CLEVELAND, Oct. 28, 2021 /PRNewswire/ -- Avient Corporation
(NYSE: AVNT), a leading provider of specialized and sustainable
material solutions, today reported its third quarter results for
2021. Third quarter 2021 GAAP EPS from continuing operations was
$0.57 compared to $0.02 in the prior year third quarter. The
company noted that GAAP EPS includes special items (Attachment 3),
which impacted EPS in both periods.
"It has been over a year since we completed the acquisition of
Clariant's color business and became Avient – bold moves to help us
become the specialty formulator we are today," said Robert M. Patterson, Chairman, President and
Chief Executive Officer, Avient Corporation. "We have
achieved significant growth in sustainable solutions, healthcare
and composites in 2021. Add on nearly $50 million in synergies from the Clariant color
business integration, and we are having a record year."
The company noted customer demand for its products continues to
be robust across all end markets and regions, as revenue increased
32% to $1.2 billion in the third
quarter and adjusted EPS increased 52% to $0.70. The company maintains its previously
communicated full-year adjusted EPS guidance of $3.00, which is an increase of 55% over the prior
year adjusted EPS of $1.93.
"This has been one of the most challenging years we have
experienced as a result of navigating the COVID pandemic and an
unprecedented combination of inflation, supply chain disruptions,
and labor shortages," Mr. Patterson said. "I'm very proud of
our performance and our associates who continue to take care of
each other and our customers."
"When we initially announced the acquisition of Clariant's color
business in December 2019, we
aggressively planned to reduce net debt to adjusted EBITDA leverage
and now project to be at 2.1x by year end, which is ahead of
schedule by nearly a year," said Mr. Patterson. "As such, we
look forward to pursuing other acquisition opportunities and/or
repurchasing Avient shares in the open market in the
future."
Upcoming Investor Day
"Planning is underway for our investor day in New York City on December 9. We are excited to lay out our
long-term growth plans highlighting our sustainable solutions
portfolio as well as provide an update on the synergies expected
from the Clariant color business acquisition," said Jamie Beggs, Senior Vice President and Chief
Financial Officer, Avient Corporation. "We will be
sending out registration information shortly and will offer both
in-person and virtual options in light of the continuing impacts of
the pandemic."
The company noted it will provide more details on its third
quarter results and outlook during the webcast scheduled for
8:00 a.m. Eastern Time on
October 28, 2021.
Webcast Details
The webcast can be viewed live at avient.com/investors, or by
clicking here: https://edge.media-server.com/mmc/p/yrq7mgm9.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 7899765. 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
11:00 a.m. ET on Thursday, October
28, 2021. To access, dial 1-855-859-2056 (domestic) or
1-404-537-3406 (international) and provide conference ID number
7899765.
Full Year Comparisons Pro Forma for Acquisition of Clariant's
Color Business
The company acquired Clariant's color ("Clariant Color")
business on July 1, 2020 (the
"Acquisition Date"). Comparisons to prior year full year
financial results herein are presented on a pro forma basis such
that the prior periods include the business results of Clariant
Color for that prior period. Management believes this
provides better comparability of the performance of the combined
businesses. Refer to Attachment 7 Reconciliation of Non-GAAP
Financial Measures for details regarding adjustments to previously
reported results to arrive to the pro forma financial
metrics.
About Avient
Avient Corporation (NYSE: AVNT), with expected 2021 revenues of
$4.75 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 8,400 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 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 including without any limitation, any supply
chain and logistics issues; our ability to achieve the strategic
and other objectives relating to the acquisition of Clariant's
Color business, including any expected synergies; 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 achieve the
anticipated financial benefit from initiatives related to
acquisition and integration working capital reductions, cost
reductions and employee productivity goals; our ability to pay
regular quarterly cash dividends and the amounts and timing of any
future dividends; information systems failures and cyberattacks;
our ability to consummate and successfully integrate acquisitions;
and 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 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, adjusted operating income, free
cash flow and adjusted EBITDA. 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
September 30,
|
|
Nine Months Ended
September 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
Sales
|
$
|
1,219.8
|
|
|
$
|
924.5
|
|
|
$
|
3,617.3
|
|
|
$
|
2,245.1
|
|
Operating
Income
|
78.7
|
|
|
33.5
|
|
|
307.2
|
|
|
124.3
|
|
Net income from
continuing operations attributable to Avient
shareholders
|
52.9
|
|
|
1.7
|
|
|
201.0
|
|
|
57.8
|
|
Basic earnings per
share from continuing operations attributable to Avient
shareholders
|
$
|
0.58
|
|
|
$
|
0.02
|
|
|
$
|
2.20
|
|
|
$
|
0.64
|
|
Diluted earnings per
share from continuing operations attributable to Avient
shareholders
|
$
|
0.57
|
|
|
$
|
0.02
|
|
|
$
|
2.18
|
|
|
$
|
0.64
|
|
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.
