Good morning, ladies and gentlemen, and welcome to Avient Corporation webcast to discuss the company's second quarter 2021 results. My name is Gigi, and I will be your operator for today. At this time, all participants are in listen-only mode. We will 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 Di Salvo, Vice President, Treasurer, and Investor Relations. Please proceed. Thank you, Gigi, and good morning, and welcome to our second quarter 2021 earnings call. Before beginning, 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're based on management's expectations 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 statement. During the discussion today, the company will use both GAAP and non-GAAP financial measures. Please refer to the presentation posted on the Avient website, where the company describes the non-GAAP measures and provides a reconciliation for historical non-GAAP financial measures to their most directly comparable GAAP financial measures. In addition, unless otherwise stated, comparisons to the prior year will be pro forma for the Clariant Masterbatch acquisition, as if the business had been together during all periods referenced. Joining me today is our Chairman, President, and Chief Executive Officer, Bob Patterson, and Senior Vice President and Chief Financial Officer, Jamie Beggs. Now, I will turn the call over to Bob for some opening comments. Thanks, Joe. Good morning, everyone. Today we are reporting record second quarter results that reflect the transformation of our portfolio and demonstrate the success of our key growth platforms. The most recent piece of that transformation occurred when we acquired Clariant's color business a year ago this month. We became Avient. The first year of integration has been a tremendous success, which not only shows up in our numbers, but in the engagement we see in our associates around the world. This momentum has served us well as we have seen unprecedented demand for our solutions grow against a backdrop of challenging conditions. Our team has come together to deliver world-class service to our customers through creativity and flexibility in our operations as we have managed through a myriad of supply chain disruptions. We truly are better together and well on our path to a record year as we turn these challenges into opportunities. Obviously, the second quarter of 2020 was a low point during the pandemic. The year-over-year comparisons reflect that with sales up 42% and adjusted EPS up 107%. What you can't see here is a very compelling story of how we delivered record revenue of $1.2 billion and $0.87 of adjusted EPS while handling inflation as well as the incremental costs associated with the previously mentioned supply chain challenges. These events substantial, but so have our efforts to overcome and offset them, both of which you will see in future slides this morning. Our performance continues to be underpinned by our four pillar strategy that guided the investments we made to transform our portfolio to one that is more specialized, focused on sustainable solutions, and concentrated on high growth end markets. It's working. All three of our segments contributed to delivering these record second quarter results. Color, Additives and Inks grew operating income 59% from robust demand across all markets and for our sustainable solutions. We have also achieved significant synergies with the ongoing integration with Clariant. Specialty Engineered Materials more than doubled operating income, driven by continued growth of our composite technologies. We see ongoing strength in consumer applications as well as increased demand for our fiber optic cable solutions used in telecom for 5G and other infrastructure build-outs. Our Distribution segment delivered record second quarter operating income of $24 million, an increase of 60% over the prior year. We reached a notable milestone, with nearly 50% of the segment's sales coming from healthcare and consumer end markets. Over the years, our portfolio has undergone a tremendous and deliberate transformation with an increased focus on specialty applications. As you know, these require more sustainable solutions and advanced performance characteristics. Not only has this been an important contributor to our recent sales growth, but the benefits of improved mix and our pricing actions are improving margins despite the inflationary pressures we've seen. When we contemplated the acquisition of the Clariant Color business, we knew there was an opportunity to improve margins to the same level of performance as the legacy PolyOne Color business. In the first year of ownership, we have made significant progress in this regard. One driver of this improved performance is the acceleration of synergy capture between the two teams, where we realized $11 million in the quarter. We are on track to deliver over $45 million in 2021. Beyond synergy capture, we see an intense focus on innovation, sustainable solutions, and pricing excellence across both businesses. There is so much energy and excitement that is being generated from the combined organizations. I got to experience that firsthand earlier this month when I visited our legacy Clariant site in West Chicago. Seeing and interacting with our people and our team further validated everything we've known. We did that during our diligence. After a year of integration, we know and now do confirm we are better together. It was invigorating to see not only our production facility, but to explore our ColorWorks Innovation Center, where designers have the opportunity to see, touch, feel, and watch their color designs come to life. What impressed me most about the visit was how our teams are supporting our customers' sustainability initiatives. The single most requested service is to help our customers use more recycled content in packaging. Let me elaborate. Recycled material has a natural grayish look to it. Quite simply, this has to be overcome with additional color concentrates and additives to achieve a similar level of brilliance and