Avient Announces Second Quarter 2023 Results

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PR Newswire

CLEVELAND, July 27, 2023

GAAP EPS of $0.24 includes special items and amortization expense
Adjusted EPS of $0.63 exceeded guidance of $0.60, driven by better-than-projected margins in both segments
Full year adjusted EPS guidance of $2.40 maintained reflecting continued weak demand conditions, offset by adjusted EBITDA margins expected to increase from 15.6% to 16.0% for the year
Most recent Sustainability Report published, highlighting the company's progress on ESG initiatives focused on People, Products, Planet and Performance
Sustainability Day for investors to be held on September 20th will focus on Avient's sustainable solutions portfolio and the demand trends that will drive long-term growth

CLEVELAND, July 27, 2023 /PRNewswire/ -- Avient Corporation (NYSE: AVNT), a leading provider of specialized and sustainable solutions, today announced its second quarter 2023 results. Second quarter GAAP and adjusted earnings per share (EPS) were $0.24 and $0.63, respectively.

GAAP EPS includes $0.21 of special items (see Attachment 3) and $0.18 of intangible amortization expense (see Attachment 1). Special items for the second quarter were primarily related to an adjustment to environmental reserves.

"Adjusted EPS for the second quarter exceeded our guidance as a result of favorable margins in both segments," said Robert M. Patterson, Chairman, President, and Chief Executive Officer, Avient Corporation. "Compared to our prior adjusted EPS expectations, raw material deflation as well as improving mix from composites and sustainable solutions positively impacted the quarter and more than offset weaker demand conditions."

"Sequentially, we've seen modest improvement in Asia, but demand across other regions remains sluggish, particularly in Europe, as consumers remain cautious with continued inflation and rising interest rates," Mr. Patterson added.

"I'm pleased with how well we have executed through the first half of the year despite persistent demand weakness and customer inventory destocking," said Mr. Patterson. "The acquisition of Dyneema has been an outstanding addition to our portfolio. Sales of our specialty materials into defense, energy, and transportation end markets have shown resilience during these challenging times."

"We are maintaining our full year adjusted EPS guidance of $2.40 on lower estimated sales of $3.3 billion," said Mr. Patterson. "We have remained consistent in our view all year that to the extent demand conditions weakened further, we would be able to offset that with strength in composites, improving margins and cost reductions."

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Avient will share further information regarding second quarter results and full-year guidance during its previously scheduled webcast at 8:00 a.m. Eastern Time on July 27, 2023.

New Sustainability Report and Upcoming Sustainability Day

The company also announced the release of its latest Sustainability Report, now available at www.avient.com/sustainability. The comprehensive publication is issued in advance of Avient's upcoming Sustainability Day to be held on September 20, 2023. "Sustainability remains a crucial matter in our world today, and it's also the largest of our four key growth drivers," Mr. Patterson said. "We are looking forward to sharing how and where our material science is helping customers achieve their sustainability goals and the megatrends that are underpinning the future growth of our sustainable solutions portfolio."

Registration information to access the Sustainability Day event will be provided in a news release in advance of the event.

Webcast Details

Avient will host a webcast on Thursday, July 27, 2023 at 8:00 a.m. ET. 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.

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, adjusted gross margin 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 adjusted EPS and adjusted EBITDA, 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, environmental remediation costs, mark-to-market adjustments associated with benefit plans, 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.

To access Avient's news library online, please visit www.avient.com/news.

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:

Dyneema®, the world's strongest fiber™, enables unmatched levels of performance and protection for end-use applications, including ballistic personal protection, marine and sustainable infrastructure and outdoor sports
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 https://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; changes in 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 achieve strategic objectives and successfully integrate acquisitions, including Avient Protective Materials; 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; 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.

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,
	2023	2022	2023	2022
Sales	$ 824.4	$ 891.0	$ 1,670.1	$ 1,783.2
Operating Income	62.3	100.1	119.4	202.3
Net income from continuing operations attributable to Avient shareholders	22.1	62.8	42.9	127.2
Basic earnings per share from continuing operations attributable to Avient shareholders	$ 0.24	$ 0.69	$ 0.47	$ 1.39
Diluted earnings per share from continuing operations attributable to Avient shareholders	$ 0.24	$ 0.68	$ 0.47	$ 1.38

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. Further, as a result of Avient's portfolio shift to a pure play specialty formulator, it has completed several acquisitions and divestitures which have resulted in a significant amount of intangible asset amortization. Management excludes intangible asset amortization from adjusted EPS as it believes excluding acquired intangible asset amortization is a useful measure of current period earnings per share. Senior management believes these measures are useful to investors because they allow for comparison to Avient's performance in prior period s 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, 2023		Three Months Ended June 30, 2022
Reconciliation to Condensed Consolidated Statements of Income	$	EPS	$	EPS

Net income from continuing operations attributable to Avient shareholders	$ 22.1	$ 0.24	$ 62.8	$ 0.68
Special items, after tax (Attachment 3)	19.6	0.21	3.2	0.03
Amortization expense, after-tax	16.2	0.18	10.5	0.12
Adjusted net income / EPS	$ 57.9	$ 0.63	$ 76.5	$ 0.83

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