AVIENT CORP
For the period ended Mar 31, 2025. Filed May 6, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 6, 2025
AVNT$45.47+0.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-05.
0001122976-24-000066
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-06.
0001122976-25-000030
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 74 previous paragraphs and 66 current paragraphs.
42 unchanged; 14 reworded; 10 added; 18 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (10)
Current report
Sales decreased $2.4 million, or 0.3%, for the three months ended March 31, 2025. Unfavorable foreign currency impacts were 2.1%, while sales, excluding the impacts of foreign exchange, increased 1.8%. The sales increases were primarily within the packaging and healthcare end markets, partially offset by declines in the transportation and defense end markets.
Current report
Selling and administrative expense increased $78.3 million for the three months ended March 31, 2025, primarily driven by an impairment charge of $71.6 million associated with the Company's decision to cease development of the cloud-based enterprise resource planning system, S/4HANA, and charges of $14.7 million associated with unpaid contractual obligations for hosting fees. Offsetting these charges was lower compensation cost for the three months ended March 31, 2025 and unfavorable foreign currency impacts.
Current report
Interest expense, net increased $0.3 million for the three months ended March 31, 2025, primarily due to the write-off of unamortized issuance costs associated with refinancing our senior secured term loan in March 2025, partially offset by the benefit of reduced interest rates resulting from previous refinancing activity.
Current report
During the three months ended March 31, 2025, the Company’s effective tax rate resulted in a benefit of 25.2% versus an expense of 25.3% for the three months ended March 31, 2024. The income tax benefit was due to a pre-tax loss in the first quarter of 2025, which was driven by the Company's cloud-based enterprise resource planning system impairment. During the three months ended March 31, 2025, the 25.2% income tax benefit was higher than the U.S. federal rate of 21.0% due to the state and local tax benefit of the pre-tax loss. During the three months ended March 31, 2024, the Company's effective tax rate of 25.3% was above the U.S. federal rate of 21.0% primarily due to foreign withholding tax, tax on global intangible low-taxed income, non-deductible items, and an increase in foreign valuation allowances. These unfavorable items were partially offset by the U.S. research and development credit.
Current report
Sales increased $4.4 million, or 0.9%, in the three months ended March 31, 2025 compared to the three months ended March 31, 2024. Unfavorable foreign currency impacts were 2.4%, while sales, excluding the impacts foreign exchange, increased 3.3%. The sales increase was primarily within the packaging and building and construction end markets, partially offset by declines in the transportation end market.
Current report
Operating income increased $3.8 million, or 5.1%, in the three months ended March 31, 2025, primarily driven by increased sales and improved mix, which more than offset unfavorable foreign currency impacts.
Current report
Sales decreased $6.0 million, or 1.9%, in the three months ended March 31, 2025 compared to the three months ended March 31, 2024. Unfavorable foreign currency impacts were 1.5%, while sales, excluding the impacts of foreign exchange, decreased 0.4%. The sales decrease was primarily within the transportation and defense end markets, which more than offset an increase within the healthcare end market.
Current report
Operating income decreased $6.3 million, or 11.8%, for the three months ended March 31, 2025, primarily driven by the impacts of foreign exchange and lower sales along with unfavorable margin impact associated with lower defense sales.
Current report
Corporate costs increased $90.8 million for the three months ended March 31, 2025, primarily driven by an impairment charge of $71.6 million associated with the Company's decision to cease development of the cloud-based enterprise resource planning system, S/4HANA, charges of $14.7 million associated with unpaid contractual obligations for hosting fees, and increased restructuring costs of $12.1 million. Partially offsetting these charges was lower compensation cost for the three months ended March 31, 2025
Current report
•our ability to service our indebtedness and restrictions on our current and future operations due to our indebtedness;
Removed paragraphs (18)
Previous report
Sales increased $61.5 million, or 8.2%, and $70.1 million, or 2.9%, for the three and nine months ended September 30, 2024, respectively, primarily driven by increased demand. Demand increases were driven by the consumer, packaging, healthcare, defense and building and construction end markets, partially offset by weakness in the transportation and telecommunications end markets. There were unfavorable foreign currency impacts of 0.4% and 0.9% for the three and nine months ended September 30, 2024, respectively.
