Avient Announces Record Second Quarter 2021 Results, Increases Full Year Guidance

CLEVELAND, July 30, 2021 /PRNewswire/ -- Avient Corporation (NYSE: AVNT), a leading provider of specialized and sustainable material solutions, today reported its second quarter results for 2021. Second quarter 2021 GAAP EPS from continuing operations was $0.74 compared to $0.25 in the prior year second quarter.  The company noted that GAAP EPS includes special items (Attachment 3), which impacted EPS in both periods and were primarily associated with environmental and restructuring costs.  Unless otherwise noted herein, all comparisons to prior year results are pro forma* for the Clariant Masterbatch acquisition.

"I'm very pleased with our results as second quarter sales and adjusted EPS reached all-time highs driven by our portfolio of sustainable solutions and continued strong demand conditions," said Robert M. Patterson, Chairman, President and Chief Executive Officer, Avient Corporation.   "In addition, it has been just over a year since we acquired Clariant Masterbatch and we became Avient.  Our first year of integration has been a tremendous success." 

"But none of this has been easy," Mr. Patterson continued.  "We are delivering record results against a backdrop of incredibly challenging conditions, including the ongoing COVID-19 pandemic, significant supply chain disruptions and inflation.  I'm more proud that we have been able to overcome these additional costs to increase adjusted EPS, while serving our customers and keeping our employees healthy and safe."

The company cited robust demand across all end markets, particularly in consumer applications (up 67%) as revenue increased 42% to $1.235 billion. The revenue growth, coupled with expanding margins and synergy capture from the Clariant Masterbatch integration, led to a 107% increase in adjusted EPS to $0.87 versus $0.42 in the prior year quarter. 

The company also noted that on July 1, 2021 it acquired Magna Colours Ltd., a market leader in sustainable, water-based inks technology for the textile screen printing industry.  "Magna represents another addition to our growing portfolio of sustainable solutions, as brand owners seek eco-conscious materials for their customers," Mr. Patterson said.

Third Quarter and Full Year 2021 Outlook

Commenting on the company's 2021 outlook, Mr. Patterson said, "Demand continues to be strong and I remain confident in our team's ability to continue navigating the supply chain dynamics to ensure we deliver for our customers.  We expect seasonality of the business to play out in the third quarter and estimate sales of $1.15 billion and adjusted EPS of $0.68. This represents sales and adjusted EPS growth of 24% and 48%, respectively, over the prior year third quarter."

Mr. Patterson added, "For the full year 2021, we are also increasing estimates and now expect revenues of approximately $4.6 to $4.7 billion and adjusted EPS of $3.00, a 55% increase over the prior year."

Sustainability Report and Upcoming Investor Day

"We plan to host an investor day in New York City on December 9 to highlight our sustainable solutions portfolio, Clariant Masterbatch integration synergies and future growth plans.  We are optimistic we can host this meeting in person, but will make arrangements to do so by video if necessary," said Jamie Beggs, Senior Vice President and Chief Financial Officer, Avient Corporation.

"For an advance look at our sustainability initiatives, please review our most recent sustainability report, which will soon be available on our website," added Ms. Beggs.  "Our report not only captures our commitments and performance but also clearly demonstrates how sustainability is an unquestionable growth driver for Avient going forward."

The comprehensive report includes expanded 2030 Sustainability Goals and highlights related to each of Avient's four cornerstones – People, Products, Planet and Performance.

The company noted it will provide more details on its second quarter results and outlook during the webcast scheduled for 8:00 a.m. Eastern Time on July 30, 2021. 

*Pro Forma

The company acquired the Clariant Masterbatch business ("CMB") on July 1, 2020 (the "Acquisition Date").  Unless otherwise noted, all comparisons to prior year financial results herein are presented on a pro forma basis and referred to as "organic" such that the prior periods include the business results of CMB for that prior period.  Management believes this provides better comparability of the performance of the combined businesses. Refer to Attachment 7 Reconciliation of Non-GAAP Financial Measures for details regarding adjustments to previously reported results to arrive to the pro forma financial metrics.   

Webcast Details

The webcast can be viewed live at avient.com/investors, or by clicking here: https://edge.media-server.com/mmc/p/p4owuchb. To participate in the audio-only portion of the call, dial 1-844-835-7433 (domestic) or 1-914-495-8589 (international) and provide conference ID number 2587092.  There will be a question and answer session following the company's presentation and prepared remarks.

