Avient Updates Third Quarter and Full Year 2022 Forecast

• Completed acquisition of DSM's Protective Materials business (including the Dyneema^® brand) on September 1st and announced the agreement to sell the Distribution segment on August 12th. The Distribution segment will be reported as discontinued operations.
   
• Adjusted EPS guidance reduced $0.30 for full year 2022 to reflect weaker demand conditions and unfavorable foreign exchange

CLEVELAND, Sept. 27, 2022 /PRNewswire/ -- Avient Corporation (NYSE: AVNT), a leading provider of specialized and sustainable solutions, announced an update to its third quarter and full year forecast to reflect the company's recent acquisition and divestiture activity and current demand outlook.

"During the third quarter we completed the acquisition of the protective materials business of DSM ("Dyneema") and announced that we reached an agreement to divest our Distribution segment.  These transactions represent the most recent steps in our multi-year portfolio transformation to becoming a pure play specialty formulator," said Robert M. Patterson, Chairman, President and Chief Executive Officer, Avient Corporation.

The company has updated its projections to include Dyneema, present the Distribution segment as discontinued operations, and adjust its outlook to reflect current demand conditions and additional unfavorable currency exchange.

Mr. Patterson continued, "The war in Ukraine and related energy supply concerns have further eroded consumer sentiment and demand in Europe, and we have not seen a recovery in Asia from the COVID-19 lockdowns in the first half of the year. The economic environment is further challenged by rapidly rising interest rates in the U.S., which have negatively impacted demand trends in the Americas.  In addition, and in the near term, we believe current global demand is likely further weakened by customer inventory destocking."

The acquisition of Dyneema closed on September 1 and the Distribution sale is expected to be completed in the fourth quarter.  The company intends to use the net proceeds from its Distribution sale to pay down its 2023 Senior Notes and a portion of the term loan.

The below table provides detail related to the company's updated guidance for adjusted EPS, which will now exclude intangible amortization from acquisitions.  Pro Forma adjusted EPS presents the full year 2022 as if the Dyneema acquisition and Distribution divestiture had happened as of January 1, 2022 and that net proceeds from the sale of Distribution were used to pay down the company's 2023 Senior Notes and a portion of the term loan, simultaneously.

"Following the acquisition of Dyneema and divestiture of Distribution, the company expects to be modestly levered at 2.9x net debt to pro forma adjusted EBITDA, positioning us well to navigate the near term uncertainty in economic conditions," said Mr. Patterson. 

Mr. Patterson added, "Most importantly, we have not wavered from our strategy of becoming a specialty formulator.  Over the last few years, we have overhauled our portfolio despite the unprecedented impacts of COVID, the war in Ukraine, and resulting supply chain issues and inflation.  We have divested more cyclical, less specialized businesses and made significant investments in innovation, composites and sustainable solutions.  We remain confident in the long-term growth potential of our new portfolio."

To facilitate investor review, Avient has provided pro forma financial information to reflect the Distribution segment as discontinued operations and the Dyneema acquisition as if it occurred on January 1, 2021. This financial information can be found on the company's website at www.avient.com/investors.

About Avient

Avient Corporation (NYSE: AVNT) 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 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, but are not limited to: 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, including recessionary conditions; the current and potential future impact of the COVID-19 pandemic on our business, results of operations, financial position or cash flows; 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 raise or sustain prices for products or services; our ability to pay regular quarterly cash dividends and the amounts and timing of any future dividends; information systems failures and cyberattacks; 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 ability to obtain required regulatory approvals and otherwise consummate the proposed sale of the Distribution business; and other factors affecting our business beyond our control, including without limitation, changes in the general economy, changes in interest rates, changes in the rate of inflation and any recessionary conditions. The above list of factors is not exhaustive.

Any forward-looking statement speaks only as of the date on which such statement is made, and 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 Financial Measures

The Company uses both GAAP (generally accepted accounting principles) and non-GAAP financial measures. The non-GAAP financial measures include: net debt to pro forma adjusted EBITDA and adjusted EPS. Avient's chief operating decision maker uses these financial measures to monitor and evaluate the ongoing performance of the Company and each business segment and to allocate resources.

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.

SOURCE Avient Corporation