CLEVELAND, July 25, 2017 /PRNewswire/ -- PolyOne Corporation
(NYSE: POL) today reported its second quarter results for
2017. GAAP EPS loss of $2.20
due to the loss from the sale of Designed Structures and Solutions
(DSS), which is now presented as discontinued operations.
This compares to GAAP EPS of $0.59 in
the prior year second quarter. Excluding special items (see
Attachment 1), adjusted earnings per share expanded to $0.63 from $0.59.
"The last few weeks mark an important inflection point in our
specialty journey as we have completed the divestiture of DSS and
reinvested the proceeds to acquire Rutland and Mesa," said Robert M. Patterson, chairman, president and
chief executive officer, PolyOne Corporation. "These
portfolio actions enable us to focus on our core areas of expertise
and better serve our customers with an expanded offering of
specialty solutions."
"Our customers recognize and value the important role of color
and design in their products as the ultimate expression of consumer
preference," Mr. Patterson added. "Both Rutland and Mesa share
PolyOne's passion for innovative color solutions and make great
additions to our specialty portfolio."
"We're further pleased to have these businesses join forces with
us at a time when we have momentum and are demonstrating strong
organic growth," said Mr. Patterson. "Sales and adjusted EPS
both increased 7% over the prior year. 6% of the sales growth
is organic with broad-based gains resulting from the significant
investments we have made in commercial resources in each of our
segments."
Bradley C. Richardson, executive
vice president and chief financial officer, commented, "Over the
last three years we have invested heavily in additional commercial
resources, most notably increasing our sales force by almost 20%
over this time period. These resources, coupled with
innovative service offerings such as IQ Design and LSS Customer
First, have been the driving force behind our sales growth."
Mr. Richardson continued, "Two of our segments, Performance
Products and Solutions and Distribution delivered record levels of
second quarter operating income, largely driving results for the
quarter. Adjusted EPS on a consolidated basis was impacted by
raw material inflation, which compressed margins and partially
offset our sales gains, most notably in our Specialty Engineered
Materials segment. Although raw material index prices have
begun to moderate, our costs were substantially higher than the
prior year."
Commenting further on the company's performance and outlook, Mr.
Patterson said, "I'm pleased with our success in driving revenue
growth - and especially proud that all four of our segments
delivered organic top line expansion for the second consecutive
quarter. As we look ahead, I am confident our now streamlined
structure will accelerate innovation and improve service in our
core areas of expertise as we pursue our 2020 Platinum Vision."
Conference Call
As previously announced, the company will conduct a conference
call to discuss its financial results for the first quarter
9:00 a.m. Eastern Time on
Tuesday, July 25, 2017. To
participate in the conference call, dial 1-844-835-7433 (domestic)
or 1-914-495-8589 (international) and provide conference ID number
51684828. A simultaneous webcast of the call will be
accessible via the company's website at
www.polyone.com/investor.
A recording of the call will also be available for one week,
beginning at 12:00 p.m. Eastern Time
on July 25, 2017. To listen to
this recording, dial 1-855-859-2056 (domestic) or 1-404-537-3406
(international) and enter conference ID number 51684828.
About PolyOne
PolyOne Corporation is a premier provider of specialized polymer
materials, services and solutions. The company is dedicated to
serving customers in diverse industries around the globe, by
creating value through collaboration, innovation and an unwavering
commitment to excellence. Guided by its Core Values,
Sustainability Promise and No Surprises PledgeSM,
PolyOne is committed to its customers, employees, communities and
shareholders through ethical, sustainable and fiscally responsible
principles. For more information, visit www.polyone.com.
To access PolyOne's news library online, please visit
www.polyone.com/news.
