- Fourth quarter and full year GAAP EPS of $0.30 and $0.83
compared to $(0.19) and $0.90 from continuing operations in the prior
year
- Fourth quarter and full year adjusted EPS of $0.52 and $2.36
exceeds guidance of $0.47 and
$2.30 as a result of favorable sales
as well as lower net interest expense
- Fourth quarter adjusted EPS increased 24% over the prior
year pro forma adjusted EPS primarily driven by improved margins
from positive portfolio mix, raw material deflation and cost
reduction actions
- 2024 full year adjusted EPS expected to range from
$2.40 to $2.65 as destocking comes to an end and
underlying demand starts to improve
CLEVELAND, Feb. 14,
2024 /PRNewswire/ -- Avient Corporation (NYSE: AVNT),
a leading provider of specialized and sustainable materials
solutions, today announced its fourth quarter and full year results
for 2023. Fourth quarter and full year GAAP earnings per share
(EPS) were $0.30 and $0.83, compared to $(0.19) and $0.90
from continuing operations in the prior year, respectively.
The company noted that fourth quarter 2023 GAAP EPS includes
$0.06 of special items (see
Attachment 3) and $0.16 of intangible
amortization expense (see Attachment 1). Special items for the
quarter were primarily related to adjustments to environmental
reserves.
Fourth quarter and full year 2023 adjusted EPS were $0.52 and $2.36,
respectively, exceeding previous guidance of $0.47 and $2.30.
"I'm pleased to finish the year with fourth quarter adjusted EPS
of $0.52, reflecting an increase of
24% over the prior year," said Dr. Ashish
Khandpur, President and Chief Executive Officer, Avient
Corporation. "We delivered year-over-year earnings growth, much of
which came from margin improvement in Europe and prudent cost control by our teams.
Customer destocking was also less impactful during the
quarter."
The company also noted that it finished the year with cash flow
from operations of $202 million;
excluding $104 million of taxes paid
on the sale of the Distribution business, cash flow from operations
was $306 million. Adjusted free cash
flow for 2023 was $186 million,
slightly ahead of expectations.
2024 Outlook
"In the first quarter, we expect demand to continue to improve
in our two largest end markets, packaging and consumer, as
destocking comes to an end and our sustainable solutions portfolio
expands. In addition, demand for Dyneema® in defense applications
is expected to be strong. Conversely, we continue to see destocking
in healthcare and telecommunications as customers reduce inventory
levels, and we expect weak demand in transportation and building
& construction due to higher interest rates," said Jamie Beggs, Senior Vice President and Chief
Financial Officer, Avient Corporation.
"Accordingly, we expect first quarter adjusted EPS of $0.68, up 8% from $0.63 in 2023."
Ms. Beggs continued, "For the full year, we are providing a
range for adjusted EBITDA and adjusted EPS between $505 million and $535
million and $2.40 to
$2.65, respectively. We anticipate
demand strengthening as we progress through the year as destocking
fully comes to an end, interest rates begin to abate and consumer
sentiment improves."
Dr. Khandpur added, "This provides an encouraging backdrop as we
begin 2024. We believe there are significant opportunities for us
to drive profitable organic revenue growth and innovation,
leveraging our culture of strong customer focus and portfolio of
differentiated technologies. I'm excited to be leading this next
chapter for Avient and building upon the great foundation
established during the company's transformative years."
Avient will provide additional details on its 2023 fourth
quarter performance and 2024 outlook during its webcast scheduled
for 8:00 a.m. Eastern Time on
February 14, 2024.
Webcast Details
Avient will host a webcast on Wednesday,
February 14, 2024 at 8:00 a.m.
EST. 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.
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, adjusted cash flow from operations
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 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.