|
Three Months Ended
September 30, 2021
|
|
Three Months Ended
September 30, 2020
|
Reconciliation to
Condensed Consolidated Statements of Income
|
$
|
|
EPS
|
|
$
|
|
EPS
|
|
|
|
|
|
|
|
|
Net income from
continuing operations attributable to Avient
shareholders
|
$
|
52.9
|
|
|
$
|
0.57
|
|
|
$
|
1.7
|
|
|
$
|
0.02
|
|
Special items, after
tax (Attachment 3)
|
11.7
|
|
|
0.13
|
|
|
40.3
|
|
|
0.44
|
|
Adjusted net income /
EPS - excluding special items
|
$
|
64.6
|
|
|
$
|
0.70
|
|
|
$
|
42.0
|
|
|
$
|
0.46
|
|
|
Nine Months Ended
September 30, 2021
|
|
Nine Months Ended
September 30, 2020
|
Reconciliation to
Condensed Consolidated Statements of Income
|
$
|
|
EPS
|
|
$
|
|
EPS
|
|
|
|
|
|
|
|
|
Net income from
continuing operations attributable to Avient
shareholders
|
$
|
201.0
|
|
|
$
|
2.18
|
|
|
$
|
57.8
|
|
|
$
|
0.64
|
|
Special items, after
tax (Attachment 3)
|
26.0
|
|
|
0.28
|
|
|
51.5
|
|
|
0.57
|
|
Adjusted net income /
EPS - excluding special items
|
$
|
227.0
|
|
|
$
|
2.46
|
|
|
$
|
109.3
|
|
|
$
|
1.21
|
|
Attachment
2
|
Avient
Corporation
|
Condensed
Consolidated Statements of Income (Unaudited)
|
(In millions, except
per share data)
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
Sales
|
$
|
1,219.8
|
|
|
$
|
924.5
|
|
|
$
|
3,617.3
|
|
|
$
|
2,245.1
|
|
Cost of
sales
|
964.4
|
|
|
714.3
|
|
|
2,770.8
|
|
|
1,713.7
|
|
Gross
margin
|
255.4
|
|
|
210.2
|
|
|
846.5
|
|
|
531.4
|
|
Selling and
administrative expense
|
176.7
|
|
|
176.7
|
|
|
539.3
|
|
|
407.1
|
|
Operating
income
|
78.7
|
|
|
33.5
|
|
|
307.2
|
|
|
124.3
|
|
Interest expense,
net
|
(19.0)
|
|
|
(29.7)
|
|
|
(57.8)
|
|
|
(55.3)
|
|
Other income,
net
|
1.4
|
|
|
1.5
|
|
|
4.1
|
|
|
12.6
|
|
Income from
continuing operations before income taxes
|
61.1
|
|
|
5.3
|
|
|
253.5
|
|
|
81.6
|
|
Income
taxes
|
(8.5)
|
|
|
(2.7)
|
|
|
(51.8)
|
|
|
(22.5)
|
|
Net income from
continuing operations
|
52.6
|
|
|
2.6
|
|
|
201.7
|
|
|
59.1
|
|
Loss from
discontinued operations, net of income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.5)
|
|
Net income
|
52.6
|
|
|
2.6
|
|
|
201.7
|
|
|
58.6
|
|
Net loss (income)
attributable to noncontrolling interests
|
0.3
|
|
|
(0.9)
|
|
|
(0.7)
|
|
|
(1.3)
|
|
Net income
attributable to Avient common shareholders
|
$
|
52.9
|
|
|
$
|
1.7
|
|
|
$
|
201.0
|
|
|
$
|
57.3
|
|
|
|
|
|
|
|
|
|
Earnings per share
attributable to Avient common shareholders - Basic:
|
|
|
|
|
Continuing
operations
|
$
|
0.58
|
|
|
$
|
0.02
|
|
|
$
|
2.20
|
|
|
$
|
0.64
|
|
Discontinued
operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
$
|
0.58
|
|
|
$
|
0.02
|
|
|
$
|
2.20
|
|
|
$
|
0.64
|
|
|
|
|
|
|
|
|
|
Earnings per share
attributable to Avient common shareholders - Diluted:
|
|
|
|
|
Continuing
operations
|
$
|
0.57
|
|
|
$
|
0.02
|
|
|
$
|
2.18
|
|
|
$
|
0.64
|
|
Discontinued
operations
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.01)
|
|
Total
|
$
|
0.57
|
|
|
$
|
0.02
|
|
|
$
|
2.18
|
|
|
$
|
0.63
|
|
|
|
|
|
|
|
|
|
Cash dividends
declared per share of common stock
