Results

Avient Corporation

11/04/2026 | Press release | Distributed by Public on 11/04/2026 09:58

Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

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 nine months ended September 30, 2026 compared to the three and nine months ended September 30, 2025:
Three Months Ended
September 30,
Variances - Favorable (Unfavorable)
Nine Months Ended
September 30,
Variances -
Favorable (Unfavorable)
(Dollars in millions, except per share data) 2026 2025 Change %
Change 		2026 2025 Change %
Change
Sales $ 891.2 $ 806.5 $ 84.7 10.5 % $ 2,655.6 $ 2,499.6 $ 156.0 6.2 %
Cost of sales 619.4 561.6 (57.8) (10.3) % 1,803.6 1,713.6 (90.0) (5.3) %
Gross margin 271.8 244.9 26.9 11.0 % 852.0 786.0 66.0 8.4 %
Selling and administrative expense 189.2 177.8 (11.4) (6.4) % 561.2 622.1 60.9 9.8 %
Operating income 82.6 67.1 15.5 23.1 % 290.8 163.9 126.9 77.4 %
Interest expense, net (22.7) (24.2) 1.5 6.2 % (67.0) (75.8) 8.8 11.6 %
Other expense, net (1.4) - (1.4) (100.0) % (3.9) (0.9) (3.0) (333.3) %
Income before income taxes 58.5 42.9 15.6 36.4 % 219.9 87.2 132.7 152.2 %
Income tax expense (15.0) (10.1) (4.9) (48.5) % (54.9) (20.8) (34.1) (163.9) %
Net income (loss) 43.5 32.8 10.7 32.6 % 165.0 66.4 98.6 148.5 %
Net income attributable to noncontrolling interests (0.8) (0.2) (0.6) nm (1.8) (1.4) (0.4) (28.6) %
Net income attributable to Avient common shareholders $ 42.7 $ 32.6 $ 10.1 31.0 % $ 163.2 $ 65.0 $ 98.2 151.1 %
nm - not meaningful
Sales
Sales increased $84.7 million, or 10.5%, for the three months ended September 30, 2026 compared with the prior-year quarter, primarily driven by increased demand for our growth vectors, favorable sales mix and pricing actions to offset inflation in input costs, including raw materials, wages, freight and energy. Sales growth was broad-based across our end markets. Packaging, our largest end market, contributed 2.5% to total company sales growth while building & construction, industrial and consumer each contributed approximately 1.5% and energy contributed 1.0%. Sales increases in our growth vectors was primarily driven by demand for high-performance computing and electronic applications and functional additives, which contributed to growth in packaging and consumer applications. Growth in building & construction and energy was driven by demand associated with commercial infrastructure investment, while growth in industrial applications reflected favorable pricing and mix.
Sales increased $156.0 million, or 6.2%, for the nine months ended September 30, 2026 compared with the prior-year period. Favorable foreign currency impacts contributed 2.0%, while organic sales increased 4.2%, driven by increased demand and pricing actions to offset inflation in input costs. Packaging contributed 1.8% to total Company sales growth, driven by demand for functional additives and high-performance computing and electronic applications. Building & construction contributed 1.2%, benefiting from commercial infrastructure investment.
Gross Margin
Gross margin as a percentage of sales was 30.5% for the three months ended September 30, 2026 compared to 30.4% for the three months ended September 30, 2025. The increase was primarily driven by the impact of higher
18 AVIENT CORPORATION
sales, which more than offset the impacts of increased environmental and restructuring costs which were $9.2 million higher in 2026.
Gross margin as a percentage of sales was 32.1% for the nine months ended September 30, 2026 compared to 31.4% for the nine months ended September 30, 2025. The increase was primarily driven by the impact of higher sales, which more than offset the impacts of increased environmental and restructuring costs, which were $10.8 million higher in 2026.
Selling and administrative expense
Selling and administrative expense increased $11.4 million for the three months ended September 30, 2026, primarily driven by higher merit and variable compensation costs associated with 2026 performance.
Selling and administrative expense decreased $60.9 million for the nine months ended September 30, 2026, primarily driven by the Company's decision to cease development of the cloud-based enterprise resource planning system, S/4HANA, in 2025, which resulted in an impairment charge of $71.6 million and additional charges of $14.7 million for unpaid contractual obligations for hosting fees, as well as lower restructuring costs of $10.4 million, partially offset by higher merit and variable compensation costs associated with 2026 performance.