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; an inability to raise or sustain prices for
products or services; 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.
|
Attachment
1
|
|
Avient
Corporation
Summary of Condensed
Consolidated Statements of Income (Unaudited)
(In millions, except
per share data)
|
|
|
Three Months
Ended
December
31,
|
|
Year
Ended
December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
Sales
|
$
719.0
|
|
$
790.4
|
|
$
3,142.8
|
|
$
3,396.9
|
|
Operating
income
|
43.1
|
|
0.4
|
|
196.8
|
|
243.3
|
|
Net income (loss) from
continuing operations attributable to Avient
shareholders
|
27.8
|
|
(17.0)
|
|
75.8
|
|
82.8
|
|
Diluted earnings (loss)
per share from continuing operations attributable
to Avient shareholders
|
$
0.30
|
|
$
(0.19)
|
|
$
0.83
|
|
$
0.90
|
|
|
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. 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 and Attachment 7 for a summary of
pro forma adjustments associated with the APM
Acquisition.
|
|
Three Months
Ended
December
31,
|
|
2023
|
|
2022
|
|
Reconciliation to
Condensed Consolidated Statements of Income
|
$
|
|
EPS(1)
|
|
$
|
|
EPS(1)
|
|
|
|
|
|
|
|
|
|
Net income (loss) from
continuing operations attributable to Avient
shareholders
|
$
27.8
|
|
$
0.30
|
|
$
(17.0)
|
|
$
(0.19)
|
|
Special items, after
tax (Attachment 3)
|
5.4
|
|
0.06
|
|
38.3
|
|
0.42
|
|
Amortization expense,
after-tax
|
15.0
|
|
0.16
|
|
14.6
|
|
0.16
|
|
Adjusted net income /
EPS
|
$
48.2
|
|
$
0.52
|
|
$
35.9
|
|
$
0.39
|
|
|
(1) Per share amounts may not
recalculate from figures presented herein due to
rounding
|
|
|
Year
Ended
December
31,
|
|
2023
|
|
2022
|
|
Reconciliation to
Condensed Consolidated Statements of Income
|
$
|
|
EPS(1)
|
|
$
|
|
EPS(1)
|
|
|
|
|
|
|
|
|
|
Net income from
continuing operations attributable to Avient
shareholders
|
$
75.8
|
|
$
0.83
|
|
$
82.8
|
|
$
0.90
|
|
Special items, after
tax (Attachment 3)
|
79.3
|
|
0.86
|
|
116.2
|
|
1.26
|
|
Amortization expense,
after-tax
|
61.5
|
|
0.67
|
|
49.0
|
|
0.53
|
|
Adjusted net income /
EPS
|
$
216.6
|
|
$
2.36
|
|
$
248.0
|
|
$
2.69
|
|
|
(1) Per share amounts may not
recalculate from figures presented herein due to
rounding
|
|
Attachment
2
|
|
Avient
Corporation
Condensed
Consolidated Statements of Income (Unaudited)
(In millions, except
per share data)
|
|
|
Three Months
Ended
December 31,
|
|
Year
Ended
December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
Sales
|
$
719.0
|
|
$
790.4
|
|
$
3,142.8
|
|
$
3,396.9
|
|
Cost of
sales
|
510.1
|
|
618.4
|
|
2,250.3
|
|
2,514.2
|
|
Gross margin
|
208.9
|
|
172.0
|
|
892.5
|
|
882.7
|
|
Selling and
administrative expense
|
165.8
|
|
171.6
|
|
695.7
|
|
639.4
|
|
Operating
income
|
43.1
|
|
0.4
|
|
196.8
|
|
243.3
|
|
Interest expense,
net
|
(26.8)
|
|
(49.4)
|
|
(115.3)
|
|
(119.8)
|
|
Other income (expense),
net
|
4.3
|
|
(28.4)
|
|
5.8
|
|
(59.7)
|
|
Income (loss) from
continuing operations before income taxes
|
20.6
|
|
(77.4)
|
|
87.3
|
|
63.8
|
|
Income tax benefit
(expense)
|
7.0
|
|
60.8
|
|
(11.0)
|
|
19.3
|
|
Net income (loss) from
continuing operations
|
27.6
|
|
(16.6)
|
|
76.3
|
|
83.1
|
|
Income (loss) from
discontinued operations, net of income taxes
|
0.8
|
|
561.5
|
|
(0.1)
|
|
620.3
|
|
Net income
|
28.4
|
|
544.9
|
|
76.2
|
|
703.4
|
|
