Avantor(US:AVTR)2025-04-25 13:00Financial Performance - Net sales for the three months ended March 31, 2025, were $1,581.4 million, a decline of $98.4 million or 5.9% compared to the same period in 2024[111]. - Organic net sales decreased by $35.3 million or 2.2%, impacted by a $19.0 million unfavorable foreign currency impact and a $44.1 million impact from the divestiture of the Clinical Services business[114]. - Adjusted EBITDA for the same period was $269.5 million, down from $283.0 million in 2024, reflecting a decrease of $13.5 million[111]. - The gross margin contracted by 20 basis points to 33.8% due to unfavorable manufacturing variances, partially offset by lower inventory reserves[117][118]. - Operating income increased slightly to $147.4 million, up by $1.1 million from $146.3 million in 2024, driven by lower SG&A expenses[119][120]. - Net income rose to $64.5 million, an increase of $4.1 million compared to $60.4 million in the previous year, primarily due to higher operating income and lower interest expenses[121]. - Adjusted EBITDA for the three months ended March 31, 2025, decreased by $13.5 million or 4.8% to $269.5 million, impacted by a foreign currency translation loss of $3.2 million[124][125]. - Adjusted Operating Income fell by $15.6 million or 6.0% to $242.8 million, with a foreign currency translation impact of $3.0 million[127][135]. - In the Laboratory Solutions segment, Adjusted Operating Income declined by $9.2 million or 6.2%, primarily due to the divestiture of the Clinical Services business[128]. - The Bioscience Production segment saw a decrease in Adjusted Operating Income of $3.5 million or 2.8%, driven by unfavorable manufacturing variances[129]. - Net income for the three months ended March 31, 2025, increased to $64.5 million, representing a net income margin of 4.1% compared to 3.6% in the prior year[134]. Cash Flow and Liquidity - Cash generated from operating activities was $109.3 million, a decrease of $32.3 million compared to $141.6 million in the same period last year[142][145]. - Free cash flow decreased by $24.8 million to $82.1 million, primarily due to lower cash flow from operating activities[145]. - The company ended the quarter with $315.7 million in cash and cash equivalents, with $230.9 million or 73.1% held by non-U.S. subsidiaries[140]. - Total liquidity available was $1,442.1 million, including $1,126.4 million in unused credit facilities[138]. - The company has a $702.0 million debt repayment due in the next twelve months related to secured notes[136]. Strategic Initiatives - The company expects to generate approximately $400 million in run rate gross savings by the end of 2027 from its global cost transformation initiative[104]. - The divestiture of the Clinical Services business was completed on October 17, 2024, and is not classified as a discontinued operation[100]. - The company continues to invest in innovation, focusing on product development in emerging areas such as cell and gene therapy[102]. - Inflationary pressures have impacted all cost categories, although pricing and productivity measures have been implemented to mitigate these effects[101].