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. They use words such as "will,"
"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
condition, performance and/or sales. Factors that could cause
actual results to differ materially from those implied by these
forward-looking statements include, but are not limited to: our
ability to realize anticipated savings and operational benefits
from the realignment of assets, including the closure of
manufacturing facilities; the timing of closings and shifts of
production to new facilities related to asset realignments and any
unforeseen loss of customers and/or disruptions of service or
quality caused by such closings and/or production shifts;
separation and severance amounts that differ from original
estimates; amounts for non-cash charges related to asset write-offs
and accelerated depreciation realignments of property, plant and
equipment that differ from original estimates; our ability to
identify and evaluate acquisition targets and consummate
acquisitions; the ability to successfully integrate acquired
businesses into our operations, including whether such businesses
will be accretive, retain the management teams of acquired
businesses, and retain relationships with customers of acquired
businesses; disruptions, uncertainty or volatility in the credit
markets that could adversely impact the availability of credit
already arranged and the availability and cost of credit in the
future; the financial condition of our customers, including the
ability of customers (especially those that may be highly leveraged
and those with inadequate liquidity) to maintain their credit
availability; the speed and extent of an economic recovery,
including the recovery of the housing market; our ability to
achieve new business gains; the effect on foreign operations of
currency fluctuations, tariffs and other political, economic and
regulatory risks; changes in polymer consumption growth rates and
laws and regulations regarding the disposal of plastic in
jurisdictions where we conduct business; changes in global industry
capacity or in the rate at which anticipated changes in industry
capacity come online; fluctuations in raw material prices, quality
and supply and in energy prices and supply; production outages or
material costs associated with scheduled or unscheduled maintenance
programs; unanticipated developments that could occur with respect
to contingencies such as litigation and environmental matters; an
inability to achieve or delays in achieving or achievement of less
than the anticipated financial benefit from initiatives related to
working capital reductions, 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; our ability to continue to pay
cash dividends; the amount and timing of repurchases of our common
shares, if any; 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. The above list of factors is not exhaustive.
We undertake no obligation to publicly update forward-looking
statements, whether as a result of new information, future events
or otherwise. You are advised 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.
Attachment
1
|
|
PolyOne
Corporation Summary of Condensed Consolidated Statements
of Income (Unaudited) (In millions, except per share
data)
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
Sales
|
$
|
814.1
|
|
|
$
|
758.2
|
|
|
$
|
1,610.8
|
|
|
$
|
1,497.1
|
|
Operating
income
|
80.0
|
|
|
81.8
|
|
|
164.0
|
|
|
152.2
|
|
Net income from
continuing operations attributable to PolyOne
shareholders
|
49.6
|
|
|
50.1
|
|
|
97.9
|
|
|
88.4
|
|
Basic earnings per
share from continuing operations attributable to
PolyOne shareholders
|
$
|
0.61
|
|
|
$
|
0.59
|
|
|
$
|
1.20
|
|
|
$
|
1.05
|
|
Diluted earnings per
share from continuing operations attributable to PolyOne
shareholders
|
$
|
0.60
|
|
|
$
|
0.59
|
|
|
$
|
1.19
|
|
|
$
|
1.04
|
|
Senior management uses comparisons of adjusted net income from
continuing operations attributable to PolyOne shareholders and
diluted adjusted earnings per share (EPS) from continuing
operations attributable to PolyOne shareholders, excluding special
items, to assess performance and facilitate comparability of
results. Senior management believes these measures are useful to
investors because they allow for comparison to PolyOne's
performance in prior periods without the effect of items that, by
their nature, tend to obscure PolyOne's operating results due to
the potential variability across periods based on timing, frequency
and magnitude. Non-GAAP financial measures have limitations as
analytical tools and should not be considered in isolation from, or
solely as alternatives to, financial measures prepared in
accordance with GAAP. Below is a reconciliation of these non-GAAP
financial measures to their most directly comparable financial
measures calculated and presented in accordance with GAAP. See
Attachment 3 for a definition and summary of special
items.
