Second quarter GAAP earnings per share (EPS) from continuing operations was
"Building on the positive start to the year, we delivered a strong second quarter, highlighted by broad-based growth across all regions and most end markets," said Dr.
2024 Outlook
"Looking ahead to the third quarter, we expect adjusted EPS of
"I'm pleased with how we have delivered during the first half of the year," added
Sustainability Report Release
The company also announced the release of its latest Sustainability Report, now available at www.avient.com/sustainability.
The report provides an update on
"We're extremely proud to share our latest achievements in this year's report, particularly our upgraded ratings by
Webcast Details
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 EBITDA and adjusted EBITDA margins.
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
About
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
Attachment 1 |
|||||||
|
|||||||
Summary of Condensed Consolidated Statements of Income (Unaudited) |
|||||||
(In millions, except per share data) |
|||||||
Three Months Ended |
Six Months Ended |
||||||
2024 |
2023 |
2024 |
2023 |
||||
Sales |
$ 849.7 |
$ 824.4 |
$ 1,678.7 |
$ 1,670.1 |
|||
Operating Income |
72.5 |
62.3 |
166.5 |
119.4 |
|||
Net income from continuing operations attributable to |
33.6 |
22.1 |
83.0 |
42.9 |
|||
Diluted earnings per share from continuing operations attributable to Avient |
$ 0.36 |
$ 0.24 |
$ 0.90 |
$ 0.47 |
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 |
Three Months Ended |
|||||||
2024 |
2023 |
||||||
Reconciliation to Condensed Consolidated Statements of Income |
$ |
EPS |
$ |
EPS |
|||
Net income from continuing operations attributable to |
$ 33.6 |
$ 0.36 |
$ 22.1 |
$ 0.24 |
|||
Special items, after-tax (Attachment 3) |
21.8 |
0.24 |
19.6 |
0.21 |
|||
Amortization expense, after-tax |
14.8 |
0.16 |
16.2 |
0.18 |
|||
Adjusted net income / EPS |
$ 70.2 |
$ 0.76 |
$ 57.9 |
$ 0.63 |
|||
Six Months Ended |
|||||||
2024 |
2023 |
||||||
Reconciliation to Condensed Consolidated Statements of Income |
$ |
EPS |
$ |
EPS |
|||
Net income from continuing operations attributable to |
$ 83.0 |
$ 0.90 |
$ 42.9 |
$ 0.47 |
|||
Special items, after-tax (Attachment 3) |
27.3 |
0.30 |
41.9 |
0.46 |
|||
Amortization expense, after-tax |
29.7 |
0.32 |
31.3 |
0.34 |
|||
Adjusted net income / EPS |
$ 140.0 |
$ 1.52 |
$ 116.1 |
$ 1.27 |
Attachment 2 |
|||||||
|
|||||||
Condensed Consolidated Statements of Income (Unaudited) |
|||||||
(In millions, except per share data) |
|||||||
Three Months Ended |
Six Months Ended |
||||||
2024 |
2023 |
2024 |
2023 |
||||
Sales |
$ 849.7 |
$ 824.4 |
$ 1,678.7 |
$ 1,670.1 |
|||
Cost of sales |
592.1 |
583.7 |
1,142.9 |
1,181.8 |
|||
Gross margin |
257.6 |
240.7 |
535.8 |
488.3 |
|||
Selling and administrative expense |
185.1 |
178.4 |
369.3 |
368.9 |
|||
Operating income |
72.5 |
62.3 |
166.5 |
119.4 |
|||
Interest expense, net |
(26.6) |
(29.4) |
(53.2) |
(58.2) |
|||
Other (expense) income, net |
(0.9) |
(0.2) |
(1.8) |
0.5 |
|||
Income from continuing operations before income taxes |
45.0 |
32.7 |
111.5 |
61.7 |
|||
Income tax expense |
(11.2) |
(10.4) |
(28.0) |
(18.1) |
|||
Net income from continuing operations |
33.8 |
22.3 |
83.5 |
43.6 |
|||
Loss from discontinued operations, net of income taxes |
— |
— |
— |
(0.9) |
|||
Net income |
$ 33.8 |
