PolyOne Streamlines Organization and Presentation of Financial Results
July 01 2008 - 7:40PM
PR Newswire (US)
CLEVELAND, July 1 /PRNewswire-FirstCall/ -- PolyOne Corporation
(NYSE: POL), a premier provider of specialized polymer materials,
services and solutions, announced on June 30, 2008 the streamlining
of its management and segment organization as well as the
presentation of its financial results. Producer Services, which
offers compounding expertise and multiple manufacturing platforms
to resin producers and processors, will be combined with Geon
Performance Polymers to form the Performance Products and Solutions
operating segment. This segment will be led by Rob Rosenau, senior
vice president and general manager. In addition, North American
Color and Additives and Specialty Inks and Polymer Systems will be
combined into a new operating segment named Specialty Color,
Additives and Inks. The newly created segment will be led by John
Van Hulle, vice president and general manager. The Company also
announced that it has defined gross margin as a line item on the
face of its externally presented financial statements. "These
changes represent another step in our transformation process and
improve investor transparency," said Stephen D. Newlin, chairman,
president and chief executive officer. "By streamlining our
management structure we are able to more closely align our
reporting organization with our three platforms. We further believe
that investors will welcome the enhanced gross margin and operating
income disclosures that highlight our specialty focus." The Company
frequently discusses its businesses in terms of three strategic
platforms - Performance Products and Solutions, PolyOne
Distribution and Specialty. The Performance Products and Solutions
and PolyOne Distribution platforms will also be reportable
segments. The Specialty platform will consist of three reportable
segments - International Color and Engineered Materials, Specialty
Engineered Materials and Specialty Colors, Additives and Inks. The
Resin and Intermediates reportable segment, which consists almost
entirely of PolyOne's 50 percent equity interest in SunBelt
Chlor-Alkali Partnership (and the Company's former 24 percent
equity interest in Oxy Vinyls LP through its disposition date of
July 6, 2007), will no longer be discussed as part of the
Performance Products and Solutions platform. The chart below
illustrates this organization in the context of the Company's
operating segments and reporting units: PLATFORMS - Operating
Segments * Reporting Units PERFORMANCE PRODUCTS AND SOLUTIONS -
Performance Products and Solutions * Geon Compounds * Specialty
Resins * Specialty Coatings * Producer Services POLYONE
DISTRIBUTION - PolyOne Distribution SPECIALTY - International Color
and Engineered Materials - Specialty Engineered Materials * North
American Engineered Materials * GLS - Specialty Color, Additives
and Inks * North American Color and Additives * Specialty Inks and
Polymers Resin and Intermediates will continue to be a reportable
segment, but will not be discussed as part of the Performance
Products and Solutions platform. To facilitate investor analysis,
the Company has included attachments with this release that recast
historical information according to the new structure. About
PolyOne PolyOne Corporation, with annual revenues of more than $2.7
billion, is a premier 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)
Attachment 1 PolyOne Corporation and Subsidiaries Consolidated
Statements of Income (Unaudited) (In millions, except per share
data) 1Q08 4Q07 3Q07 2Q07 1Q07 2007Y Sales $713.7 $631.3 $664.8
$688.8 $657.8 $2,642.7 Cost of sales 628.3 566.9 634.8 606.3 573.7
2,381.7 Gross margin 85.4 64.4 30.0 82.5 84.1 261.0 Selling and
administrative 73.4 56.9 65.3 68.5 64.1 254.8 Income (loss) from
equity affiliates and minority interest 8.1 11.1 11.7 (1.6) 6.5
27.7 Operating income (loss) 20.1 18.6 (23.6) 12.4 26.5 33.9
Interest expense, net (8.4) (7.1) (10.3) (15.1) (14.4) (46.9)
Premium on early extinguishment of debt - - (7.5) (5.3) - (12.8)
Other expense, net (2.0) (2.1) (1.8) (1.8) (0.9) (6.6) Income
(loss) before income taxes 9.7 9.4 (43.2) (9.8) 11.2 (32.4) Income
tax benefit (expense) (3.2) (2.3) 45.5 4.4 (3.8) 43.8 Net income
(loss) $6.5 $7.1 $2.3 $(5.4) $7.4 $11.4 Basic and diluted earnings
per common share: $0.07 $0.08 $0.02 $(0.06) $0.08 $0.12 Weighted
average shares used to compute earnings per share: Basic 92.9 92.9
92.8 92.8 92.6 92.8 Diluted 93.3 93.2 93.3 92.8 93.0 93.1 Dividends
declared per share of common stock $ - $ - $- $ - $ - $ - 4Q06 3Q06
