AVIENT CORP - Quarter Report: 2025 June (Form 10-Q)

Operating income Interest expense, net()()()()Other expense, net()()()()Income before income taxes Income tax expense()()()()Net income$ $ $ $ Net income attributable to noncontrolling interests()()()()Net income attributable to Avient common shareholders$ $ $ $ Earnings per share attributable to Avient common shareholders - Basic:$ $ $ $ Earnings per share attributable to Avient common shareholders - Diluted:$ $ $ $ Weighted-average shares used to compute earnings per common share:Basic Plus dilutive impact of share-based compensation Diluted Anti-dilutive share-based compensation awards Cash dividends declared per share of common stock$ $ $ $

See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

1 AVIENT CORPORATION

Avient Corporation

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

(In millions)


	Three Months Ended June 30,		Six Months Ended June 30,
	2025	2024	2025	2024
Net income	$	$	$	$
Other comprehensive income (loss), net of tax:
Translation adjustments and related hedging instruments		()		()
Other non-current assets
Total assets	$	$

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term and current portion of long-term debt	$	$
Accounts payable
Accrued expenses and other current liabilities
Total current liabilities
Non-current liabilities:
Long-term debt
Deferred income taxes
Other non-current liabilities
Total non-current liabilities

SHAREHOLDERS' EQUITY
Avient shareholders’ equity
Noncontrolling interest
Total equity
Total liabilities and equity	$	$

See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

3 AVIENT CORPORATION

Avient Corporation

Condensed Consolidated Statements of Cash Flows (Unaudited)

(In millions)


	Six Months Ended June 30,
	2025	2024
Operating activities
Net income	$	$
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
Cloud-based enterprise resource planning system impairment
Share-based compensation expense
Changes in assets and liabilities:
Increase in accounts receivable	()	()
Increase in inventories	()	()
Increase in accounts payable
Environmental insurance recovery
(Decrease) increase in incentive accruals	()
Accrued expenses and other assets and liabilities, net	()	()
Net cash provided by operating activities

Investing activities
Capital expenditures	()	()
Proceeds from plant closures
Other investing activities		()
Net cash used by investing activities	()	()

Financing activities
Payments on long-term borrowings	()	()
Cash dividends paid	()	()
Other financing activities	()	()
Net cash used by financing activities	()	()
Effect of exchange rate changes on cash		()
Decrease in cash and cash equivalents	()	()
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of period	$	$

See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

4 AVIENT CORPORATION

Avient Corporation

Condensed 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, 2025

()

Net loss

—

()

—

()

Other comprehensive income

—

Cash dividends declared -- $ per share

—

()

—

()

—

()

Share-based compensation and exercise of awards

—

()

—

()

—

()

Balance at March 31, 2025

()

Net income

—

Other comprehensive income

—

Noncontrolling interest activity

—

()

Cash dividends declared -- $ per share

—

()

—

()

—

()

Share-based compensation and exercise of awards

—

Balance at June 30, 2025

()

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, 2024

()

Net income

—

Other comprehensive loss

—

()

—

()

Noncontrolling interest activity

—

()

Cash dividends declared -- $ per share

—

()

—

()

—

()

Share-based compensation and exercise of awards

—

Balance at March 31, 2024

()

Net income

—

Other comprehensive loss

—

()

—

()

Cash dividends declared -- $ per share

—

()

—

()

—

()

Share-based compensation and exercise of awards

—

Balance at June 30, 2024

()

6 AVIENT CORPORATION

$()$ $ Patents, technology and other () Indefinite-lived trade names — Total$ $()$ $

As of December 31, 2024

(In millions)

Acquisition Cost

Accumulated Amortization

Currency Translation

Net

Customer relationships

()

Patents, technology and other

()

Indefinite-lived trade names

—

Total

()

million associated with capitalized implementation costs. The Company also recognized pre-tax charges of $ million associated with unpaid contractual obligations for hosting fees. Further, the Company recognized charges of $ million associated to severance actions resulting from the decision to cease development of S/4HANA. These charges are included in Selling and administrative expense within the Condensed Consolidated Statements of Income.