|
$
|
0.2125
|
|
|
$
|
0.2025
|
|
|
$
|
0.6375
|
|
|
$
|
0.6075
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares used to compute earnings per common share:
|
|
|
|
|
|
|
|
Basic
|
91.4
|
|
|
91.5
|
|
|
91.3
|
|
|
89.7
|
|
Diluted
|
92.2
|
|
|
91.9
|
|
|
92.1
|
|
|
90.7
|
|
Attachment
3
|
Avient
Corporation
|
Summary of Special
Items (Unaudited)
|
(In millions, except
per share data)
|
|
Special items
(1)
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Cost of
sales:
|
|
|
|
|
|
|
|
Restructuring costs,
including accelerated depreciation and amortization
|
$
|
(5.3)
|
|
|
$
|
(1.3)
|
|
|
$
|
(8.6)
|
|
|
$
|
(2.5)
|
|
Environmental
remediation costs
|
(9.4)
|
|
|
(15.8)
|
|
|
(22.4)
|
|
|
(19.3)
|
|
Reimbursement of
previously incurred environmental costs
|
—
|
|
|
—
|
|
|
4.5
|
|
|
8.7
|
|
Acquisition related
costs
|
(2.6)
|
|
|
(10.5)
|
|
|
(1.2)
|
|
|
(10.5)
|
|
Impact on cost of
sales
|
(17.3)
|
|
|
(27.6)
|
|
|
(27.7)
|
|
|
(23.6)
|
|
|
|
|
|
|
|
|
|
Selling and
administrative expense:
|
|
|
|
|
|
|
|
Restructuring, legal
and other
|
—
|
|
|
(4.2)
|
|
|
(1.7)
|
|
|
(9.5)
|
|
Acquisition earn-out
adjustments
|
—
|
|
|
(1.5)
|
|
|
—
|
|
|
(2.5)
|
|
Acquisition related
costs
|
(2.7)
|
|
|
(7.1)
|
|
|
(7.2)
|
|
|
(23.5)
|
|
Impact on selling and
administrative expense
|
(2.7)
|
|
|
(12.8)
|
|
|
(8.9)
|
|
|
(35.5)
|
|
|
|
|
|
|
|
|
|
Impact on operating
income
|
(20.0)
|
|
|
(40.4)
|
|
|
(36.6)
|
|
|
(59.1)
|
|
|
|
|
|
|
|
|
|
Costs related to
committed financing in interest expense, net
|
—
|
|
|
(9.6)
|
|
|
—
|
|
|
(10.1)
|
|
Other income,
net
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|
0.3
|
|
Pension settlement gain and mark-to-market adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
6.9
|
|
Impact on income from
continuing operations before income taxes
|
(19.9)
|
|
|
(50.0)
|
|
|
(36.5)
|
|
|
(62.0)
|
|
Income tax benefit on
above special items
|
4.6
|
|
|
12.7
|
|
|
8.9
|
|
|
15.4
|
|
Tax
adjustments(2)
|
3.6
|
|
|
(3.0)
|
|
|
1.6
|
|
|
(4.9)
|
|
Impact of special
items on net income from continuing operations attributable to
Avient Shareholders
|
$
|
(11.7)
|
|
|
$
|
(40.3)
|
|
|
$
|
(26.0)
|
|
|
$
|
(51.5)
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
common share impact
|
$
|
(0.13)
|
|
|
$
|
(0.44)
|
|
|
$
|
(0.28)
|
|
|
$
|
(0.57)
|
|
|
|
|
|
|
|
|
|
Weighted average shares
used to compute adjusted earnings per share:
|
|
|
|
|
|
|
|
Diluted
|
92.2
|
|
91.9
|
|
92.1
|
|
90.7
|
|
(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)
September 30, 2021
|
|
December 31,
2020
|
|
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
545.2
|
|
|
$
|
649.5
|
|
Accounts receivable,
net
|
703.0
|
|
|
516.6
|
|
Inventories,
net
|
477.2
|
|
|
327.5
|
|
Other current
assets
|
123.5
|
|
|
108.5
|
|
Total current
assets
|
1,848.9
|
|
|
1,602.1
|
|
Property,
net
|
669.6
|
|
|
694.9
|
|
Goodwill
|
1,293.9
|
|
|
1,308.1
|
|
Intangible assets,
net
|
948.4
|
|
|
1,008.5
|
|
Operating lease
assets, net
|
81.6
|
|
|
80.9
|
|
Other non-current
