Exhibit 99.1
NEWS RELEASE
POLYONE UPDATES 2007 FIRST-QUARTER OUTLOOK
CLEVELAND - March 23, 2007 - PolyOne Corporation (NYSE: POL) today updated its
outlook for the first quarter ending March 31, 2007.
Following is PolyOne's current view of business conditions:
Operating Segments Overview - Consistent with the Company's business outlook
at the end of January 2007, first-quarter sales are expected to rebound
approximately 10 percent over the fourth quarter of 2006, but remain
generally sluggish due to continuing slowness in construction-related and
automotive end markets. Consequently, the Company projects that total sales
will decrease between 2 percent and 4 percent compared with a record 2006
first quarter. Lower Vinyl Business demand in North America primarily
accounts for this decline. Conversely, PolyOne anticipates strong,
double-digit year-over-year sales growth for its international operations.
Additionally, the Company is realizing sequential gross margin improvement
from its operating segments, as anticipated. This improvement reflects
benefits achieved from the specialization and globalization components of
PolyOne's strategy, which are underpinned by capabilities developed through
commercial and operational excellence.
Resin and Intermediates equity investments - The Company projects that lower
margins and volumes will significantly reduce the earnings contribution from
Oxy Vinyls, LP and SunBelt Chlor-alkali Partnership compared with the record
first quarter of 2006. Given the extent to which continuing weakness in
construction-related end markets has adversely affected volumes for both
OxyVinyls and SunBelt, segment earnings will likely erode from
fourth-quarter 2006 levels. Polyvinyl chloride (PVC) resin product spreads
are expected to narrow due to lower average PVC prices. Chlor-alkali
margins, however, are projected to remain relatively strong.
OTHER CONSIDERATIONS:
o In the first quarter of 2006, PolyOne realized approximately $9 million
of benefit from non-recurring adjustments to certain operating reserves
and litigation settlements. The Company does not anticipate that it will
benefit materially from such items in the first quarter of 2007.
o Because of cumulative positive domestic earnings over the past three
years, PolyOne will return to reporting domestic tax expense in its
financial statements. This change in accounting treatment will not
affect cash flow due to PolyOne's net operating loss position, which was
$269 million as of December 31, 2006. Cash taxes will continue to be
associated principally with non-U.S. earnings.
FIRST-QUARTER 2007 EARNINGS RELEASE AND CONFERENCE CALL
- -------------------------------------------------------
PolyOne intends to release its first-quarter earnings on Wednesday, May 2, 2007,
and host a conference call at 9:00 a.m. Eastern time on Thursday, May 3, 2007.
The conference dial-in number is 866-543-6403 (domestic) or 617-213-8896
(international), passcode 34382861, conference topic: First-quarter 2007 PolyOne
Earnings Conference Call. The replay number is 888-286-8010 (domestic) or
617-801-6888 (international). The passcode for the replay is 95825105. The call
will be broadcast live and then be available via replay for one week on the
Company's Web site at www.polyone.com.
ABOUT POLYONE
- -------------
PolyOne Corporation, with 2006 annual revenues of $2.6 billion, is a leading
global provider of specialized polymer materials, services and solutions.
Headquartered in northeast Ohio, PolyOne has operations in North America,
Europe, Asia and Australia, and joint ventures in North America and South
America. See www.polyone.com for additional information on 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 and/or sales. 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:
o 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;
o changes in polymer consumption growth rates within the U.S., Europe or
Asia or other countries where PolyOne conducts business;
o 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;
o fluctuations in raw material prices, quality and supply and in energy
prices and supply, in particular fluctuations outside the normal range
of industry cycles;
o production outages or material costs associated with scheduled or
unscheduled maintenance programs;
2
o costs, difficulties or delays related to the operation of joint venture
entities;
o lack of day-to-day operating control, including procurement of raw
materials, of equity affiliates or joint ventures;
o partial control over investment decisions and dividend distribution
policy of the OxyVinyls partnership and other minority equity holdings
of PolyOne;
o an inability to launch new products and/or services within PolyOne's
various businesses;
o the possibility of further goodwill impairment;
o an inability to maintain any required licenses or permits;
o an inability to comply with any environmental laws and regulations;
o the cost of compliance with environmental laws and regulations,
including any increased cost of complying with new or revised laws and
regulations;
o 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;
o 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;
o a delay or inability to achieve targeted debt level reductions;
o an inability to access the receivables sale facility as a result of
breaching covenants due to not achieving anticipated earnings
performance or for any other reason;
o any poor performance of our pension plan assets and any obligation on
our part to fund PolyOne's pension plan;
o any delay and/or inability to bring the North American Color and
Additives and the North American Engineered Materials segments to
profitability;
o an inability to raise or sustain prices for products or services;
o an inability to maintain appropriate relations with unions and employees
in certain locations in order to avoid business disruptions;
o any change in any agreements with product suppliers to PolyOne
Distribution that prohibits PolyOne from continuing to distribute a
supplier's products to customers;
o the timing and amounts of any repurchases of outstanding senior notes
and debentures of the Company, including the amount of any premiums
paid;
o timing of completion of acquisitions, including the acquisition of Ngai
Hing PlastChem Company;
o the future financial performance of acquisitions, including that of Ngai
Hing PlastChem Company, and
o 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 that we provide 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. #32207)
###
3