UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): October 31, 2024
| (Exact Name of Registrant as Specified in Its Charter) | ||||||||
| | ||||||||
| (State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||
(Address of Principal Executive Offices) (Zip Code)
Registrant’s telephone number, including area code: (440 ) 930-1000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On October 31, 2024, the Registrant issued a press release, furnished herewith as Exhibit 99.1, announcing earnings for the third quarter of 2024. The press release shall not be deemed to be “filed” under the Securities Exchange Act of 1934.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
| Number | Exhibit | ||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | ||||
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| AVIENT CORPORATION | |||||
| By: /s/ Jamie A. Beggs | |||||
| Name: Jamie A. Beggs | |||||
Title: Senior Vice President and Chief Financial Officer | |||||
Dated: October 31, 2024
NEWS RELEASE
FOR IMMEDIATE RELEASE
Avient Announces Third Quarter 2024 Results
•Third quarter sales increased 8% over the prior year quarter to $815 million supported by broad-based growth across all regions and most end markets
•Third quarter GAAP EPS from continuing operations of $0.41 compared to $0.06 in the prior year quarter
•Third quarter adjusted EPS of $0.65 exceeded guidance of $0.62 and increased 14% over prior year quarter, driven by organic revenue growth and margin expansion in both segments, as well as lower interest expense
•2024 full-year adjusted EPS guidance range narrowed to $2.63 to $2.67, from prior guidance range of $2.55 to $2.70; Revised guidance reflects 11% to 13% growth in adjusted EPS over the prior year
•Increased dividend 5% to $1.08, on an annualized basis, representing the fourteenth consecutive annual increase
CLEVELAND – October 31, 2024 – Avient Corporation (NYSE: AVNT), a leading provider of specialized and sustainable materials solutions, today announced its third quarter 2024 results. The company reported third quarter sales of $815.2 million compared to $753.7 million in the prior year quarter.
Third quarter GAAP earnings per share (EPS) from continuing operations were $0.41 compared to $0.06 in the prior year quarter. The company noted that third quarter 2024 GAAP EPS includes $0.07 of special items (see Attachment 3) and $0.16 of intangible amortization expense (see Attachment 1). Third quarter 2024 adjusted EPS were $0.65 compared to $0.57 in the prior year.
“The Avient team delivered another strong quarter, ahead of our expectations, driven by organic revenue growth across all regions and most end markets,” said Dr. Ashish Khandpur, President and Chief Executive Officer of Avient Corporation. “Both business segments performed well as we continue to capitalize on winning new business and gaining share, while serving the underlying market demand.”
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Dr. Khandpur added, "Latin America and Asia each delivered organic double-digit topline increases of 27% and 11%, respectively, driven by growth in the packaging and consumer markets. The US and Canada region grew organic revenue by 9%, led by continued demand for our composite materials for the building and construction market. The EMEA region's organic revenues grew 5%, benefiting from share gains in packaging and continued strong demand for defense applications."
2024 Outlook
"The year has continued to play out as we expected, and as we look at the fourth quarter, we are in a position to narrow our full-year guidance," said Jamie Beggs, Senior Vice President and Chief Financial Officer of Avient Corporation. "We now expect adjusted EBITDA of $525 million to $530 million, from our previous guidance range of $515 million to $540 million. Our revised range for adjusted EPS is between $2.63 to $2.67, from our previous range of $2.55 to $2.70."
Upcoming Investor Day
"Over the course of 2024, we have been developing our strategic approach for the next chapter of Avient. It will be a future that is focused on delivering growth with margin expansion by intersecting the needs of our customers and secular market trends with our broad portfolio of technologies," said Dr. Khandpur. "We are excited to share the details of our strategy at our investor day in New York City on December 4th."
Avient's investor day will be held at the New York Stock Exchange beginning at 10:00 a.m. eastern standard time. Registration details will be released shortly.