A recording of the webcast and the slide presentation will be available at avient.com/investors.  In addition, a recording of the audio will be available for one week, beginning at 11:00 a.m. ET on Friday, July 30, 2021.  To access, dial 1-855-859-2056 (domestic) or 1-404-537-3406 (international) and provide conference ID number 2587092.

About Avient

Avient Corporation (NYSE: AVNT), with expected 2021 revenues of $4.6 to $4.7 billion, provides specialized and sustainable material solutions that transform customer challenges into opportunities, bringing new products to life for a better world. Examples include:

• Unique technologies that improve the recyclability of products and enable recycled content to be incorporated, thus advancing a more circular economy
• Light-weighting solutions that replace heavier traditional materials like metal, glass and wood, which can improve fuel efficiency in all modes of transportation and reduce carbon footprint
• Sustainable infrastructure solutions that increase energy efficiency, renewable energy, natural resource conservation and fiber optic / 5G network accessibility

Avient employs approximately 8,400 associates and is certified ACC Responsible Care®, a founding member of the Alliance to End Plastic Waste and certified Great Place to Work®.  For more information, visit www.avient.com.

Forward-looking Statements 

In this press release, statements that are not reported financial results or other historical information are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give current expectations or forecasts of future events and are not guarantees of future performance. They are based on management's expectations that involve a number of business risks and uncertainties, any of which could cause actual results to differ materially from those expressed in or implied by the forward-looking statements. They use words such as "will," "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," and other words and terms of similar meaning in connection with any discussion of future operating or financial condition, performance and/or sales. Factors that could cause actual results to differ materially from those implied by these forward-looking statements include disruptions, uncertainty or volatility in the credit markets that could adversely impact the availability of credit already arranged and the availability and cost of credit in the future; the effect on foreign operations of currency fluctuations, tariffs and other political, economic and regulatory risks; the current and potential future impact of the COVID-19 pandemic on our business, results of operations, financial position or cash flows including without any limitation, any supply chain and logistics issues; our ability to achieve the strategic and other objectives relating to the acquisition of Clariant's Masterbatch business, including any expected synergies; changes in polymer consumption growth rates and laws and regulations regarding plastics in jurisdictions where we conduct business; fluctuations in raw material prices, quality and supply, and in energy prices and supply; production outages or material costs associated with scheduled or unscheduled maintenance programs; unanticipated developments that could occur with respect to contingencies such as litigation and environmental matters; an inability to achieve the anticipated financial benefit from initiatives related to acquisition and integration working capital reductions, cost reductions and employee productivity goals; our ability to pay regular quarterly cash dividends and the amounts and timing of any future dividends; information systems failures and cyberattacks; our ability to consummate and successfully integrate acquisitions; and amounts for cash and non-cash charges related to restructuring plans that may differ from original estimates, including because of timing changes associated with the underlying actions. The above list of factors is not exhaustive.

We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise. You are advised to consult any further disclosures we make on related subjects in our reports on Form 10-Q, 8-K and 10-K that we provide to the Securities and Exchange Commission.

Non-GAAP Reconciliation

The Company does not provide reconciliations of forward-looking non-GAAP financial measures, such as outlook for adjusted earnings per share, to the most comparable GAAP financial measures on a forward-looking basis because the Company is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and amount of certain items, such as, but not limited to, restructuring costs, environmental remediation costs, acquisition related costs, and other non-routine costs. Each of such adjustments has not yet occurred, are out of the Company's control and/or cannot be reasonably predicted. For the same reasons, the Company is unable to address the probable significance of the unavailable information.

Senior management uses comparisons of adjusted net income from continuing operations attributable to Avient shareholders and diluted adjusted earnings per share (EPS) from continuing operations attributable to Avient shareholders, excluding special items, to assess performance and facilitate comparability of results. Senior management believes these measures are useful to investors because they allow for comparison to Avient's performance in prior periods without the effect of items that, by their nature, tend to obscure Avient's operating results due to the potential variability across periods based on timing, frequency and magnitude. Non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation from, or solely as alternatives to, financial measures prepared in accordance with GAAP. Below is a reconciliation of these non-GAAP financial measures to their most directly comparable financial measures calculated and presented in accordance with GAAP. See Attachment 3 for a definition and summary of special items.

The table below reconciles pre-special income tax expense and the pre-special effective tax rate to their most comparable US GAAP figures.

The following pro forma adjustments are referenced by management to provide comparable business performance by incorporating the Clariant Masterbatch business in periods prior to the acquisition date (July 1, 2020). Financial information referenced here is provided to aid in reconciling back to the most comparable GAAP figures.