ANNUAL REPORT
2024
We serve customers in 180 countries across three end markets:
Avantor® 2024
performance snapshot
FULL YEAR
Laboratory Solutions
$4,610M
Reported revenue
$6.78B
Reported revenue
$2,174M
Bioscience Production
Reported revenue
$1,199
1
M
Adjusted EBITDA
$768
2
M
Free cash flow
1. See "Reconciliations of non-GAAP measures" in our Annual Report on Form 10-K for a reconciliation of this non-GAAP measure.
2. See "Liquidity and capital resources-Historical cash flows" in our Annual Report on Form 10-K for a reconciliation of this non-GAAP measure.
3. Based on management estimates.
4. Based on FY 2024 results.
5. Top biologics in 2024 based on estimated revenue.
6. Anticipated top biologics in 2030 based on estimated revenue.
Biopharma &
Healthcare
Education &
Government
Advanced Technologies
& Applied Materials
avantorsciences.com
Supporting every step of the scientific journey
#1
supplier of high-purity
silicone for medical
implants
#1 & #2
global partner for
laboratory
consumables
Specified into
~90% of
expected 2030 top 50
biologics6
#1 & #2
global materials
provider in
bioprocessing
~60%
revenue from
biopharma and
healthcare end
markets4
~85%
recurring revenue
from materials,
consumables and
services4
Global scale – serving
300,000
labs in 180 countries
Specified into
~85% of top
20 commercialized
biologics5
~90%
self-manufactured
production content
specified into
customers’ products
or processes
>$85B
total addressable
market3
Our global network accelerates
innovation at scale
avantorsciences.com
avantorsciences.com
MICHAEL STUBBLEFIELD
President and Chief Executive Officer
A message to
our stockholders
To our stockholders, customers and colleagues:
Thank you for your continued support of Avantor®. Together,
we are setting science in motion and driving innovation across
the life sciences and advanced technologies industries. Our role
is to empower progress, which we do every day in laboratories
and production facilities across the globe. We are privileged to
partner with the innovators, pioneers and disruptors working
tirelessly to create a better world.
Avantor’s Business Model and Pivotal Achievements
In 2024, we made significant progress towards fundamentally
transforming our company, enabling us to deliver even more
value to the scientific community and to our stockholders. We
started by implementing a new operating model to better align
our business with the structure and needs of our customers:
•
Laboratory Solutions segment comprises approximately
two-thirds of our revenue and provides a comprehensive
set of products and services to scientists and technicians
in biopharma research, the academic environment and
various diagnostic labs. We offer anything a scientist needs
to perform precise and complex analytics in the lab including
various consumables, chemicals and reagents, glassware,
plasticware and a host of equipment and instruments.
High-value services and digital solutions are also key to our
portfolio. They optimize end-to-end operations and help
build the lab of the future. Today, we are the first or second
supplier of choice in each lab solutions end market we serve.
•
Our Bioscience Production segment leverages our deep
materials science capabilities to customize ultra-high-
purity materials suitable for our customers’ highly regulated
production platforms. This segment includes bioprocessing,
custom formulations for medical implant applications and
advanced technology solutions. While biosciences comprise
one-third of our revenue, it accounts for roughly half of our
profitability.
Together, our two business segments enable Avantor to
seamlessly support customers across the entire research and
development (R&D) continuum from lab to production.
A key component of our value proposition is our ability to leverage
unparalleled access in the lab to seed custom proprietary materials
in our customers’ production environments. Our materials are then
specified into our customers’ workflows, creating durable revenue and
cash flow streams over time.
In conjunction with the launch of Avantor’s new operating model,
we announced a program to generate $300 million of run rate cost
savings by the end of 2026, with a goal of $75 million in 2024. We are
pleased to have significantly outperformed that target this year with
an exit run rate of $165 million. These cost savings helped to drive
margin expansion and led to best-in-class free cash flow conversion
of over 110% in fiscal year 2024.
In 2024, we also invested in building our capabilities to support our
growth strategy:
•
We opened a new and expanded Innovation Center in
Bridgewater, N.J., which serves as our corporate R&D headquarters
committed to optimizing innovative biomanufacturing processes at
scale. It is one of 14 innovation centers across the globe, all focused
on helping our customers deliver breakthrough discoveries to
market faster and more efficiently.
•
We completed a series of manufacturing and distribution center
expansions and upgrades, including the largest manufacturing
investment we've ever made to ensure we are prepared to meet
increased bioprocessing demand. The investments in automation
and robotics will further enhance the operational flexibility
and agility of our distribution centers and strengthen our
sustainability efforts.
•
We launched our first Central Services Hub in the Boston
area, designed to automate operational tasks for local biotech
and biopharma companies and provide virtual assistance to
researchers at their lab bench.
•
We accelerated innovation in digital capabilities across our
platform. For example, we leveraged cutting-edge digital
tools and generative AI to launch a new service automating
operational tasks and providing virtual assistance to researchers
at their lab bench, alleviating capacity challenges faced by large
pharma and biotech customers.
avantorsciences.com
Finally, we made significant progress on our capital deployment
strategy in 2024. Over the past two years, we have paid down over
$2 billion in debt. This year, we took our net leverage to 3.2 times
adjusted EBITDA, down from approximately 4.0 times at the start of
the year. We are well on our way to achieving our target net leverage
of below 3.0 times adjusted EBITDA.
Looking Ahead
In 2025, we are confident in our ability to enhance organic growth.
We serve attractive end markets with the majority of our revenues
coming from biopharma and healthcare — industries that have
proven their ability to deliver strong organic growth over time.
In Lab Solutions, our growth strategy is focused on enhancing
the customer experience. We benefit from unique competitive
differentiators that customers increasingly value: deep partnerships
to understand their workflows, an extensive product and services
portfolio and a global footprint with an efficient supply chain.
We are dedicated to strengthening our market position by driving
innovation in our R&D centers and cultivating strategic partnerships
to provide scientists with the products and services they need,
anytime and anywhere.
We view digital offerings as another key growth lever in the lab and
we’re continuing to strategically invest here, including by launching a
new, more personalized e-commerce platform with dynamic search
capabilities and unparalleled customer insights.
In Bioscience Production, we are bringing innovative, integrated
solutions and systems to our customers to help address their most
pressing needs. We have prioritized robust penetration in exciting
new modalities, with particular strength in monoclonal antibodies,
biosimilars, antibody-drug conjugates and cell and gene therapy.
Customer activity in that space is growing, driven by the promise of
emerging therapies.
We are also actively progressing hundreds of innovation projects with
customers in the medical implant space. Customers recognize our
ability to offer truly unique, ultra-high-purity formulations that are
safe for prolonged use inside the body. We continue to innovate to
extend our competitive advantages in this area.
In 2025, the pace of innovation continues to increase, as does the
opportunity for us to help customers solve their most complex
challenges. Whether in the lab or the production environment, we
remain intently focused on setting science in motion to create a better
world. I can’t think of a more noble or important mission.
On behalf of our 13,500 associates across the globe, thank you again
for your support of Avantor.
avantorsciences.com
Forward-Looking Statements
See “Cautionary factors regarding forward-looking statements” and “Item 1A:
Risk Factors” in the enclosed annual report on Form 10-K for a discussion of risks
and uncertainties relating to the forward-looking statements contained herein.
Such statements speak only as of the date of this Annual Report and, except
to the extent required by applicable law, the Company does not assume any
obligation to update or revise any forward-looking statement, whether as a
result of new information, future events or otherwise.
Non-GAAP Financial Measures
As appropriate, we supplement our results of operations determined in
accordance with U.S. generally accepted accounting principles (“GAAP”) with
certain non-GAAP financial measurements that are used by management,
and which we believe are useful to investors, as supplemental operational
measurements to evaluate our financial performance.
These measurements should not be considered in isolation or as a substitute
for reported GAAP results because they may include or exclude certain items
as compared to similar GAAP-based measurements, and such measurements
may not be comparable to similarly titled measurements reported by other
companies. Rather, these measurements should be considered as an additional
way of viewing aspects of our operations that provide a more complete
understanding of our business. We strongly encourage investors to review our
consolidated financial statements in their entirety and not rely solely on any
one, single financial measurement.
avantorsciences.com
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avantorsciences.com
Form 10-K
avantorsciences.com
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
━━━━━━━━━
FORM 10-K
━━━━━━━━━
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 2024
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number: 001-38912
Avantor, Inc.
(Exact name of registrant as specified in its charter)
Delaware
82-2758923
(State or other jurisdiction of
incorporation or organization)
(I.R.S. employer identification no.)
Radnor Corporate Center, Building One, Suite 200
100 Matsonford Road
Radnor, Pennsylvania 19087
(Address of principal executive offices) (zip code)
610 386-1700
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading symbol
Exchange on which registered
Common stock, $0.01 par value
AVTR
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the
Securities Act.
☒Yes
☐No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section
15(d) of the Act.
☐Yes
☒No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days.
☒Yes
☐No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File
required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit such files).
☒Yes
☐No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-
accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of
“large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth
company” in Rule 12b-2 of the Exchange Act.
☒Large Accelerated Filer
☐Accelerated Filer
☐Non-accelerated Filer
☐Smaller reporting company
☐Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the
extended transition period for complying with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s
assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the
Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued
its audit report.
☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the
financial statements of the registrant included in the filing reflect the correction of an error to previously
issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery
analysis of incentive-based compensation received by any of the registrant’s executive officers during the
relevant recovery period pursuant to § 240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).
☐Yes
☒No
The aggregate market value of common stock held by our non-affiliates as of the last business day of the
registrant’s most recently completed second fiscal quarter was $14,407,779,658.
On February 3, 2025, 680,902,572 shares of common stock, $0.01 par value per share, were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of our definitive proxy statement for our 2025 annual meeting of stockholders will be filed with
the SEC on or before 120 days after our 2024 fiscal year-end and are incorporated by reference into Part
III of this report.
[THIS PAGE INTENTIONALLY LEFT BLANK]
Avantor, Inc. and subsidiaries
Form 10-K for the fiscal year ended December 31, 2024
Table of contents
Page
Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ii
Cautionary factors regarding forward-looking statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
iv
PART I
Item 1.
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
Item 1A.
Risk factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9
Item 1B.
Unresolved staff comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
24
Item 1C.
Cybersecurity
24
Item 2.
Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
25
Item 3.
Legal proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
25
Item 4.
Mine safety disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
26
Information about our executive officers
27
PART II
Item 5.
Market for registrant’s common equity, related stockholder matters and issuer
purchases of equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
28
Item 6.
Reserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
30
Item 7.
Management’s discussion and analysis of financial condition and results of operations
30
Item 7A.
Quantitative and qualitative disclosures about market risk . . . . . . . . . . . . . . . . . . . . . .
47
Item 8.
Financial statements and supplementary data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
48
Item 9.
Changes in and disagreements with accountants on accounting and financial
disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
48
Item 9A.
Controls and procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
48
Item 9B.
Other information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
50
Item 9C.
Disclosure regarding foreign jurisdictions that prevent inspections . . . . . . . . . . . . . . . .
50
PART III
Item 10.
Directors, executive officers and corporate governance . . . . . . . . . . . . . . . . . . . . . . . . .
51
Item 11.
Executive compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
51
Item 12.
Security ownership of certain beneficial owners and management and related
stockholder matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
51
Item 13.
Certain relationships and related transactions, and director independence . . . . . . . . . .
51
Item 14.
Principal accountant fees and services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
51
PART IV
Item 15.
Exhibits and financial statement schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
51
Item 16.
Form 10-K summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
57
i
Glossary
the Company, we, us, our . Avantor, Inc. and its subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2019 Plan . . . . . . . . . . . . . the Avantor, Inc. 2019 Equity Incentive Plan, a stock-based compensation
plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjusted EBITDA . . . . . . our earnings or loss before interest, taxes, depreciation, amortization and
certain other adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjusted Operating
Income . . . . . . . . . . . .
our earnings or loss before interest, taxes, amortization and certain other
adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
AI . . . . . . . . . . . . . . . . . . . artificial intelligence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
AMEA . . . . . . . . . . . . . . . . Asia, Middle-East and Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
AOCI . . . . . . . . . . . . . . . . . accumulated other comprehensive income or loss . . . . . . . . . . . . . . . . . . . . .
ASC . . . . . . . . . . . . . . . . . . Accounting Standards Codification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
BIS . . . . . . . . . . . . . . . . . . the Bureau of Industry and Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CERCLA . . . . . . . . . . . . . . the Comprehensive Environmental Response Compensation and Liability
Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
cGMP . . . . . . . . . . . . . . . . Current Good Manufacturing Practice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CODM . . . . . . . . . . . . . . . chief operating decision maker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
COVID-19 . . . . . . . . . . . . Coronavirus disease of 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DDTC . . . . . . . . . . . . . . . . Directorate of Defense Trade controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DEA . . . . . . . . . . . . . . . . . Drug Enforcement Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
DHHS . . . . . . . . . . . . . . . . Department of Health and Human Service . . . . . . . . . . . . . . . . . . . . . . . . . . .
EMA . . . . . . . . . . . . . . . . . European Medicines Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
EPA . . . . . . . . . . . . . . . . . . the U.S. Environmental Protection Agency . . . . . . . . . . . . . . . . . . . . . . . . . .
ERP . . . . . . . . . . . . . . . . . . enterprise resource planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
EU . . . . . . . . . . . . . . . . . . . European Union . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
EURIBOR . . . . . . . . . . . . . the basic rate of interest used in lending between banks on the European
Union interbank market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
FASB . . . . . . . . . . . . . . . . the Financial Accounting Standards Board of the United States . . . . . . . . . .
FCPA . . . . . . . . . . . . . . . . the United States Foreign Corrupt Practices Act . . . . . . . . . . . . . . . . . . . . . . .
FDA . . . . . . . . . . . . . . . . . United States Food and Drug Administration . . . . . . . . . . . . . . . . . . . . . . . . .
GAAP . . . . . . . . . . . . . . . . United States generally accepted accounting principles . . . . . . . . . . . . . . . . .
GDPR . . . . . . . . . . . . . . . . the General Data Protection Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Description
ii
ICH Q7 . . . . . . . . . . . . . . . the International Council for Harmonisation of Technical Requirements for
Pharmaceuticals for Human Use - Good Manufacturing Practice
Guidance for Active Pharmaceutical Ingredients . . . . . . . . . . . . . . . . . . .
IPO . . . . . . . . . . . . . . . . . . initial public offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ISO . . . . . . . . . . . . . . . . . . International Organization for Standardization or international equivalents .
ITAR . . . . . . . . . . . . . . . . . the International Traffic In Arms Regulations . . . . . . . . . . . . . . . . . . . . . . . .
LIBOR . . . . . . . . . . . . . . . the basic rate of interest used in lending between banks on the London
interbank market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long-Term . . . . . . . . . . . . period other than Short Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Masterflex . . . . . . . . . . . . . Masterflex LLC, a company we acquired in November 2021 . . . . . . . . . . . .
MCPS . . . . . . . . . . . . . . . . 6.250% Series A Mandatory Convertible Preferred Stock . . . . . . . . . . . . . . .
NAV . . . . . . . . . . . . . . . . . Net Asset Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
NuSil . . . . . . . . . . . . . . . . . NuSil Acquisition Corp, NuSil Investments LLC and subsidiaries, a
business organization with which we merged in 2016 . . . . . . . . . . . . . . .
NYSE . . . . . . . . . . . . . . . . the New York Stock Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
OCI . . . . . . . . . . . . . . . . . . other comprehensive income or loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
OEM . . . . . . . . . . . . . . . . . original engineering manufacturers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
OFAC . . . . . . . . . . . . . . . . the U.S. Department of The Treasury’s Office of Foreign Assets Control . . .
OSHA . . . . . . . . . . . . . . . . the U.S. Occupational Safety & Health Administration . . . . . . . . . . . . . . . . .
Ritter . . . . . . . . . . . . . . . . . Ritter GmbH and affiliates, a company we acquired in June 2021 . . . . . . . . .
RSU . . . . . . . . . . . . . . . . . . restricted stock units represent awards that will vest annually and awards
may contain performance and market conditions . . . . . . . . . . . . . . . . . . .
SEC . . . . . . . . . . . . . . . . . . the United States Securities and Exchange Commission . . . . . . . . . . . . . . . .
SG&A expenses . . . . . . . . selling, general and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . .
Short Term . . . . . . . . . . . . period less than a year from the reporting date . . . . . . . . . . . . . . . . . . . . . . . .
SKU . . . . . . . . . . . . . . . . . stock keeping unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SOFR . . . . . . . . . . . . . . . . secured overnight financing rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
specialty procurement . . . . product sales related to customer procurement services . . . . . . . . . . . . . . . . .
VWR . . . . . . . . . . . . . . . . . VWR Corporation and its subsidiaries, a company we acquired in
November 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Description
iii
Cautionary factors regarding forward-looking statements
This report 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 report are forward-looking statements. Forward-looking
statements discuss our current expectations and projections relating to our financial condition, results of
operations, plans, including our cost transformation initiative, 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.
You should understand that the following important factors, in addition to those discussed under Part I,
Item 1A, “Risk factors” and Item 7, “Management’s discussion and analysis of financial condition and
results of operations” could affect our future results and could cause those results or other outcomes to
differ materially from those expressed or implied in our forward-looking statements:
•
disruptions to our operations;
•
competition from other industry providers;
•
our ability to implement our strategies for improving growth and optimizing costs;
•
our ability to anticipate and respond to changing industry trends;
•
adverse trends in consumer, business, and government spending;
•
our dependence on sole or limited sources for some essential materials and components;
•
our ability to successfully value and integrate acquired businesses;
•
our products’ satisfaction of applicable quality criteria, specifications and performance standards;
•
our ability to maintain our relationships with key customers;
•
our ability to maintain our relationships with distributors;
•
our ability to maintain our customer base and our expected volume of customer orders;
•
our ability to maintain and develop relationships with drug manufacturers and contract
manufacturing organizations;
•
the impact of new laws, regulations, or other industry standards;
iv
•
changes in the interest rate environment that increase interest on our borrowings;
•
adverse impacts from currency exchange rates or currency controls imposed by any government
in major areas where we operate or otherwise;
•
our ability to implement and improve processing systems and prevent a compromise of our
information systems or personal data;
•
our ability to protect our intellectual property and avoid third-party infringement claims;
•
exposure to product liability and other claims in the ordinary course of business;
•
our ability to develop new products responsive to the markets we serve;
•
supply chain constraints and the availability of raw materials;
•
our ability to source certain of our products from certain suppliers;
•
our ability to contain costs in an inflationary environment;
•
our ability to avoid negative outcomes related to the use of chemicals;
•
our ability to maintain highly skilled employees;
•
our ability to maintain a competitive workforce;
•
adverse impact of impairment charges on our goodwill and other intangible assets;
•
currency fluctuations and uncertainties related to doing business outside the United States;
•
our ability to obtain and maintain required regulatory clearances or approvals, which may
constrain the commercialization of submitted products;
•
our ability to comply with environmental, health and safety laws and regulations, or the impact of
any liability or obligation imposed under such laws or regulations;
•
our indebtedness, which could adversely affect our financial condition or prevent us from
fulfilling our debt or contractual obligations;
•
our ability to generate sufficient cash flows or access sufficient additional capital to meet our debt
obligations or to fund our other liquidity needs; and
•
our ability to maintain an effective system of internal control over financial reporting.
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 report. 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.
v
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PART I
Item 1.
Business
At Avantor, everything we do is tied to our unique mission of setting science in motion to create a better
world.
We are a leading global provider of mission-critical products and services to customers in the biopharma,
healthcare, education & government, and advanced technologies & applied materials industries. Our
business model is grounded in supporting our customers from discovery to delivery and Avantor is
embedded in virtually every stage of the most important research, scale-up and manufacturing activities in
the industries we serve.
Our comprehensive offering provides scientists all they need to conduct their research: materials &
consumables, equipment & instrumentation and services & specialty procurement. Our customer-centric
innovation model enables us to provide solutions for some of the most demanding applications, and we
leverage our comprehensive offering and access to early-stage research to identify and develop content
and solutions that ultimately become specified into our customers’ approved production platforms. Our
broad portfolio of products and services, fully integrated business model and global supply chain enable
us to support our customers’ journey every step of the way.
We have a number of distinctive capabilities that set us apart from other companies in our space. For
example, our global footprint offers extraordinary customer access, enabling us to serve more than
300,000 customer locations in approximately 180 countries around the world.
Our legacy began in 1904 with the founding of the J.T. Baker Chemical Company. In 2010, we were
acquired by New Mountain Capital from Covidien plc. Since then, we have expanded through a series of
large acquisitions which have extended our global reach. In 2016, we merged with NuSil, a leading
supplier of high-purity silicone products for the medical device and aerospace industries that was founded
in 1985. In 2017, we acquired VWR, a global manufacturer and distributor of laboratory and production
products and services founded in 1852.
Avantor, Inc. was incorporated in Delaware in May 2017 in anticipation of the VWR acquisition. We
completed our initial public offering through Avantor, Inc. and listed our shares on the New York Stock
Exchange in May 2019.
1
Business segments
We report financial results in two segments: Laboratory Solutions and Bioscience Production. The
following chart presents the approximate mix of net sales for each of those segments during 2024:
Laboratory
Solutions
68%
Bioscience
Production
32%
Within our reportable segments, we sell materials & consumables, equipment & instrumentation and
services & specialty procurement to customers in the biopharma & healthcare, education & government
and advanced technologies & applied materials industries. We work with customers across these
sophisticated, science-driven industries that require innovation and adherence to the most demanding
technical and regulatory requirements. The following charts present the approximate mix of net sales for
each of these groups during 2024:
Product group
Proprietary 53%
Third-party 47%
Customer group
Biopharma &
healthcare 63%
Education &
government
11%
Advanced
technologies &
applied
materials 26%
2
Products and services
Our portfolio includes a comprehensive range of products and services that allows us to create customized
and integrated solutions for our customers. These products and services enable our customers to achieve
precise analytical results in their research, diagnostic, and quality assurance and quality control activities.
We also provide mission-critical, high-purity materials and solutions to customers that support the
development and production of their life-changing treatments. More than 86% of our net sales were from
product and service offerings that we consider to be recurring in nature. Our products and services are as
follows:
•
Materials & consumables include ultra-high purity chemicals and reagents, lab products and
supplies, highly specialized formulated silicone materials, customized excipients, customized
single-use assemblies, process chromatography resins and columns, analytical sample prep kits
and education and microbiology and clinical trial kits, and fluid handling tips. Some of these are
proprietary products that we make while others are produced by third parties;
•
Equipment & instrumentation include filtration systems, virus inactivation systems, incubators,
analytical instruments, evaporators, ultra-low-temperature freezers, peristaltic pumps, biological
safety cabinets and critical environment supplies; and
•
Services & specialty procurement include onsite lab and production, equipment, procurement and
sourcing and biopharmaceutical material scale-up and development services.
In aggregate, we provide millions of SKUs, including high value specialty products developed to exacting
purity and performance specifications. Our proprietary brands have been specified and trusted for
decades. Our e-commerce platform makes it easy for customers to do business with us and enables digital
marketing efforts that position us to capture new demand. All of our capabilities are underpinned by our
Avantor Business System which drives execution and continuous improvement. We manufacture products
that meet or exceed the demanding requirements of our customers across a number of highly regulated
industries. Our high-purity and ultra-high purity products, such as our J.T.Baker brand chemicals, are
trusted by life sciences and electronic materials customers around the world and can be manufactured at
purity levels as stringent as one part-per-trillion. Similarly, our NuSil brand of high-purity, customized
silicones has been trusted for more than 30 years by leading medical device manufacturers and aerospace
companies.
Our services organization of over 2,500 colleagues work side-by-side with our customers to support their
workflows. Our traditional service offerings focus on the needs of laboratory scientists and include
procurement, logistics, inventory and stock room management, chemical and equipment tracking and
glassware autoclaving. In addition, we offer more complex and value-added scientific research support
and production services such as DNA extraction, media preparation, bioreactor servicing and compound
management, and cleanroom control, monitoring, maintenance and sanitization.
Customers
We benefit from longstanding customer relationships, and approximately 40% of our 2024 net sales came
from customers that have had relationships with us for 15 years or more. We also have a diverse customer
base with no single end customer comprising more than 5% of net sales.
3
Suppliers
We sell proprietary products we make and third-party products sourced from a wide variety of product
suppliers located across the globe. Many of our supplier relationships are based on contracts that vary in
geographic scope, duration, product and service type, and some include exclusivity provisions. Those
relationships may include distribution, sales and marketing support as well as servicing of instruments
and equipment. Many of our supplier relationships have been in place for more than twenty years.
Sales channels
We reach our customers throughout the Americas, Europe and AMEA via a well-trained global sales
force, comprehensive websites and targeted catalogs. Our sales force is comprised of approximately 3,500
sales and sales support professionals, including over 200 sales specialists selected for their in-depth
industry and product knowledge. Our sales professionals include native speakers for each of the countries
in which we operate, allowing us to have high impact interactions with our customers across the globe.
Our e-commerce platform plays a vital role in how we conduct business with our customers. In 2024,
approximately 76% of our transactions came from our digital channels. Our websites utilize search
analytics and feature personalized search tools, customer specific web solutions and enhanced data that
optimize our customers’ online purchasing experience with rich content and AI-based recommendations
and better integrate our customers’ processes with our own. Our websites are designed to integrate
acquisitions, drive geographical expansion and serve segmented market needs with ease. In addition, we
have introduced digital services and solutions that streamline lab procurement and operations and have
become embedded into many customers’ laboratories, such as Avantor’s Inventory Manager.
Infrastructure
We have more than 200 facilities strategically located throughout the globe that include manufacturing,
distribution, service and research & technology.
We operate over 40 global manufacturing facilities, including 12 facilities that are cGMP compliant and
have been registered with the FDA or comparable foreign regulatory authorities. Our facilities are
strategically located in North America, Europe and the AMEA region to facilitate supply chain efficiency
and proximity to customers. Our manufacturing capabilities include: (i) an ability to quickly change
specifications depending on customer needs; (ii) our flexible unit operations, which allow for production
scalability, from laboratory pre-clinical development to large-volume commercialization; (iii) proprietary
purification technologies designed to ensure lot-to-lot consistency through ultra-low impurity levels; (iv)
rigorous analytical quality control testing; and (v) robust regulatory and quality control procedures. Our
global network of distribution centers gives our customers security of supply and real-time flexibility. We
also have 14 innovation centers that enable extensive collaboration and customization, critical elements
for serving highly regulated, specification-driven applications.
Information technology
We have a highly automated suite of ERP systems that promote standardization and provide business
insight. Our global web infrastructure provides seamless integration with our customers and suppliers.
These ERP platforms support rapid development and deployment of enhancements so that we may
quickly adapt to meet the technology needs of our customers and seamlessly integrate new acquisitions.
We have made significant investments to implement common ERP and online platforms that enhance the
customer experience and employ network and data security architecture.
4
Competition
We operate in a highly competitive environment with a diverse and fragmented base of competitors, many
of whom focus on specific regions, customers, and/or segments. We focus on service and delivery,
breadth of product line, customization capabilities, price, customer support, online capabilities and the
ability to meet the special and local needs of our customers.
Competition is driven not only by the product quality and purity across industries we serve, but also by
the adaptability of the supplier as a developmental and commercial partner. We rely on our scale,
expertise, deep customer access, depth of product and value-added service offerings, marketing strategies
and sales force, acquisition strategy, financial profile and management team to deliver superior solutions
to our customers and provide extensive market channel access to our suppliers.
Sustainability
Our Science for Goodness sustainability platform enhances our framework for creating long-term value
by embedding sound environmental, social and governance practices into our business strategy. The
platform also enables us to continually measure and report progress against four key commitment pillars,
which are aligned with several of the United Nations Sustainable Development Goals.
Our approach to sustainability is reflected in our people, the products we create, the transformative
services we provide, and the integrity with which we serve our stockholders, business partners, suppliers,
customers, associates, and communities. Our efforts to build a more sustainable future include programs
to monitor, measure, and set strategies to reduce greenhouse gas emissions, efficiently manage resource
use, and reduce end of life impact of products. We directly engage our supply chain on these efforts
through Avantor’s Responsible Supplier Program. The program enables collaboration with supplier
partners to identify sustainability challenges and solutions focused on four priority topic areas: climate
change, human rights, resource circularity, and natural resource conservation.
As our program matures and we continue to address the evolving expectations of stakeholders, we
completed a double materiality assessment in 2024, and will use this information to refine our strategy
and goal setting.
In 2024, Avantor received several important accolades for our efforts: Avantor received a Bronze Medal
from EcoVadis, a leader in sustainability ratings, for a second year in a row; and achieved a score of 100
on the Human Rights Campaign Foundation’s 2025 Corporate Equality Index (CEI) for the second year in
a row; and was recognized as a “Best Place to Work for Disability Inclusion” from Disability:In for the
first time.
Employees and human capital resources
Our success depends on our ability to attract, retain and motivate highly qualified and diverse talent. As
of December 31, 2024, we had approximately 13,500 employees located in over 30 different countries in
a variety of roles. Approximately 5,300 of our associates were employed in the U.S. We believe that our
relations with our employees are good. As of December 31, 2024, approximately 5% of our employees in
North America were represented by unions, and a majority of our employees in Europe were represented
by workers’ councils or unions. We compete in the highly competitive life sciences industry. Attracting,
developing and retaining talented people in technical, marketing, sales, research and other positions is
crucial to executing our strategy and our ability to compete effectively. Our ability to recruit and retain
such talent depends on a number of factors, including a positive and inclusive work environment and
culture, compensation and benefits, talent development and career growth and opportunities, and
5
protecting the health, safety and well-being of our associates. To that end, we invest in our associates in
order to be an employer of choice. Our associates reflect the communities in which we live and work, the
customers we serve, and possess a broad range of thought and experiences that have helped Avantor
achieve our goal of setting science in motion to create a better world.
People & culture
Enhancing our Associate Experience is a strategic priority for Avantor. Our values give our associates a
foundation for how we want to work together. Innovation, Customer-centricity, Accountability, Respect,
and Excellence are the building blocks of our inclusive company culture and send a strong message to our
associates, customers, suppliers, stockholders and communities: ICARE. In addition, our executive
leaders serve as sponsors of our Associate-Centric Teams (ACTs) in support of our diversity and
inclusion initiatives. ACTs are employee resource groups that foster an inclusive work environment, build
connections, create community, and promote career opportunities. Based on common interests,
backgrounds or characteristics, ACTs are open to all associates. Additionally, Avantor’s Talent
Philosophy is a part of commitment to our associates and guides our managers in their role in supporting
our people and our culture.
Compensation and benefits
We are committed to rewarding, supporting and developing the associates who make it possible to deliver
on our strategy. To that end, we offer a comprehensive total rewards program aimed at the varying health,
home-life and financial needs of our diverse and global associates. Our total rewards package includes
market-competitive pay, broad-based stock grants and bonuses, healthcare benefits, retirement savings
plans, an employee stock purchase plan, paid time off and family leave, flexible work schedules, access to
wellness programs, free physicals and flu vaccinations, and an Employee Assistance Program and other
mental health services.
Growth and development
We invest significant resources to develop talent with the right capabilities to deliver the growth and
innovation needed to support our strategy. We offer associates and their managers numerous tools to help
in their personal and professional development, including our Avantor Career Hub which enables
associates to highlight their skills, capture development plans, make connections and find new
opportunities inside Avantor. We have a robust portfolio of learning solutions that can be accessed in
multiple formats and available to our global associates across various professional, personal and
leadership development areas. Each year, we host a Learning & Career week program which is available
to associates at all levels globally, and includes a diverse slate of learning opportunities, live sessions and
on-demand resources designed to support the personal and professional growth and success of associates.
In 2023, we hosted our first Avantor Leadership Experience for individuals at the Director, Vice President
and Senior Vice President level. In addition, we provide programs on the Avantor Business System,
which drives excellence in people, processes and problem solving. These consistent lean leadership
practices empower associates to continuously improve and add value to our operations and customer
solutions. We have aligned our performance management system through which 100% of our associates
receive annual performance reviews, to support our culture of feedback to increase the focus on
continuous learning and development. Our Career Accelerator programs are focused on providing
management skills training to high-performing individual contributors and early career associates in
underrepresented ethnicities.
Health, safety and well-being
6
We are committed to protecting the health, safety and well-being of our associates. Our approach involves
environment, health and safety professionals and process engineers who identify risks and implement
behavioral solutions to prevent accidents before they occur. A robust auditing program is in place at every
facility to ensure that we measure performance and drive continuous improvement. Our primary focus is
to keep associates safe and free from injury. We do this through compliance with regulatory and
international requirements, active monitoring of regulatory agencies for changing requirements,
partnering with operational leaders to meet Environment, Health & Safety, Security & Sustainability
(EHSSS) requirements, and promoting effective communication throughout the organization.
Intellectual property
We rely on intellectual property rights, nondisclosure and other contractual provisions and technical
measures to protect our offerings, services and intangible assets. Much of our intellectual property is
know-how and asset configurations that we treat as trade secrets. These proprietary rights are important to
our ongoing operations. In some instances, we may license our technology to third parties or may elect to
license intellectual property from others. We have applied in the United States and certain foreign
countries for registration of a number of trademarks, service marks and patents, some of which have been
registered and issued. We also hold common law rights in various trademarks and service marks. Other
than our Avantor, VWR, J.T.Baker, NuSil and Masterflex trademarks, we do not consider any particular
patent, trademark, license, franchise or concession to be material to our overall business.
Government contracts
We conduct business with various government agencies and government contractors. As such, we are
subject to certain laws and regulations applicable to companies doing business with the government, as
well as with those concerning government contracts. Failure to address or comply with these laws and
regulations could harm our business by leading to a renegotiation of profits or termination of the contract
at the election of the government agency. For a discussion of risks related to government contracting
requirements, refer to Part I, Item 1A, “Risk factors.” No government contract is of such a magnitude as
to have a material adverse effect on our financial results.
