Exhibit 99.1
POLYONE UPDATES 2005 THIRD-QUARTER OUTLOOK
CLEVELAND, September 13 /PRNewswire-FirstCall/ -- PolyOne Corporation (NYSE:
POL), a leading global polymer compounding and North American distribution
company, today updated its outlook for the third quarter that will end September
30, 2005. This action is part of PolyOne's efforts to inform investors at
mid-quarter of any significant changes to major business drivers.
Since PolyOne reported second-quarter results on July 28, 2005, three
factors are adversely affecting the outlook for the third quarter:
- In North America, the anticipated increase in demand over the second
quarter has not occurred.
- Prior to Hurricane Katrina, natural gas and ethylene costs rose to
higher-than-anticipated levels, driving higher raw material costs and
placing additional pressure on product spreads (product selling prices
over raw material costs).
- The hurricane's immediate and longer-term negative effects from
production and supply disruptions and from higher energy and derivative
raw material costs are being assessed, but the full magnitude remains
unknown.
Entering the quarter, PolyOne anticipated fairly stable raw material pricing
and a counter-seasonal pickup in demand. Consistent with industry consensus,
PolyOne's view was that the unusual decline in North American second-quarter
demand was due largely to broad customer inventory reductions, and that demand
would improve in the third quarter. This demand momentum has not yet
materialized, and the Company now expects flat shipment volumes compared with
the second quarter, rather than the 1 percent to 3 percent increase in the
earlier outlook.
European demand is tracking earlier expectations, and the Company continues
to experience strong shipment growth in Asia.
The immediate impact of Hurricane Katrina is reflected largely in lowered
Resin and Intermediates (R&I) segment earnings expectations. The SunBelt
Chlor-Alkali plant in Macintosh, Alabama, lost a week of production, and
operations going forward are dependent upon railcar availability. Further, Oxy
Vinyls, LP in particular faces hurricane-driven natural gas and ethylene cost
increases, which are resulting in significantly higher operating costs and
pressure on product spreads. PolyOne expects logistical cost increases,
including fuel surcharges and rail system dislocations, to negatively affect all
North American operations for the near future.
As a result of these factors, PolyOne expects that R&I segment operating
income should decrease significantly more from the second-quarter level than
previously thought. Hurricane Katrina's impact on the industry is dynamic and
continues to evolve.
The July 28, 2005, outlook for PolyOne's discontinued operations, Specialty
Resins and Engineered Films, is unchanged.
In the third quarter, the Company expects to generate positive operating
cash flow, although the level remains subject to the unknown variables described
above. Additionally, the recently amended credit facilities (as described in the
second-quarter 2005 Form 10-Q) assure adequate liquidity.
PolyOne Third-quarter 2005 Earnings Release and Conference Call
PolyOne intends to release its third-quarter 2005 earnings after the close
of business on Thursday, October 27, 2005, and host a conference call at 9:00
a.m. Eastern time on Friday, October 28, 2005. The conference dial-in number is
888-489-0038 (domestic) or 706-643-1611 (international), conference topic:
PolyOne Earnings Call. The replay number is 800-642-1687 (domestic) or
706-645-9291 (international). The conference ID for the replay is 9932167. The
call will be broadcast live and then via replay for two weeks on the Company's
Web site at http://www.polyone.com.
About PolyOne
PolyOne Corporation, with 2004 annual revenues of approximately $2.2
billion, is a leading global compounding and North American distribution company
with continuing operations in thermoplastic compounds, specialty polymer
formulations, color and additive systems, and thermoplastic resin distribution.
Headquartered in northeast Ohio, PolyOne has employees at manufacturing sites in
North America, Europe, Asia and Australia, and joint ventures in North America
and South America. Information on PolyOne's products and services can be found
at http://www.polyone.com.