differentiation for shelf appeal that brand owners demand. This isn't easy, but think of this as a sales and margin multiplier we call a plus factor. The more recycled content is used, the more color and additives required. These capabilities were a key driver behind our decision to double down on color last year when we acquired the Clariant Masterbatch business, who was and is a clear market leader in this space. The trend toward using more recycled content bodes well for us and our long-term expectation of driving 8%-12% growth from sustainable solutions. Our second quarter results are no exception, as we achieve substantial growth in these sustainable solutions, as well as the other three key areas of focus, healthcare, composites, and growth in Asia and LATAM. You can also see the contribution margins associated with each area and that we are lapping the effects of COVID response applications sold in the prior year. From an end market perspective, over half our revenue is tied to strategic end markets such as consumer healthcare and packaging. In particular, consumer demand over the prior year grew 67%, primarily for outdoor high-performance applications. The healthcare and packaging space also performed exceptionally well during the quarter. These two percentages may look relatively small on this page, but recall, these were two end markets that outperformed in the second quarter of last year during the early days of the pandemic. Overall, I'm very pleased with our results for the quarter. I view the next couple of slides as perhaps the most insightful as we quantify and illustrate how we have overcome inflation and cost increases related to supply chain disruptions. The combination and magnitude of these two factors is unprecedented during my 13 years with the company, and I can't say enough about how well our teams have handled both. Given our recent performance and continued strong demand conditions, we have increased our outlook for the rest of the year and raised our full year projections to $3 of adjusted EPS. I'll turn the call over to Jamie now to provide more details. Thank you. As Bob mentioned, the second quarter of 2020 was a low point during the COVID pandemic, and the year-over-year comparisons reflect a substantial increase in demand. We want to highlight the significance of inflation and cost associated with supply chain disruption. All three segments attacked the situation swiftly by raising prices multiple times throughout the quarter and have continued to do so in July. As you can see in the bridge schedule, we more than covered inflation with our proactive approach and demonstrated our ability to move prices quickly. Beyond raw material and inflation, we incurred an additional $14 million of costs related to supply chain disruptions, exacerbated by a shortage of manufacturing associates. These costs manifest themselves in a form of higher freight, increased overtime, less than optimal production batches, and increased scrap as we qualified new sources of supply for our customers. These are costs that can be difficult to predict or quantify on a contemporaneous basis as they happen real-time as we seek to meet customer demand without sacrificing quality. Looking back on our projections heading into the second quarter, we submit that these additional supply chain costs were the least well-known and hit us hardest in May and June. The following slide illustrates this. Here we walk our Q1 to Q2 sequential performance to highlight how we navigated the current market dynamics. Year-over-year, the increase in supply chain disruptions were $14 million, 12 of which came from Q1 to Q2. Similarly, during the second quarter, we experienced the highest rate of inflation, again, all of which had been covered with pricing. Related to demand, it's hard to bifurcate the impact of seasonality from supply chain disruptions. We did see a slight decline in orders in Europe and the Middle East, which is consistent with what we have seen historically. This may have also been driven by COVID, as certain parts of the world continue to experience a high number of cases. Heading into the third quarter, demand continues to be strong, reflected in the orders we have received thus far. We expect supply chain issues to persist for the foreseeable future, and we may continue to see higher inflation. Given our performance in the second quarter and our demonstrated ability to navigate both of these dynamics, we are increasing our outlook for the remainder of the year. For Q3, we expect total company sales of $1.15 billion and adjusted EPS of approximately $0.68 per share. This reflects 24% growth in sales and a 48% growth in adjusted EPS over the prior year. The sequential decline from Q2 to Q3 is primarily driven by typical seasonality of the business. Yet $0.68 still would represent another record for third quarter adjusted EPS. The biggest driver of this seasonality is the holiday schedules in Europe, and from what we are hearing from our customers, many of them are seeking to take a holiday, much deserved, given the backdrop of the last year and a half. For the full year, we now expect total company sales to increase by about 23%, to be between $4.6 billion-$4.7 billion. Current demand patterns suggest a continued recovery into the fourth quarter, as many customers are still trying to keep up with orders and replenish low levels of inventory. This is predicated on the economy continuing to recover and the pandemic conditions subsiding. The 23% sales growth, combined with $45 million of synergy capture that Bob mentioned previously, is expected to result in adjusted EPS of $3, which is a 55% increase over the prior year. We realize there are many companies reporting significant growth rates compared to 2020. Perhaps it is an easy comp for many. That's why we want to remind our shareholders how Avient is differentiated in this regard. Recall that last year in 2020, our EBITDA did not decline versus 2019. It grew. Our EBITDA projections for 2021 are 31% higher than 2019. This is a direct