assets
|
168.6
|
|
|
176.0
|
|
Total
assets
|
$
|
5,011.0
|
|
|
$
|
4,870.5
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Short-term and
current portion of long-term debt
|
$
|
8.7
|
|
|
$
|
18.6
|
|
Accounts
payable
|
557.7
|
|
|
471.7
|
|
Current operating
lease obligations
|
24.1
|
|
|
25.1
|
|
Accrued expenses and
other current liabilities
|
371.3
|
|
|
285.6
|
|
Total current
liabilities
|
961.8
|
|
|
801.0
|
|
Non-current
liabilities:
|
|
|
|
Long-term
debt
|
1,851.0
|
|
|
1,854.0
|
|
Pension and other
post-retirement benefits
|
111.0
|
|
|
115.0
|
|
Non-current operating
lease obligations
|
57.7
|
|
|
56.0
|
|
Other non-current
liabilities
|
244.1
|
|
|
332.8
|
|
Total non-current
liabilities
|
2,263.8
|
|
|
2,357.8
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
Avient shareholders'
equity
|
1,768.8
|
|
|
1,697.1
|
|
Noncontrolling
interest
|
16.6
|
|
|
14.6
|
|
Total
equity
|
1,785.4
|
|
|
1,711.7
|
|
Total liabilities
and equity
|
$
|
5,011.0
|
|
|
$
|
4,870.5
|
|
Attachment
5
|
Avient
Corporation
|
Condensed
Consolidated Statements of Cash Flows (Unaudited)
|
(In
millions)
|
|
|
Nine Months
Ended
September
30,
|
|
2021
|
|
2020
|
Operating
Activities
|
|
|
|
Net income
|
$
|
201.7
|
|
|
$
|
58.6
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
105.8
|
|
|
74.8
|
|
Accelerated
depreciation and amortization
|
1.9
|
|
|
2.5
|
|
Share-based
compensation expense
|
8.4
|
|
|
7.1
|
|
Changes in assets and
liabilities, net of the effect of acquisitions:
|
|
|
|
Increase in accounts
receivable
|
(199.7)
|
|
|
(12.7)
|
|
(Increase) decrease in
inventories
|
(156.2)
|
|
|
53.0
|
|
Increase in accounts
payable
|
95.3
|
|
|
21.3
|
|
Decrease in pension
and other post-retirement benefits
|
(14.2)
|
|
|
(14.4)
|
|
Increase in
post-acquisition earnout liabilities
|
—
|
|
|
2.5
|
|
Increase in accrued
expenses and other assets and liabilities, net
|
67.0
|
|
|
56.1
|
|
Taxes paid on gain on
divestiture
|
—
|
|
|
(142.0)
|
|
Payment of
post-acquisition date earnout liability
|
—
|
|
|
(38.1)
|
|
Net cash provided by
operating activities
|
110.0
|
|
|
68.7
|
|
Investing
activities
|
|
|
|
Capital
expenditures
|
(62.7)
|
|
|
(38.6)
|
|
Business
acquisitions, net of cash acquired
|
(47.6)
|
|
|
(1,342.7)
|
|
Net proceeds from
divestiture
|
—
|
|
|
7.1
|
|
Other investing
activities
|
(2.0)
|
|
|
5.2
|
|
Net cash used by
investing activities
|
(112.3)
|
|
|
(1,369.0)
|
|
Financing
activities
|
|
|
|
Debt offering
proceeds
|
—
|
|
|
650.0
|
|
Purchase of common
shares for treasury
|
(4.2)
|
|
|
(13.6)
|
|
Cash dividends
paid
|
(58.2)
|
|
|
(52.8)
|
|
Repayment of
long-term debt
|
(16.5)
|
|
|
(6.0)
|
|
Payments of
withholding tax on share awards
|
(9.1)
|
|
|
(1.9)
|
|
Debt financing
costs
|
—
|
|
|
(9.5)
|
|
Equity offering
proceeds, net of underwriting discount and issuance
costs
|
—
|
|
|
496.1
|
|
Payment of
acquisition date earnout liability
|
—
|
|
|
(50.8)
|
|
Other financing
activities
|
(3.5)
|
|
|
—
|
|
Net cash (used)
provided by financing activities
|
(91.5)
|
|
|