Clariant Color Integration Restructuring Program

We are engaged in a restructuring program associated with our integration of Clariant Color. These actions are expected to enable us to better serve customers, improve efficiency and deliver cost savings. We expect that the full restructuring plan will be implemented by the end of 2025 and anticipate that we will incur approximately $ million of charges in connection with the restructuring plan. As of June 30, 2025, $ million had been incurred.

$ $ Restructuring charges Payments, utilization and translation()()()Balance at December 31, 2024$ $ $ Restructuring charges Payments, utilization and translation()()()Balance at June 30, 2025$ $ $

Other Restructuring Actions

During the three and six months ended June 30, 2025, the Company recognized charges of $ million and $ million, respectively, primarily associated with plant closure costs and workforce reduction.

7 AVIENT CORPORATION

$ Work in process Raw materials and supplies Inventories, net$ $

$ Buildings Machinery and equipment Property, gross Less accumulated depreciation()()Property, net$ $

% and %, respectively, were above the U.S. federal statutory rate of 21.0% primarily due to the international tax rate differential and withholding tax on foreign earnings. These unfavorable items were partially offset by the favorable impact of foreign permanent items.

During the three and six months ended June 30, 2024, the Company's effective tax rates of % and %, respectively, were above the U.S. federal statutory rate of 21.0% primarily due to withholding tax on foreign earnings, tax on global intangible low-taxed income (GILTI), and non-deductible costs. These unfavorable items were partially offset by U.S. research and development credits, a decrease in valuation allowances, and favorable impacts of other foreign tax items.

In December 2024, Avient received a Notice of Deficiency (Notice) from the U.S. Internal Revenue Service (IRS) proposing an adjustment to the 2019 tax year resulting from a disallowed capital loss. The proposed incremental tax associated with the Notice is $ million plus estimated interest of $ million. We contested the Notice by filing a petition in U.S. Tax Court on March 4, 2025. The IRS' answer to Avient's petition included an additional accuracy-related penalty of $ million and is subject to interest. The Company believes that the proposed penalty is also without merit, and we intend to contest the penalty vigorously in U.S. Tax Court. However, there can be no assurance this dispute with the IRS will be resolved favorably. As of June 30, 2025, the Company has not recorded any income tax provision related to this matter, therefore an unfavorable ruling or settlement in U.S. Tax Court would adversely impact our effective tax rate and result in a cash tax payment.

The One Big Beautiful Bill Act (OBBBA) was enacted on July 4, 2025. The OBBBA includes significant tax law changes, such as changes to the limitation on the business interest expense deductions, effective in 2025, and updates to the rules for GILTI and foreign-derived intangible income, effective in 2026. The Company is currently evaluating the OBBBA's impact, however, does not expect it to have a material impact to the current year consolidated financial statements.

8 AVIENT CORPORATION

$ $ %Senior secured term loan due 2029 %

% senior notes due 2030

% senior notes due 2031

%Other Debt Total Debt Less short-term and current portion of long-term debt Total long-term debt, net of current portion$ $ $

As of December 31, 2024 (in millions)

Principal Amount

Unamortized discount and debt issuance cost

Net Debt

Weighted average interest rate

Senior secured revolving credit facility due 2026

Senior secured term loan due 2029

% senior notes due 2030

% senior notes due 2031

Other Debt

Total Debt

Less short-term and current portion of long-term debt

Total long-term debt, net of current portion

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 basis points, which now is either (i) Adjusted Term SOFR (as defined in the Term Loan Amendment) plus %, or (ii) a Base Rate (as defined in the Term Loan Amendment) plus %. 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.

In the second quarter of 2025, the Company made a voluntary prepayment of $ 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.

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 $ million, which may be increased by up to $ 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.

As of June 30, 2025, we had borrowings outstanding under the senior secured revolving credit facility.

The agreements governing our senior secured revolving credit facility and our senior secured term loan, and the indentures and credit agreements governing our other debt, contain a number of customary financial and restrictive covenants that, among other things, limit our ability to: sell or otherwise transfer assets, including in a spin-off, incur additional debt or liens, consolidate or merge with any entity or transfer or sell all or substantially all of our assets, pay dividends or make certain other restricted payments, make investments, enter into transactions with affiliates, create dividend or other payment restrictions with respect to subsidiaries, make capital investments and alter the business we conduct. As of June 30, 2025, we were in compliance with all covenants.