reflection of the investments made to position the company to benefit from long-term secular growth trends, the quality of the Clariant Color business, and our team's ability to execute. Our strong balance sheet helps support what we're working to achieve. The increased sales and earnings will further benefit our free cash flow generation, now expected to be $280 million. This includes the investments in working capital to support our sales growth, as well as the impact from inflation and restructuring activities associated with the color business with Clariant. From a leverage perspective, we expect to finish the year at 1.9x net debt adjusted EBITDA. This is an organic projection, assuming cash remains on the balance sheet. Our preference will be to put that cash to work pursuing strategic M&A, just as we did on July 1st when we acquired Magna Colours. Magna is a market leader in water-based ink technology for textile screen printing, serving the largest consumer brand owners as they seek eco-conscious materials for their products. This acquisition expands our growing portfolio of sustainable solutions and fits nicely into our sustainable growth strategy. That concludes my prepared remarks. I'll now hand the call back over to Bob. Thanks, Jamie. Sustainability is not a buzzword for Avient. It's a growth driver. We are a leader in helping customers reach their sustainability goals. We've been doing this for many years. We have the knowledge and expertise to formulate customized solutions and will continue to grow in this space double digits well into the future. The recent acquisition of Magna highlights our commitment to invest in new technologies supporting these initiatives. With these technologies, we are helping our customers improve the recyclability of their products, reduce material content or product weight, use more recycled or eco-conscious materials. We expect revenue from sustainable solutions to grow an additional 14% this year. You will be able to read about all those benefits and more in our upcoming sustainability report that we expect to release in August. This year's report is our most comprehensive yet, and it's the most inclusive in terms of ESG metrics and data that we know are of a growing interest to our investors and all of our stakeholders, for that matter. Not only does it include enhanced disclosures that align with current ESG frameworks, but our report also provides progress updates on our own 2030 sustainability goals. We've made those goals more aggressive and challenged ourselves to think further into the future. I hope you take the time to really read this report, since it's one of the best documents we have that describes who we are, what we do, and the values we stand for. You know, as investors, you ask yourselves, "Why should I invest in Avient?" Customers do the same and ask, "Why should I buy from Avient?" As prospective employees ask, "Why should I join and work for Avient?" At no better place are these answers captured than in the pages of our sustainability report. I ask that you read it in that regard. We're committed to becoming a world-class sustainable organization, and in doing so, provide a tremendous opportunity for all our stakeholders. I am incredibly proud of what our team has accomplished in the last year. We brought two world leaders together with the acquisition of Clariant's color business. At the time, I doubt outsiders may have believed this, but our timing probably couldn't have been better, as the business was well-positioned as an essential supplier to so many industries. We changed our name to Avient. Internally, we did this to galvanize our employees in a united effort to bring our two companies together. Externally, we sought a new name to truly represent who we are today and will be tomorrow as a sustainable solutions provider. We are navigating the COVID pandemic, and I believe emerging a stronger company. The evidence of that can be seen in our first half results, where we have delivered significant sales growth and overcome massive inflation and the supply chain challenges you hear about so frequently. Lastly, and perhaps more importantly, we have built a very important foundation for the future driven by sustainable solutions. Our message and momentum after a year as Avient are very exciting, and we plan to share more with you at our investor day that we will host in New York in December. We will be taking a deeper dive into our sustainable solutions portfolio, provide more insight into our innovative technologies and long-term strategy, and hopefully, we can see all of you there in person. It's something we're really looking forward to and hope that you will block your calendars now. Of course, while we are planning to host it in person, should the state of the pandemic make that not conducive, we'll hold it virtually. That concludes our prepared remarks today. We'd love to take any questions you may have at this time. As a reminder, to ask a question, you will need to press star one on your telephone. To withdraw your question, press the pound key. Please stand by while we compile the Q&A roster. Our first question comes from the line of Frank Mitsch from Fermium Research. Your line is now open. Yes. Good morning. Congrats on the quarter and the outlook. You mentioned that, I think, May and June were particularly difficult months in terms of the supply chain issues and raw materials. Now, obviously, you've been outpacing them with pricing. I was wondering if you could kind of provide a cadence as what we should anticipate in 3Q and 4Q. What are your expectations on how this plays out through the balance of the year? I think that these conditions are going to continue for the foreseeable future. From a dollar perspective, my expectation is that those costs will probably be like kind in Q3 to what we experienced in Q2. I wouldn't say at this point, Frank, that things are getting worse, but I don't see them getting better. We've modeled that into our guidance here for the second half of the year, and that's probably the