Fourth Quarter Results
- Adjusted earnings per share increased 38% to $0.36; GAAP EPS loss of $0.16 primarily due to a mark-to-market pension adjustment and restructuring costs
- Achieved 21st consecutive quarter of strong double-digit adjusted EPS growth
- Global Color, Additives & Inks and Global Specialty Engineered Materials overcame headwinds in Europe to deliver record fourth quarter operating income
Full Year Results
- Led by the Specialty Platform, adjusted earnings per share increased 37% to a record $1.80; GAAP EPS of $0.83 includes a mark-to-market pension adjustment and Spartech restructuring costs
- 40% EPS CAGR driven by relentless focus on specialty transformation and mix improvement
- Substantial progress made toward achieving 2015 goals and our longer-term vision for 2020
Highlighted by several performance records and strong profitability expansion, PolyOne Corporation (NYSE: POL) today reported its fourth quarter and full year results. Adjusted earnings per share increased 38% to $0.36 for the fourth quarter of 2014, from $0.26 in the fourth quarter of 2013. GAAP loss per share of $0.16 in the fourth quarter of 2014 compared to earnings per share of $0.22 in the fourth quarter of 2013. Special items for the fourth quarter of 2014, the largest of which was the mark-to-market pension adjustment, resulted in a net after-tax charge of $47.5 million, or $0.52 per share (see Attachment 3).
Revenue for the fourth quarter of 2014 was $869 million compared to $924 million in the fourth quarter of 2013. As expected, the revenue decline resulted from ongoing mix improvement, including the exit of unprofitable products associated with the Spartech acquisition and certain operations in Brazil, weaker business conditions in Europe, and unfavorable foreign exchange.
For the full year, revenue in 2014 was $3.84 billion, 2% higher than 2013 revenue of $3.77 billion. This growth, combined with significant profitability expansion, led to adjusted earnings per share for 2014 expanding 37% to an all time record $1.80. GAAP earnings per share were $0.83 for the full year, versus $0.97 in 2013.
"I am very pleased to report outstanding fourth quarter results which extends our streak to 21 consecutive quarters of strong double-digit adjusted earnings per share growth," said Robert M. Patterson, president and chief executive officer. "Our Specialty platform led the way with Global Color, Additives & Inks and Global Specialty Engineered Materials overcoming difficult economic conditions in Europe and a weaker Euro to deliver record fourth quarter operating income."
"2014 was yet another great year in our company's history, underpinned by our unwavering commitment to our four pillar strategy and achieving our aggressive goals. Three of our businesses have already reached their 2015 margin targets with DSS and PP&S having line of sight to getting there this year," added Mr. Patterson. "Innovation and mix improvement continue to be at the heart of our specialty transformation as 44% of our specialty platform sales were from products introduced in the last five years."
Bradley C. Richardson, executive vice president and chief financial officer said, "Our strong free cash flow for the year enabled us to repurchase 6.3 million shares of common stock and increase our annual dividend 25%. We also completed the acquisition of Accella, thereby accelerating growth in our Specialty platform." Mr. Richardson added, "With liquidity of $475 million and a net debt to EBITDA of 1.9x, we have ample financial capacity to pursue strategic acquisitions, invest in innovation and continue our share repurchases and dividends."
Commenting on the company's outlook, Mr. Patterson said, "We remain focused on executing our strategy and providing exemplary service to our customers. With global markets for our products and services totaling approximately $40 billion in size and trends that favor our light-weight, high performance materials, we see tremendous growth opportunities to pursue and capture regardless of economic conditions."
Mr. Patterson added, "I am confident we will deliver another year of strong double-digit adjusted EPS growth in 2015, and I look forward to further expanding on our Platinum Vision for 2020 with investors in May."