CLEVELAND, Oct. 22, 2019 /PRNewswire/ -- PolyOne
Corporation (NYSE: POL) today reported its third quarter results
for 2019, which reflect PP&S as a discontinued operation.
GAAP earnings per share from continuing operations were
$0.30 in the third quarter of 2019
compared to $0.40 in the third
quarter of 2018. Adjusted earnings per share from continuing
operations increased 7% to $0.44 in
the third quarter of 2019 compared to $0.41 for the third quarter of 2018.
"Our investments in sustainable solutions combined with our
initiatives to control costs, are helping to offset weak demand
across many end markets," said Robert M.
Patterson, Chairman, President and Chief Executive Officer,
PolyOne Corporation. "Most notably, sales of composite
technologies organically increased 8% over the prior year, and
additives into the packaging market increased 3%."
The company noted ongoing weakness in demand, especially in
Europe, which impacted both the
SEM and Color segments. North
America also softened in the third quarter primarily related
to lower demand for select consumer end markets as trade
uncertainty is impacting consumer sentiment. Consolidated revenue
for the third quarter was $705
million, 3% below the third quarter of the prior year, as
growth from acquisitions of 4% partially offset a 6% reduction in
organic sales and a 1% reduction due to unfavorable foreign
exchange.
As previously announced on August
19, PolyOne reached an agreement to divest its PP&S
segment and confirms that the sale process is on track and the
transaction is expected to be completed in the fourth quarter. The
company expects approximately $600
million of after-tax proceeds from the sale.
"The divestment of PP&S is expected to close soon, which
will reduce our exposure to more cyclical end markets and
strengthen our balance sheet. This also provides us greater
financial flexibility to continue building our portfolio with
higher growth specialty and sustainable solutions," Mr. Patterson
said.
Sustainability remains a focus and key area of investment.
To articulate the company's strategy and recent contributions to
sustainability initiatives, PolyOne yesterday issued its first
Sustainability Report. Available at
www.polyone.com/sustainability, the report captures performance and
progress in PolyOne's four cornerstones of sustainability:
People, Products, Planet and Performance. "We're very excited
to share some of the many examples of how our global associates are
helping customers overcome their challenges and achieve their
sustainability goals," Mr. Patterson said.
The Company plans to provide additional details on its third
quarter performance and outlook for the balance of the year during
its regularly scheduled conference call with analysts and
investors.
Conference Call
The company will conduct a conference call at 8:00 a.m. Eastern Time on October 22, 2019. To participate in the
conference call, dial 1-844-835-7433 (domestic) or 1-914-495-8589
(international) and provide conference ID number 3550849. 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 22, 2019. To listen to
this recording, dial 1-855-859-2056 (domestic) or 1-404-537-3406
(international) and enter conference ID number 3550849.
About PolyOne
PolyOne Corporation (NYSE: POL), with
2018 revenues of $3.5 billion, is a
premier provider of specialized polymer materials, services and
solutions. The company adds value to global customers and improves
sustainability through formulating materials, such as:
- Barrier technologies that preserve the shelf-life and quality
of food, beverages, medicine and other perishable goods through
high-performance materials that require less plastic
- Light-weighting solutions that replace heavier traditional
materials like metal, glass and wood, which can improve fuel
efficiency in all modes of transportation
- Breakthrough technologies that minimize wastewater and improve
the recyclability of materials and packaging across a spectrum of
end uses
PolyOne employs approximately 6,900 associates, is certified ACC
Responsible Care® and Great Place to Work®, and is a founding
member of the Alliance to End Plastic Waste. For more
information, visit 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. 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: the
time required to consummate the proposed divestiture of the
PP&S segment; the satisfaction or waiver of conditions in the
sale agreement; any material adverse changes in the business
supporting the PP&S assets being sold; the ability to
consummate the proposed divestiture; our ability to identify
and evaluate acquisition targets and consummate and integrate
acquisitions; 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 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 plastics 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 raise or
sustain prices for products or services; an ability to achieve or
delays in achieving or achievement of less than the anticipated
financial benefit from initiatives related to acquisition and
integration, working capital reductions, costs reductions and
employee productivity goals; information systems failures and
cyberattacks; 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.