best way to think about things going from Q2 to Q3. All right. That's helpful. Bobby, you mentioned that you highlighted your business in the outdoor high-performance space growing pretty well. I guess there was a thought out there that ironically, with a reopening, that that might suffer a little bit. What's your outlook for that high margin business for you? Well, inventory levels at the retail locations remain incredibly low in just about every area of outdoor application. I think that there's still a really good run ahead of us here in that respect, just given how long it's taking for people to get the things that they want. I haven't heard anything from our customers who are feeling that way, that when the pandemic sort of subsides, that that may end. I also really think their observations are inventory level driven, too, right? There is this level of demand, but candidly, people just can't get what they want from bicycles to paddle boards or whatever it may be, like an off-road vehicle. There just isn't enough out there. At this point, I think that's going to be strong through the balance of the year. All right. Very helpful. Look forward to seeing you on December 9th, if not sooner. Thanks. Thanks. Thank you. Our next question comes from the line of Mike Sison from Wells Fargo. Your line is now open. Hey, good morning. Nice quarter, guys. Hey, Mike. In terms of the recycled material potential, what inning do you think you're in terms of how much of your customers' product lines have been converted? Is there a pretty good runway in that trend? I would describe it as embryonic. I think customers are really just getting started in this regard. I'd also really remind everyone that a major gating factor around growth is quite simply access to these recycled materials. Getting recycled PET or any other, the polyolefin families, it isn't enough. As you know, there's a lot of investment underway right now to increase that supply. I think as that happens, you'll see us grow alongside that. The really good news is, though, is that, look, just about every major brand owner out there is trying to do this. They're trying to move everything. Candidly, a lot of it's just around traditional packaging that you see. I think that ultimately is a good guy for us, as I said, from a sales and margin perspective. Great. As a follow-up, a lot of companies are struggling to get material to generate sales and impressed that you guys were able to raise your sales guidance. When you think about the third quarter growth, the 24%, can you maybe run through each of the segments? How are you able to get sort of the supply to meet demand thus far? One of the ways that we're handling that, candidly, is you've seen we have experienced some higher costs in the second quarter as Jamie pointed out, and you can see in the bridge schedule. There is a cost to securing this supply and candidly manufacturing it in the way that we are, sometimes in smaller batch sizes or bringing materials together from three different locations to meet a customer need. I think it's because of that we're able to deliver the sales and meet the orders, but it is certainly coming at a cost. I would say that at the end of every month, there are orders that we're probably not able to get out for one reason or another, and sometimes it's just a complete absence of a particular source of supply. These dynamics are real, and I know you're hearing about them from probably just about everybody, but I guess that's the best way I could answer how we're doing that, is just leveraging the network of facilities and locations and suppliers we have to do that. Great. Thank you. Sure thing. Thank you. Our next question comes from the line of Bob Koort from Goldman Sachs. Your line is now open. Thank you. Good morning. Hey Bob. Bob, thanks to the whole team. Your information, data that you're providing is super helpful and far more expansive than we've seen in the past. We really appreciate that. On slide 9, as one example, you talked about your incremental looked like 30% incrementals. I was wondering if you could talk about what the absolute margins are across those businesses and your expectations to sustain that kind of incremental margin. Sure thing. The absolute margin you're asking about, so these core areas, what do the margins look like for sustainable solutions, healthcare composites, and so on? That's right. Yep. I think what you would see is that it does really vary by segment. As you know, for us, that is kind of challenging sometimes to provide an elevator speech on. For example, we do have a lot of healthcare business in Distribution, which has lower margins vis-a-vis color and engineering materials. Where we are seeing things is, I would say that the run rate margins in those areas are really somewhere between probably 5% and 10% higher than the segment norm, is the best way to think about that. That's a good question for us to perhaps do some more elaboration on when we get toward our investor day. We have been trying to just demonstrate the contribution margins in each of those, with this chart. That's a takeaway for us to kind of look at the absolute levels in a more granular way. Let me ask you a question, maybe dovetails a little with Mike's. That consumer was up dramatically. I think he also hopefully recognized some of the COVID hangover that goes away from last year. Do you think there's a consumer hangover that you have to battle against next year as well? Maybe some of these sales were exceptional. I know you mentioned the inventory channel looks awfully lean. Could there be some demand destruction in some of those markets that makes it a little rougher on you next year? Well, that could come, and there could be a point in time where inventory levels are replenished to maybe what they looked like back in 2018 and 2019. Difficult to predict when that might happen. I know we try to kind of keep current on some of our customers where we can and where they see that happening. That probably is sometime If it happens next year, I think it