Webcast Details
Avient will provide additional details on its 2024 third quarter results and 2024 full-year outlook during its webcast scheduled for 8:00 a.m. Eastern Time on October 31, 2024.
The webcast can be viewed live at avient.com/investors, or by clicking on the webcast link here. Conference call participants in the question and answer session should pre-register using the link at avient.com/investors, or here, to receive the dial-in numbers and personal PIN. This information is required to access the conference call. The question and answer session will follow the company’s presentation and prepared remarks.
A recording of the webcast and the slide presentation will be available at avient.com/investors/events-presentations immediately following the conference call and will be accessible for one year.
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Non-GAAP Financial Measures
The Company uses both GAAP (generally accepted accounting principles) and non-GAAP financial measures. The non-GAAP financial measures include adjusted EPS, adjusted operating income, adjusted EBITDA and adjusted EBITDA margins. Avient's chief operating decision maker uses these financial measures to monitor and evaluate the ongoing performance of the Company and each business segment and to allocate resources.
The Company does not provide reconciliations of forward-looking non-GAAP financial measures, such as adjusted EPS and adjusted EBITDA, to the most comparable GAAP financial measures on a forward-looking basis because the Company is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amount of certain items, such as, but not limited to, environmental remediation costs, mark-to-market adjustments associated with benefit plans, acquisition related costs, and other non-routine costs. Each of such adjustments has not yet occurred, are out of the Company's control and/or cannot be reasonably predicted. For the same reasons, the Company is unable to address the probable significance of the unavailable information.
To access Avient’s news library online, please visit www.avient.com/news-events.
About Avient
Avient Corporation (NYSE: AVNT) provides specialized and sustainable materials solutions that transform customer challenges into opportunities, bringing new products to life for a better world. Examples include:
•Dyneema®, the world’s strongest fiber™, enables unmatched levels of performance and protection for end-use applications, including ballistic personal protection, marine and sustainable infrastructure and outdoor sports
•Unique technologies that improve the recyclability of products and enable recycled content to be incorporated, thus advancing a more circular economy
•Light-weighting solutions that replace heavier traditional materials like metal, glass and wood, which can improve fuel efficiency in all modes of transportation and reduce carbon footprint
•Sustainable infrastructure solutions that increase energy efficiency, renewable energy, natural resource conservation and fiber optic / 5G network accessibility
Avient is certified ACC Responsible Care®, a founding member of the Alliance to End Plastic Waste and certified Great Place to Work®. For more information, visit https://www.avient.com.
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Forward-looking Statements
In this press release, statements that are not reported financial results or other historical information are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give current expectations or forecasts of future events and are not guarantees of future performance. They are based on management's expectations that involve a number of business risks and uncertainties, any of which could cause actual results to differ materially from those expressed in or implied by the forward-looking statements. They use words such as "will," "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," and other words and terms of similar meaning in connection with any discussion of future operating or financial condition, performance and/or sales. Factors that could cause actual results to differ materially from those implied by these forward-looking statements include, but are not limited to: disruptions, uncertainty or volatility in the credit markets that could adversely impact the availability of credit already arranged and the availability and cost of credit in the future; the effect on foreign operations of currency fluctuations, tariffs and other political, economic and regulatory risks; disruptions or inefficiencies in our supply chain, logistics, or operations; changes in laws and regulations in jurisdictions where we conduct business, including with respect to plastics and climate change; fluctuations in raw material prices, quality and supply, and in energy prices and supply; demand for our products and services; production outages or material costs associated with scheduled or unscheduled maintenance programs; unanticipated developments that could occur with respect to contingencies such as litigation and environmental matters; our ability to pay regular quarterly cash dividends and the amounts and timing of any future dividends; information systems failures and cyberattacks; amounts for cash and non-cash charges related to restructuring plans that may differ from original estimates, including because of timing changes associated with the underlying actions; our ability to achieve strategic objectives and successfully integrate acquisitions, including the implementation of a cloud-based enterprise resource planning system, S/4HANA; and other factors affecting our business beyond our control, including without limitation, changes in the general economy, changes in interest rates, changes in the rate of inflation, geopolitical conflicts and any recessionary conditions. The above list of factors is not exhaustive.
Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise. You are advised to consult any further disclosures we make on related subjects in our reports on Form 10-Q, 8-K and 10-K that we provide to the Securities and Exchange Commission.
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Investor Relations Contact:
Giuseppe (Joe) Di Salvo
Vice President, Treasurer and Investor Relations
Avient Corporation
+1 440-930-1921
giuseppe.disalvo@avient.com
Media Contact:
Kyle G. Rose
Vice President, Marketing and Communications
Avient Corporation
+1 440-930-3162
kyle.rose@avient.com
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Attachment 1
Avient Corporation
Summary of Condensed Consolidated Statements of Income (Unaudited)
(In millions, except per share data)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| Sales | $ | 815.2 | $ | 753.7 | $ | 2,493.9 | $ | 2,423.8 | |||||||||||||||
| Operating income | 77.2 | 34.3 | 243.7 | 153.7 | |||||||||||||||||||
| Net income from continuing operations attributable to Avient shareholders | 38.2 | 5.1 | 121.2 | 48.0 | |||||||||||||||||||
Diluted earnings per share from continuing operations attributable to Avient shareholders | $ | 0.41 | $ | 0.06 | $ | 1.32 | $ | 0.52 | |||||||||||||||
Senior management uses comparisons of adjusted net income from continuing operations attributable to Avient shareholders and diluted adjusted earnings per share (EPS) from continuing operations attributable to Avient shareholders, excluding special items, to assess performance and facilitate comparability of results. Further, as a result of Avient's portfolio shift to a pure play specialty formulator, it has completed several acquisitions and divestitures which have resulted in a significant amount of intangible asset amortization. Management excludes intangible asset amortization from adjusted EPS as it believes excluding acquired intangible asset amortization is a useful measure of current period earnings per share. Senior management believes these measures are useful to investors because they allow for comparison to Avient's performance in prior periods without the effect of items that, by their nature, tend to obscure Avient's operating results due to the potential variability across periods based on timing, frequency and magnitude. Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation from, or solely as alternatives to, financial measures prepared in accordance with GAAP. Below is a reconciliation of these non-GAAP financial measures to their most directly comparable financial measures calculated and presented in accordance with GAAP. See Attachment 3 for a definition and summary of special items.
| Three Months Ended September 30, | |||||||||||||||||||||||
| 2024 | 2023 | ||||||||||||||||||||||
| Reconciliation to Condensed Consolidated Statements of Income | $ | EPS(1) | $ | EPS(1) | |||||||||||||||||||
| Net income from continuing operations attributable to Avient shareholders | $ | 38.2 | $ | 0.41 | $ | 5.1 | $ | 0.06 | |||||||||||||||
| Special items, after-tax (Attachment 3) | 6.6 | 0.07 | 32.0 | 0.35 | |||||||||||||||||||
| Amortization expense, after-tax | 15.0 | 0.16 | 15.2 | 0.16 | |||||||||||||||||||
| Adjusted net income / EPS | $ | 59.8 | $ | 0.65 | $ | 52.3 | $ | 0.57 | |||||||||||||||
(1) Per share amounts may not recalculate from figures presented herein due to rounding
| Nine Months Ended September 30, | |||||||||||||||||||||||
| 2024 | 2023 | ||||||||||||||||||||||
| Reconciliation to Condensed Consolidated Statements of Income | $ | EPS(1) | $ | EPS(1) | |||||||||||||||||||
