CLEVELAND, Oct. 25, 2017 /PRNewswire/ -- PolyOne
Corporation (NYSE: POL) today reported its third quarter results
for 2017. GAAP earnings per share in the third quarter of
2017 was $0.49 compared to
$0.51 in the third quarter of
2016. Adjusted earnings per share increased to $0.58 from $0.55 in
the prior year third quarter. Special items for the third quarter
of 2017 resulted in a net after-tax charge of $7.2 million, or $0.09 per share (see Attachment 1). Special items
in the prior year quarter resulted in a net after-tax charge of
$3.5 million, or $0.04 per share.
"Our investments in commercial resources, innovation, and
specialty acquisitions continue to drive results, as we delivered
record adjusted EPS of $0.58 for the
third quarter," said Robert M.
Patterson, chairman, president and chief executive officer,
PolyOne Corporation. "Color, Additives and Inks led the way
with all-time high revenue and operating income."
Mr. Patterson continued, "Consolidated sales increased 10% to
$818 million for the third quarter
driven primarily by 5% organic expansion and recent specialty
acquisitions, which added 4%. Favorable foreign exchange positively
impacted sales by 1%."
"We are very pleased with our recent performance; however, like
many companies we have been focused on the safety and welfare of
employees, families and communities impacted by Hurricanes Harvey
and Irma. While our facilities were undamaged and all of our
employees are safe, others were not as fortunate," added Mr.
Patterson.
"We are experiencing raw material supply and transportation
disruptions as a result of these storms," added Bradley C. Richardson, executive vice president
and chief financial officer, PolyOne Corporation.
"Fortunately, we believe these to be short-term in nature and
additional expenses related to them will approximate $3 million to $4 million in the fourth
quarter. Most importantly, we remain focused on assisting
local communities and residents where needed and serving our
customers."
Earlier in October, PolyOne's Board of Directors declared a
quarterly cash dividend of seventeen and a half cents ($0.175) per share on the common stock
outstanding, representing a 30% increase to the quarterly cash
dividend. As part of the announcement, the company also
communicated a plan to raise its annual dividend by 60%
cumulatively over the next three years.
Mr. Richardson continued, "Our recently announced dividend
expansion is our largest ever, and our three-year plan of a 60%
cumulative increase reflects the important steps we have taken to
further strengthen our portfolio, balance sheet and future cash
flows. We view the increased payouts as one element of a
balanced approach in delivering value to our shareholders. As
we look ahead, we will continue to fund our organic growth
initiatives as our first priority, seek attractive specialty
acquisitions and also be opportunistic with respect to buying back
shares."
"We have worked hard to reposition our portfolio for sustainable
growth, and it's clearly translating to improved performance,"
added Mr. Patterson. "By executing on our proven four-pillar
strategy and continuing to invest in innovation, customer service
and acquisitions, I am very confident in our ability to return to
double-digit adjusted EPS growth in 2018 and beyond."
Conference Call
As previously announced, the company
will conduct a conference call to discuss its financial results for
the third quarter at 9:00 a.m. Eastern
Time on Wednesday, October 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 97228054. 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 October 25, 2017. To listen
to this recording, dial 1-855-859-2056 (domestic) or 1-404-537-3406
(international) and enter conference ID number 97228054.