The estimated fair value of Avient’s debt instruments at June 30, 2025 and December 31, 2024 was $ million and $ million, respectively. The fair value of Avient’s debt instruments was estimated using prevailing market interest rates on debt with similar creditworthiness, terms and maturities and represent Level 2 measurements within the fair value hierarchy.

9 AVIENT CORPORATION

million maturing in November 2026, € million maturing in August 2027, € million maturing in January 2028 and € million maturing in January 2029. We designated the cross-currency swaps as net investment hedges of our net investment in our European operations under ASU 2017-12 and applied the spot method to these hedges. The changes in fair value of these derivative instruments are recognized within Accumulated Other Comprehensive Income (AOCI) to offset the changes in the values of the net investment being hedged. For the three and six months ended June 30, 2025, losses of $ million and $ million were recognized within translation adjustments in AOCI, net of tax, respectively, compared to gains of $ million and $ million, net of tax, for the three and six months ended June 30, 2024, respectively. Included in Interest expense, net on the Condensed Consolidated Statements of Income is income of $ million and $ million, respectively, for the three and six months ended June 30, 2025, compared to income of $ million and $ million, respectively, for the three and six months ended June 30, 2024, related to interest payments received from counterparties.

All of our derivative assets and liabilities measured at fair value are classified as Level 2 within the fair value hierarchy. We determine the fair value of our derivatives based on valuation methods, which project future cash flows and discount the future amounts to present value using market based observable inputs, including interest rate curves and foreign currency rates.

$ Liabilities

Cross-currency Swaps (Net Investment Hedge)

Other non-current liabilities$ $

reportable segments: (1) Color, Additives and Inks and (2) Specialty Engineered Materials.

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.

10 AVIENT CORPORATION

$ $()$ $ $()$ ))

))

Specialty Engineered Materials

Corporate

Consolidated
Total

()

))

Specialty Engineered Materials

Corporate

Consolidated
Total

()

))

Specialty Engineered Materials

Corporate

Consolidated
Total

()

11 AVIENT CORPORATION

$ $ $ Specialty Engineered Materials Corporate Depreciation and amortization$ $ $ $ Capital expenditures:Color, Additives and Inks$ $ $ $ Specialty Engineered Materials Corporate Capital expenditures$ $ $ $


	Total Assets
(In millions)	As of June 30, 2025	As of December 31, 2024
Color, Additives and Inks	$	$
Specialty Engineered Materials
Corporate
Total assets	$	$

companies signed the agreed Consent Decree and remedial action Work Plan, which received Federal Court approval in January 2021.

The largest component of remedial action at Calvert City is construction of a barrier wall around the site. Construction of the initial barrier wall section began in 2024 and was completed in the first quarter of 2025. The remaining wall designs and construction are expected to be completed in phases through 2028. As the Company completes further design work and begins construction on the remaining sections of the barrier wall and other remedial components, the Company will update its accrual, which was $ million as of June 30, 2025, for any new information as it becomes available.

12 AVIENT CORPORATION

million and $ million are reflected within Accrued expenses and other current liabilities and Other non-current liabilities in our Condensed Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024, respectively. These undiscounted accruals represent our best estimate of probable future costs that we can reasonably estimate, based upon currently available information and technology and how the remedy will be implemented. It is reasonably possible that we could incur additional costs in excess of the amount accrued, which could be material to our Condensed Consolidated Statements of Income. However, such additional costs cannot be currently estimated as they are dependent upon the results of future testing and findings during the execution of remedial design and remedial action, changes in the Calvert City construction timeline, changes in regulations, technology development, new information, newly discovered conditions and other factors that are not currently known.

During the three and six months ended June 30, 2025, Avient recognized costs of $ million and $ million, primarily associated with the ongoing remedial design and remedial action at Calvert City, compared to costs of $ million and $ million recognized during the three and six months ended June 30, 2024. These costs are recognized in Cost of Sales within the Condensed Consolidated Statements of Income.

We received $ million of cash associated with Calvert City insurance recoveries in the first quarter of 2025. The associated gain was recognized in the fourth quarter of 2024. Further insurance recoveries, if any, related to remedial activities at the Calvert City site are expected to be immaterial. During the three and six months ended June 30, 2025, Avient recognized gains related to insurance and other environmental recoveries of $ million and $ million, respectively, unrelated to Calvert City. These gains are included in Cost of sales within the Consolidated Statements of Income.

