- GAAP EPS of $0.06 includes
special items primarily related to environmental costs and
amortization expense.
- Adjusted EPS of $0.57 exceeds
guidance of $0.56 as a result of
favorable margins and reduced interest expense offsetting lower
than projected sales.
- Fourth quarter and full year adjusted EPS guidance updated
to $0.47 and $2.30, respectively; full year free cash flow
expectation maintained at $180
million.
- Destocking appears to be nearing an end in many end markets;
fourth quarter adjusted EPS projected to be 12% higher than prior
year.
CLEVELAND, Nov. 2, 2023
/PRNewswire/ -- Avient Corporation (NYSE: AVNT), a leading provider
of specialized and sustainable material solutions, today announced
its third quarter 2023 results. The company reported third
quarter sales of $754 million
compared to $823 million in the prior
year. Third quarter GAAP and adjusted earnings per share
(EPS) were $0.06 and
$0.57, respectively, compared to
($0.30) and $0.59 in the prior year.
GAAP EPS includes $0.35 of special
items (see Attachment 3) and $0.16 of
intangible amortization expense (see Attachment 1). Special
items for the third quarter were primarily related to an adjustment
to environmental reserves.
"Adjusted EPS for the third quarter of $0.57 was slightly ahead of our guidance of
$0.56," said Robert M. Patterson, Chairman, President, and
Chief Executive Officer, Avient Corporation. "Versus our
projections, lower depreciation expense, related to prior
restructuring actions, and reduced interest expense more than
offset the impact of lower sales."
The company noted that during the third quarter certain end
markets continued to perform relatively well, such as energy,
transportation and defense, whereas demand in most other markets
remained weak versus the prior year.
Commenting on the company's outlook, Mr. Patterson said, "We are
not seeing a recovery in demand as we had initially modeled for the
fourth quarter, but we are encouraged that the pace of destocking
has slowed and appears to be nearing an end in many end markets
including packaging, which is our largest."
"We have updated our full year sales and adjusted EPS guidance
to $3.13 billion and $2.30, respectively, to reflect our current
projections as well as weaker foreign exchange. For the
fourth quarter, our adjusted EPS guidance of $0.47 represents a 12% increase versus the prior
year, much of which comes from Europe where margin expansion is now more than
offsetting weak demand conditions," Mr. Patterson
added. "This is a positive turn in earnings momentum as we
look ahead to next year."
The company also noted that it had paid down $100 million of debt and refinanced its Term Loan
during the third quarter, reducing the interest rate and extending
certain maturities from 2026 to 2029. The refinancing and
debt reduction will result in $10
million of annual interest expense savings.
"We continue to generate strong cash flow from operations and
are maintaining our full year free cash flow guidance of
$180 million. Given our cash
position, we paid down $100 million
of debt during the quarter, which brings our total debt reduction
to $300 million since we financed the
acquisition of Dyneema last year," said Jamie A. Beggs, Senior Vice President and Chief
Financial Officer, Avient Corporation.
Ms. Beggs added, "Last month, we also increased our dividend for
the thirteenth consecutive year. This reflects the confidence
we have in our ability to continue to deliver consistent free cash
flow, but more importantly to drive long-term earnings growth from
the areas of focus we highlighted at our Sustainability Day in
September."
Avient will share further information regarding third quarter
results and full-year guidance during its previously scheduled
webcast at 8:00 a.m. Eastern Time on
November 2, 2023.
Webcast Details
Avient will host a webcast on Thursday,
November 2, 2023 at 8:00 a.m.
ET. 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 number 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.
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
gross margin, adjusted EBITDA, and free cash flow. 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.
About Avient
Avient Corporation (NYSE: AVNT) provides specialized and
sustainable material 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.
