- Second quarter sales grew to $1.3
billion, a 5% increase over the prior year quarter, and an
all-time quarterly record
- GAAP EPS increased 24% to $0.92 compared to $0.74 in the prior year quarter
- Adjusted EPS increased 13% to $0.98 compared to $0.87 in the prior year quarter, exceeding second
quarter guidance of $0.92. Results
driven by better than expected results in the Americas, more than
offsetting extended COVID-19 lockdowns in Shanghai
- Third quarter adjusted EPS guidance of $0.80 introduced with full year adjusted EPS
guidance of $3.50 maintained (without
giving effect to any adjustments for the announced acquisition of
DSM Protective Materials and potential sale of
Distribution)
- Most recent Sustainability Report published, highlighting
the company's progress on ESG initiatives focused on People,
Products, Planet and Performance
CLEVELAND, July 26,
2022 /PRNewswire/ -- Avient Corporation (NYSE: AVNT),
a leading provider of specialized and sustainable solutions, today
announced its second quarter 2022 results. The company
delivered second quarter GAAP EPS of $0.92 compared to $0.74 in the prior year quarter. The
company noted that GAAP EPS includes special items (Attachment 3),
which impacted EPS in both periods.
"Overall, we are pleased with our performance as we have been
able to overcome a number of continuing challenges including
inflation, supply chain disruptions, extended lockdowns in
China and the war in Ukraine," said Robert
M. Patterson, Chairman, President and Chief Executive
Officer, Avient Corporation. "Second quarter sales
increased 5% over the prior year quarter to $1.3 billion, and adjusted EPS increased 13% (20%
excluding negative foreign exchange) to $0.98."
Mr. Patterson added, "We have been on a multi-year journey to
transform our portfolio and become a premier formulator of
specialty and sustainable solutions. Our recent performance
demonstrates the resiliency of our portfolio during challenging
times."
As a continuation of its specialty transformation, the company
announced in April it had entered into an agreement to acquire the
DSM Protective Materials business (including the Dyneema® brand)
("Dyneema") and that it is exploring the sale of its Distribution
business.
In this regard Mr. Patterson added, "We remain on track with our
timeline for the acquisition and expect to close in September,
subject to the satisfaction of customary closing conditions.
In addition, we embarked on a formal process to explore the sale of
our Distribution business and are encouraged by the level of
interest we have received from several potential buyers."
Without giving effect to any impacts from the pending
acquisition of Dyneema and potential sale of Avient Distribution,
the company provided third quarter adjusted EPS guidance of
$0.80, a 14% increase from the prior
year quarter, and maintained its full year adjusted EPS guidance of
$3.50. "We expect demand in
Asia to improve from the prior
quarter and growth to continue in the Americas, offsetting
softening conditions in Europe and
weaker foreign exchange," said Jamie A.
Beggs, Senior Vice President and Chief Financial Officer,
Avient Corporation.
The company also announced that it has issued its latest
Sustainability Report, available at
www.avient.com/sustainability. The comprehensive online
publication highlights progress made toward Avient's 2030
Sustainability Goals, along with other news and information on ESG
matters. "Every day we are making positive impacts across the
sustainability spectrum, particularly with our growing portfolio of
sustainable solutions for customers," said Mr. Patterson.
"Our sustainability report offers a transparent look into where we
are focused, how we are leading and what this ultimately means for
our many stakeholders, as well as our planet."
Avient will be hosting a webcast on Tuesday, July 26, 2022 to discuss second quarter
results and provide more details about the Dyneema acquisition and
potential sale of its Distribution business.
Webcast Details
Avient will host a webcast on Tuesday,
July 26, 2022 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 a personal PIN, which are 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.
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 8,800 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:
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, including recessionary
conditions; 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; 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; any material adverse changes in the Dyneema Business; our
ability to achieve the strategic and other objectives relating to
the Dyneema Acquisition, and the possible sale of the Distribution
business segment; 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.
