AVANTOR, INC.
RADNOR -
'We had a solid finish to the year with fourth quarter revenue, margin and adjusted EPS coming in at the high end of our updated guidance. Our free cash flow for the year exceeded the top end of our guidance range, representing more than 120% conversion in the quarter. I am proud of our commercial team's continued drive and intensity, which resulted in additional wins and expanded relationships among biotech, biopharma, and academic customers.
'Looking ahead to 2024, while we are seeing encouraging signs from our customers and end markets, we have not yet seen an inflection point. We are continuing to take actions that position
Fourth Quarter 2023
For the three months ended
Diluted earnings per share on a GAAP basis was
Operating cash flow in the quarter was
Full Year 2023
For the full year ended
Diluted earnings per share on a GAAP basis was
Operating cash flow was
Adjusted net leverage was 3.9X as of
Fourth Quarter 2023 - Segment Results
Management uses Adjusted EBITDA to measure and evaluate the internal operating performance of our Company's business segments. Adjusted EBITDA is also our segment reporting profitability measure under generally accepted accounting principles.
Net sales were
Adjusted EBITDA margin decreased approximately 180 basis points to 20.2%.
Net sales were
Adjusted EBITDA margin decreased approximately 240 basis points to 18.8%.
AMEA
Net sales were
Adjusted EBITDA margin decreased approximately 570 basis points to 25.4%.
About
Use of Non-GAAP Financial Measures
To evaluate our performance, we monitor a number of key indicators. As appropriate, we supplement our results of operations determined in accordance with
The non-GAAP financial measures used in this press release are sales growth (decline) on an organic basis, sales growth (decline) on a core organic basis, Adjusted EBITDA, adjusted net income, adjusted EPS, adjusted net leverage and free cash flow.
Sales growth (decline) on an organic basis eliminates from our reported net sales growth (decline) the impacts of earnings from any acquired or disposed businesses that have been owned for less than one year and changes in foreign currency exchange rates. Sales growth (decline) on a core organic basis eliminates from our organic growth (decline) the impacts of any COVID-19 related net sales. We believe that these measurements are useful as a way to measure and evaluate our underlying commercial operating performance consistently across our segments and the periods presented.
Adjusted EBITDA is to measure and evaluate our operating performance exclusive of interest expense, income tax expense, depreciation, amortization and certain other adjustments. We believe that this measurement is useful as a way to analyze the underlying trends in our business consistently across the periods presented.
Adjusted net income is our net income or loss first adjusted for the following items: (i) amortization of acquired intangible assets, (ii) net foreign currency remeasurement gains or losses relating to financing activities, (iii) losses on extinguishment of debt, (iv) charges associated with the impairment of certain assets, (v) other costs or credits that are either isolated or cannot be expected to recur with any regularity or predictability. From this amount, we then add or subtract an assumed incremental income tax impact on the above noted pre-tax adjustments, using estimated tax rates, to arrive at Adjusted Net Income. We believe that this measurement is useful to investors as a way to analyze the business consistently across the periods presented. This measurement is used by our management for the same reason.
Adjusted EPS is our adjusted net income divided by our diluted GAAP weighted average share count adjusted for anti-dilutive instruments. We believe that this measurement is useful to investors as an additional way to analyze the underlying trends in our business consistently across the periods presented. This measurement is used by our management for the same reason.
Adjusted net leverage is equal to our gross debt, reduced by our cash and cash equivalents, divided by our trailing 12-month Adjusted EBITDA (excluding stock-based compensation expense and including the expected run-rate effect of cost synergies and the incremental results of completed acquisitions as if those acquisitions had occurred on the first day of the trailing 12-month period). We believe that this measurement is useful to investors as a way to evaluate and measure the Company's capital allocation strategies and the underlying trends in the business. This measurement is used by our management for the same reason.
Free cash flow is equal to our cash flow from operating activities, excluding acquisition-related costs paid in the period, less capital expenditures. We believe that this measurement is useful as it provides a view on the Company's ability to generate cash for use in financing or investment activities.
Forward-Looking and Cautionary Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and are subject to the safe harbor created thereby under the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this press release are forward-looking statements. Forward-looking statements discuss our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. These statements may be preceded by, followed by or include the words 'aim,' 'anticipate,' 'assumption,' 'believe,' 'continue,' 'estimate,' 'expect,' 'forecast,' 'goal,' 'guidance,' 'intend,' 'likely,' 'long-term,' 'near-term,' 'objective,' 'opportunity,' 'outlook,' 'plan,' 'potential,' 'project,' 'projection,' 'prospects,' 'seek,' 'target,' 'trend,' 'can,' 'could,' 'may,' 'should,' 'would,' 'will,' the negatives thereof and other words and terms of similar meaning.
Forward-looking statements are inherently subject to risks, uncertainties and assumptions; they are not guarantees of performance. You should not place undue reliance on these statements. We have based these forward-looking statements on our current expectations and projections about future events. Although we believe that our assumptions made in connection with the forward-looking statements are reasonable, we cannot assure you that the assumptions and expectations will prove to be correct. Factors that could contribute to these risks, uncertainties and assumptions include, but are not limited to, the factors described in 'Risk Factors' in our most recent Annual Report on Form 10-K and subsequent quarterly reports on Form 10-Q, as such risk factors may be updated from time to time in our periodic filings with the
All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements. In addition, all forward-looking statements speak only as of the date of this press release. We undertake no obligations to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise other than as required under the federal securities laws.
Contact:
Tel: +1 805-617-5297
Email: Christina.Jones@avantorsciences.com
Tel: +1 332-239-3910
Email: Emily.Collins@avantorsciences.com
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