CLEVELAND, Feb. 8, 2022 /PRNewswire/ -- Avient
Corporation (NYSE: AVNT), a leading provider of specialized and
sustainable material solutions, today reported its fourth quarter
and full year results for 2021. Fourth quarter and full year GAAP
EPS were $0.32 and $2.51 compared to $0.81 and $1.46 in
the prior year fourth quarter and full year, respectively. The
company noted that GAAP EPS includes special items (Attachment 3),
which impacted EPS in 2021 and 2020.
"I am extremely pleased to finish the year with another record
quarter and report the highest level of annual adjusted earnings we
have ever achieved," said Robert M.
Patterson, Chairman, President and Chief Executive Officer,
Avient Corporation. "For the full year, adjusted EPS
increased 58% to $3.05 driven by
demand for sustainable solutions, healthcare applications and
composites technologies."
The company reported sales growth of 27% for the full year
compared to 2020, with all segments delivering record sales and
operating income.
"We delivered record results this year against a backdrop of
unprecedented challenges including the ongoing pandemic,
substantial raw material inflation, supply chain disruptions, and
labor shortages," added Mr. Patterson. "Avient's performance
in this environment has been differentiated as a result of our
specialty focus, end market transformation and excellence in
execution."
"But none of this would be possible without exceptional
associates who continue to take care of each other and our
customers. I am very proud of the culture we have created at Avient
and the investments we have made in sustainability, advancing
diversity and inclusion, and workplace flexibility," Mr. Patterson
continued. "In December, we completed our annual employee
engagement survey and received our 3rd consecutive
Great Place to Work® certification from the Great Place to Work
Institute."
2022 Outlook
"As we discussed during our Investor Day in December, we have
momentum in growing sustainable solutions, solving healthcare
challenges and broadening advanced composite applications," said
Jamie A. Beggs, Senior Vice
President and Chief Financial Officer, Avient Corporation.
"In addition, the acquisition of Clariant's color business in
July 2020 has been transformational
to our portfolio and helped us become the specialty formulator we
are today. Integration has exceeded our high expectations
with respect to the pace and level of synergy capture and we expect
that to continue into 2022."
Ms. Beggs added, "Our headline projections for the upcoming year
are sales of approximately $5.1
billion and adjusted EPS of $3.50. While we anticipate raw material and labor
shortages to continue and inflation to be persistent, we have
proven that we can manage these challenges and expect to deliver
another record year of growth."
The Company will provide more details on its fourth quarter and
full year results and 2022 projections on its webcast scheduled for
8:00 a.m. Eastern Time on
February 8,
2022.
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.
Webcast Details
The webcast can be viewed live at avient.com/investors, or by
clicking here:
https://edge.media-server.com/mmc/p/k7okojz2. 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 2171339. 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 Tuesday, February 8,
2022. To access, dial 1-855-859-2056 (domestic) or
1-404-537-3406 (international) and provide conference ID number
2171339.
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 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; 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; our ability to pay regular quarterly cash dividends and
the amounts and timing of any future dividends; information systems
failures and cyberattacks; 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, adjusted EBITDA and net debt. 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
December
31,
|
|
Year
Ended
December
31,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
Sales
|
$
1,201.5
|
|
$
997.0
|
|
$
4,818.8
|
|
$
3,242.1
|
Operating
Income
|
74.0
|
|
65.0
|
|
381.2
|
|
189.3
|
Net income from
continuing operations attributable to Avient
shareholders
|
29.8
|
|
74.2
|
|
230.8
|
|
132.0
|
Basic earnings per
share from continuing operations attributable to
Avient shareholders
|
$
0.33
|
|
$
0.81
|
|
$
2.53
|
|
$
1.47
|
Diluted earnings per
share from continuing operations attributable to
Avient shareholders
|
$
0.32
|
|
$
0.81
|
|
$
2.51
|
|
$
1.46
|
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
and Attachment 7 for a summary of pro forma adjustments
associated with the Clariant Color Acquisition necessary to reflect
Clariant Color adjusted results in all periods presented.