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
June 30,
|
|
Six Months Ended
June 30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
Sales
|
$
1,302.4
|
|
$
1,235.2
|
|
$
2,596.2
|
|
$
2,397.5
|
Operating
Income
|
129.5
|
|
108.1
|
|
258.1
|
|
228.5
|
Net income attributable
to Avient shareholders
|
84.7
|
|
68.8
|
|
168.9
|
|
148.1
|
Basic earnings per
share attributable to Avient shareholders
|
$
0.93
|
|
$
0.75
|
|
$
1.85
|
|
$
1.62
|
Diluted earnings per
share attributable to Avient shareholders
|
$
0.92
|
|
$
0.74
|
|
$
1.83
|
|
$
1.60
|
|
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
June 30, 2022
|
|
Three Months
Ended
June 30, 2021
|
Reconciliation to
Condensed Consolidated Statements of Income
|
$
|
|
EPS
|
|
$
|
|
EPS
|
|
|
|
|
|
|
|
|
Net income attributable
to Avient shareholders
|
$
84.7
|
|
$
0.92
|
|
$
68.8
|
|
$
0.74
|
Special items, after
tax (Attachment 3)
|
5.1
|
|
0.06
|
|
11.7
|
|
0.13
|
Adjusted net income /
EPS - excluding special items
|
$
89.8
|
|
$
0.98
|
|
$
80.5
|
|
$
0.87
|
|
Six months ended
June 30, 2022
|
|
Six months ended
June 30, 2021
|
Reconciliation to
Condensed Consolidated Statements of Income
|
$
|
|
EPS
|
|
$
|
|
EPS
|
|
|
|
|
|
|
|
|
Net income attributable
to Avient shareholders
|
$
168.9
|
|
$
1.83
|
|
$
148.1
|
|
$
1.60
|
Special items, after
tax (Attachment 3)
|
12.3
|
|
0.13
|
|
14.3
|
|
0.16
|
Adjusted net income /
EPS - excluding special items
|
$
181.2
|
|
$
1.96
|
|
$
162.4
|
|
$
1.76
|
Attachment
2
|
Avient
Corporation
|
Condensed
Consolidated Statements of Income (Unaudited)
|
(In millions, except
per share data)
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
Sales
|
$
1,302.4
|
|
$
1,235.2
|
|
$
2,596.2
|
|
$
2,397.5
|
Cost of
sales
|
998.6
|
|
946.5
|
|
1,998.7
|
|
1,806.4
|
Gross margin
|
303.8
|
|
288.7
|
|
597.5
|
|
591.1
|
Selling and
administrative expense
|
174.3
|
|
180.6
|
|
339.4
|
|
362.6
|
Operating
income
|
129.5
|
|
108.1
|
|
258.1
|
|
228.5
|
Interest expense,
net
|
(16.2)
|
|
(19.5)
|
|
(33.1)
|
|
(38.8)
|
Other income,
net
|
1.4
|
|
1.2
|
|
0.8
|
|
2.7
|
Income before income
taxes
|
114.7
|
|
89.8
|
|
225.8
|
|
192.4
|
Income tax
expense
|
(30.0)
|
|
(20.4)
|
|
(56.6)
|
|
(43.3)
|
Net income
|
84.7
|
|
69.4
|
|
169.2
|
|
149.1
|
Net income attributable
to noncontrolling interests
|
—
|
|
(0.6)
|
|
(0.3)
|
|
(1.0)
|
Net income attributable
to Avient shareholders
|
$
84.7
|
|
$
68.8
|
|
$
168.9
|
|
$
148.1
|
|
|
|
|
|
|
|
|
Earnings per share
attributable to Avient common shareholders - Basic
|
$
0.93
|
|
$
0.75
|
|