|
Three Months
Ended
June 30, 2017
|
|
Three Months
Ended
June 30, 2016
|
Reconciliation to
Condensed Consolidated Statements of Income
|
$
|
|
EPS
|
|
$
|
|
EPS
|
|
|
|
|
|
|
|
|
Net income from
continuing operations attributable to PolyOne
shareholders
|
$
|
49.6
|
|
|
$
|
0.60
|
|
|
$
|
50.1
|
|
|
$
|
0.59
|
|
Special items, after
tax (Attachment 3)
|
2.2
|
|
|
0.03
|
|
|
0.2
|
|
|
—
|
|
Adjusted net income /
EPS - excluding special items
|
$
|
51.8
|
|
|
$
|
0.63
|
|
|
$
|
50.3
|
|
|
$
|
0.59
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
June 30,
2017
|
|
Six Months
Ended
June 30,
2016
|
Reconciliation to
Condensed Consolidated Statements of Income
|
$
|
|
EPS
|
|
$
|
|
EPS
|
|
|
|
|
|
|
|
|
Net income from
continuing operations attributable to PolyOne
shareholders
|
$
|
97.9
|
|
|
$
|
1.19
|
|
|
$
|
88.4
|
|
|
$
|
1.04
|
|
Special items, after
tax (Attachment 3)
|
3.1
|
|
|
0.03
|
|
|
6.9
|
|
|
0.08
|
|
Adjusted net income /
EPS - excluding special items
|
$
|
101.0
|
|
|
$
|
1.22
|
|
|
$
|
95.3
|
|
|
$
|
1.12
|
|
Attachment
2
|
|
PolyOne
Corporation Condensed Consolidated Statements of Income
(Unaudited) (In millions, except per share data)
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
Sales
|
$
|
814.1
|
|
|
$
|
758.2
|
|
|
$
|
1,610.8
|
|
|
$
|
1,497.1
|
|
Cost of
sales
|
626.1
|
|
|
576.3
|
|
|
1,240.5
|
|
|
1,138.6
|
|
Gross
margin
|
188.0
|
|
|
181.9
|
|
|
370.3
|
|
|
358.5
|
|
Selling and
administrative expense
|
108.0
|
|
|
100.1
|
|
|
206.3
|
|
|
206.3
|
|
Operating
income
|
80.0
|
|
|
81.8
|
|
|
164.0
|
|
|
152.2
|
|
Interest expense,
net
|
(15.2)
|
|
|
(14.6)
|
|
|
(29.8)
|
|
|
(29.2)
|
|
Debt extinguishment
costs
|
—
|
|
|
(0.4)
|
|
|
(0.3)
|
|
|
(0.4)
|
|
Other (expense)
income, net
|
(1.4)
|
|
|
0.1
|
|
|
(2.5)
|
|
|
0.1
|
|
Income from
continuing operations before income taxes
|
63.4
|
|
|
66.9
|
|
|
131.4
|
|
|
122.7
|
|
Income tax
expense
|
(13.8)
|
|
|
(16.8)
|
|
|
(33.5)
|
|
|
(34.4)
|
|
Net income from
continuing operations
|
49.6
|
|
|
50.1
|
|
|
97.9
|
|
|
88.3
|
|
(Loss) income from
discontinued operations, net of income taxes
|
(231.0)
|
|
|
(0.1)
|
|
|
(232.4)
|
|
|
0.7
|
|
Net (loss)
income
|
$
|
(181.4)
|
|
|
$
|
50.0
|
|
|
$
|
(134.5)
|
|
|
$
|
89.0
|
|
Net loss attributable
to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
Net (loss) income
attributable to PolyOne common shareholders
|
$
|
(181.4)
|
|
|
$
|
50.0
|
|
|
$
|
(134.5)
|
|
|
$
|
89.1
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
common share attributable to PolyOne common shareholders -
Basic:
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
0.61
|
|
|
$
|
0.59
|
|
|
$
|
1.20
|
|
|
$
|
1.05
|
|
Discontinued
operations
|
(2.83)
|
|
|
—
|
|
|
(2.84)
|
|
|
0.01
|
|
Total
|
$
|
(2.22)
|
|
|
$
|
0.59
|
|
|
$
|
(1.64)
|
|
|
$
|
1.06
|
|
Earnings (loss) per
common share attributable to PolyOne common shareholders -
Diluted:
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
0.60
|
|
|
$
|
0.59
|
|
|
$
|
1.19
|
|
|
$
|
1.04
|
|
Discontinued
operations
|
(2.80)
|
|
|
—
|
|
|
(2.82)
|
|
|
0.01
|
|
Total
|
$
|
(2.20)
|
|
|
$
|
0.59
|
|
|
$
|
(1.63)
|
|
|
$
|
1.05
|
|
|
|
|
|
|
|
|
|
Cash dividends declared
per share of common stock
|
$
|
0.135
|
|
|
$
|
0.120
|
|
|
$
|
