Core Viewpoint - Avient (AVNT) is currently identified as a strong value stock with a Zacks Rank of 2 (Buy) and an "A" grade in the Value category, indicating it is likely undervalued in the market [4][8]. Valuation Metrics - The current P/E ratio of Avient is 11.82, significantly lower than the industry average P/E of 19.19, suggesting potential undervaluation [4]. - Avient's PEG ratio stands at 1.15, compared to the industry's average PEG of 2.93, indicating a favorable growth outlook relative to its valuation [5]. - The P/B ratio for Avient is 1.4, which is attractive when compared to the industry average P/B of 1.58, further supporting the notion of undervaluation [6]. - Avient's P/CF ratio is 11.07, lower than the industry's average P/CF of 14.85, highlighting its strong cash flow position [7]. Summary of Financial Performance - Over the past year, Avient's P/E has fluctuated between a high of 18.10 and a low of 9.82, with a median of 13.35 [4]. - The PEG ratio has ranged from a high of 1.23 to a low of 0.80, with a median of 1.07 [5]. - The P/B ratio has seen a high of 2.04 and a low of 1.14, with a median of 1.54 [6]. - The P/CF ratio has varied between a high of 15.80 and a low of 9.43, with a median of 11.33 [7].

DeFi Market Overview - Avantis ($AVNT) is identified as a prominent name in the DeFi sector, exhibiting significant potential [1] - The analysis draws a parallel between $AVNT and $MYX, highlighting $MYX's 25,000%+ surge within months as a benchmark [1] Technical Analysis & Price Targets - The chart indicates a breakout zone for $AVNT between $1.30 and $2.00, suggesting a short-term target within this range [1] - The analysis anticipates a higher mid-cycle potential for $AVNT, contingent on Real World Asset (RWA) demand [1]

Group 1 - The article highlights the top 100 sustainable companies identified by Calvert Research and Management based on an annual review of over 230 Environmental, Social, and Governance (ESG) performance indicators [1] - Key ESG performance indicators include workplace diversity, data security, and greenhouse-gas emissions, which are critical for assessing corporate sustainability [1] Group 2 - The article mentions a live video feature on Facebook called the Underdog Daily Dividend Show, which showcases portfolio candidates for investment [2] - The show encourages audience interaction by allowing viewers to comment on their favorite or least favorite stock tickers for potential inclusion in future reports [2]

Group 1 - Avient (NYSE: AVNT) is showing signs of recovery and growth in 2024 after previous disappointments, with a positive outlook for 2025 [1] - The investment group "Value In Corporate Events" focuses on identifying opportunities in major corporate events such as IPOs, mergers & acquisitions, and earnings reports, providing coverage of 10 significant events monthly [2] - The article emphasizes the potential for Avient to become a more attractive investment option following the market downturn in March [1]

Core Insights - Avient reported strong Q2 2025 results with adjusted EPS of $0.80, exceeding analyst expectations of $0.78, and revenue of $866.5 million, up from $849.7 million in Q2 2024, marking the fifth consecutive quarter of organic revenue growth [1][5][11] Financial Performance - Adjusted EPS (Non-GAAP) increased by 5.3% year-over-year from $0.76 in Q2 2024 to $0.80 in Q2 2025 [2] - Revenue rose by 2.0% year-over-year from $849.7 million in Q2 2024 to $866.5 million in Q2 2025, surpassing estimates of $852.87 million [2] - Adjusted EBITDA margin improved to 17.2%, up 0.3 percentage points from 16.9% in Q2 2024 [2][5] - Operating income increased by 32.6% year-over-year from $72.5 million in Q2 2024 to $96.1 million in Q2 2025 [2] Business Overview - Avient operates in the specialty materials industry, focusing on polymers, colorants, additives, and engineered thermoplastics, with key markets in packaging, healthcare, defense, transportation, consumer goods, and energy [3][4] - The company invested $98.7 million in R&D in 2024, employing a technical workforce of around 1,100, including over 100 with doctoral degrees [3] Strategic Focus - Recent business strategies include expanding high-value applications, particularly in healthcare and defense, while maintaining operational agility and cost control [4] - The company emphasizes its global manufacturing footprint and customer partnerships to navigate regulatory changes and supply chain challenges [4] Segment Performance - The Color, Additives and Inks segment reported sales of $538.6 million, slightly down from the previous year, but operating income rose to $90.3 million due to strong demand in packaging [6] - The Specialty Engineered Materials segment saw a 7% increase in sales to $329.7 million, although operating income declined by 6.1% to $40.2 million, reflecting margin pressures [7] Cash Flow and Debt Management - Avient generated $113 million in cash flow from operations, using $50 million to reduce debt, aligning with its 2025 debt reduction target of $100–$200 million [8][9] Future Guidance - For Q3 2025, Avient forecasts adjusted EPS of $0.70 and narrows full-year guidance to $2.77–$2.87 [11] - The company anticipates continued margin expansion in defense and healthcare sectors, while monitoring cash management and working capital requirements [11]

PART I — FINANCIAL INFORMATION [ITEM 1. FINANCIAL STATEMENTS](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) Presents Avient's unaudited condensed consolidated financial statements, including income, comprehensive income, balance sheets, cash flows, and equity, with detailed notes [Condensed Consolidated Statements of Income (Unaudited)](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20(Unaudited)) Avient reported increased net income and diluted EPS for Q2 2025, but a decrease for the six months, impacted by expenses | Metric (in millions, except per share) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Sales | $866.5 | $849.7 | $1,693.1 | $1,678.7 | | Gross margin | $277.9 | $257.6 | $541.1 | $535.8 | | Operating income | $96.1 | $72.5 | $96.8 | $166.5 | | Net income | $53.5 | $33.8 | $33.6 | $83.5 | | Net income attributable to Avient common shareholders | $52.6 | $33.6 | $32.4 | $83.0 | | Diluted EPS | $0.57 | $0.36 | $0.35 | $0.90 | | Cash dividends declared per share | $0.2700 | $0.2575 | $0.5400 | $0.5150 | [Condensed Consolidated Statements of Comprehensive Income (Unaudited)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Unaudited)) Total comprehensive income significantly increased for both periods ended June 30, 2025, driven by favorable translation adjustments | Metric (in millions) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net income | $53.5 | $33.8 | $33.6 | $83.5 | | Translation adjustments and related hedging instruments | $29.4 | $(18.5) | $58.9 | $(44.4) | | Total comprehensive income | $82.9 | $15.3 | $92.5 | $39.1 | | Comprehensive income attributable to Avient common shareholders | $82.0 | $15.1 | $91.3 | $38.6 | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to **$6,133.3 million** as of June 30, 2025, driven by higher receivables, inventories, goodwill, and intangibles | Metric (in millions) | As of June 30, 2025 | As of December 31, 2024 | | :------------------- | :------------------ | :---------------------- | | Cash and cash equivalents | $474.5 | $544.5 | | Total current assets | $1,494.4 | $1,422.1 | | Goodwill | $1,754.6 | $1,659.7 | | Intangible assets, net | $1,529.3 | $1,450.4 | | Total assets | $6,133.3 | $5,811.1 | | Total current liabilities | $737.3 | $756.1 | | Long-term debt | $2,020.0 | $2,059.3 | | Total non-current liabilities | $3,022.0 | $2,725.4 | | Total equity | $2,374.0 | $2,329.6 | | Total liabilities and equity | $6,133.3 | $5,811.1 | [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) Operating cash flow slightly decreased, investing cash flow decreased, and financing cash flow significantly increased for the six months ended June 30, 2025 | Metric (in millions) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------- | :--------------------------- | :--------------------------- | | Net income | $33.6 | $83.5 | | Net cash provided by operating activities | $61.7 | $63.1 | | Net cash used by investing activities | $(39.5) | $(54.5) | | Net cash used by financing activities | $(106.4) | $(54.8) | | Decrease in cash and cash equivalents | $(70.0) | $(56.4) | | Cash and cash equivalents at end of period | $474.5 | $489.4 | [Condensed Consolidated Statements of Shareholders' Equity (Unaudited)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity%20(Unaudited)) Total equity increased to **$2,374.0 million** by June 30, 2025, driven by net income and other comprehensive income, partially offset by dividends - Net income attributable to Avient common shareholders for the six months ended June 30, 2025 was **$32.4 million**, contributing to the increase in retained earnings[6](index=6&type=chunk)[19](index=19&type=chunk) - Other comprehensive income for the six months ended June 30, 2025 was **$58.9 million**, positively impacting total equity[9](index=9&type=chunk)[19](index=19&type=chunk) | Metric (in millions) | Balance at January 1, 2025 | Balance at June 30, 2025 | | :------------------- | :------------------------- | :----------------------- | | Total Avient Shareholders' Equity | $2,313.8 | $2,358.3 | | Total Equity | $2,329.6 | $2,374.0 | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Provides essential context for financial statements, covering accounting policies, estimates, standard adoptions, and specific financial line items [Note 1 — BASIS OF PRESENTATION](index=8&type=section&id=Note%201%20%E2%80%94%20BASIS%20OF%20PRESENTATION) Outlines financial statement preparation basis, GAAP adherence, ASU 2023-07 adoption, and evaluation of upcoming accounting standards - The Company adopted ASU 2023-07, Segment Reporting, for the year ended December 31, 2024, applying retrospective changes to all periods presented[24](index=24&type=chunk) - ASU 2023-09 (Income Taxes) and ASU 2024-03 (Expense Disaggregation Disclosures) are effective for fiscal years beginning after December 15, 2024, and December 15, 2026, respectively, with impacts currently under evaluation[25](index=25&type=chunk)[26](index=26&type=chunk) [Note 2 — GOODWILL AND INTANGIBLE ASSETS](index=8&type=section&id=Note%202%20%E2%80%94%20GOODWILL%20AND%20INTANGIBLE%20ASSETS) Goodwill and intangible assets, net, increased to **$1,754.6 million** and **$1,529.3 million** respectively, primarily due to currency translation adjustments - Goodwill increased by **$94.9 million** due to currency translation during the six months ended June 30, 2025[27](index=27&type=chunk) - Intangible assets, net, saw a **$123.4 million** favorable impact from currency translation as of June 30, 2025[28](index=28&type=chunk) | Metric (in millions) | As of June 30, 2025 | As of December 31, 2024 | | :------------------- | :------------------ | :---------------------- | | Total Goodwill | $1,754.6 | $1,659.7 | | Total Intangible assets, net | $1,529.3 | $1,450.4 | [Note 3 — RESTRUCTURING, IMPAIRMENT AND OTHER CHARGES](index=9&type=section&id=Note%203%20%E2%80%94%20RESTRUCTURING,%20IMPAIRMENT%20AND%20OTHER%20CHARGES) Avient recognized a **$71.6 million** non-cash impairment for its ERP system and **$14.7 million** for related contractual obligations in H1 2025 - A non-cash, pre-tax impairment charge of **$71.6 million** was recognized in Q1 2025 due to the decision to cease development of the S/4HANA ERP system[29](index=29&type=chunk)[30](index=30&type=chunk) - Additional pre-tax charges of **$14.7 million** for hosting fees and **$2.8 million** for severance were incurred related to the S/4HANA decision[30](index=30&type=chunk) - Other restructuring actions resulted in charges of **$2.6 million** for the three months and **$10.2 million** for the six months ended June 30, 2025, primarily for plant closure costs and workforce reduction[33](index=33&type=chunk) | Clariant Color Integration Restructuring (in millions) | Balance at January 1, 2024 | Restructuring charges (6M 2024) | Payments, utilization and translation (6M 2024) | Balance at December 31, 2024 | Restructuring charges (6M 2025) | Payments, utilization and translation (6M 2025) | Balance at June 30, 2025 | | :------------------------------------- | :------------------------- | :------------------------------ | :---------------------------------------------- | :--------------------------- | :------------------------------ | :---------------------------------------------- | :----------------------- | | Workforce reductions | $30.3 | $0.4 | $(23.3) | $7.4 | $1.4 | $(1.9) | $6.9 | | Plant closing and other | $0.8 | $1.6 | $(1.6) | $0.8 | $0.1 | $(0.1) | $0.8 | | Total | $31.1 | $2.0 | $(24.9) | $8.2 | $1.5 | $(2.0) | $7.7 | [Note 4 — INVENTORIES, NET](index=10&type=section&id=Note%204%20%E2%80%94%20INVENTORIES,%20NET) Net inventories increased to **$387.5 million** as of June 30, 2025, primarily driven by an increase in raw materials and supplies | Component (in millions) | As of June 30, 2025 | As of December 31, 2024 | | :---------------------- | :------------------ | :---------------------- | | Finished products | $154.7 | $159.2 | | Work in process | $25.8 | $21.0 | | Raw materials and supplies | $207.0 | $166.6 | | Inventories, net | $387.5 | $346.8 | [Note 5 — PROPERTY, NET](index=10&type=section&id=Note%205%20%E2%80%94%20PROPERTY,%20NET) Property, net, increased to **$986.1 million** as of June 30, 2025, reflecting an increase in gross property, partially offset by accumulated depreciation | Component (in millions) | As of June 30, 2025 | As of December 31, 2024 | | :---------------------- | :------------------ | :---------------------- | | Property, gross | $1,914.8 | $1,823.8 | | Less accumulated depreciation | $(928.7) | $(868.5) | | Property, net | $986.1 | $955.3 | [Note 6 — INCOME TAXES](index=10&type=section&id=Note%206%20%E2%80%94%20INCOME%20TAXES) Effective tax rates for Q2 and H1 2025 were **24.5%** and **24.2%**, respectively, above the U.S. federal statutory rate due to international tax differentials - The Company is contesting a **$23.8 million** proposed tax adjustment from the IRS for the 2019 tax year, along with **$6.5 million** in estimated interest and a **$4.8 million** accuracy-related penalty[39](index=39&type=chunk) - The One Big Beautiful Bill Act (OBBBA), enacted July 4, 2025, includes significant tax law changes effective in 2025 and 2026, which the Company is evaluating but does not expect to materially impact current year financial statements[40](index=40&type=chunk) | Period | Effective Tax Rate (2025) | Effective Tax Rate (2024) | | :----- | :------------------------ | :------------------------ | | 3 Months Ended June 30 | 24.5% | 24.9% | | 6 Months Ended June 30 | 24.2% | 25.1% | [Note 7 — FINANCING ARRANGEMENTS](index=11&type=section&id=Note%207%20%E2%80%94%20FINANCING%20ARRANGEMENTS) Total debt decreased to **$2,049.1 million** as of June 30, 2025, following a refinancing and a **$50.0 million** prepayment, with a new revolving credit facility established - On March 12, 2025, the senior secured term loan was refinanced, reducing the interest rate by **25 basis points**[42](index=42&type=chunk) - A voluntary prepayment of **$50.0 million** was made on the senior secured term loan in Q2 2025[43](index=43&type=chunk) - A new **$500.0 million** senior secured revolving credit facility was entered into on June 12, 2025, maturing in June 2030, with no outstanding borrowings as of June 30, 2025[44](index=44&type=chunk)[45](index=45&type=chunk) | Debt Instrument (in millions) | Principal Amount (June 30, 2025) | Principal Amount (Dec 31, 2024) | Weighted Average Interest Rate (June 30, 2025) | | :---------------------------- | :------------------------------- | :------------------------------ | :--------------------------------------------- | | Senior secured term loan due 2029 | $670.7 | $720.7 | 5.97% | | 7.125% senior notes due 2030 | $725.0 | $725.0 | 7.125% | | 6.250% senior notes due 2031 | $650.0 | $650.0 | 6.250% | | Total Debt | $2,049.1 | $2,099.2 | | [Note 8 — DERIVATIVES AND HEDGING](index=12&type=section&id=Note%208%20%E2%80%94%20DERIVATIVES%20AND%20HEDGING) Avient uses cross-currency swaps to mitigate foreign currency exchange rate volatility, recognizing significant losses in AOCI for Q2 and H1 2025 - Cross-currency swaps are designated as net investment hedges for European operations, with changes in fair value recognized in Accumulated Other Comprehensive Income (AOCI)[49](index=49&type=chunk)[50](index=50&type=chunk) | Metric (in millions) | 3 Months Ended June 30, 2025 | 6 Months Ended June 30, 2025 | | :------------------- | :--------------------------- | :--------------------------- | | Losses recognized in AOCI, net of tax | $(166.3) | $(210.6) | | Income included in Interest expense, net | $9.1 | $18.1 | | Derivative Financial Instruments (in millions) | As of June 30, 2025 | As of December 31, 2024 | | :--------------------------------------------- | :------------------ | :---------------------- | | Cross-currency Swaps (Net Investment Hedge) - Assets | $0.0 | $6.1 | | Cross-currency Swaps (Net Investment Hedge) - Liabilities | $380.6 | $104.7 | [Note 9 — SEGMENT INFORMATION](index=12&type=section&id=Note%209%20%E2%80%94%20SEGMENT%20INFORMATION) Avient operates in Color, Additives and Inks, and Specialty Engineered Materials segments, with varied performance and operating income as the primary measure - Avient's two reportable segments are Color, Additives and Inks and Specialty Engineered Materials[52](index=52&type=chunk) - Operating income is the primary segment performance measure, excluding unallocated corporate expenses, restructuring charges, share-based compensation, environmental costs, asset impairments, and acquisition-related charges[53](index=53&type=chunk) | Segment Performance (in millions) | 3 Months Ended June 30, 2025 (Sales) | 3 Months Ended June 30, 2024 (Sales) | 3 Months Ended June 30, 2025 (Operating Income) | 3 Months Ended June 30, 2024 (Operating Income) | | :-------------------------------- | :----------------------------------- | :----------------------------------- | :---------------------------------------------- | :---------------------------------------------- | | Color, Additives and Inks | $538.6 | $542.0 | $90.3 | $86.1 | | Specialty Engineered Materials | $329.7 | $308.1 | $40.2 | $42.8 | | Corporate | $(1.8) | $(0.4) | $(34.4) | $(56.4) | | Total | $866.5 | $849.7 | $96.1 | $72.5 | | Segment Performance (in millions) | 6 Months Ended June 30, 2025 (Sales) | 6 Months Ended June 30, 2024 (Sales) | 6 Months Ended June 30, 2025 (Operating Income) | 6 Months Ended June 30, 2024 (Operating Income) | | :-------------------------------- | :----------------------------------- | :----------------------------------- | :---------------------------------------------- | :---------------------------------------------- | | Color, Additives and Inks | $1,058.3 | $1,057.3 | $168.9 | $160.9 | | Specialty Engineered Materials | $638.1 | $622.5 | $87.3 | $96.2 | | Corporate | $(3.3) | $(1.1) | $(159.4) | $(90.6) | | Total | $1,693.1 | $1,678.7 | $96.8 | $166.5 | [Note 10 — COMMITMENTS AND CONTINGENCIES](index=14&type=section&id=Note%2010%20%E2%80%94%20COMMITMENTS%20AND%20CONTINGENCIES) Avient is involved in environmental remediation, with a **$133.3 million** accrual for Calvert City and **$34.0 million** in insurance recoveries in Q1 2025 - Avient is a potentially responsible party (PRP) for environmental investigation and remediation at certain sites, including the former Goodrich Corporation Calvert City facility[58](index=58&type=chunk)[59](index=59&type=chunk) - An accrual of **$133.3 million** was recorded as of June 30, 2025, for the Calvert City remediation, with the largest component being barrier wall construction expected to complete in phases through 2028[62](index=62&type=chunk) - The Company received **$34.0 million** in cash from Calvert City insurance recoveries in Q1 2025[65](index=65&type=chunk) | Environmental Accruals (in millions) | As of June 30, 2025 | As of December 31, 2024 | | :----------------------------------- | :------------------ | :---------------------- | | Total environmental accruals | $141.3 | $146.0 | [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=16&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses Avient's financial performance for Q2 and H1 2025, detailing changes in sales, margins, expenses, taxes, liquidity, and cash flows [Our Business](index=16&type=section&id=Our%20Business) Avient Corporation is a global innovator of materials solutions, specializing in engineered materials, performance fibers, advanced composites, and color and additive solutions - Avient is an innovator of materials solutions, including specialty engineered materials, performance fibers, advanced composites, and color and additive solutions[68](index=68&type=chunk) - The Company provides value by linking knowledge of polymers and materials science with manufacturing and supply chain capabilities[68](index=68&type=chunk) [Results of Operations](index=16&type=section&id=Results%20of%20Operations) Avient's Q2 2025 results showed sales growth and increased operating income, but H1 2025 operating income and net income decreased due to an ERP impairment | Metric (in millions, except per share) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change (Favorable/Unfavorable) | % Change | | :------------------------------------ | :--------------------------- | :--------------------------- | :----------------------------- | :------- | | Sales | $866.5 | $849.7 | $16.8 | 2.0% | | Gross margin | $277.9 | $257.6 | $20.3 | 7.9% | | Operating income | $96.1 | $72.5 | $23.6 | 32.6% | | Net income attributable to Avient common shareholders | $52.6 | $33.6 | $19.0 | 56.5% | | Diluted EPS | $0.57 | $0.36 | | | | Metric (in millions, except per share) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (Favorable/Unfavorable) | % Change | | :------------------------------------ | :--------------------------- | :--------------------------- | :----------------------------- | :------- | | Sales | $1,693.1 | $1,678.7 | $14.4 | 0.9% | | Gross margin | $541.1 | $535.8 | $5.3 | 1.0% | | Operating income | $96.8 | $166.5 | $(69.7) | (41.9)% | | Net income attributable to Avient common shareholders | $32.4 | $83.0 | $(50.6) | (61.0)% | | Diluted EPS | $0.35 | $0.90 | | | [Sales](index=16&type=section&id=Sales) Sales increased by **2.0%** to **$866.5 million** for Q2 2025, driven by defense and healthcare, and by **0.9%** to **$1,693.1 million** for H1 2025 - Three months ended June 30, 2025: Sales increased by **$16.8 million (2.0%)**, with **0.6%** growth excluding foreign currency impacts, primarily in defense and healthcare, offset by declines in consumer and industrial[70](index=70&type=chunk) - Six months ended June 30, 2025: Sales increased by **$14.4 million (0.9%)**, with **1.2%** growth excluding foreign currency impacts, primarily in packaging, defense, and healthcare, offset by declines in consumer[71](index=71&type=chunk) [Gross Margin](index=16&type=section&id=Gross%20Margin) Gross margin as a percentage of sales improved to **32.1%** for Q2 and **32.0%** for H1 2025, primarily due to lower environmental remediation charges - Gross margin as a percentage of sales increased to **32.1%** for the three months ended June 30, 2025 (from **30.3%** in 2024), driven by **$20.6 million** lower environmental remediation charges, net of recoveries[72](index=72&type=chunk) - Gross margin as a percentage of sales increased to **32.0%** for the six months ended June 30, 2025 (from **31.9%** in 2024), driven by **$21.0 million** lower environmental remediation charges, net of recoveries[74](index=74&type=chunk) [Selling and administrative expense](index=17&type=section&id=Selling%20and%20administrative%20expense) Selling and administrative expense decreased by **$3.3 million** for Q2 2025, but increased significantly by **$75.0 million** for H1 2025 due to an ERP impairment - Selling and administrative expense decreased by **$3.3 million** for the three months ended June 30, 2025, primarily due to lower compensation cost[75](index=75&type=chunk) - Selling and administrative expense increased by **$75.0 million** for the six months ended June 30, 2025, primarily due to a **$71.6 million** impairment charge for the S/4HANA ERP system and **$14.7 million** for unpaid hosting fees[75](index=75&type=chunk) [Interest expense, net](index=17&type=section&id=Interest%20expense,%20net) Interest expense, net, decreased by **$1.9 million** and **$1.6 million** for the three and six months ended June 30, 2025, respectively, due to reduced interest rates - Interest expense, net, decreased by **$1.9 million** for the three months and **$1.6 million** for the six months ended June 30, 2025[76](index=76&type=chunk) - The decrease in interest expense was primarily driven by reduced interest rates resulting from previous refinancing activity[76](index=76&type=chunk) [Income taxes](index=17&type=section&id=Income%20taxes) Effective tax rates decreased to **24.5%** for Q2 and **24.2%** for H1 2025, primarily due to lower GILTI tax and increased favorable permanent items - The lower effective tax rate for both periods in 2025 was primarily