avnt-20230930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________________________

FORM 10-Q

________________________________________________

(Mark One)


☒			Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2023


☐			Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from to .

Commission file number 1-16091

________________________________________________

AVIENT CORPORATION

(Exact name of registrant as specified in its charter)

________________________________________________


Ohio									34-1730488
(State or other jurisdiction									(I.R.S. Employer Identification No.)
of incorporation or organization)

Avient Center
33587 Walker Road									44012
Avon Lake, Ohio
(Address of principal executive offices)									(Zip Code)

Registrant’s telephone number, including area code: (440) 930-1000

Former name, former address and former fiscal year, if changed since last report: Not Applicable

_______________________________________________

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Shares, par value $.01 per share	AVNT	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

The number of the registrant’s outstanding common shares, par value $.01 per share, as of September 30, 2023 was 91,161,436.

AVIENT CORPORATION

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Avient Corporation

Condensed Consolidated Statements of Income (Unaudited)

(In millions, except per share data)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Sales	$	753.7	$	823.3	$	2,423.8	$	2,606.5
Cost of sales	558.4		627.9		1,740.2		1,895.8
Gross margin	195.3		195.4		683.6		710.7
Selling and administrative expense	161.0		154.8		529.9		467.8

Operating income	34.3		40.6		153.7		242.9
Interest expense, net	(30.3)		(37.3)		(88.5)		(70.4)

Other income (expense), net	1.0		(32.3)		1.5		(31.3)
Income (loss) from continuing operations before income taxes	5.0		(29.0)		66.7		141.2
Income tax benefit (expense)	0.1		1.2		(18.0)		(41.5)
Net income (loss) from continuing operations	5.1		(27.8)		48.7		99.7
Income (loss) from discontinued operations, net of income taxes	—		17.1		(0.9)		58.8
Net income (loss)	$	5.1	$	(10.7)	$	47.8	$	158.5
Net loss (income) attributable to noncontrolling interests	—		0.4		(0.7)		0.1
Net income (loss) attributable to Avient common shareholders	$	5.1	$	(10.3)	$	47.1	$	158.6

Earnings (loss) per share attributable to Avient common shareholders - Basic
Continuing operations	$	0.06	$	(0.30)	$	0.53	$	1.09
Discontinued operations	—		0.19		(0.01)		0.65
Total	$	0.06	$	(0.11)	$	0.52	$	1.74

Earnings (loss) per share attributable to Avient common shareholders - Diluted
Continuing operations	$	0.06	$	(0.30)	$	0.52	$	1.08
Discontinued operations	—		0.19		(0.01)		0.64
Total	$	0.06	$	(0.11)	$	0.51	$	1.72

Weighted-average shares used to compute earnings per common share:
Basic	91.1		90.9		91.1		91.3
Dilutive impact of share-based compensation	0.8		—		0.7		0.7
Diluted	91.9		90.9		91.8		92.0

Anti-dilutive shares not included in diluted common shares outstanding	0.5		1.0		0.6		0.3

Cash dividends declared per share of common stock	$	0.2475	$	0.2375	$	0.7425	$	0.7125

See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

1 AVIENT CORPORATION

Avient Corporation

Consolidated Statements of Comprehensive Income (Unaudited)

(In millions)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net income (loss)	$	5.1	$	(10.7)	$	47.8	$	158.5
Other comprehensive (loss) income, net of tax:
Translation adjustments and related hedging instruments	(41.9)		(61.1)		(40.6)		(120.4)
Cash flow hedges	—		0.2		—		2.3
Other	(1.6)		—		(4.7)		—
Total other comprehensive loss	(43.5)		(60.9)		(45.3)		(118.1)
Total comprehensive (loss) income	(38.4)		(71.6)		2.5		40.4
Comprehensive loss (income) attributable to noncontrolling interests	—		0.4		(0.7)		0.1
Comprehensive (loss) income attributable to Avient common shareholders	$	(38.4)	$	(71.2)	$	1.8	$	40.5

See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

2 AVIENT CORPORATION

Avient Corporation

Condensed Consolidated Balance Sheets

(In millions)


	(Unaudited) September 30, 2023		December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	439.6	$	641.1
Accounts receivable, net	436.9		440.6
Inventories, net	349.6		372.7

Other current assets	138.2		115.3
Total current assets	1,364.3		1,569.7
Property, net	978.2		1,049.2
Goodwill	1,681.3		1,671.9
Intangible assets, net	1,563.0		1,597.6


