Avient (US:AVNT)2025-11-05 18:12Sales Performance - Sales decreased by $8.7 million, or 1.1%, in Q3 2025 compared to Q3 2024, with a 2.9% decline excluding foreign exchange impacts[71] - For the nine months ended September 30, 2025, sales increased by $5.7 million, or 0.2%, with a 0.2% decline excluding foreign exchange impacts[72] - Sales in the Color, Additives and Inks segment decreased by $11.6 million, or 2.2%, in Q3 2025, while the Specialty Engineered Materials segment saw an increase of $3.1 million, or 1.1%[84][88] Gross Margin and Operating Income - Gross margin as a percentage of sales was 30.4% for Q3 2025, down from 32.1% in Q3 2024, primarily due to higher environmental remediation and restructuring charges[73] - Operating income decreased by $10.1 million, or 13.1%, in Q3 2025 compared to Q3 2024, and decreased by $79.8 million, or 32.7%, for the nine months[83] - Operating income for the Specialty Engineered Materials segment decreased by $8.0 million for the nine months ended September 30, 2025, due to higher operating costs[90] Expenses - Selling and administrative expenses decreased by $6.4 million in Q3 2025 but increased by $68.6 million for the nine months, mainly due to an impairment charge related to the S/4HANA project[76] - Corporate costs increased by $9.3 million in Q3 2025, primarily due to higher environmental remediation and restructuring charges[91] - Corporate costs increased by $78.1 million for the nine months ended September 30, 2025, primarily due to a $71.6 million impairment charge related to the cessation of the S/4HANA development[92] Cash Flow and Liquidity - Net cash provided by operating activities decreased by $0.4 million during the nine months ended September 30, 2025, compared to the same period in 2024, mainly due to higher incentive compensation payments and increased working capital[97] - Net cash used by investing activities was $64.2 million for the nine months ended September 30, 2025, compared to $79.5 million in 2024, reflecting capital expenditures[98] - Net cash used by financing activities was $181.7 million for the nine months ended September 30, 2025, primarily due to $100.2 million in long-term borrowings payments and $74.1 million in dividends paid[98] - As of September 30, 2025, total liquidity was $932.9 million, consisting of $445.6 million in cash and cash equivalents and $487.3 million in revolving credit availability[94] - Approximately 76% of the company's cash and cash equivalents were held outside the United States as of September 30, 2025[94] Debt and Financing - The company made voluntary prepayments of $100.0 million on its senior secured term loan during the nine months ended September 30, 2025[102] - The company refinanced its senior secured term loan on March 12, 2025, reducing the interest rate by 25 basis points[101] - Aggregate maturities of the principal amount of debt total $1,999.1 million, with $621.1 million due in 2029 and $1,376.5 million due thereafter[101] - The company expects to meet cash requirements for the remainder of 2025 through cash on hand, cash from operations, and available liquidity under its revolving credit facility[95] Interest and Tax - Interest expense, net decreased by $2.7 million in Q3 2025, driven by reduced interest rates and $100 million in prepayments on the senior secured term loan[77] - The effective tax rate for Q3 2025 was 23.5%, up from 22.5% in Q3 2024, influenced by jurisdictional earnings mix[78]