|
Three Months
Ended
December
31,
|
|
2021
|
|
2020
|
Reconciliation to
Condensed Consolidated Statements of Income
|
$
|
|
EPS(1)
|
|
$
|
|
EPS(1)
|
|
|
|
|
|
|
|
|
Net income from
continuing operations attributable to Avient
shareholders
|
$
29.8
|
|
$
0.32
|
|
$
74.2
|
|
$
0.81
|
Special items, after
tax (Attachment 3)
|
24.0
|
|
0.26
|
|
(26.7)
|
|
(0.29)
|
Adjusted net income /
EPS - excluding special items
|
$
53.8
|
|
$
0.58
|
|
$
47.5
|
|
$
0.52
|
|
(1) Per share
amounts may not recalculate from figures presented herein due to
rounding
|
|
|
Year
Ended
December
31,
|
|
2021
|
|
2020
|
Reconciliation to
Condensed Consolidated Statements of Income
|
$
|
|
EPS(1)
|
|
$
|
|
EPS(1)
|
|
|
|
|
|
|
|
|
Net income from
continuing operations attributable to Avient
shareholders
|
$
230.8
|
|
$
2.51
|
|
$
132.0
|
|
$
1.46
|
Special items, after
tax (Attachment 3)
|
50.0
|
|
0.54
|
|
24.8
|
|
0.27
|
Adjusted net income /
EPS - excluding special items
|
$
280.8
|
|
3.05
|
|
$
156.8
|
|
1.73
|
|
(1) Per share
amounts may not recalculate from figures presented herein due to
rounding
|
Attachment
2
|
Avient
Corporation
Condensed Consolidated Statements of Income (Unaudited)
(In millions, except per share data)
|
|
|
Three Months
Ended
December 31,
|
|
Year
Ended
December
31,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
Sales
|
$
1,201.5
|
|
$
997.0
|
|
$
4,818.8
|
|
$
3,242.1
|
Cost of
sales
|
948.4
|
|
744.1
|
|
3,719.2
|
|
2,457.8
|
Gross
margin
|
253.1
|
|
252.9
|
|
1,099.6
|
|
784.3
|
Selling and
administrative expense
|
179.1
|
|
187.9
|
|
718.4
|
|
595.0
|
Operating
income
|
74.0
|
|
65.0
|
|
381.2
|
|
189.3
|
Interest expense,
net
|
(17.5)
|
|
(19.3)
|
|
(75.3)
|
|
(74.6)
|
Other (expense)
income, net
|
(5.4)
|
|
11.7
|
|
(1.3)
|
|
24.3
|
Income from
continuing operations before income taxes
|
51.1
|
|
57.4
|
|
304.6
|
|
139.0
|
Income tax (expense)
benefit
|
(22.2)
|
|
17.3
|
|
(74.0)
|
|
(5.2)
|
Net income from
continuing operations
|
28.9
|
|
74.7
|
|
230.6
|
|
133.8
|
Income (loss) from
discontinued operations, net of income taxes
|
—
|
|
0.1
|
|
—
|
|
(0.4)
|
Net income
|
28.9
|
|
74.8
|
|
230.6
|
|
133.4
|
Net loss (income)
attributable to noncontrolling interests
|
0.9
|
|
(0.5)
|
|
0.2
|
|
(1.8)
|
Net income
attributable to Avient common shareholders
|
$
29.8
|
|
$
74.3
|
|
$
230.8
|
|
$
131.6
|
|
|
|
|
|
|
|
|
Earnings per share
attributable to Avient common shareholders - Basic:
|
|
|
|
|
Continuing
operations
|
$
0.33
|
|
$
0.81
|
|
$
2.53
|
|
$
1.47
|
Discontinued
operations
|
—
|
|
—
|
|
—
|
|
(0.01)
|
Total
|
$
0.33
|
|
$
0.81
|
|
$
2.53
|
|
$
1.46
|
|
|
|
|
|
|
|
|
Earnings per share
attributable to Avient common shareholders - Diluted:
|
|
|
|
|
Continuing
