CLEVELAND, Jan. 28, 2020 /PRNewswire/ -- PolyOne Corporation
(NYSE: POL) today reported its full year and fourth quarter results
for 2019. Full year GAAP earnings per share from continuing
operations were $0.97 in 2019
compared to $1.09 in 2018.
Adjusted earnings per share in 2019 increased 12% to $1.69, from $1.51
in 2018.
Fourth quarter GAAP earnings per share from continuing
operations of $0.08 in 2019 compared
to a loss of $0.02 per share in the
fourth quarter of 2018. Adjusted earnings per share of
$0.34 in the fourth quarter of 2019
exceeded the $0.30 expected at the
time of the company's fourth quarter outlook announcement.
The better than expected earnings were driven primarily by record
performance from Advanced Composites.
Special items for the fourth quarter of 2019 included
acquisition-related costs, partially offset by a favorable
mark-to-market pension adjustment. Special items in the
fourth quarter of 2018 are primarily related to an unfavorable
mark-to-market pension adjustment (Attachment 3).
"Overall results for the fourth quarter were better than
expected, and I'm pleased to report 12% adjusted EPS growth for the
full year," said Robert M.
Patterson, Chairman, President and Chief Executive Officer,
PolyOne Corporation. "Our investments in composites and other
sustainable solutions helped to distinguish our performance, as
Specialty Engineered Materials (SEM) led the way in both the fourth
quarter and the full year."
The company noted that for the full year, SEM increased revenue
and operating income by 16% and 20%, respectively. Growth in
composites and wire and cable applications more than offset lower
sales and operating income in Europe and Asia primarily resulting from weaker
automotive demand. The latter demand conditions also
negatively impacted the Color, Additives and Inks segment for the
full year and fourth quarter.
"I also want to highlight our Distribution business, which
increased operating income to a new record of $75 million for the year despite challenging end
market dynamics," Mr. Patterson continued.
"2019 marks our tenth consecutive
year of adjusted EPS growth, which is a milestone accomplishment.
It was also the year we took two major steps forward in our
specialty transformation with the divestiture of PP&S for
$775 million and the definitive
agreement for the acquisition of Clariant Masterbatch," Mr.
Patterson said.
As the company disclosed in December, the Clariant transaction
is expected to add $1.15 billion of
annual revenue, and with run rate synergies will add
$0.85 to adjusted EPS (excluding
step-up of depreciation and amortization) and increase EBITDA from
specialty applications to greater than 85% on a pro forma
basis.
Commenting on the company's outlook, Mr. Patterson said, "We
embark on the new year with clear momentum and confidence in our
ability to deliver double-digit adjusted EPS growth in 2020 and
beyond. With a more specialty portfolio and less exposure to
cyclical end markets, we believe our best days are ahead."
Conference Call
The company will conduct a conference call at 8:00 a.m. Eastern Time on January 28, 2020. To participate in the
conference call, dial 1-844-835-7433 (domestic) or 1-914-495-8589
(international) and provide conference ID number 8047906.
A recording of the call will also be available for one week,
beginning at 12:00 p.m. Eastern Time
on January 28, 2020. To listen to
this recording, dial 1-855-859-2056 (domestic) or 1-404-537-3406
(international) and enter conference ID number 8047906.
About PolyOne
PolyOne Corporation (NYSE: POL), with 2019 revenues of
$2.9 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 5,600 associates, is certified ACC
Responsible Care® and is a founding member of the Alliance to End
Plastic Waste. 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: the
finalization of the Company's financial statements for the year
ending December 31, 2019; the time
required to consummate the acquisition of Clariant's masterbatch
business; the satisfaction or waiver of conditions in the purchase
agreements; any material adverse changes in Clariant's masterbatch
business; the ability to obtain required regulatory or other
third-party approvals and consents and otherwise consummate the
proposed acquisition of Clariant's masterbatch business; our
ability to achieve the strategic and other objectives relating to
the proposed acquisition of Clariant's masterbatch business,
including any expected synergies; our ability to successfully
integrate Clariant's masterbatch business and achieve the expected
results of the acquisition of Clariant's masterbatch business,
including, without limitation, the acquisition being accretive;
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.
