Avient Corporation (AVNT) Updates Q3 and FY22 Guidance

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.

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