Avient is buying back shares again. What changed in its cash flow?

Avient has started buying back shares again after faster sales growth lifted its profit outlook. The materials supplier is returning cash to shareholders while continuing to reduce debt.

The company bought about $10.9 million of stock in October, its first repurchases since 2022. That follows a $50 million voluntary loan repayment during the third quarter.

Growth gives the capital plan more room

Organic sales grew 10.6%, compared with 4.3% in the second quarter. Those rates measure growth from a year earlier and exclude currency changes. Avient attributed the latest increase to pricing, product mix and demand for its specialty materials, rather than volume alone.

Quarterly sales reached $891.2 million. Adjusted earnings rose to 86 cents a share from 70 cents. That exceeded the 80-cent target set in August, mainly because sales were stronger than expected.

Avient raised its annual adjusted earnings range to $3.22 to $3.32 a share from $3.10 to $3.25. It also lifted the lower end of its adjusted EBITDA forecast to $593 million from $575 million, keeping the $603 million upper end. EBITDA measures earnings before interest, taxes, depreciation and amortization.

Debt payments continue alongside buybacks

Voluntary loan repayments reached $100 million through September. That is within the $100 million to $150 million annual repayment plan set out in August. Management now expects year-end net debt to be 2.2 to 2.3 times adjusted EBITDA.

Research by Ticker Byline shows that cash generated from operations, after capital spending, rose to $113.6 million in the first nine months from $69.6 million a year earlier. Operating cash flow improved while spending on equipment and facilities changed little.

Higher earnings and lower incentive payments helped cash generation, despite more money tied up in receivables and inventory. Cash and equivalents still fell to $445.7 million from $510.5 million at year-end as debt repayments and dividends used funds.

For the full year, Avient now expects $215 million to $230 million of free cash flow, up from $210 million to $230 million. Planned capital spending is about $120 million, versus an earlier range of $120 million to $130 million.

A cleanup bill tempers the profit comparison

Reported quarterly earnings were 46 cents a share. The adjusted 86-cent figure removes special items and acquisition-related intangible amortization.

The latest report includes a $19.1 million environmental charge. Additional studies and changes in cleanup requirements extended the assumed completion of the Calvert City barrier wall by two years, to 2032. Avient said further costs beyond its reserve are probable but cannot yet be estimated.

The Avient profile follows the cash, debt and environmental obligations alongside its sales and profit outlook.