AVON LAKE, Ohio—PolyOne Corp. saw sales climb almost 10 percent in 2017, as profit from continuing operations grew more than 4 percent.
The Avon Lake-based materials firm on Jan. 26 reported full-year sales of just over $3.2 billion for 2017. Profit from continuing operations was almost $174 million, but PolyOne showed an overall loss of $57.6 million for the year, mainly resulting from of the sale of its Designed Structures & Solutions unit.
PolyOne in June sold DSS to Arsenal Capital Partners for $115 million. The unit mainly was made up of business from the former Spartech Corp., which PolyOne had acquired for almost $400 million in 2013.
In 2017, PolyOne also had its eighth consecutive year of record levels of adjusted earnings per share.
"Over the last three years, we have increased our sales, marketing and R&D resources by nearly 20 percent," Robert Patterson, chairman, president and CEO, said in a news release. "These investments have improved collaboration and service levels for our existing and new customers, leading to accelerated and sustained growth at PolyOne."
He added that in 2017, the firm "delivered the highest level of organic sales expansion since coming out of the recession in 2010, allowing us to overcome substantial raw material inflation and supply chain disruptions resulting from Hurricane Harvey."
Among business units, distribution was PolyOne's largest segment in 2017, generating just over one-third of total sales before eliminations. It was followed by Color, Additives and Inks at 26 percent, Performance Products & Solutions (including PVC compounds) at 21 percent and Specialty Engineered Materials at 18 percent. Color and SEM showed sales growth of 10-12 percent in 2017, with distribution and PPS checking in with growth of 7-8 percent.
PolyOne also grew in 2017 through four acquisitions on which it spent a total of almost $164 million. The firm started the streak in January when it bought specialty colorants and additives makers Silcotec Inc. of La Porte, Ind., and Comptek GmbH of Diez, Germany. PolyOne in June added Rutland Holding Co. — a maker of plastisol compounds and printing inks in Pineville, N.C. — and Mesa Industries Inc., a color concentrates producer in Phoenix, Ariz.
"Color has tremendous momentum heading into 2018 bolstered by the four bolt-on acquisitions we have completed over the last twelve months, adding to our specialty colorant technology portfolio and geographic presence," Patterson said in the release.
PolyOne has kept its checkbook open in 2018, already purchasing Spanish color and additive concentrates maker IQAP Masterbatch Group SL.
On a Jan. 26 conference call, Patterson said that PolyOne's investments "began to pay off" in 2017, in spite of what he called "an unprecedented volatile raw material environment" that resulted partly from the impacts of Hurricane Harvey on the U.S. Gulf Coast.
Chief Financial Officer Bradley Richardson added on the call that prices for PolyOne feedstocks such as polyethylene, polypropylene, nylon and styrenic block copolymers were up on average 10 percent from the third quarter to the fourth.
PolyOne also has benefited from additions to its sales force, according to Patterson. Since 2014, the firm has decreased the size of its average sales territory by 4 percent, while also adding sales personnel. This change has resulted in a 20 percent increase in sales calls per seller and a 40 percent increase in sales calls made overall.
"Smaller territories means more contact with customers," Patterson said on the call.
He added that PolyOne for 2018 is anticipating mid-single digit volume growth and high single-digit sales growth. The firm also will be looking for more acquisitions, regardless of size.
"We're still looking for specialty deals to add technology or geography to our portfolio," Patterson said. "Lately, we've found the best use of our cash in smaller bolt-ons. Some [larger companies] that we've been looking at for a long time aren't for sale."
PolyOne in 2017 also enjoyed a solid year on Wall Street. The firm's per-share stock price began the year around $34 but ended around $45.50 for a gain of almost 34 percent. The price was around $45 in early trading Jan. 26.
PolyOne ranks as North America's largest compounder and concentrates maker and as one of the region's largest resin distributors.