• First quarter sales grew to $1.3 billion, an 11% increase over the prior year
  • GAAP EPS increased to $0.91 from $0.86 in the prior year first quarter
  • Adjusted EPS increased 11% to $0.99 compared to $0.89 in the prior year first quarter, exceeding first quarter guidance of $0.95
  • Second quarter adjusted EPS guidance of $0.92 introduced with full year adjusted EPS expectation maintained at $3.50 (excluding the impact of the acquisition)
  • Full year free cash flow now expected to approximate $285 million, an increase of $35 million from prior estimates

CLEVELAND, April 20, 2022 /PRNewswire/ -- Avient Corporation (NYSE: AVNT), a leading provider of specialized and sustainable material solutions, today announced its first quarter 2022 results.  The company delivered first quarter GAAP EPS of $0.91 compared to $0.86 in the prior year quarter.  The company noted that GAAP EPS includes special items (Attachment 3), which impacted EPS in both periods.

(PRNewsfoto/Avient Corporation)

The company noted sales growth in nearly all end markets, as it continues to more than offset inflation to deliver record results.  Sales increased 11% to $1.3 billion in the first quarter and adjusted EPS grew 11% to $0.99 over the prior year first quarter. 

"We continue to execute very well against a backdrop of macroeconomic challenges. I'm pleased with our results for the quarter, which exceeded our initial estimates as we began the year," said Robert M. Patterson, Chairman, President and Chief Executive Officer, Avient Corporation. "Although we are being impacted by weaker foreign exchange rates, Covid-related lockdowns in China, and the war in Ukraine, we are maintaining our full year adjusted EPS guidance of $3.50 on stronger growth projections in the Americas. This excludes the impact of EPS accretion from the Dyneema acquisition."

The company is providing its first quarter results in anticipation of discussions with investors, following the signing of an agreement with Royal DSM ("DSM") to purchase the DSM Protective Materials business (including the Dyneema® brand) ("Dyneema"). 

Avient will be hosting a webcast on Wednesday April 20, 2022 to discuss the Dyneema transaction as well as its first quarter 2022 results. 

Webcast Details

Avient will host a webcast on Wednesday, April 20, 2022 at 9:00 a.m. EST. The webcast can be viewed at avient.com/investors, or by clicking here: https://edge.media-server.com/mmc/p/edkwvu9r. To participate in the audio-only portion of the call, dial 1-844-835-7433 (domestic) or 1-914-495-8589 (international) and provide conference ID number 4774915.  There will be a question and answer session following the company's presentation and prepared remarks.  A recording of the webcast and the slide presentation will be available at avient.com/investors. In addition, a recording of the audio will be available for one week, beginning at noon EST on Wednesday, April 20, 2022. To listen to this recording, dial 1-855-859-2056 (domestic) or 1-404-537-3406 (international) and provide conference ID number 4774915.

This webcast replaces the previously communicated earnings webcast date that was originally scheduled to be held on Wednesday, April 27.

About Avient

Avient Corporation (NYSE: AVNT), with 2021 revenues of $4.8 billion, provides specialized and sustainable material solutions that transform customer challenges into opportunities, bringing new products to life for a better world. Examples include:

  • 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 employs approximately 8,700 associates and 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 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: the ability and time required to consummate the acquisition of Dyneema; our ability to achieve the strategic and other objectives relating to the proposed acquisition of Dyneema; 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; the current and potential future impact of the COVID-19 pandemic on our business, results of operations, financial position or cash flows; changes in polymer consumption growth rates and 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; an inability to raise or sustain prices for products or services; information systems failures and cyberattacks; and other factors affecting our business beyond our control, including without limitation, changes in the general economy, changes in interest rates and changes in the rate of inflation. The above list of factors is not exhaustive.

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.

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 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 outlook for adjusted earnings per share, 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, restructuring costs, environmental remediation costs, 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.

