PolyOne posts Q1 loss on low demand, special items

Specialized polymer materials provider PolyOne (USA) reported a net loss of US$9.3 mln (US$0.10/share) in the Q1 - 2009 against the net income of US$6.5 mln (US$0.07/diluted share) in the same period last year. The company attributed loss to one time expenditures combined with a sharp drop in sales led by demand downturn in key markets worldwide. The company's sales revenue for the period amounted to US$463.4 mln, a 35.1% down compared with Q1 - 2008 sales revenue. PolyOne indicated that the decline in sales was principally due to lower global demand as volume fell 34% year-on-year. Included in the Q1 - 2009 results were special items totaling US$10.5 mln of expense (after-tax) and a tax gain from a favorable settlement of a foreign audit for US$10.0 mln. Special items for the Q1 period included pre-tax adjustment of US$5.0 mln related to improving preliminary estimate of goodwill impairment recorded for the Q4 - 2008. Besides, the special items also included US$10.1 mln of pre-tax charges resulting from restructuring actions announced by the company. The company's operating loss stood at US$2.7 mln, compared to US$6.5 mln in the same period a year ago. Stephen D. Newlin, chairman, president and chief executive officer said, "The first quarter revenue decline reflects lower demand across all of our businesses versus the prior year, underpinning our single largest concern - the health of the global economy. It is encouraging, however, that customer inventory destocking appears to be decelerating and we further believe that exiting the first quarter we are seeing demand stabilize, albeit at a relatively low level."
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