Net loss (income)
attributable to noncontrolling interests
|
0.2
|
|
(0.4)
|
|
(0.5)
|
|
(0.3)
|
|
Net income attributable
to Avient common shareholders
|
$
28.6
|
|
$
544.5
|
|
$
75.7
|
|
$
703.1
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share attributable to Avient common shareholders -
Basic:
|
|
|
|
|
|
Continuing
operations
|
$
0.30
|
|
$
(0.19)
|
|
$
0.83
|
|
$
0.91
|
|
Discontinued
operations
|
0.01
|
|
6.17
|
|
—
|
|
6.80
|
|
Total
|
$
0.31
|
|
$
5.98
|
|
$
0.83
|
|
$
7.71
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share attributable to Avient common shareholders -
Diluted:
|
|
|
|
|
|
Continuing
operations
|
$
0.30
|
|
$
(0.19)
|
|
$
0.83
|
|
$
0.90
|
|
Discontinued
operations
|
0.01
|
|
6.17
|
|
—
|
|
6.73
|
|
Total
|
$
0.31
|
|
$
5.98
|
|
$
0.83
|
|
$
7.63
|
|
|
|
|
|
|
|
|
|
Cash dividends declared
per share of common stock
|
$ 0.2575
|
|
$ 0.2475
|
|
$ 1.0000
|
|
$ 0.9600
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
used to compute earnings per common share:
|
|
|
|
|
|
|
|
|
Basic
|
91.2
|
|
91.0
|
|
91.1
|
|
91.2
|
|
Diluted
|
91.9
|
|
91.0
|
|
91.8
|
|
92.2
|
|
Attachment
3
|
|
Avient
Corporation
Summary of Special
Items (Unaudited)
(In millions, except
per share data)
|
|
|
Special items
(1)
|
Three Months
Ended
December 31,
|
|
Year
Ended
December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Cost of
sales:
|
|
|
|
|
|
|
|
|
Restructuring costs,
including accelerated depreciation
|
$
(2.0)
|
|
$ (21.3)
|
|
$ (11.9)
|
|
$ (31.1)
|
|
Environmental
remediation costs
|
(17.2)
|
|
(0.4)
|
|
(69.7)
|
|
(24.2)
|
|
Reimbursement of
previously incurred environmental costs
|
1.6
|
|
—
|
|
1.6
|
|
8.3
|
|
Acquisition related
costs
|
—
|
|
(23.8)
|
|
—
|
|
(34.1)
|
|
Impact on cost of
sales
|
(17.6)
|
|
(45.5)
|
|
(80.0)
|
|
(81.1)
|
|
|
|
|
|
|
|
|
|
Selling and
administrative expense:
|
|
|
|
|
|
|
|
|
Restructuring and
employee separation costs
|
(1.1)
|
|
(4.3)
|
|
(14.9)
|
|
(5.3)
|
|
Legal and
other
|
(6.1)
|
|
(4.0)
|
|
(15.2)
|
|
(3.0)
|
|
Acquisition related
costs
|
(1.3)
|
|
(6.1)
|
|
(5.9)
|
|
(19.3)
|
|
Impact on selling and
administrative expense
|
(8.5)
|
|
(14.4)
|
|
(36.0)
|
|
(27.6)
|
|
|
|
|
|
|
|
|
|
Impact on operating
income
|
(26.1)
|
|
(59.9)
|
|
(116.0)
|
|
(108.7)
|
|
|
|
|
|
|
|
|
|
Interest expense, net
- financing costs
|
(0.1)
|
|
(16.0)
|
|
(2.3)
|
|
(26.0)
|
|
|
|
|
|
|
|
|
|
Mark-to-market on
derivatives
|
—
|
|
—
|
|
—
|
|
(30.9)
|
|
Pension
and post retirement mark-to-market adjustment and other
|
3.8
|
|
(28.4)
|
|
3.7
|
|
(28.4)
|
|
Impact on other income
(expense), net
|
3.8
|
|
(28.4)
|
|
3.7
|
|
(59.3)
|
|
|
|
|
|
|
|
|
|
Impact on income from
continuing operations before income taxes
|
(22.4)
|
|
(104.3)
|
|
(114.6)
|
|
(194.0)
|
|
Income tax benefit on
above special items
|
4.5
|
|
26.8
|
|
27.7
|
|
49.4
|
|
Tax
adjustments(2)
|
12.5
|
|
39.2
|
|
7.6
|
|
28.4
|
|
Impact of special
items on net income from continuing operations
|
$
(5.4)
|
|
$ (38.3)
|
|
$ (79.3)
|
|
$
(116.2)
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
common share impact
|
$ (0.06)
|
|
$ (0.42)
|
|
$ (0.86)
|
|
$ (1.26)
|
|
|
|
|
|
|
|
|
|
Weighted average shares
used to compute adjusted earnings per share:
|
|
|
|
|
|
|
|
|
Diluted
|
91.9
|
|
91.7
|
|
91.8
|
|
92.2
|
|
|
|
(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.