0.270
|
|
|
$
|
0.240
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares used to compute earnings per common share:
|
|
|
|
|
|
|
|
Basic
|
81.8
|
|
|
84.1
|
|
|
81.9
|
|
|
84.4
|
|
Diluted
|
82.5
|
|
|
84.7
|
|
|
82.6
|
|
|
84.9
|
|
Attachment
3
|
|
PolyOne
Corporation Summary of Special Items
(Unaudited) (In millions, except per share data)
|
|
Special items
(1)
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Cost of
sales:
|
|
|
|
|
|
|
|
Restructuring costs
|
$
|
2.7
|
|
|
$
|
(1.0)
|
|
|
$
|
2.7
|
|
|
$
|
(0.9)
|
|
Environmental remediation costs
|
(5.0)
|
|
|
(2.1)
|
|
|
(7.2)
|
|
|
(3.8)
|
|
Reimbursement of previously incurred environmental costs
|
3.8
|
|
|
5.3
|
|
|
3.8
|
|
|
5.3
|
|
Acquisition related costs
|
(1.3)
|
|
|
(2.0)
|
|
|
(1.5)
|
|
|
(4.5)
|
|
Impact on cost of
sales
|
0.2
|
|
|
0.2
|
|
|
(2.2)
|
|
|
(3.9)
|
|
|
|
|
|
|
|
|
|
Selling and
administrative expense:
|
|
|
|
|
|
|
|
Restructuring,
legal and other
|
(7.1)
|
|
|
(5.6)
|
|
|
(5.7)
|
|
|
(11.5)
|
|
Acquisition related costs
|
(0.3)
|
|
|
(0.6)
|
|
|
(1.0)
|
|
|
(0.9)
|
|
Impact on selling and
administrative expense
|
(7.4)
|
|
|
(6.2)
|
|
|
(6.7)
|
|
|
(12.4)
|
|
|
|
|
|
|
|
|
|
Impact on operating
income
|
(7.2)
|
|
|
(6.0)
|
|
|
(8.9)
|
|
|
(16.3)
|
|
|
|
|
|
|
|
|
|
Debt
extinguishment costs
|
—
|
|
|
(0.4)
|
|
|
(0.3)
|
|
|
(0.4)
|
|
Other
income, net
|
(0.4)
|
|
|
(0.1)
|
|
|
(0.3)
|
|
|
0.1
|
|
Impact on income from
continuing operations before income taxes
|
(7.6)
|
|
|
(6.5)
|
|
|
(9.5)
|
|
|
(16.6)
|
|
Income tax benefit on
above special items
|
2.6
|
|
|
2.6
|
|
|
3.5
|
|
|
6.4
|
|
Tax
adjustments(2)
|
2.8
|
|
|
3.7
|
|
|
2.9
|
|
|
3.3
|
|
Impact of special items
on net (loss) income from continuing operations attributable to
PolyOne Shareholders
|
$
|
(2.2)
|
|
|
$
|
(0.2)
|
|
|
$
|
(3.1)
|
|
|
$
|
(6.9)
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
common share impact
|
$
|
(0.03)
|
|
|
$
|
—
|
|
|
$
|
(0.03)
|
|
|
$
|
(0.08)
|
|
|
|
|
|
|
|
|
|
Weighted average shares
used to compute adjusted earnings per share:
|
|
|
|
|
|
|
|
|
Diluted
|
82.5
|
|
84.7
|
|
82.6
|
|
84.9
|
(1)
|
Special items include
charges related to specific strategic initiatives or financial
restructuring such as: consolidation of operations; debt
extinguishment costs; costs incurred directly in relation to
acquisitions or divestitures; employee separation costs resulting
from personnel reduction programs, plant realignment costs,
executive separation agreements; asset impairments; mark-to-market
adjustments associated with actuarial gains and losses on pension
and other post-retirement benefit plans; environmental remediation
costs, fines, penalties and related insurance recoveries related to
facilities no longer owned or closed in prior years; gains and
losses on the divestiture of operating businesses, joint ventures
and equity investments; gains and losses on facility or property
sales or disposals; results of litigation, fines or penalties,
where such litigation (or action relating to the fines or
penalties) arose prior to the commencement of the performance
period; one-time, non-recurring items; and the effect of changes in
accounting principles or other such laws or provisions affecting
reported results.