$ 22.3 |
$ 83.5 |
$ 42.7 |
|||
Net income attributable to noncontrolling interests |
(0.2) |
(0.2) |
(0.5) |
(0.7) |
|||
Net income attributable to |
$ 33.6 |
$ 22.1 |
$ 83.0 |
$ 42.0 |
|||
Earnings (loss) per share attributable to |
|||||||
Continuing operations |
$ 0.37 |
$ 0.24 |
$ 0.91 |
$ 0.47 |
|||
Discontinued operations |
— |
— |
— |
(0.01) |
|||
Total |
$ 0.37 |
$ 0.24 |
$ 0.91 |
$ 0.46 |
|||
Earnings (loss) per share attributable to |
|||||||
Continuing operations |
$ 0.36 |
$ 0.24 |
$ 0.90 |
$ 0.47 |
|||
Discontinued operations |
— |
— |
— |
(0.01) |
|||
Total |
$ 0.36 |
$ 0.24 |
$ 0.90 |
$ 0.46 |
|||
Cash dividends declared per share of common stock |
$ 0.2575 |
$ 0.2475 |
$ 0.5150 |
$ 0.4950 |
|||
Weighted-average shares used to compute earnings per common share: |
|||||||
Basic |
91.3 |
91.1 |
91.3 |
91.1 |
|||
Diluted |
92.2 |
91.9 |
92.0 |
91.9 |
Attachment 3 |
|||||||
|
|||||||
Summary of Special Items (Unaudited) |
|||||||
(In millions, except per share data) |
|||||||
Special items (1) |
Three Months Ended |
Six Months Ended |
|||||
2024 |
2023 |
2024 |
2023 |
||||
Cost of sales: |
|||||||
Restructuring costs, including accelerated depreciation |
$ 0.2 |
$ (1.2) |
$ 3.8 |
$ (7.8) |
|||
Environmental remediation costs |
(21.8) |
(13.0) |
(25.8) |
(14.4) |
|||
Impact on cost of sales |
(21.6) |
(14.2) |
(22.0) |
(22.2) |
|||
Selling and administrative expense: |
|||||||
Restructuring and employee separation costs |
(2.8) |
(0.5) |
(3.5) |
(11.9) |
|||
Legal and other |
(2.3) |
(6.4) |
(5.8) |
(10.6) |
|||
Acquisition related costs |
(0.5) |
(0.7) |
(2.1) |
(4.2) |
|||
Impact on selling and administrative expense |
(5.6) |
(7.6) |
(11.4) |
(26.7) |
|||
Impact on operating income |
(27.2) |
(21.8) |
(33.4) |
(48.9) |
|||
Interest expense, net - financing costs |
(1.0) |
— |
(1.0) |
— |
|||
Other income (loss) |
0.1 |
0.1 |
0.1 |
(0.1) |
|||
Impact on income from continuing operations before income taxes |
(28.1) |
(21.7) |
(34.3) |
(49.0) |
|||
Income tax benefit on above special items |
7.0 |
5.5 |
8.4 |
12.4 |
|||
Tax adjustments(2) |
(0.7) |
(3.4) |
(1.4) |
(5.3) |
|||
Impact of special items on net income from continuing operations |
$ (21.8) |
$ (19.6) |
$ (27.3) |
$ (41.9) |
|||
Diluted earnings per common share impact |
$ (0.24) |
$ (0.21) |
$ (0.30) |
$ (0.46) |
|||
Weighted average shares used to compute adjusted earnings per share: |
|||||||
Diluted |
92.2 |
91.9 |
92.0 |
91.9 |
(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 |
|||
|
|||
Condensed Consolidated Balance Sheets |
|||
(In millions) |
|||
(Unaudited) |
|
||
ASSETS |
|||
Current assets: |
|||
Cash and cash equivalents |
$ 489.4 |
$ 545.8 |
|
Accounts receivable, net |
486.6 |
399.9 |
|
Inventories, net |
365.9 |
347.0 |
|
Other current assets |
117.2 |
114.9 |
|
Total current assets |
1,459.1 |
1,407.6 |
|
Property, net |
1,019.9 |
1,028.9 |
|
|
1,685.1 |
1,719.3 |
|
Intangible assets, net |
1,515.7 |
1,590.8 |
|
Other non-current assets |
228.0 |
221.9 |
|
Total assets |
$ 5,907.8 |
$ 5,968.5 |
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||
Current liabilities: |
|||
Short-term and current portion of long-term debt |
$ 657.7 |
$ 9.5 |
|
Accounts payable |
435.2 |
432.3 |
|
Accrued expenses and other current liabilities |
405.3 |
331.8 |
|
Total current liabilities |
1,498.2 |
773.6 |
|
Non-current liabilities: |
|||