2Q06 1Q06 2006Y Sales $595.2 $666.2 $686.4 $674.6 $2,622.4 Cost of
sales 527.6 603.6 599.5 591.2 2,321.9 Gross margin 67.6 62.6 86.9
83.4 300.5 Selling and administrative 56.6 56.2 54.9 54.2 221.9
Income from equity affiliates and minority interest 11.6 30.0 31.6
38.8 112.0 Operating income 22.6 36.4 63.6 68.0 190.6 Interest
expense, net (15.9) (15.1) (16.0) (16.1) (63.1) Premium on early
extinguishment of debt (3.2) - (1.2) - (4.4) Other expense, net 0.1
(0.2) (1.5) (1.2) (2.8) Income before income taxes and discontinued
operations 3.6 21.1 44.9 50.7 120.3 Income tax benefit (expense)
10.9 (1.5) (2.4) (1.7) 5.3 Income from continuing operations 14.5
19.6 42.5 49.0 125.6 Loss from discontinued operations and loss on
sale, net of income taxes (0.6) - - (2.1) (2.7) Net income $13.9
$19.6 $42.5 $46.9 $122.9 Basic and diluted earnings per common
share: From continuing operations $0.16 $0.21 $0.46 $0.53 $1.36 Net
income $0.15 $0.21 $0.46 $0.51 $1.33 Weighted average shares used
to compute earnings per share: Basic 92.5 92.5 92.4 92.1 92.4
Diluted 93.0 93.0 93.0 92.5 92.8 Dividends declared per share of
common stock $ - $ - $ - $ - $ - Attachment 2 Segment Information
(Unaudited) (In millions) 1Q08 4Q07 3Q07 2Q07 1Q07 2007Y Sales:
International Color and Engineered Materials $ 165.2 $ 146.9 $
147.4 $ 150.3 $ 144.0 $588.6 Specialty Engineered Materials 64.5
28.7 31.8 31.4 32.4 124.3 Specialty Color, Additives and Inks 58.4
53.0 58.7 60.5 59.8 232.0 Specialty Platform 288.1 228.6 237.9
242.2 236.2 944.9 Performance Products and Solutions 259.3 246.1
274.5 293.0 273.2 1,086.8 PolyOne Distribution 201.1 184.0 185.8
190.1 184.4 744.3 Corporate and eliminations (34.8) (27.4) (33.4)
(36.5) (36.0) (133.3) Sales $ 713.7 $ 631.3 $664.8 $ 688.8 $ 657.8
$2,642.7 Gross margin: International Color and Engineered Materials
$28.8 $23.0 $23.9 $25.8 $23.2 $95.9 Specialty Engineered Materials
11.6 2.9 3.4 3.1 2.8 12.2 Specialty Color, Additives and Inks 11.2
9.5 11.2 11.3 9.3 41.3 Specialty Platform 51.6 35.4 38.5 40.2 35.3
149.4 Performance Products and Solutions 21.0 15.6 23.9 30.9 35.1
105.5 PolyOne Distribution 17.2 15.4 14.8 15.8 14.7 60.7 Resin and
Intermediates - - - (0.2) 0.8 0.6 Corporate and eliminations (4.9)
(2.0) (47.2) (4.2) (1.8) (55.2) Gross margin $84.9 $64.4 $30.0
$82.5 $84.1 $261.0 Operating income (loss): International Color and
Engineered Materials $7.8 $4.8 $6.5 $7.8 $6.0 $25.1 Specialty
Engineered Materials 2.9 (1.0) - (0.3) (0.9) (2.2) Specialty Color,
Additives and Inks 2.8 1.3 3.2 2.6 (0.1) 7.0 Specialty Platform
13.5 5.1 9.7 10.1 5.0 29.9 Performance Products and Solutions 8.3
4.3 12.6 18.6 22.0 57.5 PolyOne Distribution 5.5 5.7 5.3 6.5 4.6
22.1 Resin and Intermediates 5.9 8.4 11.2 10.9 4.3 34.8 Corporate
and eliminations (13.1) (4.9) (62.4) (33.7) (9.4) (110.4) Operating
income (loss) $20.1 $18.6 $(23.6) $12.4 $26.5 $33.9 Attachment 3
Segment Information Operations (Unaudited) (In millions) 4Q06 3Q06
2Q06 1Q06 2006Y Sales: International Color and Engineered Materials
$ 129.2 $130.6 $129.6 $ 121.3 $510.7 Specialty Engineered Materials
25.4 29.1 29.9 28.9 113.3 Specialty Color, Additives and Inks 55.7
64.2 67.4 65.8 253.1 Specialty Platform 210.3 223.9 226.9 216.0
877.1 Performance Products and Solutions 249.4 301.2 311.7 303.9
1,166.2 PolyOne Distribution 166.9 182.1 189.7 194.1 732.8
Corporate and eliminations (31.4) (41.0) (41.9) (39.4) (153.7)
Sales $ 595.2 $666.2 $ 686.4 $ 674.6 $2,622.4 Gross margin:
International Color and Engineered Materials $20.0 $21.0 $22.1
$20.8 $83.9 Specialty Engineered Materials 1.8 3.1 3.6 2.2 10.7
Specialty Color, Additives and Inks 6.4 7.7 8.4 9.4 31.9 Specialty
Platform 28.2 31.8 34.1 32.4 126.5 Performance Products and
Solutions 26.7 26.4 37.8 33.2 124.1 PolyOne Distribution 12.4 14.3
15.0 15.9 57.6 Resin and Intermediates 0.1 0.3 (0.4) - - Corporate
and eliminations 0.2 (10.2) 0.4 1.9 (7.7) Gross margin $67.6 $62.6
$86.9 $83.4 $300.5 Operating income (loss): International Color and
Engineered Materials $3.4 $5.2 $6.4 $5.6 $20.6 Specialty Engineered
Materials (1.8) (0.1) 0.4 (0.9) (2.4) Specialty Color, Additives
and Inks (3.0) (2.0) 0.1 0.8 (4.1) Specialty Platform (1.4) 3.1 6.9
5.5 14.1 Performance Products and Solutions 13.0 14.0 24.9 21.5
73.4 PolyOne Distribution 3.6 4.3 5.1 6.2 19.2 Resin and
Intermediates 9.7 27.9 29.0 36.3 102.9 Corporate and eliminations
(2.3) (12.9) (2.3) (1.5) (19.0) Operating income $22.6 $36.4 $63.6
$68.0 $190.6 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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