Attachment 1
PolyOne
Corporation
|
Summary of
Condensed Consolidated Statements of Income
(Unaudited)
|
(In millions, except
per share data)
|
|
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
Sales
|
$
|
658.6
|
|
|
$
|
677.1
|
|
|
$
|
2,862.7
|
|
|
$
|
2,881.0
|
|
Operating
income
|
20.5
|
|
|
30.2
|
|
|
156.8
|
|
|
178.6
|
|
Net income (loss)
from continuing operations attributable to PolyOne
shareholders
|
6.4
|
|
|
(1.3)
|
|
|
75.5
|
|
|
87.7
|
|
Basic earnings (loss)
per share from continuing operations
attributable to PolyOne shareholders
|
$
|
0.08
|
|
|
$
|
(0.02)
|
|
|
$
|
0.98
|
|
|
$
|
1.10
|
|
Diluted earnings (loss)
per share from continuing operations
attributable to PolyOne shareholders
|
$
|
0.08
|
|
|
$
|
(0.02)
|
|
|
$
|
0.97
|
|
|
$
|
1.09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
December 31, 2019
|
|
Three Months
Ended
December 31, 2018
|
Reconciliation to
Condensed Consolidated Statements of
Income
|
$
|
|
EPS
|
|
$
|
|
EPS
|
|
|
|
|
|
|
|
|
Net income (loss)
from continuing operations attributable to PolyOne
shareholders
|
$
|
6.4
|
|
|
$
|
0.08
|
|
|
$
|
(1.3)
|
|
|
$
|
(0.02)
|
|
Special items, after
tax (Attachment 3)
|
19.9
|
|
|
0.26
|
|
|
20.6
|
|
|
0.26
|
|
Adjusted net income /
EPS - excluding special items
|
$
|
26.3
|
|
|
$
|
0.34
|
|
|
$
|
19.3
|
|
|
$
|
0.24
|
|
|
Year Ended
December 31, 2019
|
|
Year Ended
December 31, 2018
|
Reconciliation to
Condensed Consolidated Statements of
Income
|
$
|
|
EPS
|
|
$
|
|
EPS
|
|
|
|
|
|
|
|
|
Net income from
continuing operations attributable to PolyOne
shareholders
|
$
|
75.5
|
|
|
$
|
0.97
|
|
|
$
|
87.7
|
|
|
$
|
1.09
|
|
Special items, after
tax (Attachment 3)
|
55.8
|
|
|
0.72
|
|
|
33.6
|
|
|
0.42
|
|
Adjusted net income /
EPS - excluding special items
|
$
|
131.3
|
|
|
$
|
1.69
|
|
|
$
|
121.3
|
|
|
$
|
1.51
|
|
Attachment 2
PolyOne
Corporation
|
Condensed
Consolidated Statements of Income (Unaudited)
|
(In millions, except
per share data)
|
|
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Sales
|
$
|
658.6
|
|
|
$
|
677.1
|
|
|
$
|
2,862.7
|
|
|
$
|
2,881.0
|
|
Cost of
sales
|
505.3
|
|
|
536.2
|
|
|
2,205.5
|
|
|
2,256.2
|
|
Gross
margin
|
153.3
|
|
|
140.9
|
|
|
657.2
|
|
|
624.8
|
|
Selling and
administrative expense
|
132.8
|
|
|
110.7
|
|
|
500.4
|
|
|
446.2
|
|
Operating
income
|
20.5
|
|
|
30.2
|
|
|
156.8
|
|
|
178.6
|
|
Interest expense,
net
|
(11.9)
|
|
|
(15.6)
|
|
|
(59.5)
|
|
|
(62.8)
|
|
Debt extinguishment
costs
|
—
|
|
|
(1.0)
|
|
|
—
|
|
|
(1.1)
|
|
Other income
(expense), net
|
10.7
|
|
|
(14.9)
|
|
|
12.1
|
|
|
(12.9)
|
|
Income (loss) from
continuing operations before income taxes
|
19.3
|
|
|
(1.3)
|
|
|
109.4
|
|
|
101.8
|
|
Income
taxes
|
(12.9)
|
|
|
(0.2)
|
|
|
(33.7)
|
|
|