| Net income from continuing operations attributable to Avient shareholders | $ | 121.2 | $ | 1.32 | $ | 48.0 | $ | 0.52 | |||||||||||||||
| Special items, after-tax (Attachment 3) | 33.9 | 0.37 | 73.9 | 0.81 | |||||||||||||||||||
| Amortization expense, after-tax | 44.7 | 0.49 | 46.5 | 0.51 | |||||||||||||||||||
| Adjusted net income / EPS | $ | 199.8 | $ | 2.17 | $ | 168.4 | $ | 1.84 | |||||||||||||||
(1) Per share amounts may not recalculate from figures presented herein due to rounding
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Attachment 2
Avient Corporation
Condensed Consolidated Statements of Income (Unaudited)
(In millions, except per share data)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| Sales | $ | 815.2 | $ | 753.7 | $ | 2,493.9 | $ | 2,423.8 | |||||||||||||||
| Cost of sales | 553.8 | 558.4 | 1,696.7 | 1,740.2 | |||||||||||||||||||
| Gross margin | 261.4 | 195.3 | 797.2 | 683.6 | |||||||||||||||||||
| Selling and administrative expense | 184.2 | 161.0 | 553.5 | 529.9 | |||||||||||||||||||
| Operating income | 77.2 | 34.3 | 243.7 | 153.7 | |||||||||||||||||||
| Interest expense, net | (26.9) | (30.3) | (80.1) | (88.5) | |||||||||||||||||||
| Other (expense) income, net | (0.3) | 1.0 | (2.1) | 1.5 | |||||||||||||||||||
| Income from continuing operations before income taxes | 50.0 | 5.0 | 161.5 | 66.7 | |||||||||||||||||||
| Income tax (expense) benefit | (11.3) | 0.1 | (39.3) | (18.0) | |||||||||||||||||||
| Net income from continuing operations | 38.7 | 5.1 | 122.2 | 48.7 | |||||||||||||||||||
| Loss from discontinued operations, net of income taxes | — | — | — | (0.9) | |||||||||||||||||||
| Net income | $ | 38.7 | $ | 5.1 | $ | 122.2 | $ | 47.8 | |||||||||||||||
| Net income attributable to noncontrolling interests | (0.5) | — | (1.0) | (0.7) | |||||||||||||||||||
| Net income attributable to Avient common shareholders | $ | 38.2 | $ | 5.1 | $ | 121.2 | $ | 47.1 | |||||||||||||||
| Earnings (loss) per share attributable to Avient common shareholders - Basic: | |||||||||||||||||||||||
| Continuing operations | $ | 0.42 | $ | 0.06 | $ | 1.33 | $ | 0.53 | |||||||||||||||
| Discontinued operations | — | — | — | (0.01) | |||||||||||||||||||
| Total | $ | 0.42 | $ | 0.06 | $ | 1.33 | $ | 0.52 | |||||||||||||||
| Earnings (loss) per share attributable to Avient common shareholders - Diluted: | |||||||||||||||||||||||
| Continuing operations | $ | 0.41 | $ | 0.06 | $ | 1.32 | $ | 0.52 | |||||||||||||||
| Discontinued operations | — | — | — | (0.01) | |||||||||||||||||||
| Total | $ | 0.41 | $ | 0.06 | $ | 1.32 | $ | 0.51 | |||||||||||||||
| Cash dividends declared per share of common stock | $ | 0.2575 | $ | 0.2475 | $ | 0.7725 | $ | 0.7425 | |||||||||||||||
| Weighted-average shares used to compute earnings per common share: | |||||||||||||||||||||||
| Basic | 91.3 | 91.1 | 91.3 | 91.1 | |||||||||||||||||||
| Diluted | 92.3 | 91.9 | 92.0 | 91.8 | |||||||||||||||||||
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Attachment 3
Avient Corporation
Summary of Special Items (Unaudited)
(In millions, except per share data)
Special items (1) | Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
Cost of sales: | |||||||||||||||||||||||
Restructuring costs, including accelerated depreciation | $ | 1.8 | $ | (2.1) | $ | 5.6 | $ | (9.9) | |||||||||||||||
Environmental remediation costs | (2.4) | (38.1) | (28.2) | (52.5) | |||||||||||||||||||
Impact on cost of sales | (0.6) | (40.2) | (22.6) | (62.4) | |||||||||||||||||||
| Selling and administrative expense: | |||||||||||||||||||||||
Restructuring and employee separation costs | (3.1) | (2.0) | (6.6) | (13.8) | |||||||||||||||||||
| Legal and other | (4.3) | 1.7 | (10.1) | (9.1) | |||||||||||||||||||