would be towards the second half of next year. Again, that's really predicated on where demand and inventory levels are. One last one if I could, real quick. In your appendix, you sort of contextualized your performance against peers, and obviously it looks incredibly flattering to you or maybe insulting to you, depending on how you look at it. One thing your peer group of formulators really got smacked in the head on this price raws cadence, and you guys got in front of that. Can you just talk about what you did differently or what it might be about your product offering that's different than some of those peers that you look at from financial standpoint? It really was, I think, remarkable and surprising. Well, it's difficult for us to say with a lot of specificity what's happened with other companies. When I look at our numbers for the second quarter, there's two things that really were very important. One is that we started moving on price, really around December and January. I can tell you from my team's perspective, it was front and center as a topic of discussion for us literally every two weeks. I just felt like we brought a lot of attention to it. We got ahead of it and knew it was coming. When we had the inclement weather, which you knew very well in Texas, I think that just made us move even faster and higher. I guess that's the best way to think about it. We just went up. We've had, I can tell you that in my conversations with the legacy Clariant team, for example, we've done more price increases in the 1st half of this year than they've ever done in a year, right? We've had to. It's just the reality of the business. Secondly, I just think that these supply chain costs are probably more significant than people realize, just in terms of getting things from one place to another. It's difficult to price for that because it's kind of happening while you're trying to deliver for a customer. I think that's a big thing, too. From our standpoint, we were pricing with that in mind, without perfect clarity of what exactly the order of magnitude would be. I'm glad we got to where we did in the quarter because we covered it all. Maybe those are just two things to think about from a comparability standpoint. Thank you, Bob. Yep, thanks. Thank you. Our next question comes from the line of Angel Castillo from Morgan Stanley. Your line is now open. Hi, thank you for taking my question, and congrats on a strong quarter. Bob, I was hoping you could give us an update on capital allocation and M&A and where you are in terms of potential timeline of the pipeline of potential bolt-ons that you might be looking at, and also how you're thinking about buybacks in this kind of timeframe? Yeah. Look, first of all, we're really pleased to have brought Magna into the equation. For those of you who have chatted with me in the past about our acquisition history, you know that Clariant, for example, was something we had been working on for many years. Magna is something we've been in conversations with for a long time. They have been a very respected participant in the industry and candidly a competitor of ours. I think it's really important that these acquisitions we find have really strong cultural fit and bring technologies in that help our sustainable solutions portfolio. I guess that might be kind of a long-winded preamble to, we really want to put our money to work around acquisitions like this. We're optimistic about our ability to keep doing so with some other bolt-ons that we have relationships with as well. Again, that's always going to be our first priority. We've also had the priority of getting our net debt to EBITDA down below 2x, which is just something we stated at the time we announced the acquisition of the Clariant Color business. We're well on our way to getting there by the end of this year. My sense is that we can be more opportunistic with respect to buying back shares. I'd also remind everyone that it's typically in October when we revisit our dividend, and our intention would be to increase that again as we have every year for the last decade. Understood. As you look at the second half in your outlook, I was wondering if you could give a sense for what you're seeing from a regional perspective as you see everything happening with or evolving with the Delta variant. One, what are you seeing? Are you seeing any differences across the regions? If you could just kind of walk through that and give us more color, that'd be very helpful. Yeah. Look, one thing I would say about your question around the Delta variant and COVID is that it does continue to create challenges for us in specific locations, and we have had situations where we've had to limit production or close a location for a short period of time just to be in compliance with the local regulations and do the right thing from a safety standpoint. It's still continuing to cause disruptions. While maybe major other markets seem to be freeing up and getting more open as an economy, there's a lot of places that really still are struggling. My sense is that that's going to continue here for the foreseeable future, at least maybe the second half of this year. We kind of factored that in to our assessments here for the projections. I do think we are going to see some seasonality with respect to what we see in Europe here in the third quarter versus the second quarter. I think that's more normal than probably what it has been in the last year, but looks like what it did, let's say, three or four years ago. All that's really factored into the second half projections that we have and really our best estimate at this time. Maybe just a quick follow-up on that, I guess Asia has been a big driver of growth, so curious how you're seeing that in the second half. Yeah. Actually, I think Asia is going to continue to grow in the second half of the year. One thing that I really kind of call out is you'll see in one of the bridge schedules where we observed the COVID response application sales that we had in the second quarter of last year. A lot