Avient is subject to a broad range of claims, administrative and legal proceedings such as lawsuits that relate to contractual allegations, tax audits, product claims, personal injuries, and employment related matters. Although it is not possible to predict with certainty the outcome or cost of these matters, the Company believes our current reserves are appropriate and these matters will not have a material adverse effect on the condensed consolidated financial statements.

13 AVIENT CORPORATION

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Our Business

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.

Results of Operations — The three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024:


	Three Months Ended June 30,				Variances — Favorable (Unfavorable)				Six Months Ended June 30,				Variances — Favorable (Unfavorable)
(Dollars in millions, except per share data)	2025		2024		Change		% Change		2025		2024		Change		% Change
Sales	$	866.5	$	849.7	$	16.8	2.0	%	$	1,693.1	$	1,678.7	$	14.4	0.9	%
Cost of sales	588.6		592.1		3.5		0.6	%	1,152.0		1,142.9		(9.1)		(0.8)	%
Gross margin	277.9		257.6		20.3		7.9	%	541.1		535.8		5.3		1.0	%
Selling and administrative expense	181.8		185.1		3.3		1.8	%	444.3		369.3		(75.0)		(20.3)	%

Operating income	96.1		72.5		23.6		32.6	%	96.8		166.5		(69.7)		(41.9)	%
Interest expense, net	(24.7)		(26.6)		1.9		7.1	%	(51.6)		(53.2)		1.6		3.0	%
Other expense, net	(0.5)		(0.9)		0.4		nm		(0.9)		(1.8)		0.9		nm
Income before income taxes	70.9		45.0		25.9		57.6	%	44.3		111.5		(67.2)		(60.3)	%
Income tax expense	(17.4)		(11.2)		(6.2)		(55.4)	%	(10.7)		(28.0)		17.3		61.8	%


Net income	53.5		33.8		19.7		58.3	%	33.6		83.5		(49.9)		(59.8)	%
Net income attributable to noncontrolling interests	(0.9)		(0.2)		(0.7)		nm		(1.2)		(0.5)		(0.7)		nm
Net income attributable to Avient common shareholders	$	52.6	$	33.6	$	19.0	56.5	%	$	32.4	$	83.0	$	(50.6)	(61.0)	%

Earnings per share attributable to Avient common shareholders - Basic:	$	0.57	$	0.37					$	0.35	$	0.91




Earnings per share attributable to Avient common shareholders - Diluted:	$	0.57	$	0.36					$	0.35	$	0.90

10.1†

Revolving Credit Agreement, dated as of June 12, 2025, by and among Avient Corporation, JPMorgan Chase Bank, N.A., as administrative agent, and the various lenders party thereto (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed June 1 6 , 202 5 , SEC File No. 1-16091)

31.1**

Certification of Ashish K. Khandpur, Chairman, President and Chief Executive Officer, pursuant to SEC Rules 13a-14(a) and 15d-14(a), adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2**

Certification of Jamie A. Beggs, Senior Vice President and Chief Financial Officer, pursuant to SEC Rules 13a-14(a) and 15d-14(a), adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1*

Certification pursuant to 18 U.S.C. § 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as signed by Ashish K. Khandpur, Chairman, President and Chief Executive Officer

32.2*

Certification pursuant to 18 U.S.C. § 1350, adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as signed by Jamie A. Beggs, Senior Vice President and Chief Financial Officer

101.INSInline XBRL Instance Document101.SCHInline XBRL Taxonomy Extension Schema Document101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document101.LABInline XBRL Taxonomy Extension Label Linkbase Document101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

†

Certain exhibits and schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K and will be provided to the Securities and Exchange Commission upon request.

*Furnished herewith.**Filed herewith.

22 AVIENT CORPORATION

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



August 1, 2025			AVIENT CORPORATION

			/s/ Jamie A. Beggs
			Jamie A. Beggs Senior Vice President and Chief Financial Officer

23 AVIENT CORPORATION

AVIENT CORP - Quarter Report: 2025 June (Form 10-Q)

Similar companies