$
1.85
|
|
$
1.62
|
|
|
|
|
|
|
|
|
Earnings per share
attributable to Avient common shareholders - Diluted
|
$
0.92
|
|
$
0.74
|
|
$
1.83
|
|
$
1.60
|
|
|
|
|
|
|
|
|
Cash dividends declared
per share of common stock
|
$ 0.2375
|
|
$ 0.2125
|
|
$ 0.4750
|
|
$ 0.4250
|
|
|
|
|
|
|
|
|
Weighted-average shares
used to compute earnings per common share:
|
|
|
|
|
|
|
|
Basic
|
91.4
|
|
91.3
|
|
91.4
|
|
91.3
|
Diluted
|
92.1
|
|
92.4
|
|
92.2
|
|
92.3
|
Attachment
3
|
Avient
Corporation
|
Summary of Special
Items (Unaudited)
|
(In millions, except
per share data)
|
|
|
Special items
(1)
|
Three Months
Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Cost of
sales:
|
|
|
|
|
|
|
|
Restructuring costs,
including accelerated depreciation and amortization
|
$
(2.6)
|
|
$
(1.5)
|
|
$
(7.0)
|
|
$
(3.3)
|
Environmental
remediation costs
|
(3.0)
|
|
(12.5)
|
|
(5.0)
|
|
(13.0)
|
Reimbursement of
previously incurred environmental costs
|
7.6
|
|
—
|
|
8.2
|
|
4.5
|
Acquisition related
costs
|
—
|
|
1.4
|
|
—
|
|
1.4
|
Impact on cost of
sales
|
2.0
|
|
(12.6)
|
|
(3.8)
|
|
(10.4)
|
|
|
|
|
|
|
|
|
Selling and
administrative expense:
|
|
|
|
|
|
|
|
Restructuring, legal
and other
|
(4.2)
|
|
(0.4)
|
|
(3.3)
|
|
(1.7)
|
Acquisition related
costs
|
(2.1)
|
|
(1.2)
|
|
(5.0)
|
|
(4.5)
|
Impact on selling and
administrative expense
|
(6.3)
|
|
(1.6)
|
|
(8.3)
|
|
(6.2)
|
|
|
|
|
|
|
|
|
Impact on operating
income
|
(4.3)
|
|
(14.2)
|
|
(12.1)
|
|
(16.6)
|
|
|
|
|
|
|
|
|
Other income,
net
|
—
|
|
—
|
|
0.1
|
|
—
|
Mark-to-market on
cross-currency swaps
|
0.9
|
|
—
|
|
0.9
|
|
—
|
Impact on income
before income taxes
|
(3.4)
|
|
(14.2)
|
|
(11.1)
|
|
(16.6)
|
Income tax benefit on
above special items
|
0.8
|
|
3.4
|
|
2.8
|
|
4.3
|
Tax
adjustments(2)
|
(2.5)
|
|
(0.9)
|
|
(4.0)
|
|
(2.0)
|
Impact of special
items on net income attributable to Avient Shareholders
|
$
(5.1)
|
|
$
(11.7)
|
|
$
(12.3)
|
|
$
(14.3)
|
|
|
|
|
|
|
|
|
Diluted earnings per
common share impact
|
$
(0.06)
|
|
$
(0.13)
|
|
$
(0.13)
|
|
$
(0.16)
|
|
|
|
|
|
|
|
|
Weighted average shares
used to compute adjusted earnings per share:
|
|
|
|
|
|
|
|
Diluted
|
92.1
|
|
92.4
|
|
92.2
|
|
92.3
|
|
|
(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)
June 30,
2022
|
|
December 31,
2021
|
|
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
645.1
|
|
$
601.2
|
Accounts receivable,
net
|
752.6
|
|
642.3
|
Inventories,
net
|
494.0
|
|
461.1
|
Other current
assets
|
128.4
|
|
122.4
|
Total current
assets
|
2,020.1
|
|
1,827.0
|
Property,
net
|
638.9
|
|
