PolyOne Announces First Quarter 2013 Results

                 PolyOne Announces First Quarter 2013 Results

- Breakout performance in the specialty platform drives record-setting results
and the 14th consecutive quarter of double digit adjusted earnings per share
expansion

- Earnings per share of $0.12; earnings per share as adjusted of $0.31, a 29%
increase over the prior year, and a first quarter record

- Revenues increase 7.5% over first quarter 2012

PR Newswire

CLEVELAND, May 1, 2013

CLEVELAND, May 1, 2013 /PRNewswire-FirstCall/ --PolyOne Corporation (NYSE:
POL) today reported $801.1 million of revenues for the first quarter of 2013,
a 7.5% increase compared to $745.5 million in the first quarter of 2012.

Diluted earnings per share totaled $0.12 in the first quarter of 2013 compared
to $0.17 in the first quarter of 2012; however, adjusted earnings per share
increased 29% to $0.31 for the first quarter of 2013 from $0.24 in the first
quarter of 2012.

"This marks the fourteenth consecutive quarter of double-digit adjusted
earnings per share expansion," said Stephen D. Newlin, chairman, president,
and chief executive officer. "This truly was a breakout quarter for our
specialty businesses, as they delivered a 34.4% increase in adjusted operating
income over the first quarter of last year, a new first quarter record."

Mr. Newlin continued, "Since we embarked on our specialty journey, we have
overhauled our culture and invested in commercial resources to focus on
value-added formulations and solutions for specialty customer applications.
These investments are paying off, and I am particularly pleased with our first
quarter results as organic mix improvement was at the heart of our 29%
expansion in EPS." 

The acquisition of Spartech, which was completed on March 13, 2013,
contributed $54.7 million to quarterly revenue and was EPS neutral.
Additionally, on March 25, 2013, the company announced it had reached an
agreement to sell its non-core resin assets. Accordingly, these assets are
classified as held-for-sale, and the associated results of operations are
reported as discontinued. Prior periods have been restated to conform to this
presentation, as well as to reflect the realignment of the Specialty Coatings
business into the Global Color, Additives and Inks segment.

Mr. Newlin said, "During the quarter we further enhanced our portfolio as we
completed our acquisition of Spartech and announced an agreement to divest our
non-core resin assets." Mr. Newlin added, "As expected, Spartech did not
contribute to our EPS expansion during the first quarter, but with our
integration efforts well underway, we confirm our expectation that Spartech
will be EPS accretive in the first year. Further, upon achieving the
previously announced $65 million in synergies by year three, we estimate
Spartech will add $0.50 to earnings per share."

"We ended the quarter with $168.9 million of cash, coupled with $284.9 million
of availability under our asset-based revolver, leaving us with ample cash to
fund future growth initiatives and provide returns to shareholders through
dividends and share buybacks," said Richard J. Diemer, Jr., senior vice
president and chief financial officer. "During the quarter, we announced a
20% increase in our quarterly dividend to $0.06 per share, and repurchased
840,000 common shares under our existing share buyback program."

Commenting on the company's outlook, Mr. Newlin said, "We are still operating
in a challenging economic environment; however, our record first quarter
performance underscores our value-based approach as a leader in specialty
material formulations, services and solutions. Our goal is to consistently
deliver double-digit earnings per share expansion, and we remain committed to
our stated adjusted earnings per share target of $2.50 by 2015."

About PolyOne

PolyOne Corporation, with 2012 revenues of $2.9 billion, is a premier provider
of specialized polymer materials, services and solutions. Headquartered
outside Cleveland, Ohio, USA, PolyOne has operations around the world.
Consistent with the company's strategy of specialty growth and global
expansion, in March of 2013 PolyOne acquired Spartech Corporation a leader in
rollstock, sheet and packaging technologies.For additional information on
PolyOne, visit our website at 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 time required to consummate the proposed divestiture
of our resin assets; the satisfaction or waiver of conditions in the sale
agreement relating to the divestiture; any material adverse changes in the
business supporting the resin assets being sold; the ability to obtain
required regulatory or other third-party approvals and consents and otherwise
consummate the proposed divestiture; our ability to achieve the strategic and
other objectives relating to the acquisition of Spartech Corporation,
including any expected synergies; our ability to successfully integrate
Spartech and achieve the expected results of the acquisition, 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 financial condition of our customers, including the
ability of customers (especially those that may be highly leveraged and those
with inadequate liquidity) to maintain their credit availability; the speed
and extent of an economic recovery, including the recovery of the housing
market; our ability to achieve new business gains; the effect on foreign
operations of currency fluctuations, tariffs, and other political, economic
and regulatory risks; changes in polymer consumption growth rates 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
achieve or delays in achieving or achievement of less than the anticipated
financial benefit from initiatives related to working capital reductions, cost
reductions, and employee productivity goals; an inability to raise or sustain
prices for products or services; an inability to maintain appropriate
relations with unions and employees; the inability to achieve expected results
from our acquisition activities; our ability to continue to pay cash
dividends; the amount and timing of repurchases of our common shares, if any;
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.