|
|
Special items
(1)
|
Three Months
Ended
March
31,
|
|
2023
|
|
Cost of
sales:
|
|
|
Restructuring costs,
including accelerated depreciation
|
$
(6.6)
|
|
Environmental
remediation costs
|
(1.4)
|
|
Impact on cost of
sales
|
(8.0)
|
|
|
|
Selling and
administrative expense:
|
|
|
Restructuring and
employee separation costs
|
(11.3)
|
|
Legal and
other
|
(4.4)
|
|
Acquisition related
costs
|
(3.4)
|
|
Impact on selling and
administrative expense
|
(19.1)
|
|
|
|
Impact on operating
income
|
(27.1)
|
|
|
|
Other loss
|
(0.2)
|
|
|
|
Impact on income from
continuing operations before income taxes
|
(27.3)
|
|
Income tax expense on
above special items
|
6.9
|
|
Tax
adjustments(2)
|
(1.9)
|
|
Impact of special
items on net income from continuing operations
|
$
(22.3)
|
|
|
|
Diluted earnings per
common share impact
|
$
(0.24)
|
|
|
|
Weighted average shares
used to compute adjusted earnings per share:
|
|
|
Diluted
|
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, adjustments
to uncertain tax position reserves and the establishment, reversal
or changes to valuation allowances.
|
|
Attachment
4
|
|
Avient
Corporation
Condensed
Consolidated Balance Sheets (Unaudited)
(In
millions)
|
|
|
Year
Ended
December
31,
|
|
2023
|
|
2022
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
545.8
|
|
$
641.1
|
|
Accounts receivable,
net
|
399.9
|
|
440.6
|
|
Inventories,
net
|
347.0
|
|
372.7
|
|
Other current
assets
|
114.9
|
|
115.3
|
|
Total current
assets
|
1,407.6
|
|
1,569.7
|
|
Property,
net
|
1,028.9
|
|
1,049.2
|
|
Goodwill
|
1,719.3
|
|
1,671.9
|
|
Intangible assets,
net
|
1,590.8
|
|
1,597.6
|
|
Operating lease assets,
net
|
65.3
|
|
60.4
|
|
Other non-current
assets
|
156.6
|
|
136.2
|
|
Total
assets
|
$
5,968.5
|
|
$
6,085.0
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Short-term and current
portion of long-term debt
|
$
9.5
|
|
$
2.2
|
|
Accounts
payable
|
432.3
|
|
454.4
|
|
Current operating lease
obligations
|
16.6
|
|
17.0
|
|
Accrued expenses and
other current liabilities
|
315.2
|
|
395.8
|
|
Total current
liabilities
|
773.6
|
|
869.4
|
|
Non-current
liabilities:
|
|
|
|
|
Long-term
debt
|
2,070.5
|
|
2,176.7
|
|
Pension and other
post-retirement benefits
|
67.2
|
|
67.2
|
|
Deferred income
taxes
|
281.6
|
|
342.5
|
|
Non-current operating
lease obligations
|
43.2
|
|
40.9
|
|
Other non-current
liabilities
|
394.4
|
|
235.5
|
|
Total non-current
liabilities
|
2,856.9
|
|
2,862.8
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
Avient shareholders'
equity
|
2,319.2
|
|
2,334.5
|
