Company Expects Earnings Improvement CLEVELAND, June 19 /PRNewswire-FirstCall/ -- PolyOne Corporation (NYSE: POL) today updated its outlook for the second quarter ending June 30, 2008. The Company expects second-quarter consolidated sales to increase 7% to 9% compared with the second quarter of 2007, despite challenging demand trends in the North American housing and automotive markets. This projection is slightly higher than the Company's original estimate of 6% to 8% sales growth. Second-quarter 2008 earnings before special items are expected to show modest improvement over the same period a year ago earnings before special items and to increase sequentially from first-quarter 2008 earnings before special items. Aggregate sales for PolyOne's Specialty platform, including sales from GLS Corporation, are projected to grow nearly 25% in the quarter compared with the second quarter of 2007. GLS was acquired in January 2008 and represents approximately 60% of the Specialty growth for the second quarter, similar to the first quarter of 2008. PolyOne's Specialty platform consists of International Color and Engineered Materials, Specialty Engineered Materials, North American Color and Additives and Specialty Inks and Polymer Systems. Operating income in the aggregate for these businesses is projected to grow significantly from the same period a year ago, reflecting both margin expansion and an increased sales base. International Color and Engineered Materials sales in the second quarter are expected to demonstrate double-digit growth compared with the same period a year ago, primarily due to favorable foreign currency translation. While International demand is generally intact, sales in the latter part of the quarter could be adversely affected by delivery disruptions due to freight carrier strikes in Europe. In Asia, pockets of demand softening continue to be evident for customers who primarily export to North America. International segment operating income, driven by stronger operating margins, is expected to increase significantly compared with the second quarter of 2007. For PolyOne Distribution, the Company anticipates meaningful increases in both sales and operating income during the second quarter of 2008 compared with the second quarter of 2007, with earnings impacted favorably by targeted growth efforts in key end markets. Second-quarter 2008 sales for the Performance Products and Solutions platform are expected to decline 6% to 8% compared with the second quarter of 2007. The Performance Products and Solutions platform consists of Geon Performance Polymers, Producer Services and Resin and Intermediates. Operating income for Performance Products and Solutions is anticipated to be slightly above first-quarter 2008 performance, although significantly below the second-quarter 2007 level. This decrease is due primarily to lower demand in the North American housing, construction and automotive markets compared with the same period a year ago, and margin pressure caused by higher raw material and energy costs not fully offset by increased pricing. SunBelt earnings are projected to increase sequentially compared with the first quarter of 2008, but decline compared with the second quarter of 2007. Strong chlor-alkali margins, driven by increasing caustic prices, are expected to be more than offset by weak end-market demand for chlorine derivatives compared with the same period last year. Additional considerations: -- The Company expects second-quarter Corporate and eliminations to be between $11 million and $13 million, down from the prior-year quarter primarily due to adjustments in 2007 to associated operating reserves. -- The Company anticipates net financing expenses to be approximately $11 million in the second quarter of 2008. Second-quarter 2007 net financing expenses were $14.7 million, before consideration of a $1.1 million special item. The lower expense is due to the redemption in 2007 of $241.4 million of senior notes due 2010, partially offset by debt incurred in connection with the acquisition of GLS. -- The Company anticipates an effective tax rate between 33% and 35%. Second-quarter 2008 Earnings Release and Conference Call PolyOne intends to release its second-quarter earnings on Wednesday, August 6, 2008, and host a conference call at 9:00 a.m. Eastern time on Thursday, August 7, 2008. The conference dial-in number is 866-543-6403 (domestic) or 617-213-8896 (international), passcode 35865076, conference topic: Second-quarter 2008 PolyOne Earnings Conference Call. The replay number is 888-286-8010 (domestic) or 617-801-6888 (international). The passcode for the replay is 12202246. The call will be broadcast live and then be available via replay until Thursday, August 14, 2008, on the Company's web site at http://www.polyone.com/ . About PolyOne PolyOne Corporation, with annual revenues of more than $2.7 billion, is a leading global provider of specialized polymer materials, services and solutions. Headquartered outside of Cleveland, Ohio USA, PolyOne has operations around the world. For additional information on PolyOne, visit our new website at http://www.polyone.com/ . Forward-looking Statements In this press release, statements that are not reported financial results or other historical information are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward- looking statements give current expectations or forecasts of future events and are not guarantees of future performance. They are based on management's expectations that involve a number of business risks and uncertainties, any of which could cause actual results to differ materially from those expressed in or implied by the forward-looking statements. You can identify these statements by the fact that they do not relate strictly to historic or current facts. They use words such as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," and other words and terms of similar meaning in connection with any discussion of future operating or financial performance and/or sales. In particular, these include statements relating to future actions; prospective changes in raw material costs, product pricing or product demand; future performance; results of current and anticipated market conditions and market strategies; sales efforts; expenses; the outcome of contingencies such as legal proceedings; and financial results, including those of GLS. Factors that could cause actual results to differ materially include, but are not limited to: -- the effect on foreign operations of currency fluctuations, tariffs, nationalization, exchange controls, limitations on foreign investment in local businesses and other political, economic and regulatory risks; -- changes in polymer consumption growth rates within the U.S., Europe or Asia or other countries where PolyOne conducts business; -- changes in global industry capacity or in the rate at which anticipated changes in industry capacity come online in the polyvinyl chloride (PVC), chlor-alkali, vinyl chloride monomer (VCM) or other industries in which PolyOne participates; -- fluctuations in raw material prices, quality and supply and in energy prices and supply, in particular fluctuations outside the normal range of industry cycles; -- production outages or material costs associated with scheduled or unscheduled maintenance programs; -- the cost of compliance with environmental laws and regulations, including any increased cost of complying with new or revised laws and regulations; -- unanticipated developments that could occur with respect to contingencies such as litigation and environmental matters, including any developments that would require any increase in our costs and/or reserves for such contingencies; -- an inability to achieve or delays in achieving or achievement of less than the anticipated financial benefit from initiatives related to cost reductions and employee productivity goals; -- an inability to raise or sustain prices for products or services; -- an inability to maintain appropriate relations with unions and employees in certain locations in order to avoid business disruptions; -- any change in any agreements with product suppliers to PolyOne Distribution that prohibits PolyOne from continuing to distribute a supplier's products to customers; -- the ability to successfully integrate GLS; -- the ability to successfully integrate Ngai Hing PlastChem, and -- other factors affecting our business beyond our control, including, without limitation, changes in the general economy, changes in interest rates and changes in the rate of inflation. We cannot guarantee that any forward-looking statement will be realized, although we believe we have been prudent in our plans and assumptions. Achievement of future results is subject to risks, uncertainties and inaccurate assumptions. Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected. Investors should bear this in mind as they consider forward-looking statements. We undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however, to consult any further disclosures we make on related subjects in our reports on Form 10-Q, 8-K and 10-K that we provide to the Securities and Exchange Commission. You should understand that it is not possible to predict or identify all risk factors. Consequently, you should not consider any list to be a complete set of all potential risks or uncertainties. (Ref. #32108) DATASOURCE: PolyOne Corporation CONTACT: Investors, Robert M. Patterson, Senior Vice President & Chief Financial Officer, PolyOne Corporation, +1-440-930-3302 Web site: http://www.polyone.com/

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