operations
|
$
0.32
|
|
$
0.81
|
|
$
2.51
|
|
$
1.46
|
Discontinued
operations
|
—
|
|
—
|
|
—
|
|
(0.01)
|
Total
|
$
0.32
|
|
$
0.81
|
|
$
2.51
|
|
$
1.45
|
|
|
|
|
|
|
|
|
Cash dividends
declared per share of common stock
|
$
0.2375
|
|
$
0.2125
|
|
$
0.8750
|
|
$
0.8200
|
|
|
|
|
|
|
|
|
Weighted-average
shares used to compute earnings per common share:
|
|
|
|
|
|
|
|
Basic
|
91.5
|
|
91.4
|
|
91.4
|
|
90.1
|
Diluted
|
92.4
|
|
92.1
|
|
92.1
|
|
90.6
|
Attachment
3
|
Avient
Corporation
Summary of Special Items (Unaudited)
(In millions, except per share data)
|
|
Special items
(1)
|
Three Months
Ended
December 31,
|
|
Year
Ended
December
31,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Cost of
sales:
|
|
|
|
|
|
|
|
Restructuring costs,
including accelerated depreciation
|
$
(6.0)
|
|
$
(1.8)
|
|
$
(14.6)
|
|
$
(4.3)
|
Environmental
remediation costs
|
(0.5)
|
|
(1.1)
|
|
(22.9)
|
|
(20.4)
|
Reimbursement of
previously incurred environmental costs
|
—
|
|
—
|
|
4.5
|
|
8.7
|
Acquisition related
costs
|
0.6
|
|
1.2
|
|
(0.6)
|
|
(9.3)
|
Impact on cost of
sales
|
(5.9)
|
|
(1.7)
|
|
(33.6)
|
|
(25.3)
|
|
|
|
|
|
|
|
|
Selling and
administrative expense:
|
|
|
|
|
|
|
|
Restructuring, legal
and other
|
(4.2)
|
|
(13.0)
|
|
(5.9)
|
|
(22.5)
|
Acquisition earn-out
adjustments
|
—
|
|
1.5
|
|
—
|
|
(1.0)
|
Acquisition related
costs
|
(1.1)
|
|
(1.4)
|
|
(8.3)
|
|
(24.9)
|
Impact on selling and
administrative expense
|
(5.3)
|
|
(12.9)
|
|
(14.2)
|
|
(48.4)
|
|
|
|
|
|
|
|
|
Impact on operating
income
|
(11.2)
|
|
(14.6)
|
|
(47.8)
|
|
(73.7)
|
|
|
|
|
|
|
|
|
Costs related to
committed financing in interest expense, net
|
—
|
|
—
|
|
—
|
|
(10.1)
|
Other income,
net
|
—
|
|
0.1
|
|
0.1
|
|
0.4
|
Pension
settlement/curtailment and mark-to-market adjustment (loss)
gain
|
(9.4)
|
|
10.3
|
|
(9.4)
|
|
17.2
|
Impact on income from
continuing operations before income taxes
|
(20.6)
|
|
(4.2)
|
|
(57.1)
|
|
(66.2)
|
Income tax benefit
(expense) on above special items
|
4.1
|
|
(1.3)
|
|
13.0
|
|
14.1
|
Tax
adjustments(2)
|
(7.5)
|
|
32.2
|
|
(5.9)
|
|
27.3
|
Impact of special
items on net income from continuing operations
attributable to Avient Shareholders
|
$
(24.0)
|
|
$
26.7
|
|
$
(50.0)
|
|
$
(24.8)
|
|
|
|
|
|
|
|
|
Diluted earnings per
common share impact of special items on net income
from continuing operations attributable to Avient
shareholders
|
$
(0.26)
|
|
$
0.29
|
|
$
(0.54)
|
|
$
(0.27)
|
|
|
|
|
|
|
|
|
Weighted average shares
used to compute adjusted earnings per share:
|
|
|
|
|
|
|
|
Diluted
|
92.4
|
|
92.1
|
|
92.1
|
|
90.6
|
(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, adjustments to uncertain tax position reserves and deferred
income tax valuation allowances.