Interest expense, net
Interest expense, net decreased $1.5 million and $8.8 million for the three and nine months ended September 30, 2026, respectively, primarily driven by the benefit of reduced interest rates resulting from refinancing activity during 2025, in addition to prepayments on Avient's senior secured term loan totaling $100.0 million in 2026 and $150.0 million in 2025.
Income taxes
During the three months ended September 30, 2026, the Company's effective tax rate was 25.6% compared to 23.5% in the three months ended September 30, 2025. The higher effective tax rate in the three months ended September 30, 2026 is primarily driven by increased withholding taxes associated with foreign earnings growth, including Brazil's 10% withholding tax implemented in the fourth quarter of 2025, and increased valuation allowances associated with European restructuring costs. During the nine months ended September 30, 2026, the Company's effective tax rate was 25.0% compared to 23.9% in the nine months ended September 30, 2025. The higher effective tax rate is primarily driven by increased withholding taxes associated with foreign earnings, while the nine months ended September 30, 2025 included a benefit associated with the statute of limitations expiring on a previously unrecognized tax position.
We are monitoring pending legislative developments in Luxembourg, including the Draft Budget Law currently before parliament, which would eliminate the 17-year limitation on tax loss carryforwards and reduce the corporate income tax rate. Because the legislation had not been enacted as of September 30, 2026, no impact has been reflected in our financial statements. As of September 30, 2026, we had $39.8 million of valuation allowance in Luxembourg attributable to the 17-year loss carryforward period, which would be reassessed if the 17-year limitation were eliminated. Any accounting impact from the proposed legislation would be recognized in the period of enactment.
Refer to Note 6, Income Taxes, for further details.
SEGMENT INFORMATION
Avient has two 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. Our CODM utilizes this measure as an input to determine appropriate resource allocations to our segments in the annual planning process and to periodically assess segment performance, primarily by evaluating actual results in comparison to the annual operating plan and forecast. 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.
19 AVIENT CORPORATION
Sales and Operating Income - The three and nine months ended September 30, 2026 compared to the three and nine months ended September 30, 2025:
Three Months Ended
September 30,
Variances - Favorable
(Unfavorable)
Nine Months Ended
September 30,
Variances - Favorable
(Unfavorable)
(Dollars in millions) 2026 2025 Change % Change 2026 2025 Change % Change
Sales:
Color, Additives and Inks $ 551.5 $ 509.9 $ 41.6 8.2 % $ 1,653.8 $ 1,568.2 $ 85.6 5.5 %
Specialty Engineered Materials
340.6 297.7 42.9 14.4 % 1,004.7 935.8 68.9 7.4 %
Corporate (0.9) (1.1) 0.2 18.2 % (2.9) (4.4) 1.5 34.1 %
Total sales $ 891.2 $ 806.5 $ 84.7 10.5 % $ 2,655.6 $ 2,499.6 $ 156.0 6.2 %
Operating income:
Color, Additives and Inks $ 88.7 $ 73.8 $ 14.9 20.2 % $ 271.9 $ 242.7 $ 29.3 12.1 %
Specialty Engineered Materials
49.7 37.3 12.4 33.2 % 149.8 124.6 25.2 20.2 %
Corporate (55.8) (44.0) (11.8) (26.8) % (130.9) (203.4) 72.4 35.6 %
Total operating income $ 82.6 $ 67.1 $ 15.5 23.1 % $ 290.8 $ 163.9 $ 126.9 77.4 %
20 AVIENT CORPORATION
Color, Additives and Inks
Sales increased $41.6 million, or 8.2%, in the three months ended September 30, 2026 compared with the prior-year quarter, with growth across all end markets primarily driven by favorable sales mix and pricing. Our packaging and consumer end markets contributed 3.4% and 1.0%, respectively, to the segment's sales growth, driven by demand for functional additives and color solutions used in food, beverage and personal care applications. Building & construction contributed 1.5%, driven by commercial infrastructure investment.