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; changes in laws and
regulations regarding plastics in jurisdictions where we conduct
business; fluctuations in raw material prices, quality and supply,
and in energy prices and supply; 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 achieve strategic objectives and successfully integrate
acquisitions, including Avient Protective Materials; an inability
to raise or sustain prices for products or services; our ability to
pay regular quarterly cash dividends, including at the increased
rate, 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; 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 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.
|
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,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Sales
|
$
753.7
|
|
$
823.3
|
|
$
2,423.8
|
|
$
2,606.5
|
|
Operating
Income
|
34.3
|
|
40.6
|
|
153.7
|
|
242.9
|
|
Net income (loss) from
continuing operations attributable to Avient
shareholders
|
5.1
|
|
(27.4)
|
|
48.0
|
|
99.8
|
|
Basic earnings per
share from continuing operations attributable to
Avient shareholders
|
$
0.06
|
|
$
(0.30)
|
|
$
0.53
|
|
$
1.09
|
|
Diluted earnings per
share from continuing operations attributable to
Avient shareholders
|
$
0.06
|
|
$
(0.30)
|
|
$
0.52
|
|
$
1.08
|
|
|
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, 2023
|
|
Three Months
Ended
September 30, 2022
|
|
Reconciliation to
Condensed Consolidated Statements of Income
|
$
|
|
EPS
|
|
$
|
|
EPS
|
|
|
|
|
|
|
|
|
|
Net income (loss) from
continuing operations attributable to Avient
shareholders
|
$
5.1
|
|
$
0.06
|
|
$
(27.4)
|
|
$
(0.30)
|
|
Special items, after
tax (Attachment 3)
|
32.0
|
|
0.35
|
|
68.3
|
|
0.75
|
|
Amortization expense,
after-tax
|
15.2
|
|
0.16
|
|
13.4
|
|
0.14
|
|
Adjusted net income /
EPS
|
$
52.3
|
|
$
0.57
|
|
$
54.3
|
|
$
0.59
|
|
|
|
Nine Months
Ended
September 30, 2023
|
|
Nine Months
Ended
September 30, 2022
|
|
Reconciliation to
Condensed Consolidated Statements of Income
|
$
|
|
EPS
|
|
$
|
|
EPS
|
|
|
|
|
|
|
|
|
|
Net income from
continuing operations attributable to Avient
shareholders
|
$
48.0
|
|
$
0.52
|
|
$
99.8
|
|
$
1.08
|
|
Special items, after
tax (Attachment 3)
|
73.9
|
|
0.81
|
|
77.9
|
|
0.85
|
|
Amortization expense,
after-tax
|
46.5
|
|
0.51
|
|
34.9
|
|
0.38
|
|
Adjusted net income /
EPS
|
$
168.4
|
|
$
1.84
|
|
$
212.6
|
|
$
2.31
|
|
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,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
Sales
|
$
753.7
|
|
$
823.3
|
|
$
2,423.8
|
|
$
2,606.5
|
|
Cost of
sales
|
558.4
|
|
627.9
|
|
1,740.2
|
|
1,895.8
|
|
Gross margin
|
195.3
|
|
195.4
|
|
683.6
|
|
710.7
|
|
Selling and
administrative expense
|
161.0
|
|
154.8
|
|
529.9
|
|
467.8
|
|
Operating
income
|
34.3
|
|
40.6
|
|
153.7
|
|
242.9
|
|
Interest expense,
net
|
(30.3)
|
|
(37.3)
|
|
(88.5)
|
|
(70.4)
|
|
Other income (expense),
net
|
1.0
|
|
(32.3)
|
|
1.5
|
|
(31.3)
|
|
Income (loss) from
continuing operations before income taxes
|
5.0
|
|
(29.0)
|
|
66.7
|
|
141.2
|
|
Income tax benefit
(expense)
|
0.1
|
|
1.2
|
|
(18.0)
|
|
(41.5)
|
|
Net income (loss) from
continuing operations
|
5.1
|
|
(27.8)
|
|
48.7
|
|
99.7
|
|
Income (loss) from
discontinued operations, net of income taxes
|
—
|
|
17.1
|
|
(0.9)