Attachment 1
Summary of Consolidated Statement of Income (Unaudited)
First Quarter 2013
(In millions, except per share data)
                                   Three Months Ended
                                   March 31,
                                                             Adjusted (a)
                                   2013                      2012
Sales                              $   801.1              $   745.5
Operating income                   40.5                      37.4
Net income from continuing
operations attributable to PolyOne 11.2                      15.3
shareholders
Basic earnings per share from
continuing operations attributable $     0.12            $    0.17
to PolyOne shareholders
Diluted earnings per share from
continuing operations attributable $    0.12             $    0.17
to PolyOne shareholders
Senior management uses comparisons of net income from continuing operations
attributable to PolyOne shareholders and diluted earnings per share (EPS) from
continuing operations attributable to PolyOne shareholders before adjustments
to assess performance and facilitate comparability of results with prior
periods. Below is a reconciliation of these non-GAAP financial measures to
their most directly comparable measure calculated and presented in accordance
with U.S. GAAP (GAAP).



                                      Three Months Ended  Three Months Ended

                                      March 31, 2013      March 31, 2012
Reconciliation to Consolidated        $          EPS      $          EPS
Statements of Income
Net income from continuing operations $       $     $       $    
attributable to PolyOne shareholders  11.2      0.12     15.3       0.17
Special items, after tax (Attachment  17.2       0.19     6.1        0.07
3)
Tax adjustments (b)                   0.5        –        0.1        –
Adjusted net income / EPS             $       $     $      $    
                                      28.9       0.31     21.5       0.24

       Adjusted to reflect the resins business as discontinued operations,
(a)   including reclassifying the related assets and liabilities as
       held-for-sale.
       Tax adjustments include the net tax expense (benefit) from one-time
(b)    foreign and domestic income tax items and deferred income tax valuation

       allowance adjustments on deferred tax assets.





Attachment 2
PolyOne Corporation
Consolidated Statements of Income
(Unaudited)
(In millions, except per share data)
                                               Three Months Ended
                                               March 31,
                                                               Adjusted (a)
                                               2013            2012
Sales                                          $   801.1     $   745.5
Cost of sales                                  638.8           613.2
 Gross margin                               162.3           132.3
Selling and administrative expense             121.9           95.3
Income related to previously owned equity      0.1             0.4
affiliates
 Operating income                           40.5            37.4
Interest expense, net                          (15.6)          (12.3)
Premium on early extinguishment of debt        (10.6)          –
Other income (expense), net                    1.4             (1.3)
 Income from continuing operations before   15.7            23.8
income taxes
Income tax expense                             (4.7)           (8.5)
 Net income from continuing operations      11.0            15.3
Income from discontinued operations, net of    4.1             4.9
tax
 Net income                                 $    15.1   $     20.2
 Net loss attributable to               0.2              –
non-controlling interests
 Net income attributable to PolyOne common  $    15.3    $     20.2
shareholders
Earnings per common share attributable to
PolyOne common shareholders – Basic:
 Continuing operations                     $    0.12   $     0.17
 Discontinued operations                   0.05            0.06
 Total                                     $    0.17   $     0.23
Earnings per common share attributable to
PolyOne common shareholders - Diluted:
 Continuing operations                      $     0.12  $    0.17
 Discontinued operations                    0.04            0.05
 Total                                      $     0.16  $    0.22
Cash dividends per common share                $     0.06  $    0.05
Weighted-average shares used to compute
earnings per share:
 Basic                                      91.7            89.1
 Diluted                                    92.8            90.7





Attachment 3
PolyOne Corporation
Summary of Special Items (Unaudited)
(In millions, except per share data)
                                              Three Months Ended
                                               March 31,
Special items (1):
                                               2013            2012
Cost of sales:
Employee separation and plant phase-out costs  $      –   $     (0.4)
Reimbursement of previously incurred           5.2             –
environmental costs
Environmental remediation costs                (2.0)           (1.6)
Acquisition related costs                      (4.1)           (5.4)
 Impact on cost of sales                 (0.9)           (7.4)
Selling and administrative expense:
Employee separation and plant phase-out costs  (11.7)          (0.1)
Legal related gains                            0.1             –
Unrealized gain (loss) on foreign currency     0.4             (0.5)
option contracts
Acquisition related costs                      (4.6)           (0.9)
 Impact on selling and administrative    (15.8)          (1.5)
expense
Gain on sale of investment in equity           0.1             0.4
affiliates
 Impact on operating income         (16.6)          (8.5)
 Premium on early extinguishment of debt   (10.6)          –
 Bridge loan commitment fees – interest    (1.9)           –
expense
 Other income (expense), net               1.4             –
 Impact on income before income     (27.7)          (8.5)
taxes
Income tax benefit on special items            10.5            2.4
 Impact of special items on net     $    (17.2)  $     (6.1)
income attributable to PolyOne Shareholders
Basic impact per common share                  $    (0.19)  $    (0.07)
Diluted impact per common share                $    (0.19)  $    (0.07)
Weighted average shares used to compute
earnings per share:
 Basic                                       91.7            89.1
 Diluted                                     92.8            90.7

