Avient Corporation reported its third quarter results for 2020. GAAP earnings per share (EPS) from continuing operations were $0.02 in the third quarter of 2020 compared to $0.30 in the third quarter of 2019.
The company noted that GAAP EPS includes special items primarily associated with acquisition-related costs and an adjustment to environmental reserves. Acquisition-related costs primarily consist of inventory step-up and the financing commitment for the Clariant Masterbatch acquisition. Adjusted EPS of $0.54 ($0.46 including step-up depreciation and amortization) exceeded the projection included in the company's third quarter performance update provided in September.
"I am pleased with our results for the quarter given the recent challenges of the coronavirus pandemic. As we closed out September, we experienced better-than-expected revenue and margin performance across all businesses and regions," said Robert M. Patterson, chairman, president and CEO, Avient Corporation.
“Driven by demand for composites, Specialty Engineered Materials delivered record third quarter operating income of $24.7 million; a 27% increase over the prior year. In addition, we are seeing very good early integration success with Clariant Masterbatch,” Patterson added.
The company noted that integration with the Clariant Masterbatch business continues to exceed expectations and confirmed its recently increased synergy estimate of $75 million. In addition, cash-on-hand as of Sept. 30, 2020, was $577 million, which exceeds previous expectations. The company now expects net debt to adjusted EBITDA will be below 3.0x by year-end.
“With the divestment of Performance Products and Solutions and the acquisition of Clariant Masterbatch, our portfolio is far more specialized, with 87% of adjusted segment EBITDA generated from specialty applications,” Patterson noted. “In addition, nearly 60% of sales are coming from applications going into the growing packaging, consumer and healthcare end markets. As we start the fourth quarter, we see demand continuing to improve but recognize there remains uncertainty with how the ongoing pandemic recovery will unfold." Patterson said.