PolyOne Investor & Media Contact: Dennis Cocco
Vice President, Investor Relations
& Communications
440.930.1538
Forward-looking Statements
In this press release, statements that are not reported financial results or
other historical information are "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. Forward- looking
statements give current expectations or forecasts of future events and are not
guarantees of future performance. They are based on management's expectations
that involve a number of business risks and uncertainties, any of which could
cause actual results to differ materially from those expressed in or implied by
the forward-looking statements. You can identify these statements by the fact
that they do not relate strictly to historic or current facts. They use words
such as "anticipate," "estimate," "expect," "project," "intend," "plan,"
"believe" and other words and terms of similar meaning in connection with any
discussion of future operating or financial performance. In particular, these
include statements relating to future actions; prospective changes in raw
material costs, product pricing or product demand; future performance,
including, without limitation, meeting cash flow goals, receiving cash
distributions from equity affiliates and achieving working capital targets;
results of current and anticipated market conditions and market strategies;
sales efforts; expenses; the outcome of contingencies such as legal proceedings;
and financial results. Factors that could cause actual results to differ
materially include, but are not limited to:
- the effect on foreign operations of currency fluctuations, tariffs,
nationalization, exchange controls, limitations on foreign investment in
local businesses and other political, economic and regulatory risks;
- changes in U.S., regional or world polymer consumption growth rates
affecting PolyOne's markets;
- changes in global industry capacity or in the rate at which anticipated
changes in industry capacity come online in the polyvinyl chloride (PVC),
chlor-alkali, vinyl chloride monomer (VCM) or other industries in which
PolyOne participates;
- fluctuations in raw material prices, quality and supply and in energy
prices and supply, in particular fluctuations outside the normal range of
industry cycles, including those related to the effects of Hurricane
Katrina;
- production outages or material costs associated with scheduled or
unscheduled maintenance programs;
- costs or difficulties and delays related to the operation of joint
venture entities;
- lack of day-to-day operating control, including procurement of raw
materials, of equity or joint venture affiliates;
- partial control over investment decisions and dividend distribution
policy of the OxyVinyls partnership and other minority equity holdings of
PolyOne;
- an inability to launch new products and/or services within PolyOne's
various businesses;
- the possibility of further goodwill impairment;
- an inability to maintain any required licenses or permits;
- an inability to comply with any environmental laws and regulations;
- the cost of compliance with environmental laws and regulations, including
any increased cost of complying with new or revised laws and regulations;
- unanticipated developments that could occur with respect to contingencies
such as litigation and environmental matters, including any developments
that would require any increase in our costs and/or reserves for such
contingencies;
- an inability to achieve or delays in achieving or achievement of less
than the anticipated financial benefit from initiatives related to cost
reductions and employee productivity goals;
- a delay or inability to achieve targeted debt level reductions through
divestitures and/or other means;
- an inability to access the revolving credit facility and/or the
receivables sale facility as a result of breaching covenants due to not
achieving anticipated earnings performance or for any other reason;
- any poor performance of our pension plan assets and any obligation on
our part to fund PolyOne's pension plan;
- any delay and/or inability to bring the North American Colors and
Additives Masterbatch and the Engineered Materials product platforms to
profitability;
- an inability to raise prices or sustain price increases for products;
- an inability or delay beyond December 31, 2005 in finding buyers of
discontinued operations or other non-core assets for reasonable and
acceptable terms;
- an inability to achieve anticipated earnings performance due to the
divestment of a non-core business;
- an inability to complete the sale of discontinued businesses due to
problems or delays associated with legal proceedings, regulatory
approvals and/or buyers receiving financing for the transaction or any
other reasons; and
- other factors affecting our business beyond our control, including,
without limitation, changes in the general economy, changes in interest
rates and changes in the rate of inflation.
We cannot guarantee that any forward-looking statement will be realized,
although we believe we have been prudent in our plans and assumptions.
Achievement of future results is subject to risks, uncertainties and inaccurate
assumptions. Should known or unknown risks or uncertainties materialize, or
should underlying assumptions prove inaccurate, actual results could vary
materially from those anticipated, estimated or projected. Investors should bear
this in mind as they consider forward-looking statements.
We undertake no obligation to publicly update forward-looking statements,
whether as a result of new information, future events or otherwise. You are
advised, however, to consult any further disclosures we make on related subjects
in our reports on Form 10-Q, 8-K and 10-K provided to the Securities and
Exchange Commission. You should understand that it is not possible to predict or
identify all risk factors. Consequently, you should not consider any list to be
a complete set of all potential risks or uncertainties.
(Ref. #91305)
SOURCE PolyOne Corporation
-0- 09/13/2005
/CONTACT: Investor & Media, Dennis Cocco, Vice President, Investor
Relations & Communications of PolyOne Corporation, +1-440-930-1538/
/Web site: http://www.polyone.com/