Acquisition related costs | (0.4) | (0.5) | (2.5) | (4.6) | |||||||||||||||||||
Impact on selling and administrative expense | (7.8) | (0.8) | (19.2) | (27.5) | |||||||||||||||||||
Impact on operating income | (8.4) | (41.0) | (41.8) | (89.9) | |||||||||||||||||||
| Interest expense, net - financing costs | (1.3) | (2.2) | (2.3) | (2.2) | |||||||||||||||||||
Other income (loss) | — | — | 0.1 | (0.1) | |||||||||||||||||||
Impact on income from continuing operations before income taxes | (9.7) | (43.2) | (44.0) | (92.2) | |||||||||||||||||||
Income tax benefit on special items | 3.5 | 10.8 | 11.9 | 23.2 | |||||||||||||||||||
Tax adjustments(2) | (0.4) | 0.4 | (1.8) | (4.9) | |||||||||||||||||||
Impact of special items on net income from continuing operations | $ | (6.6) | $ | (32.0) | $ | (33.9) | $ | (73.9) | |||||||||||||||
| Diluted earnings per common share impact | $ | (0.07) | $ | (0.35) | $ | (0.37) | $ | (0.81) | |||||||||||||||
Weighted average shares used to compute adjusted earnings per share: | |||||||||||||||||||||||
| Diluted | 92.3 | 91.9 | 92.0 | 91.8 | |||||||||||||||||||
(1) Special items include charges related to specific strategic initiatives or financial restructuring such as: consolidation of operations; debt extinguishment costs; costs incurred directly in relation to acquisitions or divestitures; employee separation costs resulting from personnel reduction programs, plant realignment costs, executive separation agreements; asset impairments; settlement gains or losses and mark-to-market adjustments associated with gains and losses on pension and other post-retirement benefit plans; environmental remediation costs, fines, penalties and related insurance recoveries related to facilities no longer owned or closed in prior years; gains and losses on the divestiture of operating businesses, gains and losses on facility or property sales or disposals; results of litigation, fines or penalties, where such litigation (or action relating to the fines or penalties) arose prior to the commencement of the performance period; one-time, non-recurring items; and the effect of changes in accounting principles or other such laws or provisions affecting reported results.
(2) Tax adjustments include the net tax impact from non-recurring income tax items and certain adjustments to uncertain tax position reserves and valuation allowances.
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Attachment 4
Avient Corporation
Condensed Consolidated Balance Sheets
(In millions)
(Unaudited) September 30, 2024 | December 31, 2023 | ||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 505.7 | $ | 545.8 | |||||||
| Accounts receivable, net | 465.1 | 399.9 | |||||||||
| Inventories, net | 377.8 | 347.0 | |||||||||
| Other current assets | 108.8 | 114.9 | |||||||||
| Total current assets | 1,457.4 | 1,407.6 | |||||||||
| Property, net | 973.5 | 1,028.9 | |||||||||
| Goodwill | 1,716.8 | 1,719.3 | |||||||||
| Intangible assets, net | 1,542.5 | 1,590.8 | |||||||||
| Deferred income taxes | 133.1 | 92.3 | |||||||||
| Other non-current assets | 224.0 | 129.6 | |||||||||
| Total assets | $ | 6,047.3 | $ | 5,968.5 | |||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Short-term and current portion of long-term debt | $ | 7.8 | $ | 9.5 | |||||||
| Accounts payable | 425.9 | 432.3 | |||||||||
| Accrued expenses and other current liabilities | 460.8 | 331.8 | |||||||||
| Total current liabilities | 894.5 | 773.6 | |||||||||
| Non-current liabilities: | |||||||||||
| Long-term debt | 2,059.9 | 2,070.5 | |||||||||
| Pension and other post-retirement benefits | 63.7 | 67.2 | |||||||||