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 identify and evaluate acquisition targets and consummate
acquisitions; the ability to successfully integrate acquired
businesses into our operations, such as Rutland, Mesa, Comptek, SilCoTec, Gordon
Composites and Polystrand, 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; 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; our ability to continue to pay cash
dividends, including at the increasing rate, which will be subject
to, among other factors, market conditions, our cash flow and cash
requirements and restrictions contained in any of our debt
agreements; 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
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
$
|
818.5
|
|
$
|
746.7
|
|
$
|
2,429.3
|
|
$
|
2,243.8
|
Operating
income
|
67.7
|
|
72.0
|
|
231.7
|
|
224.2
|
Net income from
continuing operations attributable to PolyOne
shareholders
|
40.2
|
|
42.8
|
|
138.1
|
|
131.2
|
Basic earnings per
share from continuing operations attributable to PolyOne
shareholders
|
$
|
0.50
|
|
$
|
0.51
|
|
$
|
1.69
|
|
$
|
1.56
|
Diluted earnings per
share from continuing operations attributable to PolyOne
shareholders
|
$
|
0.49
|
|
$
|
0.51
|
|
$
|
1.68
|
|
$
|
1.55
|
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
September 30, 2017
|
|
Three Months
Ended
September 30, 2016
|
Reconciliation to
Condensed Consolidated Statements of Income
|
$
|
|
EPS
|
|
$
|
|
EPS
|
|
|
|
|
|
|
|
|
Net income from
continuing operations attributable to PolyOne
shareholders
|
$
|
40.2
|
|
$
|
0.49
|
|
$
|
42.8
|
|
$
|
0.51
|
Special items, after
tax (Attachment 3)
|
7.2
|
|
0.09
|
|
3.5
|
|
0.04
|
Adjusted net income /
EPS - excluding special items
|
$
|
47.4
|
|
$
|
0.58
|
|
$
|
46.3
|
|
$
|
0.55
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended
September 30, 2017
|
|
Nine Months
Ended
September 30, 2016
|
Reconciliation to
Condensed Consolidated Statements of Income
|
$
|
|
EPS
|
|
$
|
|
EPS
|
|
|
|
|
|
|
|
|
Net income from
continuing operations attributable to PolyOne
shareholders
|
$
|
138.1
|
|
$
|
1.68
|
|
$
|
131.2
|
|
$
|
1.55
|
Special items, after
tax (Attachment 3)
|
10.3
|
|
0.12
|
|
10.4
|
|
0.12
|
Adjusted net income /
EPS - excluding special items
|
$
|
148.4
|
|
$
|
1.80
|
|
$
|
141.6
|
|
$
|
1.67
|
Attachment
2
|
PolyOne
Corporation
Condensed
Consolidated Statements of Income (Unaudited)
(In millions, except
per share data)
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
Sales
|
$
|
818.5
|
|
|
$
|
746.7
|
|
|
$
|
2,429.3
|
|
|
$
|
2,243.8
|
Cost of
sales
|
639.0
|
|
|
580.6
|
|
|
1,879.5
|
|
|
1,719.2
|
Gross
margin
|
179.5
|
|
|
166.1
|
|
|
549.8
|
|
|
524.6
|
Selling and
administrative expense
|
111.8
|
|
|
94.1
|
|
|
318.1
|
|
|
300.4
|
Operating
income
|
67.7
|
|
|
72.0
|
|
|
231.7
|
|
|
224.2
|
Interest expense,
net
|
(15.5)
|
|
|
(15.1)
|
|
|
(45.3)
|
|
|
(44.3)
|
Debt extinguishment
costs
|
—
|
|
|
—
|
|
|
(0.3)
|
|
|
(0.4)
|
Other expense,
net
|
(0.7)
|
|
|
(0.1)
|
|
|
(3.2)
|
|
|
—
|
Income from
continuing operations before income taxes
|
51.5
|
|
|
56.8
|
|
|
182.9
|
|
|
179.5
|
Income tax
expense