driven by a decrease in GILTI tax and increased favorable permanent items[77](index=77&type=chunk) | Period | Effective Tax Rate (2025) | Effective Tax Rate (2024) | | :----- | :------------------------ | :------------------------ | | 3 Months Ended June 30 | 24.5% | 24.9% | | 6 Months Ended June 30 | 24.2% | 25.1% | [SEGMENT INFORMATION](index=17&type=section&id=SEGMENT%20INFORMATION) Segment performance shows mixed results, with Color, Additives and Inks improving operating income, Specialty Engineered Materials growing sales but declining operating income, and corporate costs fluctuating | Segment (in millions) | 3 Months Ended June 30, 2025 (Sales) | 3 Months Ended June 30, 2024 (Sales) | 3 Months Ended June 30, 2025 (Operating Income) | 3 Months Ended June 30, 2024 (Operating Income) | | :-------------------- | :----------------------------------- | :----------------------------------- | :---------------------------------------------- | :---------------------------------------------- | | Color, Additives and Inks | $538.6 | $542.0 | $90.3 | $86.1 | | Specialty Engineered Materials | $329.7 | $308.1 | $40.2 | $42.8 | | Corporate | $(1.8) | $(0.4) | $(34.4) | $(56.4) | | Total | $866.5 | $849.7 | $96.1 | $72.5 | | Segment (in millions) | 6 Months Ended June 30, 2025 (Sales) | 6 Months Ended June 30, 2024 (Sales) | 6 Months Ended June 30, 2025 (Operating Income) | 6 Months Ended June 30, 2024 (Operating Income) | | :-------------------- | :----------------------------------- | :----------------------------------- | :---------------------------------------------- | :---------------------------------------------- | | Color, Additives and Inks | $1,058.3 | $1,057.3 | $168.9 | $160.9 | | Specialty Engineered Materials | $638.1 | $622.5 | $87.3 | $96.2 | | Corporate | $(3.3) | $(1.1) | $(159.4) | $(90.6) | | Total | $1,693.1 | $1,678.7 | $96.8 | $166.5 | [Color, Additives and Inks](index=18&type=section&id=Color,%20Additives%20and%20Inks) Sales for Color, Additives and Inks slightly decreased in Q2 but increased in H1 2025, while operating income grew by **4.9%** and **5.0%** respectively due to improved mix and cost savings - Sales decreased by **0.6%** for the three months ended June 30, 2025, with a **2.0%** decrease excluding foreign currency impacts, primarily in consumer and transportation end markets[82](index=82&type=chunk) - Sales increased by **0.1%** for the six months ended June 30, 2025, with a **0.6%** increase excluding foreign currency impacts, primarily in packaging and healthcare end markets[83](index=83&type=chunk) - Operating income increased by **$4.2 million (4.9%)** for the three months and **$8.0 million (5.0%)** for the six months, driven by improved mix and cost savings from productivity and restructuring[84](index=84&type=chunk) [Specialty Engineered Materials](index=18&type=section&id=Specialty%20Engineered%20Materials) Specialty Engineered Materials sales increased by **7.0%** for Q2 and **2.5%** for H1 2025, driven by defense and healthcare, but operating income decreased due to higher costs and growth investments - Sales increased by **7.0%** for the three months ended June 30, 2025, with a **5.7%** increase excluding foreign currency impacts, primarily in defense and healthcare end markets[85](index=85&type=chunk) - Sales increased by **2.5%** for the six months ended June 30, 2025, with a **2.6%** increase excluding foreign currency impacts, primarily in defense and healthcare end markets[86](index=86&type=chunk) - Operating income decreased by **$2.6 million (6.1%)** for the three months and **$8.9 million (9.3%)** for the six months, due to higher operating costs (planned maintenance) and investments in growth vectors[87](index=87&type=chunk) [Corporate](index=18&type=section&id=Corporate) Corporate costs decreased by **$22.0 million** for Q2 2025 due to lower environmental costs, but increased by **$68.8 million** for H1 2025 due to ERP impairment and restructuring - Corporate costs decreased by **$22.0 million** for the three months ended June 30, 2025, primarily due to lower environmental costs, net of recoveries[88](index=88&type=chunk) - Corporate costs increased by **$68.8 million** for the six months ended June 30, 2025, primarily due to a **$71.6 million** ERP impairment charge, **$14.7 million** in hosting fees, and **$17.3 million** in higher restructuring costs[89](index=89&type=chunk) [Liquidity and Capital Resources](index=18&type=section&id=Liquidity%20and%20Capital%20Resources) Avient's total liquidity reached **$961.6 million** as of June 30, 2025, with **73%** of cash held outside the U.S., sufficient for foreseeable cash requirements - Approximately **73%** of the Company's cash and cash equivalents resided outside the United States as of June 30, 2025[91](index=91&type=chunk) - Expected sources of cash for 2025 include cash on hand, cash from operations, and available liquidity under the revolving credit facility[92](index=92&type=chunk) | Metric (in millions) | As of June 30, 2025 | As of December 31, 2024 | | :------------------- | :------------------ | :---------------------- | | Cash and cash equivalents | $474.5 | $544.5 | | Revolving credit availability | $487.1 | $211.4 | | Total Liquidity | $961.6 | $755.9 | [Cash Flows](index=19&type=section&id=Cash%20Flows) Operating cash flow slightly decreased, investing cash flow decreased, and financing cash flow significantly increased for the six months ended June 30, 2025 - Operating cash flow decreased by **$1.4 million**, primarily due to higher incentive compensation payments and increased working capital, partially offset by **$34.0 million** in insurance proceeds[94](index=94&type=chunk) - Financing activities included **$50.2 million** in payments on long-term borrowings and **$49.4 million** in cash dividends paid for the six months ended June 30, 2025[95](index=95&type=chunk) | Cash Flow Activity (in millions) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------- | :--------------------------- | :--------------------------- | | Net cash provided by operating activities | $61.7 | $63.1 | | Net cash used by investing activities | $(39.5) | $(54.5) | | Net cash used by financing activities | $(106.4) | $(54.8) | [Debt](index=19&type=section&id=Debt) Avient's aggregate debt maturities total **$2,049.1 million** as of June 30, 2025, following a term loan