Sales increased $85.6 million, or 5.5%, in the nine months ended September 30, 2026 compared with the prior-year period. Excluding a favorable foreign currency impact of 2.3%, organic sales increased 3.2%, primarily driven by favorable sales mix and pricing actions to offset inflation. Packaging contributed 2.2% to the segment's sales growth driven by demand for functional additives and color solutions used in food, beverage and personal care applications. Building and construction contributed 0.7% to the segment's sales growth driven by commercial infrastructure investment.
Operating income increased $14.9 million and $29.3 million for the three and nine months ended September 30, 2026, respectively, compared to the three and nine months ended September 30, 2025. The increase was primarily driven by higher sales and favorable mix associated with the additive growth noted above, while the benefit of cost savings from productivity and restructuring actions offset higher merit and variable compensation costs.
Specialty Engineered Materials
Sales increased $42.9 million, or 14.4%, in the three months ended September 30, 2026 compared with the prior-year quarter, primarily driven by increased demand for our growth vectors, favorable sales mix and pricing actions to offset inflation in input costs. Defense, the segment's largest end market, contributed 2.5% to sales growth amid higher government defense spending. Industrial and consumer contributed 2.4% and 1.7%, respectively, reflecting new business wins and favorable pricing and mix. Telecommunications contributed 2.2% driven by high-performance computing applications. Energy and building & construction contributed 2.1% and 1.8%, respectively, driven by commercial infrastructure investment, while healthcare contributed 1.7%, driven by demand for remote monitoring and drug delivery applications.
Sales increased $68.9 million, or 7.4%, in the nine months ended September 30, 2026 compared with the prior-year period. Favorable foreign currency impacts contributed 1.6%, while organic sales increased 5.8%, reflecting higher demand and pricing actions to offset inflation in input costs. Growth was broad-based across nearly all end markets. Most notably, building & construction contributed 2.0% to total segment sales growth, driven by commercial infrastructure investment; packaging contributed 1.2%, driven by growth in high-performance computing applications; and defense contributed 1.1%, reflecting higher government defense spending.
Operating income increased $12.4 million and $25.2 million for the three and nine months ended September 30, 2026 compared to the three and nine months ended September 30, 2025. The increase was primarily driven by higher sales, favorable mix and benefits of cost savings from productivity and restructuring actions that more than offset higher merit and variable compensation costs.
Corporate
Corporate costs increased $11.8 million for the three months ended September 30, 2026, primarily driven by higher merit and variable compensation costs and environmental charges of $5.6 million, while inflation was partially offset by productivity and restructuring actions.
Corporate costs decreased $72.4 million for the nine months ended September 30, 2026, primarily driven by the Company's decision to cease development of the cloud-based enterprise resource planning system, S/4HANA, in 2025, which resulted in an impairment charge of $71.6 million and additional charges of $14.7 million for unpaid contractual obligations for hosting fees. Additionally, lower restructuring charges of $8.4 million along with cost savings from restructuring and productivity actions for the nine months ended September 30, 2026 partially offset higher merit and variable compensation costs compared to the nine months ended September 30, 2025.
Liquidity and Capital Resources
Our objective is to finance our business through operating cash flow and an appropriate mix of debt and equity. By laddering the maturity structure, we avoid concentrations of debt maturities, reducing liquidity risk. We may from time to time seek to retire or purchase our outstanding debt with cash and/or exchanges for equity securities, in open market purchases, privately negotiated transactions or otherwise. We may also seek to repurchase our outstanding common shares. Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved have been and may continue to be material.
21 AVIENT CORPORATION
The following table summarizes our liquidity as of September 30, 2026 and December 31, 2025:
(In millions) As of September 30, 2026 As of December 31, 2025
Cash and cash equivalents $ 445.7 $ 510.5
Revolving credit availability 486.7 490.3
Liquidity $ 932.4 $ 1,000.8
As of September 30, 2026, approximately 83% of the Company's cash and cash equivalents resided outside the United States.
Expected sources of cash needed to satisfy cash requirements for the remainder of 2026 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 2026 include interest payments, cash taxes, dividend payments, debt repayments, share repurchases, environmental remediation payments, restructuring payments and capital expenditures.
Cash Flows
The following describes the significant components of cash flows from operating, investing and financing activities for the nine months ended September 30, 2026 and 2025.
Operating Activities - Net cash provided by operating activities increased $46.2 million during the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025, primarily driven by higher 2026 earnings coupled with lower incentive payments in 2026 associated with 2025 performance. These increases were partially offset by the 2025 impairment of SAP S/4HANA for $71.6 million, a $34.0 million insurance recovery related to our remediation of the Calvert City site in 2025 as well as higher 2026 restructuring payments.