Government regulation
Our facilities that engage in the manufacturing, packaging, distribution of material used in
biopharmaceutical and biomaterials production, as well as many of our products themselves, are subject
to extensive ongoing regulation by U.S. governmental authorities, the EMA and other global regulatory
authorities. Certain of our subsidiaries are required to register with these agencies, or to apply for permits
and/or licenses with, and must comply with the operating, cGMP, quality and security standards of
applicable domestic and foreign regulators, including the FDA, the DEA, the Bureau of Alcohol,
Tobacco, Firearms and Explosives, DHHS, the equivalent agencies of EU member states, and comparable
foreign, state and local agencies, as well as various accrediting bodies, each depending upon the type of
operation and the locations of storage or sale of the products manufactured or services provided by those
subsidiaries in the event of noncompliance.
In order to maintain certain certifications of quality and safety standards for our manufacturing facilities
and operations, we must comply with numerous regulatory systems, standards, guidance and other
requirements, as appropriate, including, but not limited to, ICH Q7, the guidelines of the International
Pharmaceutical Excipients Council, European in vitro diagnostic medical device directives, U.S.
Pharmacopeia / National Formulary, as well as the European, British, Japanese, Indian and Chinese
Pharmacopeia, the Food Chemicals Codex and controlled substances regulations.
7
In addition, our operations, and some of the products we offer, are subject to a number of complex and
stringent laws and regulations governing the production, handling, transportation and distribution of
chemicals, drugs and other similar products. We are subject to various federal, state, local, foreign and
transnational laws, regulations and recommendations, both in the U.S. and abroad, relating to safe
working conditions, good laboratory and distribution practices, and the safe and proper use, transportation
and disposal of hazardous or potentially hazardous substances. In addition, U.S. and international import
and export laws and regulations, including those enforced by the U.S. Departments of Commerce, State
and Treasury, OFAC and BIS, require us to abide by certain standards relating to the cross-border transit
of finished goods, raw materials and supplies and the handling of related information. Our logistics
activities must comply with the rules and regulations of the U.S. Department of Transportation,
Department of Homeland Security, Department of Commerce, Department of Defense, and the Federal
Aviation Administration and similar foreign agencies. We are also subject to various other laws and
regulations concerning the conduct of our foreign operations, including the FCPA and other anti-bribery
laws as well as laws pertaining to the accuracy of our internal books and records.
The costs associated with complying with the various applicable federal, state, local, foreign and
transnational regulations could be significant, and the failure to comply with such legal requirements
could have an adverse effect on our reputation, results of operations and financial condition. See Part I,
Item 1A, “Risk factors—Risks related to regulation.” We are subject to audits by the FDA and other
similar foreign regulatory bodies. To date, we have had no instances of noncompliance that have had a
material impact on our operations.
In addition to the regulations described above, as part of our aerospace and military offerings, we are
registered with the DDTC as a manufacturer and exporter of goods controlled by ITAR, and we are
subject to strict export control and prior approval requirements related to these goods. In connection with
our NuSil brand products, we have one ITAR site registration and one ITAR product registration, and we
maintain control systems which enable ITAR compliance. With respect to our electronic materials
products, we adhere to applicable industry guidelines which set stringent quality criteria for our products,
and we are subject to import and export regulations and other restrictions regarding the safe use of these
products as well.
We are also subject to various federal, state and international laws and regulations related to privacy and
data protection, including the EU’s GDPR as well as the California Consumer Privacy Act of 2018, which
became effective on January 1, 2020 (as amended by the California Privacy Rights Act, which took effect
on January 1, 2023, the “CPRA”). The interpretation and application of data privacy, cross-border data
transfers and data protection laws and regulations are often uncertain and are evolving in the U.S. and
internationally, such as in the EU, China and other jurisdictions. We monitor pending and proposed
legislation and regulatory initiatives to ascertain their relevance to, and potential impact on, our business
and develop strategies to address regulatory trends and developments, including any required changes to
our privacy and data protection compliance programs and policies. Globally, we see a growing trend
toward data protection laws and regulations increasing in complexity and number, and we anticipate that
our obligations will expand commensurately.
Environmental matters
We are subject to various laws and governmental regulations concerning environmental, safety and health
matters, including employee safety and health, in the U.S. and other countries. U.S. federal environmental
legislation that affects us includes the Toxic Substances Control Act, the Resource Conservation and
Recovery Act, the Clean Air Act, the Clean Water Act, the Safe Drinking Water Act, and CERCLA.
These laws and regulations govern, among other things, air emissions, wastewater discharges, the use,
8
handling and disposal of hazardous substances and wastes, soil and groundwater contamination and the
general health and safety of our associates and the communities in which we operate. We are also subject
to regulation by OSHA concerning employee safety and health matters. The EPA, OSHA, and other
federal and foreign or local agencies have the authority to promulgate regulations that may impact our
operations.
Under CERCLA, and analogous statutes in local and foreign jurisdictions, current and former owners and
operators of contaminated land are strictly liable for the investigation and remediation of the land and for
natural resource damages that may result from releases of hazardous substances at or from the property.
Liability under CERCLA and analogous laws is strict, unlimited, joint, several, retroactive, may be
imposed regardless of fault and may relate to historical activities or contamination not caused by the
current owner or operator. It is possible that facilities that we acquire or have acquired may expose us to
environmental liabilities associated with historical site conditions that have not yet been discovered.
In addition to the federal environmental laws that govern our operations, various states have been
delegated certain authority under the aforementioned federal statutes as well as having authority over
these matters under state laws. Many state and local governments have adopted environmental and
employee safety and health laws and regulations, some of which are similar to federal requirements.
A number of our operations involve, in varying degrees, the handling, manufacturing, use or sale of
substances that are or could be classified as toxic or hazardous materials within the meaning of applicable
laws. Consequently, some risk of environmental harm is inherent in our operations and products, as it is
with other companies engaged in similar businesses. For additional information about environmental
matters, see note 13 to our consolidated financial statements beginning on page F-1 of this report.
Available information
We file or furnish annual, quarterly and current reports, proxy statements and other documents with or to
the SEC. The public can obtain any documents that we file with or furnish to the SEC at www.sec.gov.
You may also access our press releases, financial information and reports filed with or furnished to the
SEC through our own website at www.avantorsciences.com. Copies of any documents on our website
may be obtained free of charge, and reports filed with or furnished to the SEC will be available as soon as
reasonably practicable after they are filed with or furnished to the SEC. The information found on our
website is not part of this or any other report filed with or furnished to the SEC.
Item 1A. Risk factors
Risks related to our business and our industry
Significant interruptions in our operations could harm our business, financial condition and results of
operations.
Any significant disruptions to the operations of our manufacturing or distribution centers or logistics
providers for any reason, including labor relations issues, power interruptions, severe weather, destruction
or damage or other circumstances beyond our control could have a significant impact on our operating
results, including an increase to our operating expenses without coverage or compensation, or seriously
harm our ability to fulfill our customers’ orders or deliver products on a timely basis, or both. We must
also maintain sufficient production capacity to meet anticipated customer demand, which carries fixed
costs that we may not be able to offset if orders slow, which would adversely affect our operating
9
margins. If we are unable to manufacture our products consistently, in sufficient quantities, and on a
timely basis, our net sales, gross margins and our other operating results will be materially and adversely
affected. In addition, we have experienced problems with, or delays in, our production, shipping and
logistics capabilities that have resulted in delays in our ability to ship finished products, and there can be
no assurance that we will not encounter such problems in the future. Significant delays in our
manufacturing, shipping or logistics processes could damage our customer relationships, cause disruption
to our customers and adversely affect our business, financial condition and operating results.
We have been impacted by supply chain constraints and inflationary pressures
We have experienced challenges in sourcing certain products and raw materials as a result of global
supply chain disruptions and have experienced inflationary pressures across all of our cost categories.
While we have implemented pricing and productivity measures to combat these pressures, they may
continue to adversely impact our results.
We compete in highly competitive markets. Failure to compete successfully could adversely affect our
business, financial condition and results of operations.
We face competition across our products and the markets in which we operate, both domestically and
internationally. Competition is driven by proprietary technologies and know-how, capabilities,
consistency of operational performance, quality, supply chain control, price, value and speed. Our
competitors range from regional companies, which may be able to more quickly respond to customers’
needs because of geographic proximity, to large multinational companies, which may have greater
financial, marketing, operational and research and development resources than we do, allowing for a more
rapid response with new, alternative or emerging technologies.
In addition, consolidation trends in the biopharma and healthcare industries have served to create fewer
customer accounts and to concentrate purchasing decisions for some customers, resulting in increased
pricing pressures. New competitors in low-cost manufacturing locations, particularly developing markets,
may create increased pricing and competitive pressures and impede our goal to grow in those markets.
Failure to anticipate and respond to competitors’ actions may adversely affect our results of operations
and financial condition.
It may be difficult for us to implement our strategies for improving growth and optimizing costs.
Effective January 1, 2024, we transitioned to a new operating model consisting of two complementary
business segments, the Laboratory Solutions segment and the Bioscience Production segment. In
conjunction with our new operating model, we launched a multi-year cost transformation initiative, with
the objective to deliver approximately $300 million in annual gross run-rate savings by the end of 2026.
We have also committed to certain significant restructuring activities in connection with the initiative.
The initiative and restructuring activities are subject to a variety of known and unknown risks and
uncertainties, including the potential that we may not be able to successfully execute on the initiative or
achieve the anticipated benefits and cost-saving opportunities, or that achieving such benefits and
opportunities may take longer to realize than expected. If we are unable to achieve the expected benefits
from the initiative and manage the effects of the restructuring activities, this could have an adverse effect
on our business, results of operations and financial condition.
As we refine our business model, we may also pursue divestitures in line with our new operating model.
For example, in October 2024, we divested our Clinical Services business, a component of our Laboratory
Solutions reportable segment. We also plan to continue expanding our commercial sales operations and
scope and complexity of our business both domestically and internationally, while maintaining our
commercial operations and administrative activities. Our ability to manage our business and conduct our
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global operations while also pursuing our strategies for improving growth and optimizing costs requires
considerable management attention and resources and is subject to the challenges of supporting a rapidly
growing business in an environment of multiple languages, cultures and customs, legal and regulatory
systems, alternative dispute systems and commercial markets. Our failure to implement these strategies in
a cost-effective and timely manner could have an adverse effect on our business, results of operations and
financial condition.
Part of our growth strategy is to pursue strategic acquisitions, which will subject us to a variety of risks
that could harm our business.
As part of our business strategy, we intend to continue to review, pursue and complete selective
acquisition opportunities. There can be no assurances that we will be able to complete suitable
acquisitions for a variety of reasons, including the identification of, and competition for, acquisition
targets, the need for regulatory approvals, the inability of the parties to agree to the structure or purchase
price of the transaction and the inability to finance the transaction on commercially acceptable terms. In
addition, any completed acquisition will subject us to a variety of other risks, including: (i) potential
adverse effects on our business relationships with existing or future suppliers and other business partners
(in particular, to the extent we consummate acquisitions that vertically integrate portions of our business);
(ii) the assumption of substantial actual or contingent liabilities, known or unknown, including
environmental liabilities; (iii) failure to meet expectations of future financial performance; (iv) delays or
reductions in realizing expected synergies; (v) substantial unanticipated costs or other problems
associated with acquired businesses or devoting time and capital to investigate a potential acquisition that
is not completed; (vi) failure to achieve intended objectives for a transaction; (vii) failure to retain key
personnel, customers and suppliers of the acquired business; and (viii) adverse impacts resulting from
impairment charges on goodwill, other intangible assets and tangible assets. These factors related to our
acquisition strategy, among others, could have an adverse effect on our business, financial condition and
results of operations.
The customers we serve have experienced, and will continue to experience, significant industry-related
changes that could adversely affect our business.
Many of the customers we serve have experienced, and are expected to continue to experience, significant
industry-related changes, including reductions in governmental payments for biopharmaceutical products,
expirations of significant patents, adverse changes in legislation or regulations regarding the delivery or
pricing of general healthcare services or mandated benefits, and increased requirements on quality.
General industry changes include:
•
development of large and sophisticated group purchasing organizations and on-line auction sites
that increase competition for, and reduce spending on, laboratory products;
•
consolidation of biopharmaceutical companies resulting in a rationalization of research
expenditures;
•
increased regulatory scrutiny over drug production requiring safer raw materials;
•
customers’ purchasing the products that we supply directly from our suppliers; and
•
significant reductions in development and production activities.
Some of our customers have implemented, or may in the future implement, certain measures described
above in an effort to control and reduce costs. The ability of our customers to develop new products to
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replace sales decreases attributable to expirations of significant patents, along with the impact of other
past or potential future changes in the industries we serve, may result in our customers significantly
reducing their purchases of products from us or the prices they are willing to pay for those products.
While we believe we will be able to adapt our business to maintain existing customer relationships and
develop new customer relationships, if we are unsuccessful or untimely in these efforts, our results of
operations may suffer.
Our offerings are highly complex, and, if our products do not satisfy applicable quality criteria,
specifications and performance standards, we could experience lost sales, delayed or reduced
market acceptance of our products, increased costs and damage to our reputation.
The high-purity materials and customized solutions we offer are highly exacting and complex due to
demanding customer specifications and stringent regulatory and industry requirements. Our operating
results depend on our ability to execute and, when necessary, improve our global quality control systems,
including our ability to effectively train and maintain our employees with respect to quality control. A
failure of our global quality control systems could result in problems with facility operations or
preparation or provision of defective or non-compliant products. Nearly all of our products are
subsequently incorporated into products sold to end users by our customers, and we have no control over
the manufacture and production of such products.
Our success depends on our customers’ confidence that we can provide reliable, high-quality products.
We believe that customers in our target markets are likely to be particularly sensitive to product defects
and errors. Our reputation and the public image of our products and technologies may be impaired if our
products fail to perform as expected or fail to meet applicable quality criteria, specifications or
performance standards. If our products experience, or are perceived to experience, a material defect or
error, this could result in loss or delay of net sales, damaged reputation, diversion of development
resources, and increased insurance or warranty costs, any of which could harm our business.
The loss of a significant number of customers or a significant reduction in customer orders could
reduce our net sales and harm our operating results.
Our operating results could be negatively affected by the loss of revenue from a significant number of our
customers, including direct distributors and end users. Though we often include pricing and volume
incentives in our contracts, our customers are generally not obligated to purchase any fixed quantities of
products, and they may stop placing orders with us at any time. If we experience a significant reduction in
customer orders, increased order deferrals, our sales could decline, and our operating results may not meet
our expectations. In addition, if customers order our products, but fail to pay on time or at all, our
liquidity and operating results could be adversely affected.
Our contracts generally do not contain minimum purchase requirements, and we sell primarily on a
purchase order basis. Therefore, our sales are subject to changes in demand from our customers, and these
changes have been material in the past. The level and timing of orders placed by our customers vary for a
number of reasons, including individual customer strategies, the introduction of new technologies, the
desire of our clients to reduce their exposure to any single supplier and general economic conditions. If
we are unable to anticipate and respond to the demands of our customers, we may lose customers because
we have an inadequate supply of raw materials with which to manufacture our products or insufficient
capacity in our sites. Alternatively, we may have excess inventory or excess capacity. Either of these
factors may have a material adverse effect on our business, financial position and operating results.
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We are subject to risks associated with doing business globally, which may harm our business.
We have global operations and derive a substantial portion of our net sales from customers outside of the
United States. Accordingly, our international operations or those of our international customers could be
substantially affected by a number of risks arising from operating an international business, including: (i)
limitations on repatriation of earnings; (ii) taxes on imports; (iii) the possibility that unfriendly nations or
groups could boycott our products; (iv) general economic and political conditions in the markets where
we operate, including changes in inflation and interest rates, instability in the global banking industry,
rising energy prices, potential energy shortages and actual or anticipated military or political conflicts,
such as the ongoing Ukraine/Russia or Israel/Hamas conflicts; (v) foreign currency exchange rate
fluctuations; (vi) potential changes in diplomatic and trade relationships, including potential changes
under the second Trump administration and political and trade uncertainty in China; (vii) a global health
crisis; (viii) potential increased costs associated with overlapping tax structures; (ix) potential increased
reliance on third parties within less developed markets; (x) potential changes in trade restrictions, tariffs
and exchange controls, such as tariffs that may be proposed by the second Trump administration and
potential retaliatory tariffs by other countries; (xi) more limited protection for intellectual property rights
in some countries; (xii) difficulties and costs associated with staffing and managing foreign operations;
(xiii) difficulties in complying with a wide variety of foreign laws and regulations and unexpected
changes thereto; (xiv) expanded enforcement of laws related to data protection and personal privacy; (xv)
the risk that certain governments may adopt regulations or take other actions that would have a direct
adverse impact on our business and market opportunities, including nationalization of private enterprise;
(xvi) violations of anti-bribery and anti-corruption laws, such as the FCPA; (xvii) violations of economic
sanctions laws, such as the regulations enforced by OFAC; (xviii) longer accounts receivable cycles in
certain foreign countries, whether due to cultural differences, exchange rate fluctuation or other factors;
(xix) the credit risk of local customers and distributors; (xx) limitations on our ability to enforce legal
rights and remedies with third parties or partners outside of the United States; (xxi) import and export
licensing requirements and other restrictions, such as those imposed by OFAC, BIS, DDTC and
comparable regulatory agencies and policies of foreign governments; and (xxii) changes to our
distribution networks.
Changes in exchange rates can adversely affect our financial condition, results of operations and cash
flows.
A substantial amount of our revenues is derived from international operations, and we anticipate that a
significant portion of our sales will continue to come from outside of the United States in the future. Our
consolidated results of operations are comprised of many different functional currencies that translate into
our U.S. dollar reporting currency. The movement of the U.S. dollar against those functional currencies,
particularly the Euro, has caused significant variability in our results in the past and may continue to do so
in the future. The revenues we report with respect to our operations outside of the United States have been
in the past and may be adversely affected by fluctuations in foreign currency exchange rates.
Further, we have a substantial amount of Euro denominated indebtedness, as well as intercompany loans
and short-term intercompany balances between entities with the Euro as their functional currency.
Fluctuations in the exchange rate between U.S. dollars and Euros may have a material adverse effect on
our ability to repay such indebtedness. See Part I, Item 7A, “Quantitative and qualitative disclosures about
market risk.”
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Our business depends on our ability to use and access information systems, and any failure to
successfully maintain these systems or implement new systems to handle our changing needs could
materially harm our operations.
Our businesses rely on sophisticated information systems: (i) to obtain, rapidly process, analyze, and
manage data to facilitate the purchase and distribution of thousands of inventory items from numerous
distribution centers; (ii) to receive, process, and ship orders on a timely basis; (iii) to account for other
product and service transactions with customers; (iv) to manage the accurate billing and collections for
thousands of customers; and (v) to process payments to suppliers. We continue to make substantial
investments in data centers and information systems. To the extent our information systems are not
successfully implemented or fail, or there are data center interruptions or outages, our business and results
of operations may be adversely affected. Our business and results of operations may also be adversely
affected if a third-party service provider does not perform satisfactorily, or if the information systems are
interrupted or damaged by unforeseen events, including due to the actions or inactions of third parties.
While we have implemented cybersecurity and data protection measures, our efforts to minimize the risks
and impacts of cyberattacks and protect our information systems may be insufficient and we may
experience significant breaches or other failures or disruptions that could compromise our systems and
data and, ultimately, affect our business operations and our financial position or results of operations.
New technology that could result in greater operational efficiency, such as the development and adoption
of AI and machine learning technology, may further exposure our systems and businesses to the risk of
cyberattacks. Like other companies, the systems and networks we maintain and third-party systems and
networks we use have in the past been, and will likely in the future be, subject to or targets of
unauthorized or fraudulent access, including physical or electronic break-ins or unauthorized tampering,
as well as attempted cyber and other security threats and other attacks such as “denial of service” attacks,
phishing, untargeted but sophisticated and automated attacks, ransomware, and other disruptive software.
For example, as AI continues to evolve, cyber-attackers could also use AI to develop malicious code and
sophisticated phishing attempts. We are also exposed to similar risks resulting from cyber-attacks that are
experienced by our third-party service providers. For example, we and many of the third-party service
providers we rely on use generative AI, which increases the risk that our confidential or proprietary
information or personal data could be inadvertently or maliciously exposed. Security breaches can also
occur as a result of intentional or inadvertent actions by our employees, third-party service providers or
their personnel or other parties.
A failure, interruption, or breach of our systems, or those of our third-party service providers, as a result
of cyber-attacks or information security breaches, could disrupt our business, result in the disclosure or
misuse of confidential or proprietary information or personal data, damage our reputation, cause loss of
customers or revenue, increase our costs, result in litigation and/or regulatory action, and/or cause other
losses, any of which may have a material adverse impact on our business operations and our financial
position or results of operations. Although we believe that we have robust information security
procedures, controls and other safeguards in place, as cyber threats continue to evolve, we will be
required to expend additional resources to continue to enhance our information security measures and/or
to investigate and remediate information security vulnerabilities.
Our actual or perceived failure to adequately protect personal data could adversely affect our business.
Given the nature of our business, we collect and store confidential information that customers provide in
order to, among other things, purchase products and services and register on our website.
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We are required to comply with increasingly complex and changing data privacy regulations both in the
United States and beyond that regulate the collection, use, sharing, and transfer of personal data. Many of
these regulations also grant rights to individuals. Many foreign data privacy regulations (including GDPR
in the EU) and certain state laws and regulations (including California’s CPRA) impose requirements
beyond those enacted under federal law including, in some instances, private rights of action. For
example, the EU GDPR imposes more stringent data protection requirements, including a broader scope
of protected data, restrictions on cross-border transfers of personal data and more onerous breach
reporting requirements, and greater penalties for non-compliance than the federal data protection laws.
Other states and countries continue to enact similar legislation. We are also required to comply with
expanding and increasingly complex privacy and data protection regulations in the United States and
abroad with respect to reporting adverse events and additional requirements for avoiding or responding to
an adverse event. We also have contractual obligations to our customers related to the protection of
personal data and compliance with privacy laws.
While we have taken various measures and made significant efforts and investment and designed our
policies, processes and systems to be robust, a failure, or perceived failure, by us to comply with any
applicable regulatory requirements or orders, including but not limited to privacy, data protection,
information security, or consumer protection-related privacy laws and regulations, in one or more
jurisdictions within the United States, the EU or elsewhere, could result in proceedings or actions against
us by governmental entities or individuals; subject us to significant fines, penalties, and/or judgments;
require us to change our business practices; limit access to our products and services in certain countries,
incur substantial costs (even if we ultimately prevail) or otherwise adversely affect our business.
Our inability to protect our intellectual property could adversely affect our business. In addition, third
parties may claim that we infringe their intellectual property, and we could suffer significant
litigation or licensing expenses as a result.
We rely on a variety of intellectual property rights, including patents, trademarks, copyrights and trade
secrets, to protect our proprietary technology and products. We place considerable emphasis on obtaining
patent or maintaining trade secret protection for significant new technologies, products and processes
because of the length of time and expense associated with bringing new products and processes through
development and to the market.
We may need to spend significant resources monitoring and enforcing our intellectual property rights and
we may not be able to prove infringement by third parties. Our competitive position may be harmed if we
cannot enforce our intellectual property rights. In some circumstances, we may choose to not pursue
enforcement for business reasons. In addition, competitors might avoid infringement by designing around
our intellectual property rights or by developing non-infringing competing technologies. Intellectual
property rights and our ability to enforce them may be unavailable or limited in some countries, which
could make it easier for competitors to capture market share and could result in lost revenues.
Our trademarks are valuable assets and if we are unable to protect them from infringement, our
business prospects may be harmed.
Our brands, particularly our J.T.Baker, NuSil, VWR and Masterflex brands, are valuable assets.
Therefore, we actively manage our trademark portfolio, including by maintaining registrations for long-
standing trademarks and applying to obtain trademark registrations for new brands. We also police our
trademark portfolio against infringement. Our efforts to protect and defend our trademarks may fall short
or be unsuccessful against competitors or other third parties for a variety of reasons. To the extent that
third parties or distributors sell products that are counterfeit versions of our branded products, our
customers could inadvertently purchase products that are inferior. This could cause our customers to
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refrain from purchasing our brands in the future and in turn could impair our brand equity and adversely
affect our sales.
We are subject to product liability and other claims in the ordinary course of business.
Our business involves risk of product liability, intellectual property claims and other claims in the
ordinary course of business arising from the products that we source from various manufacturers or
produce ourselves. Furthermore, there may be product liability risks that are unknown or which become
known in the future. Substantial, complex or extended litigation on any claim could cause us to incur
significant costs and distract our management. We maintain insurance policies and in some cases, our
suppliers, customers and predecessors of acquired companies have indemnified us against certain claims.
We cannot assure you that our insurance coverage or indemnification agreements will be available in all
pending or any future cases brought against us. Accordingly, we could be subject to uninsured and
unindemnified future liabilities requiring us to provide additional reserves to address such liabilities. An
unfavorable result in a case for which adequate insurance or indemnification is not available could
adversely affect our business, financial condition and results of operations.
We must develop new products, adapt to rapid and significant technological change and respond to
introductions of new products by competitors to remain competitive.
We sell our products in industries that are characterized by significant technological changes, frequent
new product and technology introductions and enhancements and evolving industry standards. As a result,
our customers’ needs are rapidly evolving. If we do not appropriately innovate and invest in new
technologies, our offerings may become less desirable in the markets we serve, and our customers could
move to new technologies offered by our competitors or make products themselves. Without the timely
introduction of new products, services and enhancements, our offerings will likely become less
competitive over time, in which case, our competitive position, net sales and operating results could
suffer. To the extent we fail to timely introduce new and innovative products or services, adequately
predict our customers’ needs or fail to obtain desired levels of market acceptance, our business may
suffer.
Accordingly, we focus significant efforts and resources on the development and identification of new
technologies, products and services that are attractive to, and gain acceptance, in the markets we serve
and further broaden our offerings. We have been and expect to continue to utilize AI and machine
learning in certain of our products and services. As with many technological innovations, there are
significant risks and challenges involved in maintaining and deploying these technologies, including risks
related to cybersecurity, privacy and data use practices as well as related to accuracy issues, and there can
be no assurance that the use of such technologies will enhance our products or services or be beneficial to
our business. Further, the regulatory landscape surrounding AI is evolving and may impose restrictions
that limit the usability or effectiveness of AI in our products and services and expose us to an increased
risk of regulatory enforcement and litigation.
We depend upon the availability of raw materials.
Our operations depend upon our ability to obtain high-quality raw materials meeting our specifications
and other requirements at reasonable prices, including various active pharmaceutical ingredients,
components, compounds, excipients and other raw materials, many of which are sole-sourced due to
market or customer demands. Our ability to maintain an adequate supply of such materials and
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components could be impacted by the availability and price of those raw materials and maintaining
relationships with key suppliers.
Moreover, we are dependent upon the ability of our suppliers to provide materials and components that
meet our specifications, quality standards, other applicable criteria, and delivery schedules. Our suppliers’
failure to provide expected raw materials or components that meet such criteria could adversely affect
production schedules and contract profitability and negatively impact our results of operations.
We depend upon maintaining our relationships with suppliers.
We offer products from a wide range of suppliers. While there is generally more than one source of
supply for most of the categories of third-party materials & consumables and equipment &
instrumentation that we sell, we currently do not manufacture the majority of our products and are
dependent on these suppliers for access to those products.
Our ability to sustain our gross margins has been, and will continue to be, dependent in part upon our
ability to obtain favorable terms from our suppliers. These terms may change from time to time, and such
changes could adversely affect our gross margins over time. In addition, our results of operations and cash
flows could be adversely impacted by the acceleration of payment terms to our suppliers and/or the
imposition of more restrictive credit terms and other contractual requirements.
Our use of chemicals and chemical processes is subject to inherent risk.
We use chemical ingredients in the manufacture of certain of our products. Due to the nature of the
manufacturing process itself, there is a risk of incurring liability for damages caused by or during the
storage or manufacture of both the chemical ingredients and the finished products. The processes used in
certain of our facilities typically involve large volumes of solvents and chemicals, creating the potential
for fires, spills and other safety or environmental impacts. If any of these risks materialize, it could result
in significant remediation and other costs, potential adverse regulatory actions and liabilities, any of
which could have an adverse effect on our business, results of operations and financial condition.
In addition, the manufacturing, use, storage, and distribution of chemicals are subject to threats including
terrorism. We have several high-risk chemical facilities that contain materials that could be stolen and
used to make weapons. We could also be subject to an attack on our high-risk facilities that could cause a
significant number of deaths and injuries. Such an occurrence could also harm the environment, our
reputation and disrupt our operations.
Climate change, and the legal or regulatory response thereto, may have a long-term impact on our
business, financial condition and results of operations.
We continue to focus on strategies and systems, such as reducing greenhouse gas emissions and
packaging waste, to address climate change. However, we face climate and environmental risks and the
occurrence of one or more unexpected events, including fires, tornadoes, tsunamis, hurricanes,
earthquakes, drought, storms, sea level rise, floods, and other severe hazards or accidents in the United
States, the United Kingdom, the EU or in other countries or regions in which we operate could adversely
affect our operations and financial performance. Extreme weather, natural disasters, power outages, or
other unexpected events could result in physical damage to, and complete or partial closure of, one or
more of our manufacturing or distribution centers; temporary or long-term disruption in the supply of
products; and/or disruption of our ability to deliver products to customers. Increasing concern over
climate change also may result in additional legal or regulatory requirements designed to reduce or
mitigate the effects of carbon dioxide and other greenhouse gas emissions on the environment. The
17
effects of climate change and legal or regulatory initiatives to address climate change could have a long-
term adverse impact on our business, financial condition and results of operations. We also monitor rules
and regulations related to environmental, social and governance disclosure obligations, which may expose
us to increased costs associated with additional reporting obligations. In addition, we have established and
publicly announced goals and commitments to reduce our carbon footprint, including targets to reduce
greenhouse gas emissions (scope 1, scope 2 and scope 3). We have a broad range of stakeholders,
including our stockholders, employees and customers, some of whom increasingly focus on
environmental, social and governance matters. If we are unable to achieve, or improperly report on our
progress toward, our carbon footprint reduction goals and commitments, this may result in litigation and/
or regulatory action as well as negative publicity, which could lead to the loss of business, adverse
reputational impacts, diluted market valuations and challenges in attracting and retaining customers and
talented employees.
We are highly dependent on our senior management and key employees.
Our success depends on our ability to attract, motivate and retain highly qualified individuals.
Competition for senior management and other key personnel in our industry is intense, and the pool of
suitable candidates is limited. The failure to attract, retain and properly motivate members of our senior
management team and other key employees, or to find suitable replacements for them in the event of
death, illness or their desire to pursue other professional opportunities, could have a negative effect on our
operating results.
The indemnification provisions of acquisition agreements by which we have acquired companies may
not fully protect us and as a result, we may face unexpected liabilities.
Certain of the acquisition agreements by which we have acquired companies require the former owners to
indemnify us against certain liabilities related to the operation of the company before we acquired it. In
most of these agreements, however, the liability of the former owners is limited and certain former
owners may be unable to meet their indemnification responsibilities. We cannot assure you that these
indemnification provisions will protect us fully or at all, and as a result, we may face unexpected
liabilities that adversely affect our financial statements.
We face risks related to health epidemics and pandemics.
We face risks related to health epidemics and pandemics, including risks related to any responses thereto
by the federal, state or foreign governments, as well as customers and suppliers. A pandemic has in the
past and could in the future adversely affect our operations, supply chains and distribution network, and
we could experience and expect prolonged unpredictable reductions in supply and demand for certain of
our offerings similar to those experienced during the COVID-19 pandemic, as well as unpredictable
increases in demand for certain of our offerings similar to those experienced during the COVID-19
pandemic. Further, it is possible that disruptions or delays in shipments of certain raw materials used in
the products we manufacture and in the finished goods that we sell globally could be similar to those
experienced during the COVID-19 pandemic. The implementation of any government-mandated
vaccination or testing mandates may impact our ability to retain current employees and attract new
employees. Any extended disruption in our ability to service our customers could have a negative effect
on our operating results.
Changes in tax law relating to multinational corporations could adversely affect our tax position.
The U.S. Congress, foreign governments, and their agencies in non-U.S. jurisdictions where we and our
affiliates do business, and the Organization for Economic Cooperation and Development (“OECD”),
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continue to focus on issues related to the taxation of multinational corporations. As part of this focus, the
OECD has introduced a framework to implement a 15% global minimum corporate tax rate. While it is
uncertain whether the U.S. will enact legislation to adopt the minimum tax directive, certain countries in
which we operate have adopted legislation and other countries are in the process of introducing legislation
to implement the minimum tax directive. While we do not currently expect the minimum tax directive to
have a material impact on our effective tax rate, our analysis is ongoing as the OECD continues to release
additional guidance. There can be no assurance that these changes, and any further contemplated changes
when finalized and adopted by countries, will not have an adverse impact on our provision for income
taxes.
Due to the potential for changes to tax laws and regulations or changes to the interpretation thereof, the
ambiguity of tax laws and regulations, the subjectivity of factual interpretations, the complexity of our
intercompany arrangements, uncertainties regarding the geographic mix of earnings in any particular
period, and other factors, our estimates of effective tax rate and income tax assets and liabilities may be
incorrect and our financial statements could be adversely affected. The impact of the factors referenced in
the first sentence of this paragraph may be substantially different from period-to-period.
Certain of our businesses rely on relationships with collaborative partners and other third parties for
development, supply and marketing of certain products and potential products, and such
collaborative partners or other third parties could fail to perform sufficiently.