# # #
To access PolyOne's news library online, please visit
www.polyone.com/news.
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,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
Sales
|
$
|
705.3
|
|
$
|
729.0
|
|
$
|
2,204.1
|
|
$
|
2,203.9
|
Operating
income
|
43.1
|
|
48.7
|
|
136.3
|
|
148.4
|
Net income from
continuing operations attributable to PolyOne
shareholders
|
23.5
|
|
32.5
|
|
69.1
|
|
89.0
|
Basic earnings per
share from continuing operations attributable to
PolyOne shareholders
|
$
|
0.31
|
|
$
|
0.41
|
|
$
|
0.89
|
|
$
|
1.11
|
Diluted earnings per
share from continuing operations attributable to
PolyOne shareholders
|
$
|
0.30
|
|
$
|
0.40
|
|
$
|
0.89
|
|
$
|
1.10
|
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.
|
|
With respect to our
forecasted results for full-year 2019 adjusted EPS, the Company
does not provide a reconciliation of this forward-looking non-GAAP
financial measure because it is not possible for the Company to
provide a meaningful or accurate calculation or estimation of
reconciling items and the information is not available without
unreasonable effort. This is due to the inherent difficulty of
forecasting the timing and amount of certain items, such as, but
not limited to, restructuring costs, environmental remediation
costs, acquisition-related costs, and other non-routine costs. Each
of such adjustments has not yet occurred, are out of the Company's
control and/or cannot be reasonably predicted. For the same
reasons, the Company is unable to address the probable significance
of the unavailable information.
|
|
|
Three Months
Ended
September 30, 2019
|
|
Three Months
Ended
September 30, 2018
|
Reconciliation to
Condensed Consolidated Statements of Income
|
$
|
|
EPS
|
|
$
|
|
EPS
|
|
|
|
|
|
|
|
|
Net income from
continuing operations attributable to PolyOne
shareholders
|
$
|
23.5
|
|
$
|
0.30
|
|
$
|
32.5
|
|
$
|
0.40
|
Special items, after
tax (Attachment 3)
|
10.5
|
|
0.14
|
|
0.5
|
|
0.01
|
Adjusted net income /
EPS - excluding special items
|
$
|
34.0
|
|
$
|
0.44
|
|
$
|
33.0
|
|
$
|
0.41
|
|
Nine Months
Ended
September 30, 2019
|
|
Nine Months
Ended
September 30, 2018
|
Reconciliation to
Condensed Consolidated Statements of
Income
|
$
|
|
EPS
|
|
$
|
|
EPS
|
|
|
|
|
|
|
|
|
Net income from
continuing operations attributable to PolyOne
shareholders
|
$
|
69.1
|
|
$
|
0.89
|
|
$
|
89.0
|
|
$
|
1.10
|
Special items, after
tax (Attachment 3)
|
35.9
|
|
0.46
|
|
13.0
|
|
0.16
|
Adjusted net income /
EPS - excluding special items
|
$
|
105.0
|
|
$
|
1.35
|
|
$
|
102.0
|
|
$
|
1.26
|
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,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
Sales
|
$
|