|
Attachment
4
|
Avient
Corporation
Condensed Consolidated Balance Sheets (Unaudited)
(In millions)
|
|
|
Year
Ended
December
31,
|
|
2021
|
|
2020
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
601.2
|
|
$
649.5
|
Accounts receivable,
net
|
642.3
|
|
516.6
|
Inventories,
net
|
461.1
|
|
327.5
|
Other current
assets
|
128.1
|
|
108.5
|
Total current
assets
|
1,832.7
|
|
1,602.1
|
Property,
net
|
676.1
|
|
694.9
|
Goodwill
|
1,286.4
|
|
1,308.1
|
Intangible assets,
net
|
925.2
|
|
1,008.5
|
Operating lease
assets, net
|
74.1
|
|
80.9
|
Other non-current
assets
|
208.4
|
|
176.0
|
Total
assets
|
$
5,002.9
|
|
$
4,870.5
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Short-term and
current portion of long-term debt
|
$
8.6
|
|
$
18.6
|
Accounts
payable
|
553.9
|
|
471.7
|
Current operating
lease obligations
|
24.2
|
|
25.1
|
Accrued expenses and
other current liabilities
|
359.6
|
|
285.6
|
Total current
liabilities
|
946.3
|
|
801.0
|
Non-current
liabilities:
|
|
|
|
Long-term
debt
|
1,850.3
|
|
1,854.0
|
Pension and other
post-retirement benefits
|
100.0
|
|
115.0
|
Deferred income
taxes
|
100.6
|
|
140.0
|
Non-current operating
lease obligations
|
50.1
|
|
56.0
|
Other non-current
liabilities
|
165.1
|
|
192.8
|
Total non-current
liabilities
|
2,266.1
|
|
2,357.8
|
SHAREHOLDERS'
EQUITY
|
|
|
|
Avient shareholders'
equity
|
1,774.7
|
|
1,697.1
|
Noncontrolling
interest
|
15.8
|
|
14.6
|
Total
equity
|
1,790.5
|
|
1,711.7
|
Total liabilities
and equity
|
$
5,002.9
|
|
$
4,870.5
|
Attachment
5
|
Avient
Corporation
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In millions)
|
|
|
Year
Ended
December
31,
|
|
2021
|
|
2020
|
Operating
activities
|
|
|
|
Net income
|
$
230.6
|
|
$
133.4
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
144.2
|
|
111.8
|
Accelerated
depreciation
|
1.7
|
|
3.2
|
Share-based
compensation expense
|
11.2
|
|
11.3
|
Changes in assets and
liabilities, net of the effect of acquisitions:
|
|
|
|
Increase in accounts
receivable
|
(143.1)
|
|
(4.6)
|
(Increase) decrease in
inventories
|
(139.5)
|
|
40.2
|
Increase in accounts
payable
|
95.3
|
|
78.4
|
(Decrease) increase in
pension and other post-retirement benefits
|
(10.9)
|
|
30.7
|
Increase in
post-acquisition earnout liabilities
|
—
|
|
1.0
|
Increase (decrease) in
accrued expenses and other assets and liabilities, net
|
44.3
|
|
(3.7)
|
Taxes paid on gain on
divestiture
|
—
|
|
(142.0)
|
Payment of
post-acquisition date earnout liability
|
—
|
|
(38.1)
|
Net cash provided by
operating activities
|
233.8
|
|
221.6
|
Investing
activities
|
|
|
|
Capital
expenditures
|
(100.6)
|
|
(63.7)
|
Business
acquisitions, net of cash acquired
|
(47.6)
|
|
(1,380.2)
|
Net proceeds from
divestiture
|
—
|
|
7.1
|
Other investing
activities
|
(2.0)
|
|
5.2
|
Net cash used by
investing activities
|
(150.2)
|
|
(1,431.6)
|
Financing
activities
|
|
|
|
Debt offering
proceeds
|
—
|
|
650.0
|
Purchase of common
shares for treasury
|
(4.2)
|
|
(22.4)
|
Cash dividends
paid
|
(77.7)
|
|
(71.3)
|
Repayment of
long-term debt
|
(18.5)
|
|
(7.8)
|
Payments on
withholding tax on share awards
|
(10.7)
|
|