We believe that for certain of our businesses, success in penetrating target markets depends in part on
their ability to develop and maintain collaborative relationships with other companies. Relying on
collaborative relationships is risky because, among other things, our collaborative partners may (i) not
devote sufficient resources to the success of our collaborations; (ii) fail to obtain regulatory approvals
necessary to continue the collaborations in a timely manner; (iii) be acquired by other companies and
terminate our collaborative partnership or become insolvent; (iv) compete with us; (v) disagree with us on
key details of the collaborative relationship; (vi) have insufficient capital resources; and (vii) decline to
renew existing collaborations on acceptable terms. Because these and other factors may be beyond our
control, the development or commercialization of our products involved in collaborative partnerships may
be delayed or otherwise adversely affected. If we or any of our collaborative partners terminate a
collaborative arrangement, we may be required to devote additional resources to product development and
commercialization or we may need to cancel some development programs, which could adversely affect
our business and financial statements.
Risks related to regulation
We are required to comply with a wide variety of laws and regulations, and are subject to regulation by
various federal, state and foreign agencies, and our failure to comply with existing and future
regulatory requirements could adversely affect our results of operations and financial condition.
We compete in markets in which we and our customers are subject to federal, state, local, international
and transnational laws and regulations, including the operating, quality and security standards of the
FDA, various state health departments, the DHHS, similar bodies of the EU and its member states and
other comparable agencies around the world, and, in the future, any changes to such laws and regulations
could adversely affect us. We develop, configure and market our products to meet customer needs driven
by those regulations. Among other rules affecting us, we are subject to laws and regulations concerning
cGMP and product safety. Our subsidiaries may be required to register for permits and/or licenses with,
and may be required to comply with, the laws and regulations of the FDA, the DHHS, the DEA, foreign
agencies including the EMA, and other various state health departments and/or comparable state and
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foreign agencies as well as certain accrediting bodies depending upon the types of operations and
locations of distribution and sale of the products manufactured or services provided by those subsidiaries.
Any significant change in regulations could reduce demand for our products or increase our expenses. For
example, many of our products are marketed to the biopharma industry for use in discovering, developing
and manufacturing drugs, or are sold as raw materials or components to drug device manufacturers or for
use in the manufacture of implantable devices. Changes in the domestic or foreign regulation of drug
discovery, development or manufacturing processes or medical device manufacturing processes, or
adverse findings concerning any health effects associated with these products, could have an adverse
effect on the demand for these products and could also result in legal liability and claims.
We are also registered with the DDTC, as a manufacturer and exporter of goods controlled by ITAR, and
we are subject to strict export control and prior approval requirements related to these goods. Our failure
to comply with ITAR and other export control laws and regulations, as well as economic sanctions, could
result in penalties, loss, or suspension of contracts or other consequences. Any of these could adversely
affect our operations and financial condition. Failure by us or by our customers to meet one or more of
these various regulatory obligations could have adverse consequences in the event of material non-
compliance. Compliance with relevant sanctions and export control laws could restrict our access to, and
increase the cost of obtaining, certain products and at times could interrupt our supply of imported
inventory or our ability to service certain customers. Conversely, compliance with these regulatory
obligations may require us to incur significant expenses.
In addition, certain of our facilities are certified to ISO, including ISO 13485, ISO 9001, AS9100, ISO
22000 and/or ISO 14001. These standards are voluntary quality management system standards, the
maintenance of which indicates to customers certain quality and operational norms. Customers may rely
on contractual assurances that we make with respect to ISO certificates to transact business. Failure to
comply with these ISO standards can lead to observations of non-compliance or even suspension of ISO
or Aerospace Standard (AS) certifications or European Community (EC) Declarations of Conformity
Certificates by the registrar. If we were to lose ISO or AS certifications or EC Declarations of
Conformity, we could lose sales and customers to competitors or other suppliers. We are also subject to
periodic inspections or audits by our customers. If these audits or inspections identify issues or the
customer perceives there are issues, the customer may decide to cease purchasing products from us which
could adversely affect our business.
Our reputation, ability to do business and financial statements may be impaired by improper conduct
by any of our employees, agents or business partners.
We cannot provide assurance that our internal controls and compliance systems will always protect us
from acts committed by employees, agents or business partners of ours (or of businesses we acquire or
partner with) that would violate U.S. and/or non-U.S. laws, including the laws governing payments to
government officials, bribery, fraud, kickbacks and false claims, pricing, sales and marketing practices,
conflicts of interest, competition, export and import compliance, money laundering and data privacy. In
particular, the FCPA, the U.K. Bribery Act and similar anti-bribery laws in other jurisdictions generally
prohibit companies and their intermediaries from making improper payments for the purpose of obtaining
or retaining business, and we operate in many parts of the world that have experienced corruption to some
degree. Any such improper actions or allegations of such acts could damage our reputation and subject us
to civil or criminal investigations in the United States and in other jurisdictions and related stockholder
lawsuits, could lead to substantial civil and criminal, monetary and non monetary penalties and could
cause us to incur significant legal and investigatory fees. In addition, the government in relevant
jurisdictions may seek to hold us liable as a successor for violations committed by companies in which we
invest or that we acquire. We also rely on our suppliers to adhere to our supplier standards of conduct,
20
and material violations of such standards of conduct could occur that could have a material effect on our
business, reputation and financial statements.
We are subject to laws and regulations governing government contracts, and failure to address these
laws and regulations or comply with government contracts could harm our business by leading to a
reduction in sales to these customers or penalties.
We sell products to government entities and, as a result, we are subject to various statutes and regulations
that apply to companies doing business with the government. The laws governing government contracts
differ from the laws governing private contracts and government contracts may contain pricing terms and
conditions that are not applicable to private contracts. We are also subject to investigation for compliance
with the regulations governing government contracts. A failure to comply with these regulations could
result in suspension of these contracts, criminal, civil and administrative penalties or debarment.
We are subject to environmental, health and safety laws and regulations, and costs to comply with such
laws and regulations, or any liability or obligation imposed under such laws or regulations, could
negatively impact our business, financial condition and results of operations.
We are subject to a broad range of foreign, federal, state and local environmental, health and safety laws
and regulations, including those of the EPA, OSHA and equivalent local, state, and foreign regulatory
agencies in each of the jurisdictions in which we operate, and we may be fined or penalized for non-
compliance. In addition, contamination resulting from our current or past operations or from past uses of
land that we own or operate may trigger investigation or remediation obligations, which may have an
adverse effect on our business, financial condition and results of operations. We cannot be certain that
identification of presently unidentified environmental, health and safety conditions, new regulations, more
vigorous enforcement by regulatory authorities or other unanticipated events will not arise in the future
and give rise to additional environmental liabilities, business interruptions, compliance costs or penalties,
which could have an adverse effect on our business, financial condition and results of operations.
We currently incur costs and may incur additional costs related to remediation of alleged environmental
damage associated with past or current waste disposal practices or other hazardous materials handling at
property that we currently own or operate, or formerly owned or operated, or facilities to which we
arranged for the disposal of hazardous substances. Our liabilities arising from past or future releases of, or
exposures to, hazardous substances may exceed our estimates or adversely affect our financial statements
and reputation and we may be subject to additional claims for cleanup or other environmental claims in
the future based on our past, present or future business activities, and we may not be able to recover any
costs under any of our indemnifications that we have. For additional information regarding environmental
matters, see note 13 to our consolidated financial statements beginning on page F-1 of this report.
Changes in corporate governance and public disclosure requirements and expectations could impact
compliance costs and the risks of noncompliance.
We are subject to the rules and regulations promulgated by a number of governmental and self-regulatory
organizations, including the SEC and NYSE, as well as evolving investor expectations around
environmental, social and governance practices and disclosures. These rules and regulations continue to
evolve in scope and complexity, and many new requirements have been created in response to laws and
directives enacted by federal, state, local and foreign governments, making compliance more difficult and
uncertain. The increasing complexity and costs to comply with such evolving expectations, rules and
regulations, as well as any risk of noncompliance, could adversely affect our business.
21
Risks related to our indebtedness
Our indebtedness could adversely affect our financial condition and prevent us from fulfilling our debt
or contractual obligations.
We now have and expect to continue to have a significant amount of debt. Our indebtedness could have
important consequences to us including the following:
•
making it more difficult for us to satisfy our debt or contractual obligations;
•
exposing us to the risk of increased interest rates as certain of our borrowings, including
borrowings under our senior secured credit facilities, are at variable rates of interest;
•
restricting us from making strategic acquisitions or causing us to make non-strategic divestitures;
•
requiring us to dedicate a substantial portion of our cash flow from operations to payments on our
indebtedness, which would reduce the funds available for working capital, capital expenditures,
investments, acquisitions and other general corporate purposes;
•
limiting our flexibility in planning for, or reacting to, changes in our business, future business
opportunities and the industry in which we operate;
•
placing us at a competitive disadvantage compared to any of our less leveraged competitors;
•
increasing our vulnerability to a downturn in our business and both general and industry-specific
adverse economic conditions; and
•
limiting our ability to obtain additional financing.
Our credit facilities contain financial and other restrictive covenants that could limit our ability to engage
in activities that may be in our long-term best interests. Our failure to comply with those covenants could
result in an event of default which, if not cured or waived, could result in the acceleration of all of our
debt, which could adversely affect our business, earnings and financial condition.
Despite our current level of indebtedness, we and our subsidiaries may still be able to incur
substantially more debt.
We and our subsidiaries may be able to incur significant additional indebtedness in the future. Although
our credit agreement and indentures contain restrictions on the incurrence of additional indebtedness,
these restrictions are subject to a number of qualifications and exceptions, and the additional indebtedness
incurred in compliance with these restrictions could be substantial. If new debt is added to our current
debt levels, the related risks that we now face could intensify.
22
Risks related to ownership of our stock
Because we have no current plans to pay cash dividends on our common stock, you may not receive
any return on investment unless you sell your common stock for a price greater than that which
you paid for it.
We have no current plans to pay cash dividends on our common stock. The declaration, amount and
payment of any future dividends on our common stock will be at the sole discretion of our Board of
Directors. Our Board of Directors may take into account general and economic conditions, our financial
condition and results of operations, our available cash and current and anticipated cash needs, capital
requirements, contractual, legal, tax and regulatory restrictions and implications on the payment of
dividends by us to our stockholders or by our subsidiaries to us, including restrictions under our credit
agreement and other indebtedness we may incur, and such other factors as our Board of Directors may
deem relevant.
As a result, you may not receive any return on an investment in our common stock unless you sell our
common stock for a price greater than your purchase price.
If we fail to maintain an effective system of internal controls, we may not be able to accurately report
our financial results.
Effective internal controls are necessary for us to provide reliable and accurate financial statements and to
effectively prevent fraud. We devote significant resources and time to comply with the internal control
over financial reporting requirements of the Sarbanes Oxley Act of 2002 and continue to enhance our
controls. However, we cannot be certain that we will be able to prevent future significant deficiencies or
material weaknesses. Inadequate internal controls could cause investors to lose confidence in our reported
financial information, which could have a negative effect on investor confidence in our financial
statements, the trading price of our stock and our access to capital.
Our amended and restated certificate of incorporation provides, subject to limited exceptions, that state
and federal courts (as appropriate) located within the State of Delaware will be the sole and
exclusive forum for certain stockholder litigation matters, which could limit our stockholders’
ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees
or stockholders.
Our amended and restated certificate of incorporation provides that unless we consent to the selection of
an alternative forum, the state or federal courts (as appropriate) located within the State of Delaware shall,
to the fullest extent permitted by law, be the sole and exclusive forum for any (i) derivative action or
proceeding brought on behalf of our company, (ii) action asserting a claim of breach of a fiduciary duty
owed by any director, officer, or other employee or stockholder of our company to us or our stockholders,
creditors or other constituents, (iii) action against us or any of our directors or officers involving a claim
or defense arising pursuant to any provision of the Delaware General Corporation Law or our amended
and restated certificate of incorporation or our amended and restated bylaws, (iv) action against us or any
director or officer of the Company involving a claim or defense implicating the internal affairs doctrine,
or (v) action against us or any of our directors or officers involving a claim or defense arising pursuant to
the Exchange Act or the Securities Act. It is possible that these exclusive forum provisions may be
challenged in court and may be deemed unenforceable in whole or in part. Our exclusive forum provision
shall not relieve the company of its duties to comply with the federal securities laws and the rules and
23
regulations thereunder, and our stockholders will not be deemed to have waived our compliance with
these laws, rules and regulations.
Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be
deemed to have notice of and consented to the forum provisions in our amended and restated certificate of
incorporation. This choice of forum provision may limit a stockholder’s ability to bring a claim in a
judicial forum that it finds favorable for disputes with us or any of our directors, officers, other employees
or stockholders which may discourage lawsuits with respect to such claims. Alternatively, if a court were
to find the choice of forum provision contained in our amended and restated certificate of incorporation to
be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving
such action in other jurisdictions, which could harm our business, operating results and financial
condition.
Item 1B.
Unresolved staff comments
None.
Item 1C.
Cybersecurity
Risk Management and Strategy
We rely on sophisticated information systems to obtain, rapidly process, analyze, and manage data in
order to effectively operate our business. We are committed to protecting our business information,
intellectual property, customer, supplier and employee data and information systems from cybersecurity
risks and maintain an active cybersecurity risk management and strategy program, which is integrated in
our enterprise risk management program.
We maintain enterprise-wide information security policies, processes and standards that set the
requirements around acceptable use of information systems and data, risk assessment and management,
identity and access management, data security, security operations, security incident response and threat
and vulnerability management. We also perform formal risk assessment activities annually, aligned to the
National Institute of Standards and Technology (NIST) 800-171 and Cybersecurity Framework, as its
program controls are designed to protect and maintain confidentiality, integrity, and continued availability
of our data and information systems. Our team of information security professionals monitors our
information systems for cybersecurity threats, breaches, intrusions and other weaknesses, responds to
cybersecurity incidents, develops and implements plans to mitigate cybersecurity threats and facilitates
training for our employees.
We also engage consultants and other third-party advisors to conduct independent assessments of our
cybersecurity readiness and control effectiveness. In collaboration with external cybersecurity firms, we
seek to gain insights into emerging threats and vulnerabilities, industry trends, and leading practices to
inform our cybersecurity response, risk remediation and resilience capabilities, including by working with
an external retained incident response team, receiving third-party threat intelligence, participating in
incident tabletops, and performing assessments and controls testing on our enterprise environment.
Our program includes procedures to oversee and identify cybersecurity risks and threats of our third-party
service providers, which include third-party evaluations performed by our team of information security
professionals, review of independent assessment documentation, and continuous monitoring of third-party
independent posture scoring. We also include security and data protection provisions in our contractual
arrangements with third-party service providers where applicable. Additionally, we have purchased a
cybersecurity risk insurance policy that would reduce the costs associated with a covered cybersecurity
incident if it occurred.
24
Although no cybersecurity incident during the year ended December 31, 2024 resulted in an interruption
of our operations, known losses of critical data, or otherwise had a material impact on Avantor’s strategy,
financial condition or results of operations, the scope and impact of any future incident cannot be
predicted. See “Item 1A. Risk Factors” for more information on how material cybersecurity attacks may
impact our business.
Governance
Management plays a critical role in assessing and managing material risks from cybersecurity threats. Our
Vice President of Information Security & Risk Management and Chief Information Security Officer
(CISO), in coordination with our Chief Information Officer, leads a team of information security
professionals and manages our cybersecurity risk management program and activities. This involves
monitoring our information systems for cybersecurity threats, reviewing cybersecurity incidents,
analyzing emerging threats, and the development and implementation of risk mitigation strategies. Our
CISO has over 25 years of experience working in the information technology and services industry who is
a subject matter expert in a variety of areas including information security, and IT risk.
Our CISO reports to our executive leadership team composed of our Chief Executive Officer, Chief
Financial Officer, and Chief Information Officer on cybersecurity matters, providing the leadership team
with updates on enterprise risks, cybersecurity incidents, the status of ongoing initiatives, key metrics, and
additional cybersecurity topics. Our information technology leaders also meet regularly to discuss the
progress of ongoing program initiatives, cybersecurity priorities, identified risks and metrics. We have
also developed a cross functional disclosure working group to assess elevated cybersecurity incidents and,
as appropriate, report on such events to Avantor’s standing Disclosure Committee to conclude on the
materiality of the incident and any need for regulatory reporting.
The Board of Directors exercises direct oversight of strategic risks to the Company. The Board has
delegated the responsibility for cybersecurity oversight to the Audit and Finance Committee. The Audit
and Finance Committee’s responsibilities include reviewing and discussing with management the
strategies, process and controls pertaining to the management of Avantor’s information technology
operations, including cybersecurity risks and information security. The CISO and Chief Information
Officer report to the Audit and Finance Committee annually and more frequently, as needed, on
cybersecurity matters, including the cybersecurity threat landscape, key metrics demonstrating the overall
management of our cybersecurity risk and risk management program, related key initiatives, enterprise
program framework alignment, annual risk mitigation strategy, and review of cybersecurity incidents. Our
Board is committed to maintaining a well-informed and cybersecurity-aware posture, regularly engaging
through regular and requested updates on our strategy and evolving threat landscape.
Item 2.
Properties
As of December 31, 2024, the Company had facilities in over 30 countries, including approximately 200
significant administrative, sales, research and development, manufacturing and distribution facilities.
Approximately 60 of these facilities are located in the United States across 20 states. Approximately 140
of these facilities are located outside the United States, primarily in Europe and to a lesser extent in
AMEA. Refer to the Consolidated Financial Statements included in this Annual Report for additional
information with respect to the Company’s lease commitments.
Item 3.
Legal proceedings
For information regarding legal proceedings and matters, see note 13 to our consolidated financial
statements beginning on page F-1 of this report, which information is incorporated into this item by
reference.
25
Item 4.
Mine safety disclosures
Not applicable.
26
Information about our Executive Officers
The following table sets forth certain information regarding our executive officers at February 3, 2025:
Age
Position
Michael Stubblefield . . . .
52
Director, President and Chief Executive Officer
R. Brent Jones . . . . . . . . .
55
Executive Vice President and Chief Financial Officer
Benoit Gourdier . . . . . . . .
54
Executive Vice President, Bioscience Production
Christophe Couturier . . . .
59
Executive Vice President, AMEA
Brittany Hankamer . . . . . .
44
Executive Vice President and Chief Human Resources Officer
Claudius Sokenu . . . . . . .
57
Executive Vice President, Chief Legal and Compliance Officer and
Corporate Secretary
James Bramwell . . . . . . . .
58
Executive Vice President, Sales and Customer Excellence
Kitty Sahin . . . . . . . . . . . .
55
Executive Vice President, Strategy and Corporate Development
Unless indicated to the contrary, the business experience summaries provided below describe positions
held by the named individuals during the last five years.
Michael Stubblefield became our President and Chief Executive Officer in 2014. In addition, Mr.
Stubblefield also serves as a Director. Prior to joining Avantor, Mr. Stubblefield was a Senior Expert for
the Chemicals Practice of McKinsey & Company, a management consulting firm, from 2013 to 2014.
R. Brent Jones is our Executive Vice President and Chief Financial Officer, a position he has held since
August 2023. Prior to joining the Company, Mr. Jones served as Executive Vice President, Chief
Financial Officer and Chief Operating Officer of LifeScan Global Corporation, a medical devices
company, from March 2023 until July 2023 and as LifeScan’s Chief Financial Officer from February
2020 until March 2023. Prior to that, Mr. Jones served as Chief Financial Officer of Klöckner Pentaplast
Group, a plastics packaging manufacturer, from April 2016 until August 2018.
Benoit Gourdier is our Executive Vice President, Bioscience Production, a position he has held since
January 2024. Prior to his current role, Mr. Gourdier served as Executive Vice President, Biopharma
Production from October 2023 to December 2023. Prior to joining Avantor, Mr. Gourdier spent 23 years
at Merck KGaA, a chemical company, where he served in a number of leadership positions including,
most recently, as Senior Vice President and General Manager, BioReliance Contract Testing Services at
Millipore Sigma from September 2017 to September 2023.
Christophe Couturier is our Executive Vice President, AMEA, a position he has held since April 2021.
Prior to his current role, Mr. Couturier served as Executive Vice President, Services, from April 2018 to
April 2021. Prior to joining Avantor, Mr. Couturier served as Chief Executive Officer of Salicornia, LLC,
a personal consulting company, from September 2017 to April 2018.
Brittany Hankamer is our Executive Vice President and Chief Human Resources Officer, a position she
has held since August 2023. Prior to assuming her current position, Ms. Hankamer served as Avantor’s
Senior Vice President of Talent and People Operations from May 2021 to August 2023 and as Vice
President, Human Resources from September 2019 to May 2021. Prior to joining Avantor, Ms. Hankamer
was Vice President of Human Resources at Conquest Completion Services, LLC from May 2018 to
September 2019.
Claudius Sokenu is our Executive Vice President, Chief Legal and Compliance Officer and Corporate
Secretary, a position he has held since July 2023. Prior to joining Avantor, Mr. Sokenu was General
27
Counsel, Corporate Secretary and Chief Administrative Officer at Unisys, a technology company, from
May 2022 to June 2023, Senior Vice President and Global Deputy General Counsel at Cognizant, an
information technology services and consulting company, from March 2020 to April 2022 and Deputy
General Counsel, Global Head of Litigation, Investigations and Ethics & Compliance from May 2017 to
October 2018. Previously, he was a partner at Shearman & Sterling LLP and Arnold & Porter LLP.
James Bramwell is our Executive Vice President, Sales and Customer Excellence, a position he has held
since January 2024. Prior to his current role, he served as Avantor’s Executive Vice President, Americas
from October 2022 to December 2023, and as Executive Vice President, Strategic Partners from
November 2017 to October 2022.
Kitty Sahin is our Executive Vice President, Strategy and Corporate Development, a position she has held
since June 2022. Prior to joining Avantor, Ms. Sahin served as EVP, Strategy & Business Development
for Novanta, a medical, life science and industrial technology company, from September 2017 to June
2022.
PART II
Item 5.
Market for registrant’s common equity, related stockholder matters and issuer
purchases of equity securities
Principal markets for common stock
Our common stock is listed on the NYSE under the symbol “AVTR.”
Holders of common stock
On February 3, 2025, we had 6 holders of record of our common stock. This does not include holdings in
street or nominee names.
Dividends
We currently do not expect to pay any dividends on our common stock. Additionally, our subsidiaries are
party to certain debt agreements that would restrict their ability to fund future dividend payments to our
common stockholders. For more information, see note 24 to our consolidated financial statements
beginning on page F-1 of this report.
Stock performance graph
The following graph compares the return on a $100 investment in our common stock made on May 17,
2019, the day we first began trading on the NYSE, with a $100 investment also made on May 17, 2019 in
the S&P 500 Index and the S&P 500 Health Care Index. The S&P 500 Index is a broad equity market
index of companies having market capitalization similar to ours. The S&P 500 Health Care Index is an
industry-specific equity market index that we believe closely aligns to us based on the following: (i) the
index follows companies of a similar size to us in terms of net sales and market capitalization; (ii) the
index includes health care distributors, the segment of the Global Industry Classification Standard that we
believe most closely aligns to us; and (iii) the index includes companies in the biopharma and healthcare
industries, two of our primary customer groups that together comprise over half of our net sales.
The information in this section is not “soliciting material,” is not deemed “filed” with the SEC and is not
to be incorporated by reference in any of our filings under the Securities Act of 1933, as amended, or the
28
Securities Exchange Act of 1934, as amended, whether made before or after the date of this report, except
to the extent that we specifically incorporate such information by reference. The stock performance
shown below is not necessarily indicative of future performance.
Value of $100 investment (in $)
Avantor, Inc.
S&P 500 Index
S&P 500 Health Care Index
May 17, 2019
December
31, 2020
December
31, 2021
December
31, 2022
December
31, 2023
December
31, 2024
100
125
150
175
200
225
250
275
300
325
350
Securities Authorized for Issuance Under Equity Compensation Plans
The information required by this item is incorporated by reference to the applicable information in our
2025 Proxy Statement (defined below).
29
Item 6.
[Reserved]
Item 7.
Management’s discussion and analysis of financial condition and results of operations
This discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our
actual results may differ materially from those contained in or implied by any forward-looking
statements. See “Cautionary factors regarding forward-looking statements.”
Overview
For the fiscal year ended December 31, 2024, we recorded net sales of $6,783.6 million, net income of
$711.5 million, Adjusted EBITDA of $1,198.8 million and Adjusted Operating Income of $1,089.8
million. Net sales declined 2.6% which included 2.1% organic net sales decrease compared to the same
period in 2023. See “Reconciliations of non-GAAP measures” for reconciliations of net income to
Adjusted EBITDA and Adjusted Operating Income, and net income margin to Adjusted EBITDA margin
and Adjusted Operating Income margin. See “Results of operations” for a reconciliation and explanation
of changes of net sales growth (decline) to organic net sales growth (decline).
Segment Change
Effective January 1, 2024, we changed our operating model and reporting segment structure from three
reportable segments to two reportable segments, Laboratory Solutions and Bioscience Production. This
structure aligns with how our Chief Executive Officer, who is our CODM, measures segment operating
performance and allocates resources across our operating segments. This reportable segment change has
no impact on our consolidated operating results.
In connection with the operating model and reporting structure change, our CODM changed the measure
used to evaluate segment profitability from Adjusted EBITDA to Adjusted Operating Income. All
disclosures relating to segment profitability, including those for comparative periods, have been revised
as a result of this change.
Trends affecting our business and results of operations
The following trends have affected our recent operating results, and they may also continue to affect our
performance and financial condition in future periods.
Our business continues to be impacted by the transition from the global COVID-19 pandemic
Customer demand and required inventory levels continue to normalize in the transition from the
COVID-19 pandemic. The transition from the outbreak continued to impact the full year results of our
two segments, as described further in the “Results of operations” section.
Our results are impacted by a divestiture to further refine our business model
We completed the sale of our Clinical Services business, a component of the Company’s Laboratory
Solutions reportable segment, on October 17, 2024, pursuant to a definitive agreement that was signed on
August 16, 2024. The Clinical Services business has not been classified as a discontinued operation as it
did not represent a strategic shift that will have a major effect on the Company’s operations and financial
results.
We have been impacted by supply chain constraints and inflationary pressures
30
We have experienced inventory fluctuations and build up at customers as a result of global supply chain
disruptions and have experienced inflationary pressures across all of our cost categories. While we have
implemented pricing and productivity measures to combat these pressures, they may continue to
adversely impact our results.
We continue to invest in a differentiated innovation model
We are engaging with our customers early in their product development cycles to advance their programs
from research and discovery through development and commercialization. These projects include
enhancing product purity and performance characteristics, improving product packaging and streamlining
workflows. We are also developing new products in emerging areas of science such as cell and gene
therapy.
We continue to advance our cost transformation initiative to reduce our expenses
We are advancing a global cost transformation initiative to further enhance productivity through increased
organizational efficiency, footprint optimization, reduced cost-to-serve and procurement savings that are
expected to generate approximately $300 million in run rate gross cost savings by the end of 2026.
We increased our liquidity and mitigated the impact of interest rate volatility
In June 2023, we amended the revolving credit facility to increase its funding limit up to $975.0 million
and extended the term to June 29, 2028.
In 2024, we made prepayments of $690.0 million and $526.4 million on U.S. dollar term loan B-6 and
Euro term loan B-4, respectively, which reduced our variable-rate debt.
Changes in foreign currency exchange rates are impacting our financial condition and results of
operations
Our consolidated results of operations are comprised of many different functional currencies that translate
into our U.S. dollar reporting currency. The movement of the U.S. dollar against those functional
currencies, particularly the Euro, has caused significant variability in our results and may continue to do
so in the future. See Part I, Item 7A, “Quantitative and qualitative disclosures about market risk.”
Key indicators of performance and financial condition
To evaluate our performance, we monitor a number of key indicators. As appropriate, we supplement our
results of operations determined in accordance with U.S. GAAP with certain non-GAAP financial
measurements that we believe are useful to investors, creditors and others in assessing our performance.
These measures should not be considered in isolation or as a substitute for reported GAAP results because
they may include or exclude certain items as compared to similar GAAP-based measures, and such
measures may not be comparable to similarly titled measures reported by other companies. Rather, these
measures should be considered as an additional way of viewing aspects of our operations that provide a
more complete understanding of our business.
31
The key indicators that we monitor are as follows:
•
Net sales, gross margin, operating income, operating income margin, net income or loss and
net income or loss margin. These measures are discussed in the section entitled “Results of
operations”;
•
Organic net sales growth (decline), which is a non-GAAP measure discussed in the section
entitled “Results of operations.” Organic net sales growth (decline) eliminates from our reported
net sales change the impacts of revenues from acquisitions and divestitures that occurred in the
last year (as applicable) and changes in foreign currency exchange rates. We believe that this
measurement is useful to investors as a way to measure and evaluate our underlying commercial
operating performance consistently across our segments and the periods presented. This
measurement is used by our management for the same reason. Reconciliations to the change in
reported net sales, the most directly comparable GAAP financial measure, are included in the
section entitled “Results of operations”;
•
Adjusted EBITDA and Adjusted EBITDA margin, which are non-GAAP measures discussed in
the section entitled “Results of operations.” Adjusted EBITDA is our net income or loss adjusted
for the following items: (i) interest expense, (ii) income tax expense, (iii) amortization of acquired
intangible assets, (iv) depreciation expense, (v) losses on extinguishment of debt, (vi) charges
associated with the impairment of certain assets, (vii) gain on sale of business, (viii) and certain
other adjustments. Adjusted EBITDA margin is Adjusted EBITDA divided by net sales as
determined under GAAP. We believe that these measurements are useful to investors as ways to
analyze the underlying trends in our business consistently across the periods presented. These
measurements are used by our management for the same reason. A reconciliation of net income
or loss and net income or loss margin, the most directly comparable GAAP financial measures, to
Adjusted EBITDA and Adjusted EBITDA margin, respectively, are included in the section
entitled “Reconciliations of non-GAAP measures”;
•
Adjusted Operating Income and Adjusted Operating Income margin, which are non-GAAP
measures discussed in the section entitled “Results of operations.” Adjusted Operating Income is
our net income or loss adjusted for the following items: (i) interest expense, (ii) income tax
expense, (iii) amortization of acquired intangible assets, (iv) losses on extinguishment of debt, (v)
charges associated with the impairment of certain assets, (vi) gain on sale of business, (vii) and
certain other adjustments. This measurement is our segment reporting profitability measure under
GAAP. Adjusted Operating Income margin is Adjusted Operating Income divided by net sales as
determined under GAAP. We believe that these measurements are useful to investors as ways to
analyze the underlying trends in our business consistently across the periods presented. These
measurements are used by our management for the same reason. A reconciliation of net income
or loss and net income or loss margin, the most directly comparable GAAP financial measures, to
Adjusted Operating Income and Adjusted Operating Income margin, respectively, are included in
the section entitled “Reconciliations of non-GAAP measures”;
•
Cash flows from operating activities, which we discuss in the section entitled “Liquidity and
capital resources—Historical cash flows”;
•
Free cash flow, which is a non-GAAP measure, is equal to our cash flows from operating
activities, less capital expenditures, plus direct transaction costs and income taxes paid related to
acquisitions and divestitures (as applicable) in the period. We believe that this measurement is
32
useful to investors as it provides a view on the Company’s ability to generate cash for use in
financing or investing activities. This measurement is used by management for the same reason.
A reconciliation of cash flows from operating activities, the most directly comparable GAAP
financial measure, to free cash flow, is included in the section entitled “Liquidity and capital
resources—Historical cash flows.”
Results of operations
We present results of operations in the same way that we manage our business, evaluate our performance
and allocate our resources. We also provide discussion of net sales and Adjusted Operating Income by
segment: Laboratory Solutions and Bioscience Production. Corporate costs are managed on a standalone
basis, certain of which are allocated to our reportable segments.
Years ended December 31, 2024, 2023 and 2022
Executive summary
(dollars in millions)
Year ended December 31,
2024 vs.
2023
2023 vs.
2022
2024
2023
2022
Net sales . . . . . . . . . . . . . . . . . . . . . $ 6,783.6
$ 6,967.2
$ 7,512.4
$
(183.6)
$
(545.2)
Gross margin . . . . . . . . . . . . . . . . .
33.6 %
33.9 %
34.6 %
(30) bps
(70) bps
Operating income . . . . . . . . . . . . . . $ 1,084.8
$
696.4
$ 1,130.2
$
388.4
$
(433.8)
Operating income margin . . . . . . .
16.0 %
10.0 %
15.0 %
600 bps
(500) bps
Net income . . . . . . . . . . . . . . . . . . . $
711.5
$
321.1
$
686.5
$
390.4
$
(365.4)
Net income margin . . . . . . . . . . . . .
10.5 %
4.6 %
9.1 %
590 bps
(450) bps
Adjusted EBITDA . . . . . . . . . . . . . $ 1,198.8
$ 1,309.1
$ 1,570.7
$
(110.3)
$
(261.6)
Adjusted EBITDA margin . . . . . . .
17.7 %
18.8 %
20.9 %
(110) bps
(210) bps
Adjusted Operating Income . . . . . . $ 1,089.8
$ 1,211.8
$ 1,477.3
$
(122.0)
$
(265.5)
Adjusted Operating Income margin
16.1 %
17.4 %
19.7 %
(130) bps
(230) bps
In 2024, the net sales decline was driven by decreases in both segments primarily due to reduced
customer demand. Volume declines and inflationary pressures, partially offset by savings from our cost
transformation initiative, contributed to contraction in gross margin and gross profit. Operating income
was driven primarily by the gain on sale of our Clinical Services business. Lower gross profit and higher
annual incentive compensation expenses, partially offset by savings from our cost transformation
initiative, drove Adjusted EBITDA and Adjusted Operating Income margin contraction.
In 2023, the net sales decline was driven primarily by reduced customer demand, the impact of customer
destocking, and COVID-19 related headwinds. Unfavorable product mix and inflationary pressures
contributed to contraction in gross margin. Operating income was driven primarily by asset impairment
charges recorded in 2023. Lower sales volumes along with unfavorable product mix drove Adjusted
EBITDA margin contraction and Adjusted Operating Income margin contraction.
