Change is under way at PolyOne Corp., resulting in the firm's sales and stock price both rising substantially since the start of the year.
``We said last year that to reach our potential, we'd have to change dramatically,'' said Stephen Newlin, chairman, president and chief executive officer, at the firm's May 15 annual meeting in Cleveland. ``We've come a long way in a short time, and I'm pleased with our progress.''
Avon Lake, Ohio-based PolyOne which ranks as North America's largest compounder saw first-quarter sales increase by 9 percent vs. the year-ago period, to almost $714 million, even as the firm's first-quarter profit remained roughly flat at $6.5 million.
The company hopes to rebound from a 2007 in which sales were flat at about $2.6 billion, but profit tumbled 90 percent to $11 million. At the annual meeting, Newlin stressed that the firm is heading in the right direction.
The $261 million sale of PolyOne's stake in PVC maker OxyVinyls LP was ``a catalyst'' for PolyOne in 2007, said Newlin.
The sale ``eliminated a major source of earnings volatility,'' he said. ``Our debt now is at the lowest level in our history. We're shifting from a commodity to a specialty portfolio with a higher-quality earnings stream.''
Newlin who's held the top spot since 2006 also cited the recent purchases of thermoplastic elastomers maker GLS Corp. of McHenry, Ill., and of a PVC compounding plant in Dongguan, China, from Ngai Hing Hong Co. as positive steps for PolyOne. The firm also is increasing liquid-color capacity by as much as 50 percent at its plant in Massillon, Ohio. The increase will be accomplished via new high-speed media mills and upgraded high-intensity mixers.
Wall Street appears to believe the PolyOne story, as the firm's per-share stock price has climbed about 20 percent since Jan. 1 and was at $7.70 in late trading May 15.
Newlin added that PolyOne researchers have added 35 patents in the past two years, after compiling only 52 in the firm's first six years of operation. PolyOne was formed in 2000 through a merger of Geon Co. and M.A. Hanna Co.
PolyOne also is about halfway toward its goal of generating 25 percent of sales from products developed in the past five years. Newlin said PolyOne wants to reach that level by 2011. The firm's plants also set a safety record in 2007, with only 1.14 reportable incidents per 100 employees. PolyOne's total was far below the industry average of 6.8, Newlin said.
The company weathered a major first-quarter storm in its Geon Performance Polymers unit, the largest of its four units and one that generates about one-third of the firm's sales. GPP which makes a range of PVC-based compounds saw quarterly sales slip 4 percent and operating income tumble almost 70 percent.
PolyOne's other three units Distribution, Specialty Engineered Materials and International Color and Engineered Materials picked up the slack, with each posting sales and operating income gains.
In a May 6 news release, Newlin said first-quarter results ``offer further evidence that a meaningful shift in PolyOne's earnings base is well under way.''
``This performance, amid some of the toughest business conditions in a generation, clearly demonstrates our progress in executing our strategy,'' he said. ``Our success this year will depend on our cost-management efforts and our ability to grow profitably by improving our sales mix and closing on new business.''
In the personnel area, Robert Patterson has joined PolyOne as senior vice president and chief financial officer. Patterson, 35, previously was vice president and treasurer of Novelis Inc., a maker of aluminum-rolled products in Atlanta.
Patterson replaces W. David Wilson, who will retire later this year after a 30-year career with PolyOne and its predecessors Geon Co. and BFGoodrich Co. Newlin said Wilson's counsel and insight ``have been instrumental to the creation of PolyOne.''