Exhibit 99.1
POLYONE UPDATES 2005 FOURTH-QUARTER OUTLOOK
CLEVELAND, Dec. 20 /PRNewswire-FirstCall/ -- PolyOne Corporation (NYSE: POL), a
leading global polymer compounding and North American distribution company,
today updated its outlook for the fourth quarter ending December 31, 2005. This
action is part of PolyOne's continuing effort to keep investors informed of
current business conditions.
The following summarizes conditions within the business segments:
- Performance Plastics -- At the end of the third quarter, the Company
stated that its highest priority was to restore product spreads,
particularly because it anticipated continuing escalation of raw material
costs from its North American suppliers. To date, each business unit has
achieved higher selling prices, which has enabled the Company to offset
most cost increases. While spreads are not fully recovered, the Company
will enter 2006 with better spreads and stronger momentum than it had
entering 2005.
Demand in North America has returned to pre-hurricane levels; in fact,
fourth-quarter shipment volumes appear to be tracking slightly ahead of
fourth-quarter 2004 levels. Shipments in Europe and Asia are tracking
with earlier expectations and remain at typical seasonal levels.
While availability issues remain with some specialty raw materials in
North America, the business units have generally managed through any
supply dislocations. Freight and energy costs, however, remain high.
- Distribution -- Demand appears slightly higher than earlier anticipated.
This unit has aggressively increased prices for the entire year, which
has allowed it to maintain its product spreads.
- Resin and Intermediates -- SunBelt Chlor-Alkali continues to benefit from
stable chlorine prices and slightly higher caustic soda prices. To match
its customers' production disruptions, SunBelt did not operate at full
capacity in early October, but it has been near full capacity for the
balance of the quarter.
OxyVinyls, LP suffered no significant production outage as a result of
Hurricane Rita, and PolyOne anticipates that OxyVinyls' earnings in the
fourth quarter should improve significantly over third-quarter results.
Polyvinyl chloride (PVC) resin prices increased in October, though an
additional price increase announced for November was not implemented.
Natural gas costs have remained near record levels throughout the quarter
but ethylene costs, while higher during the quarter, have not reached
anticipated levels. PVC demand has been better than expected for the
quarter, particularly in the PVC pipe market.
PolyOne projects that the combined factors affecting OxyVinyls and
SunBelt should result in a fourth-quarter segment earnings performance $4
million to $6 million higher than the segment earnings achieved in the
fourth quarter of 2004.
As a result of these improved business segment conditions, PolyOne now
expects fourth-quarter 2005 financial results to be better than
anticipated at the end of the third quarter and better than the fourth-
quarter 2004 results. In addition, the Company continues to project
positive operating cash flow generation.
Additional updates:
- Specialty Resins -- The Company has determined that the current Specialty
Resins divestment process is unlikely to result in a sale of the business
at acceptable terms and, therefore, Specialty Resins will no longer be
reported as a business being held for sale within discontinued
operations. The unit will be reported as a continuing operation within
the Performance Plastics segment results.
- Engineered Films -- PolyOne now expects the close of the sale of the
Engineered Films unit to occur in early 2006. At the time the letter of
intent was signed, the parties expected that the transaction would be
completed during the fourth quarter of 2005.
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.
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 and Rita;
- 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, buyers receiving financing for the transaction, satisfactory
completion of due diligence, finalization of definitive agreements or any
other reasons;
- an ability to maintain appropriate relations with unions and employees in
certain locations in order to avoid disruptions of business; 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. #122005)
SOURCE PolyOne Corporation
-0- 12/20/2005
/CONTACT: Investors and Media, Dennis Cocco, Vice President, Investor
Relations & Communications of PolyOne Corporation, +1-440-930-1538/
/Web site: http://www.polyone.com /
(POL)