33
Net sales
(in millions)
Year ended
December 31,
Reconciliation of net sales growth (decline) to organic
net sales growth (decline)
Net sales
growth
(decline)
Foreign
currency
impact
Divestiture
impact
Organic
net sales
growth
(decline)
2024
2023
Laboratory Solutions . . $ 4,610.1
$ 4,738.3
$
(128.2)
$
5.5
$
(42.4)
$
(91.3)
Bioscience Production .
2,173.5
2,228.9
(55.4)
1.8
—
(57.2)
Total . . . . . . . . . . . $ 6,783.6
$ 6,967.2
$
(183.6)
$
7.3
$
(42.4)
$
(148.5)
Net sales decreased $183.6 million or 2.6%, which included $7.3 million or 0.1% of favorable foreign
currency translation impact and $42.4 million or 0.6% of impact related to our Clinical Services
divestiture. Organic net sales decreased by $148.5 million or 2.1% which is discussed below.
In the Laboratory Solutions segment, net sales decreased $128.2 million or 2.7% which included $5.5
million or 0.1% of favorable foreign currency translation impact and $42.4 million or 0.9% of impact
related to our Clinical Services divestiture. Organic net sales decreased by $91.3 million or 1.9%. The
sales decline was driven primarily by decreased demand in biopharma and healthcare end markets.
In the Bioscience Production segment, net sales decreased $55.4 million or 2.5%, which included $1.8
million or 0.1% of favorable foreign currency translation impact. Organic net sales decreased $57.2
million or 2.6%. The sales decline was driven primarily by decreased demand in biopharma and
healthcare end markets.
(in millions)
Year ended December 31,
Reconciliation of net sales growth (decline) to
organic net sales growth (decline)
Net sales
growth
(decline)
Foreign
currency
impact
Organic net
sales growth
(decline)
2023
2022
Laboratory Solutions . . . $
4,738.3
$
5,002.4
$
(264.1)
$
30.8
$
(294.9)
Bioscience Production . .
2,228.9
2,510.0
(281.1)
10.4
(291.5)
Total . . . . . . . . . . . . $
6,967.2
$
7,512.4
$
(545.2)
$
41.2
$
(586.4)
Net sales decreased $545.2 million or 7.3%, which included $41.2 million or 0.5% of favorable foreign
currency translation impact. Organic net sales decreased by $586.4 million or 7.8% (decline of 5.2%
when excluding the impact of sales of COVID-19 related products in both periods, referred to herein as
COVID-19 related headwinds or tailwinds).
In the Laboratory Solutions segment, net sales decreased $264.1 million or 5.3% which included $30.8
million or 0.6% of favorable foreign currency translation impact. Organic net sales decreased by $294.9
million or 5.9% (decline of 3.4% excluding COVID-19 headwinds). The organic decline was primarily
34
related to the roll off of COVID-19 revenues for diagnostic testing, in addition to reduced customer
demand and destocking of lab products.
In the Bioscience Production segment, net sales decreased $281.1 million or 11.2%, which included $10.4
million or 0.4% of favorable foreign currency translation impact. Organic net sales decreased $291.5
million or 11.6% (decline of 8.9% excluding COVID-19 headwinds). The organic decline was primarily
related to the roll off of COVID-19 revenues for vaccines, decline in medical grade silicones and lower
demand for our semiconductor and electronic device offerings.
Gross margin
Year ended December 31,
2024 vs.
2023
2023 vs.
2022
2024
2023
2022
Gross margin . . . . . . . . . . . . . . . . .
33.6 %
33.9 %
34.6 %
(30) bps
(70) bps
In 2024, gross margin decreased 30 basis points resulting primarily from the impact of inflationary
pressures, partially offset by savings from our cost transformation initiative.
In 2023, gross margin decreased 70 basis points resulting primarily from unfavorable product mix and the
impact of inflationary pressures, partially offset by lower distribution costs.
Operating income
(in millions)
Year ended December 31,
2024 vs.
2023
2023 vs.
2022
2024
2023
2022
Gross profit . . . . . . . . . . . . . . . . . . $ 2,279.3
$ 2,363.8
$ 2,602.8
$
(84.5)
$
(239.0)
Operating expenses (excluding
impairment charges & gain on
sale of business) . . . . . . . . . . . .
1,641.1
1,506.6
1,472.6
134.5
34.0
Impairment charges . . . . . . . . . . . .
—
160.8
—
(160.8)
160.8
Gain on sale of business . . . . . . . . .
(446.6)
—
—
(446.6)
—
Operating income . . . . . . . . . . $ 1,084.8
$
696.4
$ 1,130.2
$
388.4
$
(433.8)
In 2024, operating income increased primarily from the gain on sale of our Clinical Services business and
the absence of impairment charges in 2024, partially offset by lower gross profit as previously discussed,
higher operating expenses driven by restructuring and severance charges, transformation expenses, and
annual incentive compensation expenses.
In 2023, operating income decreased primarily from lower gross profit, as previously discussed, as well as
higher operating expenses driven by asset impairment charges recorded in 2023, accrual of a long-term
retention incentive, inflation and investments made to grow the business, partially offset by lower
accruals related to incentive compensation.
35
Net income
(in millions)
Year ended December 31,
2024 vs.
2023
2023 vs.
2022
2024
2023
2022
Operating income . . . . . . . . . . . . . . $ 1,084.8
$
696.4
$ 1,130.2
$
388.4
$
(433.8)
Interest expense, net . . . . . . . . . . . .
(218.8)
(284.8)
(265.8)
66.0
(19.0)
Loss on extinguishment of debt . . .
(10.9)
(6.9)
(12.5)
(4.0)
5.6
Other (expense) income, net . . . . .
(1.2)
5.8
(0.8)
(7.0)
6.6
Income tax expense . . . . . . . . . . . .
(142.4)
(89.4)
(164.6)
(53.0)
75.2
Net income . . . . . . . . . . . . . . . $
711.5
$
321.1
$
686.5
$
390.4
$
(365.4)
In 2024, net income increased primarily due to higher operating income, as previously discussed, as well
as lower interest expense due to debt repayments on our variable-rate debt, partially offset by higher
income tax expense due to higher income before income taxes.
In 2023, net income decreased primarily due to lower operating income, as previously discussed, as well
as higher interest expense from rising interest rates on our variable-rate term loans, partially offset by
lower income tax expense due to lower income before income taxes.
Adjusted EBITDA and Adjusted EBITDA margin
For reconciliations of Adjusted EBITDA and Adjusted EBITDA margin to net income and net income
margin, respectively, the most directly comparable measures under GAAP, see “Reconciliations of non-
GAAP measures.”
(dollars in millions)
Year ended December 31,
2024 vs.
2023
2023 vs.
2022
2024
2023
2022
Adjusted EBITDA . . . . . . . . . . . . . $ 1,198.8
$ 1,309.1
$ 1,570.7
$
(110.3)
$
(261.6)
Adjusted EBITDA margin . . . . . . .
17.7 %
18.8 %
20.9 %
(110) bps
(210) bps
In 2024, Adjusted EBITDA decreased $110.3 million or 8.4%, which included a favorable foreign
currency translation impact of $3.3 million or 0.3%. The remaining decline of $113.6 million or 8.7% was
driven primarily by lower gross profit and higher annual incentive compensation expenses, partially offset
by savings from our cost transformation initiative.
In 2023, Adjusted EBITDA decreased $261.6 million or 16.7%, which included a favorable foreign
currency translation impact of $5.3 million or 0.3%. The remaining decline of $266.9 million or 17.0%
was driven primarily by lower gross profit, partially offset by reduced operating expenses and lower
distribution costs.
36
Adjusted Operating Income and Adjusted Operating Income margin
For a reconciliation of Adjusted Operating Income and Adjusted Operating Income margin to net income
and net income margin, respectively, the most directly comparable measures under GAAP, see
“Reconciliations of non-GAAP financial measures.”
(dollars in millions)
Year ended December 31,
Change
2024
2023
Adjusted Operating Income:
Laboratory Solutions . . . . . . . . . . . . . . . . . . . . . . . . . . $
598.0
$
668.3
$
(70.3)
Bioscience Production . . . . . . . . . . . . . . . . . . . . . . . . .
558.2
601.9
(43.7)
Corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(66.4)
(58.4)
(8.0)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
1,089.8
$
1,211.8
$
(122.0)
Adjusted Operating Income margin . . . . . . . . . . . . . . . . . .
16.1 %
17.4 %
(130) bps
Adjusted Operating Income decreased $122.0 million or 10.1%, which included an unfavorable foreign
currency translation impact of $1.3 million or 0.1%. The remaining decline of $120.7 million or 10.0% is
discussed below.
In the Laboratory Solutions segment, Adjusted Operating Income declined $70.3 million or 10.5%, or
10.2% when adjusted for unfavorable foreign currency translation impact. The decrease was driven
primarily by lower sales volume and higher annual incentive compensation expenses, partially offset by
savings from our cost transformation initiative.
In the Bioscience Production segment, Adjusted Operating Income declined $43.7 million or 7.3%. The
impact of foreign currency translation impact was immaterial. The decrease was driven primarily by
lower sales volume, unfavorable product mix and higher annual incentive compensation expenses,
partially offset by savings from our cost transformation initiative.
In Corporate, Adjusted Operating Income decreased $8.0 million driven primarily by increased stock-
based compensation expense.
(dollars in millions)
Year ended December 31,
Change
2023
2022
Adjusted Operating Income:
Laboratory Solutions . . . . . . . . . . . . . . . . . . . . . . . . . . $
668.3
$
764.7
$
(96.4)
Bioscience Production . . . . . . . . . . . . . . . . . . . . . . . . .
601.9
778.9
(177.0)
Corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(58.4)
(66.3)
7.9
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
1,211.8
$
1,477.3
$
(265.5)
Adjusted Operating Income margin . . . . . . . . . . . . . . . . . .
17.4 %
19.7 %
(230) bps
37
Adjusted Operating Income decreased $265.5 million or 18.0%, which included a favorable foreign
currency translation impact of $5.3 million or 0.4%. The remaining decline of $270.8 million or 18.4% is
discussed below.
In the Laboratory Solutions segment, Adjusted Operating Income declined $96.4 million or 12.6%, or
13.1% when adjusted for favorable foreign currency translation impact. The decrease was driven by lower
sales volume and unfavorable product mix, partially offset by reduced operating expenses and distribution
costs.
In the Bioscience Production segment, Adjusted Operating Income declined $177.0 million or 22.7%, or
22.9% when adjusted for favorable foreign currency translation impact. The decrease was driven by lower
sales volume and unfavorable product mix, partially offset by reduced operating expenses, distribution
costs and favorable manufacturing variances.
In Corporate, Adjusted Operating Income increased $7.9 million driven primarily by reduced stock-based
compensation expense.
Reconciliations of non-GAAP measures
The following table presents the reconciliation of net income and net income margin to Adjusted
EBITDA and Adjusted EBITDA margin, respectively:
(dollars in millions, % based on net sales)
Year ended December 31,
2024
2023
2022
$
%
$
%
$
%
Net income . . . . . . . . . . . . . . . . . . . . . . $ 711.5
10.5 % $ 321.1
4.6 % $ 686.5
9.1 %
Interest expense, net . . . . . . . . . . . . . . .
218.8
3.2 %
284.8
4.1 %
265.8
3.5 %
Income tax expense . . . . . . . . . . . . . . . .
142.4
2.1 %
89.4
1.3 %
164.6
2.2 %
Depreciation and amortization . . . . . . .
405.5
6.0 %
402.3
5.7 %
405.5
5.4 %
Loss on extinguishment of debt . . . . . .
10.9
0.2 %
6.9
0.1 %
12.5
0.2 %
Integration-related expenses1 . . . . . . . .
—
— %
7.6
0.1 %
19.2
0.3 %
Purchase accounting adjustments2 . . . .
—
— %
—
— %
9.4
0.2 %
Restructuring and severance charges3 . .
82.8
1.2 %
26.5
0.4 %
3.5
— %
Transformation expenses4 . . . . . . . . . . .
58.9
0.9 %
5.4
0.1 %
—
— %
Reserve for certain legal matters, net5 .
9.2
0.2 %
7.1
0.1 %
—
— %
Other6 . . . . . . . . . . . . . . . . . . . . . . . . . .
(3.9)
(0.2)%
(2.8)
— %
3.7
— %
Impairment charges7 . . . . . . . . . . . . . . .
—
— %
160.8
2.3 %
—
— %
Gain on sale of business8 . . . . . . . . . . .
(446.6)
(6.6)%
—
— %
—
— %
Pension termination charges9 . . . . . . . .
9.3
0.2 %
—
— %
—
— %
Adjusted EBITDA . . . . . . . . . . . . . $1,198.8
17.7 % $1,309.1
18.8 % $1,570.7
20.9 %
1.
Represents direct costs incurred with third parties and the accrual of a long-term retention incentive to
integrate acquired companies. These expenses represent incremental costs and are unrelated to normal
38
operations of our business. Integration expenses are incurred over a pre-defined integration period specific to
each acquisition.
2.
Represents the non-cash reduction of contingent consideration related to the Ritter acquisition and the
amortization of the purchase accounting adjustment to record Masterflex inventory at fair value.
3.
Reflects the incremental expenses incurred in the period related to restructuring initiatives to increase
profitability and productivity. Costs included in this caption are specific to employee severance, site-related
exit costs, and contract termination costs. The expenses recognized in 2024 represent costs incurred to
achieve the Company’s publicly-announced cost transformation initiative.
4.
Represents incremental expenses directly associated with the Company’s publicly-announced cost
transformation initiative, primarily related to the cost of external advisors.
5.
Represents charges and legal costs, net of recoveries, in connection with certain litigation and other
contingencies that are unrelated to our core operations and not reflective of on-going business and operating
results.
6.
Represents net foreign currency (gain) loss from financing activities and other stock-based compensation
expense (benefit).
7.
As described in notes 10 and 11 to our consolidated financial statements beginning on F-1 of this report.
8.
As described in note 4 to our consolidated financial statements beginning on F-1 of this report.
9.
As described in note 17 to our consolidated financial statements beginning on F-1 of this report.
The following table presents the reconciliation of net income and net income margin to Adjusted
Operating Income and Adjusted Operating Income margin, respectively:
(dollars in millions, % based on net sales)
Year ended December 31,
2024
2023
2022
$
%
$
%
$
%
Net income . . . . . . . . . . . . . . . . . . . . . . $ 711.5
10.5 % $ 321.1
4.6 % $ 686.5
9.1 %
Interest expense, net . . . . . . . . . . . . . . .
218.8
3.2 %
284.8
4.1 %
265.8
3.5 %
Income tax expense . . . . . . . . . . . . . . . .
142.4
2.1 %
89.4
1.3 %
164.6
2.2 %
Loss on extinguishment of debt . . . . . .
10.9
0.2 %
6.9
0.1 %
12.5
0.2 %
Other (expense) income, net . . . . . . . . .
1.2
— %
(5.8)
(0.1)%
0.8
— %
Operating income . . . . . . . . . . . . . .
1,084.8
16.0 %
696.4
10.0 %
1,130.2
15.0 %
Amortization . . . . . . . . . . . . . . . . . . . . .
299.8
4.4 %
307.7
4.4 %
318.3
4.2 %
Integration-related expenses1 . . . . . . . .
—
— %
7.6
0.1 %
19.2
0.3 %
Purchase accounting adjustments2 . . . .
—
— %
—
— %
9.4
0.2 %
Restructuring and severance charges3 . .
82.8
1.2 %
26.5
0.4 %
3.5
— %
Transformation expenses4 . . . . . . . . . . .
58.9
0.9 %
5.4
0.1 %
—
— %
Reserve for certain legal matters, net5 .
9.2
0.2 %
7.1
0.1 %
—
— %
Other6 . . . . . . . . . . . . . . . . . . . . . . . . . .
0.9
— %
0.3
— %
(3.3)
— %
Impairment charges7 . . . . . . . . . . . . . . .
—
— %
160.8
2.3 %
—
— %
Gain on sale of business8 . . . . . . . . . . .
(446.6)
(6.6)%
—
— %
—
— %
Adjusted Operating Income . . . . . . $1,089.8
16.1 % $1,211.8
17.4 % $1,477.3
19.7 %
1.
Represents direct costs incurred with third parties and the accrual of a long-term retention incentive to
integrate acquired companies. These expenses represent incremental costs and are unrelated to normal
39
operations of our business. Integration expenses are incurred over a pre-defined integration period specific to
each acquisition.
2.
Represents the non-cash reduction of contingent consideration related to the Ritter acquisition and the
amortization of the purchase accounting adjustment to record Masterflex inventory at fair value.
3.
Reflects the incremental expenses incurred in the period related to restructuring initiatives to increase
profitability and productivity. Costs included in this caption are specific to employee severance, site-related
exit costs, and contract termination costs. The expenses recognized in 2024 represent costs incurred to
achieve the Company’s publicly-announced cost transformation initiative.
4.
Represents incremental expenses directly associated with the Company’s publicly-announced cost
transformation initiative, primarily related to the cost of external advisors.
5.
Represents charges and legal costs, net of recoveries, in connection with certain litigation and other
contingencies that are unrelated to our core operations and not reflective of on-going business and operating
results.
6.
Represents other stock-based compensation expense (benefit).
7.
As described in notes 10 and 11 to our consolidated financial statements beginning on F-1 of this report.
8.
As described in note 4 to our consolidated financial statements beginning on F-1 of this report.
Liquidity and capital resources
We fund short-term cash requirements primarily from operating cash flows, while most of our long-term
financing is from indebtedness, which we use to finance transactions outside of our normal operations.
Our most significant contractual obligations are scheduled principal and interest payments for
indebtedness. We also have obligations to make payments under operating leases, to purchase certain
products and services and to fund defined benefit plan obligations primarily outside of the United States.
In addition to contractual obligations, we use cash to fund capital expenditures and taxes. Changes in
working capital may be a source or a use of cash depending on our operations during the period.
We expect to fund our short-term and long-term capital needs with cash generated by operations and
availability under our credit facilities. Although we believe that these sources will provide sufficient
liquidity for us to meet our long-term capital needs, our ability to fund these needs will depend to a
significant extent on our future financial performance, which will be subject in part to general economic,
competitive, financial, regulatory and other factors that are beyond our control.
We believe that cash generated by operations, together with available liquidity under our credit facilities,
will be adequate to meet our current and expected needs for cash prior to the maturity of our debt,
although no assurance can be given in this regard.
40
Liquidity
The following table presents our primary sources of liquidity:
(in millions)
December 31, 2024
Receivables
facility
Revolving
credit facility
Total
Unused availability under credit facilities:
Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
247.6
$
975.0
$
1,222.6
Undrawn letters of credit outstanding . . . . . . . . . . . . .
(15.3)
(3.1)
(18.4)
Outstanding borrowings . . . . . . . . . . . . . . . . . . . . . . .
(125.0)
—
(125.0)
Unused availability . . . . . . . . . . . . . . . . . . . . . . . . $
107.3
$
971.9
1,079.2
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
261.9
Total liquidity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
1,341.1
Our availability under our receivables facility depends upon maintaining a sufficient borrowing base of
eligible accounts receivable. We believe that we have sufficient capital resources to meet our liquidity
needs.
At December 31, 2024, $217.7 million or 83% of our cash and cash equivalents was held by our non-U.S.
subsidiaries and may be subject to certain taxes upon repatriation, primarily where foreign withholding
taxes apply. We ordinarily generate significant cash flows in the U.S. and deploy U.S. cash flows
promptly toward debt principal repayment. Our U.S. business has significant liquidity via our unused
working capital facilities, which satisfy our day-to-day cash operating needs.
41
Historical cash flows
The following table presents a summary of cash provided by (used in) various activities:
(in millions)
Year ended December 31,
Change
2024
2023
Operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
711.5
$
321.1
$
390.4
Non-cash items1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
81.9
533.0
(451.1)
Working capital changes2 . . . . . . . . . . . . . . . . . . . . . .
89.9
(21.3)
111.2
All other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(42.5)
37.2
(79.7)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
840.8
$
870.0
$
(29.2)
Investing activities:
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . $
(148.8)
$
(146.4)
$
(2.4)
Cash proceeds from sale of disposal group, net of
cash and cash equivalents sold . . . . . . . . . . . . . . .
585.2
—
585.2
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.5
2.7
(0.2)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
438.9
$
(143.7)
$
582.6
Financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1,281.2)
(843.7)
(437.5)
1.
Consists of non-cash charges including depreciation and amortization, impairment charges, stock-based
compensation expense, deferred income tax expense, non-cash restructuring charges, pension termination
charges, gain on sale of business and others.
2.
Includes changes to our accounts receivable, inventory, contract assets and accounts payable.
Cash flows from operating activities provided $29.2 million less cash in 2024 due to higher cash costs
related to our cost transformation initiative and higher cash taxes paid in the current year, partially offset
by improved working capital.
Investing activities provided $582.6 million more cash in 2024. The change was primarily attributable to
the proceeds received from the sale of our Clinical Services business.
Financing activities used $437.5 million more cash in 2024 primarily due to higher debt repayments in the
current year, partially offset by higher proceeds received from stock option exercises in 2024.
Free cash flow
(in millions)
Year ended December 31,
Change
2024
2023
Net cash provided by operating activities . . . . . . . . . . . . . $
840.8
$
870.0
$
(29.2)
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . .
(148.8)
(146.4)
(2.4)
Divestiture-related transaction expenses and taxes
paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
76.3
—
76.3
Free cash flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
768.3
$
723.6
$
44.7
42
Free cash flow was $44.7 million higher in 2024 driven by changes in cash flows from operating activities
noted above.
A discussion and analysis of historical cash flows covering the year ended December 31, 2022 is included
in the 2023 Form 10-K.
Indebtedness
A significant portion of our long-term financing is from indebtedness. The purpose of this section is to
disclose how certain features of our indebtedness influence our liquidity and capital resources. Additional
detail about the terms of our indebtedness may be found in note 14 to our consolidated financial
statements beginning on page F-1 of this report.
Our credit facilities provide us access to up to $1,222.6 million of borrowing capacity.
We have entered into a receivables facility and a revolving credit facility that provide us access to cash to
fund short-term business needs. See the section entitled “Liquidity” for additional information.
Our indebtedness restricts us from paying dividends to common stockholders.
Certain of the debt agreements entered into by our wholly-owned subsidiary, Avantor Funding, Inc.,
prevent it from paying dividends or making other payments to Avantor, Inc., subject to limited
exceptions. At December 31, 2024 and 2023, substantially all of Avantor, Inc.’s net assets were subject to
those restrictions.
Our senior secured credit facilities require or may require us to make certain principal repayments prior
to maturity
We are required to make quarterly payments on our senior secured credit facilities, with the balance due
on the maturity date. We have generated sufficient cash flows to make all required historical payments,
and we expect that our cash flows will continue to be sufficient to make future payments.
To the extent our net leverage ratios, as defined in our credit agreement, reach certain levels, we are
required to make additional prepayments if: (i) we generate excess cash flows, as defined in our credit
agreement, at specified percentages that decline if certain net leverage ratios are achieved; or (ii) we
receive cash proceeds from certain types of asset sales or debt issuances. We are required to make a
prepayment of 50% of our excess cash flows if our first lien net leverage ratio, as defined in our credit
agreement, exceeds 4.50:1.00, a prepayment of 25% of our excess cash flows if our first lien net leverage
ratio is less than or equal to 4.50:1.00 but greater than 3.75:1.00, and no prepayment if our first lien net
leverage ratio is less than or equal to 3.75:1.00. As our first lien net leverage ratio was below 3.75:1.00 at
December 31, 2024, no additional prepayments were required and no such prepayments have become due
since the inception of the credit facilities.
We are subject to certain financial covenants that, if not met, could put us in default of our debt
agreements
The receivables facility and our senior secured credit facilities contain certain customary covenants,
including a financial covenant. That covenant becomes applicable in periods when we have drawn more
than 35% of our revolving credit facility. When applicable, we may not have total borrowings in excess of
43
a pro forma net leverage ratio, as defined. This covenant was not applicable at December 31, 2024, and
our historical net leverage has been below the covenant requirement.
Contractual obligations
The following table presents our contractual obligations at December 31, 2024:
(in millions)
Payments due by period
Total
Short-Term
Long-Term
Debt:
Principal(1)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
4,077.8
$
821.1
$
3,256.7
Interest(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
536.9
159.2
377.7
Operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
236.1
37.8
198.3
Purchase obligations(3) . . . . . . . . . . . . . . . . . . . . . . . . .
326.6
113.6
213.0
Other liabilities: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Underfunded defined benefit plans(4) . . . . . . . . . . . . . .
92.0
6.2
85.8
Transition tax payments(5) . . . . . . . . . . . . . . . . . . . . . .
19.3
19.3
—
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.7
1.1
3.6
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
5,293.4
$
1,158.3
$
4,135.1
(1)
Includes finance lease liabilities. To calculate payments for principal and interest, we assumed that variable
interest rates, foreign currency exchange rates and outstanding borrowings under credit facilities were
unchanged from December 31, 2024 through maturity. Further, we have not considered any interest
obligation on our receivables facility. For the variable interest rates and principal amounts used, see note 14 to
our consolidated financial statements beginning on page F-1 of this report.
(2)
Our senior secured credit facilities would require us to accelerate our principal repayments should we
generate excess cash flows, as defined, in future periods.
(3)
Purchase obligations for certain products and services are made in the normal course of business to meet
operating needs.
(4)
Represents our obligation to fund defined benefit plans with obligations in excess of plan assets. The total
obligation is equal to the aggregate excess of the discounted benefit obligation over the fair value of plan
assets for all underfunded plans. The payments due in less than one year are estimated using actuarial
methods. The payments due for all other years are estimated by distributing the remaining funding status to
future periods in the same way as benefit payments are expected to be made by the plans following actuarial
methods.
(5)
Represents our transition tax obligation due over eight years to transition to the modified territorial tax system
under U.S. income tax legislation issued in 2017.
Critical accounting policies and estimates
The preparation of financial statements in conformity with GAAP requires us to make estimates and
assumptions that affect the amounts reported throughout the financial statements. Those estimates and
assumptions are based on our best estimates and judgment. We evaluate our estimates and assumptions on
an ongoing basis using historical experience and known facts and circumstances. We adjust our estimates
and assumptions when we believe the facts and circumstances warrant an adjustment. As future events
and their effects cannot be determined with precision, actual results could differ significantly from those
estimates.
44
We consider the policies and estimates discussed below to be critical to an understanding of our financial
statements because their application places the most significant demands on our judgment. Specific risks
for these critical accounting policies are described in the following sections. For all of these policies, we
caution that future events rarely develop exactly as forecasted, and such estimates naturally require
adjustment.
Our discussion of critical accounting policies and estimates is intended to supplement, not duplicate, our
summary of significant accounting policies so that readers will have greater insight into the uncertainties
involved in these areas. For a summary of all of our significant accounting policies, see note 2 to our
consolidated financial statements beginning on page F-1 of this report.
Testing goodwill and other intangible assets for impairment
We carry significant amounts of goodwill and other intangible assets on our consolidated balance sheet.
At December 31, 2024, the combined carrying value of goodwill and other intangible assets, net of
accumulated amortization and impairment charges, was $8,899.4 million or 73% of our total assets.
Required annual assessment
On October 1 of each year, we perform annual impairment testing of our goodwill and indefinite-lived
intangible assets, or more frequently if an event or change in circumstance occurs that would require
reassessment of the recoverability of those assets. The impairment analysis for goodwill and indefinite-
lived intangible assets consists of an optional qualitative test potentially followed by a quantitative
analysis. These measurements rely upon significant judgment from management described as follows:
•
The qualitative analysis for goodwill and indefinite-lived intangible assets requires us to identify
potential factors that may result in an impairment and estimate whether they would warrant
performance of a quantitative test;
•
The quantitative impairment test requires us to estimate the fair value of our reporting units and
indefinite-lived intangible assets. We estimate the fair value of each reporting unit using a
weighted average of two valuation methods based on a discounted cash flows method and a
guideline public company method. These valuation methods require management to make various
assumptions, including, but not limited to, future profitability, cash flows, discount rates,
weighting of valuation methods and the selection of comparable publicly traded companies.
Our estimates are based on historical trends, management’s knowledge and experience and overall
economic factors, including projections of future earnings potential. Developing future cash flows in
applying the income approach requires us to evaluate our intermediate to longer-term strategies,
including, but not limited to, estimates about net sales growth, operating margins, capital requirements,
inflation and working capital management. The development of appropriate rates to discount the
estimated future cash flows requires the selection of risk premiums, which can materially impact the
present value of future cash flows. Selection of an appropriate peer group under the market approach
involves judgment, and an alternative selection of guideline companies could yield materially different
market multiples. Weighing the different value indications involves judgment about their relative
usefulness and comparability to the reporting unit.
We did not record any impairment charges as a result of our October 1, 2024 impairment testing. Each
reporting unit had a fair value that was in excess of its carrying value, and our indefinite-lived intangible
45
assets did not show any indications that their fair value was more likely than not below their carrying
value.
Estimating valuation allowances on deferred tax assets
We are required to estimate the degree to which tax assets and loss carryforwards will result in a future
income tax benefit, based on our expectations of future profitability by tax jurisdiction. We provide a
valuation allowance for deferred tax assets that we believe will more likely than not go unutilized. If it
becomes more likely than not that a deferred tax asset will be realized, we reverse the related valuation
allowance and recognize an income tax benefit for the amount of the reversal. At December 31, 2024, our
valuation allowance on deferred tax assets was $214.1 million, $149.2 million of which relates to foreign
net operating loss carry forwards that are not expected to be realized.
We must make assumptions and judgments to estimate the amount of valuation allowance to be recorded
against our deferred tax assets, which take into account current tax laws and estimates of the amount of
future taxable income, if any. Changes to any of the assumptions or judgments could cause our actual
income tax obligations to differ from our estimates.
Accounting for uncertain tax positions
In the ordinary course of business, there is inherent uncertainty in quantifying our income tax positions.
We assess income tax positions for all years subject to examination based upon our evaluation of the
facts, circumstances and information available at the reporting date. For those tax positions where it is
more likely than not that a tax benefit will be sustained, we have recorded an amount having greater than
50% likelihood of being realized upon ultimate settlement with a taxing authority assumed to have full
knowledge of all relevant information. For those income tax positions where it is not more likely than not
that a tax benefit will be sustained, no tax benefit has been recognized in the financial statements. Our
reserve for uncertain tax positions was $83.3 million at December 31, 2024, exclusive of penalties and
interest. Where applicable, associated interest expense has also been recognized as a component of
interest expense.
We operate in numerous countries under many legal forms and, as a result, we are subject to the
jurisdiction of numerous domestic and non-U.S. tax authorities, as well as to tax agreements and treaties
among these governments. Our tax positions may be scrutinized by local tax authorities upon
examination. Determination of taxable income in any jurisdiction requires the interpretation of the related
tax laws and regulations, including transfer pricing guidelines, and the use of estimates and assumptions
regarding significant future events, such as the amount, timing and character of deductions and the
sources and character of income and tax credits. Changes in tax laws, regulations, agreements and
treaties, currency exchange restrictions or our level of operations or profitability in each taxing
jurisdiction could have an impact upon the amount of current and deferred tax balances and hence our net
income.
We file tax returns in each tax jurisdiction that requires us to do so. Should tax return positions not be
sustained upon audit, we could be required to record an income tax provision. Should previously
unrecognized tax benefits ultimately be sustained, we could be required to record an income tax benefit.
Calculating expense for long-term compensation arrangements
Our employees receive various long-term compensation awards, including stock options, RSUs,
performance stock units and cash-based awards. We calculate expense for some of those awards using fair
46
value estimates based on unobservable inputs. Additionally, some of those awards contain performance or
market conditions. We assess the probability of achieving those performance conditions, and in cases
where partial or exceptional performance affects the size of the award, we also estimate the projected
achievement level. We determine the fair value of awards with market conditions on their grant date using
a Monte Carlo model, which incorporates the probability of achieving the market condition in the awards’
fair value. We recognize the expense for such awards ratably over their vesting term.
Expense for stock options without performance or market conditions is determined on the grant date and
recognized ratably over their vesting term. We estimate the grant date fair value of stock options using the
Black-Scholes model. This model requires us to make various assumptions, with the most significant
assumption currently being the volatility of our stock price. A public quotation was first established for
our common stock in May 2019, which does not provide adequate historical basis to reasonably estimate
the expected volatility of our common stock over their more than six-year expected life. Instead, we
estimate volatility based on historical stock price trends of a peer company set. The fair value of our
awards would have differed had we selected different peer companies or used a different technique to
estimate volatility. Increasing our expected volatility assumption by 5 percentage points for all stock
options at the date of grant would have increased our 2024 stock-based compensation expense by $1.1
million.
Estimating the net realizable value of inventories
We value our inventories at the lower of cost or net realizable value. We regularly review quantities of
inventories on hand and compare these amounts to the expected use of each product or product line,
which can require us to make significant judgments. If our judgments prove to be incorrect, we may be
required to record a charge to cost of sales to reduce the carrying amount of inventory on hand to net
realizable value. As with any significant estimate, we cannot be certain of future events which may cause
us to change our judgments.
Item 7A.
Quantitative and qualitative disclosures about market risk
Foreign currency exchange risk
Although we report our results and financial condition in U.S. dollars, a significant portion of our
operating and financing activities are denominated in foreign currencies, principally the Euro but also
many others.
Certain of our U.S. subsidiaries carry Euro-denominated debt. This does not result in any material risks
from an earnings perspective because the exposure from these instruments is substantially hedged by
offsetting exposures from intercompany borrowing arrangements. From a cash flow perspective, we have
the risk of paying more or less cash for any optional or mandatory repayments of our Euro-denominated
debt that may not be offset with equivalent cash repayments of our intercompany borrowings. For
example, an optional debt repayment of €100 million on December 31, 2024 and December 31, 2023,
with a 10% weakening of the U.S. dollar would have caused us to pay an additional $10.3 million and
$11.1 million, respectively, to extinguish that debt.