refinancing, a **$50.0 million** prepayment, and a new revolving credit facility - The senior secured term loan was refinanced on March 12, 2025, reducing the interest rate by **25 basis points**[97](index=97&type=chunk) - A voluntary prepayment of **$50.0 million** was made on the senior secured term loan in the second quarter of 2025[98](index=98&type=chunk) - A new **$500.0 million** revolving credit agreement was entered into on June 12, 2025, maturing in June 2030[99](index=99&type=chunk) | Debt Maturities (in millions) | Amount | | :---------------------------- | :----- | | 2025 | $0.3 | | 2026 | $0.5 | | 2027 | $0.4 | | 2028 | $0.4 | | 2029 | $671.1 | | Thereafter | $1,376.4 | | Aggregate maturities | $2,049.1 | [Derivatives and Hedging](index=20&type=section&id=Derivatives%20and%20Hedging) Avient utilizes derivative transactions, specifically cross-currency swaps, to manage market risks associated with foreign currency exchange rates and interest rates - Avient uses derivative transactions to manage market risks from foreign currency exchange rates and interest rates[101](index=101&type=chunk) - Further details on derivative instruments are provided in Note 8, Derivatives and Hedging[101](index=101&type=chunk) [Material Cash Requirements](index=20&type=section&id=Material%20Cash%20Requirements) Avient's future cash obligations include debt, interest, operating leases, pension benefits, purchase obligations, and environmental remediation, with a **$50.0 million** debt prepayment in H1 2025 - Future obligations include debt, interest, operating leases, pension/post-retirement benefits, purchase obligations, and environmental remediation[102](index=102&type=chunk) - The senior secured term loan was refinanced and a **$50.0 million** prepayment was made during the six months ended June 30, 2025[102](index=102&type=chunk) - No other material changes to these obligations were reported compared to the 2024 Annual Report on Form 10-K[102](index=102&type=chunk) CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS This section identifies forward-looking statements and outlines business risks and uncertainties that could cause actual results to differ materially from projections - Statements in the report that are not historical facts are considered 'forward-looking statements' under the Private Securities Litigation Reform Act of 1995[104](index=104&type=chunk) - Factors that could cause actual results to differ materially include disruptions in credit markets, currency fluctuations, supply chain inefficiencies, changes in laws, raw material and energy price fluctuations, demand for products, production outages, litigation, environmental matters, ability to pay dividends, cyberattacks, debt restrictions, and other macroeconomic factors[104](index=104&type=chunk)[106](index=106&type=chunk) - The Company undertakes no obligation to publicly update forward-looking statements, except as required by law[105](index=105&type=chunk) PART II — OTHER INFORMATION [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=22&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) No material changes to Avient's exposures to market risk have occurred since the Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes to market risk exposures have occurred since the Annual Report on Form 10-K for the year ended December 31, 2024[107](index=107&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=22&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Avient's management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting - Avient's disclosure controls and procedures were effective as of June 30, 2025[108](index=108&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2025[109](index=109&type=chunk) [ITEM 1. LEGAL PROCEEDINGS](index=22&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) Information regarding Avient's legal proceedings is incorporated by reference from Note 10, Commitments and Contingencies, to the accompanying condensed consolidated financial statements - Legal proceedings information is incorporated by reference from Note 10, Commitments and Contingencies[110](index=110&type=chunk) [ITEM 1A. RISK FACTORS](index=22&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section refers to risk factors from the 2024 Annual Report on Form 10-K, highlighting that changes in foreign trade policy could materially and adversely affect Avient's operating results - A discussion of risk factors can be found in Item 1A of the Annual Report on Form 10-K for the fiscal year ended December 31, 2024[111](index=111&type=chunk) - Changes to foreign trade policy, including new or increased tariffs and changing import/export regulations, could adversely affect operating results and may be material[112](index=112&type=chunk) - Such policy changes and retaliatory actions by foreign governments have the potential to negatively impact the global economy, Avient's industry, and demand for its products[113](index=113&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=23&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) Avient did not repurchase any common shares during Q2 2025, with approximately **5.0 million** shares remaining available under its ongoing repurchase authorization - As of June 30, 2025, approximately **5.0 million** shares remained available for purchase under the Company's share repurchase authorization, which has no expiration[115](index=115&type=chunk) | Period | Total Number of Shares Purchased | Weighted Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Program | Number of Shares that May Yet be Purchased Under the Program | | :---------------- | :------------------------------- | :------------------------------------ | :----------------------------------------------------------- | :----------------------------------------------------------- | | April 1 to April 30 | — | $— | — | 4,957,472 | | May 1 to May 31 | — | $— | — | 4,957,472 | | June 1 to June 30 | — | $— | — | 4,957,472 | | Total | — | $— | — | | [ITEM 5. OTHER INFORMATION](index=23&type=section&id=ITEM%205.%20OTHER%20INFORMATION) No directors or officers adopted, modified, or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the fiscal quarter ended June 30, 2025 - No directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter ended June 30, 2025[116](index=116&type=chunk) [ITEM 6. EXHIBITS](index=24&type=section&id=ITEM%206.