|
|
|
(2)
|
Tax adjustments
include the net tax expense/benefit from one-time income tax items,
the set-up or reversal of uncertain tax position reserves and
deferred income tax valuation allowance adjustments.
|
Attachment
4
|
|
PolyOne
Corporation Condensed Consolidated Balance
Sheets (In millions)
|
|
|
(Unaudited)
June 30,
2017
|
|
December 31,
2016
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
191.1
|
|
|
$
|
225.5
|
|
Accounts receivable,
net
|
435.7
|
|
|
325.6
|
|
Inventories,
net
|
296.0
|
|
|
266.4
|
|
Current assets
held-for-sale
|
142.6
|
|
|
86.5
|
|
Other current
assets
|
69.9
|
|
|
45.5
|
|
Total current
assets
|
1,135.3
|
|
|
949.5
|
|
Property,
net
|
435.6
|
|
|
426.3
|
|
Goodwill
|
598.5
|
|
|
532.7
|
|
Intangible assets,
net
|
403.4
|
|
|
342.7
|
|
Non-current assets
held for sale
|
—
|
|
|
347.4
|
|
Other non-current
assets
|
139.8
|
|
|
139.8
|
|
Total
assets
|
$
|
2,712.6
|
|
|
$
|
2,738.4
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Short-term and
current portion of long-term debt
|
$
|
17.6
|
|
|
$
|
18.5
|
|
Accounts
payable
|
376.8
|
|
|
320.9
|
|
Current liabilities
held-for-sale
|
39.5
|
|
|
45.3
|
|
Accrued expenses and
other current liabilities
|
112.3
|
|
|
125.2
|
|
Total current
liabilities
|
546.2
|
|
|
509.9
|
|
Non-current
liabilities:
|
|
|
|
Long-term
debt
|
1,382.5
|
|
|
1,239.4
|
|
Pension and other
post-retirement benefits
|
63.6
|
|
|
63.1
|
|
Non-current
liabilities held for sale
|
—
|
|
|
52.8
|
|
Other non-current
liabilities
|
162.2
|
|
|
147.7
|
|
Total non-current
liabilities
|
1,608.3
|
|
|
1,503.0
|
|
Shareholders'
equity:
|
|
|
|
PolyOne shareholders'
equity
|
557.3
|
|
|
724.7
|
|
Noncontrolling
interests
|
0.8
|
|
|
0.8
|
|
Total
equity
|
558.1
|
|
|
725.5
|
|
Total liabilities
and shareholders' equity
|
$
|
2,712.6
|
|
|
$
|
2,738.4
|
|
Attachment
5
|
|
PolyOne
Corporation Condensed Consolidated Statements of Cash
Flows (Unaudited) (In millions)
|
|
|
Six Months Ended
June 30,
|
|
2017
|
|
2016
|
Operating
Activities
|
|
|
|
Net income
|
$
|
(134.5)
|
|
|
$
|
89.0
|
|
Adjustments to
reconcile net income to net cash used by operating
activities:
|
|
|
|
Loss from
classification to held for sale, net of tax
|
229.3
|
|
|
—
|
|
Depreciation and
amortization
|
52.6
|
|
|
49.2
|
|
Accelerated
depreciation and fixed asset charges associated with restructuring
activities
|
0.9
|
|
|
4.1
|
|
Gain from the sale of
closed facilities
|
(3.1)
|
|
|
—
|
|
Debt extinguishment
costs
|
0.3
|
|
|
0.4
|
|
Share-based
compensation expense
|
5.7
|
|
|
4.3
|
|
Change in assets and
liabilities, net of the effect of acquisitions:
|
|
|
|
Increase in accounts
receivable
|
(98.5)
|
|
|
(84.3)
|
|
Increase in