Changes to foreign currency exchange rates could favorably or unfavorably affect the translation of our
foreign operating results. For example, during times of a strengthening U.S. dollar, our reported
international sales and earnings will be reduced because local currencies will translate into fewer U.S.
dollars. For the year ended December 31, 2024, a 10% strengthening of the U.S. dollar compared to all
other currencies would have decreased net income by $16.2 million and decreased Adjusted Operating
47
Income by $30.6 million. For the year ended December 31, 2023, a 10% strengthening of the U.S. dollar
compared to all other currencies would have increased net income by $17.5 million and decreased
Adjusted Operating Income by $19.6 million.
Interest rate risk
We carry debt that exposes us to interest rate risk. A portion of our debt consists of variable-rate
instruments. We have also issued fixed-rate secured and unsecured notes. None of our other financial
instruments are subject to material interest rate risk.
At December 31, 2024, we had borrowings of $617.7 million under our senior secured credit facilities and
our receivables facility. Borrowings under these facilities bear interest at variable rates based on
prevailing LIBOR, EURIBOR and SOFR rates in the financial markets. At December 31, 2024, the
Company had $100.0 million of interest rate swaps to convert variable rate interest to fixed rate interest.
Changes to those market rates affect both the amount of cash we pay for interest and our reported interest
expense. At December 31, 2024, a 100 basis point increase to the applicable variable rates of interest
taking into account our interest rate swap would have increased the amount of interest by $5.2 million per
annum. At December 31, 2023, a 100 basis point increase to the applicable variable rates of interest
would have increased the amount of interest by $11.4 million per annum.
Our senior secured notes and senior unsecured notes bear interest at fixed rates, so their fair value will
increase if interest rates fall and decrease if interest rates rise. At December 31, 2024, a 100 basis point
decrease in the market rate of interest would have increased their aggregate fair value by $99.9 million.
At December 31, 2023, a 100 basis point decrease in the market rate of interest would have increased
their aggregate fair value by $130.6 million.
Item 8.
Financial statements and supplementary data
The information required by this item is included at the end of this report beginning on page F-1.
Item 9.
Changes in and disagreements with accountants on accounting and financial disclosure
None.
Item 9A.
Control and procedures
Management’s evaluation of disclosure controls and procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer,
evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules
13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of December 31, 2024. Based on
this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of
December 31, 2024, our disclosure controls and procedures were effective in providing reasonable
assurance that information required to be disclosed by us in the reports that we file or submit under the
Securities Exchange Act of 1934 is recorded, processed, summarized, reported, accumulated and
communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as
appropriate to allow timely decisions regarding required disclosure.
48
Changes in internal control over financial reporting
There have been no changes to our internal control over financial reporting during the fiscal quarter ended
December 31, 2024 that have materially affected or are reasonably likely to materially affect our internal
control over financial reporting.
Management’s annual report on internal control over financial reporting
Our management, including our Chief Executive Officer and Chief Financial Officer, is responsible for
establishing and maintaining adequate internal control over financial reporting (as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f)) for the company. Internal control over financial reporting is a process
designed to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with accounting principles
generally accepted in the United States of America. Because of its inherent limitations, internal control
over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become inadequate because of
changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Our management conducted an assessment of the effectiveness of our internal control over financial
reporting as of December 31, 2024 based on criteria established in Internal Control - Integrated
Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO). Based on this assessment, our management concluded that, as of December 31, 2024, our
internal control over financial reporting was effective.
Deloitte & Touche LLP (PCAOB ID No. 34), an independent registered public accounting firm, which
has audited and reported on the consolidated financial statements contained in this Form 10-K, has issued
its report on the effectiveness of the Company’s internal control over financial reporting which follows
this report.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the stockholders and the Board of Directors of Avantor, Inc.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Avantor, Inc. and subsidiaries (the
“Company”) as of December 31, 2024, based on criteria established in Internal Control — Integrated
Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO). In our opinion, the Company maintained, in all material respects, effective internal control over
financial reporting as of December 31, 2024, based on criteria established in Internal Control —
Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight
Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended
December 31, 2024, of the Company and our report dated February 7, 2025, expressed an unqualified
opinion on those financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial
reporting and for its assessment of the effectiveness of internal control over financial reporting, included
in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our
49
responsibility is to express an opinion on the Company’s internal control over financial reporting based
on our audit. We are a public accounting firm registered with the PCAOB and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether effective internal control over
financial reporting was maintained in all material respects. Our audit included obtaining an understanding
of internal control over financial reporting, assessing the risk that a material weakness exists, testing and
evaluating the design and operating effectiveness of internal control based on the assessed risk, and
performing such other procedures as we considered necessary in the circumstances. We believe that our
audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles. A company’s internal
control over financial reporting includes those policies and procedures that (1) pertain to the maintenance
of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the
assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted accounting principles,
and that receipts and expenditures of the company are being made only in accordance with authorizations
of management and directors of the company; and (3) provide reasonable assurance regarding prevention
or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could
have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk
that controls may become inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
/s/ Deloitte & Touche LLP
Philadelphia, Pennsylvania
February 7, 2025
Item 9B.
Other information
Securities Trading Plans of Directors and Officers
No directors or officers, as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, of the
Company adopted or terminated (i) a Rule 10b5-1 trading arrangement, as defined in Item 408(a) under
Regulation S-K of the Securities Act of 1933, or (ii) a non-Rule 10b5-1 trading arrangement, as defined in
Item 408(c) under Regulation S-K of the Securities Act of 1933, during the three months ended December
31, 2024.
Item 9C.
Disclosure regarding foreign jurisdictions that prevent inspections.
Not applicable.
50
PART III
See Part I, “Information about our executive officers” for information about our executive officers, which
is incorporated by reference herein. The other information required by Part III is incorporated herein by
reference to our definitive proxy statement for our 2025 annual meeting of stockholders.
Item 10.
Directors, executive officers and corporate governance
See Part I, “Information about our executive officers” for information about our executive officers, which
is incorporated by reference herein. The other information required by this Item is incorporated herein by
reference to the applicable information in our definitive proxy statement for our 2025 annual meeting of
stockholders which we intend to file with the SEC no later than 120 days after our 2024 fiscal year end
(the “2025 Proxy Statement”).
Item 11.
Executive compensation
The information required by this Item is incorporated by reference to the applicable information in our
2025 Proxy Statement.
Item 12.
Security ownership of certain beneficial owners and management and related
stockholder matters
The information required by this Item is incorporated by reference to the applicable information in our
2025 Proxy Statement.
Item 13.
Certain relationships and related transactions, and director independence
The information required by this Item is incorporated by reference to the applicable information in our
2025 Proxy Statement.
Item 14.
Principal accountant fees and services
The information required by this Item is incorporated by reference to the applicable information in our
2025 Proxy Statement.
PART IV
Item 15.
Exhibits and financial statement schedules
The following documents are filed as part of this report.
1.
Financial Statements and Schedules. See Index to Consolidated Financial Statements and Schedules
on page F-1.
2.
Exhibits:
3.1
Fourth Amended and Restated Certificate of
Incorporation, effective May 9, 2024
8-K
3.1
5/10/2024
Exhibit
no.
Description
Location of exhibits
Form
Exhibit
no.
Filing date
51
3.2
Fourth Amended and Restated Bylaws of Avantor, Inc.
8-K
3.1
2/28/2024
4.1
Description of capital stock
*
4.2
Indenture, dated as of July 17, 2020, among Avantor
Funding, Inc., the guarantors party thereto and The
Bank of New York Mellon Trust Company, N.A., as
Trustee.
8-K
4.1
7/17/2020
4.3
Indenture, dated as of November 6, 2020, among
Avantor Funding, Inc., the guarantors party thereto and
The Bank of New York Mellon Trust Company, N.A.,
as Trustee and Notes Collateral Agent.
8-K
4.1
11/6/2020
4.4
Indenture, dated as of October 26, 2021, among Avantor
Funding, Inc., the guarantors party thereto and The
Bank of New York Mellon Trust Company, N.A., as
Trustee.
8-K
4.1
10/26/2021
10.1
Credit Agreement, dated as of November 21, 2017, by
and among Vail Holdco Sub LLC, Avantor Funding,
Inc. (f/k/a Avantor, Inc.), the guarantors party thereto,
Goldman Sachs Bank USA and the other lenders, L/C
issuers and parties thereto.
S-1/A
10.1
4/10/2019
10.2
Amendment No. 1, dated as of November 27, 2018, to
the Credit Agreement, dated as of November 21, 2017,
among Vail Holdco Sub LLC, Avantor Funding, Inc.,
the guarantors party thereto, Goldman Sachs Bank USA,
as administrative agent and collateral, Swing Line
Lender and an L/C issuer, the lenders party thereto and
Goldman Sachs Bank USA , as the Additional Euro
Term Lender and the Additional Dollar Term Lender.
S-1/A
10.2
4/10/2019
10.3
Amendment No. 2, dated as of June 18, 2019, to the
Credit Agreement, dated as of November 21, 2017,
among Vail Holdco Sub LLC, Avantor Funding, Inc.,
each of the Guarantors, each of the lenders from time to
time party thereto and Goldman Sachs Bank USA, as
administrative agent and collateral, Swing Line Lender
and an L/C Issuer, the lenders party thereto and
Goldman Sachs Lending Partners LLC, as the
Additional Initial B-2 Euro Term Lender and the
Additional Initial B-2 Dollar Term Lender.
8-K
10.1
6/18/2019
10.4
Amendment No. 3, dated as of January 24, 2020, to the
Credit Agreement, dated as of November 21, 2017,
among Vail Holdco Sub LLC, Avantor Funding, Inc.,
each of the Guarantors, each of the lenders from time to
time party thereto and Goldman Sachs Bank USA, as
administrative agent and collateral agent, Swing Line
Lender and an L/C Issuer, the lenders party thereto and
Goldman Sachs Lending Partners LLC, as the
Additional Initial B-3 Euro Term Lender and the
Additional Initial B-3 Dollar Term Lender.
8-K
10.1
1/27/2020
Exhibit
no.
Description
Location of exhibits
Form
Exhibit
no.
Filing date
52
10.5
Amendment No. 4, dated as of July 14, 2020, to the
Credit Agreement, dated as of November 21, 2017,
among Vail Holdco Sub LLC, Avantor Funding, Inc.,
each of the Guarantors, each of the lenders from time to
time party thereto and Goldman Sachs Bank USA, as
administrative agent and collateral agent, Swing Line
Lender and an L/C Issuer.
8-K
10.1
7/14/2020
10.6
Amendment No. 5, dated as of November 6, 2020, to
the Credit Agreement, dated as of November 21, 2017,
among Vail Holdco Sub LLC, Avantor Funding, Inc.,
each of the Guarantors, each of the lenders from time to
time party thereto and Goldman Sachs Bank USA, as
administrative agent and collateral agent, the lenders
party thereto and Goldman Sachs Lending Partners
LLC, as Swing Line Lender, an L/C Issuer and the New
Term Lender
8-K
10.1
11/6/2020
10.7
Amendment No. 6, dated as of June 10, 2021, to the
Credit Agreement, dated as of November 21, 2017,
among Vail Holdco Sub LLC, Avantor Funding, Inc.,
each of the Guarantors, each of the lenders from time to
time party thereto and Goldman Sachs Bank USA, as
administrative agent and collateral agent, Goldman
Sachs Lending Partners LLC, as Swing Line Lender and
an L/C Issuer, the lenders party thereto and Citibank,
N.A., as the New Term Lender
8-K
10.1
6/14/2021
10.8
Amendment No. 7, dated as of July 7, 2021, to the
Credit Agreement, dated as of November 21, 2017,
among Vail Holdco Sub LLC, Avantor Funding, Inc.,
each of the Guarantors, each of the lenders from time to
time party thereto and Goldman Sachs Bank USA, as
administrative agent and collateral agent, Goldman
Sachs Lending Partners LLC, as Swing Line Lender and
an L/C Issuer, the lenders party thereto and Bank of
America, N.A., as the Additional Initial B-4 Dollar
Term Lender and as the Additional Incremental B-5
Dollar Term Lender
8-K
10.1
7/9/2021
10.9
Amendment No. 8, dated as of November 1, 2021 to the
Credit Agreement, dated as of November 21, 2017,
among Vail Holdco Sub LLC, Avantor Funding, Inc.,
each of the Guarantors, each of the lenders from time to
time party thereto and Goldman Sachs Bank USA, as
administrative agent and collateral agent, and Goldman
Sachs Bank USA, as the 2021 Incremental B-5 Dollar
Term
8-K
10.1
11/2/2021
10.10
Amendment No. 9, dated as of April 7, 2022, to the
Credit Agreement, dated as of November 21, 2017,
between Avantor Funding, Inc., and Goldman Sachs
Bank USA, as administrative agent and collateral agent
for the lenders.
10-Q
10.1
7/29/2022
Exhibit
no.
Description
Location of exhibits
Form
Exhibit
no.
Filing date
53
10.11
Amendment No. 10, dated as of March 17, 2023, to the
Credit Agreement, dated as of November 21, 2017,
among Avantor Funding, Inc., Goldman Sachs Bank
USA, as administrative agent and collateral agent for the
lenders and the Revolving Credit Lenders.
10-Q
10.1
4/28/2023
10.12
Amendment No. 11, dated as of June 29, 2023, to the
Credit Agreement, dated as of November 21, 2017,
among Vail Holdco Sub, LLC, Avantor Funding, Inc.,
each of the Guarantors, each of the lenders from time to
time party thereto and Goldman Sachs Bank USA, as
administrative agent and collateral agent, Swing Line
Lender and an L/C Issuer
8-K
10.1
7/5/2023
10.13
Amendment No. 12, dated as of April 2, 2024 (the
“Credit Agreement Amendment”), to the Credit
Agreement, dated as of November 21, 2017 among Vail
Holdco Sub LLC, Avantor Funding, Inc., each of the
guarantors, Goldman Sachs Bank USA, as
administrative agent and collateral agent, the Swing
Line Lender, a L/C issuer and Goldman Sachs Bank
USA, as the Additional Incremental B-6 Dollar Term
Lender (as defined in the Credit Agreement
Amendment) and the other lenders party thereto.
8-K
10.1
4/5/2024
10.14
Security Agreement, dated as of November 21, 2017,
among the grantors identified therein and Goldman
Sachs Bank USA, as agent.
S-1/A
10.3
4/10/2019
10.15
First Lien Intercreditor Agreement, dated as of
November 21, 2017, by and among Avantor Funding,
Inc. (f/k/a Avantor, Inc.), Vail Holdco Sub LLC, the
other grantors party thereto, Goldman Sachs Bank USA,
as collateral agent for the credit agreement secured
parties, the Bank of New York Mellon Trust Company,
N.A., as collateral agent for the indenture secured
parties and each additional agent party from time to time
thereto.
S-1/A
10.4
4/10/2019
10.16
Receivables Purchase Agreement, dated March 27,
2020, among Avantor Receivables Funding, LLC, VWR
International, LLC, the various conduit purchasers from
time to time party thereto, the various related committed
purchasers from time to time party thereto, the various
purchaser agents from time to time party thereto, the
various LC participants from time to time party thereto
and PNC Bank, National Association, as Administrator
and LC Bank.
8-K
10.1
3/30/2020
Exhibit
no.
Description
Location of exhibits
Form
Exhibit
no.
Filing date
54
10.17
Amendment No. 1 dated as of December 21, 2021, to
the Receivables Purchase Agreement, dated as of March
27, 2020, among Avantor Receivables Funding, LLC,
VWR International, LLC, the various conduit
purchasers from time to time party thereto, the various
related committed purchasers from time to time party
thereto, the various purchaser agents from time to time
thereto, the various LC participants from time to time
party thereto and PNC Bank, National Association, as
Administrator and LC Bank.
10-K
10.13
2/11/2022
10.18
Amendment No.2, dated as of October 25, 2022, to the
Receivables Purchase Agreement, dated as of March 27,
2020, among Avantor Receivables Funding, LLC, VWR
International, LLC, the various conduit purchasers from
time to time party thereto, the various purchaser agents
from time to time thereto, the various LC participants
from time to time party thereto and PNC Bank, National
Association, as administrator and LC Bank
10-Q
10.2
10/28/2022
10.19
Amendment No. 3, dated as of June 14, 2023, to the
Receivables Purchase Agreement, dated as of March 27,
2020, among Avantor Receivables Funding, LLC, VWR
International, LLC, Avantor Funding, Inc. as
performance guarantor, and PNC Bank, National
Association, as administrator, LC Bank, Related
Committed Purchaser and Purchaser Agent
10-Q
10.1
7/28/2023
10.20
Amendment No. 4, dated as of September 19, 2023, to
the Receivables Purchase Agreement, dated as of March
27, 2020, among Avantor Receivables Funding, LLC,
VWR International, LLC, Avantor Funding, Inc., as
performance guarantor, PNC Bank, National
Association, as administrator, LC Bank, Related
Committed Purchaser and Purchaser Agent, and Wells
Fargo Bank, National Association, as Related
Committed Purchaser, Purchaser Agent and LC
Participant
10-Q
10.1
10/27/2023
10.21
Purchase and Sale Agreement, dated as of March 27,
2020, between the various entities listed on Schedule I
thereto as Originators and Avantor Receivables
Funding, LLC.
8-K
10.2
3/30/2020
10.22^
Avantor Funding, Inc. (f/k/a Avantor, Inc.) Equity
Incentive Plan (as amended through September 28,
2016).
S-1/A
10.12
4/5/2019
10.23^
Form of Nonqualified Stock Option Agreement under
the Avantor Funding, Inc. Equity Incentive Plan.
S-1/A
10.13
4/25/2019
10.24^
Avantor, Inc. (f/k/a Vail Holdco Corp) Equity Incentive
Plan.
S-1/A
10.14
4/5/2019
Exhibit
no.
Description
Location of exhibits
Form
Exhibit
no.
Filing date
55
10.25^
Form of Nonqualified Stock Option Agreement under
the Avantor, Inc. (f/k/a Vail Holdco Corp) Equity
Incentive Plan.
S-1/A
10.15
4/25/2019
10.26^
Avantor, Inc. 2019 Equity Incentive Plan
8-K
10.2
5/21/2019
10.27^
Form of Option Grant Notice under the Avantor, Inc.
2019 Equity Incentive Plan.
S-1/A
10.25
4/25/2019
10.28
Form of Performance Stock Unit Grant Notice under the
Avantor, Inc. 2019 Equity Incentive Plan (Employees)
10-K
10.22
2/16/2021
10.29^
Form of Restricted Stock Unit Grant Notice under the
Avantor, Inc. 2019 Equity Incentive Plan (Employees).
S-1/A
10.26
4/25/2019
10.30^
Form of Restricted Stock Unit Grant Notice under the
Avantor, Inc. 2019 Equity Incentive Plan (Non-
Employee Directors).
S-1/A
10.27
4/25/2019
10.31^
Form of 2024 Option Grant Notice under the Avantor,
Inc. 2019 Equity Incentive Plan.
*
10.32^
Form of 2024 Performance Stock Unit Grant Notice
under the Avantor, Inc. 2019 Equity Incentive Plan
*
10.33^
Form of 2024 Restricted Stock Unit Grant Notice under
the Avantor, Inc. 2019 Equity Incentive Plan
(Employees).
*
10.34^
Avantor, Inc. 2019 Employee Stock Purchase Plan
8-K
10.3
5/21/2019
10.35^
Amendment No. 1 to the Avantor, Inc. 2019 Employee
Stock Purchase Plan
S-8
4.4
11/14/2019
10.36^
Amendment No.2 to the Avantor, Inc. 2019 Employee
Stock Purchase Plan
10-Q
10.1
10/28/2022
10.37^
Amendment No.3 to the Avantor, Inc. 2019 Employee
Stock Purchase Plan
10-K
10.33
2/14/2024
10.38^
Amended and Restated Employment Agreement, dated
April 10, 2019, between Michael Stubblefield and
Avantor, Inc. (f/k/a Vail Holdco Corp)
S-1/A
10.16
4/25/2019
10.39^
Amended and Restated Employment Letter Agreement,
dated April 2, 2019, between Gerard Brophy and VWR
Management Services, LLC
S-1/A
10.19
4/10/2019
10.40^
Contract of Employment, dated June 29, 2018, between
Frederic Vanderhaegen and VWR International GmbH
S-1/A
10.20
4/25/2019
10.41^
Addendum to Contract of Employment, dated April 10,
2019, between Frederic Vanderhaegen and VWR
International GmbH
S-1/A
10.21
4/25/2019
10.42^
Offer Letter, dated July 12, 2023 between R. Brent
Jones and VWR Management Services, LLC
8-K
10.1
7/13/2023
10.43^
Consulting Agreement dated April 3, 2024 by and
between VWR International, LLC and BrophyBio, LLC
10-Q
10.2
4/26/2024
Exhibit
no.
Description
Location of exhibits
Form
Exhibit
no.
Filing date
56
10.44^
Scientific Advisory Board Consulting Agreement dated
April 3, 2024, by and between Avantor, Inc. and Gerard
Brophy
10-Q
10.3
4/26/2024
10.45^
Amended and Restated Employment Letter Agreement,
dated April 2, 2019, between Jim Bramwell and VWR
International, LLC
10-Q
10.4
4/26/2024
10.46^
Employment Letter Agreement, dated April 11, 2023,
between Randy Stone and VWR Management Services,
LLC
10-Q
10.5
4/26/2024
10.47^
Form of Indemnification Agreement (between Avantor,
Inc. and its directors and officers)
S-1/A
10.23
4/25/2019
19
Insider Trading Policy
*
21
List of subsidiaries of Avantor, Inc.
*
23
Consent of Deloitte & Touche LLP
*
31.1
Certification of Principal Executive Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
*
31.2
Certification of Principal Financial Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
*
32.1
Certification of Principal Executive Officer pursuant to
18 U.S.C. 1350 (Section 906 of the Sarbanes-Oxley Act
of 2002)
**
32.2
Certification of Principal Financial Officer pursuant to
18 U.S.C. 1350 (Section 906 of the Sarbanes-Oxley Act
of 2002)
**
97^
Erroneously Awarded Compensation Recovery Policy
10-K
97
2/14/2024
101
The following materials from this report, formatted in
iXBRL (Inline eXtensible Business Reporting
Language): (i) the Consolidated Statements of Income,
(ii) the Consolidated Statements of Comprehensive
Income, (iii) the Consolidated Balance Sheets, (iv) the
Consolidated Statements of Cash Flows, and (v) Notes
to Consolidated Financial Statements.
*
104
Cover Page Interactive Data File (formatted as Inline
XBRL and contained in Exhibit 101)
Exhibit
no.
Description
Location of exhibits
Form
Exhibit
no.
Filing date
*
Filed herewith
** Furnished herewith
^
Indicates management contract or compensatory plan, contract or arrangement.
Item 16.
Form 10-K summary
None.
57
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Avantor, Inc.
Date: February 7, 2025
By:
/s/ Steven Eck
Name:
Steven Eck
Title:
Senior Vice President and Chief Accounting Officer
(Principal Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by
the following persons on behalf of the registrant and in the capacities indicated, as of February 7, 2025.
/s/ Juan Andres
Director
Juan Andres
/s/ John Carethers
Director
John Carethers
/s/ Steven Eck
Senior Vice President and Chief
Accounting Officer
(Principal Accounting Officer)
Steven Eck
/s/ R. Brent Jones
Executive Vice President and Chief
Financial Officer
(Principal Financial Officer)
R. Brent Jones
/s/ Lan Kang
Director
Lan Kang
/s/ Dame Louise Makin
Director
Dame Louise Makin
/s/ Mala Murthy
Director
Mala Murthy
/s/ Joseph Massaro
Director
Joseph Massaro
/s/ Jonathan Peacock
Chairman of the Board of Directors
Jonathan Peacock
58
/s/ Michael Stubblefield
Director, President and Chief
Executive Officer
(Principal Executive Officer)
Michael Stubblefield
/s/ Greg Summe
Director
Greg Summe
/s/ Michael Severino
Director
Michael Severino
59
[THIS PAGE INTENTIONALLY LEFT BLANK]
Avantor, Inc. and subsidiaries
Index to consolidated financial statements
Page
Report of independent registered public accounting firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-2
Consolidated balance sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-4
Consolidated statements of operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-5
Consolidated statements of comprehensive income or loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-6
Consolidated statements of stockholders’ equity
F-7
Consolidated statements of cash flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-9
Notes to consolidated financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F-13
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the stockholders and the Board of Directors of Avantor, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Avantor, Inc. and subsidiaries (the
"Company") as of December 31, 2024 and 2023, the related consolidated statements of operations,
comprehensive income or loss, stockholders' equity, and cash flows, for each of the three years in the
period ended December 31, 2024, and the related notes (collectively referred to as the "financial
statements"). In our opinion, the financial statements present fairly, in all material respects, the financial
position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 2024, in conformity with accounting
principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight
Board (United States) (PCAOB), the Company's internal control over financial reporting as of December
31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by
the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February
7, 2025, expressed an unqualified opinion on the Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to
express an opinion on the Company's financial statements based on our audits. We are a public
accounting firm registered with the PCAOB and are required to be independent with respect to the
Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of
the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement, whether due to error or fraud. Our audits included performing procedures
to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and
performing procedures that respond to those risks. Such procedures included examining, on a test basis,
evidence regarding the amounts and disclosures in the financial statements. Our audits also included
evaluating the accounting principles used and significant estimates made by management, as well as
evaluating the overall presentation of the financial statements. We believe that our audits provide a
reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the
financial statements that was communicated or required to be communicated to the audit committee and
that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our
especially challenging, subjective, or complex judgments. The communication of critical audit matters
does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by
communicating the critical audit matter below, providing a separate opinion on the critical audit matter or
on the accounts or disclosures to which it relates.
F-2
Goodwill Impairment - Refer to Notes 2, 6 and 11 to the financial statements
Critical Audit Matter Description
Goodwill is tested for impairment at the reporting unit level on October 1 of each year or more frequently
whenever an event or change in circumstance occurs that would require reassessment of the recoverability
of the asset. Quantitative impairment testing requires the Company to estimate the fair value of each of its
six reporting units. The Company estimates the fair value of each reporting unit using a weighted average
of two valuation methods based on a discounted cash flows method and a guideline public company
method. These valuation methods require management to make various assumptions, which include, but
are not limited to, future profitability, cash flows, discount rates, weighting of valuation methods, and the
selection of comparable publicly traded companies (peer groups). If the Company determines the carrying
value of a reporting unit exceeds its fair value, an impairment charge is recorded for the excess. No
impairment charges were recorded as each reporting unit had a fair value in excess of its carrying value.
The principal considerations for our determination that performing audit procedures relating to the
goodwill impairment assessments of the Buy Sell Lab and Proprietary Lab reporting units is a critical
audit matter are (i) the significant judgment by management when developing the fair value estimate of
these reporting units; (ii) a high degree of auditor judgment in evaluating the reasonableness of
management’s assumptions under the discounted cash flows method, including the net sales growth and
discount rate assumptions, and, under the guideline public company method, the selection of appropriate
peer groups and market multiples; and (iii) an increased extent of effort, including the need to involve our
fair value specialists.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures over management’s estimates of net sales growth and discount rates as well as the
selection of peer groups and market multiples for the Buy Sell Lab and Proprietary Lab reporting units
included the following, among others:
•
We tested the effectiveness of controls over management’s goodwill impairment testing,
including those over management’s assumptions of net sales growth and discount rates under the
discounted cash flows method and the selection of appropriate peer groups and market multiples
under the guideline public company method.
•
We evaluated management’s ability to accurately forecast net sales growth by comparing
management’s forecasts reflected in these reporting units recasted prior period forecasts to actual
results.
•
With the assistance of our fair value specialists, we evaluated the reasonableness of the discount
rate assumptions and the selection of the peer groups and guideline public company market
multiples, including testing the underlying information supporting these assumptions and the
mathematical accuracy of the calculations.
/s/ Deloitte & Touche LLP
Philadelphia, Pennsylvania
February 7, 2025
We have served as the Company’s auditor since 2010.
F-3
Avantor, Inc. and subsidiaries
Consolidated balance sheets
(in millions)
December 31,
2024
2023
Assets
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
261.9
$
262.9
Accounts receivable, net of allowances of $30.2 and $35.0 . . . . . .
1,034.5
1,150.2
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
731.5
828.1
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
118.7
143.7
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,146.6
2,384.9
Property, plant and equipment, net (see note 10) . . . . . . . . . . . . . . . . .
708.1
737.5
Other intangible assets, net (see note 11) . . . . . . . . . . . . . . . . . . . . . . .
3,360.2
3,775.3
Goodwill, net (see note 11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,539.2
5,716.7
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
360.4
358.3
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
12,114.5
$
12,972.7
Liabilities and stockholders’ equity
Current liabilities:
Current portion of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
821.1
$
259.9
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
662.8
625.9
Employee-related liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
168.2
133.1
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
48.6
50.2
Other current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
306.8
411.2
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,007.5
1,480.3
Debt, net of current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,234.7
5,276.7
Deferred income tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
557.3
612.8
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
358.3
350.3
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6,157.8
7,720.1
Commitments and contingencies (see note 13)
Stockholders’ equity:
Common stock including paid-in capital, 680.8 and 676.6 shares
issued and outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,937.7
3,830.1
Accumulated earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,203.0
1,491.5
Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . .
(184.0)
(69.0)
Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5,956.7
5,252.6
Total liabilities and stockholders’ equity . . . . . . . . . . . . . . . . . . . . $
12,114.5
$
12,972.7
The accompanying notes are an integral part of these consolidated financial statements
F-4
Avantor, Inc. and subsidiaries
Consolidated statements of operations
(in millions, except per share data)
Year ended December 31,
2024
2023
2022
Net sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,783.6
$ 6,967.2
$ 7,512.4
Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,504.3
4,603.4
4,909.6
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,279.3
2,363.8
2,602.8
Selling, general and administrative expenses . . . . . . . . . . . . . . . . . .
1,641.1
1,506.6
1,472.6
Impairment charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
160.8
—
Gain on sale of business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(446.6)
—
—
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,084.8
696.4
1,130.2
Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(218.8)
(284.8)
(265.8)
Loss on extinguishment of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(10.9)
(6.9)
(12.5)
Other (expense) income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1.2)
5.8
(0.8)
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . .
853.9
410.5
851.1
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(142.4)
(89.4)
(164.6)
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
711.5
321.1
686.5
Accumulation of yield on preferred stock . . . . . . . . . . . . . . . . . . . . .
—
—
(24.2)
Net income available to common stockholders . . . . . . . . . . . . . $
711.5
$
321.1
$
662.3
Earnings per share:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
1.05
$
0.48
$
1.02
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
1.04
$
0.47
$
1.01
Weighted average shares outstanding:
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
679.6
675.6
650.9
Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
681.9
678.4
679.4
The accompanying notes are an integral part of these consolidated financial statements
F-5
Avantor, Inc. and subsidiaries
Consolidated statements of comprehensive income or loss
(in millions)
Year ended December 31,
2024
2023
2022
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
711.5
$
321.1
$
686.5
Other comprehensive (loss) income:
Foreign currency translation:
Unrealized (loss) gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(83.3)
38.3
(102.0)
Reclassification of gain into earnings . . . . . . . . . . . . . . . . .
(0.5)
—
—
Derivative instruments:
Unrealized gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18.2
21.3
33.1
Reclassification of gain into earnings . . . . . . . . . . . . . . . . .
(34.5)
(31.0)
(7.4)
Activity related to defined benefit plans:
Unrealized (loss) gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(17.4)
(7.7)
47.9
Reclassification of loss (gain) into earnings . . . . . . . . . . . .
6.9
(5.9)
(1.0)
Other comprehensive (loss) income before income taxes . . . . .
(110.6)
15.0
(29.4)
Income tax effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4.4)
16.3
(27.7)
Other comprehensive (loss) income . . . . . . . . . . . . . . . . . . . . .
(115.0)
31.3
(57.1)
Comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
596.5
$
352.4
$
629.4
The accompanying notes are an integral part of these consolidated financial statements
F-6
Avantor, Inc. and subsidiaries
Consolidated statements of stockholders’ equity
Balance on December 31, 2021 . . . . . . . . . . . . . . . .
20.7
$ 1,003.7
609.7
$
2,752.6
$
483.9
$
(43.2)
$ 4,197.0
Comprehensive income (loss) . . . . . . . . . . . . . .
—
—
—
—
686.5
(57.1)
629.4
Stock-based compensation expense . . . . . . . . . .
—
—
—
49.1
—
—
49.1
Accumulation of yield on preferred stock . . . . .
—
—
—
(24.2)
—
—
(24.2)
Stock option exercises and other common stock
transactions . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
1.7
4.1
—
—
4.1
Conversion of MCPS into common stock . . . . .
(20.7)
(1,003.7)
62.9
1,003.7
—
—
—
Balance on December 31, 2022 . . . . . . . . . . . . . . . .
—
$
—
674.3
$
3,785.3
$
1,170.4
$ (100.3)
$ 4,855.4
Comprehensive income . . . . . . . . . . . . . . . . . . .
—
—
—
—
321.1
31.3
352.4
Stock-based compensation expense . . . . . . . . . .
—
—
—
40.2
—
—
40.2
Stock option exercises and other common stock
transactions . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
2.3
4.6
—
—
4.6
Balance on December 31, 2023 . . . . . . . . . . . . . . . .
—
$
—
676.6
$
3,830.1
$
1,491.5
$
(69.0)
$ 5,252.6
(in millions)
MCPS including paid-
in capital
Common stock including
paid-in capital
Accumulated
(deficit)
earnings
AOCI
Total
Shares
Amount
Shares
Amount
The accompanying notes are an integral part of these consolidated financial statements
F-7
Avantor, Inc. and subsidiaries
Consolidated statements of stockholders’ equity (continued)
(in millions)
Common stock including
paid-in capital
Accumulated
(deficit)
earnings
AOCI
Total
Shares
Amount
Balance on December 31, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
676.6
$
3,830.1
$
1,491.5
$
(69.0)
$ 5,252.6
Comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
—
711.5
(115.0)
596.5
Stock-based compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
47.0
—
—
47.0
Stock option exercises and other common stock transactions . . . . . . .