of that really was coming and sourced from Asia. That's still going to be the case that we're lapping that in the third and fourth quarter as well. On the surface of it, maybe the Asia sales growth doesn't look like what you might be expecting, but it is because we're lapping some of these COVID response applications. That's very helpful. Thank you. Sure thing. Thank you. Our next question comes from the line of Ben Kallo from Baird. Your line is now open. Hey, good morning. Thanks for taking my question. Good morning. Congrats managing through everything you had to deal with for you and your team. Just a couple quick questions. On the margin front, it looked like margins held up and going back many years to when you targeted the operating margin was a big target that you highlighted. Is that something that we should start expecting from you going forward? Is my first question. Yeah. I'd really like to expand on that at our investor day, and if you recall, Ben, we had done that in the past where we've looked at margins specifically and outlined some goals and objectives in that regard. I think that a big driver of that's going to be bringing the two organizations together where we still see synergy capture between Clariant legacy and PolyOne. There's a really important trend and story here around sustainable solutions and margin improvement that I expect to come from that. Really, I think it's not well understood yet what we are going to be doing as an enabler of customers using more recycled materials, and I think it's going to be a big deal. Maybe a little long-winded there and foreshadowing of what we want to cover at the investor day here in December, but there will definitely be a margin focus. Okay. Just on transportation and lightweighting, I know it's pretty specific, the question, but I know you guys do work there. All we're hearing from auto OEMs, whether it's passenger vehicle or truck OEMs, is lightweighting and the move to EVs. I just wanted to hear, is the business going to kind of stay steady where it is? Are there more opportunities for you to grow your exposure towards the movement towards lightweighting? Thank you for the questions. First of all, when we actually report lightweighting as sustainable solutions, that's also inclusive of using less material in other end markets, including packaging. For us, lightweighting is bigger in those areas than it really is in transportation. Partly that's just driven by the fact that transportation's really only around 7% or 8% of our sales, so it is a smaller market now for us. We continue to look at it as a growth area, and as you sort of pointed out there specifically around vehicle electrification, which I think is a good guide for us as well. We do see that as a growth area. Obviously, if you look at the Q2 numbers, transportation grew quite a bit, but of course, it was down quite a bit last year or so. Another thing that we'll just provide some more, I think, detail on is where does the growth come from in each of these sustainable areas by end market. We'll do some more of that in December, too. Thank you, guys. Yes, man. Thank you. Our next question comes from the line of Colin Rusch from Oppenheimer. Thanks so much. Can you give us a sense of the overall activity around new formulations, whether it is on new products or evolution of existing products? It seems like you are in a position to actually expand your opportunity set, as well as take some market share gains in existing products. There was kind of an interesting time, I'd say, in the second half of last year where we're really in probably one of the more challenging times related to the pandemic. You would think that innovation might take a back seat, but actually, we really saw a lot of customers kind of amp up their focus on sustainability and sustainable solutions at that time. May have been working from home or what other flexibility they had that sort of brought that about. I was encouraged to see that. I would say that's actually probably moderated in the last few months just simply because of the supply chain challenges, and it seems a little bit like it's all hands on deck, just to deliver what customers need right now. I guess I view that as just a short-term dynamic. With respect to share gain, I really believe that we are getting some share as a result of putting legacy Clariant and PolyOne together because of the number of locations we have and how we can serve and can only move products back and forth. There is innovation required to make that happen. All that sounds really kind of tactical, and that's just how it feels right now. I'll tell you, man, there's so many questions and inquiries around sustainable solutions, and this one particular area in packaging of using more recycled content is at the top of the list, and I think we're going to be the best service provider in that area. I think if we move fast and we get that business, there is a real opportunity for share gains. That's super helpful. Thanks. Can you speak to the leverage you're getting in the sales process, either in terms of just market share or pricing from the transparency you guys offer in your ESG program, which really is kind of at the top of best practices around the industrial complex? Yeah, I think you look at the price over inflation dynamics that we have in our bridge schedules, probably the best way to mathematically illustrate what we've done. That being said, the order of magnitude is so significant in the second quarter that maybe you're not seeing leverage in a traditional way that you would around price with immediate margin expansion. I'd expect that to come. Look, for us, we've always looked at the long-term margin expansion opportunity in the business is really coming from mix and innovation, driving that more than just outright price increases. Maybe back to, I don't know, Ben or Bob's earlier question, a good area for us to, I think, focus on and do some more work for the December 9th Investor Day. Okay. Thanks so much, guys. Sure thing. Thank you. Our next