705.3
|
|
$
|
729.0
|
|
$
|
2,204.1
|
|
$
|
2,203.9
|
Cost of
sales
|
544.8
|
|
571.8
|
|
1,700.2
|
|
1,720.0
|
Gross
margin
|
160.5
|
|
157.2
|
|
503.9
|
|
483.9
|
Selling and
administrative expense
|
117.4
|
|
108.5
|
|
367.6
|
|
335.5
|
Operating
income
|
43.1
|
|
48.7
|
|
136.3
|
|
148.4
|
Interest expense,
net
|
(15.5)
|
|
(15.6)
|
|
(47.6)
|
|
(47.2)
|
Debt extinguishment
costs
|
—
|
|
—
|
|
—
|
|
(0.1)
|
Other income,
net
|
0.6
|
|
0.7
|
|
1.4
|
|
2.0
|
Income from
continuing operations before income taxes
|
28.2
|
|
33.8
|
|
90.1
|
|
103.1
|
Income tax
expense
|
(4.6)
|
|
(1.3)
|
|
(20.8)
|
|
(14.2)
|
Net income from
continuing operations
|
23.6
|
|
32.5
|
|
69.3
|
|
88.9
|
Income from
discontinued operations, net of income taxes
|
19.5
|
|
17.7
|
|
54.2
|
|
59.4
|
Net income
|
$
|
43.1
|
|
$
|
50.2
|
|
$
|
123.5
|
|
$
|
148.3
|
Net (income) loss
attributable to noncontrolling interests
|
(0.1)
|
|
—
|
|
(0.2)
|
|
0.1
|
Net income
attributable to PolyOne common shareholders
|
$
|
43.0
|
|
$
|
50.2
|
|
$
|
123.3
|
|
$
|
148.4
|
|
|
|
|
|
|
|
|
Earnings per common
share attributable to PolyOne common shareholders -
Basic:
|
|
|
|
|
Continuing
operations
|
$
|
0.31
|
|
$
|
0.41
|
|
$
|
0.89
|
|
$
|
1.11
|
Discontinued
operations
|
0.25
|
|
0.22
|
|
0.71
|
|
0.74
|
Total
|
$
|
0.56
|
|
$
|
0.63
|
|
$
|
1.60
|
|
$
|
1.85
|
Earnings per common
share attributable to PolyOne common shareholders -
Diluted:
|
|
|
|
|
Continuing
operations
|
$
|
0.30
|
|
$
|
0.40
|
|
$
|
0.89
|
|
$
|
1.10
|
Discontinued
operations
|
0.26
|
|
0.22
|
|
0.69
|
|
0.74
|
Total
|
$
|
0.56
|
|
$
|
0.62
|
|
$
|
1.58
|
|
$
|
1.84
|
|
|
|
|
|
|
|
|
Weighted-average
shares used to compute earnings per common
share:
|
|
|
|
|
|
|
|
Basic
|
76.9
|
|
79.8
|
|
77.3
|
|
80.1
|
Diluted
|
77.4
|
|
80.7
|
|
77.8
|
|
80.8
|
|
|
|
|
|
|
|
|
Cash dividends declared
per share of common stock
|
$
|
0.195
|
|
$
|
0.175
|
|
$
|
0.585
|
|
$
|
0.525
|
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,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Cost of
sales:
|
|
|
|
|
|
|
|
Restructuring costs
|
$
|
—
|
|
$
|
(0.1)
|
|
$
|
0.3
|
|
$
|
(0.5)
|
Environmental remediation costs
|
(6.4)
|
|
(7.4)
|
|
(10.4)
|
|
(19.2)
|
Reimbursement of previously incurred environmental costs
|
4.0
|
|
1.5
|
|
4.0
|
|
3.8
|
Acquisition related costs
|
—
|
|
—
|
|
(2.0)
|
|
(1.8)
|
Impact on cost of
sales
|
(2.4)
|
|
(6.0)
|
|
(8.1)
|
|
(17.7)
|
|
|
|
|
|
|
|
|
Selling and
administrative expense:
|
|
|
|
|
|
|
|
Restructuring, legal and other
|
(3.0)
|
|
(1.5)
|
|
(15.0)
|
|
(12.2)
|
Acquisition
earn-out adjustments
|
(10.0)
|
|
—
|
|
(20.7)
|
|
—
|
Acquisition related costs
|
(1.0)
|
|
(0.7)
|
|
(3.3)
|
|
(2.7)
|
