AVIENT CORP
For the period ended Jun 30, 2025. Filed Aug 1, 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.
Jun 30, 2025 · Filed Aug 1, 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 2025-03-31; filed 2025-05-06.
0001122976-25-000030
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-01.
0001122976-25-000053
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 66 previous paragraphs and 76 current paragraphs.
46 unchanged; 15 reworded; 15 added; 5 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 (15)
Current report
Sales increased $16.8 million, or 2.0%, in the three months ended June 30, 2025 compared to the three months ended June 30, 2024. Favorable foreign currency impacts were 1.4%, while sales, excluding the impacts of foreign exchange, increased 0.6%. The sales increase was primarily within the defense and healthcare end markets, partially offset by declines in the consumer and industrial end markets.
Current report
Sales increased $14.4 million, or 0.9%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. Unfavorable foreign currency impacts were 0.3%, while sales, excluding the impacts of foreign exchange, increased 1.2%. The sales increase was primarily within the packaging, defense and healthcare end markets, partially offset by declines in the consumer end market.
Current report
Gross margin as a percentage of sales was 32.0% for the six months ended June 30, 2025 compared to 31.9% for the six months ended June 30, 2024. This increase was driven primarily by lower environmental remediation charges of $21.0 million, net of recoveries, partially offset by higher restructuring charges of $10.5 million.
Current report
During the three months ended June 30, 2025, the Company’s effective tax rate was 24.5% compared to 24.9% in the three months ended June 30, 2024. The lower effective tax rate for the three months ended June 30, 2025 was primarily driven by a decrease in the tax on global intangible low-taxed income (GILTI) partially offset by a reduction in favorable foreign permanent items. During the six months ended June 30, 2025, the Company's effective tax rate was 24.2% compared to 25.1% in the six months ended June 30, 2024. The lower effective tax rate for the six months ended June 30, 2025 was primarily driven by a decrease in GILTI tax and increased favorable permanent items. Partially offsetting these benefits was an increase in valuation allowances.
Current report
Refer to Note 6, Income Taxes, for further details.
Current report
Operating income increased $4.2 million and $8.0 million for the three and six months ended June 30, 2025, respectively, primarily driven by improved mix and cost savings from productivity and restructuring actions.
Current report
Sales increased $21.6 million, or 7.0%, in the three months ended June 30, 2025 compared to the three months ended June 30, 2024. Favorable foreign currency impacts were 1.3%, while sales, excluding the impacts of foreign exchange, increased 5.7%. The sales increase was primarily within the defense and healthcare end markets, partially offset by declines in the consumer end market.
Current report
Sales increased $15.6 million, or 2.5%, in the six months ended June 30, 2025 compared to the six months ended June 30, 2024. Unfavorable foreign currency impacts were 0.1%, while sales, excluding the impacts of foreign exchange, increased 2.6%. The sales increase was primarily within the defense and healthcare end markets, partially offset by declines in the consumer and industrial end markets.
Current report
Operating income decreased $2.6 million and $8.9 million for the three and six months ended June 30, 2025, respectively, driven by higher operating costs, primarily associated with planned maintenance, and investments in the Company's growth vectors.
Current report
Corporate costs decreased $22.0 million for the three months ended June 30, 2025, primarily driven by lower environmental costs of $20.6 million, net of recoveries.
Current report
Financing Activities —Net cash used by financing activities for the six months ended June 30, 2025 of $106.4 million primarily reflects payment on long-term borrowings of $50.2 million and $49.4 million of dividends paid.
Current report
In the second quarter of 2025, the Company made a voluntary prepayment of $50.0 million on its senior secured term loan, which was applied to the principal installments in direct order of maturity. This prepayment was made without penalty or premium.