Attachment 1

Avient Corporation

Summary of Condensed Consolidated Statements of Income (Unaudited)

(In millions, except per share data)



Three Months Ended
March 31,


2022


2021





Sales

$    1,293.8


$    1,162.3

Operating Income

128.6


120.4

Net income attributable to Avient shareholders

84.2


79.3

Basic earnings per share attributable to Avient shareholders

$         0.92


$         0.87

Diluted earnings per share attributable to Avient shareholders

$         0.91


$         0.86

Senior management uses comparisons of adjusted net income attributable to Avient shareholders and diluted adjusted earnings per share (EPS) 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.


Three Months Ended March 31, 2022


Three Months Ended March 31, 2021

Reconciliation to Condensed Consolidated Statements of Income

$


EPS


$


EPS









Net income attributable to Avient shareholders

$        84.2


$        0.91


$        79.3


$        0.86

Special items, after tax (Attachment 3)

7.2


0.08


2.6


0.03

Adjusted net income / EPS - excluding special items

$        91.4


$        0.99


$        81.9


$        0.89

 

Attachment 2

Avient Corporation

Condensed Consolidated Statements of Income (Unaudited)

(In millions, except per share data)



Three Months Ended

March 31,


2022


2021





Sales

$        1,293.8


$        1,162.3

Cost of sales

1,000.1


859.9

Gross margin

293.7


302.4

Selling and administrative expense

165.1


182.0

Operating income

128.6


120.4

Interest expense, net

(16.9)


(19.3)

Other (expense) income, net

(0.6)


1.5

Income before income taxes

111.1


102.6

Income taxes

(26.6)


(22.9)

Net income

84.5


79.7

Net income attributable to noncontrolling interests

(0.3)


(0.4)

Net income attributable to Avient shareholders

$             84.2


$             79.3





     Earnings per share attributable to Avient common shareholders - Basic

$             0.92


$             0.87





     Earnings per share attributable to Avient common shareholders - Diluted

$             0.91


$             0.86





Cash dividends declared per share of common stock

$         0.2375


$         0.2125





Weighted-average shares used to compute earnings per common share:




     Basic

91.5


91.3

     Diluted

92.3


92.2

 

Attachment 3

Avient Corporation

Summary of Special Items (Unaudited)

(In millions, except per share data)


Special items (1)

Three Months Ended
March 31,


2022


2021

Cost of sales:




     Restructuring costs, including accelerated depreciation and amortization

$          (4.4)


$          (1.8)

     Environmental remediation costs

(2.0)


(0.5)

     Reimbursement of previously incurred environmental costs

0.6


4.5

          Impact on cost of sales

(5.8)


2.2





Selling and administrative expense:




     Restructuring, legal and other

0.9


(1.3)

     Acquisition related costs

(2.9)


(3.3)

          Impact on selling and administrative expense

(2.0)


(4.6)





          Impact on operating income

(7.8)


(2.4)





     Other income, net

0.1


          Impact on income before income taxes

(7.7)


(2.4)

     Income tax benefit on above special items

2.0


0.9

     Tax adjustments(2)

(1.5)


(1.1)

          Impact of special items on net income attributable to Avient Shareholders

$          (7.2)


$          (2.6)





Diluted earnings per common share impact

$        (0.08)


$        (0.03)





Weighted average shares used to compute adjusted earnings per share:




     Diluted

92.3


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 actuarial 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, joint ventures and equity investments; 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 benefit/(expense) from one-time income tax items, the set-up or reversal of uncertain tax position reserves and deferred income tax valuation allowance adjustments.

