Avient (AVNT)2020-06-16 17:38PolyOne Corporation (POL) Second Quarter Performance Update Conference Call Summary Company Overview - Company: PolyOne Corporation (POL) - Date of Call: June 16, 2020 - Participants: - Joe Di Salvo - Vice President, Treasurer, and Investor Relations - Bob Patterson - Chairman, President and Chief Executive Officer - Brad Richardson - Executive Vice President, and Chief Financial Officer Core Industry Insights - Industry Impact: The COVID-19 pandemic has significantly affected demand across various sectors, particularly in automotive and consumer discretionary items, while healthcare and packaging have shown resilience and growth during this period [7][12][14]. Key Financial Performance Metrics - Sales Decline: - April sales were down 15% due to the pandemic, with an expected overall sales decline of 20% for the quarter [11][12]. - Automotive-related sales, while only 10% of total sales, accounted for nearly 40% of the second quarter sales decline [11]. - Specific segment declines: Color down 16.5%, Engineered Materials (EM) down 18%, and Distribution down 23% [23]. - Adjusted EPS: Expected to be approximately 0.48 in the same quarter last year; adjusted EPS could be 65 million for the quarter, with an ending cash balance of $1.95 billion [15]. Operational Adjustments - Facility Operations: Most facilities deemed essential remained operational, with strict health protocols in place. Five facilities temporarily ceased operations due to local regulations [7][9]. - Remote Work: Associates who can work from home continue to do so, adapting well to remote operations [9]. Market Trends and Demand - Healthcare and Packaging: Strong demand in these sectors, with expected growth of 5% and 8% respectively for the quarter [12][49]. - Regional Performance: - Europe expected to see a 27% decline in sales, while the Americas down about 20%. - Asia, primarily China, expected to be up about 10% [14]. Clariant Acquisition Update - Acquisition Status: The acquisition of Clariant is expected to close on July 1, 2020, with all necessary regulatory approvals received [15][16]. - Synergy Planning: Contingency plans are in place to achieve synergies despite travel restrictions, with expectations to hit the ground running post-acquisition [25][26]. Risks and Concerns - Customer Financial Health: Some customers are in precarious financial positions due to the pandemic, leading to increased reserves for bad debts [42]. - Potential for Second Lockdown: Concerns about a resurgence of COVID-19 cases could impact operations and demand, particularly in China [45][48]. Conclusion - PolyOne Corporation is navigating the challenges posed by the COVID-19 pandemic with a focus on essential markets such as healthcare and packaging. The company is preparing for the upcoming Clariant acquisition while managing operational adjustments and financial performance amidst a volatile market environment [7][15][16].