(14.4)
|
|
Net income (loss)
from continuing operations
|
6.4
|
|
|
(1.5)
|
|
|
75.7
|
|
|
87.4
|
|
Income from
discontinued operations, net of income taxes
|
458.9
|
|
|
12.7
|
|
|
513.1
|
|
|
72.1
|
|
Net income
|
$
|
465.3
|
|
|
$
|
11.2
|
|
|
$
|
588.8
|
|
|
$
|
159.5
|
|
Net loss (income)
attributable to noncontrolling interests
|
—
|
|
|
0.2
|
|
|
(0.2)
|
|
|
0.3
|
|
Net income
attributable to PolyOne common shareholders
|
$
|
465.3
|
|
|
$
|
11.4
|
|
|
$
|
588.6
|
|
|
$
|
159.8
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share attributable to PolyOne common shareholders -
Basic:
|
|
|
|
|
Continuing
operations
|
$
|
0.08
|
|
|
$
|
(0.02)
|
|
|
$
|
0.98
|
|
|
$
|
1.10
|
|
Discontinued
operations
|
5.97
|
|
|
0.17
|
|
|
6.64
|
|
|
0.91
|
|
Total
|
$
|
6.05
|
|
|
$
|
0.15
|
|
|
$
|
7.62
|
|
|
$
|
2.01
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share attributable to PolyOne common shareholders -
Diluted:
|
|
|
|
|
Continuing
operations
|
$
|
0.08
|
|
|
$
|
(0.02)
|
|
|
$
|
0.97
|
|
|
$
|
1.09
|
|
Discontinued
operations
|
5.92
|
|
|
0.16
|
|
|
6.61
|
|
|
0.90
|
|
Total
|
$
|
6.00
|
|
|
$
|
0.14
|
|
|
$
|
7.58
|
|
|
$
|
1.99
|
|
|
|
|
|
|
|
|
|
Cash dividends
declared per share of common stock
|
$
|
0.203
|
|
|
$
|
0.195
|
|
|
$
|
0.788
|
|
|
$
|
0.720
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares used to compute earnings per common share:
|
|
|
|
|
Basic
|
76.9
|
|
|
78.6
|
|
|
77.2
|
|
|
79.7
|
|
Diluted
|
77.5
|
|
|
79.2
|
|
|
77.7
|
|
|
80.4
|
|
Attachment 3
PolyOne
Corporation
|
Summary of Special
Items (Unaudited)
|
(In millions, except
per share data)
|
|
Special items
(1)
|
Three Months Ended
December
31,
|
|
Year Ended
December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Cost of
sales:
|
|
|
|
|
|
|
|
Restructuring costs
|
$
|
—
|
|
|
$
|
(0.1)
|
|
|
$
|
0.3
|
|
|
$
|
(0.6)
|
|
Environmental remediation costs
|
0.3
|
|
|
(3.9)
|
|
|
(10.1)
|
|
|
(23.1)
|
|
Reimbursement of previously incurred environmental costs
|
0.5
|
|
|
0.5
|
|
|
4.5
|
|
|
4.3
|
|
Acquisition related costs
|
—
|
|
|
0.2
|
|
|
(2.0)
|
|
|
(1.6)
|
|
Impact on cost of
sales
|
0.8
|
|
|
(3.3)
|
|
|
(7.3)
|
|
|
(21.0)
|
|
|
|
|
|
|
|
|
|
Selling and
administrative expense:
|
|
|
|
|
|
|
|
Restructuring, legal and other
|
(4.4)
|
|
|
(4.8)
|
|
|
(19.4)
|
|
|
(17.0)
|
|
Acquisition earnout
adjustments
|
(15.7)
|
|
|
(0.7)
|
|
|
(36.4)
|
|
|
(0.7)
|
|
Acquisition related costs
|
(5.3)
|
|
|
(1.0)
|
|
|
(8.6)
|
|
|
(3.7)
|
|
Impact on selling and
administrative expense
|
(25.4)
|
|
|
(6.5)
|
|
|
(64.4)
|
|
|
(21.4)
|
|
|
|
|
|
|
|
|
|
Impact on operating
income
|
(24.6)
|
|
|
(9.8)
|
|
|
(71.7)
|
|
|
(42.4)
|
|
|
|
|
|
|
|
|
|
Debt
extinguishment costs
|
—
|
|
|
(1.0)
|
|
|
—
|
|
|
(1.1)
|
|
Other
