Avient Provides Third Quarter 2020 Performance Update

CLEVELAND, Sept. 24, 2020 /PRNewswire/ -- Avient Corporation (NYSE: AVNT), a leading provider of specialized and sustainable material solutions, provided third quarter financial performance expectations today as well as updated synergy estimates related to the Clariant Masterbatch acquisition.

"We are seeing a recovery in demand in the third quarter, and expect to deliver adjusted EPS of approximately $0.43," said ROBERT M. PATTERSON, Chairman, President and Chief Executive Officer, Avient Corporation.  "Most notably, our composites business is benefitting from increased demand for outdoor high performance applications.  As a result, we expect the Specialty Engineered Materials segment will deliver over 15% EBITDA growth versus the prior year third quarter."

Mr. Patterson added, "We are also benefitting from the acquisition of the Clariant Masterbatch business, which has been immediately accretive to adjusted EPS."  Excluding the impact of step up depreciation and amortization related to the acquisition, adjusted EPS for the third quarter is expected to be $0.51, which is 16% higher than the prior year.

"Our integration efforts are on track and very encouraging – culturally, commercially and operationally," Mr. Patterson continued.  "From a synergy standpoint, we've identified additional upside from our original $60 million estimate, and now expect to achieve a run rate of $75 million in cost reductions by the end of year three.  We do not foresee synergy capture being impacted by the pandemic."

The company noted that a number of end markets that were negatively impacted by the pandemic in the second quarter are recovering and expects third quarter sales and adjusted EBITDA to approximate $905 million and $107 million, respectively.  The company also stated it expects to generate $80 million of free cash flow during the quarter and is on-track to deliver $240 million of free cash flow for the year, which compares to $160 million in 2019.

"We are pleased to see early signs of recovery from the coronavirus pandemic," Mr. Patterson said. "Our manufacturing facilities are fully operational, our commercial team is collaborating with customers, and we remain fully committed to doing everything we can to support the ongoing recovery efforts."

About Avient

Avient Corporation (NYSE: AVNT), with pro forma revenues of $3.7 billion, provides specialized and sustainable material solutions that transform customer challenges into opportunities, bringing new products to life for a better world. Examples include:

• Barrier technologies that preserve the shelf-life and quality of food, beverages, medicine and other perishable goods through high-performance materials that require less plastic
• Light-weighting solutions that replace heavier traditional materials like metal, glass and wood, which can improve fuel efficiency in all modes of transportation
• Breakthrough technologies that minimize wastewater and improve the recyclability of materials and packaging across a spectrum of end uses

Avient employs approximately 9,100 associates and is certified ACC Responsible Care® and a founding member of the Alliance to End Plastic Waste.  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 the impact the COVID-19 pandemic has on our business, results from operations, financial condition and liquidity; our ability to achieve the strategic and other objectives relating to the acquisition of Clariant's Masterbatch business, including any expected synergies; our ability to successfully integrate Clariant's Masterbatch business and achieve the expected results of the acquisition of Clariant's Masterbatch business, including, without limitation, the acquisition being accretive; 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; changes in polymer consumption growth rates and laws and regulations regarding plastics in jurisdictions where we conduct business; changes in global industry capacity or in the rate at which anticipated changes in industry capacity come online; 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; an ability to achieve or delays in achieving or achievement of less than the anticipated financial benefit from initiatives related to acquisitions and integration, working capital reductions, costs reductions and employee productivity goals; information systems failures and cyberattacks; and other factors affecting our business beyond our control, including, without limitation, changes in the general economy, changes in interest rates and changes in the rate of inflation. 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 and free cash flow, 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.

Reconciliation of Non-GAAP Financial Measures (Unaudited)
 (Dollars in millions, except per share data)

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. Additionally, senior management reviews free cash flow, which is defined by the Company as cash flows from continuing operations less capital expenditures. 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.

With respect to our forecasted results for full-year 2020 adjusted EPS, the Company does not provide a reconciliation of this forward-looking non-GAAP financial measure because it is not possible for the Company 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.

Adjusted EPS attributable to Avient common shareholders is calculated as follows:

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SOURCE Avient Corporation

Investor Relations Contact: Joe Di Salvo, Vice President, Treasurer and Investor Relations, Avient Corporation, +1 440-930-1921, giuseppe.disalvo@avient.com; Media Contact: Kyle G. Rose, Vice President, Corporate Communications, Avient Corporation, +1 440-930-3162, kyle.rose@avient.com