%20EXHIBITS) This section lists all exhibits filed with the Form 10-Q, including organizational documents, the Revolving Credit Agreement, and certifications - Key exhibits include the Amended and Restated Articles of Incorporation, Avient Corporation Regulations, and the Revolving Credit Agreement dated June 12, 2025[119](index=119&type=chunk) - Certifications from the Chairman, President and CEO, and Senior Vice President and CFO are included pursuant to SEC Rules 13a-14(a) and 15d-14(a) and 18 U.S.C. § 1350[119](index=119&type=chunk) - Inline XBRL documents (Instance, Schema, Calculation, Definition, Label, Presentation Linkbase Documents) are also part of the exhibits[119](index=119&type=chunk) SIGNATURES The Form 10-Q was formally signed on August 1, 2025, by Jamie A. Beggs, Senior Vice President and Chief Financial Officer of Avient Corporation - The report was signed on August 1, 2025, by Jamie A. Beggs, Senior Vice President and Chief Financial Officer of Avient Corporation[123](index=123&type=chunk)

Financial Data and Key Metrics Changes - The company reported second quarter organic sales growth of 0.6% despite an uncertain macro environment, with adjusted EPS growing 5% to $0.80, slightly ahead of guidance [6][10] - Adjusted EBITDA margin expanded by 30 basis points to 17.2%, driven by favorable mix, productivity initiatives, and disciplined discretionary spending [6][10] - For the first half of the year, organic sales grew about 1%, with expectations for a similar demand environment in the second half [7][10] Business Line Data and Key Metrics Changes - The Color Additives and Inks segment saw adjusted EBITDA grow 4% on 2% lower organic sales, with weaker demand in consumer and transportation markets offset by strong growth in healthcare [16] - The Specialty Engineered Materials segment grew organic sales by 6%, driven by strong demand in defense and healthcare, with healthcare growing double digits [17][18] - Packaging Materials, the segment's largest end market, experienced muted sales growth, particularly in EMEA, despite overall EBITDA margin expansion of 100 basis points [16][20] Market Data and Key Metrics Changes - In the U.S. and Canada, sales increased 1% year over year, led by healthcare and defense, offsetting weaker demand in consumer and transportation markets [19] - EMEA sales were down slightly, with robust healthcare and defense sales but muted packaging sales [20] - Asia delivered 3% organic growth, marking the fifth consecutive quarter of growth, with strength in healthcare and transportation [20] Company Strategy and Development Direction - The company aims to evolve from a specialty formulator to an innovator of material solutions, with a focus on strategic structural changes in R&D to enhance product differentiation [9][11] - The operational playbook is designed to realize approximately $40 million in benefits for 2025, with a focus on sourcing, Lean Six Sigma, and manufacturing optimization [8][10] - The company is prioritizing investments in growth vectors, particularly in healthcare and defense, which are expected to drive future growth [12][18] Management's Comments on Operating Environment and Future Outlook - Management noted that market trends are not improving, with customers remaining in a wait-and-see mode, particularly in consumer markets [7][10] - The company expects Q3 to continue the trends observed in Q2, with consumer weakness anticipated to persist [7][45] - Despite challenges, management remains optimistic about strong demand in defense and healthcare, which are seen as bright spots for the business [7][18] Other Important Information - The company has already realized $17 million of the $40 million benefits targeted for 2025, with the remaining expected in the second half [8] - The company is on track to reduce total debt by $100 million to $200 million by year-end, having repaid $50 million in the second quarter [11][22] Q&A Session Summary Question: Is there any pre-buying activity affecting sales? - Management indicated no significant pre-buying activity has been observed, as customers are managing inventory tightly in the current uncertain demand environment [25][26] Question: What is the outlook for raw material inflation? - The company expects raw material inflation to remain at 1% to 2% for the year, with some fluctuations in specific materials [28][29] Question: What is the outlook for volume in the second half? - Management anticipates a continuation of trends from the first half, with consumer markets expected to decline and packaging to grow slightly [35][36] Question: How has consumer weakness evolved? - Consumer sales were flat in Q1 and down 8% in Q2, with significant weakness noted in the U.S. and Canada [44][45] Question: What is the impact of planned maintenance on EBITDA? - The planned maintenance in the SEM segment impacted EBITDA by approximately $3 million in Q2, but margins are expected to expand in the second half [46][80] Question: Are customers pressuring for tariff cost absorption? - Management acknowledged some pressure on pricing due to increased tariffs, but they are working with suppliers and customers to manage costs [50][51] Question: Can you provide context on healthcare growth? - Healthcare has shown strong growth, particularly in medical devices and drug delivery, with a positive outlook for continued demand [62][63] Question: What are the trends in key markets in China? - The color business in China is under pressure due to government policies, but growth is expected in the SEM side related to high-performance computing [66][68]