question comes from the line of Mike Harrison from Seaport Research. Your line is now open. Hi, good morning. Congrats on- Hi. ...the nice quarter and the guidance raise. I wanted to come back to this discussion around increasing recycled content and your comments that availability is a key issue. Do you have visibility on recycled resins or recycled plastics capacity coming on stream? Do you think that's going to be gradual, or is there going to be a point where there's a big slug that comes on all at once? Are you working with customers now on solutions and new formulations, such that when the materials become available, you can really hit the ground running with some of those new additives and colors? Thanks. Look, I would say that I couldn't give you an absolute capacity number right now, but anybody who is making recycled materials for these types of applications, I am sure is running full out, right? There's just way more demand than there is supply. I'm really encouraged by what I see as stated investments in this area. There are a number of companies dedicating assets to recycled materials for their particular streams. Organizations like Alliance to End Plastic Waste are doing the same thing. I think you're going to see a massive amount of supply increases over the course of the next few years. I don't think you'll see anything meaningfully change inside of 12 months or so. In a few years, I think that you will. Sometimes we get the question about our own investment in this area, and I just remind everybody, look, we're not a base resin manufacturer, right? We don't make polyethylene or polypropylene and don't have any intention to do that, and don't have any intention to own recycling assets. We're a formulator, and we're going to formulate around these materials, and our efforts right now are 100% focused on being the best at formulating around recycled content. We do that, we win. That does require some partnerships, I think, with some of these suppliers who have that and some sources of supply, unique plastics like ocean plastics and recovered things of that nature are all partnerships that we have in motion. All right. On the Distribution business, the gross margin dropped below 10%. I think that's the lowest we've seen in some time. Is this a product of supply chain disruption and some increases in your logistics cost, or is this just really how the math works as prices go up and maybe you're maintaining your margin per pound? How should we think about that gross margin number, I guess, for Q2 and as we look at the rest of the year in Distribution? Thanks. Yeah, it's really just math. Look, I know the bridge schedules we put out this morning are fresh, but I think when you get an opportunity to run some of that yourself, you'll see that, look, if you just take the inflation number and the cost number, right? We've got maybe like a plus $3 million on that in Distribution. Bottom line is that we are doing more from a bottom-line standpoint, but with a higher revenue number, and therefore, the margin percent is lower. Did we lose Mike? I'm all set. Thanks very much. Okay. Thank you. Thank you. Our next question comes from the line of Laurence Alexander from Jefferies. Your line is now open. Good morning. Do you have a sense for how much volume might have been constrained by the supply constraints that your customers are seeing? Are there any areas where you're seeing real demand destruction now because of pricing or changes in how your customers manage inventory to handle the inflationary environment? Yeah, I think this may have been one of Jamie's observations, is that it's a little hard to bifurcate demand from Q1 to Q2. It was down roughly 2.5%. Laurence, I can't really say definitively if that was simply because of seasonality. We did see those levels perhaps most impacted in Europe and Middle East, and that would've been normal, I think, in the second quarter. There could be some that's candidly just due to supply chain challenges, right? It's not always just our own, but sometimes customers have different supply chain issues, and as a result, can't place the orders that they would otherwise. Really difficult to say what that is definitively. Then, I'm sorry, the second part of your question? Just in terms of customers changing behavior or purchasing patterns or the size of orders because of the inflationary environment. Yeah. It's been surprising just how well you've handled that. Yeah. Look, I think customers have been I guess I'd say they've just been very flexible. I think that they are willing to take what they can get when they can get it oftentimes. We do, as you know, lots and lots of small things. For us, small batch sizes is not something we're not used to. In some customers, it's even smaller than what they are used to, and I think you're seeing a lot of flexibility in their regard to do that. They're also looking at alternative sources of supply in ways that I'd say they may not have in the past, just given these challenges. Look, I think we are seeing changes in customer behavior, but I view it generally as a positive in terms of their willingness to work under these conditions with us and to explore alternative solutions. Okay, great. Thanks. Yeah, thank you. Thank you. Our next question comes from the line of Vincent Anderson from Stifel. Good morning, everyone. Thank you. Yeah, good morning. First off, thank you again for all the added detail, especially around the recycling side of the business. When I go to slide 18, I was trying to think more generally maybe how the research and commercialization for you specifically contrasts with maybe some of your traditional businesses, if it does at all. I'm thinking maybe as an example, that little sliver of biopolymers where you have very novel materials that your customers may not be prepared to work with or even maybe aware of. Just how you develop a product around some of these sustainability attributes that diverge from traditional performance-based attributes. Yeah. One of the reasons why bio-based is the sliver