    Special items is a non-GAAP financial measure. Special items include
(1) charges related to specific strategic initiatives or financial
    restructurings such as: consolidation of operations; debt extinguishment
    costs; employee separation costs resulting from personnel reduction
    programs, plant phase-out costs, executive separation agreements; asset
    impairments; mark-to-market adjustments associated with actuarial gains
    and losses on pension and other postretirement benefit plans;
    environmental remediation costs, fines or penalties for 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;
    unrealized gains and losses from foreign currency option contracts;
    one-time, non-recurring items; and the effect of changes in accounting
    principles or other such laws or provisions affecting reported results.





Attachment 4
PolyOne Corporation
Condensed Consolidated Balance Sheets (Unaudited)
(In millions)
                                                                     Adjusted
                                                                     (a)
                                                          March 31,  December
                                                                     31,
                                                          2013       2012
Assets
Current assets:
                                                          $      $    
 Cash and cash equivalents                                       
                                                                     210.0
                                                          168.9
 Accounts receivable, net                              526.1      313.9
 Inventories, net                                      353.5      244.4
 Assets held-for-sale                                  42.0       39.3
 Other current assets                                  80.3       81.1
 Total current assets                              1,170.8    888.7
Property, net                                             671.6      385.8
Goodwill                                                  544.0      405.5
Intangible assets,                                        381.0      340.0
net
Other non-current assets                                  136.1      108.0
                                                          $      $    
 Total assets                                                
                                                           2,903.5  2,128.0
Liabilities and Shareholders' Equity
Current liabilities:
                                                          $      $    
 Short-term debt and current portion of long-term debt           
                                                                   
                                                          7.9       3.8
 Accounts payable                                      443.7      296.1
 Liabilities held-for-sale                             18.6       18.0
 Accrued expenses                                      134.3      141.9
 Total current liabilities                         604.5      459.8
Non-current liabilities:
 Long-term debt                                        1,047.6    703.1
 Post-retirement benefits other than pensions          16.3       16.9
 Pension benefits                                      128.6      182.8
 Other non-current liabilities                         232.6      134.0
 Total non-current liabilities                     1,425.1    1,036.8
Shareholders' equity:
 PolyOne shareholders' equity                          871.8      629.1
 Non-controlling interests                             2.1        2.3
 Total equity                                       873.9      631.4
                                                          $      $    
  Total liabilities and shareholders' equity                  
                                                           2,903.5  2,128.0





Attachment 5
PolyOne Corporation
Consolidated Statements of Cash Flows (Unaudited)
(In millions)
                                              Three Months Ended
                                              March 31,
                                              2013             2012
Operating Activities
Net income                                    $         $      
                                              15.1            20.2
Adjustments to reconcile net income to net
cash used by operating activities:
 Depreciation and amortization          19.9             17.7
 Debt extinguishment costs              10.6             –
Change in assets and liabilities:
 Increase in accounts receivable        (76.2)           (80.2)
 Decrease (increase) in inventories     11.4             (7.5)
 Increase in accounts payable           49.2             61.0
 Decrease in pensions and other         (54.7)           (5.5)
post-retirement benefits
 Decrease in accrued expenses and other (66.8)           (25.8)
Net cash used by operating activities         (91.5)           (20.1)
Investing Activities
 Capital expenditures                      (12.9)           (7.9)
 Business acquisitions, net of cash        (259.9)          –
acquired
 Proceeds from sale of equity affiliate    24.1             18.9
and other assets
Net cash (used) provided by investing         (248.7)          11.0
activities
Financing Activities
 Repayment of long-term debt               (297.0)          (0.8)
 Proceeds from long-term debt              600.0            –
 Debt financing costs                      (13.0)           –
 Borrowings under credit facilities        41.7             –
 Payments under credit facilities          (10.0)           –
 Purchase of common shares for treasury    (20.8)           (1.4)
 Exercise of stock awards                  2.9              5.7
 Cash dividends paid                       (4.5)            (3.6)
 Proceeds from non-controlling interests   –                2.4
Net cash provided by financing activities     299.3            2.3
Effect of exchange rate changes on cash       (0.2)            1.2
Decrease in cash and cash equivalents         (41.1)           (5.6)
Cash and cash equivalents at beginning of     210.0            191.9
period
Cash and cash equivalents at end of period    $         $       
                                              168.9           186.3