1,011.5
|
|
Effect of exchange
rate changes on cash
|
(10.5)
|
|
|
1.4
|
|
Decrease in cash and
cash equivalents
|
(104.3)
|
|
|
(287.4)
|
|
Cash and cash
equivalents at beginning of year
|
649.5
|
|
|
864.7
|
|
Cash and cash
equivalents at end of period
|
$
|
545.2
|
|
|
$
|
577.3
|
|
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
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Sales:
|
|
|
|
|
|
|
|
Color,
Additives and Inks
|
$
|
586.6
|
|
|
$
|
493.8
|
|
|
$
|
1,820.3
|
|
|
$
|
977.1
|
|
Specialty Engineered Materials
|
233.6
|
|
|
174.1
|
|
|
690.7
|
|
|
518.2
|
|
Distribution
|
438.8
|
|
|
276.9
|
|
|
1,205.9
|
|
|
805.2
|
|
Corporate and eliminations
|
(39.2)
|
|
|
(20.3)
|
|
|
(99.6)
|
|
|
(55.4)
|
|
Sales
|
$
|
1,219.8
|
|
|
$
|
924.5
|
|
|
$
|
3,617.3
|
|
|
$
|
2,245.1
|
|
|
|
|
|
|
|
|
|
Gross
margin:
|
|
|
|
|
|
|
|
Color,
Additives and Inks
|
$
|
172.1
|
|
|
$
|
155.0
|
|
|
$
|
563.0
|
|
|
$
|
320.1
|
|
Specialty Engineered Materials
|
63.1
|
|
|
53.4
|
|
|
197.4
|
|
|
148.5
|
|
Distribution
|
39.9
|
|
|
30.8
|
|
|
119.3
|
|
|
91.6
|
|
Corporate and eliminations
|
(19.7)
|
|
|
(29.0)
|
|
|
(33.2)
|
|
|
(28.8)
|
|
Gross
margin
|
$
|
255.4
|
|
|
$
|
210.2
|
|
|
$
|
846.5
|
|
|
$
|
531.4
|
|
|
|
|
|
|
|
|
|
Selling and
administrative expense:
|
|
|
|
|
|
|
|
Color,
Additives and Inks
|
$
|
105.3
|
|
|
$
|
104.5
|
|
|
$
|
321.1
|
|
|
$
|
196.8
|
|
Specialty Engineered Materials
|
31.4
|
|
|
28.7
|
|
|
94.2
|
|
|
84.5
|
|
Distribution
|
16.1
|
|
|
13.3
|
|
|
47.8
|
|
|
40.1
|
|
Corporate and eliminations
|
23.9
|
|
|
30.2
|
|
|
76.2
|
|
|
85.7
|
|
Selling and
administrative expense
|
$
|
176.7
|
|
|
$
|
176.7
|
|
|
$
|
539.3
|
|
|
$
|
407.1
|
|
|
|
|
|
|
|
|
|
Operating
income:
|
|
|
|
|
|
|
|
Color,
Additives and Inks
|
$
|
66.8
|
|
|
$
|
50.5
|
|
|
$
|
241.9
|
|
|
$
|
123.3
|
|
Specialty Engineered Materials
|
31.7
|
|
|
24.7
|
|
|
103.2
|
|
|
64.0
|
|
Distribution
|
23.8
|
|
|
17.5
|
|
|
71.5
|
|
|
51.5
|
|
Corporate and eliminations
|
(43.6)
|
|
|
(59.2)
|
|
|
(109.4)
|
|
|
(114.5)
|
|
Operating
income
|
$
|
78.7
|
|
|
$
|
33.5
|
|
|
$
|
307.2
|
|
|
$
|
124.3
|
|
|
|
|
|
|
|
|
|
Earnings before
interest, taxes, depreciation and amortization
(EBITDA):
|
|
|
|
|
|
|
|
Color,
Additives and Inks
|
$
|
93.4
|
|
|
$
|
76.8
|
|
|
$
|
321.1
|
|
|
$
|
171.3
|
|
Specialty Engineered Materials
|
39.6
|
|
|
32.2
|
|
|
127.0
|
|
|
86.7
|
|
Distribution
|
24.0
|
|
|
17.7
|
|
|
72.1
|
|
|
51.9
|
|
Corporate and eliminations
|
(41.5)
|
|
|
(56.7)
|
|
|
(105.3)
|
|
|
(108.3)
|
|
Other income,
net
|
1.4
|
|
|
1.5
|
|
|
|
4.1
|
|
|
|
12.6
|
|
EBITDA
|
$
|
116.9
|
|
|
$
|
71.5
|
|
|
$
|
419.0
|
|
|
$
|
214.2
|
|
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
September
30,
|
|
Nine Months
Ended
September
30,
|
Reconciliation to
Consolidated Statements of Income
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
Sales
|
$
|
1,219.8
|
|
|
$
|
924.5
|
|
|
$
|
3,617.3
|
|
|
$
|
2,245.1
|
|
|
|
|
|
|
|
|
|
Gross margin -
GAAP
|
255.4
|
|
|
210.2
|
|
|
846.5
|
|
|
531.4
|