|
(11.3)
|
|
|
(14.0)
|
|
|
(44.8)
|
|
|
(48.4)
|
Net income from
continuing operations
|
40.2
|
|
|
42.8
|
|
|
138.1
|
|
|
131.1
|
(Loss) income from
discontinued operations, net of income taxes
|
(1.4)
|
|
|
(0.5)
|
|
|
(233.8)
|
|
|
0.2
|
Net income
(loss)
|
$
|
38.8
|
|
|
$
|
42.3
|
|
|
$
|
(95.7)
|
|
|
$
|
131.3
|
Net loss attributable
to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
0.1
|
Net income (loss)
attributable to PolyOne common shareholders
|
$
|
38.8
|
|
|
$
|
42.3
|
|
|
$
|
(95.7)
|
|
|
$
|
131.4
|
|
|
|
|
|
|
|
|
Earnings (loss) per
common share attributable to PolyOne common shareholders -
Basic:
|
|
|
|
|
Continuing
operations
|
$
|
0.50
|
|
|
$
|
0.51
|
|
|
$
|
1.69
|
|
|
$
|
1.56
|
Discontinued
operations
|
(0.02)
|
|
|
(0.01)
|
|
|
(2.86)
|
|
|
—
|
Total
|
$
|
0.48
|
|
|
$
|
0.50
|
|
|
$
|
(1.17)
|
|
|
$
|
1.56
|
Earnings (loss) per
common share attributable to PolyOne common shareholders -
Diluted:
|
|
|
|
|
Continuing
operations
|
$
|
0.49
|
|
|
$
|
0.51
|
|
|
$
|
1.68
|
|
|
$
|
1.55
|
Discontinued
operations
|
(0.02)
|
|
|
(0.01)
|
|
|
(2.84)
|
|
|
—
|
Total
|
$
|
0.47
|
|
|
$
|
0.50
|
|
|
$
|
(1.16)
|
|
|
$
|
1.55
|
|
|
|
|
|
|
|
|
Cash dividends declared
per share of common stock
|
$
|
0.135
|
|
|
$
|
0.120
|
|
|
$
|
0.405
|
|
|
$
|
0.360
|
|
|
|
|
|
|
|
|
Weighted-average
shares used to compute earnings per common share:
|
|
|
|
|
|
|
|
Basic
|
81.2
|
|
|
83.9
|
|
|
81.7
|
|
|
84.2
|
Diluted
|
82.0
|
|
|
84.5
|
|
|
82.3
|
|
|
84.8
|
|
|
|
Attachment
3
|
PolyOne
Corporation
Summary of Special
Items (Unaudited)
(In millions, except
per share data)
|
|
|
|
|
Special items
(1)
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Cost of
sales:
|
|
|
|
|
|
|
|
Restructuring costs
|
$
|
0.6
|
|
|
$
|
—
|
|
|
$
|
3.3
|
|
|
$
|
(0.9)
|
|
Environmental remediation costs
|
(4.9)
|
|
|
(2.4)
|
|
|
(12.1)
|
|
|
(6.2)
|
|
Reimbursement of previously incurred environmental costs
|
2.5
|
|
|
—
|
|
|
6.3
|
|
|
5.3
|
|
Acquisition related costs
|
(1.2)
|
|
|
(2.0)
|
|
|
(2.7)
|
|
|
(6.5)
|
|
Impact on cost of
sales
|
(3.0)
|
|
|
(4.4)
|
|
|
(5.2)
|
|
|
(8.3)
|
|
|
|
|
|
|
|
|
|
Selling and
administrative expense:
|
|
|
|
|
|
|
|
Restructuring, legal and other
|
(5.8)
|
|
|
(5.3)
|
|
|
(11.5)
|
|
|
(16.8)
|
|
Acquisition related costs
|
(1.4)
|
|
|
(0.5)
|
|
|
(2.4)
|
|
|
(1.4)
|
|
Impact on selling and
administrative expense
|
(7.2)
|
|
|
(5.8)
|
|
|
(13.9)
|
|
|
(18.2)
|
|
|
|
|
|
|
|
|
|
Impact on operating
income
|
(10.2)
|
|
|
(10.2)
|
|
|
(19.1)
|
|
|
(26.5)
|
|
|
|
|
|
|
|
|
|
Debt
extinguishment costs
|
—
|
|
|
—
|
|
|
(0.3)
|
|
|
(0.4)
|
|
Other
income (expense), net
|
0.1
|
|
|
—
|
|
|
(0.2)
|
|
|
0.1
|
|
Impact on income from
continuing operations before income taxes
|
(10.1)
|
|
|
(10.2)
|
|
|
(19.6)
|
|
|
(26.8)
|
|
Income tax benefit on
above special items
|
3.3
|
|
|
3.7
|
|
|
6.8
|
|
|
10.1
|
|
Tax
adjustments(2)
|
(0.4)
|
|
|
3.0
|
|
|
2.5
|
|
|
6.3
|
|
Impact of special items
on net income (loss) from continuing operations
attributable to PolyOne Shareholders
|
$
|
(7.2)
|
|
|
$
|
(3.5)
|
|
|
$
|
(10.3)
|
|
|
$
|
(10.4)
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