|
|
58.8
|
|
Net income
(loss)
|
5.1
|
|
(10.7)
|
|
47.8
|
|
158.5
|
|
Net loss (income)
attributable to noncontrolling interests
|
—
|
|
0.4
|
|
(0.7)
|
|
0.1
|
|
Net income (loss)
attributable to Avient common shareholders
|
$
5.1
|
|
$
(10.3)
|
|
$
47.1
|
|
$
158.6
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share attributable to Avient common shareholders -
Basic:
|
|
|
|
|
|
Continuing
operations
|
$
0.06
|
|
$
(0.30)
|
|
$
0.53
|
|
$
1.09
|
|
Discontinued
operations
|
—
|
|
0.19
|
|
(0.01)
|
|
0.65
|
|
Total
|
$
0.06
|
|
$
(0.11)
|
|
$
0.52
|
|
$
1.74
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share attributable to Avient common shareholders -
Diluted:
|
|
|
|
|
|
Continuing
operations
|
$
0.06
|
|
$
(0.30)
|
|
$
0.52
|
|
$
1.08
|
|
Discontinued
operations
|
—
|
|
0.19
|
|
(0.01)
|
|
0.64
|
|
Total
|
$
0.06
|
|
$
(0.11)
|
|
$
0.51
|
|
$
1.72
|
|
|
|
|
|
|
|
|
|
Cash dividends declared
per share of common stock
|
$ 0.2475
|
|
$ 0.2375
|
|
$ 0.7425
|
|
$ 0.7125
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
used to compute earnings per common share:
|
|
|
|
|
|
|
|
|
Basic
|
91.1
|
|
90.9
|
|
91.1
|
|
91.3
|
|
Diluted
|
91.9
|
|
90.9
|
|
91.8
|
|
92.0
|
|
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,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Cost of
sales:
|
|
|
|
|
|
|
|
|
Restructuring costs,
including accelerated depreciation
|
$
(2.1)
|
|
$
(2.8)
|
|
$
(9.9)
|
|
$
(9.8)
|
|
Environmental
remediation costs
|
(38.1)
|
|
(18.8)
|
|
(52.5)
|
|
(23.8)
|
|
Reimbursement of
previously incurred environmental costs
|
—
|
|
0.1
|
|
—
|
|
8.3
|
|
Acquisition related
costs
|
—
|
|
(10.3)
|
|
—
|
|
(10.3)
|
|
Impact on cost of
sales
|
(40.2)
|
|
(31.8)
|
|
(62.4)
|
|
(35.6)
|
|
|
|
|
|
|
|
|
|
Selling and
administrative expense:
|
|
|
|
|
|
|
|
|
Restructuring and
employee separation costs
|
(2.0)
|
|
0.3
|
|
(13.8)
|
|
(1.0)
|
|
Legal and
other
|
1.7
|
|
(0.5)
|
|
(9.1)
|
|
1.0
|
|
Acquisition related
costs
|
(0.5)
|
|
(8.2)
|
|
(4.6)
|
|
(13.2)
|
|
Impact on selling and
administrative expense
|
(0.8)
|
|
(8.4)
|
|
(27.5)
|
|
(13.2)
|
|
|
|
|
|
|
|
|
|
Impact on operating
income
|
(41.0)
|
|
(40.2)
|
|
(89.9)
|
|
(48.8)
|
|
|
|
|
|
|
|
|
|
Interest expense, net
- financing costs
|
(2.2)
|
|
(10.0)
|
|
(2.2)
|
|
(10.0)
|
|
|
|
|
|
|
|
|
|
Mark-to-market on
derivative instruments
|
—
|
|
(31.8)
|
|
—
|
|
(30.9)
|
|
Other
|
—
|
|
—
|
|
(0.1)
|
|
0.1
|
|
Impact on other
expense, net
|
—
|
|
(31.8)
|
|
(0.1)
|
|
(30.8)
|
|
|
|
|
|
|
|
|
|
Impact on income from
continuing operations before income taxes
|
(43.2)
|
|
(82.0)
|
|
(92.2)
|
|
(89.6)
|
|
Income tax benefit on
above special items
|
10.8
|
|
20.5
|
|
23.2
|
|
22.5
|
|
Tax
adjustments(2)
|
0.4
|
|
(6.8)
|
|
(4.9)
|
|
(10.8)
|
|
Impact of special
items on net income from continuing operations
|
$
(32.0)
|
|
$
(68.3)
|
|
$
(73.9)
|
|
$
(77.9)
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
common share impact
|
$
(0.35)
|
|
$
(0.75)
|
|
$
(0.81)
|
|
$
(0.85)
|
|
|
|
|
|
|
|
|
|
Weighted average shares
used to compute adjusted earnings per share:
|
|
|
|
|
|
|
|
|
Diluted
|
91.9
|
|
91.6
|
|
91.8
|
|
92.0
|
|
|
(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, adjustments
to uncertain tax position reserves and the establishment, reversal
or changes to valuation allowances.