| Deferred income taxes | 289.1 | 281.6 | |||||||||
| Other non-current liabilities | 359.9 | 437.6 | |||||||||
| Total non-current liabilities | 2,772.6 | 2,856.9 | |||||||||
| SHAREHOLDERS' EQUITY | |||||||||||
| Avient shareholders’ equity | 2,363.0 | 2,319.2 | |||||||||
| Noncontrolling interest | 17.2 | 18.8 | |||||||||
| Total equity | 2,380.2 | 2,338.0 | |||||||||
| Total liabilities and equity | $ | 6,047.3 | $ | 5,968.5 | |||||||
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Attachment 5
Avient Corporation
Condensed Consolidated Statements of Cash Flows (Unaudited)
(In millions)
| Nine Months Ended September 30, | |||||||||||
| 2024 | 2023 | ||||||||||
| Operating activities | |||||||||||
| Net income | $ | 122.2 | $ | 47.8 | |||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Depreciation and amortization | 133.1 | 142.6 | |||||||||
| Accelerated depreciation | 1.2 | 1.9 | |||||||||
| Share-based compensation expense | 12.5 | 9.7 | |||||||||
| Changes in assets and liabilities: | |||||||||||
| Increase in accounts receivable | (65.7) | (5.7) | |||||||||
| (Increase) decrease in inventories | (30.2) | 16.5 | |||||||||
| Decrease in accounts payable | (5.7) | (59.1) | |||||||||
| Taxes paid on gain on sale of business | — | (104.1) | |||||||||
| Accrued expenses and other assets and liabilities, net | (33.2) | (2.5) | |||||||||
| Net cash provided by operating activities | 134.2 | 47.1 | |||||||||
| Investing activities | |||||||||||
| Capital expenditures | (80.8) | (75.0) | |||||||||
| Net proceeds from divestiture | — | 7.3 | |||||||||
| Proceeds from plant closures | 3.4 | — | |||||||||
| Other investing activities | (2.1) | 2.3 | |||||||||
| Net cash used by investing activities | (79.5) | (65.4) | |||||||||
| Financing activities | |||||||||||
| Proceeds from long-term borrowings | 650.0 | — | |||||||||
| Payments on long-term borrowings | (659.1) | (103.8) | |||||||||
| Cash dividends paid | (70.5) | (67.6) | |||||||||
| Debt financing costs | (9.6) | (2.3) | |||||||||
| Other financing activities | (4.6) | (2.3) | |||||||||
| Net cash used by financing activities | (93.8) | (176.0) | |||||||||
| Effect of exchange rate changes on cash | (1.0) | (7.2) | |||||||||
| Decrease in cash and cash equivalents | (40.1) | (201.5) | |||||||||
| Cash and cash equivalents at beginning of year | 545.8 | 641.1 | |||||||||
| Cash and cash equivalents at end of period | $ | 505.7 | $ | 439.6 | |||||||
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Attachment 6
Avient Corporation
Business Segment Operations (Unaudited)
(In millions)
Operating income and earnings before interest, taxes, depreciation and amortization (EBITDA) at the segment level does not include: special items as defined in Attachment 3; corporate general and administration costs that are not allocated to segments; intersegment sales and profit eliminations; share-based compensation costs; and certain other items that are not included in the measure of segment profit and loss that is reported to and reviewed by the chief operating decision maker. These costs are included in Corporate.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| Sales: | |||||||||||||||||||||||
| Color, Additives and Inks | $ | 521.5 | $ | 486.5 | $ | 1,578.8 | $ | 1,548.0 | |||||||||||||||
| Specialty Engineered Materials | 294.6 | 267.9 | 917.1 | 878.4 | |||||||||||||||||||
| Corporate | (0.9) | (0.7) | (2.0) | (2.6) | |||||||||||||||||||
| Sales | $ | 815.2 | $ | 753.7 | $ | 2,493.9 | $ | 2,423.8 | |||||||||||||||
| Gross margin: | |||||||||||||||||||||||
| Color, Additives and Inks | $ | 172.8 | $ | 156.8 | $ | 528.5 | $ | 482.9 | |||||||||||||||
