Garland reported fourth-quarter adjusted gross profit of $104 million and adjusted gross margin of 52.4%, an increase of 170 basis points year-over-year. He attributed the improvement primarily to volume leverage and price, which more than offset inflation, with “slight headwinds from mix and tariffs.” For the full year, adjusted gross margin was 52.6%, up about 220 basis points from 2024 on similar drivers.CFO Jason Garland said acquisitions contributed about one percentage point to fourth-quarter reported ...

Core Insights - Engine Capital Management has significantly increased its investment in Avantor, acquiring 14.2 million shares valued at approximately $172 million, raising its total stake to $246.1 million as of September 30 [2][3][10] Company Overview - Avantor, Inc. is a global supplier of essential products and services for biopharma, healthcare, education, and advanced technology sectors, leveraging a broad portfolio and integrated supply chain to meet complex customer needs [6][9] - The company reported a market capitalization of $7.5 billion and a revenue of $6.6 billion for the trailing twelve months (TTM) [4] Financial Performance - In the latest quarter, Avantor's net sales decreased by 5% to $1.6 billion, and a non-cash goodwill impairment of $785 million resulted in a GAAP net loss of $712 million [11] - Despite the losses, the company generated an adjusted EBITDA of $268 million and free cash flow of $172 million, indicating ongoing cash generation capabilities [11] Investment Thesis - Avantor now constitutes 29.2% of Engine Capital Management's assets under management (AUM), suggesting a strong conviction in the company's long-term value despite recent operational challenges [3][12] - The current market conditions present a classic recovery opportunity for long-term investors, characterized by durable end-market exposure and a reset in valuation driven by market sentiment rather than solvency concerns [10][12]