|
|
Attachment
4
|
|
Avient Corporation
Condensed
Consolidated Balance Sheets
(In
millions)
|
|
|
(Unaudited)
September 30,
2023
|
|
December 31,
2022
|
|
|
|
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
439.6
|
|
$
641.1
|
|
Accounts receivable,
net
|
436.9
|
|
440.6
|
|
Inventories,
net
|
349.6
|
|
372.7
|
|
Other current
assets
|
138.2
|
|
115.3
|
|
Total current
assets
|
1,364.3
|
|
1,569.7
|
|
Property,
net
|
978.2
|
|
1,049.2
|
|
Goodwill
|
1,681.3
|
|
1,671.9
|
|
Intangible assets,
net
|
1,563.0
|
|
1,597.6
|
|
Other non-current
assets
|
202.9
|
|
196.6
|
|
Total
assets
|
$
5,789.7
|
|
$
6,085.0
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Short-term and current
portion of long-term debt
|
$
9.5
|
|
$
2.2
|
|
Accounts
payable
|
389.5
|
|
454.4
|
|
Accrued expenses and
other current liabilities
|
328.1
|
|
412.8
|
|
Total current
liabilities
|
727.1
|
|
869.4
|
|
Non-current
liabilities:
|
|
|
|
|
Long-term
debt
|
2,070.8
|
|
2,176.7
|
|
Pension and other
post-retirement benefits
|
65.1
|
|
67.2
|
|
Deferred income
taxes
|
293.2
|
|
342.5
|
|
Other non-current
liabilities
|
337.6
|
|
276.4
|
|
Total non-current
liabilities
|
2,766.7
|
|
2,862.8
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
Avient shareholders'
equity
|
2,276.9
|
|
2,334.5
|
|
Noncontrolling
interest
|
19.0
|
|
18.3
|
|
Total
equity
|
2,295.9
|
|
2,352.8
|
|
Total liabilities
and equity
|
$
5,789.7
|
|
$
6,085.0
|
|
Attachment
5
|
|
Avient Corporation
Condensed
Consolidated Statements of Cash Flows (Unaudited)
(In
millions)
|
|
|
Nine Months
Ended
September
30,
|
|
2023
|
|
2022
|
|
Operating
Activities
|
|
|
|
|
Net income
|
$
47.8
|
|
$
158.5
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
142.6
|
|
110.3
|
|
Accelerated
depreciation
|
1.9
|
|
4.0
|
|
Share-based
compensation expense
|
9.7
|
|
9.5
|
|
Changes in assets and
liabilities, net of the effect of acquisitions:
|
|
|
|
|
Increase in accounts
receivable
|
(5.7)
|
|
(66.5)
|
|
Decrease (increase) in
inventories
|
16.5
|
|
(12.5)
|
|
(Decrease) increase in
accounts payable
|
(59.1)
|
|
43.5
|
|
Taxes paid on gain on
sale of business
|
(104.1)
|
|
—
|
|
Accrued expenses and
other assets and liabilities, net
|
(2.5)
|
|
(22.9)
|
|
Net cash provided by
operating activities
|
47.1
|
|
223.9
|
|
Investing
activities
|
|
|
|
|
Capital
expenditures
|
(75.0)
|
|
(55.1)
|
|
Business acquisitions,
net of cash acquired
|
—
|
|
(1,426.1)
|
|
Settlement of foreign
exchange derivatives
|
—
|
|
93.3
|
|