inventories
|
(17.8)
|
|
|
(4.3)
|
|
Increase in accounts
payable
|
39.5
|
|
|
21.6
|
|
Decrease in pension
and other post-retirement benefits
|
(6.7)
|
|
|
(27.1)
|
|
(Decrease) increase
in accrued expenses and other assets and liabilities -
net
|
(24.0)
|
|
|
1.7
|
|
Net cash provided by
operating activities
|
43.7
|
|
|
54.6
|
|
Investing
Activities
|
|
|
|
Capital
expenditures
|
(34.1)
|
|
|
(39.6)
|
|
Business
acquisitions
|
(137.9)
|
|
|
(72.8)
|
|
Sale of
assets
|
9.8
|
|
|
9.0
|
|
Net cash used by
investing activities
|
(162.2)
|
|
|
(103.4)
|
|
Financing
Activities
|
|
|
|
Borrowings under
credit facilities
|
699.6
|
|
|
471.2
|
|
Repayments under
credit facilities
|
(555.0)
|
|
|
(471.4)
|
|
Purchase of common
shares for treasury
|
(34.3)
|
|
|
(39.6)
|
|
Cash dividends
paid
|
(22.2)
|
|
|
(20.7)
|
|
Repayment of
long-term debt
|
(3.3)
|
|
|
(2.8)
|
|
Payments of
withholding tax on share awards
|
(2.7)
|
|
|
(4.4)
|
|
Debt financing
costs
|
(1.9)
|
|
|
(0.6)
|
|
Net cash provided
(used) by financing activities
|
80.2
|
|
|
(68.3)
|
|
Effect of exchange
rate changes on cash
|
2.7
|
|
|
(1.3)
|
|
Decrease in cash and
cash equivalents
|
(35.6)
|
|
|
(118.4)
|
|
Cash and cash
equivalents at beginning of period
|
226.7
|
|
|
279.8
|
|
Cash and cash
equivalents at end of period
|
$
|
191.1
|
|
|
$
|
161.4
|
|
Attachment
6
|
|
PolyOne
Corporation Business Segment and Platform Operations
(Unaudited) (In millions)
|
|
Operating income at
the segment level does not include: special items as defined in
Attachment 3; corporate general and administration costs
that are not allocated to segments; intersegment sales and profit
eliminations; share-based compensation costs; and certain other
items that are not included in the measure of segment profit and
loss that is reported to and reviewed by the chief operating
decision maker. These costs are included in Corporate and
eliminations.
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Sales:
|
|
|
|
|
|
|
|
Color,
Additives and Inks
|
$
|
223.7
|
|
|
$
|
212.2
|
|
|
$
|
435.5
|
|
|
$
|
417.1
|
|
Specialty Engineered Materials
|
158.7
|
|
|
143.3
|
|
|
317.8
|
|
|
284.3
|
|
Performance Products and Solutions
|
184.2
|
|
|
172.8
|
|
|
367.9
|
|
|
339.0
|
|
PolyOne
Distribution
|
290.8
|
|
|
272.6
|
|
|
576.9
|
|
|
541.4
|
|
Corporate and eliminations
|
(43.3)
|
|
|
(42.7)
|
|
|
(87.3)
|
|
|
(84.7)
|
|
Sales
|
$
|
814.1
|
|
|
$
|
758.2
|
|
|
$
|
1,610.8
|
|
|
$
|
1,497.1
|
|
|
|
|
|
|
|
|
|
Gross
margin:
|
|
|
|
|
|
|
|
Color,
Additives and Inks
|
$
|
80.1
|
|
|
$
|
78.0
|
|
|
$
|
155.3
|
|
|
$
|
153.3
|
|
Specialty Engineered Materials
|
42.2
|
|
|
43.0
|
|
|
88.3
|
|
|
87.2
|
|
Performance Products and Solutions