income, net
|
0.1
|
|
|
0.2
|
|
|
0.5
|
|
|
0.4
|
|
Pension
& other post-retirement benefits - mark-to-market
adjustment
|
9.5
|
|
|
(15.6)
|
|
|
9.5
|
|
|
(15.6)
|
|
Impact on income from
continuing operations before income taxes
|
(15.0)
|
|
|
(26.2)
|
|
|
(61.7)
|
|
|
(58.7)
|
|
Income tax (expense)
benefit on above special items
|
(0.4)
|
|
|
5.5
|
|
|
11.1
|
|
|
14.7
|
|
Tax
adjustments(2)
|
(4.5)
|
|
|
0.1
|
|
|
(5.2)
|
|
|
10.4
|
|
Impact of special items
on net income from continuing operations
attributable to PolyOne Shareholders
|
$
|
(19.9)
|
|
|
$
|
(20.6)
|
|
|
$
|
(55.8)
|
|
|
$
|
(33.6)
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
common share impact
|
$
|
(0.26)
|
|
|
$
|
(0.26)
|
|
|
$
|
(0.72)
|
|
|
$
|
(0.42)
|
|
|
|
|
|
|
|
|
|
Weighted average shares
used to compute adjusted earnings per
share:
|
|
|
|
|
|
|
|
Diluted
|
77.5
|
|
|
79.2
|
|
77.7
|
|
|
80.4
|
|
|
|
|
|
|
|
|
|
|
(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, including adjustments related to
contingent consideration; 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)
|
|
|
Year Ended
December 31, 2019
|
|
Year Ended
December 31, 2018
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
864.7
|
|
|
$
|
170.9
|
|
Accounts receivable,
net
|
326.8
|
|
|
347.2
|
|
Inventories,
net
|
260.9
|
|
|
284.6
|
|
Current assets held
for sale
|
—
|
|
|
129.7
|
|
Other current
assets
|
54.0
|
|
|
66.4
|
|
Total current
assets
|
1,506.4
|
|
|
998.8
|
|
Property,
net
|
407.4
|
|
|
384.5
|
|
Goodwill
|
685.7
|
|
|
639.1
|
|
Intangible assets,
net
|
469.3
|
|
|
422.4
|
|
Operating lease
assets, net
|
63.8
|
|
|
—
|
|
Non-current assets
held for sale
|
—
|
|
|
124.5
|
|
Other non-current
assets
|
133.3
|
|
|
154.0
|
|
Total
assets
|
$
|
3,265.9
|
|
|
$
|
2,723.3
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Short-term and
current portion of long-term debt
|
$
|
18.4
|
|
|
$
|
19.4
|
|
Accounts
payable
|
283.3
|
|
|
305.0
|
|
Current operating
lease obligations
|
21.0
|
|
|
—
|
|
Current liabilities
held for sale
|
—
|
|
|
104.5
|
|
Accrued expenses and
other current liabilities
|
372.4
|
|
|
128.7
|
|
Total current
liabilities
|
695.1
|
|
|
557.6
|
|
Non-current
liabilities:
|
|
|
|
Long-term
debt
|
1,210.9
|
|
|
1,336.2
|
|
Pension and other
post-retirement benefits
|
56.6
|
|
|
54.3
|
|
Deferred income
taxes
|
63.5
|
|
|
69.1
|
|
Non-current operating
lease obligations
|
42.8
|
|
|
—
|
|
Non-current
liabilities held for sale
|
—
|
|
|
3.3
|
|
Other non-current
liabilities
|
144.3
|
|
|
162.2
|
|
Total non-current
liabilities
|
1,518.1
|
|
|
1,625.1
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
PolyOne shareholders'
equity
|
1,051.9
|
|
|
540.0
|
|
Noncontrolling
interest
|
0.8
|
|
|
0.6
|
|
Total
equity