676.1
|
Goodwill
|
1,256.8
|
|
1,286.4
|
Intangible assets,
net
|
867.2
|
|
925.2
|
Operating lease assets,
net
|
62.7
|
|
74.1
|
Other non-current
assets
|
197.9
|
|
208.4
|
Total
assets
|
$
5,043.6
|
|
$
4,997.2
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Short-term and current
portion of long-term debt
|
$
607.7
|
|
$
8.6
|
Accounts
payable
|
634.0
|
|
553.9
|
Current operating lease
obligations
|
21.4
|
|
24.2
|
Accrued expenses and
other current liabilities
|
307.5
|
|
353.9
|
Total current
liabilities
|
1,570.6
|
|
940.6
|
Non-current
liabilities:
|
|
|
|
Long-term
debt
|
1,249.1
|
|
1,850.3
|
Pension and other
post-retirement benefits
|
95.0
|
|
100.0
|
Deferred income
taxes
|
106.6
|
|
100.6
|
Non-current operating
lease obligations
|
41.8
|
|
50.1
|
Other non-current
liabilities
|
154.7
|
|
165.1
|
Total non-current
liabilities
|
1,647.2
|
|
2,266.1
|
SHAREHOLDERS'
EQUITY
|
|
|
|
Avient shareholders'
equity
|
1,809.7
|
|
1,774.7
|
Noncontrolling
interest
|
16.1
|
|
15.8
|
Total
equity
|
1,825.8
|
|
1,790.5
|
Total liabilities
and equity
|
$
5,043.6
|
|
$
4,997.2
|
Attachment
5
|
Avient
Corporation
|
Condensed
Consolidated Statements of Cash Flows (Unaudited)
|
(In
millions)
|
|
|
Six Months
Ended
June
30,
|
|
2022
|
|
2021
|
Operating
Activities
|
|
|
|
Net income
|
$
169.2
|
|
$
149.1
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
71.1
|
|
69.5
|
Accelerated
depreciation and amortization
|
3.2
|
|
1.4
|
Share-based
compensation expense
|
6.3
|
|
5.6
|
Changes in assets and
liabilities, net of the effect of acquisitions:
|
|
|
|
Increase in accounts
receivable
|
(133.2)
|
|
(196.1)
|
Increase in
inventories
|
(45.9)
|
|
(88.1)
|
Increase in accounts
payable
|
98.5
|
|
108.4
|
Decrease in pension
and other post-retirement benefits
|
(9.9)
|
|
(9.2)
|
(Decrease) increase in
accrued expenses and other assets and liabilities, net
|
(52.6)
|
|
27.5
|
Net cash provided by
operating activities
|
106.7
|
|
68.1
|
Investing
activities
|
|
|
|
Capital
expenditures
|
(34.0)
|
|
(42.1)
|
Settlement of
cross-currency swaps
|
75.1
|
|
—
|
Net cash proceeds used
by other assets
|
—
|
|
(2.0)
|
Net cash provided
(used) by investing activities
|
41.1
|
|
(44.1)
|
Financing
activities
|
|
|
|
Purchase of common
shares for treasury
|
(36.4)
|
|
(4.2)
|
Cash dividends
paid
|
(43.5)
|
|
(38.8)
|
Repayment of long-term
debt
|
(4.4)
|
|
(4.4)
|
Payments of withholding
tax on share awards
|
(4.1)
|
|
(4.2)
|
Net cash used by
financing activities
|
(88.4)
|
|
(51.6)
|
Effect of exchange rate
changes on cash
|