 

Attachment 4

Avient Corporation

Condensed Consolidated Balance Sheets

(In millions)



(Unaudited)

March 31, 2022


December 31,
2021





ASSETS




Current assets:




Cash and cash equivalents

$                          562.6


$                  601.2

Accounts receivable, net

757.9


642.3

Inventories, net

475.4


461.1

Other current assets

131.0


122.4

     Total current assets

1,926.9


1,827.0

Property, net

661.9


676.1

Goodwill

1,283.4


1,286.4

Intangible assets, net

904.1


925.2

Operating lease assets, net

67.1


74.1

Other non-current assets

200.3


208.4

     Total assets

$                       5,043.7


$               4,997.2





LIABILITIES AND SHAREHOLDERS' EQUITY




Current liabilities:




Short-term and current portion of long-term debt

$                          607.5


$                      8.6

Accounts payable

642.3


553.9

Current operating lease obligations

21.7


24.2

Accrued expenses and other current liabilities

284.8


353.9

     Total current liabilities

1,556.3


940.6

Non-current liabilities:




Long-term debt

1,250.2


1,850.3

Pension and other post-retirement benefits

98.5


100.0

Deferred income taxes

99.4


100.6

Non-current operating lease obligations

45.9


50.1

Other non-current liabilities

164.1


165.1

     Total non-current liabilities

1,658.1


2,266.1

SHAREHOLDERS' EQUITY




Avient shareholders' equity

1,813.2


1,774.7

Noncontrolling interest

16.1


15.8

     Total equity

1,829.3


1,790.5

     Total liabilities and equity

$                       5,043.7


$               4,997.2

 

Attachment 5

Avient Corporation

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In millions)



Three Months Ended

March 31,


2022


2021

Operating Activities




Net income

$               84.5


$               79.7

Adjustments to reconcile net income to net cash provided by operating activities:




     Depreciation and amortization

35.7


36.6

     Accelerated depreciation and amortization

2.1


0.5

     Share-based compensation expense

3.2


2.7

Changes in assets and liabilities, net of the effect of acquisitions:




     Increase in accounts receivable

(118.8)


(137.6)

     Increase in inventories

(15.1)


(35.1)

     Increase in accounts payable

90.5


67.3

     Decrease in pension and other post-retirement benefits

(4.0)


(7.1)

     Decrease in accrued expenses and other assets and liabilities, net

(59.2)


(3.4)

Net cash provided by operating activities

18.9


3.6

Investing activities




Capital expenditures

(13.3)


(16.5)

Other investing activities


(2.0)

Net cash used by investing activities

(13.3)


(18.5)

Financing activities




Purchase of common shares for treasury

(15.8)


(4.2)

Cash dividends paid

(21.7)


(19.5)

Repayment of long-term debt

(2.4)


(2.3)

Payments of withholding tax on share awards

(3.9)


(3.1)

Net cash used by financing activities

(43.8)


(29.1)

Effect of exchange rate changes on cash

(0.4)


(11.0)

Decrease in cash and cash equivalents

(38.6)


(55.0)

Cash and cash equivalents at beginning of year

601.2


649.5

Cash and cash equivalents at end of period

$             562.6


$             594.5

 

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 and eliminations.

 



Three Months Ended

March 31,


2022


2021

Sales:




   Color, Additives and Inks

$        649.5


$           609.3

   Specialty Engineered Materials

244.7


216.5

   Distribution

432.9


362.7

   Corporate and eliminations

(33.3)


(26.2)

      Sales

$    1,293.8


$        1,162.3





Gross margin:




   Color, Additives and Inks

$        192.1


$           197.5

   Specialty Engineered Materials

69.8


64.7

   Distribution

39.3


39.3

   Corporate and eliminations

(7.5)


0.9

      Gross margin

$        293.7


$           302.4





Selling and administrative expense:




   Color, Additives and Inks

$          97.6


$           108.7

   Specialty Engineered Materials

30.1


30.5

   Distribution

15.1


15.3

   Corporate and eliminations

22.3


27.5

      Selling and administrative expense

$        165.1


$           182.0





Operating income:




   Color, Additives and Inks

$          94.5


$             88.8

   Specialty Engineered Materials

39.7


34.2

   Distribution

24.2


24.0

   Corporate and eliminations

(29.8)


(26.6)

      Operating income

$        128.6


$           120.4





Earnings before interest, taxes, depreciation and amortization (EBITDA):




   Color, Additives and Inks

$        120.5


$           116.2

   Specialty Engineered Materials

47.5


42.0

   Distribution

24.4


24.2

   Corporate and eliminations

(26.0)