|
Special items in
gross margin (Attachment 3)
|
17.3
|
|
|
27.6
|
|
|
27.7
|
|
|
23.6
|
|
Adjusted gross
margin
|
$
|
272.7
|
|
|
$
|
237.8
|
|
|
$
|
874.2
|
|
|
$
|
555.0
|
|
|
|
|
|
|
|
|
|
Adjusted gross margin
as a percent of sales
|
22.4
|
%
|
|
25.7
|
%
|
|
24.2
|
%
|
|
24.7
|
%
|
|
|
|
|
|
|
|
|
Operating income -
GAAP
|
78.7
|
|
|
33.5
|
|
|
307.2
|
|
|
124.3
|
|
Special items in
operating income (Attachment 3)
|
20.0
|
|
|
40.4
|
|
|
36.6
|
|
|
59.1
|
|
Adjusted operating
income
|
$
|
98.7
|
|
|
$
|
73.9
|
|
|
$
|
343.8
|
|
|
$
|
183.4
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income as a percent of sales
|
8.1
|
%
|
|
8.0
|
%
|
|
9.5
|
%
|
|
8.2
|
%
|
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
September 30,
|
|
2021
|
|
2020
|
|
GAAP
Results
|
|
Special
Items
|
|
Adjusted
Results
|
|
GAAP
Results
|
|
Special
Items
|
|
Adjusted
Results
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations before income taxes
|
$
|
61.1
|
|
|
$
|
19.9
|
|
|
$
|
81.0
|
|
|
$
|
5.3
|
|
|
$
|
50.0
|
|
|
$
|
55.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense -
GAAP
|
(8.5)
|
|
|
—
|
|
|
(8.5)
|
|
|
(2.7)
|
|
|
—
|
|
|
(2.7)
|
|
Income tax impact of
special items (Attachment 3)
|
—
|
|
|
(4.6)
|
|
|
(4.6)
|
|
|
—
|
|
|
(12.7)
|
|
|
(12.7)
|
|
Tax adjustments
(Attachment 3)
|
—
|
|
|
(3.6)
|
|
|
(3.6)
|
|
|
—
|
|
|
3.0
|
|
|
3.0
|
|
Income tax (expense)
benefit
|
$
|
(8.5)
|
|
|
$
|
(8.2)
|
|
|
$
|
(16.7)
|
|
|
$
|
(2.7)
|
|
|
$
|
(9.7)
|
|
|
$
|
(12.4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Tax
Rate(1)
|
14.1
|
%
|
|
|
|
20.8
|
%
|
|
51.9
|
%
|
|
|
|
22.7
|
%
|
|
(1) Rates may not
recalculate from figures presented herein due to
rounding
|
|
Nine Months Ended
September 30,
|
|
2021
|
|
2020
|
|
GAAP
Results
|
|
Special
Items
|
|
Adjusted
Results
|
|
GAAP
Results
|
|
Special
Items
|
|
Adjusted
Results
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations before income taxes
|
$
|
253.5
|
|
|
$
|
36.5
|
|
|
$
|
290.0
|
|
|
$
|
81.6
|
|
|
$
|
62.0
|
|
|
$
|
143.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense -
GAAP
|
(51.8)
|
|
|
—
|
|
|
(51.8)
|
|
|
(22.5)
|
|
|
—
|
|
|
(22.5)
|
|
Income tax impact of
special items (Attachment 3)
|
—
|
|
|
(8.9)
|
|
|
(8.9)
|
|
|
—
|
|
|
(15.4)
|
|
|
(15.4)
|
|
Tax adjustments
(Attachment 3)
|
—
|
|
|
(1.6)
|
|
|
(1.6)
|
|
|
—
|
|
|
4.9
|
|
|
4.9
|
|
Income tax (expense)
benefit
|
$
|
(51.8)
|
|
|
$
|
(10.5)
|
|
|
$
|
(62.3)
|
|
|
$
|
(22.5)
|
|
|
$
|
(10.5)
|
|
|
$
|
(33.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Tax
Rate(1)
|
20.5
|
%
|
|
|
|
21.5
|
%
|
|
27.6
|
%
|
|
|
|
23.0
|
%
|
|
(1) Rates may not
recalculate from figures presented herein due to
rounding
|
The following pro
forma adjustments are referenced by management to provide
comparable business performance by incorporating the Clariant
Masterbatch business in periods prior to the acquisition date (July
1, 2020). Financial information referenced here is provided to aid
in reconciling back to the most comparable GAAP figures.