(15.5)
|
|
(5.7)
|
Increase (decrease) in
cash and cash equivalents
|
43.9
|
|
(33.3)
|
Cash and cash
equivalents at beginning of year
|
601.2
|
|
649.5
|
Cash and cash
equivalents at end of period
|
$
645.1
|
|
$
616.2
|
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
June
30,
|
|
Six Months
Ended
June
30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Sales:
|
|
|
|
|
|
|
|
Color,
Additives and Inks
|
$
649.1
|
|
$
624.4
|
|
$
1,298.6
|
|
$
1,233.7
|
Specialty
Engineered Materials
|
243.9
|
|
240.6
|
|
488.6
|
|
457.1
|
Distribution
|
443.2
|
|
404.4
|
|
876.1
|
|
767.1
|
Corporate
and eliminations
|
(33.8)
|
|
(34.2)
|
|
(67.1)
|
|
(60.4)
|
Sales
|
$
1,302.4
|
|
$
1,235.2
|
|
$
2,596.2
|
|
$
2,397.5
|
|
|
|
|
|
|
|
|
Gross
margin:
|
|
|
|
|
|
|
|
Color,
Additives and Inks
|
$
193.4
|
|
$
193.4
|
|
$
385.5
|
|
$
390.9
|
Specialty
Engineered Materials
|
67.4
|
|
69.6
|
|
137.2
|
|
134.3
|
Distribution
|
42.9
|
|
40.1
|
|
82.2
|
|
79.4
|
Corporate
and eliminations
|
0.1
|
|
(14.4)
|
|
(7.4)
|
|
(13.5)
|
Gross
margin
|
$
303.8
|
|
$
288.7
|
|
$
597.5
|
|
$
591.1
|
|
|
|
|
|
|
|
|
Selling and
administrative expense:
|
|
|
|
|
|
|
|
Color,
Additives and Inks
|
$
99.8
|
|
$
107.1
|
|
$
197.4
|
|
$
215.8
|
Specialty
Engineered Materials
|
30.8
|
|
32.3
|
|
60.9
|
|
62.8
|
Distribution
|
15.8
|
|
16.4
|
|
30.9
|
|
31.7
|
Corporate
and eliminations
|
27.9
|
|
24.8
|
|
50.2
|
|
52.3
|
Selling and
administrative expense
|
$
174.3
|
|
$
180.6
|
|
$
339.4
|
|
$
362.6
|
|
|
|
|
|
|
|
|
Operating
income:
|
|
|
|
|
|
|
|
Color,
Additives and Inks
|
$
93.6
|
|
$
86.3
|
|
$
188.1
|
|
$
175.1
|
Specialty
Engineered Materials
|
36.6
|
|
37.3
|
|
76.3
|
|
71.5
|
Distribution
|
27.1
|
|
23.7
|
|
51.3
|
|
47.7
|
Corporate
and eliminations
|
(27.8)
|
|
(39.2)
|
|
(57.6)
|
|
(65.8)
|
Operating
income
|
$
129.5
|
|
$
108.1
|
|
$
258.1
|
|
$
228.5
|
|
|
|
|
|
|
|
|
Earnings before
interest, taxes, depreciation and amortization
(EBITDA):
|
|
|
|
|
|
|
|
Color,
Additives and Inks
|
$
119.5
|
|
$
111.6
|
|
$
240.0
|
|
$
227.7
|
Specialty
Engineered Materials
|
44.3
|
|
45.4
|
|
91.8
|
|
87.4
|
Distribution
|
27.3
|
|
23.9
|
|
51.7
|
|
48.1
|
Corporate
and eliminations
|
(25.1)
|
|
(39.0)
|
|
(51.1)
|
|
(63.8)
|
Other income,
net
|
1.4
|
|
1.2
|
|
0.8
|
|
2.7
|
EBITDA
|
$
167.4
|
|
$
143.1
|
|
$
333.2
|
|
$
302.1
|
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
June
30,
|
|
Six Months
Ended
June
30,
|
Reconciliation to
Consolidated Statements of Income
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
Sales
|
$
1,302.4
|