Financial Data and Key Metrics Changes - The company reported second quarter organic sales growth of 0.6% and adjusted EPS growth of 5% to $0.80, slightly ahead of guidance [6][11] - Adjusted EBITDA margin expanded by 30 basis points to 17.2%, driven by favorable mix and productivity initiatives [6][11] - For the first half of the year, organic sales grew about 1%, with expectations for a similar demand environment in the second half [7][11] Business Line Data and Key Metrics Changes - The Color Additives and Inks segment saw adjusted EBITDA grow 4% despite a 2% decline in organic sales, with weaker demand in consumer and transportation markets [16][17] - Specialty Engineered Materials segment grew organic sales by 6%, driven by strong growth in defense and healthcare, with healthcare growing double digits [18][19] - Packaging Materials segment's sales were muted, but EBITDA margins expanded by 100 basis points through cost improvement initiatives [16][17] Market Data and Key Metrics Changes - In the U.S. and Canada, sales increased by 1% year over year, led by healthcare and defense, offsetting weaker demand in other sectors [20] - EMEA sales were slightly down, with robust healthcare and defense sales but muted packaging sales [21] - Latin America grew 6%, marking its sixth consecutive quarter of growth, while Asia delivered 3% organic growth [21] Company Strategy and Development Direction - The company aims to evolve from a specialty formulator to an innovator of material solutions, with a focus on strategic structural changes in R&D to enhance product differentiation [10][12] - The operational playbook is designed to navigate low demand and high uncertainty, targeting approximately $40 million in benefits for 2025 [8][12] - Continued investment in growth vectors and strategic initiatives is prioritized, with a focus on healthcare, defense, and telecommunications as key growth drivers [12][19] Management's Comments on Operating Environment and Future Outlook - Management noted that market trends are not improving, with customers remaining in a wait-and-see mode, particularly in consumer markets [6][7] - The company expects Q3 to mirror Q2, with continued strength in defense and healthcare offsetting consumer weakness [7][22] - There is cautious optimism regarding the second half of the year, with expectations for adjusted EPS of $0.70, representing 8% growth year over year [22][23] Other Important Information - The company has a strong cash position, having paid down $50 million of debt during the quarter, and is on track to reduce total debt by $100 million to $200 million by year-end [12][23] - Patent filings increased by 50% in 2024 compared to 2023, indicating a focus on innovation [13] - The company expects CapEx for the year to be approximately $110 million and free cash flow to range from $190 million to $210 million [23] Q&A Session Summary Question: Is there any pre-buying activity affecting sales? - Management indicated no significant pre-buying activity has been observed, as customers are managing inventory tightly in uncertain demand environments [26][28] Question: What is the outlook for raw material inflation? - The company expects raw material inflation to remain at 1% to 2%, with some fluctuations in specific materials [30][31] Question: What is the outlook for volume in the second half? - Management expects a continuation of trends from the first half, with healthcare, defense, and telecommunications driving growth, while consumer and packaging markets may see slight declines [35][36] Question: How has consumer weakness evolved? - Consumer sales were flat in Q1 but down 8% in Q2, with significant weakness noted in the U.S. and Canada [45][46] Question: What is the impact of planned maintenance on EBITDA? - The planned maintenance impacted EBITDA by approximately $3 million in Q2, but margins are expected to expand in the second half [47][48] Question: Are customers pressuring to absorb tariff costs? - Management acknowledged pressure from customers regarding pricing due to increased tariffs, but they are working to manage costs and maintain pricing [51][52] Question: Can you provide context on the healthcare growth? - Healthcare has shown strong growth, particularly in medical devices and drug delivery, with a long-term positive outlook [61][62] Question: What are the trends in key markets in China? - The color business in China is under pressure due to government policies, but growth is expected in high-performance computing [67][68]

Core Viewpoint - Avient (AVNT) reported quarterly earnings of $0.8 per share, exceeding the Zacks Consensus Estimate of $0.78 per share, and showing an increase from $0.76 per share a year ago, indicating a positive earnings surprise of +2.56% [1] Financial Performance - The company achieved revenues of $866.5 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.78% and showing growth from $849.7 million year-over-year [2] - Over the last four quarters, Avient has consistently surpassed consensus EPS estimates four times and topped revenue estimates two times [2] Stock Performance and Outlook - Avient shares have declined approximately 22.7% since the beginning of the year, contrasting with the S&P 500's gain of 7.8% [3] - The company's earnings outlook is crucial for assessing future stock performance, with current consensus EPS estimates at $0.67 for the coming quarter and $2.76 for the current fiscal year [7] Industry Context - The Zacks Chemical - Diversified industry, to which Avient belongs, is currently ranked in the bottom 5% of over 250 Zacks industries, suggesting potential challenges for stock performance [8] - The performance of Avient's stock may also be influenced by the overall industry outlook, as historical data indicates that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8]

Q2 2025 Performance - Sales reached $867 million, reflecting a 2% increase compared to Q2 2024 [9] - Adjusted EBITDA was $149 million, a 3.9% increase year-over-year [9] - Adjusted EPS increased by 5.3% to $0.80 [9] - Adjusted EBITDA margin was 17.2% [10] Segment Performance - Color, Additives & Inks sales were $539 million, a 1% decrease, but adjusted EBITDA margin expanded by 100 bps to 20.9% [20] - Specialty Engineered Materials sales increased by 7% to $330 million, but adjusted EBITDA margin decreased to 19% [23] Regional Growth - Organic revenue growth by region: US & Canada +1%, Europe, Middle East & Africa -1%, Asia +3%, Latin America +6% [25] Full Year 2025 Guidance - Adjusted EBITDA is projected to be between $545 million and $560 million, representing a 4% to 6% growth excluding foreign exchange impact [28] - Adjusted EPS is expected to be between $2.77 and $2.87 for the full year [28] - Free Cash Flow is expected to be $190 million to $210 million for FY 2025 [16] Productivity and Debt Reduction - $40 million of full year YoY productivity benefits more than offset inflation & investments in growth vectors [14] - $50 million debt reduction in Q2; expect $100 million to $200 million total debt reduction by year end [16]