(24.9)

   Other income, net

(0.6)


1.5

      EBITDA

$        165.8


$           159.0

 

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 annual and long-term employee 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

March 31,

Reconciliation to Consolidated Statements of Income

2022


2021





Sales

$          1,293.8


$          1,162.3





Gross margin - GAAP

293.7


302.4

Special items in gross margin (Attachment 3)

5.8


(2.2)

     Adjusted gross margin

$              299.5


$              300.2





Adjusted gross margin as a percent of sales

23.2%


25.8%





Operating income - GAAP

128.6


120.4

Special items in operating income (Attachment 3)

7.8


2.4

Adjusted operating income

$              136.4


$              122.8





Adjusted operating income as a percent of sales

10.5%


10.6%

The table below reconciles pre-special income tax expense and the pre-special effective tax rate to their most comparable US GAAP figures.


Three Months Ended March 31,


2022


2021


GAAP Results


Special Items


Adjusted Results


GAAP Results


Special Items


Adjusted Results













 

Income from before income taxes

$  111.1


$        7.7


$ 118.8


$  102.6


$        2.4


$ 105.0













Income tax expense - GAAP

(26.6)



(26.6)


(22.9)



(22.9)

Income tax impact of special items (Attachment 3)


(2.0)


(2.0)



(0.9)


(0.9)

Tax adjustments (Attachment 3)


1.5


1.5



1.1


1.1

Income tax (expense) benefit

$ (26.6)


$      (0.5)


$  (27.1)


$ (22.9)


$        0.2


$  (22.7)













Effective Tax Rate(1)

23.9%




22.8%


22.3%




21.6%


(1) Rates may not recalculate from figures presented herein due to rounding

 

Reconciliation of EBITDA by Segment

Three Months Ended

March 31,


2022


2021

Operating income:




   Color, Additives and Inks

$       94.5


$       88.8

   Specialty Engineered Materials

39.7


34.2

   Distribution

24.2


24.0

   Corporate and eliminations

(29.8)


(26.6)

      Operating income

$     128.6


$     120.4





Items below OI in Corporate:




Other income, net

$        (0.6)


$         1.5





Depreciation & amortization:




Color, Additives and Inks

$       26.0


$       27.4

Specialty Engineered Materials

7.8


7.8

Distribution

0.2


0.2

Corporate and eliminations

3.8


1.7

Depreciation & Amortization

$       37.8


$       37.1





EBITDA:




   Color, Additives and Inks

$     120.5


$     116.2

   Specialty Engineered Materials

47.5


42.0

   Distribution

24.4


24.2

   Corporate and eliminations

(26.0)


(24.9)

   Other income, net

(0.6)


1.5

      EBITDA

$     165.8


$     159.0





EBITDA as a % of Sales:




Color, Additives and Inks

18.6 %


19.1 %

Specialty Engineered Materials

19.4 %


19.4 %

Distribution

5.6 %


6.7 %

 


Three Months Ended

March 31,

Reconciliation to EBITDA and Adjusted EBITDA:

2022


2021

Net income from continuing operations – GAAP

$           84.5


$           79.7

Income tax expense

26.6


22.9

Interest expense

16.9


19.3

Depreciation and amortization

37.8


37.1

EBITDA

$         165.8


$         159.0

Special items, before tax

7.7


2.4

Depreciation and amortization included in special items

(2.1)


(0.5)

Adjusted EBITDA 

$         171.4


$         160.9

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/avient-announces-first-quarter-2022-results-in-connection-with-announcement-to-acquire-dsm-protective-materials-dyneema-301528668.html

SOURCE Avient Corporation

Copyright 2022 PR Newswire

Avient (NYSE:AVNT)
Historical Stock Chart
From Nov 2022 to Dec 2022 Click Here for more Avient Charts.
Avient (NYSE:AVNT)
Historical Stock Chart
From Dec 2021 to Dec 2022 Click Here for more Avient Charts.