Attachment 6
Business Segment and Platform Operations (Unaudited)
(In millions)
Operating income at the segment level does not include: special items as
defined on 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
                                     March 31,
                                                           Adjusted (a) (c)
                                     2013                  2012
Sales:
 Global Specialty Engineered      $   159.8           $   142.0
Materials
 Global Color, Additives and      205.3                 202.4
Inks
 Designed Structures and          41.5                  –
Solutions
 Specialty Platform           406.6                 344.4
 Performance Products and         159.7                 168.5
Solutions
 PolyOne Distribution             268.0                 263.0
 Corporate and eliminations       (33.2)                (30.4)
 Sales                        $   801.1           $   745.5
Gross margin:
 Global Specialty Engineered      $    40.0          $    33.2
Materials
 Global Color, Additives and      67.7                  60.5
Inks
 Designed Structures and          5.2                   –
Solutions
 Specialty Platform           112.9                 93.7
 Performance Products and         23.2                  18.5
Solutions
 PolyOne Distribution             28.2                  29.1
 Corporate and eliminations       (2.0)                 (9.0)
 Gross Margin                 $   162.3           $   132.3
Selling and administrative
expense:
 Global Specialty Engineered      $    23.8          $    21.4
Materials
 Global Color, Additives and      43.6                  40.9
Inks
 Designed Structures and          3.3                   –
Solutions
 Specialty Platform           70.7                  62.3
 Performance Products and         10.2                  10.0
Solutions
 PolyOne Distribution             12.0                  12.4
 Corporate and eliminations       29.0                  10.6
 Selling and                  $   121.9           $    95.3
administrative expense
Operating income:
 Global Specialty Engineered      $    16.2          $    11.8
Materials
 Global Color, Additives and      24.1                  19.6
Inks
 Designed Structures and          1.9                   –
Solutions
 Specialty Platform           42.2                  31.4
 Performance Products and         13.0                  8.5
Solutions
 PolyOne Distribution             16.2                  16.7
 Corporate and eliminations       (30.9)                (19.2)
 Operating income             $    40.5          $    37.4
Specialty Platform consists of our three specialty businesses: Global
Specialty Engineered Materials; Global Color, Additives and Inks; and Designed
Structures and Solutions. We present Specialty Platform sales, gross margin,
selling and administration, and operating income because management believes
that this is useful information to investors by highlighting our collective
progress in advancing our specialization strategy.
(c) Adjusted to reclassify our Specialty Coatings business from the
Performance Products and Solutions segment to the Global Color, Additives and
Inks segment as well as remove the resins business from the Performance
Products and Solutions segment as it is now classified as a discontinued
operation.





Attachment 7
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 that current levels may serve as a base for
future performance. In addition, operating income before the effect of special
items is a component of various PolyOne annual and long-term employee
incentive plans and is used in debt covenant computations. Senior management
uses free cash flow to assess our ability to service our debt. Below is a
reconciliation of non-GAAP financial measures to the most directly comparable
measures calculated and presented in accordance with GAAP. See Attachment 3
for a definition of special items.
                                   Three Months Ended
                                   March 31,
                                                           Adjusted (b)
Reconciliation to Consolidated     2013                    2012
Statements of Operations
Sales                              $   801.1             $    745.5
Gross margin before special items  $   163.2             $    139.7
Special items in gross margin      (0.9)                   (7.4)
(Attachment 3)
 Gross margin – GAAP             $  162.3              $    132.3
Gross margin before special items  20.4%                   18.7%
as a percent of sales
Operating income adjusted          $    57.1            $     45.9
Special items in operating income  (16.6)                  (8.5)
(Attachment 3)
 Operating income - GAAP         $   40.5             $     37.4
Senior management uses net debt as a measure of our financial position. Below
is a reconciliation of this non-GAAP financial measure to the most directly
comparable measure calculated and presented in accordance with GAAP.



                                            March 31,         December 31,
Reconciliation to Condensed Consolidated    2013              2012
Balance Sheets
Short-term debt and current portion of      $      7.9  $      3.8
long-term debt
Long-term debt                              1,047.6           703.1
Less cash and cash equivalents              (168.9)           (210.0)
Net debt                                    $    886.6    $    496.9



SOURCE PolyOne Corporation

Website: http://www.polyone.com
Contact: Investor Relations, Isaac D. DeLuca, Vice President, Planning &
Investor Relations, PolyOne Corporation, +1 440-930-1226,
isaac.deluca@polyone.com, or Media, Kyle Rose, Director, Corporate
Communications, PolyOne Corporation, +1 440-930-3162, kyle.rose@polyone.com
 
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