4.2
60.6
—
—
60.6
Balance on December 31, 2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
680.8
$
3,937.7
$
2,203.0
$ (184.0)
$ 5,956.7
The accompanying notes are an integral part of these consolidated financial statements
F-8
Avantor, Inc. and subsidiaries
Consolidated statements of cash flows
2024
2023
2022
Cash flows from operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
711.5
$
321.1
$
686.5
Reconciling adjustments:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . .
405.5
402.3
405.5
Impairment charges . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
160.8
—
Gain on sale of business . . . . . . . . . . . . . . . . . . . . . . . . .
(446.6)
—
—
Stock-based compensation expense . . . . . . . . . . . . . . . .
46.8
40.5
45.8
Non-cash restructuring charges (see note 12) . . . . . . . . .
16.9
—
—
Provision for accounts receivable and inventory . . . . . .
75.1
84.5
65.0
Deferred income tax benefit . . . . . . . . . . . . . . . . . . . . . .
(46.9)
(172.4)
(69.1)
Amortization of deferred financing costs . . . . . . . . . . . .
11.2
13.0
15.7
Loss on extinguishment of debt . . . . . . . . . . . . . . . . . . .
10.9
6.9
12.5
Foreign currency remeasurement (gain) loss . . . . . . . . .
(0.3)
(2.6)
10.0
Pension termination charges . . . . . . . . . . . . . . . . . . . . . .
9.3
—
—
Changes in assets and liabilities:
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . .
45.9
77.0
(45.2)
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(18.5)
30.3
(112.5)
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . .
59.6
(139.6)
15.6
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1.6)
0.3
0.1
Other assets and liabilities . . . . . . . . . . . . . . . . . . . .
(37.7)
48.6
(179.3)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(0.3)
(0.7)
(7.0)
Net cash provided by operating activities . . . . . . . .
840.8
870.0
843.6
Cash flows from investing activities:
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(148.8)
(146.4)
(133.4)
Cash paid for acquisitions, net of cash acquired . . . . . . . . . .
—
—
(20.2)
Cash proceeds from settlement of cross currency swap . . . .
—
—
42.5
Proceeds from sale of disposal group, net of cash sold . . . . .
585.2
—
—
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.5
2.7
1.5
Net cash provided by (used in) investing activities . $
438.9
$
(143.7)
$
(109.6)
(in millions)
Year ended December 31,
The accompanying notes are an integral part of these consolidated financial statements
F-9
Avantor, Inc. and subsidiaries
Consolidated statements of cash flows (continued)
(in millions)
Year ended December 31,
2024
2023
2022
Cash flows from financing activities:
Debt borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
—
$
—
$
327.2
Debt repayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1,341.8)
(846.0)
(947.0)
Payments of debt refinancing fees and premiums . . . . . . . . .
—
(2.3)
(0.6)
Payments of dividends on preferred stock . . . . . . . . . . . . . .
—
—
(32.4)
Proceeds received from exercise of stock options . . . . . . . .
69.2
18.3
17.3
Shares repurchased to satisfy employee tax obligations for
vested stock-based awards . . . . . . . . . . . . . . . . . . . . . . .
(8.6)
(13.7)
(13.2)
Net cash used in financing activities . . . . . . . . . . . .
(1,281.2)
(843.7)
(648.7)
Effect of currency rate changes on cash and cash equivalents . .
(21.5)
8.2
(15.5)
Net change in cash, cash equivalents and restricted cash . . . . . .
(23.0)
(109.2)
69.8
Cash, cash equivalents and restricted cash, beginning of year . .
287.7
396.9
327.1
Cash, cash equivalents and restricted cash, end of year . . . . . . . $
264.7
$
287.7
$
396.9
The accompanying notes are an integral part of these consolidated financial statements
F-10
Avantor, Inc. and subsidiaries
Notes to consolidated financial statements
1.
Nature of operations and presentation of financial statements
We are a global manufacturer and distributor that provides products and services to customers in the
biopharmaceutical, healthcare, education & government and advanced technologies & applied materials
industries.
Basis of presentation
The accompanying financial statements have been prepared in accordance with the rules and regulations
of the SEC for annual reports and GAAP. The financial statements include the accounts of Avantor, Inc.,
its consolidated subsidiaries, and those business entities in which we maintain a controlling interest.
Principles of consolidation
All intercompany balances and transactions have been eliminated from the financial statements.
Use of estimates
The preparation of financial statements in conformity with GAAP requires us to make estimates and
assumptions that affect the amounts reported throughout the financial statements. Actual results could
differ from those estimates.
2.
Summary of significant accounting policies
Earnings per share
Basic earnings per share is computed by dividing net income available to common stockholders by the
weighted average number of common shares outstanding during the reporting period.
Diluted earnings per share is computed based on the weighted average number of common shares
outstanding increased by the number of additional shares that would have been outstanding had the
potentially dilutive common shares been issued and reduced by the number of shares we could have
repurchased with the proceeds from the issuance of the potentially dilutive shares. Preferred dividends are
added back to net income available to common stockholders provided that the preferred securities are not
anti-dilutive to the calculation.
Segment reporting
Effective January 1, 2024, we changed our operating model and reporting segment structure from three
reportable segments to two reportable segments: Laboratory Solutions and Bioscience Production. This
structure aligns with how our Chief Executive Officer, who is our CODM, measures segment operating
performance and allocates resources across our operating segments.
None of our customers contributed more than 5% to our net sales, and we disclose net sales for the
following product categories: proprietary and third-party.
We disclose geographic data for our largest country, the United States, as a percentage of consolidated net
sales. No other countries were individually material. We disclose property and equipment by geographic
F-13
area because many of these assets cannot be readily moved and are illiquid, subjecting them to geographic
risk. None of our other long-lived assets are subject to significant geopolitical risk. We do not manage
total assets on a segment basis and as a result the Company does not report asset information by segment.
Segment information about interest expense, income tax expense or benefit and other significant non-cash
items other than depreciation and amortization, are not disclosed because they are not included in the
segment profitability measurement nor are they otherwise provided to our CODM on a regular basis.
Cash and cash equivalents
Cash equivalents are comprised of highly-liquid investments with original maturities of three months or
less. Bank overdrafts are classified as current liabilities, and changes to bank overdrafts are presented as a
financing activity on our consolidated statements of cash flows.
Accounts receivable and allowance for current expected credit losses
Substantially all of our accounts receivable are trade accounts that are recorded at the invoiced amount
and generally do not bear interest. Accounts receivable are presented net of an allowance for current
expected credit losses. We consider many factors in estimating our allowance including the age of our
receivables, historical collections experience, customer types, creditworthiness and economic trends.
Account balances are written off against the allowance when we determine it is probable that the
receivable will not be recovered.
Inventory
Inventory consists of merchandise inventory related to our distribution business and finished goods, raw
materials and work in process related to our manufacturing business. Goods are removed from inventory
as follows:
•
Merchandise inventory purchased by certain U.S. subsidiaries using the last-in, first-out method.
•
All other merchandise inventory using the first-in, first-out method.
•
Manufactured inventories using an average cost method.
Inventory is valued at the lower of cost or net realizable value. Cost for manufactured goods is determined
using standard costing methods to estimate raw materials, labor and overhead consumed. Variances from
actual cost are recorded to inventory at period-end. Cost for other inventory is based on amounts invoiced
by suppliers plus freight. If net realizable value is less than carrying value, we reduce the carrying amount
to net realizable value and record a loss in cost of sales.
Property, plant and equipment
Property, plant and equipment are stated at cost. Depreciation is recognized using the straight-line method
over estimated useful lives of ten to forty years for buildings and related improvements, three to ten years
for machinery and equipment and three to fifteen years for capitalized software. Leasehold improvements
are depreciated on a straight-line basis over the shorter of the estimated useful lives of the assets or the
estimated remaining life of the lease. Depreciation is classified as cost of sales or SG&A expense based
on the nature of the underlying asset.
F-14
Software development costs are capitalized as property, plant and equipment once the preliminary project
stage is completed and management commits to funding the project if it is probable that the project will
be completed for its intended use. Preliminary project planning and training costs related to software are
expensed as incurred.
Impairment of long-lived assets
Long-lived assets include property, plant and equipment, finite-lived intangible assets and certain other
assets. For impairment testing purposes, long-lived assets may be grouped with working capital and other
types of assets or liabilities if they generate cash flows on a combined basis.
We evaluate long-lived assets or asset groups for impairment whenever events or changes in
circumstances indicate a potential inability to recover their carrying amounts. Impairment is determined
by comparing their carrying value to their estimated undiscounted future cash flows. If long-lived assets
or asset groups are impaired, the loss is measured as the amount by which their carrying values exceed
their fair value.
Goodwill and other intangible assets
Goodwill represents the excess of the price of an acquired business over the aggregate fair value of its
identifiable net assets. Other intangible assets consist of both finite-lived and indefinite-lived intangible
assets.
Goodwill and other indefinite-lived intangible assets are tested annually for impairment on October 1 of
each year and whenever an impairment indicator arises. Goodwill impairment testing is performed at the
reporting unit level.
As described above, we reorganized our segment reporting structure effective January 1, 2024. The
segment reporting reorganization also resulted in a change to our reporting units for the purpose of
goodwill impairment testing. Our new reporting units are Buy Sell Lab, Proprietary Lab, Services,
Manufactured Products, Buy Sell Production, and NuSil. As a result of the reorganization, our goodwill
was reassigned to reporting units affected using a relative fair value approach similar to that used when a
portion of a reporting unit is disposed of, to the new reporting units making up our Laboratory Solutions
and Bioscience Production reporting segments.
Our finite-lived intangible assets are tested for impairment whenever an impairment indicator arises.
Examples of impairment indicators include unexpected adverse business conditions, economic factors,
unanticipated technological changes or competitive activities, loss of key personnel and acts or
anticipated acts by governments and courts.
The impairment analysis for goodwill and indefinite-lived intangible assets consists of an optional
qualitative assessment potentially followed by a quantitative analysis. If we determine that the carrying
value of a reporting unit or an indefinite-lived intangible asset exceeds its fair value, an impairment
charge is recorded for the excess.
Indefinite-lived intangible assets are not amortized. Annually, we evaluate whether these assets continue
to have indefinite lives, considering whether they have any legal, regulatory, contractual, competitive or
economic limitations and whether they are expected to contribute to the generation of cash flows
indefinitely.
F-15
Finite-lived intangible assets are amortized over their estimated useful lives on a straight-line basis, with
customer relationships amortized over lives of ten to twenty years, tradenames amortized over lives of ten
to fifteen years and other finite-lived intangible assets amortized over lives of five to twenty years.
Amortization is classified in SG&A expenses. We reevaluate the estimated useful lives of our finite-lived
intangible assets annually.
Restructuring and severance charges
Restructuring plans are designed to improve gross margins and reduce operating costs over time. We
typically incur up-front charges to implement these plans related to employee severance, facility closure
and other actions:
•
Employee severance and related — Employee severance programs can be voluntary or
involuntary. Voluntary severances are recorded at their reasonably estimated amount when
associates accept severance offers. Involuntary severances covered by plan or statute are recorded
at estimated amounts when probable and reasonably estimable. Judgment is required to determine
probability and whether the amount can be reasonably estimated. Involuntary severances
requiring significant continuing service are measured at fair value as of the termination date and
recognized on a straight-line basis over the service period.
•
Facility closure — On the date we cease using a facility, facility leased assets are tested for
impairment in the same way as other long-lived assets. The remaining lease expense is
recognized between the period that we commit to cease use of a facility and the date we exit.
•
Other — Other charges may be incurred to write down assets, divest businesses or for other
reasons and are accounted for under applicable GAAP as described elsewhere in these policies.
Restructuring and severance charges are classified as SG&A expenses or cost of sales depending on the
nature of the expense. Accrued restructuring and severance charges are classified as employee-related or
current liabilities if we anticipate settlement within one year, otherwise they are included in other
liabilities.
Contingencies
Our business exposes us to various contingencies including compliance with environmental laws and
regulations, legal exposures related to the manufacture and sale of products and other matters. Loss
contingencies are reflected in the financial statements based on our assessments of their expected outcome
or resolution:
•
They are recognized as liabilities on our balance sheet if the potential loss is probable and the
amount can be reasonably estimated.
•
They are disclosed if the potential loss is material and considered at least reasonably possible.
Significant judgment is required to determine probability and whether the amount can be reasonably
estimated. Due to uncertainties related to these matters, accruals are based only on the information
available at the time. As additional information becomes available, we reassess potential liabilities and
may revise our previous estimates.
F-16
Debt
Borrowings under lines of credit are stated at their face amount. Borrowings under term debt and through
the issuance of notes are stated at their face amounts net of unamortized deferred financing costs,
including any original issue discounts or premiums.
The accounting for financing costs depends on whether debt is newly issued, extinguished or modified.
That determination is made on an individual lender basis when the lenders are part of a syndication. When
new debt is issued, financing costs and discounts are deferred and recognized as interest expense through
maturity of the debt. When debt is extinguished, unamortized deferred financing costs and discounts are
written off and presented as a loss on extinguishment of debt. When debt is modified, new financing costs
and prior unamortized deferred financing costs may be either (i) immediately recognized as interest
expense, other expense, or SG&A expense or (ii) deferred and recognized as interest expense through
maturity of the modified debt, depending on the type of cost and whether the modification was substantial
or insubstantial.
Borrowings and repayments under lines of credit are short-term in nature and presented on the statement
of cash flows on a net basis.
Equity
Stockholders’ equity or deficit comprises nonredeemable ownership interests in MCPS and common
stock. Our accounting policies for these instruments are as follows:
•
MCPS is classified as permanent equity and initially recorded at fair value, net of issuance costs.
Accrued but unpaid MCPS dividends are classified as other current liabilities with a
corresponding reduction to common stock including paid-in capital.
•
Common stock is presented at par value plus additional paid-in amounts, net of issuance costs.
Distributions are accounted for as reductions to common stock including paid-in capital and are
classified as financing activities on the statement of cash flows.
•
Upon issuance, paid-in capital is allocated among host stock instruments on a relative fair value
basis.
Costs directly associated with new equity issuances are recorded as other current assets until the issuances
are completed or abandoned. If the issuance is completed, the costs are reclassified to stockholders’
equity and presented as a reduction of proceeds received. If the issuance is abandoned, the costs are
reclassified to SG&A expenses. Costs associated with secondary equity offerings under a registration
rights agreement are recorded as SG&A expenses.
Disclosures about certain classes of stock are provided in the footnotes and not stated separately on the
balance sheet or statement of stockholders’ equity when those presentations are not deemed to be
material.
Revenue recognition
We recognize revenue by applying a five-step process: (i) identify the contract with a customer, (ii)
identify the performance obligation in the contract, (iii) determine the transaction price, (iv) allocate the
transaction price to the performance obligations and (v) recognize revenue as the performance obligations
F-17
are satisfied by transferring control of the performance obligation through delivery of a promised product
or service to a customer.
Control of a performance obligation may transfer to the customer either at a point in time or over time
depending on an evaluation of the specific facts and circumstances for each contract, including the terms
and conditions of the contract as agreed with the customer, as well as the nature of the products or
services to be provided. The substantial majority of our net sales are recognized at a point in time based
upon the delivery of products to customers pursuant to purchase orders. We recognize service revenues
and sales of certain of our custom-manufactured products over time as control passes to the customer
concurrent with our performance. We are able to fulfill most purchase orders rapidly, and service and
custom-manufacturing cycles are short. As a result, we do not record material contract assets or liabilities,
nor do we have material unfulfilled performance obligations.
We have elected to use the practical expedient not to adjust the transaction price of a contract for the
effects of a significant financing component if, at the inception of the contract, we expect that the period
between when we transfer a promised good or service to a customer and when the customer pays for that
good or service will be one year or less.
Some customer contracts include variable consideration, such as rebates and prebates, some of which
depend upon our customers meeting specified performance criteria, such as a purchasing level over a
period of time. We use judgment to estimate the value of these pricing arrangements at each reporting
date and record contract assets or liabilities to the extent that estimated values are recognized at a different
time than the revenue for the related products. When estimating variable consideration, we also apply
judgment when considering the probability of whether a reversal of revenue could occur and only
recognize revenue subject to this constraint.
The only significant costs we incur to obtain contracts are related to sales commissions. These
commissions are primarily based on purchase order amounts, not recoverable and not applicable to
periods greater than one year. We elected to apply the practical expedient to expense these costs as
incurred as if the amortization period of the asset that would have otherwise been recognized is one year
or less.
Performance obligations following the delivery of products, such as rights of return and warranties, are
not material. No other types of revenue arrangements were material to our consolidated financial
statements.
Classification of expenses — cost of sales
Cost of sales includes the cost of the product, depreciation of production assets, supplier rebates, shipping
and receiving charges and inventory adjustments. For manufactured products, the cost of the product
includes direct and indirect manufacturing costs, plant administrative expenses and the cost of raw
materials consumed in the manufacturing process.
Classification of expenses — selling, general and administrative
Selling, general and administrative expenses include personnel and facility costs, amortization of
intangible assets, depreciation of non-production assets, research and development costs, advertising
expense, promotional charges and other charges related to our global operations. Research and
development expenses were not material for the periods presented.
F-18
Employee benefit plans
Some of our employees participate in defined benefit plans that we sponsor. We present these plans as
follows due to their differing geographies, characteristics and actuarial assumptions:
•
U.S. plans — The two U.S. plans are closed to participants who joined the Company after 2018,
and annual accruals of future pension benefits for participating employees are not material to our
financial statements. One of our two U.S. plans is in the process of being terminated as discussed
in note 17.
•
Non-U.S. plans — Eight plans for our employees around the world that we acquired from VWR
in 2017, most of which continue to accrue future pension benefits.
•
Medical plan — A post-retirement medical plan for certain employees in the United States. The
medical plan is closed to new employees, and annual accruals of future pension benefits for
participating employees are not material to our financial statements.
We sponsor a number of other defined benefit plans around the world that are not material individually or
in the aggregate and therefore are not included in our disclosures. Defined contribution and other
employee benefit plans are also not material.
The cost of our defined benefit plans is incurred systematically over expected employee service periods.
We use actuarial methods and assumptions to determine expense each period and the value of projected
benefit obligations. Actuarial changes in the projected value of defined benefit obligations are deferred to
AOCI and recognized in earnings systematically over future periods. The portion of cost attributable to
continuing employee service is included in SG&A expenses. The rest of the cost is included in other
income or expense, net.
Stock-based compensation expense
Some of our management and directors are compensated with stock-based awards. Stock-based
compensation expense is included in SG&A expenses on the statement of operations.
Stock options and RSUs
We measure the expense of stock options and RSUs based on their grant-date fair values. These awards
typically vest with continuing service, so expense is recognized on a straight-line basis from the date of
grant through the end of the requisite service period. When awards are contingent upon the achievement
of a performance condition, we record expense over the life of the awards in accordance with the
probability of achievement. We measure the expense of awards with a market condition based on the
grant-date fair value, which includes the probability of achieving the market condition. We recognize
forfeitures of unvested awards as they occur by reversing any expense previously recorded in the period
of forfeiture. We issue new shares of common stock upon exercise or vesting of awards.
The grant-date fair value of stock options is measured using the Black-Scholes pricing model using
assumptions based on the terms of each stock option agreement, the expected behavior of grant recipients
and peer company data. We have limited historical data about our own awards upon which to base our
assumptions. Expected volatility is calculated based on the observed equity volatility for a peer group
over a period of time equal to the expected life of the stock options. The risk-free interest rate is based on
U.S. Treasury observed market rates continuously compounded over the duration of the expected life. The
F-19
expected life of stock options is estimated as the midpoint of the weighted average vesting period and the
contractual term.
The grant-date fair value for RSUs in which the vesting condition is based only on continuing service is
measured as the quoted closing price of our common stock on the grant date. For awards with market
conditions, we measure the grant-date fair value using a Monte Carlo model. The grant-date fair value of
awards with performance conditions is the quoted closing price of our common stock on the grant date,
adjusted for the probability of achievement.
Award modifications
When stock-based compensation arrangements are modified, we treat the modification as an exchange of
the original award for a new award and immediately recognize expense for the incremental value of the
new award. The incremental value is measured as the excess of the fair value of new awards over the fair
value of the original awards, each based on circumstances and assumptions as of the modification date.
Fair value is measured using the same methods previously described. We have not had any such
modifications for the periods presented in these financial statements.
Income taxes
Our worldwide income is subject to the income tax regulations of many governments. Income tax expense
is calculated using an estimated global rate with recognition of deferred tax assets and liabilities for
expected temporary differences between taxable and reported income. Deferred tax assets and liabilities
are measured using the enacted tax rates expected to apply to taxable income when those temporary
differences are expected to reverse. We record a valuation allowance to reduce deferred tax assets to the
amount that is more likely than not to be realized.
Income tax regulations change from time to time. The effect of a change in tax law on deferred tax assets
and liabilities is recognized as a cumulative adjustment to income tax expense or benefit in the period of
enactment. The effect of a change in tax law on the income tax expense or benefit itself is recognized
prospectively for the applicable tax years.
Income tax regulations can be complex, requiring us to interpret tax law and take positions. Upon audit,
tax authorities may challenge our positions. We regularly assess the outcome of potential examinations
and only recognize positions that are more likely than not to be sustained. Recognized income tax
positions are measured at the largest amount that is more likely than not of being realized. Changes in
recognition or measurement are reflected in the period in which a change in judgment occurs, as a result
of information that arises or when a tax position is effectively settled. We recognize accrued interest and
penalties related to unrecognized tax benefits as a component of interest expense in our consolidated
financial statements.
F-20
Fair value measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at a measurement date. We classify fair value
measurements based on the lowest of the following levels that is significant to the measurement:
•
Level 1 — Quoted prices in active markets for identical assets or liabilities
•
Level 2 — Inputs that are observable for the asset or liability, either directly or indirectly through
market corroboration, for substantially the full term of the asset or liability
•
Level 3 — Inputs that are unobservable for the asset or liability based on our evaluation of the
assumptions market participants would use in pricing the asset or liability
We exercise considerable judgment when estimating fair value, particularly when evaluating what
assumptions market participants would likely make. The use of different assumptions or estimation
methodologies could have a material effect on the estimated fair values.
Foreign currency translation
Our operations span the globe, so we are impacted by changes in foreign currency exchange rates. We
determine the functional currency of our subsidiaries based upon the primary currency used to generate
and expend cash, which is usually the currency of the country in which the subsidiary is located. For
subsidiaries with functional currencies other than the U.S. dollar, assets and liabilities are translated into
U.S. dollars using period-end exchange rates, and revenues, expenses, income and losses of our
subsidiaries are translated into U.S. dollars using monthly average exchange rates. The resulting foreign
currency translation gains or losses are deferred as AOCI and reclassified to earnings only upon sale or
liquidation of those businesses.
Gains and losses related to the remeasurement of debt and intercompany financing into functional
currencies are reported in earnings as other income or expense, net. When foreign currency-denominated
debt is designated as a hedge of our net investments in non-U.S denominated subsidiaries, gains and
losses are reported in AOCI as part of the cumulative translation adjustment. Gains and losses associated
with the remeasurement of operating assets and liabilities into functional currencies are reported within
the applicable component of operating income.
Leases
We primarily enter into real estate leases for manufacturing, warehousing and commercial office space to
support our global operations. We also enter into vehicle and equipment leases to support those
operations.
We determine if an arrangement is a lease at inception. Short-term leases, defined as having an initial
term of twelve months or less, are expensed as incurred and not recorded on the balance sheet. We record
the value of all other leased property and the related obligations as assets and liabilities on the balance
sheet. Information about the amount and classification of lease assets and liabilities is included in note 23.
At inception, lease assets and liabilities are measured at the present value of future lease payments over
the lease term. As most of our leases do not provide an implicit rate, we exercise judgment in selecting
the incremental borrowing rate based on the information available at inception to determine the present
F-21
value of future payments. Operating lease assets are further adjusted for lease incentives and initial direct
costs.
Our lease terms may include options to extend or terminate the lease. We exercise judgment to calculate
the term of those leases when extension or termination options are present and include such options in the
calculation of the lease term when it is reasonably certain that we will exercise those options. Operating
lease expense is recognized on a straight-line basis over the lease term, except for variable rent which is
expensed as incurred. Short-term lease and variable rent expense was immaterial to the financial
statements and has been included within operating lease expense. Finance lease expense includes
depreciation, which is recognized on a straight-line basis over the expected life of the leased asset and
interest expense.
Some of our lease agreements include both lease and non-lease components. We account for those
components separately for real estate leases and as a combined single lease component for all other types
of leases.
Business combinations
We account for business acquisitions under the accounting standards for business combinations. The
results of each acquisition are included in our consolidated results as of the acquisition date and the
purchase price of an acquisition is allocated to tangible and intangible assets and assumed liabilities based
on their estimated fair values. Any excess of the fair value consideration transferred over the estimated
fair values of the identifiable net assets acquired is recognized as goodwill.
Any purchase price that is considered contingent consideration is measured at its estimated fair value at
the acquisition date. Contingent consideration is remeasured at the end of each reporting period, with
changes in estimated fair value being recorded through SG&A expense within our statement of
operations.
Derivatives and hedging
We use derivative instruments primarily to manage currency exchange and interest rate risks and
recognize them as either assets or liabilities which are measured at fair value.
•
Cash flow hedges — We use interest rate derivatives to add stability to interest expense and to
manage our exposure to interest rate movements. For derivative instruments that are designated
and qualify as a cash flow hedge, the gain or loss on the derivative is recorded in AOCI and
reclassified into earnings in the same period(s) during which the hedged transaction affects
earnings and is presented in the same income statement line item as the earnings effect of the
hedged item.
•
Net Investment hedges — We use foreign currency-denominated debt and cross-currency swaps
to hedge our net investments in foreign operations against adverse movements in exchange rates.
For derivatives designated as net investment hedges, the gain or loss on the derivative is reported
in AOCI as part of the cumulative translation adjustment. Amounts are reclassified out of AOCI
into earnings in the event the hedged net investment is either sold or substantially liquidated.
3.
New accounting standards
Segment Reporting
F-22
In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures,
which amends the existing segment reporting guidance (ASC Topic 280) to improve reportable segment
disclosure requirements, primarily through enhanced disclosures about significant segment expenses that
are regularly provided to the CODM and included within each reported measure of segment profit or loss,
an amount for other segment items by reportable segment and a description of its composition, the title
and position of the CODM and an explanation of how the CODM uses the reported measure(s) of
segment profit or loss in assessing segment performance and deciding how to allocate resources. The
amendments in this update were effective for fiscal years beginning after December 15, 2023, and interim
periods within fiscal years beginning after December 15, 2024.
We adopted this standard on a retrospective basis within our annual report for the year ended December
31, 2024, which resulted in additional disclosures in our segment financial information footnote, primarily
related to significant segment expenses that are regularly provided to the CODM and included within our
reported measure of segment profit or loss. Refer to note 7 for these additional disclosures.
Income Taxes
In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which
amends the existing income taxes guidance (ASC Topic 740) to require additional disclosures
surrounding annual rate reconciliation, income taxes paid and other income tax related disclosures.
The amendments in this update are effective for annual periods beginning after December 15, 2024. Early
adoption is permitted. We are currently evaluating the impact of our pending adoption of this standard on
our financial statement disclosures.
Disaggregation of Income Statement Expenses (DISE)
In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses
(DISE), requiring additional disclosure of the nature of expenses included in the income statement. The
new standard requires disclosures about specific types of expenses included in the expense captions
presented on the face of the income statement as well as disclosures about selling expenses.
The amendments in this update are effective for annual periods beginning after December 15, 2026 and
interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. We
are currently evaluating the impact of our pending adoption of this standard on our financial statements.
Other
There were no other new accounting standards that we expect to have a material impact on our financial
position or results of operations upon adoption.
Adoption of rules to enhance and standardize climate-related disclosures for Investors
On March 6, 2024, the SEC adopted final rules to require registrants to disclose certain climate-related
information in registration statements and annual reports.
On April 4, 2024, the SEC issued an order staying the final rules pending completion of judicial review of
the petitions challenging the final rules. The order does not amend the compliance dates contemplated by
the final rules, which are applicable to the Company for fiscal years beginning with the Company’s
annual report on Form 10-K for the fiscal year ending December 31, 2025. We are currently evaluating
the impact of our pending adoption of these requirements on our financial statement disclosures.
F-23
4.
Divestitures
We completed the sale of our Clinical Services business, a component of the Company’s Laboratory
Solutions reportable segment, on October 17, 2024, pursuant to a definitive agreement that was signed on
August 16, 2024. We received gross proceeds of approximately $595.0 million, which are subject to
customary post-closing adjustments. In connection with the sale, we recorded a gain of $446.6 million in
the consolidated statements of operations. The Clinical Services business has not been classified as a
discontinued operation as it did not represent a strategic shift that will have a major effect on our
operations and financial results.
5.
Earnings per share
The following table presents the reconciliation of basic and diluted earnings per share for the years ended
December 31, 2024, 2023 and 2022:
(in millions,
except
per
share
data)
Year ended December 31, 2024
Year ended December 31, 2023
Year ended December 31, 2022
Earnings
(numerator)
Weighted
average
shares
outstanding
(denominator)
Earnings
per
share
Earnings
(numerator)
Weighted
average
shares
outstanding
(denominator)
Earnings
per
share
Earnings
(numerator)
Weighted
average
shares
outstanding
(denominator)
Earnings
per
share
Basic . . . . . . $
711.5
679.6
$
1.05
$
321.1
675.6
$
0.48
$
662.3
650.9
$
1.02
Dilutive
effect of
stock-based
awards . . .
—
2.3
—
2.8
—
5.6
Dilutive
impact of
MCPS . . .
—
—
—
—
24.2
22.9
Diluted $
711.5
681.9
$
1.04
$
321.1
678.4
$
0.47
$
686.5
679.4
$
1.01
6.
Risks and uncertainties
Remeasurement of foreign-denominated debt and intercompany borrowings
Our operations span the globe. To fund those operations, we have entered into significant Euro-
denominated indebtedness (see note 14), and we have also established intercompany borrowings among
our subsidiaries that are denominated in various currencies. Changes in foreign currency exchange rates,
particularly the Euro, have required us to record gains and losses, some of which have been significant, to
remeasure the debt and the intercompany borrowings into functional currencies of the subsidiaries
holding them.
Our intercompany capitalization structure is intended to mitigate substantially all of our net Euro
financing exposure in future periods. We expect to record gains and losses related to intercompany
borrowings denominated in other currencies. Historically, the remeasurement of borrowings denominated
in currencies other than the Euro has not been material.
Impairment testing
On January 1, 2024, in connection with the Company’s reporting segment structure change, we performed
quantitative impairment testing of goodwill for each of our reporting units. We did not record any
impairment charges as each reporting unit had a fair value that was in excess of its carrying value.
F-24
On October 1, 2024, we performed quantitative annual impairment testing of goodwill for each of our
reporting units. We did not record any impairment charges. Each reporting unit had a fair value that was
in excess of its carrying value.
Unfavorable changes to forecasted results and other assumptions used to determine fair values of
reporting units could present a risk of impairment in future periods. We have not recorded any material
impairments during the periods presented.
Collective bargaining arrangements
As of December 31, 2024, approximately 5% of our employees in North America were represented by
unions, and a majority of our employees in Europe are represented by workers’ councils or unions.
7.
Segment financial information
Effective January 1, 2024, we changed our operating model and reporting segment structure into two
reportable business segments: Laboratory Solutions and Bioscience Production. Corporate costs are
managed on a standalone basis, certain of which are allocated to our reportable segments.
In connection with this change, our CODM changed the measure used to evaluate segment profitability
from Adjusted EBITDA to Adjusted Operating Income. The CODM uses Adjusted Operating Income for
each segment predominantly in the annual budget and forecasting process. We have recasted prior-period
segment disclosures given the change in our reportable segments.
F-25
The following tables present information by reportable segment:
(in millions)
Net sales
Year ended December 31,
Adjusted Operating Income
Year ended December 31,
2024
2023
2022
2024
2023
2022
Laboratory Solutions . . . . $ 4,610.1
$ 4,738.3
$ 5,002.4
$
598.0
$
668.3
$
764.7
Bioscience Production . . .
2,173.5
2,228.9
2,510.0
558.2
601.9
778.9
Corporate . . . . . . . . . . . . .
—
—
—
(66.4)
(58.4)
(66.3)
Total . . . . . . . . . . . . . $ 6,783.6
$ 6,967.2
$ 7,512.4
$ 1,089.8
$ 1,211.8
$ 1,477.3
(in millions)
Year ended December 31, 2024
Laboratory
Solutions
Bioscience
Production
Corporate
Total
Net sales . . . . . . . . . . . . . . . . . . . $
4,610.1
$
2,173.5
$
—
$
6,783.6
Adjusted cost of sales1 . . . . . . . .
3,288.4
1,203.8
—
4,492.2
Adjusted operating expenses2 . . .
723.7
411.5
66.4
1,201.6
Adjusted Operating Income . . $
598.0
$
558.2
$
(66.4)
$
1,089.8
(in millions)
Year ended December 31, 2023
Laboratory
Solutions
Bioscience
Production
Corporate
Total
Net sales . . . . . . . . . . . . . . . . . . . $
4,738.3
$
2,228.9
$
—
$
6,967.2
Adjusted cost of sales1 . . . . . . . .
3,380.3
1,223.1
—
4,603.4
Adjusted operating expenses2 . . .
689.7
403.9
58.4
1,152.0
Adjusted Operating Income . . $
668.3
$
601.9
$
(58.4)
$
1,211.8
(in millions)
Year ended December 31, 2022
Laboratory
Solutions
Bioscience
Production
Corporate
Total
Net sales . . . . . . . . . . . . . . . . . . . $
5,002.4
$
2,510.0
$
—
$
7,512.4
Adjusted cost of sales1 . . . . . . . .