| Specialty Engineered Materials | 89.0 | 78.3 | 290.7 | 263.7 | |||||||||||||||||||
| Corporate | (0.4) | (39.8) | (22.0) | (63.0) | |||||||||||||||||||
| Gross margin | $ | 261.4 | $ | 195.3 | $ | 797.2 | $ | 683.6 | |||||||||||||||
| Selling and administrative expense: | |||||||||||||||||||||||
| Color, Additives and Inks | $ | 97.3 | $ | 92.3 | $ | 292.1 | $ | 284.8 | |||||||||||||||
| Specialty Engineered Materials | 52.6 | 48.0 | 158.1 | 150.6 | |||||||||||||||||||
| Corporate | 34.3 | 20.7 | 103.3 | 94.5 | |||||||||||||||||||
| Selling and administrative expense | $ | 184.2 | $ | 161.0 | $ | 553.5 | $ | 529.9 | |||||||||||||||
| Operating income: | |||||||||||||||||||||||
| Color, Additives and Inks | $ | 75.5 | $ | 64.5 | $ | 236.4 | $ | 198.1 | |||||||||||||||
| Specialty Engineered Materials | 36.4 | 30.3 | 132.6 | 113.1 | |||||||||||||||||||
| Corporate | (34.7) | (60.5) | (125.3) | (157.5) | |||||||||||||||||||
| Operating income | $ | 77.2 | $ | 34.3 | $ | 243.7 | $ | 153.7 | |||||||||||||||
| Depreciation & amortization: | |||||||||||||||||||||||
| Color, Additives and Inks | $ | 21.9 | $ | 24.6 | $ | 65.6 | $ | 76.1 | |||||||||||||||
| Specialty Engineered Materials | 20.7 | 20.5 | 61.1 | 61.6 | |||||||||||||||||||
| Corporate | 2.5 | 1.3 | 7.6 | 6.8 | |||||||||||||||||||
| Depreciation & amortization | $ | 45.1 | $ | 46.4 | $ | 134.3 | $ | 144.5 | |||||||||||||||
Earnings before interest, taxes, depreciation and amortization (EBITDA): | |||||||||||||||||||||||
| Color, Additives and Inks | $ | 97.4 | $ | 89.1 | $ | 302.0 | $ | 274.2 | |||||||||||||||
| Specialty Engineered Materials | 57.1 | 50.8 | 193.7 | 174.7 | |||||||||||||||||||
| Corporate | (32.2) | (59.2) | (117.7) | (150.7) | |||||||||||||||||||
| Other (expense) income, net | (0.3) | 1.0 | (2.1) | 1.5 | |||||||||||||||||||
| EBITDA from continuing operations | $ | 122.0 | $ | 81.7 | $ | 375.9 | $ | 299.7 | |||||||||||||||
| Special items, before tax | 9.7 | 43.2 | 44.0 | 92.2 | |||||||||||||||||||
| Interest expense included in special items | (1.3) | (2.2) | (2.3) | (2.2) | |||||||||||||||||||
| Depreciation & amortization included in special items | (0.4) | — | (1.2) | (1.9) | |||||||||||||||||||
| Adjusted EBITDA | $ | 130.0 | $ | 122.7 | $ | 416.4 | $ | 387.8 | |||||||||||||||
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Attachment 7
Avient Corporation
Reconciliation of Non-GAAP Financial Measures (Unaudited)
(In millions, except per share data)
Senior management uses gross margin before special items and operating income before special items to assess performance and allocate resources because senior management believes that these measures are useful in understanding current profitability levels and how it may serve as a basis for future performance. In addition, operating income before the effect of special items is a component of Avient's annual incentive plans and is used in debt covenant computations. Senior management believes these measures are useful to investors because they allow for comparison to Avient's performance in prior periods without the effect of items that, by their nature, tend to obscure Avient's operating results due to the potential variability across periods based on timing, frequency and magnitude. Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation from, or solely as alternatives to, financial measures prepared in accordance with GAAP. Below is a reconciliation of these non-GAAP financial measures to their most directly comparable financial measures calculated and presented in accordance with GAAP. See Attachment 3 for a definition and summary of special items.