(2.3)
|
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
|
(114.6)
|
|
982.0
|
Effect of exchange
rate changes on cash
|
(17.3)
|
|
12.8
|
Decrease in cash and
cash equivalents
|
(48.3)
|
|
(215.2)
|
Cash and cash
equivalents at beginning of year
|
649.5
|
|
864.7
|
Cash and cash
equivalents at end of year
|
$
601.2
|
|
$
649.5
|
Attachment
6
|
Avient
Corporation
Business Segment Operations (Unaudited)
(In millions)
|
|
Operating income 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
December 31,
|
|
Year
Ended
December
31,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Sales:
|
|
|
|
|
|
|
|
Color,
Additives and Inks
|
$
581.3
|
|
$
525.8
|
|
$
2,401.6
|
|
$
1,502.9
|
Specialty Engineered Materials
|
228.2
|
|
190.6
|
|
918.9
|
|
708.8
|
Distribution
|
425.0
|
|
305.1
|
|
1,630.9
|
|
1,110.3
|
Corporate and eliminations
|
(33.0)
|
|
(24.5)
|
|
(132.6)
|
|
(79.9)
|
Sales
|
$
1,201.5
|
|
$
997.0
|
|
$
4,818.8
|
|
$
3,242.1
|
|
|
|
|
|
|
|
|
Gross
margin:
|
|
|
|
|
|
|
|
Color,
Additives and Inks
|
$
164.5
|
|
$
164.3
|
|
$
727.5
|
|
$
484.4
|
Specialty Engineered Materials
|
60.0
|
|
59.1
|
|
257.4
|
|
207.6
|
Distribution
|
36.5
|
|
32.4
|
|
155.8
|
|
124.0
|
Corporate and eliminations
|
(7.9)
|
|
(2.9)
|
|
(41.1)
|
|
(31.7)
|
Gross
margin
|
$
253.1
|
|
$
252.9
|
|
$
1,099.6
|
|
$
784.3
|
|
|
|
|
|
|
|
|
Selling and
administrative expense:
|
|
|
|
|
|
|
|
Color,
Additives and Inks
|
$
103.3
|
|
$
106.8
|
|
$
424.4
|
|
$
303.6
|
Specialty Engineered Materials
|
31.2
|
|
28.7
|
|
125.4
|
|
113.2
|
Distribution
|
14.8
|
|
14.4
|
|
62.6
|
|
54.5
|
Corporate and eliminations
|
29.8
|
|
38.0
|
|
106.0
|
|
123.7
|
Selling and
administrative expense
|
$
179.1
|
|
$
187.9
|
|
$
718.4
|
|
$
595.0
|
|
|
|
|
|
|
|
|
Operating
income:
|
|
|
|
|
|
|
|
Color,
Additives and Inks
|
$
61.2
|
|
$
57.5
|
|
$
303.1
|
|
$
180.8
|
Specialty Engineered Materials
|
28.8
|
|
30.4
|
|
132.0
|
|
94.4
|
Distribution
|
21.7
|
|
18.0
|
|
93.2
|
|
69.5
|
Corporate and eliminations
|
(37.7)
|
|
(40.9)
|
|
(147.1)
|
|
(155.4)
|
Operating
income
|
$
74.0
|
|
$
65.0
|
|
$
381.2
|
|
$
189.3
|
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
December 31,
|
|
Year
Ended
December
31,
|
Reconciliation to
Consolidated Statements of Income
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
|
|
|
|
|
|
|
Sales
|
$
1,201.5
|
|
$
997.0
|
|
$
4,818.8
|
|
$
3,242.1
|
|
|
|
|
|
|
|
|
Gross margin -
GAAP
|
253.1
|
|
252.9
|
|
1,099.6
|
|
784.3
|
Special items in
gross margin (Attachment 3)
|
5.9
|
|
1.7
|
|
33.6
|
|
25.3
|
Adjusted Gross
margin
|
$
259.0
|
|
$
254.6
|
|
$
1,133.2
|
|
$
809.6
|
|
|
|
|
|
|
|
|
Adjusted Gross margin
as a percent of sales
|
21.6 %
|
|
25.5 %
|
|
23.5 %
|
|
25.0 %
|
|
|
|
|
|
|
|
|
Operating income -
GAAP
|
74.0
|
|
65.0
|
|
381.2
|
|
189.3
|
Special items in
operating income (Attachment 3)
|
11.2
|
|
14.6
|
|
47.8
|
|
73.7
|
Adjusted Operating
income
|
$
85.2
|
|
$
79.6
|
|
$
429.0
|
|
$
263.0
|
|
|
|
|
|
|
|
|
Adjusted Operating
income as a percent of sales
|
7.1 %
|
|
8.0 %
|
|
8.9 %
|
|
8.1 %
|
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
December
31,
|
|