|
1,052.7
|
|
|
540.6
|
|
Total liabilities
and equity
|
$
|
3,265.9
|
|
|
$
|
2,723.3
|
|
Attachment 5
PolyOne
Corporation
|
Condensed
Consolidated Statements of Cash Flows (Unaudited)
|
(In
millions)
|
|
|
Year Ended
December 31,
|
|
2019
|
|
2018
|
Operating
Activities
|
|
|
|
Net income
|
$
|
588.8
|
|
|
$
|
159.5
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
Gain on sale of
business, net of tax
|
(457.7)
|
|
|
—
|
|
Depreciation and
amortization
|
87.5
|
|
|
88.5
|
|
Accelerated
depreciation and fixed asset charges associated with
restructuring activities
|
—
|
|
|
3.0
|
|
Debt extinguishment
costs
|
—
|
|
|
1.1
|
|
Share-based
compensation expense
|
12.3
|
|
|
10.9
|
|
Changes in assets and
liabilities, net of the effect of acquisitions:
|
|
|
|
Decrease (increase) in
accounts receivable
|
32.9
|
|
|
(11.3)
|
|
Decrease (increase) in
inventories
|
40.2
|
|
|
(10.6)
|
|
(Decrease) increase in
accounts payable
|
(27.1)
|
|
|
7.9
|
|
(Decrease) increase in
pension and other post-retirement benefits
|
(19.7)
|
|
|
4.8
|
|
Increase in
post-acquisition earnouts
|
36.4
|
|
|
0.7
|
|
Increase (decrease) in
accrued expenses and other assets and liabilities - net
|
8.1
|
|
|
(0.8)
|
|
Net cash provided
by operating activities
|
301.7
|
|
|
253.7
|
|
Investing
activities
|
|
|
|
Capital
expenditures
|
(81.7)
|
|
|
(76.0)
|
|
Business
acquisitions, net of cash acquired
|
(119.6)
|
|
|
(98.6)
|
|
Proceeds from
divestiture
|
761.8
|
|
|
—
|
|
Proceeds from other
assets
|
51.4
|
|
|
4.3
|
|
Net cash used by
investing activities
|
611.9
|
|
|
(170.3)
|
|
Financing
activities
|
|
|
|
Borrowings under
credit facilities
|
963.4
|
|
|
1,152.9
|
|
Repayments under
credit facilities
|
(1,083.9)
|
|
|
(1,090.3)
|
|
Purchase of common
shares for treasury
|
(26.9)
|
|
|
(123.0)
|
|
Cash dividends
paid
|
(60.9)
|
|
|
(56.1)
|
|
Repayment of other
debt
|
(1.8)
|
|
|
(16.4)
|
|
Repayment of
long-term debt
|
(6.5)
|
|
|
(6.5)
|
|
Payments on
withholding tax on share awards
|
(2.4)
|
|
|
(4.1)
|
|
Debt financing
costs
|
(0.2)
|
|
|
(4.6)
|
|
Net cash used by
financing activities
|
(219.2)
|
|
|
(148.1)
|
|
Effect of exchange
rate changes on cash
|
(0.6)
|
|
|
(8.0)
|
|
Increase
(decrease) in cash and cash equivalents
|
693.8
|
|
|
(72.7)
|
|
Cash and cash
equivalents at beginning of year
|
170.9
|
|
|
243.6
|
|
Cash and cash
equivalents at end of year
|
$
|
864.7
|
|
|
$
|
170.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
December 31,
|
|
Year Ended
December 31,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Sales:
|
|
|
|
|
|
|
|
Color, Additives and
Inks
|
$
|
226.7
|
|
|
$
|
240.9
|
|
|
$
|
1,003.8
|
|
|
$
|
1,046.5
|
|
Specialty Engineered
Materials
|
177.5
|
|
|
150.5
|
|
|
745.7
|
|
|
645.8
|
|