Long-term debt |
1,420.8 |
2,070.5 |
|
Pension and other post-retirement benefits |
63.3 |
67.2 |
|
Deferred income taxes |
276.3 |
281.6 |
|
Other non-current liabilities |
315.0 |
437.6 |
|
Total non-current liabilities |
2,075.4 |
2,856.9 |
|
SHAREHOLDERS' EQUITY |
|||
|
2,317.5 |
2,319.2 |
|
Noncontrolling interest |
16.7 |
18.8 |
|
Total equity |
2,334.2 |
2,338.0 |
|
Total liabilities and equity |
$ 5,907.8 |
$ 5,968.5 |
Attachment 5 |
|||
|
|||
Condensed Consolidated Statements of Cash Flows (Unaudited) |
|||
(In millions) |
|||
Six Months Ended |
|||
2024 |
2023 |
||
Operating Activities |
|||
Net income |
$ 83.5 |
$ 42.7 |
|
Adjustments to reconcile net income to net cash provided (used) by operating activities: |
|||
Depreciation and amortization |
88.4 |
96.2 |
|
Accelerated depreciation |
0.8 |
1.9 |
|
Share-based compensation expense |
9.0 |
6.5 |
|
Changes in assets and liabilities: |
|||
Increase in accounts receivable |
(97.0) |
(66.6) |
|
(Increase) decrease in inventories |
(27.3) |
14.0 |
|
Increase (decrease) in accounts payable |
11.9 |
(26.2) |
|
Taxes paid on gain on sale of business |
— |
(103.0) |
|
Accrued expenses and other assets and liabilities, net |
(6.2) |
9.8 |
|
Net cash provided (used) by operating activities |
63.1 |
(24.7) |
|
Investing activities |
|||
Capital expenditures |
(55.8) |
(45.9) |
|
Net proceeds from divestiture |
— |
7.3 |
|
Proceeds from plant closures |
3.4 |
— |
|
Other investing activities |
(2.1) |
— |
|
Net cash used by investing activities |
(54.5) |
(38.6) |
|
Financing activities |
|||
Cash dividends paid |
(47.0) |
(45.0) |
|
Repayment of long-term debt |
(4.5) |
(1.0) |
|
Other financing activities |
(3.3) |
(2.3) |
|
Net cash used by financing activities |
(54.8) |
(48.3) |
|
Effect of exchange rate changes on cash |
(10.2) |
(0.8) |
|
Decrease in cash and cash equivalents |
(56.4) |
(112.4) |
|
Cash and cash equivalents at beginning of year |
545.8 |
641.1 |
|
Cash and cash equivalents at end of period |
$ 489.4 |
$ 528.7 |
Attachment 6 |
|||||||
|
|||||||
Business Segment Operations (Unaudited) |
|||||||
(In millions) |
|||||||
Operating income and earnings before interest, taxes, depreciation and amortization (EBITDA) at the segment level does not include: |
|||||||
Three Months Ended |
Six Months Ended |
||||||
2024 |
2023 |
2024 |
2023 |
||||
Sales: |
|||||||
Color, Additives and Inks |
$ 542.0 |
$ 524.5 |
$ 1,057.3 |
$ 1,061.5 |
|||
Specialty Engineered Materials |
308.1 |
300.8 |
622.5 |
610.5 |
|||
Corporate |
(0.4) |
(0.9) |
(1.1) |
(1.9) |
|||
Sales |
$ 849.7 |
$ 824.4 |
$ 1,678.7 |
$ 1,670.1 |
|||
Gross margin: |
|||||||
Color, Additives and Inks |
$ 184.5 |
$ 164.1 |
$ 355.7 |
$ 326.1 |
|||
Specialty Engineered Materials |
94.7 |
91.5 |
201.7 |
185.4 |
|||
Corporate |
(21.6) |
(14.9) |
(21.6) |
(23.2) |
|||
Gross margin |
$ 257.6 |
$ 240.7 |
$ 535.8 |
$ 488.3 |
|||
Selling and administrative expense: |
|||||||
Color, Additives and Inks |
$ 98.4 |
$ 96.1 |
$ 194.8 |
$ 192.5 |
|||
Specialty Engineered Materials |
51.9 |
51.8 |
105.5 |
102.6 |
|||
Corporate |
34.8 |
30.5 |
69.0 |
73.8 |
|||
Selling and administrative expense |
$ 185.1 |
$ 178.4 |
$ 369.3 |
$ 368.9 |
|||
Operating income: |
|||||||
Color, Additives and Inks |
$ 86.1 |
$ 68.0 |
$ 160.9 |
$ 133.6 |
|||
Specialty Engineered Materials |
42.8 |
39.7 |
96.2 |
82.8 |
|||
Corporate |
(56.4) |
(45.4) |