Current report
On June 12, 2025, the Company entered into a revolving credit agreement (the Revolving Credit Agreement) with various financial institutions as lenders, and JPMorgan Chase Bank, N.A., as administrative agent, which replaced our previous credit agreement. The Revolving Credit Agreement provides for a senior secured revolving credit facility of up to $500.0 million, which may be increased by up to $250.0 million, subject to certain conditions. Loans under the Revolving Credit Agreement will mature on June 12, 2030. The Revolving Credit Agreement contains representations and warranties, affirmative covenants, negative covenants and events of default that are substantially similar to those contained in the Company's existing term loan credit agreement.
Current report
18 AVIENT CORPORATION
Current report
19 AVIENT CORPORATION
Removed paragraphs (5)
Previous report
13 AVIENT CORPORATION
Previous 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.
Previous 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.
Previous 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.
Previous 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.
Reworded paragraphs (15)
Previous wording
Results of Operations — The three months ended March 31, 2025 compared to the three months ended March 31, 2024:
Current wording
Results of Operations — The three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024:
Previous 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.
Current wording
Gross margin as a percentage of sales was 32.1% for the three months ended June 30, 2025 compared to 30.3% for the three months ended June 30, 2024. This increase was driven primarily by lower environmental remediation charges of $20.6 million, net of recoveries, partially offset by higher restructuring charges of $2.8 million.
Previous wording
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 wording
Selling and administrative expense decreased $3.3 million for the three months ended June 30, 2025, primarily driven by lower compensation cost. Selling and administrative expense increased $75.0 million for the six months ended June 30, 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. These charges were partially offset by lower compensation cost.
Previous wording
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 wording
Interest expense, net decreased $1.9 million and $1.6 million for the three and six months ended June 30, 2025, respectively, primarily driven by the benefit of reduced interest rates resulting from previous refinancing activity.
Previous wording
Sales and Operating Income —The three months ended March 31, 2025 compared to the three months ended March 31, 2024:
Current wording
Sales and Operating Income —The three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024:
Previous wording
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 wording
Sales decreased $3.4 million, or 0.6%, in the three months ended June 30, 2025 compared to the three months ended June 30, 2024. Favorable foreign currency impacts were 1.4%, while sales, excluding the impacts of foreign exchange, decreased 2.0%. The sales decrease was primarily within the consumer and transportation end markets, partially offset by sales increases within the healthcare end market.
Previous wording
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 wording
Sales increased $1.0 million, or 0.1%, in the six months ended June 30, 2025 compared to the six months ended June 30, 2024. Unfavorable foreign currency impacts were 0.5%, while sales, excluding the impacts of foreign exchange, increased 0.6%. The sales increase was primarily within the packaging and healthcare end markets, partially offset by declines in the consumer and transportation end markets.
Previous wording
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 wording
Corporate costs increased $68.8 million for the six months ended June 30, 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 higher restructuring costs of $17.3 million. Partially offsetting these charges was lower environmental remediation charges of $21.0 million, net of recoveries, and lower compensation cost.
Previous wording
As of March 31, 2025, approximately 71% of the Company’s cash and cash equivalents resided outside the United States.
Current wording
As of June 30, 2025, approximately 73% 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 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.
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 debt payments, 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 three months ended March 31, 2025 and 2024.
Current wording
The following describes the significant components of cash flows from operating, investing and financing activities for the six months ended June 30, 2025 and 2024.
Previous 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.
Current wording
Operating Activities —Net cash provided by operating activities decreased $1.4 million during the six months ended June 30, 2025 compared to the six months ended June 30, 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 three months ended March 31, 2025 and 2024 of $12.5 million and $24.5 million, respectively, primarily reflects the impact of capital expenditures.
Current wording
Investing Activities —Net cash used by investing activities during the six months ended June 30, 2025 and 2024 of $39.5 million and $54.5 million, respectively, primarily reflects the impact of capital expenditures.
Previous 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.
Current wording
Net cash used by financing activities for the six months ended June 30, 2024 of $54.8 million primarily reflects $47.0 million of dividends paid.
Previous 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.
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 six months ended June 30, 2025, we refinanced our senior secured term loan, which reduced the interest rate per annum by 25 basis points, and made a voluntary prepayment of $50.0 million, refer to Note 9, Financing Arrangements. 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, 2024.