- Completed acquisition of DSM's Protective Materials business
(including the Dyneema® brand) on September 1st and announced the agreement to sell
the Distribution segment on August
12th. The Distribution segment will be reported as
discontinued operations.
- Adjusted EPS guidance reduced $0.30 for full year 2022 to reflect weaker demand
conditions and unfavorable foreign exchange
CLEVELAND, Sept. 27,
2022 /PRNewswire/ -- Avient Corporation (NYSE: AVNT),
a leading provider of specialized and sustainable solutions,
announced an update to its third quarter and full year forecast to
reflect the company's recent acquisition and divestiture activity
and current demand outlook.
"During the third quarter we completed the acquisition of the
protective materials business of DSM ("Dyneema") and announced that
we reached an agreement to divest our Distribution segment.
These transactions represent the most recent steps in our
multi-year portfolio transformation to becoming a pure play
specialty formulator," said Robert M.
Patterson, Chairman, President and Chief Executive Officer,
Avient Corporation.
The company has updated its projections to include Dyneema,
present the Distribution segment as discontinued operations, and
adjust its outlook to reflect current demand conditions and
additional unfavorable currency exchange.
Mr. Patterson continued, "The war in Ukraine and related energy supply concerns
have further eroded consumer sentiment and demand in Europe, and we have not seen a recovery in
Asia from the COVID-19 lockdowns
in the first half of the year. The economic environment is further
challenged by rapidly rising interest rates in the U.S., which have
negatively impacted demand trends in the Americas. In
addition, and in the near term, we believe current global demand is
likely further weakened by customer inventory destocking."
The acquisition of Dyneema closed on September 1 and the Distribution sale is expected
to be completed in the fourth quarter. The company intends to
use the net proceeds from its Distribution sale to pay down its
2023 Senior Notes and a portion of the term loan.
The below table provides detail related to the company's updated
guidance for adjusted EPS, which will now exclude intangible
amortization from acquisitions. Pro Forma adjusted EPS
presents the full year 2022 as if the Dyneema acquisition and
Distribution divestiture had happened as of January 1, 2022 and that net proceeds from the
sale of Distribution were used to pay down the company's 2023
Senior Notes and a portion of the term loan, simultaneously.
|
|
|
Q3
2022
|
|
FY
2022
|
|
FY 2022
Pro Forma
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EPS - Prior
Estimate
|
|
$
0.80
|
|
$
3.50
|
|
$
3.50
|
|
|
|
|
|
|
|
|
|
Discontinued
Operations
|
|
(0.25)
|
|
(0.93)
|
|
(0.93)
|
|
|
|
|
|
|
|
|
Adjusted EPS -
Continuing Operations
|
|
0.55
|
|
2.57
|
|
2.57
|
|
|
|
|
|
|
|
|
|
Forecast Revision (ex.
FX)
|
|
(0.04)
|
|
(0.25)
|
|
(0.25)
|
|
Foreign
Exchange
|
|
(0.02)
|
|
(0.05)
|
|
(0.05)
|
Forecast
Revision
|
|
(0.06)
|
|
(0.30)
|
|
(0.30)
|
|
|
|
|
|
|
|
|
Dyneema
|
|
0.04
|
|
0.13
|
|
0.46
|
|
|
|
|
|
|
|
|
Interest
Expense
|
|
(0.09)
|
|
(0.25)
|
|
(0.38)
|
|
|
|
|
|
|
|
|
Intangible
Amortization(1)
|
|
0.14
|
|
0.55
|
|
0.75
|
|
|
|
|
|
|
|
|
Adjusted
EPS
|
|
$
0.58*
|
|
$
2.70*
|
|
$
3.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Updated
forecast
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Intangible amortization expense for 2022
pro forma includes a preliminary estimate of $0.29 associated with
the Dyneema acquisition.
|
The remaining $0.46 is
associated with legacy Avient.
|
|
|
|
|
|
"Following the acquisition of Dyneema and divestiture of
Distribution, the company expects to be modestly levered at 2.9x
net debt to pro forma adjusted EBITDA, positioning us well to
navigate the near term uncertainty in economic conditions," said
Mr. Patterson.
Mr. Patterson added, "Most importantly, we have not wavered from
our strategy of becoming a specialty formulator. Over the
last few years, we have overhauled our portfolio despite the
unprecedented impacts of COVID, the war in Ukraine, and resulting supply chain issues and
inflation. We have divested more cyclical, less specialized
businesses and made significant investments in innovation,
composites and sustainable solutions. We remain confident in
the long-term growth potential of our new portfolio."
To facilitate investor review, Avient has provided pro
forma financial information to reflect the Distribution segment as
discontinued operations and the Dyneema acquisition as if it
occurred on January 1, 2021. This
financial information can be found on the company's website at
www.avient.com/investors.
About Avient
Avient Corporation (NYSE: AVNT) provides specialized and
sustainable material solutions that transform customer challenges
into opportunities, bringing new products to life for a better
world. Examples include:
- 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 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; the ability to obtain required regulatory approvals and
otherwise consummate the proposed sale of the Distribution
business; 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: net debt to pro forma adjusted EBITDA and
adjusted EPS. 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.
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SOURCE Avient Corporation