3,533.0
1,361.6
—
4,894.6
Adjusted operating expenses2 . . .
704.7
369.5
66.3
1,140.5
Adjusted Operating Income . . $
764.7
$
778.9
$
(66.3)
$
1,477.3
━━━━━━━━━
1.
Adjusted cost of sales exclude $12.1 million and $15.0 million of non-GAAP adjustments primarily related to
restructuring and severance and purchase accounting as described in more detail within the non-GAAP
reconciliation presented below, for the years ended December 31, 2024 and December 31, 2022, respectively.
There were no such non-GAAP adjustments to cost of sales for the year ended December 31, 2023.
2.
Adjusted operating expenses exclude $(7.1) million, $515.4 million and $332.1 million of non-GAAP
adjustments primarily related to gain on sale of business, impairment charges, restructuring and severance
charges and transformation expenses as described in more detail within the non-GAAP reconciliation
F-26
presented below, for the years ended December 31, 2024, December 31, 2023 and December 31, 2022,
respectively.
(in millions)
Depreciation and amortization
Year ended December 31,
2024
2023
2022
Laboratory Solutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
212.8
$
215.0
$
215.9
Bioscience Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
192.7
187.3
189.6
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
405.5
$
402.3
$
405.5
Information about our segment’s assets and capital expenditures is not disclosed because this information
is not provided to our CODM.
The amounts above exclude inter-segment activity because it is not material. All of the net sales for each
segment are from external customers.
The following table presents the reconciliation of Adjusted Operating Income, our segment profitability
measure, to Income before income taxes, the nearest measurement under GAAP:
(in millions)
Year ended December 31,
2024
2023
2022
Adjusted Operating Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,089.8
$ 1,211.8
$ 1,477.3
Amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(299.8)
(307.7)
(318.3)
Integration-related expenses1 . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
(7.6)
(19.2)
Purchase accounting adjustments2 . . . . . . . . . . . . . . . . . . . . . . . .
—
—
(9.4)
Restructuring and severance charges3 . . . . . . . . . . . . . . . . . . . . .
(82.8)
(26.5)
(3.5)
Transformation expenses4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(58.9)
(5.4)
—
Reserve for certain legal matters, net5 . . . . . . . . . . . . . . . . . . . . .
(9.2)
(7.1)
—
Other6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(0.9)
(0.3)
3.3
Impairment charges7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
(160.8)
—
Gain on sale of business8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
446.6
—
—
Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(218.8)
(284.8)
(265.8)
Loss on extinguishment of debt . . . . . . . . . . . . . . . . . . . . . . . . . .
(10.9)
(6.9)
(12.5)
Other (expense) income, net
(1.2)
5.8
(0.8)
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . $
853.9
$
410.5
$
851.1
━━━━━━━━━
1.
Represents direct costs incurred with third parties and the accrual of a long-term retention incentive to
integrate acquired companies. These expenses represent incremental costs and are unrelated to
normal operations of our business. Integration expenses are incurred over a pre-defined integration period
specific to each acquisition.
2.
Represents the non-cash reduction of contingent consideration related to the Ritter acquisition and the
amortization of the purchase accounting adjustment to record Masterflex inventory at fair value.
3.
Reflects the incremental expenses incurred in the period related to restructuring initiatives to increase
profitability and productivity. Costs included in this caption are specific to employee severance, site-related
exit costs, and contract termination costs. The expenses recognized in 2024 represent costs incurred to
achieve the Company’s publicly-announced cost transformation initiative.
F-27
4.
Represents incremental expenses directly associated with the Company’s publicly-announced cost
transformation initiative, primarily related to the cost of external advisors.
5.
Represents charges and legal costs, net of recoveries, in connection with certain litigation and other
contingencies that are unrelated to our core operations and not reflective of on-going business and operating
results.
6.
Represents other stock-based compensation expense (benefit).
7.
As described in notes 10 and 11.
8.
As described in note 4 .
The following table presents net sales by product category:
(in millions)
Year ended December 31,
2024
2023
2022
Proprietary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,615.1
$ 3,720.2
$ 4,024.7
Third-party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,168.5
3,247.0
3,487.7
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,783.6
$ 6,967.2
$ 7,512.4
The following table presents information by geographic area:
(in millions)
Net sales
Year ended December 31,
Property, plant and
equipment, net
Year ended December 31,
2024
2023
2022
2024
2023
United States . . . . . . . . . . . . . . . . . $ 3,549.6
$ 3,705.2
$ 4,278.1
$
445.8
$
462.1
All other countries . . . . . . . . . . . . .
3,234.0
3,262.0
3,234.3
262.3
275.4
Total . . . . . . . . . . . . . . . . . . . . . $ 6,783.6
$ 6,967.2
$ 7,512.4
$
708.1
$
737.5
8.
Supplemental disclosures of cash flow information
The following tables present supplemental disclosures of cash balances:
(in millions)
December 31,
2024
2023
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
261.9
$
262.9
Restricted cash classified as other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.8
24.8
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
264.7
$
287.7
(in millions)
Year ended December 31,
2024
2023
2022
Cash flows from operating activities:
Cash paid for income taxes, net . . . . . . . . . . . . . . . . . . . . . . $
247.8
$
224.4
$
256.9
Cash paid for interest, net, excluding financing leases . . . . .
211.0
267.0
242.2
Cash paid for interest on finance leases . . . . . . . . . . . . . . . .
4.2
5.1
5.1
Cash paid under operating leases . . . . . . . . . . . . . . . . . . . . .
44.0
43.8
42.9
Cash flows from financing activities:
Cash paid under finance leases . . . . . . . . . . . . . . . . . . . . . . .
5.7
5.1
4.6
F-28
9.
Inventory
The following table presents components of inventory:
(dollars in millions)
December 31,
2024
2023
Merchandise inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
416.0
$
503.5
Finished goods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
101.2
91.0
Raw materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
149.3
167.2
Work in process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
65.0
66.4
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
731.5
$
828.1
Inventory under the LIFO method:
Percentage of total inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
22 %
23 %
Excess of current cost over carrying value . . . . . . . . . . . . . . . . . . . . . . $
39.7
$
42.2
10.
Property, plant and equipment
The following table presents the components of property, plant and equipment:
(in millions)
December 31,
2024
2023
Buildings and related improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
414.3
$
426.8
Machinery, equipment and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
544.3
548.3
Software . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
238.9
187.3
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
53.9
55.6
Assets not yet placed into service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
86.2
136.4
Property, plant and equipment, gross . . . . . . . . . . . . . . . . . . . . . . . . . .
1,337.6
1,354.4
Accumulated depreciation and impairment charges . . . . . . . . . . . . . . . . . .
(629.5)
(616.9)
Property, plant and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
708.1
$
737.5
Depreciation expense was $105.7 million in 2024, $94.6 million in 2023 and $87.2 million in 2022.
In the second quarter of 2023, persistently high customer inventory in the end markets served by Ritter
and an overall slowdown in research activity caused Ritter’s revenue to decline compared to prior
expectations. Due to these circumstances, we performed an impairment test of the Ritter asset group,
which resulted in a fair value that was lower than its carrying value. As a result, we recorded an
impairment charge of $54.4 million on Ritter’s property, plant & equipment in the second quarter of
2023. This charge impacted our Laboratory Solutions reportable segment.
Our impairment test was performed as of June 30, 2023 and utilized our then latest estimates of Ritter’s
projected cash flows, including revenues, gross margin, SG&A expenses, capital expenditures to maintain
the acquired assets, and investments in debt free net working capital, as well as current market
assumptions for the discount rate.
F-29
11.
Goodwill and other intangible assets
Goodwill
As described in note 2, we reorganized our segment reporting structure effective January 1, 2024. The
segment reporting reorganization also resulted in a change to our reporting units for the purpose of
goodwill impairment testing. Our new reporting units are Buy Sell Lab, Proprietary Lab, Services,
Manufactured Products, Buy Sell Production, and NuSil. As a result of the reorganization, our goodwill
was reassigned to the new reporting units making up our Laboratory Solutions and Bioscience Production
reporting segments.
We have reassigned goodwill as of January 1, 2024 to align to our new segment structure by using a
relative fair value approach as required under GAAP. We tested goodwill for impairment immediately
before and after the reorganization of our reporting structure; no impairment was identified.
The following table presents goodwill by our reportable segments, on the effective date of the change:
Laboratory
Solutions
Bioscience
Production
Total
Goodwill, gross . . . . . . . . . . . . . . . . . . . . . . . . $
3,842.0
$
1,913.5
$
5,755.5
Accumulated impairment losses . . . . . . . . . . .
(18.4)
(20.4)
(38.8)
Goodwill, net . . . . . . . . . . . . . . . . . . . . . . $
3,823.6
$
1,893.1
$
5,716.7
The following tables present changes in goodwill by reportable segment:
(in millions)
December 31, 2024
Laboratory
Solutions
Bioscience
Production
Total
Beginning balance, net . . . . . . . . . . . . . . . . . . . . . . . . . . $
3,823.6
$
1,893.1
$
5,716.7
Currency translation . . . . . . . . . . . . . . . . . . . . . . . . .
(113.4)
(5.1)
(118.5)
Divestitures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(59.0)
—
(59.0)
Ending balance, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,651.2
1,888.0
5,539.2
Accumulated impairment losses . . . . . . . . . . . . . . . . . . .
18.4
20.4
38.8
Ending balance, gross . . . . . . . . . . . . . . . . . . . . . . . . $
3,669.6
$
1,908.4
$
5,578.0
(in millions)
December 31, 2023
Laboratory
Solutions
Bioscience
Production
Total
Beginning balance, net . . . . . . . . . . . . . . . . . . . . . . . . . . $
3,760.7
$
1,891.9
$
5,652.6
Currency translation . . . . . . . . . . . . . . . . . . . . . . . . .
62.9
1.2
64.1
Ending balance, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,823.6
1,893.1
5,716.7
Accumulated impairment losses . . . . . . . . . . . . . . . . . . .
18.4
20.4
38.8
Ending balance, gross . . . . . . . . . . . . . . . . . . . . . . . . $
3,842.0
$
1,913.5
$
5,755.5
F-30
The following table presents the components of other intangible assets:
(in millions)
December 31, 2024
December 31, 2023
Gross
value
Accumulated
amortization
and
impairment1
Carrying
value
Gross
value
Accumulated
amortization
and
impairment1
Carrying
value
Customer relationships . $4,697.5
$
1,840.4
$ 2,857.1
$4,883.2
$
1,670.3
$ 3,212.9
Trade names . . . . . . . . .
351.6
240.4
111.2
359.7
228.3
131.4
Other . . . . . . . . . . . . . . .
626.8
327.2
299.6
635.5
296.8
338.7
Total finite-lived . . $5,675.9
$
2,408.0
3,267.9
$5,878.4
$
2,195.4
3,683.0
Indefinite-lived . . . . . . .
92.3
92.3
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 3,360.2
$ 3,775.3
━━━━━━━━━
1.
As of December 31, 2024 and December 31, 2023, accumulated impairment losses on Customer
relationships were $65.9 million and on Other were $40.5 million totaling $106.4 million.
Amortization expense was $299.8 million in 2024, $307.7 million in 2023 and $318.3 million in 2022.
We recorded an impairment charge of $106.4 million on Ritter’s finite-lived intangible assets in the
second quarter of 2023 in connection with the impairment of Ritter’s property, plant & equipment, as
previously discussed in note 10. This charge impacted our Laboratory Solutions reportable segment.
The following table presents estimated future amortization:
(in millions)
December 31,
2024
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
293.1
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
291.7
2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
290.3
2028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
275.8
2029 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
272.2
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,844.8
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
3,267.9
F-31
12.
Restructuring
The following table presents restructuring and severance expenses by plan:
(in millions)
Year ended December 31,
2024
2023
2022
2024 restructuring program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
82.8
$
—
$
—
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
26.5
3.5
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
82.8
$
26.5
$
3.5
2024 restructuring program
The 2024 restructuring program is a part of the Company’s multi-year cost transformation initiative
designed to right-size the Company’s cost base and optimize its footprint and organizational structure
with a focus on driving significant cost improvement and productivity. We do not expect to incur any
material charges in the future under the 2024 restructuring program.
The following table presents information about expenses under the 2024 restructuring program for the
periods covered under this report in which the plan was active:
(in millions)
Year ended
December 31,
Charges
incurred
Expected
remaining
charges
Total
expected
charges
2024
Employee severance and related . . . . . . $
64.3
$
64.3
$
—
$
64.3
Facility closure . . . . . . . . . . . . . . . . . . .
1.6
1.6
—
1.6
Other . . . . . . . . . . . . . . . . . . . . . . . . . . .
16.9
16.9
—
16.9
Total . . . . . . . . . . . . . . . . . . . . . . . . $
82.8
$
82.8
$
—
$
82.8
Laboratory Solutions . . . . . . . . . . . . . . . $
41.3
$
41.3
$
—
$
41.3
Bioscience Production . . . . . . . . . . . . .
40.6
40.6
—
40.6
Corporate . . . . . . . . . . . . . . . . . . . . . . .
0.9
0.9
—
0.9
Total . . . . . . . . . . . . . . . . . . . . . . . . $
82.8
$
82.8
$
—
$
82.8
Other charges in the table above primarily relate to the write-downs of the carrying value of assets that we
have or plan to dispose of under the program.
The following table presents changes to accrued employee severance and related expenses under the 2024
restructuring program, which are primarily classified as employee-related current liabilities:
(in millions)
Year ended December 31,
2024
Beginning balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
—
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
64.3
Cash payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(44.0)
Currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.0
Ending balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
21.3
F-32
13.
Commitments and contingencies
Our business involves commitments and contingencies related to compliance with environmental laws
and regulations, the manufacture and sale of products and litigation. The ultimate resolution of
contingencies is subject to significant uncertainty, and it is reasonably possible that contingencies could
be decided unfavorably against us.
Environmental laws and regulations
Our environmental liabilities are subject to changing governmental policy and regulations, discovery of
unknown conditions, judicial proceedings, method and extent of remediation, existence of other
potentially responsible parties and future changes in technology. We believe that known and unknown
environmental matters, if not resolved favorably, could have a material effect on our financial position,
liquidity and profitability. Matters to be disclosed are as follows:
Mallinckrodt indemnification
In 2010, New Mountain Capital acquired us from Covidien plc in accordance with a stock purchase
agreement dated May 25, 2010. At that time, we were organized as Mallinckrodt Baker, Inc. or MBI.
Pursuant to the terms of that agreement, we are entitled to various levels of indemnification with respect
to environmental liabilities involving the former MBI operations. In 2013, in connection with the
Covidien plc divestiture of Mallinckrodt Group S.a.r.l and Mallinckrodt LLC, together “Mallinckrodt,”
and by a second amendment to the stock purchase agreement dated June 6, 2013, but effective upon the
consummation of the divestiture, Covidien plc assigned its obligations as described herein to
Mallinckrodt, and Mallinckrodt assumed those obligations from Covidien plc subject to a continuing
guarantee by Covidien International Finance, S.A (“CIFSA”). As a result of the stock purchase agreement
and assignment, Mallinckrodt is contractually obligated to indemnify and defend us for all off-site
environmental liabilities (for example, Superfund or CERCLA liabilities) arising from the pre-closing
disposal of chemicals or wastes by former MBI operations.
In connection with environmental liabilities arising from pre-closing noncompliance with environmental
laws, Mallinckrodt became contractually obligated to reimburse us for a percentage of the total liability,
with such reimbursements made through disbursements from a $30.0 million environmental escrow
established at the time of the closing. Specifically, Mallinckrodt became responsible for reimbursement of
80% of the total costs up to $40.0 million of such environmental liabilities. Mallinckrodt became
responsible for reimbursement of 50% of the next $40.0 million of such environmental liabilities. If such
environmental liabilities exceed $80.0 million in the aggregate, Mallinckrodt became responsible for
reimbursement of 100% of such liabilities up to the next $30.0 million in the aggregate. Currently,
reimbursements are 80% of the amounts spent by us, with reimbursements and settlements to date
exceeding $12.0 million. In addition, in connection with operation and maintenance activities required
pursuant to administrative consent orders and subsequently issued remedial action permits involving our
Phillipsburg, New Jersey, facility, amounts in excess of a small annual threshold are also subject to
reimbursement, currently at the 80% level.
In 2023, Mallinckrodt initiated bankruptcy proceedings under Chapter 11 of the Bankruptcy Code and
notified us that it was seeking to reject the 2010 stock purchase agreement and its obligations thereunder.
As noted above, Mallinckrodt’s obligations under the 2010 stock purchase agreement were guaranteed by
CIFSA, who has agreed to honor its indemnity obligations going forward.
F-33
Other noteworthy matters
The New Jersey Department of Environmental Protection has ordered us to remediate groundwater
conditions near our plant in Phillipsburg, New Jersey. This matter is covered by the indemnification
arrangement previously described. At December 31, 2024, our accrued obligation under this order is $2.3
million, which is calculated based on expected cash payments discounted at rates ranging from 4.1% to
4.9% between 2025 and 2045. The undiscounted amount of that obligation is $3.6 million.
In 2016, we assessed the environmental condition of our chemical manufacturing site in Gliwice, Poland.
Our assessment revealed specific types of soil and groundwater contamination throughout the site. We are
also monitoring the condition of a closed landfill on that site. These matters are not covered by our
indemnification arrangement because they relate to an operation we subsequently acquired. At
December 31, 2024, our balance sheet includes a liability of $1.1 million for remediation and monitoring
costs. That liability is estimated primarily on discounted expected remediation payments and is not
materially different from its undiscounted amount.
Manufacture and sale of products
Our business involves risk of product liability, patent infringement and other claims in the ordinary course
of business arising from the products that we produce ourselves or obtain from our suppliers, as well as
from the services we provide. Our exposure to such claims may increase to the extent that we expand our
manufacturing operations or service offerings.
We maintain insurance policies to protect us against these risks, including product liability insurance. In
many cases the suppliers of products we distribute have indemnified us against such claims. Our
insurance coverage or indemnification agreements with suppliers may not be adequate in all pending or
any future cases brought against us. Furthermore, our ability to recover under any insurance or
indemnification arrangements is subject to the financial viability of our insurers, our suppliers and our
suppliers’ insurers, as well as legal enforcement under the local laws governing the arrangements.
We have entered into indemnification agreements with customers of our self-manufactured products to
protect them from liabilities and losses arising from our negligence, willful misconduct or sale of
defective products. To date, we have not incurred material costs to defend lawsuits or settle claims related
to these indemnification provisions.
Litigation
At December 31, 2024, there was no outstanding litigation that we believe would result in material losses
if decided against us, and we do not believe that there are any unasserted matters that are reasonably
possible to result in a material loss.
14.
Debt
F-34
The following table presents information about our debt:
(dollars in millions)
December 31, 2024
December 31,
2023
Interest terms
Rate
Amount
Receivables facility . . . . . . . . . . . SOFR1 plus 0.80% . . . . .
5.27 %
$
125.0
$
221.0
Senior secured credit facilities:
Euro term loans B-4 . . . . . . . . EURIBOR plus 2.50% . .
5.36 %
81.6
630.1
Euro term loans B-5 . . . . . . . . EURIBOR plus 2.00% . .
4.86 %
324.5
350.4
U.S. dollar term loans B-5 . . . SOFR1 plus —% . . . . . .
— %
—
787.6
U.S. dollar term loans B-6 . . . SOFR1 plus 2.00% . . . . .
6.46 %
86.6
—
2.625% secured notes . . . . . . . . . . fixed rate . . . . . . . . . . . .
2.625 %
672.6
718.7
3.875% unsecured notes . . . . . . . . fixed rate . . . . . . . . . . . .
3.875 %
800.0
800.0
3.875% unsecured notes . . . . . . . . fixed rate . . . . . . . . . . . .
3.875 %
413.9
442.3
4.625 % unsecured notes . . . . . . . fixed rate . . . . . . . . . . . .
4.625 %
1,550.0
1,550.0
Finance lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15.0
68.3
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.6
11.6
Total debt, gross . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4,077.8
5,580.0
Less: unamortized deferred financing costs . . . . . . . . . . . . . . . . . . . . . . .
(22.0)
(43.4)
Total debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,055.8
$
5,536.6
Classification on balance sheets: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current portion of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
821.1
$
259.9
Debt, net of current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,234.7
5,276.7
━━━━━━━━━
1.
SOFR includes credit spread adjustment.
The following table presents mandatory future repayments of debt principal:
(in millions)
December 31,
2024
20251 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
821.1
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
340.4
2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
82.0
2028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,030.3
2029 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
802.5
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.5
Total debt, gross . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
4,077.8
1.
Includes $125.0 million of outstanding borrowings on our receivables facility.
F-35
Interest expense, net includes interest income of $75.1 million, $65.2 million and $15.9 million for the
year ended December 31, 2024, December 31, 2023 and December 31, 2022, respectively. The interest
income for the year ended December 31, 2024, December 31, 2023 and December 31, 2022, primarily
relates to income on our interest rate swaps and cross currency swaps discussed in note 21.
Credit facilities
The following table presents availability under our credit facilities:
(in millions)
December 31, 2024
Receivables
facility
Revolving
credit facility
Total
Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
247.6
$
975.0
$
1,222.6
Undrawn letters of credit outstanding . . . . . . . . . . .
(15.3)
(3.1)
(18.4)
Outstanding borrowings . . . . . . . . . . . . . . . . . . . . . .
(125.0)
—
(125.0)
Unused availability . . . . . . . . . . . . . . . . . . . . . . $
107.3
$
971.9
$
1,079.2
Current availability under the receivables facility depends upon maintaining a sufficient borrowing base
of eligible accounts receivable. At December 31, 2024, $444.1 million of accounts receivable were
available as collateral under the facility.
In June 2023, we amended the revolving credit facility to increase its funding limit up to $975.0 million
and extended the term to June 29, 2028. We capitalized $2.3 million of fees in connection with this
transaction.
In June 2023, the Company entered into an Amendment to the Receivables Purchase Agreement to
increase the Delinquency Ratio cap from 13.0% to 16.0%.
Receivables facility
The receivables facility is with a commercial bank and functions like a line of credit. On October 25,
2022, we amended the receivables facility to increase its funding limit up to $400.0 million and extended
the term to October 27, 2025. The fees to complete this transaction were not material. Borrowings are
secured by accounts receivable which are sold by certain of our domestic subsidiaries to a separate
consolidated subsidiary. As a result, those receivables are not available to satisfy the claims of other
creditors. We bear the risk of collection on those receivables and account for the receivables facility as a
secured borrowing.
The receivables facility includes representations and covenants that we consider usual and customary,
including a financial covenant. That covenant becomes applicable for periods in which we have drawn
more than 35% of our revolving credit facility under the senior secured credit facilities. When applicable,
we may not have total borrowings in excess of a pro forma net leverage ratio, as defined. This covenant
was not applicable at December 31, 2024.
Senior secured credit facilities
On April 2, 2024, we amended the credit agreement to reprice the U.S. Dollar term loan under our senior
secured credit facilities. Pursuant to the agreement, the interest rate applicable to the U.S. Dollar term
loan reduced from SOFR plus a spread of 2.25% per annum to SOFR plus a spread of 2.00% per annum.
The principal amount of U.S. Dollar term loan outstanding immediately prior to the amendment and the
F-36
outstanding principal amount of U.S. Dollar term loan immediately following the amendment each totaled
$772.4 million. The final stated maturity of the U.S. Dollar term loan remains November 8, 2027. The
costs to complete the amendment were not material.
On December 31, 2024, the senior secured credit facilities consist of a $975.0 million revolving credit
facility that matures on June 29, 2028, a $86.6 million term loan facility that matures on November 8,
2027, a $324.5 million term loan facility that matures on June 10, 2026 and a $81.6 million term loan
facility that matures on June 10, 2028. The revolving credit facility allows us to issue letters of credit and
also to issue short term notes. Borrowings under the facilities are guaranteed by substantially all of our
domestic subsidiaries and secured by substantially all of their assets except for the accounts receivable
that secure the receivables facility.
The senior secured credit facilities bear interest at variable rates. The margin on the revolving credit
facility declines if certain net leverage ratios are achieved. Various other immaterial fees are payable
under the facilities.
We are required to make additional prepayments if: (i) we generate excess cash flows, as defined, at
specified percentages that decline if certain net leverage ratios are achieved; or (ii) we receive cash
proceeds from certain types of asset sales or debt issuances. No additional required prepayments have
become due since the inception of the credit facilities.
We may also prepay the term loans at our option. In 2024 and 2023, we made optional prepayments of
$526.4 million and $21.5 million, respectively, of Euro term loans and $690.0 million and $680.0 million,
respectively, of U.S. dollar term loans. In connection with the 2024 and 2023 prepayments, we recorded
losses on extinguishment of debt of $10.9 million and $6.9 million, respectively, for the proportional
write-off of the related unamortized deferred financing costs.
During the second quarter of 2023, we also amended our U.S. dollar term loan B-5 from LIBOR based
floating rate interest to SOFR based floating rate interest. This amendment was done in accordance with
ASC 848 and had no impact on the financial statements. The Company is applying optional expedients
and exceptions to certain contract modifications and hedging relationships as permitted under ASUs
2020-04 and 2022-06.
The senior secured credit facilities contain certain other customary covenants, including a financial
covenant. That covenant becomes applicable in periods when we have drawn more than 35% of our
revolving credit facility. When applicable, we may not have total borrowings in excess of a pro forma net
leverage ratio, as defined. This covenant was not applicable at December 31, 2024.
15.
Equity
The following table presents the equity capitalization of Avantor, Inc.:
(shares in millions)
Par value
per share
Shares
authorized
Undesignated preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
0.01
75.0
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.01
750.0
Conversion of MCPS into Common Stock
In May of 2022, all outstanding shares of 6.250% Series A MCPS, par value $0.01 per share,
automatically converted into 62.9 million shares of our common stock, in accordance with their terms.
The conversion rate for each share of MCPS was 3.0395 shares of our common stock, subject to receipt of
F-37
cash in lieu of fractional shares, and was determined based on the price of our common stock on the date
of conversion. No outstanding shares of the MCPS remained following the mandatory conversion.
Common stock
Each share of common stock entitles the holder to one vote for applicable matters. Holders are entitled to
receive dividends declared by the board of directors and a pro rata share of assets available for
distribution after satisfaction of the rights of the preferred stockholders.
16.
Accumulated other comprehensive income (loss)
The following table presents changes in the components of AOCI:
(in millions)
Foreign
currency
translation
Derivative
instruments
Defined
benefit
plans
Total
Balance on December 31, 2021 . . . . . . . . . . . . . . . $
(19.2)
$
0.4
$
(24.4)
$
(43.2)
Unrealized (loss) gain . . . . . . . . . . . . . . . . . . .
(102.0)
33.1
47.9
(21.0)
Reclassification of gain into earnings . . . . . . .
—
(7.4)
(1.0)
(8.4)
Change due to income taxes . . . . . . . . . . . . . .
(10.1)
(6.2)
(11.4)
(27.7)
Balance on December 31, 2022 . . . . . . . . . . . . . . .
(131.3)
19.9
11.1
(100.3)
Unrealized gain (loss) . . . . . . . . . . . . . . . . . . .
38.3
21.3
(7.7)
51.9
Reclassification of gain into earnings . . . . . . .
—
(31.0)
(5.9)
(36.9)
Change due to income taxes . . . . . . . . . . . . . .
10.2
2.4
3.7
16.3
Balance on December 31, 2023 . . . . . . . . . . . . . . .
(82.8)
12.6
1.2
(69.0)
Unrealized (loss) gain . . . . . . . . . . . . . . . . . . .
(83.3)
18.2
(17.4)
(82.5)
Reclassification of (gain) loss into earnings . .
(0.5)
(34.5)
6.9
(28.1)
Change due to income taxes . . . . . . . . . . . . . .
(10.8)
3.9
2.5
(4.4)
Balance on December 31, 2024 . . . . . . . . . . . . . . . $
(177.4)
$
0.2
$
(6.8)
$
(184.0)
The reclassifications effects shown above were immaterial to the financial statements and were made to
either cost of sales, selling, general and administrative expense, other (expense) income, net or interest
expense depending upon the nature of the underlying transaction. The income tax effects in 2024 and
2023 on foreign currency translation were due to our net investment hedge and cross-currency swap
discussed in note 21.
17.
Employee benefit plans
We sponsor many defined benefit plans across the globe. Those plans have resulted in significant
obligations to pay benefits to current and former employees, many of which are at least partially funded
with plan assets. Unless required otherwise, we typically seek to close the defined benefit plans to new
participants. Defined benefit plans do not materially impact our earnings, and as a result, certain
disclosures have been omitted.
We approved the termination of our U.S. Pension Plan during 2024. The pension liability was partially
settled in December 2024 due to lump sum distribution payments of $54.2 million to plan participants.
We recorded $9.3 million of pension termination costs for the year ended December 31, 2024, which are
included in other income or expenses as discussed in note 19.
F-38
The remaining pension liability was partially settled subsequent to December 31, 2024, and before the
filing of these financial statements through the purchase of annuity contracts totaling $97.7 million. The
remaining pension liability is expected to be settled by the end of the first quarter of 2025. We expect
additional pension termination charges in the range of $15.0 million to $25.0 million to be recorded in
2025.
The following table presents changes in benefit obligations and plan assets and the funded status of our
plans:
(in millions)
U.S. pension plans
Year ended
December 31,
Non-U.S. pension plans
Year ended
December 31,
U.S. medical plan
Year ended
December 31,
2024
2023
2024
2023
2024
2023
Benefit obligation:
Beginning balance . . . . . . . . . $ 164.6
$ 168.7
$
200.7
$
179.3
$
10.6
$
10.2
Service cost . . . . . . . . . . . . . .
1.9
2.9
3.2
3.1
0.1
0.1
Interest cost . . . . . . . . . . . . . .
8.1
8.6
6.8
7.2
0.5
0.5
Employee contributions . . . . .
—
—
1.1
1.4
—
—
Actuarial loss (gain) . . . . . . .
8.5
1.6
(7.9)
12.7
(1.0)
0.2
Benefits paid . . . . . . . . . . . . .
(9.2)
(13.1)
(7.7)
(6.1)
(0.4)
(0.4)
Settlements and curtailments .
(54.2)
(4.1)
(9.0)
(8.7)
—
—
Currency translation . . . . . . .
—
—
(9.5)
10.1
—
—
Other . . . . . . . . . . . . . . . . . . .
—
—
1.3
1.7
—
—
Ending balance . . . . . . . .
119.7
164.6
179.0
200.7
9.8
10.6
Fair value of plan assets:
Beginning balance . . . . . . . . .
214.7
211.4
124.8
118.6
—
—
Return (loss) on plan assets . .
1.7
15.7
(3.5)
4.2
—
—
Employer contributions . . . . .
0.7
0.7
6.3
5.8
0.4
0.4
Employee contributions . . . . .
—
—
1.1
1.4
—
—
Benefits paid . . . . . . . . . . . . .
(9.2)
(13.1)
(7.7)
(6.1)
(0.4)
(0.4)
Settlements and curtailments .
(54.2)
—
(9.0)
(8.7)
—
—
Currency translation . . . . . . .
—
—
(4.4)
7.6
—
—
Other . . . . . . . . . . . . . . . . . . .
—
—
1.4
2.0
—
—
Ending balance . . . . . . . .
153.7
214.7
109.0
124.8
—
—
Funded status at end of year . . . . . $
34.0
$
50.1
$
(70.0)
$
(75.9)
$
(9.8)
$ (10.6)
F-39
The following table presents other balance sheet information for defined benefit plans:
(in millions)
U.S. pension plans
December 31,
Non-U.S. pension plans
December 31,
U.S. medical plan
December 31,
2024
2023
2024
2023
2024
2023
Accumulated benefit obligation . . $ 119.6
$ 164.5
$
176.4
$
197.6
$
9.8
$
10.6
Amounts recorded in balance
sheet:
Other assets . . . . . . . . . . . . . . $
41.6
$
58.1
$
4.5
$
3.9
$
—
$
—
Other current liabilities . . . . .
(0.7)
(0.7)
(2.8)
(3.6)
(0.7)
(0.7)
Other liabilities . . . . . . . . . . .
(6.9)
(7.3)
(71.7)
(76.2)
(9.1)
(9.9)
Funded status . . . . . . . . . $
34.0
$
50.1
$
(70.0)
$
(75.9)
$
(9.8)
$ (10.6)
Components of AOCI, excluding
tax effects:
Actuarial (loss) gain . . . . . . . $ (19.1)
$ (10.1)
$
3.1
$
5.4
$
9.3
$
9.4
Prior service gain . . . . . . . . . .
—
—
1.0
1.4
—
—
The following table presents the assumptions used to determine the benefit obligation:
U.S. pension plans
December 31,
Non-U.S. pension plans
December 31,
U.S. medical plan
December 31,
2024
2023
2024
2023
2024
2023
Discount rate . . . . . . . . . . . . . . . .
5.5 %
5.1 %
3.7 %
3.6 %
5.2 %
5.1 %
Annual rate of salary increase . . .
3.5 %
3.5 %
2.2 %
2.2 %
—
—
Health care cost trends:
Initial rate . . . . . . . . . . . . . . . .
n/a
n/a
n/a
n/a
6.9 %
7.2 %
Ultimate rate . . . . . . . . . . . . .
n/a
n/a
n/a
n/a
4.0 %
4.0 %
Year ultimate rate is reached .
n/a
n/a
n/a
n/a
2048
2048
The discount rate continues to be the primary driver for changes in the projected benefit obligation. The
increases in discount rates in the U.S. and U.K. during 2024 caused the majority of the actuarial gains in
the U.S. and Non-U.S. pension plan projected benefit obligations, partially offset by experience losses in
the U.S. due to the planned annuities purchase as a result of the plan termination. Additional experience
gains in the Non-U.S. pension plans were a result of involuntary terminations during 2024. In 2023, the
decreases in discount rates caused most of the actuarial losses in the U.S. and Non-U.S. pension plan
projected benefit obligations but were offset by experience gains in the U.S. The actuarial gains in the
U.S. medical plan in 2024 were driven primarily by the favorable experience gains; in 2023 the actuarial
gains were driven primarily by the decrease in the discount rate and also the increase in the claims trend
assumption and were offset by favorable experience gains.