Distribution
|
272.4
|
|
|
304.8
|
|
|
1,192.2
|
|
|
1,265.4
|
|
Corporate and
eliminations
|
(18.0)
|
|
|
(19.1)
|
|
|
(79.0)
|
|
|
(76.7)
|
|
Sales
|
$
|
658.6
|
|
|
$
|
677.1
|
|
|
$
|
2,862.7
|
|
|
$
|
2,881.0
|
|
|
|
|
|
|
|
|
|
Gross
margin:
|
|
|
|
|
|
|
|
Color, Additives and
Inks
|
$
|
73.9
|
|
|
$
|
78.1
|
|
|
$
|
338.4
|
|
|
$
|
353.4
|
|
Specialty Engineered
Materials
|
47.7
|
|
|
36.9
|
|
|
200.2
|
|
|
171.7
|
|
Distribution
|
31.0
|
|
|
30.6
|
|
|
132.1
|
|
|
125.8
|
|
Corporate and
eliminations
|
0.7
|
|
|
(4.7)
|
|
|
(13.5)
|
|
|
(26.1)
|
|
Gross
margin
|
$
|
153.3
|
|
|
$
|
140.9
|
|
|
$
|
657.2
|
|
|
$
|
624.8
|
|
|
|
|
|
|
|
|
|
Selling and
administrative expense:
|
|
|
|
|
|
|
|
Color, Additives and
Inks
|
$
|
46.7
|
|
|
$
|
48.1
|
|
|
$
|
191.0
|
|
|
$
|
194.9
|
|
Specialty Engineered
Materials
|
28.2
|
|
|
24.7
|
|
|
113.4
|
|
|
99.4
|
|
Distribution
|
14.0
|
|
|
13.6
|
|
|
56.7
|
|
|
54.3
|
|
Corporate and
eliminations
|
43.9
|
|
|
24.3
|
|
|
139.3
|
|
|
97.6
|
|
Selling and
administrative expense
|
$
|
132.8
|
|
|
$
|
110.7
|
|
|
$
|
500.4
|
|
|
$
|
446.2
|
|
|
|
|
|
|
|
|
|
Operating
income:
|
|
|
|
|
|
|
|
Color, Additives and
Inks
|
$
|
27.2
|
|
|
$
|
30.0
|
|
|
$
|
147.4
|
|
|
$
|
158.5
|
|
Specialty Engineered
Materials
|
19.5
|
|
|
12.2
|
|
|
86.8
|
|
|
72.3
|
|
Distribution
|
17.0
|
|
|
17.0
|
|
|
75.4
|
|
|
71.5
|
|
Corporate and
eliminations
|
(43.2)
|
|
|
(29.0)
|
|
|
(152.8)
|
|
|
(123.7)
|
|
Operating
income
|
$
|
20.5
|
|
|
$
|
30.2
|
|
|
$
|
156.8
|
|
|
$
|
178.6
|
|
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
December 31,
|
|
Year Ended
December 31,
|
Reconciliation to
Consolidated Statements of Income
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
Sales
|
$
|
658.6
|
|
|
$
|
677.1
|
|
|
$
|
2,862.7
|
|
|
$
|
2,881.0
|
|
|
|
|
|
|
|
|
|
Gross margin -
GAAP
|
153.3
|
|
|
140.9
|
|
|
657.2
|
|
|
624.8
|
|
Special items in
gross margin (Attachment 3)
|
(0.8)
|
|
|
3.3
|
|
|
7.3
|
|
|
21.0
|
|
Adjusted Gross
margin
|
$
|
152.5
|
|
|
$
|
144.2
|
|
|
$
|
664.5
|
|
|
$
|
645.8
|
|
|
|
|
|
|
|
|
|
Adjusted Gross margin
as a percent of sales
|
23.2
|
%
|
|
21.3
|
%
|
|
23.2
|
%
|
|
22.4
|
%
|
|
|
|
|
|
|
|
|
Operating income -
GAAP
|
20.5
|
|
|
30.2
|
|
|
156.8
|
|
|
178.6
|
|
Special items in
operating income (Attachment 3)
|
24.6
|
|
|
9.8
|
|
|
71.7
|
|
|
42.4
|
|
Adjusted
Operating income
|
$
|
45.1
|
|
|
$
|
40.0
|
|
|
$
|
228.5
|
|
|
$
|
221.0
|
|
|
|
|
|
|
|
|
|
Adjusted Operating
income as a percent of sales
|
6.8
|
%
|
|
5.9
|
%
|
|
8.0
|
%
|
|
7.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
The tables below
reconciles pre-special income tax expense and the pre-special
effective tax rate to their most directly comparable GAAP financial
measures.
