CLEVELAND, Sept. 16 /PRNewswire-FirstCall/ -- PolyOne Corporation (NYSE: POL) today updated its outlook for the second half of its fiscal year ending December 31, 2008. The Company expects second half consolidated sales growth of 8-10% versus the second half of 2007, below management's previous expectation of 15% sales growth. This revision is largely driven by the following factors, including: -- Weakened European demand, previously mentioned in PolyOne's August 7, 2008 earnings release, has worsened. -- European sales growth is expected to be further reduced by the recent weakening of the Euro which has lost approximately 10% of its value relative to the U.S. Dollar. -- Demand and pricing trends in the North American housing and automotive markets are more challenging than expected in the Company's Performance Products and Solutions segment. In addition, the Company temporarily shut down production at two of its facilities in Texas as a direct result of Hurricane Ike. While the Company expects its affected plants to be operational by the end of this week, the full impact that the hurricane has had on customers and suppliers is not yet clear. The Company expects it will experience customer order delays and is already aware of logistic disruptions related to the supply of raw materials. "First and foremost, we're relieved to report that our employees and their families were unharmed," said Stephen D. Newlin, chairman, president and chief executive officer. "We exercised the appropriate safety precautions by closing our plants in advance of the hurricane, and we are now working to restore power and repair what appears to be only minor facility damage. We are concerned about potential delays in customer orders and raw material supply directly related to the storm." Commenting on the trends noted above, Mr. Newlin added, "August was a difficult month and early indications are that these industry conditions may continue. Furthermore, while the end result of the unprecedented financial industry crisis and ongoing tight credit policy in the U.S. has not fully played itself out, it is reasonable to expect that it will provide further headwind to near-term economic growth." Newlin further stated, "During our second quarter 2008 earnings conference call we noted our concern about a possible slowdown in Europe however at that time we did not yet have visibility relative to the magnitude of any such decline which is now becoming apparent." Discussing North America conditions, Mr. Newlin continued, "We are disappointed that PolyOne has thus far been unable to capture meaningful selling price improvement in our Performance Products and Solutions segment, despite unprecedented increases in raw material and energy costs. While oil and natural gas prices have recently declined, we have not been a beneficiary of this trend, and we further believe that end users were shielded from much of the previous increases in raw material and energy costs by compounders like PolyOne, who have so far absorbed much of these elevated costs." The Company expects earnings from its SunBelt joint venture to benefit from favorable caustic soda price trends which are expected to more than offset weak end-market demand for chlorine derivatives. However, some of this benefit may be offset by potential delays in customer orders as a result of Hurricane Ike. Corporate costs are expected to be lower than previously forecasted as a result of reduced incentive accrual estimates. Senior vice president and chief financial officer Robert M. Patterson said, "It's unfortunate that our increasingly successful specialty business focus and growth initiatives are being temporarily overshadowed by weak end- market demand and unfavorable pricing dynamics. Clearly we made the right decision in July to close certain of our manufacturing facilities and reduce overall manufacturing capacity. We will be focusing our efforts on accelerating these previously announced actions to help offset the headwinds outlined above." Patterson added, "As a result of the business interruption related to the hurricane and the unfavorable trends observed in our Performance Products and Solutions segment and Europe, we expect it will be a challenge to reach consensus expectations of $0.13 per share for the third quarter, before special items. Further, it is difficult to forecast our results for the year given the number of uncertainties in the market, and therefore we are projecting a range of performance between $0.36 and $0.41 per share before special items for the fiscal year ending December 31, 2008." Additional considerations -- The Company expects third quarter special items to approximate $0.17 - $0.19 per share. The majority of these costs relate to the previously announced manufacturing realignment, although the Company also expects to record incremental legacy environmental costs that increased as a result of higher utility cost estimates necessary to support remediation. -- Net interest expense for the remainder of the year is expected to approximate the second quarter run-rate, as anticipated debt reductions will occur toward the end of the year. -- The Company anticipates an effective tax rate between 33% and 35% for the second half of 2008. Third Quarter 2008 Earnings Release and Conference Call PolyOne intends to release its third quarter earnings and host a conference call at 9:00 a.m. Eastern time on Wednesday, November 5, 2008. The conference dial-in number is 866-543-6403 (domestic) or 617-213-8896 (international), passcode 55915037, conference topic: Third Quarter 2008 PolyOne Earnings Conference Call. The replay number is 888-286-8010 (domestic) or 617-801-6888 (international). The passcode for the replay is 19198595. The call will be broadcast live and then be available via replay until Wednesday, November 12, 2008, on the Company's Web site at http://www.polyone.com/. About PolyOne PolyOne Corporation, with annual revenues of more than $2.7 billion, is a premier provider of specialized polymer materials, services and solutions. Headquartered outside of Cleveland, Ohio USA, PolyOne has operations around the world. For additional information on PolyOne, visit our new Web site at http://www.polyone.com/. 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; 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: -- 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; -- changes in polymer consumption growth rates within the U.S., Europe or Asia or other countries where PolyOne conducts business; -- 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; -- fluctuations in raw material prices, quality and supply and in energy prices and supply, in particular fluctuations outside the normal range of industry cycles; -- production outages or material costs associated with scheduled or unscheduled maintenance programs; -- the cost of compliance with environmental laws and regulations, including any increased cost of complying with new or revised laws and regulations; -- 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; -- 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; -- an inability to raise or sustain prices for products or services; -- an inability to maintain appropriate relations with unions and employees in certain locations in order to avoid business disruptions; -- any change in any agreements with product suppliers to PolyOne Distribution that prohibits PolyOne from continuing to distribute a supplier's products to customers, 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. 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. #32108) DATASOURCE: PolyOne Corporation CONTACT: Investors, Robert M. Patterson, Senior Vice President and Chief Financial Officer of PolyOne Corporation, +1-440-930-3302, Web site: http://www.polyone.com/

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