common share impact
|
$
|
(0.09)
|
|
|
$
|
(0.04)
|
|
|
$
|
(0.12)
|
|
|
$
|
(0.12)
|
|
|
|
|
|
|
|
|
|
Weighted average shares
used to compute adjusted earnings per share:
|
|
|
|
|
|
|
Diluted
|
82.0
|
|
|
84.5
|
|
|
82.3
|
|
|
84.8
|
|
(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)
September 30,
2017
|
|
December 31,
2016
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
233.5
|
|
|
$
|
225.5
|
|
Accounts receivable,
net
|
431.1
|
|
|
325.6
|
|
Inventories,
net
|
308.9
|
|
|
266.4
|
|
Current assets
held-for-sale
|
—
|
|
|
86.5
|
|
Other current
assets
|
70.5
|
|
|
45.5
|
|
Total current
assets
|
1,044.0
|
|
|
949.5
|
|
Property,
net
|
447.8
|
|
|
426.3
|
|
Goodwill
|
608.9
|
|
|
532.7
|
|
Intangible assets,
net
|
405.7
|
|
|
342.7
|
|
Non-current assets
held for sale
|
—
|
|
|
347.4
|
|
Other non-current
assets
|
143.1
|
|
|
139.8
|
|
Total
assets
|
$
|
2,649.5
|
|
|
$
|
2,738.4
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Short-term and
current portion of long-term debt
|
$
|
32.5
|
|
|
$
|
18.5
|
|
Accounts
payable
|
378.2
|
|
|
320.9
|
|
Current liabilities
held-for-sale
|
—
|
|
|
45.3
|
|
Accrued expenses and
other current liabilities
|
123.2
|
|
|
125.2
|
|
Total current
liabilities
|
533.9
|
|
|
509.9
|
|
Non-current
liabilities:
|
|
|
|
Long-term
debt
|
1,319.5
|
|
|
1,239.4
|
|
Pension and other
post-retirement benefits
|
63.4
|
|
|
63.1
|
|
Non-current
liabilities held for sale
|
—
|
|
|
52.8
|
|
Other non-current
liabilities
|
164.0
|
|
|
147.7
|
|
Total non-current
liabilities
|
1,546.9
|
|
|
1,503.0
|
|
Shareholders'
equity:
|
|
|
|
PolyOne shareholders'
equity
|
567.9
|
|
|
724.7
|
|
Noncontrolling
interests
|
0.8
|
|
|
0.8
|
|
Total
equity
|
568.7
|
|
|
725.5
|
|
Total liabilities
and shareholders' equity
|
$
|
2,649.5
|
|
|
$
|
2,738.4
|
|
|
Attachment
5
|
PolyOne
Corporation
Condensed
Consolidated Statements of Cash Flows (Unaudited)
(In
millions)
|
|
|
|
Nine Months Ended
September 30,
|
|
2017
|
|
2016
|
Operating
Activities
|
|
|
|
Net (loss)
income
|
$
|
(95.7)
|
|
|
$
|
131.3
|
|
Adjustments to
reconcile net income to net cash used by operating
activities:
|
|
|
|
Loss on sale of
business, net of tax
|
228.7
|
|
|
—
|
|
Depreciation and
amortization
|
75.7
|
|
|
74.7
|
|
Accelerated
depreciation and fixed asset charges associated with restructuring
activities
|
0.9
|
|
|
4.6
|
|
Gain from sale of
closed facilities
|
(3.6)
|
|
|
—
|
|
Debt extinguishment
costs
|
0.3
|
|
|
0.4
|
|
Share-based
compensation expense
|
8.0
|
|
|
6.5
|
|
Change in assets and
liabilities, net of the effect of acquisitions:
|
|
|
|
Increase in accounts
receivable
|
(83.6)
|
|
|
(67.4)
|
|
Increase in
inventories
|
(21.7)
|
|
|
(10.4)
|
|
Increase in accounts
payable
|
43.0
|
|
|
30.1
|
|
Decrease in pension
and other post-retirement benefits
|
(10.4)
|
|
|
(31.3)
|
|
Decrease in accrued
expenses and other assets and liabilities - net
|
(30.4)
|
|
|
(6.0)
|
|
Net cash provided by
operating activities
|
111.2
|
|
|
132.5
|
|
Investing
Activities
|
|
|
|
Capital
expenditures
|
(52.0)
|
|
|
(58.0)
|
|
Business
acquisitions, net of cash acquired
|
