Avient Corporation

Good morning, ladies and gentlemen, and welcome to Avian Corporation's webcast to discuss the company's fourth quarter and full year 2025 results. My name is Michelle, and I'll be your operator for today. At this time, all participants are on listen-only mode. We'll have a question-and-answer session following the company's prepared remarks. As a reminder, this conference is being recorded for replay purposes. I would now like to turn the call over to Joe DiSalvo, Vice President, Treasurer, Investor Relations. Please proceed.

Thank you, and good morning, everyone, to joining us on the call today. Before we begin, we'd like to remind you that statements made during this webcast may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements will give current expectations or forecasts of future events and are not guarantees of future performance. They are based on management's expectation and 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. We encourage you to review our most recent reports, including our 10-K or any applicable amendments, for a complete discussion of these factors and other risks that may affect our future results. During the discussion today, the company will use both GAAP and non-GAAP financial measures. Please refer to the presentation posted on the investor relations section of the Aviant website where the company describes the non-GAAP measures and provides a reconciliation of historical non-GAAP financial measures to their most directly comparable GAAP financial measures. A replay of this call will be available on our website. Information to access the replay is listed in today's press release, which is available at avian.com in the investor relations section. Joining me on the call today is our Chairman, President, and Chief Executive Officer, Dr. Ashish Kanpur, and Senior Vice President and Chief Financial Officer, Jamie Beggs. I will now hand the call over to Ashish to begin.

Thank you, Joe, and good morning, everyone. Strong execution by our teams with favorable mix and management's tight cost control led to 80 basis points of adjusted EBITDA margin expansion and a strong 14% adjusted EPS growth for the fourth quarter. With this result, we expanded our adjusted EBITDA margins year over year in each of the four quarters of 2025. Organic sales in Q4 were down slightly at 0.8% and grew 1.9% as reported over the prior year due to favorable foreign exchange impact. As we had highlighted in our third quarter's earnings call, we continue to see strong momentum in defense, healthcare, and telecom markets with business growing double digits in each. In addition, packaging demand improved modestly growing sales low single digits in the fourth quarter compared to being down low single digits in the third quarter. As expected, businesses in our other markets finished down versus the prior year. Moving to the right-hand side of the slide, for the full year 2025, sales were relatively flat year over year. Favorable product mix and our productivity initiatives led to 50 basis points of adjusted EBITDA margin expansion versus 2024, helping us achieve full-year record high margins of 16.7%. Adjusted EBITDA finished at $545 million for 2025, with 3.5% year-over-year growth as reported. Adjusted EPS grew 6%, helped by lower interest expense and favorable foreign currencies. Our team's highly disciplined cash management helped us generate $195 million of free cash flow, enabling us to reduce our outstanding debt by $150 million and end the year with a net leverage ratio of 2.66. As you know, one of our key drivers to advance our strategy is innovation. Creating meaningful and differentiated products, especially in markets supported by secular trends, will not only help us grow faster, but also increase our profitability. Today, I would like to share some examples of recent innovations from our company. The first set of examples address the need and demand for non-PFAS products in applications currently using PFAS materials, which are facing stringent regulations, especially in the United States and Europe. Our teams recently developed and commercialized GlideTech technology which enables new non-PFAS and non-silicone lubricious materials for use in catheters, particularly those used in neurological and vascular applications. Our portfolio contains formulations that are ISO 10993-5 and USP87 compliant in standard grades. These products deliver exceptional coefficient of friction reduction, are compatible with all common sterilization methods, and processable using conventional extrusion equipment. Another example in this space is non-PFAS polymer processing aids for polyolefin film used in packaging applications for personal care products. Here, we have innovated and launched a portfolio of products in 2025, and several other customer manufacturing qualifications are in progress currently. We continue to gain more knowledge and experience in this new area, working closely with our customers and understanding the interplay between our innovative materials and their processes. The last example for today is a process innovation where we can unlock additional Dyneema fiber making capacity with tailored material properties using our existing manufacturing equipment. As you may recall, demand for our products in defense grew double digits in 2024, followed by high single digits growth in 2025. We expect this momentum to continue, supported by the announced increases in defense spending over the next few years, especially in the United States and Europe. Due to the success of our innovation, we will now be able to quickly unlock meaningful new capacity from our current manufacturing lines to support the anticipated growth in our defense growth vector. In addition, we plan to deploy incremental capital over the next two years to further expand capacity and support the growth we foresee from our Dyneema-based businesses. Jamie will share more about these investments in her section. Before we get to 2026, I would like to take a moment to reflect on our performance over the last two years. As you know, in 2024, we evolved our company strategy to prioritize organic growth to be complemented by targeted M&A where it enhances our capabilities. We also sharpened our focus on profitability to deliver both top line growth and margin expansion. 2023 to 2025 marked the first period of time in nearly 20 years where there has been no impact on financials from acquisitions or divestitures, providing clean and noise-free data to compare performance. I'm happy to report that over the last two years, our strategy has gained significant traction with our prioritized growth vectors delivering substantial growth, with innovation beginning to show up in differentiated products and improved margins. Additionally, we continue to eliminate structural complexity and drive productivity to become a more agile and customer-focused organization. These actions have enabled us to deliver consistent improvements across our key financial metrics for the second consecutive year, despite a volatile macro backdrop. Over the last two years, we have grown adjusted earnings per share by about 20% and expanded adjusted EBITDA margins by 70 basis points, 20 basis points in 2024, and an additional 50 basis points in 2025. As a result, ROIC has improved each year and is now up 90 basis points versus 2023. Our strong free cash flow generation and disciplined capital deployment also allowed us to reduce debt bringing net leverage down from 3.1x in 2023 to 2.6x in 2025. Importantly, we achieved these results while continuing to invest in the business, particularly in our prioritized growth vectors aligned with our strategy. As we move forward, we plan to continue advancing these value creation metrics as we have over the past eight quarters. With increasing traction from our growth vectors and innovation pipeline, we expect to scale revenue and margin expansion with greater ease over time. Coming specifically to 2026, our premise is that macro environment will remain volatile, impacted by trade policies, geopolitics, and moving supply chains. However, we are cautiously optimistic about 2026 being a better year than 2025 from market demand perspective. This is especially true for our color additives and inks, or CAI business, which showed negative 2% organic growth in 2025. Last year, some of the biggest markets for the CAI business, namely consumer, industrial, building and construction, and transportation, saw anemic demand while packaging was relatively flat. With 2026 showing stronger than 2025 U.S. GDP growth projections and several government initiatives in the United States, like the new tax bill, focus on domestic manufacturing expansion, and the potential for easing interest rates, demand in our relevant markets is expected to improve. This would be a welcome scenario for our customers and our business, but at the same time, we are also focused on driving productivity in the organization to ensure we continue to drive our earnings and margin expansion in case market demand does not improve. We grew our specialty engineered materials segment sales by 2% in 2025, excluding foreign currency impact. And we believe there are several secular macro trends in this business that will support organic sales growth again this year. Before I hand the call over to Jamie, who will provide additional color on our 2025 segment and regional performance, as well as our guidance for 2026, I would like to thank the entire AVN team for their determination and outstanding efforts to successfully deliver in 2025. I have no doubt our team is up to the task to deliver an even stronger 2026. Jamie?