|
|
Reconciliation of
Pro Forma Adjusted Earnings per Share:
|
Nine Months
Ended
September 30,
2020
|
|
Year Ended
December 31, 2020
|
|
|
|
|
Net income from
continuing operations attributable to Avient
shareholders
|
$
|
57.8
|
|
|
$
|
132.0
|
|
Special items, after
tax
|
42.0
|
|
|
24.8
|
|
Adjusted net income
from continuing operations excluding special items
|
99.8
|
|
|
156.8
|
|
Clariant MB pro forma
adjustments to net income from continuing
operations(2)
|
20.7
|
|
|
20.7
|
|
Pro forma adjusted
net income from continuing operations attributable to Avient
shareholders
|
$
|
120.5
|
|
|
$
|
177.5
|
|
|
|
|
|
Weighted average
diluted shares
|
90.7
|
|
|
90.6
|
|
Pro forma impact to
diluted shares from January 2020 equity
offering(2)
|
2.9
|
|
|
1.5
|
|
Pro forma weighted
average diluted shares
|
93.6
|
|
|
92.1
|
|
|
|
|
|
Adjusted EPS -
excluding special items pro forma for Clariant MB
acquisition
|
$
|
1.29
|
|
|
$
|
1.93
|
|
|
(2) Pro forma
adjustments for the periods prior to the acquisition date (July 1,
2020) and to give effects to the financing for the
acquisition
|
|
Nine Months
Ended
September 30,
2020
|
Reconciliation of
Pro Forma Adjusted Earnings per Share:
|
Avient
|
|
Special
Items
|
|
Adjusted
Avient
|
|
Clariant
MB
Pro Forma
Adjustments(2)
|
|
Pro Forma Adjusted
Avient
|
|
|
|
|
|
|
|
|
|
|
Sales
|
$
|
2,245.1
|
|
|
$
|
—
|
|
|
$
|
2,245.1
|
|
|
$
|
540.5
|
|
|
$
|
2,785.6
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
$
|
124.3
|
|
|
$
|
59.1
|
|
|
$
|
183.4
|
|
|
$
|
45.0
|
|
|
$
|
228.4
|
|
Interest expense,
net
|
(55.3)
|
|
|
—
|
|
|
(55.3)
|
|
|
(18.1)
|
|
|
(73.4)
|
|
Pension settlement
gain and mark-to-market adjustment
|
—
|
|
|
(6.9)
|
|
|
(6.9)
|
|
|
—
|
|
|
(6.9)
|
|
Other income,
net
|
12.6
|
|
|
0.3
|
|
|
12.9
|
|
|
—
|
|
|
12.9
|
|
Income
taxes
|
(22.5)
|
|
|
(10.5)
|
|
|
(33.0)
|
|
|
(6.2)
|
|
|
(39.2)
|
|
Net income
attributable to noncontrolling interests
|
(1.3)
|
|
|
—
|
|
|
(1.3)
|
|
|
—
|
|
|
(1.3)
|
|
Net income from
continuing operations attributable to Avient
shareholders
|
$
|
57.8
|
|
|
$
|
42.0
|
|
|
$
|
99.8
|
|
|
$
|
20.7
|
|
|
$
|
120.5
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted shares
|
|
90.7
|
|
Impact to diluted
shares from January 2020 equity offering
|
|
2.9
|
|
Pro forma weighted
average diluted shares
|
|
93.6
|
|
|
|
|
|
|
|
|
|
|
|
Pro forma adjusted
EPS
|
|
$
|
1.29
|
|
|
(2) Pro forma
adjustments for the periods prior to the acquisition date (July 1,
2020) and to give effects to the financing for the
acquisition
|
Reconciliation of
EBITDA by Segment
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Operating
income:
|
|
|
|
|
|
|
|
Color,
Additives and Inks
|
$
|
66.8
|
|
|
$
|
50.5
|
|
|
$
|
241.9
|
|
|
$
|
123.3
|
|
Specialty Engineered Materials
|
31.7
|
|
|
24.7
|
|
|
103.2
|
|
|
64.0
|
|
Distribution
|
23.8
|
|
|
17.5
|
|
|
71.5
|
|
|
51.5
|
|
Corporate and eliminations
|
(43.6)
|
|
|
(59.2)
|
|
|
(109.4)
|
|
|
(114.5)
|
|
Operating
income
|
$
|
78.7
|
|
|
$
|
33.5
|
|
|
$
|
307.2
|
|
|
$
|
124.3
|
|
|
|
|
|
|
|
|
|
Items below OI in
Corporate:
|
|
|
|
|
|
|
|
Other income,
net
|
$
|
1.4
|
|
|
$
|
1.5
|
|
|
$
|
4.1
|
|
|
$
|
12.6
|
|
|
|
|
|
|
|
|
|
Depreciation &
amortization:
|
|
|
|
|
|
|
|
Color, Additives and
Inks
|
$
|
26.6
|
|
|
$
|
26.3