F-40
The following table presents future benefits expected to be paid:
(in millions)
December 31, 2024
U.S. pension
plans
Non-U.S.
pension plans
U.S. medical
plan
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
1.4
$
8.7
$
0.8
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.7
8.9
0.8
2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.7
9.5
0.9
2028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.7
10.8
0.9
2029 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.7
12.2
0.9
2030 – 2034 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.2
60.3
4.3
We do not expect to make any material contributions to our defined benefit plans in 2025.
The following table presents the allocation of plan assets:
(in millions)
December 31, 2024
December 31, 2023
Total
Level
1
Level
2
Level
3
NAV1
Total
Level
1
Level
2
Level
3
NAV1
U.S. plans:
Cash . . . . . . . . . $ 25.4
$25.4
$ —
$ —
$
—
$
4.2
$ 4.2
$ —
$ —
$
—
Fixed income . .
122.8
23.3
99.5
—
—
167.2
—
167.2
—
—
Equity . . . . . . .
5.5
5.5
—
—
—
43.3
—
43.3
—
—
Total . . . . $ 153.7
$54.2
$99.5
$ —
$
—
$ 214.7
$ 4.2
$210.5 $ —
$
—
Non-U.S. plans:
Cash . . . . . . . . . $
1.2
$ 1.2
$ —
$ —
$
—
$
0.6
$ 0.6
$ —
$ —
$
—
Fixed income . .
46.5
—
42.3
—
4.2
46.6
—
46.6
—
—
Equity . . . . . . .
20.0
—
11.8
—
8.2
10.1
—
10.1
—
—
Other . . . . . . . .
2.9
—
1.3
—
1.6
21.8
—
6.6
—
15.2
Insurance
contracts .
38.4
—
—
38.4
—
45.7
—
—
45.7
—
Total . . . . $ 109.0
$ 1.2
$55.4
$38.4
$
14.0
$ 124.8
$ 0.6
$63.3
$45.7
$
15.2
━━━━━━━━━
1.
Investments are measured at fair value using the net asset value per share practical expedient, and
therefore, are not classified in the fair value hierarchy.
For the U.S. plans, our primary investment strategy is to match the duration of plan assets with benefit
obligations. This strategy, utilizing diversified fixed income funds, attempts to hedge the rate used to
discount pension obligations. The fixed income funds invest in long duration investment grade corporate
bonds primarily across industrial, financial and utilities sectors and is managed by a single institution.
Surplus assets are invested in equity funds. We estimate the expected long-term rate of return on plan
assets considering prior performance, the mix of assets and expectations for the long-term returns on
those asset classes.
F-41
For the non-U.S. plans, in many cases we enter into insurance contracts to guarantee payment of benefits
for an annual fee. Otherwise, our primary investment strategy is to seek a return on plan assets sufficient
to achieve our long-term funding objectives. To seek this return, we invest significantly in global equity
funds and secondarily in fixed income funds to mitigate inflation and interest rate risk. These funds
primarily invest in inflation-linked and other types of government bonds. We estimate the expected long-
term rate of return on plan assets in a similar manner to the U.S. plans.
The following table presents changes to plan assets of non-U.S. plans that were measured using
unobservable inputs:
(in millions)
Year ended December 31,
2024
2023
Beginning balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
45.7
$
43.4
Purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.0
6.5
Actual returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.4
1.8
Settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(9.7)
(9.4)
Currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3.0)
3.4
Ending balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
38.4
$
45.7
18.
Stock-based compensation
The following table presents components of stock-based compensation expense:
(in millions)
Classification
Year ended December 31,
2024
2023
2022
Stock options . . . . . . . . . . . . . . . . . . . . . . . . . . Equity . . . . . .
$
10.5
$
13.7
$
16.0
RSUs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Equity . . . . . .
35.0
25.5
31.7
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Both . . . . . . . .
1.3
1.3
(1.9)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
46.8
$
40.5
$
45.8
Award classification:
Equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
47.0
$
40.2
$
49.1
Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(0.2)
0.3
(3.3)
At December 31, 2024, unvested awards have remaining expense of $72.7 million to be recognized over a
weighted average period of 1.6 years.
We recognized a reduction to income tax expense as a result of tax benefits associated with our stock-
based compensation plans of $5.9 million, $5.0 million and $10.3 million, in 2024, 2023 and 2022,
respectively.
Our stock-based compensation awards have been issued under a succession of plans sponsored by the
ultimate parent of our business, which is currently Avantor, Inc. In connection with the IPO, we adopted
the 2019 Plan. The 2019 Plan provides for up to 23.5 million shares of common stock to be issued in the
form of stock options, RSUs or other equity-based awards or cash-based awards. The 2019 Plan also
provides for 1% annual increases to the number of shares of common stock available for issuance unless
reduced by our Board of Directors. At December 31, 2024, 37.5 million shares were available for future
issuance. The 2019 Plan will automatically terminate on May 17, 2029, and no award under the plan may
be granted after this date.
F-42
Stock options
The following table presents information about outstanding stock options:
(options and intrinsic value in millions)
Number of
options
Weighted
average
exercise
price per
option
Aggregate
intrinsic
value
Weighted
average
remaining
term
Balance on December 31, 2023 . . . . . . . . . . . . . .
16.4
$
21.37
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.7
24.14
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3.1)
20.45
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2.1)
20.40
Balance on December 31, 2024 . . . . . . . . . . . . . .
11.9
$
21.94
$
19.5
4.9 years
Expected to vest . . . . . . . . . . . . . . . . . . . . . . .
2.5
25.49
0.1
8.2 years
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.4
21.05
19.4
4.0 years
During 2024, we granted stock options that have a contractual life of ten years and will vest annually over
three years, subject to the recipient continuously providing service to us through each such date.
The following table presents weighted-average information about stock options granted:
Year ended December 31,
2024
2023
2022
Grant date fair value per option . . . . . . . . . . . . . . . . . . . . . . . . . . $
9.86
$
9.64
$
11.09
Assumptions used to determine grant date fair value:
Expected stock price volatility . . . . . . . . . . . . . . . . . . . . . . .
34 %
33 %
31 %
Risk free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.3 %
4.1 %
2.2 %
Expected dividend rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
nil
nil
nil
Expected life of options . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.0 years
6.2 years
6.3 years
F-43
The following table presents other information about stock options:
(in millions)
Year ended December 31,
2024
2023
2022
Fair value of options vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
13.7
$
14.2
$
15.4
Intrinsic value of options exercised . . . . . . . . . . . . . . . . . . . . . . .
11.7
7.1
10.1
RSUs
The following table presents information about unvested RSUs:
(awards in millions)
Number
of awards
Weighted
average grant
date fair value
per award
Balance on December 31, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.0
$
26.35
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.3
25.54
Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1.1)
25.42
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(0.6)
27.90
Balance on December 31, 2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.6
$
26.63
During 2024, we granted RSUs that will vest annually over three years, subject to the recipient
continuously providing service to us through each such date. Certain of those awards contain performance
and market conditions that impact the number of shares that will ultimately vest. We recorded expense on
such awards of $9.3 million, $3.1 million and $7.3 million, for the years ended December 31, 2024, 2023
and 2022, respectively.
The fair value of RSUs that vested in 2024, 2023 and 2022 was $31.0 million, $29.5 million and $20.9
million, respectively.
19.
Other income or expense, net
The following table presents the components of other income or expense, net:
(in millions)
Year ended December 31,
2024
2023
2022
Net foreign currency gain (loss) from financing activities . . . . . $
4.7
$
3.1
$
(7.0)
(Expense) income related to defined benefit plans . . . . . . . . . . .
(6.6)
2.6
6.0
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.7
0.1
0.2
Other (expense) income, net . . . . . . . . . . . . . . . . . . . . . . . . . $
(1.2)
$
5.8
$
(0.8)
Most of the net foreign currency remeasurement gain (loss) from financing activities was caused by the
volatility of the U.S. dollar on unhedged intercompany loan positions as disclosed in note 6. Other income
or expense related to our defined benefit plans primarily relates to pension termination charges as
described in note 17, and the expected returns on defined benefit plan assets.
F-44
20.
Income taxes
The following table presents detail about captions appearing on the statements of operations:
(in millions)
Year ended December 31,
2024
2023
2022
Income (loss) before income taxes:
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
521.2
$
527.6
$
618.0
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
332.7
(117.1)
233.1
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
853.9
$
410.5
$
851.1
Current income tax (expense) benefit:
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(97.6)
$
(110.7)
$
(119.9)
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(30.4)
(35.5)
(32.2)
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(61.3)
(115.6)
(81.6)
Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(189.3)
(261.8)
(233.7)
Deferred income tax (expense) benefit:
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
18.5
18.9
18.0
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(0.4)
0.9
4.4
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
28.8
152.6
46.7
Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
46.9
172.4
69.1
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(142.4)
$
(89.4)
$
(164.6)
The following table reconciles the income tax provision calculated at the United States federal corporate
rate to the amounts presented in the statements of operations:
(in millions)
Year ended December 31,
2024
2023
2022
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
853.9
$
410.5
$
851.1
United States federal corporate rate . . . . . . . . . . . . . . . . . . . . . . .
21 %
21 %
21 %
Income tax expense at federal corporate rate . . . . . . . . . . . .
(179.3)
(86.2)
(178.7)
State income taxes, net of federal benefit . . . . . . . . . . . . . . . . . .
(24.4)
(27.3)
(23.3)
Rate changes related to foreign jurisdictions . . . . . . . . . . . . . . . .
(0.3)
1.5
1.3
Stock-based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(0.8)
0.1
3.5
Foreign taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21.7
38.7
12.8
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(21.4)
(22.1)
4.8
Changes to uncertain tax positions . . . . . . . . . . . . . . . . . . . . . . .
22.7
(0.9)
1.1
Foreign-derived intangible income . . . . . . . . . . . . . . . . . . . . . . .
13.9
17.1
12.1
Executive Compensation Limitation . . . . . . . . . . . . . . . . . . . . . .
(2.2)
(6.1)
—
Global Intangible Low-Taxed Income . . . . . . . . . . . . . . . . . . . . .
(8.0)
—
—
Clinical Services sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
34.6
—
—
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.1
(4.2)
1.8
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (142.4)
$
(89.4)
$ (164.6)
F-45
Deferred taxes
The following table presents the components of deferred tax assets and liabilities:
(in millions)
December 31,
2024
2023
Deferred tax assets:
Reserves and accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
54.7
$
50.8
Pension, postretirement and environmental liabilities . . . . . . . . . . . . . .
8.2
3.0
Net operating loss and deferred deductions . . . . . . . . . . . . . . . . . . . . . .
458.7
451.3
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.1
22.9
Deferred tax assets, gross . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
524.7
528.0
Less: valuation allowances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(214.1)
(206.1)
Deferred tax assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
310.6
321.9
Deferred tax liabilities:
Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(656.1)
(741.3)
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(57.8)
(40.9)
Investment in partnerships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(58.5)
(51.2)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
—
(1.2)
Deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(772.4)
(834.6)
Net deferred tax liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
(461.8)
$
(512.7)
Classification on balance sheets:
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
95.5
$
100.1
Deferred income tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(557.3)
(612.8)
The increase (decrease) to the valuation allowance was $8.0 million in 2024, $26.4 million in 2023 and
$(7.9) million in 2022.
At December 31, 2024, $149.2 million of the valuation allowances presented above relate to foreign net
operating loss carryforwards that are not expected to be realized. We evaluate the realization of deferred
tax assets by considering such factors as the reversal of existing taxable temporary differences, expected
profitability by tax jurisdiction and available carryforward periods. The extent and timing of any such
reversals will influence the extent of tax benefits recognized in a particular year. Should applicable losses,
credits and deductions ultimately be realized, the resulting reduction in the valuation allowance would
generally be recognized as an income tax benefit.
Uncertain tax positions
We file federal income tax returns in the United States and other tax returns in various states and
international jurisdictions. In the normal course of business, we are subject to examination by taxing
authorities throughout the world. In these cases, we evaluate our tax position using the recognition
threshold and the measurement analysis in accordance with the accounting guidance. A tax position that
meets the more-likely-than-not recognition threshold is measured to determine the amount of benefit
recognized in our financial statements. Tax years are subject to examination in the United States since
2021 at the federal level, since 2016 for certain states and in certain international jurisdictions since 2014.
F-46
The following table reflects changes to the reserve for uncertain tax positions, excluding accrued interest
and penalties:
(in millions)
Year ended December 31,
2024
2023
2022
Beginning balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
106.9
$
51.8
$
55.3
Additions:
Tax positions related to the current year . . . . . . . . . . . . .
1.1
—
1.2
Tax positions related to prior years . . . . . . . . . . . . . . . .
1.6
65.2
—
Reductions:
Settlements with taxing authorities . . . . . . . . . . . . . . . . .
—
(6.3)
(0.1)
Lapse of statutes of limitations . . . . . . . . . . . . . . . . . . . .
(25.6)
(4.5)
(2.4)
Currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(0.7)
0.7
(2.2)
Ending balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
83.3
$
106.9
$
51.8
At December 31, 2024, December 31, 2023 and December 31, 2022, the total amount of unrecognized tax
benefits that, if recognized, would reduce income tax expense and the effective tax rate by $31.3 million,
$50.8 million and $51.8 million, respectively.
Accrued interest and penalties related to the reserve for uncertain tax positions were $7.2 million at
December 31, 2024, $8.2 million at December 31, 2023 and $6.7 million at December 31, 2022. We
believe that it is reasonably possible that the reserve for uncertain tax positions could decrease by up to
$2.6 million over the next twelve months.
The development of reserves for uncertain tax positions requires judgments about tax issues, potential
outcomes and the timing of settlement discussions with tax authorities. If we were to prevail on all
uncertain tax positions, we would recognize an income tax benefit.
Deferred tax treatment of retained goodwill
The Company completed the sale of its Clinical Services business on October 17, 2024. Under ASC
350-20-40-3, the Company determined the amount of goodwill that was deconsolidated in the sale by
allocating goodwill between the Clinical Services business and the Company. The goodwill that was
retained from the Clinical Services business by the Company has been treated as non-deductible goodwill,
which creates a permanent basis difference for tax purposes for which no deferred tax liability has been
provided.
Other matters
Undistributed earnings of foreign subsidiaries that are deemed to be permanently reinvested amount to
$2,655.4 million at December 31, 2024. In addition to the one-time transition tax imposed on all
accumulated foreign undistributed earnings through December 31, 2017, undistributed earnings of foreign
subsidiaries as of December 31, 2024 may still be subject to certain taxes upon repatriation, primarily
where foreign withholding taxes apply. We assert indefinite reinvestment related to investments in foreign
subsidiaries. It is not practicable to calculate the unrecognized deferred tax liability on undistributed
foreign earnings due to the complexity of the hypothetical calculation.
At December 31, 2024, we had federal net operating loss carryforwards of $9.6 million that have
indefinite expirations and state net operating loss carryforwards of $61.6 million that expire at various
F-47
times through 2040. In addition, we had foreign net operating loss carryforwards of $613.1 million, which
predominantly have indefinite expirations.
At December 31, 2024, we had a remaining transition tax payable imposed by the Tax Cuts and Jobs Act
of 2017 of $19.3 million, all of which is payable in 2025.
21.
Derivative and hedging activities
Hedging instruments:
We engage in hedging activities to reduce our exposure to foreign currency exchange rates and interest
rates. Our hedging activities are designed to manage specific risks according to our strategies, as
summarized below, which may change from time to time. Our hedging activities consist of the following:
•
Economic hedges — We are exposed to changes in foreign currency exchange rates on certain of
our euro-denominated term loans and notes that move inversely from our portfolio of euro-
denominated intercompany loans. The currency effects for these non-derivative instruments are
recorded through earnings in the period of change and substantially offset one another;
•
Other hedging activities — Certain of our subsidiaries hedge short-term foreign currency
denominated business transactions, external debt and intercompany financing transactions using
foreign currency forward contracts. These activities were not material to our consolidated
financial statements.
Cash flow hedges of interest rate risk
Our objectives in using interest rate derivatives are to add stability to interest expense and to manage its
exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest
rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow
hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making
fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.
For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the
derivative is recorded in AOCI and subsequently reclassified into interest expense in the same period(s)
during which the hedged transaction affects earnings. Amounts reported in AOCI related to derivatives
will be reclassified to interest expense as interest payments are made on the Company’s variable-rate
debt. During the next twelve months, the Company estimates that an immaterial amount will be
reclassified as a decrease to interest expense.
In April of 2023, the Company executed a $100.0 million interest rate swap to convert SOFR based
floating rate interest to fixed rate interest. The transaction is intended to mitigate our exposure to
fluctuations in interest rates and will terminate on October 27, 2025. In addition, in April of 2023, we
amended our $750.0 million interest rate swap from LIBOR based floating rate interest to SOFR based
floating rate interest. This amendment was done in accordance with ASC 848 and had no impact on the
financial statements. The Company is applying optional expedients and exceptions to certain contract
modifications and hedging relationships as permitted under ASUs 2020-04 and 2022-06.
During the quarter ended September 30, 2024, the hedging relationship between our $750.0 million
notional value interest rate swap and underlying hedged item became ineffective as the hedged forecast
transaction was deemed no longer probable of occurring. Due to the ineffectiveness, hedge accounting
was discontinued, which resulted in a $6.2 million reclassification of gain on the hedged transaction from
F-48
AOCI into earnings. After the hedging relationship was discontinued, we terminated the interest rate swap
and monetized $6.2 million of cash proceeds, which were received in October 2024.
As of December 31, 2024, the Company had the following outstanding interest rate derivatives that were
designated as cash flow hedges of interest rate risk:
(dollars in millions)
Interest rate derivative
Number of instruments
Notional
Interest rate swaps . . . . . . . . . . .
1
$
100.0
Effect of cash flow hedge accounting on AOCI
The table below presents the effect of cash flow hedge accounting on AOCI for the years ended
December 31, 2024 and 2023.
(in millions)
Hedging relationships
Amount of gain or (loss)
recognized in OCI on
Derivative
Location of gain or (loss)
reclassified from AOCI
into income
Amount of gain or (loss)
reclassified from AOCI
into income
Year ended
December 31,
Year ended
December 31,
2024
2023
2024
2023
Interest rate products
$
5.4
$
8.4
Interest expense, net
$
21.7
$
18.0
Total
$
5.4
$
8.4
$
21.7
$
18.0
Effect of cash flow hedge accounting on the income statement
The table below presents the effect of our derivative financial instruments on the statement of operations
for the years ended December 31, 2024 and 2023.
Year ended December 31,
2024
2023
(in millions)
Interest
expense, net
Interest
expense, net
Total amounts of line items presented in the statements of operations where
the effects of cash flow hedges are recorded
$
(218.8) $
(284.8)
Amount of gain reclassified from AOCI into income
$
21.7
$
18.0
Net investment hedges
We are exposed to fluctuations in foreign exchange rates on investments we hold in foreign entities,
specifically our net investment in Avantor Holdings B.V., a EUR-functional-currency consolidated
subsidiary, against the risk of changes in the EUR-USD exchange rate.
For derivatives designated as net investment hedges, the gain or loss on the derivative is reported in AOCI
as part of the cumulative translation adjustment. Amounts are reclassified out of AOCI into earnings in
the event the hedged net investment is either sold or substantially liquidated.
F-49
As of December 31, 2024, we had the following outstanding foreign currency derivatives that were used
to hedge its net investments in foreign operations:
(value in millions)
Foreign currency
derivative
Number of instruments
Notional sold
Notional purchased
Cross-currency swaps
1
€
732.1
$
750.0
Effect of net investment hedges on AOCI and the income statement
The table below presents the effect of our net investment hedges on AOCI and the statement of operations
for the years ended December 31, 2024 and 2023.
(in millions)
Hedging relationships
Amount of gain or (loss)
recognized in OCI on
Derivative
Location of gain or
(loss) recognized in
income on Derivative
(amount excluded
from effectiveness
testing)
Amount of gain or (loss)
recognized in income on
Derivative (amount
excluded from
effectiveness testing)
Year ended December 31,
Year ended December 31,
2024
2023
2024
2023
Cross currency swaps
$
60.9
$
(21.1)
Interest expense, net
$
12.7
$
12.7
Total
$
60.9
$
(21.1)
$
12.7
$
12.7
The Company did not reclassify any other deferred gains or losses related to cash flow hedge from
accumulated other comprehensive income (loss) to earnings for the years ended December 31, 2024 and
2023 other than those mentioned above.
F-50
The table below presents the fair value of our derivative financial instruments as well as their
classification on the Balance Sheet as of December 31, 2024 and 2023:
Derivative assets
Derivative liabilities
December 31,
December 31,
2024
2023
2024
2023
(in millions)
Balance
sheet
location
Fair
value
Balance
sheet
location
Fair
value
Balance
sheet
location
Fair
value
Balance
sheet
location
Fair value
Derivatives
designated as
hedging
instruments:
Interest rate
products
Other
current
assets
$
0.3
Other
current
assets
$
16.6
Other
current
liabilities
$
—
Other
current
liabilities
$
—
Foreign
exchange
products
Other
current
assets
—
Other
current
assets
—
Other
current
liabilities
(7.0)
Other
current
liabilities
(55.2)
Total
$
0.3
$
16.6
$
(7.0)
$
(55.2)
Termination of cross-currency swap
In July 2022, we terminated our existing $750.0 million cross-currency swap, maturing on April 30, 2025
and monetized $42.5 million of cash proceeds. We simultaneously entered into new on-market
$750.0 million fixed-to-fixed cross-currency swap to hedge our exposure to changes in foreign exchange
rates of its foreign investments. The purpose of this swap is to replace the swap that we terminated in July
2022. The new swap matures on April 30, 2025. Cross-currency swaps involve the receipt of functional-
currency fixed-rate amounts from a counterparty in exchange for making foreign-currency fixed-rate
payments over the life of the agreement.
Non-derivative financial instruments which are designated as hedging instruments:
We designated all of our outstanding €400.0 million 3.875% senior unsecured notes, issued on July 17,
2020, and maturing on July 15, 2028, as a hedge of our net investment in certain of our European
operations. For instruments that are designated and qualify as net investment hedges, the foreign currency
transactional gains or losses are reported as a component of AOCI.
In October 2024, the Company de-designated these outstanding €400.0 million 3.875% senior unsecured
notes as a hedge of our net investment in certain of our European operations. The de-designation had no
impact on earnings as the accumulated gain on the net investment hedge is only reclassified into earnings
upon a liquidation event or deconsolidation of a hedged foreign subsidiary.
The accumulated gain related to the foreign currency denominated debt designated as net investment
hedges classified in the foreign currency translation adjustment component of AOCI was $6.0 million and
$9.3 million as of December 31, 2024 and December 31, 2023, respectively.
The amount of loss (gain) related to the foreign currency denominated debt designated as net investment
hedges classified in the foreign currency translation adjustment component of other comprehensive
F-51
income is presented below:
(in millions)
Year ended December 31,
2024
2023
2022
Net investment hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
3.3
$
15.0
$
(27.8)
22.
Financial instruments and fair value measurements
Our financial instruments include cash and cash equivalents, accounts receivable, accounts payable and
debt.
Certain financial and non-financial assets and liabilities are measured at fair value on a nonrecurring basis
and are subject to fair value adjustments in certain circumstances, such as when there is evidence of
impairment. As discussed in note 10 and 11, during the second quarter of 2023, property, plant and
equipment, customer relationships and developed technology related to Ritter were deemed to be
impaired and their carrying values were reduced to estimated fair values of $25.9 million, $31.4 million
and $19.3 million, respectively. This was the result of an impairment charge of $160.8 million. The
Company estimated the fair value of Ritter using Level 3 inputs, which included a discounted cash flow
analysis.
Assets and liabilities for which fair value is only disclosed
The carrying amount of cash and cash equivalents was the same as its fair value and is a Level 1
measurement. The carrying amounts for trade accounts receivable and accounts payable approximated
fair value due to their short-term nature and are Level 2 measurements.
The following table presents the gross amounts, which exclude unamortized deferred financing costs, and
the fair values of debt instruments:
(in millions)
December 31, 2024
December 31, 2023
Gross
amount
Fair value
Gross
amount
Fair value
Receivables facility . . . . . . . . . . . . . . . . . . . . . . . . $
125.0
$
125.0
$
221.0
$
221.0
Senior secured credit facilities:
Euro term loans B-4 . . . . . . . . . . . . . . . . . . . .
81.6
82.1
630.1
630.9
Euro term loans B-5 . . . . . . . . . . . . . . . . . . . .
324.5
326.1
350.4
351.1
U.S. dollar term loans B-5 . . . . . . . . . . . . . . .
—
—
787.6
791.0
U.S. dollar term loans B-6 . . . . . . . . . . . . . . .
86.6
87.2
—
—
2.625% secured notes . . . . . . . . . . . . . . . . . . . . . .
672.6
668.4
718.7
705.3
3.875% unsecured notes . . . . . . . . . . . . . . . . . . . .
800.0
729.9
800.0
727.3
3.875% unsecured notes . . . . . . . . . . . . . . . . . . . .
413.9
413.6
442.3
434.3
4.625 % unsecured notes . . . . . . . . . . . . . . . . . . .
1,550.0
1,480.6
1,550.0
1,489.1
Finance lease liabilities . . . . . . . . . . . . . . . . . . . . .
15.0
15.0
68.3
68.3
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8.6
8.6
11.6
11.6
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,077.8
$ 3,936.5
$ 5,580.0
$ 5,429.9
The fair values of debt instruments are based on standard pricing models that take into account the present
value of future cash flows, and in some cases private trading data, which are Level 2 measurements.
F-52
23.
Leases
The following table presents lease assets and liabilities and their balance sheet classification:
(in millions)
Classification
December 31,
2024
2023
Operating leases:
Lease assets . . . . . . . . . . . . . . . . . Other assets . . . . . . . . . . . . . . . . . . . .
$
156.5
$
120.7
Current portion of liabilities . . . . Other current liabilities . . . . . . . . . . .
29.8
36.2
Liabilities, net of current portion
Other liabilities . . . . . . . . . . . . . . . . .
143.2
88.5
Finance leases:
Lease assets . . . . . . . . . . . . . . . . . Property, plant and equipment, net . .
15.2
52.3
Current portion of liabilities . . . . Current portion of debt . . . . . . . . . . .
4.0
5.5
Liabilities, net of current portion
Debt, net of current portion . . . . . . . .
11.0
62.8
The following tables present information about lease expense:
(in millions)
Year ended December 31,
2024
2023
2022
(1,2)
(1,2)
(1,2)
Operating lease expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
58.2
$
52.5
$
48.5
Finance lease expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10.6
11.6
10.7
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
68.8
$
64.1
$
59.2
(1)
Operating lease expense for 2024 and 2023 includes $14.6 million and $7.8 million, respectively, classified as
cost of sales and $43.6 million and $44.7 million classified as SG&A expenses, respectively.
(2)
Finance lease expense consists primarily of amortization of finance lease assets that is classified as SG&A
expenses.
December 31,
(dollars in millions)
2024
2023
2022
Weighted average remaining lease term at end of the
year:
Operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.3 years
6.6 years
Finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.4 years
11.7 years
Weighted average discount rate at end of the year:
Operating leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.2 %
4.4 %
Finance leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.8 %
7.9 %
Statement of cash flows:
Operating lease right-of-use assets obtained in exchange
for operating lease liabilities
$
100.1
$
39.3
$
52.6
Finance lease right-of-use assets obtained in exchange for
Finance lease liabilities
4.4
4.2
2.4
F-53
The following table presents future payments due under leases reconciled to lease liabilities:
(in millions)
December 31, 2024
Operating
leases
Finance
leases
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
37.8
$
4.4
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
35.2
3.7
2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
28.4
2.9
2028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
22.2
2.5
2029 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
16.3
2.3
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
96.2
0.3
Total undiscounted lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . .
236.1
16.1
Difference between undiscounted and discounted lease payments . . . . . . .
(63.1)
(1.1)
Lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
173.0
$
15.0
24.
Condensed unconsolidated financial information of Avantor, Inc.
Pursuant to SEC regulations, the following presents condensed unconsolidated financial information of
the registrant, Avantor, Inc.
The following condensed unconsolidated financial statements should be read in conjunction with our
consolidated financial statements and notes thereto because certain applicable disclosures are provided
there. In these condensed unconsolidated financial statements, all of our subsidiaries are wholly-owned
for the periods presented and presented as investments of Avantor, Inc. under the equity method. Under
that method, the equity interest in subsidiaries’ assets and liabilities is stated as a net non current asset at
historical cost on the balance sheet.
No statements of operations are included because Avantor, Inc. only had equity in the earnings or loss of
its subsidiaries for the periods presented in amounts equal to our consolidated net income or loss.
F-54
Avantor, Inc.
Condensed unconsolidated balance sheets
(in millions)
December 31,
2024
2023
Assets
Investment in unconsolidated subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . $
5,956.7
$
5,252.6
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
5,956.7
$
5,252.6
Stockholders’ equity
Common stock including paid-in capital, 680.8 and 676.6 shares
outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3,937.7
3,830.1
Accumulated earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2,203.0
1,491.5
Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(184.0)
(69.0)
Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
5,956.7
$
5,252.6
Avantor, Inc.
Condensed unconsolidated statements of cash flows
(in millions)
Year ended
December 31,
2024
Year ended
December 31,
2023
Year ended
December 31,
2022
Cash flows from investing activities:
Contribution (to) from unconsolidated
subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . $
(60.6)
$
(4.6)
$
28.3
Net cash (used in) provided by investing
activities
(60.6)
(4.6)
28.3
Cash flows from financing activities:
Payments of dividends on preferred stock . . . .
—
—
(32.4)
Proceeds received from exercise of stock
options, net of shares repurchased to
satisfy employee tax obligations for vested
stock-based awards . . . . . . . . . . . . . . . . . . .
60.6
4.6
4.1
Net cash provided by (used in) financing
activities . . . . . . . . . . . . . . . . . . . . . . . .
60.6
4.6
(28.3)
Net change in cash and cash equivalents . . . . . . . .
—
—
—
Cash, cash equivalents and restricted cash,
beginning of year . . . . . . . . . . . . . . . . . . . . . . .
—
—
—
Cash, cash equivalents and restricted cash, end of
year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
—
$
—
$
—
F-55
25.
Valuation and qualifying accounts
The following table presents changes to our valuation and qualifying accounts:
(in millions)
Allowance for
expected credit
losses
Valuation
allowances on
deferred tax
assets
Balance on December 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
26.4
$
187.6
Charged to costs and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.9
2.7
Deductions(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3.7)
—
Currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1.4)
(10.6)
Balance on December 31, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
28.2
179.7
Charged to costs and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15.3
20.2
Deductions(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(9.2)
—
Currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
0.7
6.2
Balance on December 31, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
35.0
206.1
Charged to costs and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.3
21.8
Deductions(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(9.0)
—
Currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(1.1)
(13.8)
Balance on December 31, 2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
30.2
$
214.1
(1)
For the allowance for expected credit losses, deductions represent bad debts charged off, net of recoveries.
F-56
2025 Annual Meeting
May 8, 2025, 11:00 a.m. Eastern Time
Avantor will be hosting a virtual Annual Stockholder
Meeting this year. Stockholders entitled to vote at the
meeting will be able to participate by accessing:
www.virtualshareholdermeeting.com/AVTR2025
Additional Information
Financial documents, such as our Annual Report on Form
10-K, quarterly reports on Form 10-Q and other reports
and filings, such as the Company’s Code of Ethics and
Conduct, may be obtained from the Company website at
ir.avantorsciences.com or by calling the Company’s Investor
Relations Department at (610) 386-1524.
Stockholder Services
Our transfer agent, Equiniti Trust Company, LLC ("EQ"), can
assist you with a variety of stockholder services, including
change of address, ownership transfer and account
consolidation, and can be reached at:
Tel.: (800) 937-5449; outside the U.S. and Canada
at (718) 921-8124
Internet: www.equiniti.com
Mail: PO Box 500
Newark, NJ 07101
Email: HelpAST@equiniti.com
Investor Relations
Stockholders, security analysts, portfolio managers and
other investors desiring further information about the
Company may direct questions or requests to:
Avantor, Inc.
Building One, Ste. 200
100 Matsonford Road
Radnor, PA 19087
Tel.: (610) 386-1524
Email: AvantorIR@avantorsciences.com
Independent Auditors
Deloitte & Touche LLP, Philadelphia, Pennsylvania
Stock Listing
Common stock
New York Stock Exchange I Ticker Symbol: AVTR
COMPANY AND INVESTOR INFORMATION
Jonathan Peacock
Chairman of the Board
Avantor, Inc.
Chairman
UCB SA
Michael Stubblefield
President and Chief Executive Officer
Avantor, Inc.
Juan Andres
Former President, Strategic Partnerships and
Enterprise Expansion
Moderna, Inc.
John Carethers, M.D.
Vice Chancellor Health Science
University of California San Diego
Lan Kang
President and Chief Executive Officer
Azkarra Therapeutics
Dame Louise Makin
Chair
Halma plc
Joseph Massaro
Vice Chair, Engineered Components Group
Aptiv PLC
Mala Murthy
Chief Financial Officer
Teladoc Health, Inc.
Michael Severino, M.D.
Chief Executive Officer
Tessera Therapeutics
Greg Summe
Managing Partner
Glen Capital Partners
BOARD OF DIRECTORS
Annual Report
2024
avantorsciences.com
CORPORATE
HEADQUARTERS
One Radnor Corporate Center
Building One, Suite 200
100 Matsonford Road
Radnor, PA 19087
(610) 386-1700