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Avient (AVNT) - 2025 Q2 - Quarterly Results
Avient Avient (US:AVNT)2025-08-01 10:01

Second Quarter 2025 Results Overview This section covers Avient's Q2 2025 financial performance, management commentary, and business outlook, highlighting key financial metrics and strategic direction Q2 2025 Financial Highlights Avient reported increased sales and EPS for Q2 2025, with adjusted EPS exceeding guidance, driven by organic revenue growth and strong operational performance. The company also narrowed its full-year adjusted EPS guidance and made significant debt repayments Q2 2025 Key Financial Metrics | Metric | Q2 2025 | Q2 2024 | Change | | :----- | :------ | :------ | :----- | | Sales | $866.5 million | $849.7 million | +2.0% | | GAAP EPS | $0.57 | $0.36 | +58.3% | | Adjusted EPS | $0.80 | $0.76 | +5.3% | - Second quarter sales of $867 million reflect 2% growth over the prior year quarter and includes a favorable impact of 1% from foreign exchange5 - Second quarter 2025 GAAP EPS includes special items of $0.07 and $0.16 of intangible amortization expense2 - Second quarter 2025 adjusted EPS includes a favorable impact of $0.01 attributable to foreign exchange3 2025 Full-Year Adjusted EPS Guidance | Metric | Previous Guidance | New Guidance | | :----- | :---------------- | :----------- | | 2025 Full-Year Adjusted EPS | $2.70 to $2.94 | $2.77 to $2.87 | - Strong cash flow from operations of $113 million in the quarter supported $50 million of debt repayment; on-track to reduce debt in total by $100 million to $200 million by year-end5 Management Commentary and Business Outlook Management highlighted mixed demand conditions, with resilience in defense and healthcare offsetting weakness in consumer markets, leading to expanded adjusted EBITDA margins. The company narrowed its full-year guidance for adjusted EBITDA and EPS and is on track for significant debt reduction - Demand conditions were mixed across end markets; defense and healthcare demand remained resilient, growing double digits, offsetting weak demand in consumer6 - Adjusted EBITDA margins expanded 30 basis points to 17.2% in Q2 20256 - Company expects similar demand trends in the second half of the year, with momentum from high-profit portfolios in defense and healthcare markets7 2025 Full-Year Guidance Updates | Metric | Previous Guidance | New Guidance | | :----- | :---------------- | :----------- | | 2025 Full-Year Adjusted EBITDA | N/A | $545 to $560 million | | 2025 Full-Year Adjusted EPS | $2.70 to $2.94 | $2.77 to $2.87 | - For the third quarter, adjusted EPS is expected to be $0.70, representing 8% growth over the prior year quarter, largely driven by higher margins7 - Company is on track to reduce total debt by $100 million to $200 million by year-end, having already repaid $50 million in Q27 - Minimal direct impact from tariffs is expected as raw materials are primarily sourced and products manufactured locally8 Company Information This section provides an overview of Avient Corporation's business, its focus on materials solutions and sustainability, and contact details for investor and media relations About Avient Avient Corporation is an innovator of materials solutions, focusing on customer success and sustainability. They offer a broad portfolio including colorants, advanced composites, functional additives, engineered materials, and Dyneema®, serving customers globally with over 9,000 employees - Avient Corporation (NYSE: AVNT) is an innovator of materials solutions focused on customer success and enabling a sustainable world15 - The company harnesses the collective strength of more than 9,000 employees worldwide15 - Expanding portfolio includes colorants, advanced composites, functional additives, engineered materials, and Dyneema®, the world's strongest fiber™15 Investor and Media Contacts Provides contact information for investor relations and corporate communications personnel at Avient Corporation - Investor Relations Contact: Giuseppe (Joe) Di Salvo, Vice President, Treasurer and Investor Relations, +1 440-930-1921, giuseppe.disalvo@avient.com20 - Media Contact: Kyle G. Rose, Vice President, Corporate Communications, +1 440-930-3162, kyle.rose@avient.com20 GAAP Financial Statements This section presents Avient's unaudited condensed consolidated GAAP financial statements, including statements of income, balance sheets, and cash flows for specified periods Condensed Consolidated Statements of Income Presents the GAAP income statement for the three and six months ended June 30, 2025 and 2024, showing sales, gross margin, operating income, net income, and diluted earnings per share Condensed Consolidated Statements of Income (in millions, except per share data) | Metric | Q2 2025 (3 Months) | Q2 2024 (3 Months) | YTD 2025 (6 Months) | YTD 2024 (6 Months) | | :------------------------------------- | :----------------- | :----------------- | :------------------ | :------------------ | | 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 