(163.8)
|
|
|
(158.3)
|
|
Proceeds from sale of
business and other assets
|
123.0
|
|
|
9.8
|
|
Net cash used by
investing activities
|
(92.8)
|
|
|
(206.5)
|
|
Financing
Activities
|
|
|
|
Proceeds from
long-term debt
|
—
|
|
|
100.0
|
|
Borrowings under
credit facilities
|
1,111.2
|
|
|
805.9
|
|
Repayments under
credit facilities
|
(1,013.3)
|
|
|
(806.4)
|
|
Purchase of common
shares for treasury
|
(70.7)
|
|
|
(50.7)
|
|
Cash dividends
paid
|
(33.2)
|
|
|
(30.1)
|
|
Repayment of
long-term debt
|
(4.9)
|
|
|
(4.4)
|
|
Payments of
withholding tax on share awards
|
(2.9)
|
|
|
(4.7)
|
|
Debt financing
costs
|
(2.5)
|
|
|
(1.9)
|
|
Net cash (used)
provided by financing activities
|
(16.3)
|
|
|
7.7
|
|
Effect of exchange
rate changes on cash
|
4.7
|
|
|
(1.3)
|
|
Increase (decrease)
in cash and cash equivalents
|
6.8
|
|
|
(67.6)
|
|
Cash and cash
equivalents at beginning of period
|
226.7
|
|
|
279.8
|
|
Cash and cash
equivalents at end of period
|
$
|
233.5
|
|
|
$
|
212.2
|
|
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
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Sales:
|
|
|
|
|
|
|
|
Color,
Additives and Inks
|
$
|
235.1
|
|
|
$
|
195.9
|
|
|
$
|
670.6
|
|
|
$
|
613.0
|
|
Specialty Engineered Materials
|
156.3
|
|
|
146.2
|
|
|
474.1
|
|
|
430.5
|
|
Performance Products and Solutions
|
175.7
|
|
|
171.3
|
|
|
543.6
|
|
|
510.3
|
|
PolyOne
Distribution
|
291.1
|
|
|
274.8
|
|
|
868.0
|
|
|
816.2
|
|
Corporate and eliminations
|
(39.7)
|
|
|
(41.5)
|
|
|
(127.0)
|
|
|
(126.2)
|
|
Sales
|
$
|
818.5
|
|
|
$
|
746.7
|
|
|
$
|
2,429.3
|
|
|
$
|
2,243.8
|
|
|
|
|
|
|
|
|
|
Gross
margin:
|
|
|
|
|
|
|
|
Color,
Additives and Inks
|
$
|
81.5
|
|
|
$
|
70.0
|
|
|
$
|
236.8
|
|
|
$
|
223.3
|
|
Specialty Engineered Materials
|
40.4
|
|
|
41.7
|
|
|
128.7
|
|
|
128.9
|
|
Performance Products and Solutions
|
28.9
|
|
|
29.2
|
|
|
96.5
|
|
|
94.6
|
|
PolyOne
Distribution
|
31.9
|
|
|
29.6
|
|
|
96.8
|
|
|
89.8
|
|
Corporate and eliminations
|
(3.2)
|
|
|
(4.4)
|
|
|
(9.0)
|
|
|
(12.0)
|
|
Gross
margin
|
$
|
179.5
|
|
|
$
|
166.1
|
|
|
$
|
549.8
|
|
|
$
|
524.6
|
|
|
|
|
|
|
|
|
|
Selling and
administrative expense:
|
|
|
|
|
|
|
|
Color,
Additives and Inks
|
$
|
45.1
|
|
|
$
|
38.6
|
|
|
$
|
126.7
|
|
|
$
|
118.8
|
|
Specialty Engineered Materials
|
22.1
|
|
|
21.2
|
|
|
66.5
|
|
|
63.6
|
|
Performance Products and Solutions
|
11.1
|
|
|
11.2
|
|
|
34.3
|
|
|
35.6
|
|
PolyOne
Distribution
|
13.3
|
|
|
11.4
|
|
|
39.3
|
|
|
36.3
|
|
Corporate and eliminations
|
20.2
|
|
|
11.7
|
|
|
51.3
|
|
|
46.1
|
|
Selling and
administrative expense
|
$
|
111.8
|
|
|
$
|
94.1
|
|
|
$
|
318.1
|
|
|
$
|
300.4
|
|
|
|
|
|
|
|
|
|
Operating
income:
|
|
|
|
|
|
|
|
Color,
Additives and Inks
|
$
|
36.4
|
|
|
$
|
31.4
|
|
|
$
|
110.1
|
|
|
$
|
104.5
|
|
Specialty Engineered Materials
|
18.3
|
|
|
20.5
|
|
|
62.2
|
|
|
65.3
|
|
Performance Products and Solutions
|
17.8
|
|
|
18.0
|
|
|
62.2
|
|
|
59.0
|
|
PolyOne
Distribution
|
18.6
|
|
|
18.2
|
|
|
57.5
|
|
|
53.5
|
|
Corporate and eliminations
|
(23.4)
|
|
|
(16.1)
|
|
|
(60.3)
|
|
|
(58.1)
|
|
Operating
income
|
$
|
67.7
|
|
|
$
|
72.0
|
|
|
$
|
231.7