Investing Activities - Net cash used in investing activities during the nine months ended September 30, 2026 and 2025 was $66.4 million and $64.2 million, respectively, which reflects the impact of capital expenditures.
Financing Activities - Net cash used in financing activities for the nine months ended September 30, 2026 and 2025 was $178.5 million and $181.7 million, respectively, which primarily reflects dividend payments and prepayments on Avient's senior secured term loan.
22 AVIENT CORPORATION
Debt
As of September 30, 2026, aggregate maturities of the principal amount of debt for the current year, next four years and thereafter, are as follows:
(In millions)
2026 $ 0.2
2027 0.4
2028 0.4
2029 471.1
2030 725.5
Thereafter 651.0
Aggregate maturities $ 1,848.6
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.
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.
In 2025, the Company made voluntary prepayments of $150.0 million on its senior secured term loan, which were applied to the principal installments in direct order of maturity. These prepayments were made using cash on hand and without penalty or premium.
In June 2026 and September 2026, the Company made voluntary prepayments of $50.0 million each, totaling $100.0 million for the year, on its senior secured term loan, which were applied to the principal installments in direct order of maturity. These prepayments were made using cash on hand and without penalty or premium.
As of September 30, 2026, we were in compliance with all financial and restrictive covenants pertaining to our debt. For additional information regarding our debt, please see Note 7, Financing Arrangements, to the accompanying condensed consolidated financial statements.
Derivatives and Hedging
We are exposed to market risks, such as changes in foreign currency exchange rates and interest rates. To manage the volatility related to these exposures we may enter into various derivative transactions. For additional information regarding our derivative instruments, please see Note 8, Derivatives and Hedging, to the accompanying condensed consolidated financial statements.
Material Cash Requirements
We have future obligations under various contracts relating to debt and interest payments, operating leases, pension and post-retirement benefit plans, purchase obligations, restructuring payments and environmental remediation obligations. During the nine months ended September 30, 2026, there were no material changes to these obligations as reported in our Annual Report on Form 10-K for the year ended December 31, 2025.
23 AVIENT CORPORATION
CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS
In this Quarterly Report on Form 10-Q, 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. You can identify these statements by the fact that they do not relate strictly to historic or current facts. 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. In particular, these include statements relating to future actions; prospective changes in raw material costs, product pricing or product demand; future performance; estimated capital expenditures; results of current and anticipated market conditions and market strategies; sales efforts; expenses; the outcome of contingencies such as legal proceedings and environmental liabilities; and financial results. Factors that could cause actual results to differ materially from those implied by these forward-looking statements include, but are not limited to:
•disruptions, uncertainty or volatility in the global 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;
•disruptions or inefficiencies in our supply chain, logistics, or operations;
•changes in laws and regulations in jurisdictions where we conduct business, including with respect to plastics and climate change;
•changes to foreign trade policy, including new or increased tariffs and changing import/export regulations
•fluctuations in raw material prices, quality and supply, and in energy prices and supply;
•demand for our products and services;
•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;
•our ability to pay regular quarterly cash dividends and the amounts and timing of any future dividends;
•information systems failures, cybersecurity breaches and cyberattacks;
•our ability to service our indebtedness and restrictions on our current and future operations due to our indebtedness;
•amounts for cash and non-cash charges related to restructuring plans that may differ from original estimates, including because of timing changes associated with the underlying actions;
•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
•other factors described in our Annual Report on Form 10-K for the year ended December 31, 2025 under Item 1A, "Risk Factors."
We cannot guarantee that any forward-looking statement will be realized, although we believe we have been prudent in our plans and assumptions. Achievement of future results is subject to risks, uncertainties and assumptions. Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected. Investors should bear this in mind as they consider forward-looking statements. We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise, except as otherwise required by law. You are advised, however, to consult any further disclosures we make on related subjects in our reports on Forms 10-Q, 8-K and 10-K filed with the Securities and Exchange Commission. You should understand that it is not possible to predict or identify all risk factors. Consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties.
24 AVIENT CORPORATION
Avient Corporation published this content on November 04, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on November 04, 2026 at 15:59 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]