that it is simply because there isn't very much of this stuff available to work with. People have been talking about it for years, right, in terms of maybe plant-based plastics or other sources of supply. There just isn't much out there. Look, for us, on the innovation side, again, we view ourselves as a formulator, and there's a lot of work going on behind the scenes to make sure that we can formulate around all these materials, because really, it's going to be customer preference that drives what we formulate. If they want to use bio-based, we can do that, right? If they want to use just more recycled content, we can do that. If they just want their product to be more easily recyclable, that's also a formulation for us. It's not one of these things. I'd also say we're not trying to dictate for our customers what they use and why. We just want to be able to support them. Understood. That's helpful. When I think about that, it sounds like maybe it's not likely that you would be going out there and maybe looking to form some stronger partnerships between a large supplier of a novel material and a significant buyer to bring something to market. It's really more about being prepared for basically just customer demand pull. No, I might clarify on that. What's good about what we do as a formulator is that for suppliers of, and I'll just use bio-based materials, they do seek out relationships with us as we do with them because they know that if we formulate well around their material, that we're going to be an advocate for that as a specification in the future. I see those relationships as very important in partnerships, but I wouldn't go so far as to say, "Okay, that's so important that I want to acquire a bio-based manufacturer of a polyolefin." That's not true. The partnerships are there. They're growing. There's a lot of appetite from these suppliers to work with us in that regard. Great. Well, I appreciate the color on that. Good luck on the rest of the year. All right, thank you. Thank you. Our next question comes from the line of Jaideep Pandya from On Field Research. Your line is now open. Thanks. First question really is on Clariant. Back in the day when you guys were competitors, how difficult was it to sort of increase prices in an environment like this with Clariant as a competitor? I'm just trying to understand, now that you guys are Avient, has that actually made it easier for you to go after these dynamic price increases versus when you guys were sort of competitors? That's the first question. The second question is really around the whole sustainable solutions recycling aspect. Are you also working around solutions where you actually are reducing the plastic content in a solution, i.e., allowing the same performance but with a lower plastic element, or is it really more just around appearance and color that you're sort of working on? The third question really is just around sort of the synergies. In an environment where demand is so dynamic, how are you sort of managing plant utilization and also sort of plant rationalization? Obviously, key part of your synergies is to sort of shut some of these sites. How are you tackling that in such a dynamic world right now? Thanks a lot. The first question around pricing is, first thing I'd say is that, I think that legacy Clariant and the legacy PolyOne competitive relationship was one of the best that you could ask for in the sense that our two teams really did compete on the basis of innovation and customer service. Both of us viewed our businesses and services as specialties. Anyway, I felt like we all competed in the right way, and that relates to pricing as well. It's kind of difficult to actually answer that question because the pricing dynamic in our first year together has been one that's unlike any I've ever seen in my time with the company. I am sure that by having our two organizations together, that we're better able to communicate and move collectively, and communicate better with our customers. It's really hard to compare and contrast what would the last six months have been like if we weren't together? It's hard to say that, but I'm sure that because we are one team and because the integration has gone so well, it just has to be better now than what it would've been. With respect to your question on the sustainable solutions, I mean, that's huge for us, right? A lot of customers, they say, "Hey, look, I want to make the same package, but I'd love to use half the material," right? That's kind of the holy grail, right? Is how do you make the same package with half the stuff? All of that's a good thing for us from a color and additives perspective, and a big part of what we call lightweighting. That's one of the most important areas, I think, from a sustainability perspective that exists and that we are well geared towards serving. Then, your last question around integration is that, look, we are ahead of schedule with respect to cost synergies and our ability to capture those. Largely to date, that's been administrative costs and sourcing. There are operational synergies that we see in the future. One thing though that has kind of come out of the pandemic, and what we see with supply chain challenges right now is that we just need to stay flexible. What we might have had as a plan six months ago could be different from what we see today, just to make sure that we can continue to serve our customers as well as we can. We're still moving ahead with some of these ideas that we have, but they may have gotten pushed back a bit because of the pandemic, and really probably even more so these supply chain challenges right now. Great. Thanks a lot. Awesome. Thank you very much. We appreciate everyone's time, attention, and participating on the call today. We look forward to connecting with you at our Investor Day and hopefully sometime in between. Again, just want to say thanks for your time on the call today, and till we chat next time, take care and stay safe. This concludes today's conference call. Thank you for participating.