|
Noncontrolling
interest
|
18.8
|
|
18.3
|
|
Total
equity
|
2,338.0
|
|
2,352.8
|
|
Total liabilities
and equity
|
$
5,968.5
|
|
$
6,085.0
|
|
Attachment
5
|
|
Avient
Corporation
Condensed
Consolidated Statements of Cash Flows (Unaudited)
(In
millions)
|
|
|
Year
Ended
December
31,
|
|
2023
|
|
2022
|
|
Operating
activities
|
|
|
|
|
Net income
|
$
76.2
|
|
$
703.4
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Gain on sale of
business, net of tax expense
|
—
|
|
(550.1)
|
|
Depreciation and
amortization
|
186.9
|
|
157.6
|
|
Accelerated
depreciation
|
1.9
|
|
5.5
|
|
Amortization of
inventory step-up
|
—
|
|
34.4
|
|
Deferred income tax
(benefit) expense
|
(61.3)
|
|
0.5
|
|
Share-based
compensation expense
|
13.2
|
|
13.2
|
|
Changes in assets and
liabilities, net of the effect of acquisitions:
|
|
|
|
|
Decrease in accounts
receivable
|
38.6
|
|
32.6
|
|
Decrease in
inventories
|
24.3
|
|
14.0
|
|
(Decrease) increase in
accounts payable
|
(22.2)
|
|
10.7
|
|
(Decrease) increase in
pension and other post-retirement benefits
|
(15.1)
|
|
7.1
|
|
Taxes paid on gain on
sale of business
|
(104.1)
|
|
(2.8)
|
|
Accrued expenses and
other assets and liabilities, net
|
63.2
|
|
(27.7)
|
|
Net cash provided by
operating activities
|
201.6
|
|
398.4
|
|
Investing
activities
|
|
|
|
|
Capital
expenditures
|
(119.4)
|
|
(105.5)
|
|
Business acquisitions,
net of cash acquired
|
—
|
|
(1,426.1)
|
|
Settlement of foreign
exchange derivatives
|
—
|
|
93.3
|
|
Net proceeds from
divestiture
|
7.3
|
|
928.2
|
|
Proceeds from plant
closures
|
7.6
|
|
6.1
|
|
Other investing
activities
|
10.3
|
|
—
|
|
Net cash used by
investing activities
|
(94.2)
|
|
(504.0)
|
|
Financing
activities
|
|
|
|
|
Debt offering
proceeds
|
—
|
|
1,300.0
|
|
Purchase of common
shares for treasury
|
—
|
|
(36.4)
|
|
Cash dividends
paid
|
(90.2)
|
|
(86.8)
|
|
Repayment of long-term
debt
|
(105.8)
|
|
(956.8)
|
|
Payments on withholding
tax on share awards
|
(3.4)
|
|
(4.3)
|
|
Debt financing
costs
|
(2.3)
|
|
(49.3)
|
|
Net cash (used)
provided by financing activities
|
(201.7)
|
|
166.4
|
|
Effect of exchange rate
changes on cash
|
(1.0)
|
|
(20.9)
|
|
(Decrease) increase in
cash and cash equivalents
|
(95.3)
|
|
39.9
|
|
Cash and cash
equivalents at beginning of year
|
641.1
|
|
601.2
|
|
Cash and cash
equivalents at end of year
|
$
545.8
|
|
$
641.1
|
|
Attachment
6
|
|
Avient
Corporation
Business Segment
Operations (Unaudited)
(In
millions)
|
|
Operating income 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 and
eliminations.