Impact on selling and
administrative expense
|
(14.0)
|
|
(2.2)
|
|
(39.0)
|
|
(14.9)
|
|
|
|
|
|
|
|
|
Impact on operating
income
|
(16.4)
|
|
(8.2)
|
|
(47.1)
|
|
(32.6)
|
|
|
|
|
|
|
|
|
Debt
extinguishment costs
|
—
|
|
—
|
|
—
|
|
(0.1)
|
Other
income, net
|
0.1
|
|
—
|
|
0.4
|
|
0.2
|
Impact on income from
continuing operations before income taxes
|
(16.3)
|
|
(8.2)
|
|
(46.7)
|
|
(32.5)
|
Income tax benefit on
above special items
|
4.1
|
|
2.9
|
|
11.5
|
|
9.2
|
Tax
adjustments(2)
|
1.7
|
|
4.8
|
|
(0.7)
|
|
10.3
|
Impact of special items
on net income from continuing operations
attributable to PolyOne Shareholders
|
$
|
(10.5)
|
|
$
|
(0.5)
|
|
$
|
(35.9)
|
|
$
|
(13.0)
|
|
|
|
|
|
|
|
|
Diluted earnings per
common share impact
|
$
|
(0.14)
|
|
$
|
(0.01)
|
|
$
|
(0.46)
|
|
$
|
(0.16)
|
|
|
|
|
|
|
|
|
Weighted average shares
used to compute adjusted earnings per share:
|
|
|
|
|
|
|
Diluted
|
77.4
|
|
80.7
|
|
77.8
|
|
80.8
|
(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 benefit/(expense) 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
(Unaudited) (In millions)
|
|
|
September
30,
2019
|
|
December 31,
2018
|
Assets
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
199.6
|
|
$
|
170.9
|
Accounts receivable,
net
|
368.7
|
|
347.2
|
Inventories,
net
|
281.6
|
|
284.6
|
Current assets held
for sale
|
265.5
|
|
129.7
|
Other current
assets
|
58.4
|
|
66.4
|
Total current
assets
|
1,173.8
|
|
998.8
|
Property,
net
|
386.0
|
|
384.5
|
Goodwill
|
682.6
|
|
639.1
|
Intangible assets,
net
|
475.8
|
|
422.4
|
Operating lease
assets, net
|
65.0
|
|
—
|
Non-current assets
held for sale
|
—
|
|
124.5
|
Other non-current
assets
|
163.0
|
|
154.0
|
Total
assets
|
$
|
2,946.2
|
|
$
|
2,723.3
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
Current
liabilities:
|
|
|
|
Short-term and
current portion of long-term debt
|
$
|
18.6
|
|
$
|
19.4
|
Accounts
payable
|
289.3
|
|
305.0
|
Current operating
lease obligations
|
20.7
|
|
—
|
Current liabilities
held for sale
|
105.2
|
|
104.5
|
Accrued expenses and
other current liabilities
|
191.7
|
|
128.7
|
Total current
liabilities
|
625.5
|
|
557.6
|
Non-current
liabilities:
|
|
|
|
Long-term
debt
|
1,406.3
|
|
1,336.2
|
Pension and other
post-retirement benefits
|
52.7
|
|
54.3
|
Non-current operating
lease obligations
|
44.3
|
|
—
|
Non-current
liabilities held for sale
|
—
|
|
3.3
|
Other non-current
liabilities
|
225.2
|
|
231.3
|
Total non-current
liabilities
|
1,728.5
|
|
1,625.1
|
Equity:
|
|
|
|
PolyOne shareholders'
equity
|
591.4
|
|
540.0
|
Noncontrolling
interests
|
0.8
|
|
0.6
|
Total
equity
|
592.2
|
|
540.6
|
Total liabilities
and equity
|
$
|
2,946.2
|
|
$
|
2,723.3
|
Attachment
5
|
PolyOne