|
$
1,235.2
|
|
$
2,596.2
|
|
$
2,397.5
|
|
|
|
|
|
|
|
|
Gross margin -
GAAP
|
303.8
|
|
288.7
|
|
597.5
|
|
591.1
|
Special items in gross
margin (Attachment 3)
|
(2.0)
|
|
12.6
|
|
3.8
|
|
10.4
|
Adjusted gross
margin
|
$
301.8
|
|
$
301.3
|
|
$ 601.3
|
|
$ 601.5
|
|
|
|
|
|
|
|
|
Adjusted gross margin
as a percent of sales
|
23.3 %
|
|
24.4 %
|
|
23.2 %
|
|
25.1 %
|
|
|
|
|
|
|
|
|
Operating income -
GAAP
|
129.5
|
|
108.1
|
|
258.1
|
|
228.5
|
Special items in
operating income (Attachment 3)
|
4.3
|
|
14.2
|
|
12.1
|
|
16.6
|
Adjusted operating
income
|
$
133.8
|
|
$
122.3
|
|
$ 270.2
|
|
$ 245.1
|
|
|
|
|
|
|
|
|
Adjusted operating
income as a percent of sales
|
10.3 %
|
|
9.9 %
|
|
10.4 %
|
|
10.2 %
|
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
June 30,
|
|
2022
|
|
2021
|
|
GAAP
Results
|
|
Special
Items
|
|
Adjusted
Results
|
|
GAAP
Results
|
|
Special
Items
|
|
Adjusted
Results
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from before
income taxes
|
$
114.7
|
|
$
3.4
|
|
$ 118.1
|
|
$ 89.8
|
|
$ 14.2
|
|
$ 104.0
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense -
GAAP
|
(30.0)
|
|
—
|
|
(30.0)
|
|
(20.4)
|
|
—
|
|
(20.4)
|
Income tax impact of
special items (Attachment 3)
|
—
|
|
(0.8)
|
|
(0.8)
|
|
—
|
|
(3.4)
|
|
(3.4)
|
Tax adjustments
(Attachment 3)
|
—
|
|
2.5
|
|
2.5
|
|
—
|
|
0.9
|
|
0.9
|
Income tax (expense)
benefit
|
$ (30.0)
|
|
$
1.7
|
|
$
(28.3)
|
|
$ (20.4)
|
|
$ (2.5)
|
|
$
(22.9)
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Tax
Rate(1)
|
26.1 %
|
|
|
|
23.9 %
|
|
22.7 %
|
|
|
|
22.0 %
|
|
(1) Rates may not recalculate from
figures presented herein due to rounding
|
|
|
|
Six Months Ended
June 30,
|
|
2022
|
|
2021
|
|
GAAP
Results
|
|
Special
Items
|
|
Adjusted
Results
|
|
GAAP
Results
|
|
Special
Items
|
|
Adjusted
Results
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from before
income taxes
|
$
225.8
|
|
$ 11.1
|
|
$ 236.9
|
|
$
192.4
|
|
$ 16.6
|
|
$ 209.0
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense -
GAAP
|
(56.6)
|
|
—
|
|
(56.6)
|
|
(43.3)
|
|
—
|
|
(43.3)
|
Income tax impact of
special items (Attachment 3)
|
—
|
|
(2.8)
|
|
(2.8)
|
|
—
|
|
(4.3)
|
|
(4.3)
|
Tax adjustments
(Attachment 3)
|
—
|
|
4.0
|
|
4.0
|
|
—
|
|
2.0
|
|
2.0
|
Income tax (expense)
benefit
|
$ (56.6)
|
|
$
1.2
|
|
$
(55.4)
|
|
$ (43.3)
|
|
$ (2.3)
|
|
$
(45.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Tax
Rate(1)
|
25.0 %
|
|
|
|
23.4 %
|
|
22.5 %
|
|
|
|
21.8 %
|
|
(1) Rates may not recalculate from
figures presented herein due to rounding
|
|
|