|
|
|
Three Months
Ended December 31,
|
|
Year
Ended
December
31,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Sales:
|
|
|
|
|
|
|
|
|
Color,
Additives and Inks
|
$
459.4
|
|
$
490.8
|
|
$
2,007.4
|
|
$
2,355.0
|
|
Specialty
Engineered Materials
|
259.8
|
|
300.8
|
|
1,138.2
|
|
1,044.4
|
|
Corporate
|
(0.2)
|
|
(1.2)
|
|
(2.8)
|
|
(2.5)
|
|
Sales
|
$
719.0
|
|
$
790.4
|
|
$
3,142.8
|
|
$
3,396.9
|
|
|
|
|
|
|
|
|
|
Gross
margin:
|
|
|
|
|
|
|
|
|
Color,
Additives and Inks
|
$
148.3
|
|
$
134.5
|
|
$
631.2
|
|
$
681.3
|
|
Specialty
Engineered Materials
|
78.1
|
|
82.4
|
|
341.8
|
|
283.7
|
|
Corporate
|
(17.5)
|
|
(44.9)
|
|
(80.5)
|
|
(82.3)
|
|
Gross
margin
|
$
208.9
|
|
$
172.0
|
|
$
892.5
|
|
$
882.7
|
|
|
|
|
|
|
|
|
|
Selling and
administrative expense:
|
|
|
|
|
|
|
|
|
Color,
Additives and Inks
|
$
86.5
|
|
$
90.2
|
|
$
371.3
|
|
$
380.3
|
|
Specialty
Engineered Materials
|
48.7
|
|
47.2
|
|
199.3
|
|
143.6
|
|
Corporate
|
30.6
|
|
34.2
|
|
125.1
|
|
115.5
|
|
Selling and
administrative expense
|
$
165.8
|
|
$
171.6
|
|
$
695.7
|
|
$
639.4
|
|
|
|
|
|
|
|
|
|
Operating
income:
|
|
|
|
|
|
|
|
|
Color,
Additives and Inks
|
$
61.8
|
|
$
44.3
|
|
$
259.9
|
|
$
301.0
|
|
Specialty
Engineered Materials
|
29.4
|
|
35.2
|
|
142.5
|
|
140.1
|
|
Corporate
|
(48.1)
|
|
(79.1)
|
|
(205.6)
|
|
(197.8)
|
|
Operating
income
|
$
43.1
|
|
$
0.4
|
|
$
196.8
|
|
$
243.3
|
|
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
December 31,
|
|
Year
Ended
December
31,
|
|
Reconciliation to
Consolidated Statements of Income
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
Sales
|
$ 719.0
|
|
$ 790.4
|
|
$
3,142.8
|
|
$
3,396.9
|
|
|
|
|
|
|
|
|
|
Gross margin -
GAAP
|
208.9
|
|
172.0
|
|
892.5
|
|
882.7
|
|
Special items in gross
margin (Attachment 3)
|
17.6
|
|
45.5
|
|
80.0
|
|
81.1
|
|
Adjusted gross
margin
|
$ 226.5
|
|
$ 217.5
|
|
$ 972.5
|
|
$ 963.8
|
|
|
|
|
|
|
|
|
|
Adjusted gross margin
as a percent of sales
|
31.5 %
|
|
27.5 %
|
|
30.9 %
|
|
28.4 %
|
|
|
|
|
|
|
|
|
|
Operating income -
GAAP
|
43.1
|
|
0.4
|
|
196.8
|
|
243.3
|
|
Special items in
operating income (Attachment 3)
|
26.1
|
|
59.9
|
|
116.0
|
|
108.7
|
|
Adjusted operating
income
|
$
69.2
|
|
$
60.3
|
|
$ 312.8
|
|
$ 352.0
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income as a percent of sales
|
9.6 %
|
|
7.6 %
|
|
10.0 %
|
|
10.4 %
|
|
The following pro forma
adjustments are referenced by management to provide comparable
business performance by incorporating the APM business in periods
prior to the acquisition date (September 1, 2022). Financial
information referenced here is provided to aid in reconciling back
to the most comparable GAAP figures.