(90.6) |
(97.0) |
|||
Operating income |
$ 72.5 |
$ 62.3 |
$ 166.5 |
$ 119.4 |
|||
Depreciation & amortization: |
|||||||
Color, Additives and Inks |
$ 21.8 |
$ 25.7 |
$ 43.7 |
$ 51.5 |
|||
Specialty Engineered Materials |
20.8 |
19.9 |
40.4 |
41.1 |
|||
Corporate |
2.3 |
2.0 |
5.1 |
5.5 |
|||
Depreciation & amortization |
$ 44.9 |
$ 47.6 |
$ 89.2 |
$ 98.1 |
|||
Earnings before interest, taxes, depreciation and |
|||||||
Color, Additives and Inks |
$ 107.9 |
$ 93.7 |
$ 204.6 |
$ 185.1 |
|||
Specialty Engineered Materials |
63.6 |
59.6 |
136.6 |
123.9 |
|||
Corporate |
(54.1) |
(43.4) |
(85.5) |
(91.5) |
|||
Other (expense) income, net |
(0.9) |
(0.2) |
(1.8) |
0.5 |
|||
EBITDA from continuing operations |
$ 116.5 |
$ 109.7 |
$ 253.9 |
$ 218.0 |
|||
Special items, before tax |
28.1 |
21.7 |
34.3 |
49.0 |
|||
Interest expense included in special items |
(1.0) |
— |
(1.0) |
— |
|||
Depreciation & amortization included in special items |
(0.3) |
(0.1) |
(0.8) |
(1.9) |
|||
Adjusted EBITDA |
$ 143.3 |
$ 131.3 |
$ 286.4 |
$ 265.1 |
Attachment 7 |
|||||||
|
|||||||
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 |
|||||||
Three Months Ended |
Six Months Ended |
||||||
Reconciliation to Consolidated Statements of Income |
2024 |
2023 |
2024 |
2023 |
|||
Sales |
$ 849.7 |
$ 824.4 |
$ 1,678.7 |
$ 1,670.1 |
|||
Gross margin - GAAP |
257.6 |
240.7 |
535.8 |
488.3 |
|||
Special items in gross margin (Attachment 3) |
21.6 |
14.2 |
22.0 |
22.2 |
|||
Adjusted gross margin |
$ 279.2 |
$ 254.9 |
$ 557.8 |
$ 510.5 |
|||
Adjusted gross margin as a percent of sales |
32.9 % |
30.9 % |
33.2 % |
30.6 % |
|||
Operating income - GAAP |
72.5 |
62.3 |
166.5 |
119.4 |
|||
Special items in operating income (Attachment 3) |
27.2 |
21.8 |
33.4 |
48.9 |
|||
Adjusted operating income |
$ 99.7 |
$ 84.1 |
$ 199.9 |
$ 168.3 |
|||
Adjusted operating income as a percent of sales |
11.7 % |
10.2 % |
11.9 % |
10.1 % |
|||
Three Months Ended |
Six Months Ended |
||||||
Reconciliation to EBITDA and Adjusted EBITDA: |
2024 |
2023 |
2024 |
2023 |
|||
Net income from continuing operations – GAAP |
$ 33.8 |
$ 22.3 |
$ 83.5 |
$ 43.6 |
|||
Income tax expense |
11.2 |
10.4 |
28.0 |
18.1 |
|||
Interest expense, net |
26.6 |
29.4 |
53.2 |
58.2 |
|||
Depreciation & amortization |
44.9 |
47.6 |
89.2 |
98.1 |
|||
EBITDA from continuing operations |
$ 116.5 |
$ 109.7 |
$ 253.9 |
$ 218.0 |
|||
Special items, before tax |
28.1 |
21.7 |
34.3 |
49.0 |
|||
Interest expense included in special items |
(1.0) |
— |
(1.0) |
— |
|||
Depreciation & amortization included in special items |
(0.3) |
(0.1) |
(0.8) |
(1.9) |
|||
Adjusted EBITDA |
$ 143.3 |
$ 131.3 |
$ 286.4 |
$ 265.1 |
|||
Adjusted EBITDA as a percent of sales |
16.9 % |
15.9 % |
17.1 % |
15.9 % |
Year Ended |
|||
Reconciliation to Condensed Consolidated Statements of Income |
$ |
EPS |
|
Net income from continuing operations attributable to |
$ 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 |
|
Three Months Ended |
|||
Reconciliation to Condensed Consolidated Statements of Income |
$ |
EPS |
|
Net income from continuing operations attributable to |
$ 5.1 |
$ 0.06 |
|
Special items, after-tax |
32.0 |
0.35 |
|
Amortization expense, after-tax |
15.2 |
0.16 |
|
Adjusted net income / EPS |
$ 52.3 |
$ 0.57 |
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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