2021
|
|
2020
|
|
GAAP
Results
|
|
Special
Items
|
|
Adjusted
Results
|
|
GAAP
Results
|
|
Special I
tems
|
|
Adjusted
Results
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations before income taxes
|
$
51.1
|
|
$
20.6
|
|
$
71.7
|
|
$
57.4
|
|
$
4.2
|
|
$
61.6
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax (expense)
benefit - GAAP
|
(22.2)
|
|
—
|
|
(22.2)
|
|
17.3
|
|
—
|
|
17.3
|
Income tax impact of
special items (Attachment 3)
|
—
|
|
(4.1)
|
|
(4.1)
|
|
—
|
|
1.3
|
|
1.3
|
Tax adjustments
(Attachment 3)
|
—
|
|
7.5
|
|
7.5
|
|
—
|
|
(32.2)
|
|
(32.2)
|
Income tax (expense)
benefit
|
$ (22.2)
|
|
$
3.4
|
|
$
(18.8)
|
|
$
17.3
|
|
$
(30.9)
|
|
$
(13.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Tax
Rate(1)
|
43.4 %
|
|
|
|
26.0 %
|
|
(30.1) %
|
|
|
|
22.1 %
|
|
(1) Rates may not
recalculate from figures presented herein due to
rounding
|
|
|
Year
Ended
December
31,
|
|
2021
|
|
2020
|
|
GAAP
Results
|
|
Special
Items
|
|
Adjusted
Results
|
|
GAAP
Results
|
|
Special
Items
|
|
Adjusted
Results
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations before income taxes
|
$
304.6
|
|
$
57.1
|
|
$ 361.7
|
|
$ 139.0
|
|
$
66.2
|
|
$ 205.2
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense -
GAAP
|
(74.0)
|
|
—
|
|
(74.0)
|
|
(5.2)
|
|
—
|
|
(5.2)
|
Income tax impact of
special items (Attachment 3)
|
—
|
|
(13.0)
|
|
(13.0)
|
|
—
|
|
(14.1)
|
|
(14.1)
|
Tax adjustments
(Attachment 3)
|
—
|
|
5.9
|
|
5.9
|
|
—
|
|
(27.3)
|
|
(27.3)
|
Income tax
expense
|
$ (74.0)
|
|
$
(7.1)
|
|
$
(81.1)
|
|
$
(5.2)
|
|
$
(41.4)
|
|
$
(46.6)
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Tax
Rate(1)
|
24.3 %
|
|
|
|
22.4 %
|
|
3.7 %
|
|
|
|
22.7 %
|
|
(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 Color
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:
|
Year Ended
December 31, 2020
|
|
|
Net income from
continuing operations attributable to Avient
shareholders
|
$
132.0
|
Special items, after
tax
|
24.8
|
Adjusted net income
from continuing operations excluding special items
|
156.8
|
Clariant Color pro
forma adjustments to net income from continuing
operations(2)
|
20.7
|
Pro forma adjusted
net income from continuing operations attributable to Avient
shareholders
|
$
177.5
|
|
|
Weighted average
diluted shares
|
90.6
|
Pro forma impact to
diluted shares from January 2020 equity
offering(2)
|
1.5
|
Pro forma weighted
average diluted shares
|
92.1
|
|
|
Adjusted EPS -
excluding special items pro forma for Clariant Color
acquisition
|
$
1.93
|
|
Year
Ended
December 31,
2020
|
Sales
|
$
3,242.1
|
Clariant Color pro
forma adjustment to sales(2)
|
540.4
|
Pro forma
sales
|
$
3,782.5
|
(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
Earnings Before Interest, Taxes, Depreciation
and Amortization (EBITDA) by Segment
|
Three Months
Ended
December
31,
|
|
Year
Ended
December
31,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Operating
income:
|
|
|
|
|
|
|
|
Color,
Additives and Inks
|
$
61.2
|
|
$
57.5
|
|
$
303.1
|
|
$
180.8
|
Specialty Engineered Materials
|
28.8
|
|
30.4
|
|
132.0
|
|
94.4
|
Distribution
|
21.7
|
|
18.0
|
|
93.2