|
33.7
|
|
|
33.0
|
|
|
67.6
|
|
|
65.4
|
|
PolyOne
Distribution
|
33.5
|
|
|
29.5
|
|
|
64.9
|
|
|
60.2
|
|
Corporate and eliminations
|
(1.5)
|
|
|
(1.6)
|
|
|
(5.8)
|
|
|
(7.6)
|
|
Gross
margin
|
$
|
188.0
|
|
|
$
|
181.9
|
|
|
$
|
370.3
|
|
|
$
|
358.5
|
|
|
|
|
|
|
|
|
|
Selling and
administrative expense:
|
|
|
|
|
|
|
|
Color,
Additives and Inks
|
$
|
41.5
|
|
|
$
|
39.8
|
|
|
$
|
81.6
|
|
|
$
|
80.2
|
|
Specialty Engineered Materials
|
21.9
|
|
|
21.6
|
|
|
44.4
|
|
|
42.4
|
|
Performance Products and Solutions
|
11.4
|
|
|
11.7
|
|
|
23.2
|
|
|
24.4
|
|
PolyOne
Distribution
|
13.2
|
|
|
11.7
|
|
|
26.0
|
|
|
24.9
|
|
Corporate and eliminations
|
20.0
|
|
|
15.3
|
|
|
31.1
|
|
|
34.4
|
|
Selling and
administrative expense
|
$
|
108.0
|
|
|
$
|
100.1
|
|
|
$
|
206.3
|
|
|
$
|
206.3
|
|
|
|
|
|
|
|
|
|
Operating
income:
|
|
|
|
|
|
|
|
Color,
Additives and Inks
|
$
|
38.6
|
|
|
$
|
38.2
|
|
|
$
|
73.7
|
|
|
$
|
73.1
|
|
Specialty Engineered Materials
|
20.3
|
|
|
21.4
|
|
|
43.9
|
|
|
44.8
|
|
Performance Products and Solutions
|
22.3
|
|
|
21.3
|
|
|
44.4
|
|
|
41.0
|
|
PolyOne
Distribution
|
20.3
|
|
|
17.8
|
|
|
38.9
|
|
|
35.3
|
|
Corporate and eliminations
|
(21.5)
|
|
|
(16.9)
|
|
|
(36.9)
|
|
|
(42.0)
|
|
Operating
income
|
$
|
80.0
|
|
|
$
|
81.8
|
|
|
$
|
164.0
|
|
|
$
|
152.2
|
|
Attachment
7
|
|
PolyOne
Corporation Reconciliation of Non-GAAP Financial Measures
(Unaudited) (In millions, except per share data)
|
|
Senior management
uses gross margin before special items and operating income before
special items to assess performance and allocate resources because
senior management believes that these measures are useful in
understanding current profitability levels and how it may serve as
a basis for future performance. In addition, operating income
before the effect of special items is a component of PolyOne annual
and long-term employee incentive plans and is used in debt covenant
computations. Senior management believes these measures are useful
to investors because they allow for comparison to PolyOne's
performance in prior periods without the effect of items that, by
their nature, tend to obscure PolyOne's operating results due to
the potential variability across periods based on timing, frequency
and magnitude. Non-GAAP financial measures have limitations as
analytical tools and should not be considered in isolation from, or
solely as alternatives to, financial measures prepared in
accordance with GAAP. Below is a reconciliation of these non-GAAP
financial measures to their most directly comparable financial
measures calculated and presented in accordance with GAAP. See
Attachment 3 for a definition and summary of special
items.