Corporation Condensed Consolidated Statements of Cash
Flows (Unaudited) (In millions)
|
|
|
Nine Months Ended
September 30,
|
|
2019
|
|
2018
|
Operating
Activities
|
|
|
|
Net income
|
$
|
123.5
|
|
$
|
148.3
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
68.4
|
|
69.0
|
Debt extinguishment
costs
|
—
|
|
0.1
|
Share-based
compensation expense
|
8.7
|
|
8.3
|
Change in assets and
liabilities, net of the effect of acquisitions:
|
|
|
|
Increase in accounts
receivable
|
(12.7)
|
|
(70.6)
|
Decrease (increase) in
inventories
|
20.0
|
|
(0.1)
|
Increase (decrease) in
accounts payable
|
(28.3)
|
|
28.4
|
Decrease in pension
and other post-retirement benefits
|
(7.0)
|
|
(7.7)
|
Increase (decrease) in
accrued expenses and other assets and liabilities, net
|
26.0
|
|
(4.8)
|
Net cash provided by
operating activities
|
198.6
|
|
170.9
|
Investing
Activities
|
|
|
|
Capital
expenditures
|
(47.9)
|
|
(51.2)
|
Business
acquisitions, net of cash acquired
|
(119.6)
|
|
(98.6)
|
Sale of and proceeds
from other assets
|
5.3
|
|
3.9
|
Net cash used by
investing activities
|
(162.2)
|
|
(145.9)
|
Financing
Activities
|
|
|
|
Borrowings under
credit facilities
|
882.4
|
|
835.3
|
Repayments under
credit facilities
|
(808.5)
|
|
(797.5)
|
Repayment of other
debt
|
—
|
|
(16.4)
|
Purchase of common
shares for treasury
|
(26.9)
|
|
(53.0)
|
Cash dividends
paid
|
(45.7)
|
|
(42.1)
|
Repayment of
long-term debt
|
(4.9)
|
|
(4.9)
|
Payments of
withholding tax on share awards
|
(2.0)
|
|
(3.9)
|
Debt financing
costs
|
(0.2)
|
|
(0.5)
|
Net cash used by
financing activities
|
(5.8)
|
|
(83.0)
|
Effect of exchange
rate changes on cash
|
(1.9)
|
|
(4.8)
|
Increase (decrease)
in cash and cash equivalents
|
28.7
|
|
(62.8)
|
Cash and cash
equivalents at beginning of period
|
170.9
|
|
243.6
|
Cash and cash
equivalents at end of period
|
$
|
199.6
|
|
$
|
180.8
|
Attachment
6
|
PolyOne
Corporation Business Segment 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,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Sales:
|
|
|
|
|
|
|
|
Color,
Additives and Inks
|
$
|
246.3
|
|
$
|
261.0
|
|
$
|
777.1
|
|
$
|
805.6
|
Specialty Engineered Materials
|
183.0
|
|
166.7
|
|
568.2
|
|
495.3
|
Distribution
|
295.9
|
|
321.8
|
|
919.8
|
|
960.6
|
Corporate and eliminations
|
(19.9)
|
|
(20.5)
|
|
(61.0)
|
|
(57.6)
|
Sales
|
$
|
705.3
|
|
$
|
729.0
|
|
$
|
2,204.1
|
|
$
|
2,203.9
|
|
|
|
|
|
|
|
|
Gross
margin:
|
|
|
|
|
|
|
|
Color,
Additives and Inks
|
$
|
83.7
|
|
$
|
88.8
|
|
$
|
264.5
|
|
$
|
275.3
|
Specialty Engineered Materials
|
48.1
|
|
44.4
|
|
152.5
|
|
134.8
|
Distribution
|
32.7
|
|
31.4
|
|
101.1
|
|
95.2
|
Corporate and eliminations
|
(4.0)
|
|
(7.4)
|
|
(14.2)
|
|
(21.4)
|
Gross