|
|
Three Months
Ended
December 31, 2019
|
|
Three Months
Ended
December 31, 2018
|
|
GAAP
Results
|
|
Special
Items
|
|
Adjusted
Results
|
|
GAAP
Results
|
|
Special
Items
|
|
Adjusted
Results
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations before
income taxes
|
$
|
19.3
|
|
|
$
|
15.0
|
|
|
$
|
34.3
|
|
|
$
|
(1.3)
|
|
|
$
|
26.2
|
|
|
$
|
24.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense -
GAAP
|
(12.9)
|
|
|
—
|
|
|
(12.9)
|
|
|
(0.2)
|
|
|
—
|
|
|
(0.2)
|
|
Income tax impact of
special items (Attachment 3)
|
—
|
|
|
0.4
|
|
|
0.4
|
|
|
—
|
|
|
(5.5)
|
|
|
(5.5)
|
|
Tax adjustments
(Attachment 3)
|
—
|
|
|
4.5
|
|
|
4.5
|
|
|
—
|
|
|
(0.1)
|
|
|
(0.1)
|
|
Income tax (expense)
benefit
|
$
|
(12.9)
|
|
|
$
|
4.9
|
|
|
$
|
(8.0)
|
|
|
$
|
(0.2)
|
|
|
$
|
(5.6)
|
|
|
$
|
(5.8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Tax
Rate
|
66.8
|
%
|
|
|
|
23.2
|
%
|
|
(15.4)
|
%
|
|
|
|
23.3
|
%
|
|
Year Ended
December 31, 2019
|
|
Year Ended
December 31, 2018
|
|
GAAP
Results
|
|
Special
Items
|
|
Adjusted
Results
|
|
GAAP
Results
|
|
Special
Items
|
|
Adjusted
Results
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations before
income taxes
|
$
|
109.4
|
|
|
$
|
61.7
|
|
|
$
|
171.1
|
|
|
$
|
101.8
|
|
|
$
|
58.7
|
|
|
$
|
160.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense -
GAAP
|
(33.7)
|
|
|
—
|
|
|
(33.7)
|
|
|
(14.4)
|
|
|
—
|
|
|
(14.4)
|
|
Income tax impact of
special items (Attachment 3)
|
—
|
|
|
(11.1)
|
|
|
(11.1)
|
|
|
—
|
|
|
(14.7)
|
|
|
(14.7)
|
|
Tax adjustments
(Attachment 3)
|
—
|
|
|
5.2
|
|
|
5.2
|
|
|
—
|
|
|
(10.4)
|
|
|
(10.4)
|
|
Income tax
expense
|
$
|
(33.7)
|
|
|
$
|
(5.9)
|
|
|
$
|
(39.6)
|
|
|
$
|
(14.4)
|
|
|
$
|
(25.1)
|
|
|
$
|
(39.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Tax
Rate
|
30.8
|
%
|
|
|
|
23.1
|
%
|
|
14.1
|
%
|
|
|
|
24.6
|
%
|
Liquidity is
calculated as follows:
|
|
(In
millions)
|
As of December 31,
2019
|
Cash and cash
equivalents
|
$
|
864.7
|
|
Revolving credit
availability
|
281.1
|
|
Liquidity
|
$
|
1,145.8
|
|
View original
content:http://www.prnewswire.com/news-releases/polyone-announces-fourth-quarter-and-full-year-2019-results-300994332.html
SOURCE PolyOne Corporation