5 295.4 Gross profit — 373.3 402.2 Gross profit margin — % 52.2 % 57.7 % Cost of products sold increased from $341.5 million to $___ million primarily driven by higher freight costs, including air freight, associated with shipping products from China to the United States and delays in returning our manufacturing operations to pre-pandemic efficiency levels. In addition, we recorded inventory allowances of $__ million, which includes $__ million for inventory associated with restructuring activities, $__ million for Halyard-branded inventory and $__ million for inventory obsolescence. Accordingly, In the year ended December 31, 2021, gross profit margin, decreased from 52.2% to ___%. In the year ended December 31, 2020, our gross profit margin decreased to 52.2% from 57.7% in 2019 primarily due the pandemic-driven shift in demand for products that earn lower margins along with $4.9 million of incremental costs associated with our response to the COVID-19 pandemic and manufacturing inefficiencies driven by the COVID-19 pandemic. In addition, we recorded inventory allowances of $8.8 million, which includes $5.7 million for Halyard-branded products and $3.1 million for obsolescence. Research and Development (in millions) Year Ended December 31, 2021 2020 2019 Research and development $ — $ 34.9 $ 37.7 Percentage of net sales — % 4.9 % 5.4 % Research and development consists primarily of compensation for personnel and expenses for product trial costs, outside laboratory and license fees, the cost of laboratory equipment and facilities and asset write-offs for equipment associated with unsuccessful product launches. Research and development has historically been between 4% and 6% of net sales. Selling and General Expenses (in millions) Year Ended December 31, 2021 2020 2019 Selling and general expenses $ — $ 332.6 $ 399.1 Percentage of net sales — % 46.5 % 57.2 % Selling and general expenses decreased from $332.6 million in 2020 to $___ million in 2021. In 2021, savings were realized from the restructuring activities undertaken in 2020 and continued discipline over spending throughout 2021. As described previously under “Restructuring Activities,” the savings realized include lower compensation costs as we reduced the size of our senior leadership team and lower operating costs as we consolidated certain operations within the pain management franchise and reduced our office space footprint. Selling and general expenses included $__ million of restructuring expenses in 2021 compared to $5.0 million in 2020. In the year ended December 31, 2020, selling and general expenses decreased from $399.1 million in 2019 to $332.6 million in 2020. The decrease was driven by lower post divestiture separation costs, which were $7.7 million in 2020 compared to $53.1 million in 2019. Restructuring costs included in selling and general expenses were $4.9 million in 2020 compared to $17.2 million in 2019. The remainder of the decrease was driven by lower travel and other expenses associated with business activities curtailed or restricted during the COVID-19 pandemic. Other Expense, net (in millions) Year Ended December 31, 2021 2020 2019 Other expense, net $ — $ 51.9 $ 21.1 Percentage of net sales — % 7.3 % 3.0 % Other expense, net decreased from $51.9 million in 2020 to $__ million in 2021 primarily due to lower restructuring costs. In 2020, other expense included $20.0 million of restructuring costs associated with our 2020 Restructuring as described under “Restructuring Activities.” Other expense, net also includes litigation and legal costs of $__ million and $27.5 million in the years ended December 31, 2021 and 2020 respectively. Legal and litigation costs were incurred for matters described in “Commitments and Contingencies” in Note __ to the consolidated financial statements in Item 8. Other expense, net increased from $21.1 million in 2019 to $51.9 million primarily due to $20.0 million of restructuring costs in 2020. Legal and litigation costs in 2019 were $15.6 million. Operating Profit (Loss) (in millions) Year Ended December 31, 2021 2020 2019 Operating profit (loss) $ — $ (46.1) $ (55.7) Operating profit margin — % (6.4) % (8.0) % The items previously described drove operating profit to $__ million in the year ended December 31, 2021 compared operating losses of $46.1 million and $55.7, respectively, in the years ended December 31, 2020 and 2019. Adjusted Operating Profit (Loss) A reconciliation of adjusted operating profit (loss), a non-GAAP measure, to operating profit (loss) is provided in the table below, (in millions): Year Ended December 31, 2021 2020 2019 Operating (Loss) Profit, as reported (GAAP) $ — $ (46.1) $ (55.7) COVID-19 related expenses — 7.9 — 2020 Restructuring charges — 27.6 — Post divestiture restructuring charges — 2.2 20.2 Post divestiture transition charges — 14.9 56.3 Acquisition and integration-related charges — 12.5 13.1 EU MDR Compliance — — — Litigation and legal — 27.5 22.5 Intangibles amortization — 19.4 20.0 Adjusted operating profit (non-GAAP) $ — $ 65.9 $ 76.4 Adjusting items in the preceding table are described below: COVID-19 related expenses: As a result of the COVID-19 pandemic, we incurred incremental expenses for additional personal protective equipment for our manufacturing employees, sanitation at our facilities and other costs. 2020 Restructuring Charges: As previously described under “Restructuring Activities,” these charges were incurred with certain initiatives undertaken in response to the COVID-19 pandemic. As of December 31, 2021, restructuring activities associated with the 2020 Restructuring were substantially complete. Post divestiture restructuring charges: As previously described under “Restructuring Activities,” these charges were associated with a multi-phase restructuring plan intended to align our organizational structure, IT platform, supply chain and distribution channels to be more appropriate for our business following the divestiture. As of December 31, 2021, restructuring activities associated with the Plan were substantially complete. Post divestiture transition costs: Transition costs included costs incurred to separate our IT systems and incremental costs related to transition services agreements in place with the buyer of the divested business that ran into 2020. Rebranding costs, including registration of our products under the “Avanos” brand in every jurisdiction in which we do business around the globe continued into 2021. All transition-related activities and costs were substantially complete by the end of 2021. Acquisition and integration-related charges: In 2021, acquisition and integration-related charges were primarily for the integration of acquisitions into our systems and operations. In 2020 and 2019, acquisition and integration-related charges included $0.5 million and $9.1 million of restructuring costs as previously described under “Restructuring Activ