Net proceeds from
divestiture
|
7.3
|
|
—
|
|
Other investing
activities
|
2.3
|
|
—
|
|
Net cash used by
investing activities
|
(65.4)
|
|
(1,387.9)
|
|
Financing
activities
|
|
|
|
|
Debt
proceeds
|
—
|
|
1,300.0
|
|
Purchase of common
shares for treasury
|
—
|
|
(36.4)
|
|
Cash dividends
paid
|
(67.6)
|
|
(65.2)
|
|
Repayment of long-term
debt
|
(103.8)
|
|
(6.8)
|
|
Debt financing
costs
|
(2.3)
|
|
(49.3)
|
|
Other
financing
|
(2.3)
|
|
(4.2)
|
|
Net cash (used)
provided by financing activities
|
(176.0)
|
|
1,138.1
|
|
Effect of exchange rate
changes on cash
|
(7.2)
|
|
(30.9)
|
|
Decrease in cash and
cash equivalents
|
(201.5)
|
|
(56.8)
|
|
Cash and cash
equivalents at beginning of year
|
641.1
|
|
601.2
|
|
Cash and cash
equivalents at end of period
|
$
439.6
|
|
$
544.4
|
|
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,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Sales:
|
|
|
|
|
|
|
|
|
Color,
Additives and Inks
|
$
486.5
|
|
$
565.6
|
|
$
1,548.0
|
|
$
1,864.2
|
|
Specialty
Engineered Materials
|
267.9
|
|
258.2
|
|
878.4
|
|
743.6
|
|
Corporate
|
(0.7)
|
|
(0.5)
|
|
(2.6)
|
|
(1.3)
|
|
Sales
|
$
753.7
|
|
$
823.3
|
|
$
2,423.8
|
|
$
2,606.5
|
|
|
|
|
|
|
|
|
|
Gross
margin:
|
|
|
|
|
|
|
|
|
Color,
Additives and Inks
|
$
156.8
|
|
$
161.3
|
|
$
482.9
|
|
$
546.8
|
|
Specialty
Engineered Materials
|
78.3
|
|
66.9
|
|
263.7
|
|
201.3
|
|
Corporate
|
(39.8)
|
|
(32.8)
|
|
(63.0)
|
|
(37.4)
|
|
Gross
margin
|
$
195.3
|
|
$
195.4
|
|
$
683.6
|
|
$
710.7
|
|
|
|
|
|
|
|
|
|
Selling and
administrative expense:
|
|
|
|
|
|
|
|
|
Color,
Additives and Inks
|
$
92.3
|
|
$
92.7
|
|
$
284.8
|
|
$
290.1
|
|
Specialty
Engineered Materials
|
48.0
|
|
35.5
|
|
150.6
|
|
96.4
|
|
Corporate
|
20.7
|
|
26.6
|
|
94.5
|
|
81.3
|
|
Selling and
administrative expense
|
$
161.0
|
|
$
154.8
|
|
$
529.9
|
|
$
467.8
|
|
|
|
|
|
|
|
|
|
Operating
income:
|
|
|
|
|
|
|
|
|
Color,
Additives and Inks
|
$
64.5
|
|
$
68.6
|
|
$
198.1
|
|
$
256.7
|
|
Specialty
Engineered Materials
|
30.3
|
|
31.4
|
|
113.1
|
|
104.9
|
|
Corporate
|
(60.5)
|
|
(59.4)
|
|
(157.5)
|
|
(118.7)
|
|
Operating
income
|
$
34.3
|
|
$
40.6
|
|
$
153.7
|
|
$
242.9
|
|
|
|
|
|
|
|
|
|
Depreciation &
amortization:
|
|
|
|
|
|
|
|
|
Color, Additives and
Inks
|
$
24.6
|
|
$
24.2
|
|
$
76.1
|
|
$
76.1
|
|
Specialty Engineered
Materials
|
20.5
|
|
12.9
|
|
61.6
|
|
28.4
|
|
Corporate
|
1.3
|
|
2.7
|
|
6.8
|
|
9.2
|
|
Depreciation &
Amortization
|
$
46.4
|
|
$
39.8
|
|
$
144.5
|
|
$
113.7
|
|