Previous report
Gross margin as a percentage of sales was 32.0% for the nine months ended September 30, 2024 compared to 28.2% for the nine months ended September 30, 2023. The gross margin improvement was driven primarily by the benefit from raw material deflation, mix improvement, lower environmental remediation costs of $24.3 million and lower restructuring charges of $15.5 million.
Previous report
Selling and administrative expense increased $23.2 million for the three months ended September 30, 2024, primarily driven by higher employee costs. Selling and administrative expense increased $23.6 million for the nine months ended September 30, 2024, primarily driven by higher employee costs, which more than offset lower restructuring charges of $7.2 million.
Previous report
Interest expense, net decreased $3.4 million and $8.4 million for the three and nine months ended September 30, 2024, respectively, primarily driven by the refinancing of our senior secured term loans in April 2024 and August 2023, which included a partial principal prepayment of $102.3 million during the third quarter of 2023.
Previous report
During the three months ended September 30, 2024, the Company’s effective tax rate was 22.5% compared to a benefit of 3.1% for the three months ended September 30, 2023. The higher effective tax rate in 2024 compared to 2023 was primarily driven by the favorable return-to-provision adjustment related to a capital loss deduction in 2023 not repeating in 2024.
Previous report
During the nine months ended September 30, 2024, the Company’s effective tax rate was 24.3% compared to 26.9% for the nine months ended September 30, 2023. The lower effective tax rate in 2024 was primarily driven by lower foreign valuation allowances in 2024. This was partially offset by the favorable return-to-provision adjustment related to a capital loss deduction in 2023 not repeating in 2024.
Previous report
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Previous report
Sales increased $35.0 million, or 7.2%, for the three months ended September 30, 2024, primarily driven by increased demand in the packaging, consumer, healthcare and building and construction end markets, partially offset by weakness in the transportation end market and an unfavorable foreign currency impact of 0.5%. Sales increased $30.8 million, or 2.0%, in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, primarily driven by increased demand in the packaging, consumer and building and construction end markets, partially offset by an unfavorable foreign currency impact of 0.8%.
Previous report
Operating income increased $11.0 million and $38.3 million for the three and nine months ended September 30, 2024, respectively, driven primarily by the impacts of the aforementioned sales increase and margin improvement associated with raw material deflation.
Previous report
Sales increased $26.7 million, or 10.0%, and $38.7 million, or 4.4%, for the three and nine months ended September 30, 2024, respectively, primarily driven by increased demand in defense, building and construction, consumer and healthcare end markets. This was partially offset by demand weakness in the telecommunications and transportation end markets. There was an unfavorable foreign currency impact of 0.7% for the nine months ended September 30, 2024.
Previous report
Operating income increased $6.1 million and $19.5 million for the three and nine months ended September 30, 2024, respectively, primarily due to the impacts of increased sales and mix improvement.
Previous report
Corporate costs decreased $25.8 million for the three months ended September 30, 2024, primarily driven by $35.7 million of lower environmental remediation costs, partially offset by higher employee costs. Corporate costs decreased $32.2 million for the nine months ended September 30, 2024 primarily driven by $24.3 million of lower environmental remediation costs and $22.7 million of lower restructuring charges, partially offset by higher employee costs.
Previous report
Net cash used by investing activities during the nine months ended September 30, 2023 of $65.4 million primarily reflects the impact of capital expenditures of $75.0 million, partially offset by proceeds received from the divestiture of the Distribution business of $7.3 million.
Previous report
Financing Activities —Net cash used by financing activities for the nine months ended September 30, 2024 of $93.8 million primarily reflects payment on long-term borrowings of $659.1 million, $70.5 million of dividends paid and $9.6 million of debt financing costs, partially offset by $650.0 million of proceeds from long-term borrowings.
Previous report
On September 19, 2024, the Company completed the issuance of $650.0 million in 6.250% Senior Notes which will mature on November 1, 2031 (the "2031 Notes"). The Company received proceeds of $641.9 million, net of financing costs, related to the issuance. Interest on the 2031 Notes is payable semi-annually in arrears on May 1 and November 1 of each year, commencing on May 1, 2025. The 2031 Notes were sold in a private offering and are senior unsecured obligations of the Company.
Previous report
Proceeds from the 2031 Notes and cash on hand were used to fully redeem the $650.0 million outstanding of the Company's 5.750% Senior Notes due May 15, 2025. The notes were redeemed at a redemption price equal to 100.0% of the principal amount.