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
Reconciliation of
Pro Forma Adjusted Earnings per Share
|
December 31,
2022
|
|
Net (loss) income from
continuing operations attributable to Avient
shareholders
|
$
(17.0)
|
|
$
82.8
|
|
Special items, after
tax (Attachment 3)
|
38.3
|
|
116.2
|
|
Amortization expense,
after-tax (Attachment 1)
|
14.6
|
|
49.0
|
|
Adjusted net income
from continuing operations excluding special items
|
35.9
|
|
248.0
|
|
APM pro forma
adjustments to net income from continuing operations*
|
2.5
|
|
13.6
|
|
APM amortization
expense, after tax*
|
—
|
|
19.1
|
|
Pro forma adjusted net
income from continuing operations attributable to Avient
shareholders
|
$
38.4
|
|
$
280.7
|
|
|
|
|
|
Weighted average
diluted shares
|
91.7
|
|
92.2
|
|
|
|
|
|
Pro forma adjusted EPS
- excluding special items
|
$
0.42
|
|
$
3.04
|
|
|
* Pro forma
adjustment for January - August 2022 APM results (period before
Avient ownership) including the impacts of debt financing and
prepayments on net income from continuing
operations.
|
|
Free Cash Flow
Calculation
|
December 31,
2023
|
|
Cash provided by
operating activities
|
$
201.6
|
|
Taxes paid on gain on
sale of business
|
104.1
|
|
Adjusted cash provided
by operating activities
|
$
305.7
|
|
Capital
expenditures
|
$
(119.4)
|
|
Free cash
flow
|
$
186.3
|
|
Three Months
Ended
March 31, 2023
|
|
Reconciliation to
Condensed Consolidated Statements of Income
|
$
|
|
EPS
|
|
|
|
|
|
Net income from
continuing operations attributable to Avient
shareholders
|
$
20.8
|
|
$
0.23
|
|
Special items, after
tax
|
22.3
|
|
0.24
|
|
Amortization expense,
after-tax
|
15.1
|
|
0.16
|
|
Adjusted net income /
EPS
|
$
58.2
|
|
$
0.63
|
|
Three Months
Ended
December
31,
|
|
Year
Ended
December
31,
|
|
Reconciliation to
EBITDA and Pro Forma Adjusted EBITDA
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Net income (loss) from
continuing operations – GAAP
|
$
27.6
|
|
$
(16.6)
|
|
$
76.3
|
|
$
83.1
|
|
Income tax (benefit)
expense
|
(7.0)
|
|
(60.8)
|
|
11.0
|
|
(19.3)
|
|
Interest
expense
|
26.8
|
|
49.4
|
|
115.3
|
|
119.8
|
|
Depreciation and
amortization from continuing operations
|
44.2
|
|
48.6
|
|
188.8
|
|
162.5
|
|
EBITDA from continuing
operations
|
$
91.6
|
|
$
20.6
|
|
$
391.4
|
|
$
346.1
|
|
Special items, before
tax
|
22.4
|
|
104.3
|
|
114.6
|
|
194.0
|
|
Interest expense
included in special items
|
(0.1)
|
|
(16.0)
|
|
(2.3)
|
|
(26.0)
|
|
Depreciation and
amortization included in special items
|
—
|
|
(1.5)
|
|
(1.9)
|
|
(5.5)
|
|
Adjusted
EBITDA
|
$
113.9
|
|
$
107.4
|
|
$
501.8
|
|
$
508.6
|
|
APM pro forma
adjustments - 8 months 2022*
|
—
|
|
—
|
|
—
|
|
83.1
|
|
Pro forma adjusted
EBITDA
|
$
113.9
|
|
$
107.4
|
|
$
501.8
|
|
$
591.7
|
|
|
* Pro forma
adjustment for January - August 2022 APM results (period
before Avient ownership).
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/avient-announces-fourth-quarter-and-full-year-2023-results-302061720.html
SOURCE Avient Corporation