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 Balance Sheets Provides the GAAP balance sheet as of June 30, 2025, and December 31, 2024, detailing current and non-current assets, liabilities, and shareholders' equity Condensed Consolidated Balance Sheets (in millions) | Metric | June 30, 2025 | December 31, 2024 | Change | | :-------------------------------- | :------------ | :---------------- | :----- | | Total assets | $6,133.3 | $5,811.1 | +$322.2 | | Total liabilities | $3,759.3 | $3,481.5 | +$277.8 | | Total equity | $2,374.0 | $2,329.6 | +$44.4 | | Cash and cash equivalents | $474.5 | $544.5 | -$70.0 | | Accounts receivable, net | $523.4 | $399.5 | +$123.9 | | Inventories, net | $387.5 | $346.8 | +$40.7 | | Long-term debt | $2,020.0 | $2,059.3 | -$39.3 | Condensed Consolidated Statements of Cash Flows Outlines the GAAP cash flow statement for the six months ended June 30, 2025, and 2024, categorizing cash flows from operating, investing, and financing activities, showing a decrease in cash and cash equivalents Condensed Consolidated Statements of Cash Flows (in millions) | Metric | YTD 2025 (6 Months) | YTD 2024 (6 Months) | Change | | :-------------------------------- | :------------------ | :------------------ | :----- | | Net cash provided by operating activities | $61.7 | $63.1 | -$1.4 | | Net cash used by investing activities | ($39.5) | ($54.5) | +$15.0 | | Net cash used by financing activities | ($106.4) | ($54.8) | -$51.6 | | Decrease in cash and cash equivalents | ($70.0) | ($56.4) | -$13.6 | | Cash and cash equivalents at end of period | $474.5 | $489.4 | -$14.9 | Non-GAAP Financial Measures and Reconciliations This section explains Avient's use of non-GAAP financial measures and provides detailed reconciliations to their GAAP equivalents for adjusted net income, EPS, operating income, and EBITDA Explanation of Non-GAAP Financial Measures Avient uses various non-GAAP financial measures, such as adjusted EPS, adjusted EBITDA, and organic performance, to evaluate ongoing performance and allocate resources, believing these provide useful insights to investors by excluding certain variable items. The company does not provide forward-looking reconciliations due to inherent difficulties in forecasting certain items - Non-GAAP financial measures include organic performance, adjusted EPS, adjusted operating income, adjusted EBITDA, adjusted EBITDA margins, free cash flow, and adjusted free cash flow12 - These measures are used by Avient's chief operating decision maker to monitor and evaluate performance and allocate resources, and are believed to be useful to investors for comparability12 - The Company does not provide reconciliations of forward-looking non-GAAP financial measures to GAAP due to the inherent difficulty of forecasting the timing and amount of certain items13 Reconciliation of Adjusted Net Income and EPS Reconciles GAAP net income and EPS to adjusted net income and adjusted EPS for the three and six months ended June 30, 2025 and 2024, by adjusting for special items and intangible amortization expense Reconciliation of Adjusted Net Income and EPS (in millions, except per share data) | Metric | Q2 2025 (3 Months) | Q2 2024 (3 Months) | YTD 2025 (6 Months) | YTD 2024 (6 Months) | | :------------------------------------- | :----------------- | :----------------- | :------------------ | :------------------ | | Net income attributable to Avient common shareholders (GAAP) | $52.6 | $33.6 | $32.4 | $83.0 | | Special items, after-tax | $5.7 | $21.8 | $81.4 | $27.3 | | Amortization expense, after-tax | $15.2 | $14.8 | $29.7 | $29.7 | | Adjusted net income | $73.5 | $70.2 | $143.5 | $140.0 | | Diluted EPS (GAAP) | $0.57 | $0.36 | $0.35 | $0.90 | | Adjusted EPS | $0.80 | $0.76 | $1.56 | $1.52 | Summary of Special Items Details the impact of special items on cost of sales, selling and administrative expense, operating income, and net income for the three and six months ended June 30, 2025 and 2024, including restructuring costs, environmental remediation, and a significant cloud-based ERP system impairment in 2025 Summary of Special Items (in millions, except per share data) | Impact on | Q2 2025 (3 Months) | Q2 2024 (3 Months) | YTD 2025 (6 Months) | YTD 2024 (6 Months) | | :------------------------------------- | :----------------- | :----------------- | :------------------ | :------------------ | | Cost of sales | ($3.8) | ($21.6) | ($11.5) | ($22.0) | | Selling and administrative expense | ($3.2) | ($5.6) | ($95.0) | ($11.4) | | Operating income | ($7.0) | ($27.2) | ($106.5) | ($33.4) | | Net income | ($5.7) | ($21.8) | ($81.4) | ($27.3) | | Diluted EPS impact | ($0.07) | ($0.24) | ($0.89) | ($0.30) | - Special items for YTD 2025 include a significant cloud-based enterprise resource planning system impairment of $86.3 million impairment within selling and administrative expense28 - Special items are defined as charges related to specific strategic initiatives or financial restructuring, such as consolidation