Previous report
•our ability to achieve strategic objectives and successfully integrate acquisitions, including the implementation of a cloud-based enterprise resource planning system, S/4HANA;
Previous report
18 AVIENT CORPORATION
Reworded paragraphs (14)
Previous wording
We are a premier formulator of specialized and sustainable materials solutions that transform customer challenges into opportunities, bringing new products to life for a better world. Our products include specialty engineered materials, performance fibers, advanced composites, and color and additive systems. We are also a highly specialized developer and manufacturer of performance enhancing additives, liquid colorants and silicone colorants. Headquartered in Avon Lake, Ohio, we have manufacturing and warehouses across the globe. We provide value to our customers through our ability to link our knowledge of polymers and formulation technology with our manufacturing and supply chain capabilities to provide value-added solutions to designers, assemblers and processors of plastics. When used in this Quarterly Report on Form 10-Q, the terms “we,” “us,” “our,” “Avient” and the “Company” mean Avient Corporation and its consolidated subsidiaries.
Current wording
We are an innovator of materials solutions to help our customers succeed, while enabling a sustainable world. Our products include specialty engineered materials, performance fibers, advanced composites, and color and additive solutions. We are also a highly specialized developer and manufacturer of performance enhancing additives, liquid colorants and silicone colorants. Headquartered in Avon Lake, Ohio, we have manufacturing sites, research and development facilities, design centers and warehouses around the globe. We provide value to our customers through our ability to link our knowledge of polymers and materials science with our manufacturing and supply chain capabilities to provide value-added solutions to designers, assemblers and processors of materials. When used in this Quarterly Report on Form 10-Q, the terms “we,” “us,” “our,” “Avient” and the “Company” mean Avient Corporation and its consolidated subsidiaries.
Previous wording
Results of Operations — The three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023:
Current wording
Results of Operations — The three months ended March 31, 2025 compared to the three months ended March 31, 2024:
Previous wording
Gross margin as a percentage of sales was 32.1% for the three months ended September 30, 2024 compared to 25.9% for the three months ended September 30, 2023. The gross margin improvement was driven primarily by the benefit from raw material deflation, mix improvement, lower environmental remediation costs of $35.7 million and lower restructuring charges of $3.9 million.
Current wording
Gross margin as a percentage of sales was 31.8% for the three months ended March 31, 2025 compared to 33.6% for the three months ended March 31, 2024. This decrease was driven primarily by higher restructuring charges of $7.7 million and the mix impacts of lower defense sales.
Previous wording
Operating income is the primary measure that is reported to our chief operating decision maker (CODM) for purposes of allocating resources to the segments and assessing their performance. Operating income at the segment level does not include: corporate general and administrative expenses that are not allocated to segments; intersegment sales and profit eliminations; charges related to specific strategic initiatives, such as the consolidation of operations; restructuring activities, including employee separation costs resulting from personnel reduction programs, plant closure and phase-in costs; costs incurred directly in relation to acquisitions or divestitures; integration costs; executive separation agreements; share-based compensation costs; asset impairments; environmental remediation costs, along with related gains from insurance recoveries, and other liabilities for facilities no longer owned or closed in prior years; actuarial gains and losses associated with our pension and other post-retirement benefit plans; and certain other items that are not included in the measure of segment profit or loss that is reported to and reviewed by our CODM. These costs are included in Corporate.
Current wording
Operating income is the primary segment performance measure that is reported to our chief operating decision maker (CODM), which is the Company's chief executive officer, for purposes of allocating resources and assessing performance. Operating income at the segment level does not include corporate general and administrative expenses that are not allocated to segments, restructuring charges, share-based compensation costs, environmental remediation costs and associated recoveries, asset impairments, acquisition-related charges, mark-to-market adjustments on pension and other post-retirement obligations, and certain other items that are not included in the measure of segment profit or loss that is reported to and reviewed by our CODM. These costs are included in Corporate.
Previous wording
Sales and Operating Income —The three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023:
Current wording
Sales and Operating Income —The three months ended March 31, 2025 compared to the three months ended March 31, 2024:
Previous wording
As of September 30, 2024, approximately 82% of the Company’s cash and cash equivalents resided outside the United States.
Current wording
As of March 31, 2025, approximately 71% of the Company’s cash and cash equivalents resided outside the United States.