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| Reconciliation to Consolidated Statements of Income | 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||
| Sales | $ | 815.2 | $ | 753.7 | $ | 2,493.9 | $ | 2,423.8 | |||||||||||||||
| Gross margin - GAAP | 261.4 | 195.3 | 797.2 | 683.6 | |||||||||||||||||||
| Special items in gross margin (Attachment 3) | 0.6 | 40.2 | 22.6 | 62.4 | |||||||||||||||||||
| Adjusted gross margin | $ | 262.0 | $ | 235.5 | $ | 819.8 | $ | 746.0 | |||||||||||||||
| Adjusted gross margin as a percent of sales | 32.1 | % | 31.2 | % | 32.9 | % | 30.8 | % | |||||||||||||||
| Operating income - GAAP | 77.2 | 34.3 | 243.7 | 153.7 | |||||||||||||||||||
| Special items in operating income (Attachment 3) | 8.4 | 41.0 | 41.8 | 89.9 | |||||||||||||||||||
| Adjusted operating income | $ | 85.6 | $ | 75.3 | $ | 285.5 | $ | 243.6 | |||||||||||||||
| Adjusted operating income as a percent of sales | 10.5 | % | 10.0 | % | 11.4 | % | 10.1 | % | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| Reconciliation to EBITDA and Adjusted EBITDA: | 2024 | 2023 | 2024 | 2023 | |||||||||||||||||||
| Net income from continuing operations – GAAP | $ | 38.7 | $ | 5.1 | $ | 122.2 | $ | 48.7 | |||||||||||||||
| Income tax expense (benefit) | 11.3 | (0.1) | 39.3 | 18.0 | |||||||||||||||||||
| Interest expense, net | 26.9 | 30.3 | 80.1 | 88.5 | |||||||||||||||||||
| Depreciation & amortization | 45.1 | 46.4 | 134.3 | 144.5 | |||||||||||||||||||
| EBITDA from continuing operations | $ | 122.0 | $ | 81.7 | $ | 375.9 | $ | 299.7 | |||||||||||||||
| Special items, before tax | 9.7 | 43.2 | 44.0 | 92.2 | |||||||||||||||||||
| Interest expense included in special items | (1.3) | (2.2) | (2.3) | (2.2) | |||||||||||||||||||
| Depreciation & amortization included in special items | (0.4) | — | (1.2) | (1.9) | |||||||||||||||||||
| Adjusted EBITDA | $ | 130.0 | $ | 122.7 | $ | 416.4 | $ | 387.8 | |||||||||||||||
| Adjusted EBITDA as a percent of sales | 15.9 | % | 16.3 | % | 16.7 | % | 16.0 | % | |||||||||||||||
| Year Ended December 31, 2023 | |||||||||||
| Reconciliation to Condensed Consolidated Statements of Income | $ | EPS(1) | |||||||||
| Net income from continuing operations attributable to Avient shareholders | $ | 75.8 | $ | 0.83 | |||||||
| Special items, after-tax | 79.3 | 0.86 | |||||||||
| Amortization expense, after-tax | 61.5 | 0.67 | |||||||||
| Adjusted net income / EPS | $ | 216.6 | $ | 2.36 | |||||||
(1) Per share amounts may not recalculate from figures presented herein due to rounding
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