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
Reconciliation to
Consolidated Statements of Income
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
Sales
|
$
|
814.1
|
|
|
$
|
758.2
|
|
|
$
|
1,610.8
|
|
|
$
|
1,497.1
|
|
|
|
|
|
|
|
|
|
Gross margin -
GAAP
|
188.0
|
|
|
181.9
|
|
|
370.3
|
|
|
358.5
|
|
Special items in
gross margin (Attachment 3)
|
(0.2)
|
|
|
(0.2)
|
|
|
2.2
|
|
|
3.9
|
|
Adjusted Gross
margin
|
$
|
187.8
|
|
|
$
|
181.7
|
|
|
$
|
372.5
|
|
|
$
|
362.4
|
|
|
|
|
|
|
|
|
|
Adjusted Gross margin
as a percent of sales
|
23.1
|
%
|
|
24.0
|
%
|
|
23.1
|
%
|
|
24.2
|
%
|
|
|
|
|
|
|
|
|
Operating income -
GAAP
|
80.0
|
|
|
81.8
|
|
|
164.0
|
|
|
152.2
|
|
Special items in
operating income (Attachment 3)
|
7.2
|
|
|
6.0
|
|
|
8.9
|
|
|
16.3
|
|
Adjusted
Operating income
|
$
|
87.2
|
|
|
$
|
87.8
|
|
|
$
|
172.9
|
|
|
$
|
168.5
|
|
|
|
|
|
|
|
|
|
Adjusted Operating
income as a percent of sales
|
10.7
|
%
|
|
11.6
|
%
|
|
10.7
|
%
|
|
11.3
|
%
|
The table below
reconciles pre-special income tax expense and the pre-special
effective tax rate to their most comparable US GAAP
figures.
|
|
|
Three Months
Ended
June 30, 2017
|
|
Three Months
Ended
June 30, 2016
|
|
GAAP
Results
|
|
Special
Items
|
|
Adjusted
Results
|
|
GAAP
Results
|
|
Special
Items
|
|
Adjusted
Results
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations before income taxes
|
$
|
63.4
|
|
|
$
|
7.6
|
|
|
$
|
71.0
|
|
|
$
|
66.9
|
|
|
$
|
6.5
|
|
|
$
|
73.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense -
GAAP
|
(13.8)
|
|
|
—
|
|
|
(13.8)
|
|
|
(16.8)
|
|
|
—
|
|
|
(16.8)
|
|
Income tax impact of
special items (Attachment 3)
|
—
|
|
|
(2.6)
|
|
|
(2.6)
|
|
|
—
|
|
|
(2.6)
|
|
|
(2.6)
|
|
Tax adjustments
(Attachment 3)
|
—
|
|
|
(2.8)
|
|
|
(2.8)
|
|
|
—
|
|
|
(3.7)
|
|
|
(3.7)
|
|
Income tax
expense
|
$
|
(13.8)
|
|
|
$
|
(5.4)
|
|
|
$
|
(19.2)
|
|
|
$
|
(16.8)
|
|
|
$
|
(6.3)
|
|
|
$
|
(23.1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Tax
Rate
|
21.8
|
%
|
|
|
|
27.0
|
%
|
|
25.1
|
%
|
|
|
|
31.5
|
%
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
June 30,
2017
|
|
Six Months
Ended
June 30,
2016
|
|
GAAP
Results
|
|
Special
Items
|
|
Adjusted
Results
|
|
GAAP
Results
|
|
Special
Items
|
|
Adjusted
Results
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations before income taxes
|
$
|
131.4
|
|
|
$
|
9.5
|
|
|
$
|
140.9
|
|
|
$
|
122.7
|
|
|
$
|
16.6
|
|
|
$
|
139.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense -
GAAP
|
(33.5)
|
|
|
—
|
|
|
(33.5)
|
|
|
(34.4)
|
|
|
—
|
|
|
(34.4)
|
|
Income tax impact of
special items (Attachment 3)
|
—
|
|
|
(3.5)
|
|
|
(3.5)
|
|
|
—
|
|
|
(6.4)
|
|
|
(6.4)
|
|
Tax adjustments
(Attachment 3)
|
—
|
|
|
(2.9)
|
|
|
(2.9)
|
|
|
—
|
|
|
(3.3)
|
|
|
(3.3)
|
|
Income tax
expense
|
$
|
(33.5)
|
|
|
$
|
(6.4)
|
|
|
$
|
(39.9)
|
|
|
$
|
(34.4)
|
|
|
$
|
(9.7)
|
|
|
$
|
(44.1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Tax
Rate
|
25.5
|
%
|
|
|
|
28.3
|
%
|
|
28.0
|
%
|
|
|
|
31.7
|
%
|
View original
content:http://www.prnewswire.com/news-releases/polyone-announces-second-quarter-2017-results-300493494.html
SOURCE PolyOne Corporation