|
|
|
|
|
|
|
|
Earnings before
interest, taxes, depreciation and
amortization (EBITDA):
|
|
|
|
|
|
|
|
|
Color,
Additives and Inks
|
$
89.1
|
|
$
92.8
|
|
$
274.2
|
|
$
332.8
|
|
Specialty
Engineered Materials
|
50.8
|
|
44.3
|
|
174.7
|
|
133.3
|
|
Corporate
|
(59.2)
|
|
(56.7)
|
|
(150.7)
|
|
(109.5)
|
|
Other income (expense),
net
|
1.0
|
|
(32.3)
|
|
1.5
|
|
(31.3)
|
|
EBITDA including
special items
|
$
81.7
|
|
$
48.1
|
|
$
299.7
|
|
$
325.3
|
|
Special items in
EBITDA
|
41.0
|
|
71.2
|
|
88.1
|
|
75.6
|
|
Total Company, EBITDA
adjusted
|
$
122.7
|
|
$
119.3
|
|
$
387.8
|
|
$
400.9
|
|
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
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
Sales
|
$
753.7
|
|
$
823.3
|
|
$
2,423.8
|
|
$
2,606.5
|
|
|
|
|
|
|
|
|
|
Gross margin -
GAAP
|
195.3
|
|
195.4
|
|
683.6
|
|
710.7
|
|
Special items in gross
margin (Attachment 3)
|
40.2
|
|
31.8
|
|
62.4
|
|
35.6
|
|
Adjusted gross
margin
|
$
235.5
|
|
$
227.2
|
|
$ 746.0
|
|
$ 746.3
|
|
|
|
|
|
|
|
|
|
Adjusted gross margin
as a percent of sales
|
31.2 %
|
|
27.7 %
|
|
30.8 %
|
|
28.6 %
|
|
|
|
|
|
|
|
|
|
Operating income -
GAAP
|
34.3
|
|
40.6
|
|
153.7
|
|
242.9
|
|
Special items in
operating income (Attachment 3)
|
41.0
|
|
40.2
|
|
89.9
|
|
48.8
|
|
Adjusted operating
income
|
$
75.3
|
|
$
80.8
|
|
$ 243.6
|
|
$ 291.7
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income as a percent of sales
|
10.0 %
|
|
9.8 %
|
|
10.1 %
|
|
11.2 %
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
Reconciliation to
EBITDA and Adjusted EBITDA:
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Net income from
continuing operations – GAAP
|
$
5.1
|
|
$ (27.8)
|
|
$
48.7
|
|
$ 99.7
|
|
Income tax (benefit)
expense
|
(0.1)
|
|
(1.2)
|
|
18.0
|
|
41.5
|
|
Interest expense,
net
|
30.3
|
|
37.3
|
|
88.5
|
|
70.4
|
|
Depreciation and
amortization
|
46.4
|
|
39.8
|
|
144.5
|
|
113.7
|
|
EBITDA from continuing
operations
|
$
81.7
|
|
$
48.1
|
|
$ 299.7
|
|
$
325.3
|
|
Special items, before
tax
|
43.2
|
|
82.0
|
|
92.2
|
|
89.6
|
|
Interest expense
included in special items
|
(2.2)
|
|
(10.0)
|
|
(2.2)
|
|
(10.0)
|
|
Depreciation and
amortization included in special items
|
—
|
|
(0.8)
|
|
(1.9)
|
|
(4.0)
|
|
Adjusted
EBITDA
|
$ 122.7
|
|
$ 119.3
|
|
$ 387.8
|
|
$
400.9
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA as a %
of sales
|
16.3 %
|
|
14.5 %
|
|
16.0 %
|
|
15.4 %
|
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SOURCE Avient Corporation