Other non-current assets	202.9		196.6
Total assets	$	5,789.7	$	6,085.0

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term and current portion of long-term debt	$	9.5	$	2.2
Accounts payable	389.5		454.4


Accrued expenses and other current liabilities	328.1		412.8
Total current liabilities	727.1		869.4
Non-current liabilities:
Long-term debt	2,070.8		2,176.7
Pension and other post-retirement benefits	65.1		67.2
Deferred income taxes	293.2		342.5


Other non-current liabilities	337.6		276.4
Total non-current liabilities	2,766.7		2,862.8

SHAREHOLDERS' EQUITY
Avient shareholders’ equity	2,276.9		2,334.5
Noncontrolling interest	19.0		18.3
Total equity	2,295.9		2,352.8
Total liabilities and equity	$	5,789.7	$	6,085.0

See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

3 AVIENT CORPORATION

Avient Corporation

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In millions)


	Nine Months Ended September 30,
	2023		2022
Operating Activities
Net income	$	47.8	$	158.5
Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization	142.6		110.3
Accelerated depreciation	1.9		4.0




Share-based compensation expense	9.7		9.5


Changes in assets and liabilities, net of the effect of acquisitions:
Increase in accounts receivable	(5.7)		(66.5)
Decrease (increase) in inventories	16.5		(12.5)
(Decrease) increase in accounts payable	(59.1)		43.5




Taxes paid on gain on sale of business	(104.1)		—
Accrued expenses and other assets and liabilities, net	(2.5)		(22.9)

Net cash provided by operating activities	47.1		223.9
Investing activities
Capital expenditures	(75.0)		(55.1)
Business acquisitions, net of cash acquired	—		(1,426.1)
Settlement of foreign exchange derivatives	—		93.3
Net proceeds from divestiture	7.3		—
Other investing activities	2.3		—
Net cash used by investing activities	(65.4)		(1,387.9)
Financing activities
Debt proceeds	—		1,300.0


Purchase of common shares for treasury	—		(36.4)
Cash dividends paid	(67.6)		(65.2)

Repayment of long-term debt	(103.8)		(6.8)

Debt financing costs	(2.3)		(49.3)


Other financing	(2.3)		(4.2)
Net cash (used) provided by financing activities	(176.0)		1,138.1
Effect of exchange rate changes on cash	(7.2)		(30.9)
Decrease in cash and cash equivalents	(201.5)		(56.8)
Cash and cash equivalents at beginning of year	641.1		601.2
Cash and cash equivalents at end of period	$	439.6	$	544.4

See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

4 AVIENT CORPORATION

Avient Corporation

Consolidated Statements of Shareholders' Equity (Unaudited)

(In millions)


	Common Shares		Shareholders’ Equity
	Common Shares	Common Shares Held in Treasury	Common Shares		Additional Paid-in Capital		Retained Earnings		Common Shares Held in Treasury		Accumulated Other Comprehensive (Loss) Income		Total Avient shareholders' equity		Non-controlling Interests		Total equity
Balance at January 1, 2023	122.2	(31.3)	$	1.2	$	1,520.5	$	1,823.6	$	(935.0)	$	(75.8)	$	2,334.5	$	18.3	$	2,352.8
Net income	—	—	—		—		19.9		—		—		19.9		0.5		20.4
Other comprehensive income	—	—	—		—		—		—		16.1		16.1		—		16.1

Cash dividends declared -- $0.2475 per share	—	—	—		—		(22.5)		—		—		(22.5)		—		(22.5)


Share-based compensation and exercise of awards	—	—	—		0.5		—		1.4		—		1.9		—		1.9

Balance at March 31, 2023	122.2	(31.3)	$	1.2	$	1,521.0	$	1,820.9	$	(933.6)	$	(59.7)	$	2,349.8	$	18.8	$	2,368.6
Net income	—	—	—		—		22.1		—		—		22.1		0.2		22.3
Other comprehensive loss	—	—	—		—		—		—		(17.9)		(17.9)		—		(17.9)

Cash dividends declared -- $0.2475 per share	—	—	—		—		(22.5)		—		—		(22.5)		—		(22.5)


Share-based compensation and exercise of awards	—	—	—		3.1		—		0.1		—		3.2		—		3.2

Balance at June 30, 2023	122.2	(31.3)	$	1.2	$	1,524.1	$	1,820.5	$	(933.5)	$	(77.6)	$

SEC Form 10-Q filed by Avient Corporation