margin
|
$
|
160.5
|
|
$
|
157.2
|
|
$
|
503.9
|
|
$
|
483.9
|
|
|
|
|
|
|
|
|
Selling and
administrative expense:
|
|
|
|
|
|
|
|
Color,
Additives and Inks
|
$
|
45.3
|
|
$
|
47.7
|
|
$
|
144.3
|
|
$
|
146.8
|
Specialty Engineered Materials
|
27.8
|
|
25.5
|
|
85.2
|
|
74.7
|
Distribution
|
13.9
|
|
13.8
|
|
42.7
|
|
40.7
|
Corporate and eliminations
|
30.4
|
|
21.5
|
|
95.4
|
|
73.3
|
Selling and
administrative expense
|
$
|
117.4
|
|
$
|
108.5
|
|
$
|
367.6
|
|
$
|
335.5
|
|
|
|
|
|
|
|
|
Operating
income:
|
|
|
|
|
|
|
|
Color,
Additives and Inks
|
$
|
38.4
|
|
$
|
41.1
|
|
$
|
120.2
|
|
$
|
128.5
|
Specialty Engineered Materials
|
20.3
|
|
18.9
|
|
67.3
|
|
60.1
|
Distribution
|
18.8
|
|
17.6
|
|
58.4
|
|
54.5
|
Corporate and eliminations
|
(34.4)
|
|
(28.9)
|
|
(109.6)
|
|
(94.7)
|
Operating
income
|
$
|
43.1
|
|
$
|
48.7
|
|
$
|
136.3
|
|
$
|
148.4
|
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
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
Sales
|
$
|
705.3
|
|
|
$
|
729.0
|
|
|
$
|
2,204.1
|
|
|
$
|
2,203.9
|
|
|
|
|
|
|
|
|
|
Gross margin -
GAAP
|
160.5
|
|
|
157.2
|
|
|
503.9
|
|
|
483.9
|
|
Special items in
gross margin (Attachment 3)
|
2.4
|
|
|
6.0
|
|
|
8.1
|
|
|
17.7
|
|
Adjusted Gross
margin
|
$
|
162.9
|
|
|
$
|
163.2
|
|
|
$
|
512.0
|
|
|
$
|
501.6
|
|
|
|
|
|
|
|
|
|
Adjusted Gross margin
as a percent of sales
|
23.1
|
%
|
|
22.4
|
%
|
|
23.2
|
%
|
|
22.8
|
%
|
|
|
|
|
|
|
|
|
Operating income -
GAAP
|
43.1
|
|
|
48.7
|
|
|
136.3
|
|
|
148.4
|
|
Special items in
operating income (Attachment 3)
|
16.4
|
|
|
8.2
|
|
|
47.1
|
|
|
32.6
|
|
Adjusted
Operating income
|
$
|
59.5
|
|
|
$
|
56.9
|
|
|
$
|
183.4
|
|
|
$
|
181.0
|
|
|
|
|
|
|
|
|
|
Adjusted Operating
income as a percent of sales
|
8.4
|
%
|
|
7.8
|
%
|
|
8.3
|
%
|
|
8.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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, 2019
|
|
Three Months Ended
September
30, 2018
|
|
GAAP
Results
|
|
Special
Items
|
|
Adjusted
Results
|
|
GAAP
Results
|
|
Special
Items
|
|
Adjusted
Results
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations before income
taxes
|
$
|
28.2
|
|
|
$
|
16.3
|
|
$
|
44.5
|
|
|
$
|
33.8
|
|
|
$
|
8.2
|
|
$
|
42.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense -
GAAP
|
(4.6)
|
|
|
—
|
|
(4.6)
|
|
|
(1.3)
|
|
|
—
|
|
(1.3)
|
|
Income tax impact of
special items (Attachment
3)
|
—
|
|
|
(4.1)
|
|
(4.1)
|
|
|
—
|
|
|
(2.9)
|
|
(2.9)
|
|
Tax adjustments
(Attachment 3)
|
—
|
|
|
(1.7)
|
|
(1.7)
|
|
|
—
|
|
|
(4.8)
|
|
(4.8)
|
|
Income tax
expense
|
$
|
(4.6)
|
|
|
$
|
(5.8)
|
|
$
|
(10.4)
|
|
|
$
|
(1.3)
|
|
|
$
|
(7.7)
|
|
$
|
(9.0)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Tax