|
|
|
$
|
224.2
|
|
|
|
|
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
September 30,
|
|
Nine Months
Ended
September 30,
|
Reconciliation to
Consolidated Statements of Income
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
Sales
|
$
|
818.5
|
|
|
$
|
746.7
|
|
|
$
|
2,429.3
|
|
|
$
|
2,243.8
|
|
|
|
|
|
|
|
|
|
Gross margin -
GAAP
|
179.5
|
|
|
166.1
|
|
|
549.8
|
|
|
524.6
|
|
Special items in
gross margin (Attachment 3)
|
3.0
|
|
|
4.4
|
|
|
5.2
|
|
|
8.3
|
|
Adjusted Gross
margin
|
$
|
182.5
|
|
|
$
|
170.5
|
|
|
$
|
555.0
|
|
|
$
|
532.9
|
|
|
|
|
|
|
|
|
|
Adjusted Gross margin
as a percent of sales
|
22.3
|
%
|
|
22.8
|
%
|
|
22.8
|
%
|
|
23.7
|
%
|
|
|
|
|
|
|
|
|
Operating income -
GAAP
|
67.7
|
|
|
72.0
|
|
|
231.7
|
|
|
224.2
|
|
Special items in
operating income (Attachment 3)
|
10.2
|
|
|
10.2
|
|
|
19.1
|
|
|
26.5
|
|
Adjusted
Operating income
|
$
|
77.9
|
|
|
$
|
82.2
|
|
|
$
|
250.8
|
|
|
$
|
250.7
|
|
|
|
|
|
|
|
|
|
Adjusted Operating
income as a percent of sales
|
9.5
|
%
|
|
11.0
|
%
|
|
10.3
|
%
|
|
11.2
|
%
|
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
September 30, 2017
|
|
Three Months
Ended
September 30, 2016
|
|
GAAP
Results
|
|
Special
Items
|
|
Adjusted
Results
|
|
GAAP
Results
|
|
Special
Items
|
|
Adjusted
Results
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations before income taxes
|
$
|
51.5
|
|
|
$
|
10.1
|
|
|
$
|
61.6
|
|
|
$
|
56.8
|
|
|
$
|
10.2
|
|
|
$
|
67.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense -
GAAP
|
(11.3)
|
|
|
—
|
|
|
(11.3)
|
|
|
(14.0)
|
|
|
—
|
|
|
(14.0)
|
|
Income tax impact of
special items (Attachment 3)
|
—
|
|
|
(3.3)
|
|
|
(3.3)
|
|
|
—
|
|
|
(3.7)
|
|
|
(3.7)
|
|
Tax adjustments
(Attachment 3)
|
—
|
|
|
0.4
|
|
|
0.4
|
|
|
—
|
|
|
(3.0)
|
|
|
(3.0)
|
|
Income tax
expense
|
$
|
(11.3)
|
|
|
$
|
(2.9)
|
|
|
$
|
(14.2)
|
|
|
$
|
(14.0)
|
|
|
$
|
(6.7)
|
|
|
$
|
(20.7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Tax
Rate
|
21.9
|
%
|
|
|
|
23.1
|
%
|
|
24.6
|
%
|
|
|
|
30.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended
September 30, 2017
|
|
Nine Months
Ended
September 30, 2016
|
|
GAAP
Results
|
|
Special
Items
|
|
Adjusted
Results
|
|
GAAP
Results
|
|
Special
Items
|
|
Adjusted
Results
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations before income taxes
|
$
|
182.9
|
|
|
$
|
19.6
|
|
|
$
|
202.5
|
|
|
$
|
179.5
|
|
|
$
|
26.8
|
|
|
$
|
206.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense -
GAAP
|
(44.8)
|
|
|
—
|
|
|
(44.8)
|
|
|
(48.4)
|
|
|
—
|
|
|
(48.4)
|
|
Income tax impact of
special items (Attachment 3)
|
—
|
|
|
(6.8)
|
|
|
(6.8)
|
|
|
—
|
|
|
(10.1)
|
|
|
(10.1)
|
|
Tax adjustments
(Attachment 3)
|
—
|
|
|
(2.5)
|
|
|
(2.5)
|
|
|
—
|
|
|
(6.3)
|
|
|
(6.3)
|
|
Income tax
expense
|
$
|
(44.8)
|
|
|
$
|
(9.3)
|
|
|
$
|
(54.1)
|
|
|
$
|
(48.4)
|
|
|
$
|
(16.4)
|
|
|
$
|
(64.8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Tax
Rate
|
24.5
|
%
|
|
|
|
26.7
|
%
|
|
27.0
|
%
|
|
|
|
31.4
|
%
|
View original
content:http://www.prnewswire.com/news-releases/polyone-announces-third-quarter-2017-results-300542934.html
SOURCE PolyOne Corporation