of operations, acquisition-related costs, employee separation costs, asset impairments, and environmental remediation costs28 Reconciliation of Adjusted Operating Income and EBITDA Reconciles GAAP operating income to adjusted operating income and GAAP net income to EBITDA and adjusted EBITDA for the three and six months ended June 30, 2025 and 2024, by adding back special items, interest, taxes, depreciation, and amortization. Adjusted EBITDA margin for Q2 2025 was 17.2% Reconciliation of Adjusted Operating Income and EBITDA (in millions) | Metric | Q2 2025 (3 Months) | Q2 2024 (3 Months) | YTD 2025 (6 Months) | YTD 2024 (6 Months) | | :------------------------------------- | :----------------- | :----------------- | :------------------ | :------------------ | | Adjusted gross margin | $281.7 | $279.2 | $552.6 | $557.8 | | Adjusted gross margin as a percent of sales | 32.5% | 32.9% | 32.6% | 33.2% | | Adjusted operating income | $103.1 | $99.7 | $203.3 | $199.9 | | Adjusted operating income as a percent of sales | 11.9% | 11.7% | 12.0% | 11.9% | | EBITDA | $142.2 | $116.5 | $187.8 | $253.9 | | Adjusted EBITDA | $148.9 | $143.3 | $293.6 | $286.4 | | Adjusted EBITDA as a percent of sales | 17.2% | 16.9% | 17.3% | 17.1% | Business Segment Operations This section details Avient's financial performance by business segment, including sales, operating income, and EBITDA for Color, Additives and Inks, and Specialty Engineered Materials Segment Sales and Profitability Provides a detailed breakdown of sales, gross margin, selling and administrative expense, operating income, depreciation & amortization, and EBITDA by business segment for the three and six months ended June 30, 2025 and 2024. The Color, Additives and Inks segment showed slight sales growth and increased operating income, while Specialty Engineered Materials saw sales growth but a decrease in operating income Segment Sales (in millions) | Segment Sales (in millions) | Q2 2025 (3 Months) | Q2 2024 (3 Months) | YTD 2025 (6 Months) | YTD 2024 (6 Months) | | :-------------------------- | :----------------- | :----------------- | :------------------ | :------------------ | | Color, Additives and Inks | $538.6 | $542.0 | $1,058.3 | $1,057.3 | | Specialty Engineered Materials | $329.7 | $308.1 | $638.1 | $622.5 | Segment Operating Income (in millions) | Segment Operating Income (in millions) | Q2 2025 (3 Months) | Q2 2024 (3 Months) | YTD 2025 (6 Months) | YTD 2024 (6 Months) | | :------------------------------------- | :----------------- | :----------------- | :------------------ | :------------------ | | Color, Additives and Inks | $90.3 | $86.1 | $168.9 | $160.9 | | Specialty Engineered Materials | $40.2 | $42.8 | $87.3 | $96.2 | | Corporate | ($34.4) | ($56.4) | ($159.4) | ($90.6) | Segment EBITDA (in millions) | Segment EBITDA (in millions) | Q2 2025 (3 Months) | Q2 2024 (3 Months) | YTD 2025 (6 Months) | YTD 2024 (6 Months) | | :--------------------------- | :----------------- | :----------------- | :------------------ | :------------------ | | Color, Additives and Inks | $112.7 | $107.9 | $213.0 | $204.6 | | Specialty Engineered Materials | $62.6 | $63.6 | $131.2 | $136.6 | | Corporate | ($32.6) | ($54.1) | ($155.5) | ($85.5) | Legal and Disclaimers This section includes important legal disclaimers regarding forward-looking statements and provides details for accessing the Q2 2025 earnings webcast and conference call Forward-Looking Statements This section contains a standard disclaimer regarding forward-looking statements, outlining the various business risks and uncertainties, such as market disruptions, currency fluctuations, supply chain issues, regulatory changes, and raw material prices, that could cause actual results to differ materially from projections. The company undertakes no obligation to publicly update these statements - Statements not reported financial results are 'forward-looking statements' subject to business risks and uncertainties17 - Factors causing actual results to differ include credit market volatility, currency fluctuations, tariffs, supply chain disruptions, regulatory changes, raw material prices, and demand for products17 - The company undertakes no obligation to publicly update forward-looking statements18 Webcast and Conference Call Details Provides information on how to access the webcast and conference call for the Q2 2025 results and full-year outlook, scheduled for August 1, 2025, at 8:00 a.m. Eastern Time, including links for live viewing and pre-registration for Q&A. A recording will be available online for one year - Avient will provide additional details on its 2025 second quarter and full year outlook during its webcast scheduled for 8:00 a.m. Eastern Time on August 1, 20259 - The webcast can be viewed live at avient.com/investors, and conference call participants should pre-register to receive dial-in information10 - A recording of the webcast and slide presentation will be available at avient.com/investors/events-presentations for one year11