Rate
|
16.3
|
%
|
|
|
|
23.4
|
%
|
|
3.8
|
%
|
|
|
|
21.4
|
%
|
|
Nine Months
Ended
September
30, 2019
|
|
Nine Months
Ended
September
30, 2018
|
|
GAAP
Results
|
|
Special
Items
|
|
Adjusted
Results
|
|
GAAP
Results
|
|
Special
Items
|
|
Adjusted
Results
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations before income
taxes
|
$
|
90.1
|
|
|
$
|
46.7
|
|
$
|
136.8
|
|
|
$
|
103.1
|
|
|
$
|
32.5
|
|
$
|
135.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense -
GAAP
|
(20.8)
|
|
|
—
|
|
(20.8)
|
|
|
(14.2)
|
|
|
—
|
|
(14.2)
|
|
Income tax impact of
special items (Attachment
3)
|
—
|
|
|
(11.5)
|
|
(11.5)
|
|
|
—
|
|
|
(9.2)
|
|
(9.2)
|
|
Tax adjustments
(Attachment 3)
|
—
|
|
|
0.7
|
|
0.7
|
|
|
—
|
|
|
(10.3)
|
|
(10.3)
|
|
Income tax
expense
|
$
|
(20.8)
|
|
|
$
|
(10.8)
|
|
$
|
(31.6)
|
|
|
$
|
(14.2)
|
|
|
$
|
(19.5)
|
|
$
|
(33.7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Tax
Rate
|
23.1
|
%
|
|
|
|
23.1
|
%
|
|
13.8
|
%
|
|
|
|
24.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attachment
8
|
PolyOne
Corporation Impacts of Discontinued Operations on
Earnings Per Share (Unaudited)
|
|
|
Three Months
Ended
March
31,
|
|
Three Months
Ended
June
30,
|
|
Three Months
Ended
September
30,
|
Three Months
Ended
December
31,
|
Year
Ended
December
31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2018
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated adjusted
EPS
from con't ops
|
$
|
0.43
|
|
$
|
0.39
|
|
$
|
0.48
|
|
$
|
0.46
|
|
$
|
0.44
|
|
$
|
0.41
|
|
$
|
0.24
|
|
|
$
|
1.51
|
|
Estimated adjusted
EPS
from disc ops
|
0.21
|
|
0.29
|
|
0.26
|
|
0.25
|
|
0.26
|
|
0.22
|
|
0.17
|
|
|
0.92
|
|
|
$
|
0.64
|
|
$
|
0.68
|
|
$
|
0.74
|
|
$
|
0.71
|
|
$
|
0.70
|
|
$
|
0.63
|
|
$
|
0.41
|
|
|
$
|
2.43
|
|
Special items,
before
income taxes
|
(0.17)
|
|
(0.11)
|
|
(0.25)
|
|
(0.18)
|
|
(0.21)
|
|
(0.11)
|
|
(0.33)
|
|
|
(0.75)
|
|
Income tax benefit
on
special items
|
0.04
|
|
0.03
|
|
0.06
|
|
0.05
|
|
0.05
|
|
0.04
|
|
0.07
|
|
|
0.19
|
|
Tax
adjustments
|
(0.02)
|
|
(0.01)
|
|
(0.01)
|
|
0.06
|
|
0.02
|
|
0.06
|
|
—
|
|
|
0.13
|
|
GAAP EPS
|
$
|
0.49
|
|
$
|
0.59
|
|
$
|
0.54
|
|
$
|
0.64
|
|
$
|
0.56
|
|
$
|
0.62
|
|
$
|
0.15
|
|
|
$
|
2.00
|
|
|
See Attachment
1 for details on the use by senior management of diluted
adjusted earnings per share (EPS) from continuing operations
attributable to PolyOne shareholders, excluding special items, to
assess performance and facilitate comparability of results. See
Attachment 3 for a definition and summary of special items
and tax adjustments.
|
View original
content:http://www.prnewswire.com/news-releases/polyone-announces-third-quarter-2019-results-300942868.html
SOURCE PolyOne Corporation