Previous wording
Expected sources of cash needed to satisfy cash requirements for the remainder of 2024 include our cash on hand, cash from operations and available liquidity under our revolving credit facility, if necessary. We believe that these sources will also provide sufficient liquidity to satisfy our expected uses of cash for at least the next twelve months and the foreseeable future thereafter. Expected uses of cash for the remainder of 2024 include interest payments, cash taxes, dividend payments, environmental remediation costs, capital expenditures and S/4HANA development costs.
Current wording
Expected sources of cash needed to satisfy cash requirements for 2025 include our cash on hand, cash from operations and available liquidity under our revolving credit facility, if necessary. We believe that these sources will also provide sufficient liquidity to satisfy our expected uses of cash for at least the next twelve months and the foreseeable future thereafter. Expected uses of cash for 2025 include interest payments, cash taxes, dividend payments, environmental remediation payments and capital expenditures.
Previous wording
The following describes the significant components of cash flows from operating, investing and financing activities for the nine months ended September 30, 2024 and 2023.
Current wording
The following describes the significant components of cash flows from operating, investing and financing activities for the three months ended March 31, 2025 and 2024.
Previous wording
Operating Activities —Net cash provided by operating activities increased $87.1 million during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023, driven primarily by higher current year earnings and lower tax payments as 2023 included tax payments of $104.1 million associated with the gain on sale of our Distribution business, partially offset by an increased investment in working capital.
Current wording
Operating Activities —Net cash used by operating activities increased $8.3 million during the three months ended March 31, 2025 compared to the three months ended March 31, 2024, driven primarily by higher incentive compensation payments and increased working capital, partially offset by insurance proceeds of $34.0 million for previously incurred losses at the Calvert City site.
Previous wording
Investing Activities —Net cash used by investing activities during the nine months ended September 30, 2024 of $79.5 million primarily reflects the impact of capital expenditures.
Current wording
Investing Activities —Net cash used by investing activities during the three months ended March 31, 2025 and 2024 of $12.5 million and $24.5 million, respectively, primarily reflects the impact of capital expenditures.
Previous wording
Net cash used by financing activities for the nine months ended September 30, 2023 of $176.0 million primarily reflects payment on long-term borrowings of $103.8 million and $67.6 million of dividends paid.
Current wording
Financing Activities —Net cash used by financing activities for the three months ended March 31, 2025 and 2024 of $28.3 million and $28.1 million, respectively, primarily reflects the impact of dividends paid.
Previous wording
On April 9, 2024, the Company refinanced its senior secured term loan by amending the credit agreement governing such term loan (the "Term Loan Amendment"). The amendment reduced the interest rates per annum by 50 basis points, which now are either (i) Adjusted Term SOFR (as defined in the Term Loan Amendment) plus 2.00%, or (ii) a Base Rate (as defined in the Term Loan Amendment) plus 1.00%. The maturity date and other terms and conditions are substantially the same as the terms and conditions under the credit agreement immediately prior to the Term Loan Amendment.
Current wording
On March 12, 2025, the Company refinanced its senior secured term loan by amending the credit agreement governing such term loan (the Term Loan Amendment). The Term Loan Amendment reduced the interest rate per annum by 25 basis points, which now is either (i) Adjusted Term SOFR (as defined in the Term Loan Amendment) plus 1.75%, or (ii) a Base Rate (as defined in the Term Loan Amendment) plus 0.75%. The maturity date and other terms and conditions are substantially the same as the terms and conditions under the credit agreement immediately prior to the Term Loan Amendment.
Previous wording
We have future obligations under various contracts relating to debt and interest payments, operating leases, pension and post-retirement benefit plans, environmental remediation and purchase obligations. During the nine months ended September 30, 2024, we recorded adjustments to the Calvert City environmental remediation accrual. For additional information, please see Note 10, Commitments and Contingencies, to the accompanying condensed consolidated financial statements. There were no other material changes to these obligations as reported in our Annual Report on Form 10-K for the year ended December 31, 2023.
Current wording
We have future obligations under various contracts relating to debt and interest payments, operating leases, pension and post-retirement benefit plans, purchase obligations and environmental remediation obligations. During the three months ended March 31, 2025, there were no material changes to these obligations as reported in our Annual Report on Form 10-K for the year ended December 31, 2024.
Previous wording
•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, geopolitical conflicts, and any recessionary conditions; and
Current wording
•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, geopolitical conflicts, tariffs and any recessionary conditions; and