Reconciliation of
EBITDA by Segment
|
Three Months
Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Operating
income:
|
|
|
|
|
|
|
|
Color,
Additives and Inks
|
$
93.6
|
|
$
86.3
|
|
$ 188.1
|
|
$ 175.1
|
Specialty
Engineered Materials
|
36.6
|
|
37.3
|
|
76.3
|
|
71.5
|
Distribution
|
27.1
|
|
23.7
|
|
51.3
|
|
47.7
|
Corporate
and eliminations
|
(27.8)
|
|
(39.2)
|
|
(57.6)
|
|
(65.8)
|
Operating
income
|
$ 129.5
|
|
$ 108.1
|
|
$ 258.1
|
|
$ 228.5
|
|
|
|
|
|
|
|
|
Items below OI in
Corporate:
|
|
|
|
|
|
|
|
Other income,
net
|
$
1.4
|
|
$
1.2
|
|
$
0.8
|
|
$
2.7
|
|
|
|
|
|
|
|
|
Depreciation &
amortization:
|
|
|
|
|
|
|
|
Color, Additives and
Inks
|
$
25.9
|
|
$
25.3
|
|
$
51.9
|
|
$
52.6
|
Specialty Engineered
Materials
|
7.7
|
|
8.1
|
|
15.5
|
|
15.9
|
Distribution
|
0.2
|
|
0.2
|
|
0.4
|
|
0.4
|
Corporate and
eliminations
|
2.7
|
|
0.2
|
|
6.5
|
|
2.0
|
Depreciation &
Amortization
|
$
36.5
|
|
$
33.8
|
|
$
74.3
|
|
$
70.9
|
|
|
|
|
|
|
|
|
EBITDA:
|
|
|
|
|
|
|
|
Color,
Additives and Inks
|
$ 119.5
|
|
$ 111.6
|
|
$ 240.0
|
|
$ 227.7
|
Specialty
Engineered Materials
|
44.3
|
|
45.4
|
|
91.8
|
|
87.4
|
Distribution
|
27.3
|
|
23.9
|
|
51.7
|
|
48.1
|
Corporate
and eliminations
|
(25.1)
|
|
(39.0)
|
|
(51.1)
|
|
(63.8)
|
Other
income, net
|
1.4
|
|
1.2
|
|
$
0.8
|
|
$
2.7
|
EBITDA
|
$ 167.4
|
|
$ 143.1
|
|
$ 333.2
|
|
$ 302.1
|
|
Three Months
Ended
June 30,
|
|
Six Months Ended
June 30,
|
Reconciliation to
EBITDA and Adjusted EBITDA:
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net income –
GAAP
|
$
84.7
|
|
$
69.4
|
|
$
169.2
|
|
$
149.1
|
Income tax
expense
|
30.0
|
|
20.4
|
|
56.6
|
|
43.3
|
Interest
expense
|
16.2
|
|
19.5
|
|
33.1
|
|
38.8
|
Depreciation and
amortization
|
36.5
|
|
33.8
|
|
74.3
|
|
70.9
|
EBITDA
|
$
167.4
|
|
$
143.1
|
|
$
333.2
|
|
$
302.1
|
Special items, before
tax
|
3.4
|
|
14.2
|
|
11.1
|
|
16.6
|
Depreciation and
amortization included in special items
|
(1.1)
|
|
1.4
|
|
(3.2)
|
|
0.8
|
Adjusted
EBITDA
|
$
169.7
|
|
$
158.7
|
|
$
341.1
|
|
$
319.5
|
|
Three Months
Ended
June 30, 2021
|
Reconciliation to
Condensed Consolidated Statements of Income
|
$
|
|
EPS
|
|
|
|
|
Net income attributable
to Avient shareholders
|
$
68.8
|
|
$
0.74
|
Special items, after
tax (Attachment 3)
|
11.7
|
|
0.13
|
Adjusted net income /
EPS - excluding special items
|
80.5
|
|
0.87
|
FX
adjustment
|
(4.9)
|
|
(0.05)
|
Adjusted net income /
EPS - excluding special items, adjusted for FX
|
$
75.6
|
|
$
0.82
|
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SOURCE Avient Corporation