|
|
|
$
|
79.2
|
|
|
$
|
48.0
|
|
Specialty Engineered
Materials
|
7.9
|
|
|
7.5
|
|
|
23.8
|
|
|
22.7
|
|
Distribution
|
0.2
|
|
|
0.2
|
|
|
0.6
|
|
|
0.4
|
|
Corporate and
eliminations
|
2.1
|
|
|
2.5
|
|
|
4.1
|
|
|
6.2
|
|
Depreciation &
Amortization
|
$
|
36.8
|
|
|
$
|
36.5
|
|
|
$
|
107.7
|
|
|
$
|
77.3
|
|
|
|
|
|
|
|
|
|
EBITDA:
|
|
|
|
|
|
|
|
Color,
Additives and Inks
|
$
|
93.4
|
|
|
$
|
76.8
|
|
|
$
|
321.1
|
|
|
$
|
171.3
|
|
Specialty Engineered Materials
|
39.6
|
|
|
32.2
|
|
|
127.0
|
|
|
86.7
|
|
Distribution
|
24.0
|
|
|
17.7
|
|
|
72.1
|
|
|
51.9
|
|
Corporate and eliminations
|
(41.5)
|
|
|
(56.7)
|
|
|
(105.3)
|
|
|
(108.3)
|
|
EBITDA
|
$
|
116.9
|
|
|
$
|
71.5
|
|
|
$
|
419.0
|
|
|
$
|
214.2
|
|
|
|
|
|
|
|
|
|
EBITDA as a % of
Sales:
|
|
|
|
|
|
|
|
Color, Additives and
Inks
|
15.9
|
%
|
|
15.6
|
%
|
|
17.6
|
%
|
|
17.5
|
%
|
Specialty Engineered
Materials
|
17.0
|
%
|
|
18.5
|
%
|
|
18.4
|
%
|
|
16.7
|
%
|
Distribution
|
5.5
|
%
|
|
6.4
|
%
|
|
6.0
|
%
|
|
6.4
|
%
|
Reconciliation of
Pro Forma EBITDA - Color, Additives and Inks
|
Nine Months
Ended
September 30,
2020
|
Sales:
|
|
Color,
Additives and Inks
|
$
|
977.1
|
|
Clariant
MB pro forma adjustments(2)
|
540.5
|
|
Pro forma
sales
|
$
|
1,517.6
|
|
|
|
Operating
income:
|
|
Color,
Additives and Inks
|
$
|
123.3
|
|
Clariant
MB pro forma adjustments(2)
|
45.0
|
|
Pro forma operating
income
|
$
|
168.3
|
|
|
|
Depreciation &
amortization:
|
|
Color, Additives and
Inks
|
$
|
48.0
|
|
Clariant MB pro forma
adjustments(2)
|
30.1
|
|
Pro forma depreciation
& amortization
|
$
|
78.1
|
|
|
|
Earnings Before
Interest, Taxes, Depreciation and Amortization
(EBITDA):
|
|
Color,
Additives and Inks
|
$
|
171.3
|
|
Clariant
MB pro forma adjustments(2)
|
75.1
|
|
Pro forma
EBITDA
|
$
|
246.4
|
|
|
|
Pro forma EBITDA
as a % of Sales
|
16.2
|
%
|
|
(2) Pro forma
adjustments for the periods prior to the acquisition date (July 1,
2020) and to give effects to the financing for the
acquisition
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
Reconciliation to
EBITDA and Pro Forma Adjusted EBITDA:
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net income from
continuing operations – GAAP
|
$
|
52.6
|
|
|
$
|
2.6
|
|
|
$
|
201.7
|
|
|
$
|
59.1
|
|
Income tax
expense
|
8.5
|
|
|
2.7
|
|
|
51.8
|
|
|
22.5
|
|
Interest
expense
|
19.0
|
|
|
29.7
|
|
|
57.8
|
|
|
55.3
|
|
Depreciation and
amortization from continuing operations
|
36.8
|
|
|
36.5
|
|
|
107.7
|
|
|
77.3
|
|
EBITDA
|
$
|
116.9
|
|
|
$
|
71.5
|
|
|
$
|
419.0
|
|
|
$
|
214.2
|
|
Special items, before
tax
|
19.9
|
|
|
50.0
|
|
|
36.5
|
|
|
62.0
|
|
Interest expense
included in special items
|
—
|
|
|
(9.6)
|
|
|
—
|
|
|
(10.1)
|
|
Depreciation and
amortization included in special items
|
(0.9)
|
|
|
(1.3)
|
|
|
(0.1)
|
|
|
(2.5)
|
|
Adjusted
EBITDA
|
$
|
135.9
|
|
|
$
|
110.6
|
|
|
$
|
455.4
|
|
|
$
|
263.6
|
|
Clariant MB pro forma
adjustments(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
75.1
|
|
Pro forma adjusted
EBITDA
|
$
|
135.9
|
|
|
$
|
110.6
|
|
|
$
|
455.4
|
|
|
$
|
338.7
|
|
|
(2) Pro forma
adjustments for the periods prior to the acquisition date (July 1,
2020) and to give effects to the financing for the
acquisition
|
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SOURCE Avient Corporation