|
|
69.5
|
Corporate and eliminations
|
(37.7)
|
|
(40.9)
|
|
(147.1)
|
|
(155.4)
|
Operating
income
|
$
74.0
|
|
$
65.0
|
|
$
381.2
|
|
$
189.3
|
|
|
|
|
|
|
|
|
Items below OI in
Corporate:
|
|
|
|
|
|
|
|
Other income,
net
|
$
(5.4)
|
|
$
11.7
|
|
$
(1.3)
|
|
$
24.3
|
|
|
|
|
|
|
|
|
Depreciation &
amortization:
|
|
|
|
|
|
|
|
Color, Additives and
Inks
|
$
26.4
|
|
$
27.3
|
|
$
105.7
|
|
$
75.1
|
Specialty Engineered
Materials
|
8.0
|
|
7.4
|
|
31.7
|
|
30.0
|
Distribution
|
0.2
|
|
0.3
|
|
0.8
|
|
0.7
|
Corporate and
eliminations
|
3.6
|
|
2.8
|
|
7.7
|
|
9.3
|
Depreciation &
Amortization
|
$
38.2
|
|
$
37.8
|
|
$
145.9
|
|
$
115.1
|
|
|
|
|
|
|
|
|
EBITDA:
|
|
|
|
|
|
|
|
Color,
Additives and Inks
|
$
87.6
|
|
$
84.8
|
|
$
408.8
|
|
$
255.9
|
Specialty Engineered Materials
|
36.8
|
|
37.8
|
|
163.7
|
|
124.4
|
Distribution
|
21.9
|
|
18.3
|
|
94.0
|
|
70.2
|
Corporate and eliminations
|
(39.5)
|
|
(26.4)
|
|
(140.7)
|
|
(121.8)
|
EBITDA
|
$
106.8
|
|
$
114.5
|
|
$
525.8
|
|
$
328.7
|
Reconciliation of
Pro Forma Sales, Operating Income and EBITDA - Color, Additives and
Inks
|
Year
Ended
December 31,
2020
|
Sales:
|
|
Color,
Additives and Inks
|
$
1,502.9
|
Clariant
Color pro forma adjustments(2)
|
540.4
|
Pro forma
sales
|
$
2,043.3
|
|
|
Operating
income:
|
|
Color,
Additives and Inks
|
$
180.8
|
Clariant
Color pro forma adjustments(2)
|
45.0
|
Pro forma operating
income
|
$
225.8
|
|
|
Depreciation &
amortization:
|
|
Color, Additives and
Inks
|
$
75.1
|
Clariant Color pro
forma adjustments(2)
|
30.1
|
Pro forma depreciation
& amortization
|
$
105.2
|
|
|
EBITDA:
|
|
Color,
Additives and Inks
|
$
255.9
|
Clariant
Color pro forma adjustments(2)
|
75.1
|
Pro forma
EBITDA
|
$
331.0
|
|
(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
December
31,
|
|
Year
Ended
December
31,
|
Reconciliation to
EBITDA and Pro Forma Adjusted EBITDA:
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net income from
continuing operations – GAAP
|
$
28.9
|
|
$
74.7
|
|
$
230.6
|
|
$
133.8
|
Income tax expense
(benefit)
|
22.2
|
|
(17.3)
|
|
74.0
|
|
5.2
|
Interest
expense
|
17.5
|
|
19.3
|
|
75.3
|
|
74.6
|
Depreciation and
amortization from continuing operations
|
38.2
|
|
37.8
|
|
145.9
|
|
115.1
|
EBITDA
|
$
106.8
|
|
$
114.5
|
|
$
525.8
|
|
$
328.7
|
Special items, before
tax
|
20.6
|
|
4.2
|
|
57.1
|
|
66.2
|
Interest expense
included in special items
|
—
|
|
—
|
|
|
|
(10.1)
|
Depreciation and
amortization included in special items
|
(1.6)
|
|
(0.7)
|
|
(1.7)
|
|
(3.2)
|
Adjusted
EBITDA
|
$
125.8
|
|
$
118.0
|
|
$
581.2
|
|
$
381.6
|
Clariant Color pro
forma adjustments(2)
|
—
|
|
—
|
|
—
|
|
75.1
|
Pro forma adjusted
EBITDA
|
$
125.8
|
|
$
118.0
|
|
$
581.2
|
|
$
456.7
|
|
(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
|
Net Debt
Calculation
|
|
December 31,
2021
|
Total long-term debt,
net
|
|
$
1,850.3
|
Unamortized discount
and debt issuance cost
|
|
14.4
|
Short-term and
current portion of long term debt
|
|
8.6
|
Total debt
|
|
$
1,873.3
|
Cash
|
|
(601.2)
|
Net debt
|
|
$
1,272.1
|
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SOURCE Avient Corporation