Avient Corporation

Good morning, ladies and gentlemen, and welcome to the Poly1 Corporation's first quarter 2020 conference call. My name is Catherine, and I'll be your operator for today. At this time, all participants are in a listen-only mode. We will have a question-and-answer session at the end of the conference. As a reminder, this conference is being recorded for replay purposes. At this time, I'd like to turn the call over to Joe DiSalvo, Vice President, Treasurer, and Investor Relations. Please proceed.

Thank you, Catherine. Good morning and welcome to everyone joining us on the call today. Before beginning, we'd like to remind you that statements made during this conference call may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements will be of current expectations or forecasts of future events and are not guarantees of future performance. They're based on management's expectation and 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 statement. Some of these risks and uncertainties can be found in the company's filings with the Securities and Exchange Commission as well as in today's press release. During the discussion today, the company used both GAAP and non-GAAP financial measures. Please refer to the earnings release posted on the Poly1 website where the company describes the non-GAAP measures and provides a reconciliation from the most comparable GAAP financial measures. Unless otherwise stated, operating results referenced during today's call will be comparing the first quarter of 2020 to the first quarter of 2019. Joining me today on the call is our Chairman, President, and Chief Executive Officer, Bob Patterson, and Executive Vice President and Chief Financial Officer, Brad Richardson. Now I will turn the call over to Bob.

Well, thanks, Joe, and good morning, everyone. I'd like to start the call with a special thank you. It's to all the first responders, healthcare professionals, food service workers, infrastructure, and delivery employees who are tirelessly giving their time in the coronavirus response and recovery efforts. They and many others are keeping the world moving at a time we need them most. For those on the front lines, our world is especially grateful for you right now. The COVID-19 pandemic is having a significant impact on the world, and our first priority is the health and safety of our associates, customers, and all stakeholders. We are strictly adhering to government guidelines and protocols, as well as other preventative measures to help stop the spread of the virus. At the same time, we continue to serve our customers, many of whom need us now more than ever. We have just over 60 manufacturing facilities around the world, and all but two continue to operate as we are an essential source of supply related to the coronavirus support and recovery. These are certainly unprecedented times. As you know, on March 20th, we held an investor call during which we commented on our first quarter expectations in light of the coronavirus pandemic. Now, as we share our actual results, we are pleased to report we delivered adjusted EPS of 53 cents. That's a 23% increase over the prior year first quarter and 5 cents better than we expected a month ago. Recall that to align with our initial guidance provided in January, These results exclude the impact of the additional shares we issued in February. If we included those shares, our adjusted EPS for the first quarter is 48 cents. Much of the upside was driven by better than expected margin performance across all segments and regions, and an increase in orders in Asia late in the quarter as China recovered from the local impact of coronavirus. When we spoke a month ago, we weren't sure how fast China could get up and running, but they have certainly moved quickly, and I believe this bodes well for us and the global economy. Our margin and mix story is an important one, as I believe it differentiates our performance in these trying times. On a constant currency basis, sales declined 4%, and nearly all of that was due to a decline in automotive demand. Some of this is likely pre-existing weakness we saw in the second half of last year, particularly in Europe. But we also started to see the impact of coronavirus-related shutdowns. Packaging, consumer, and healthcare markets all fared much better, and they were either up or flat globally. Pockets of strength were seen in demand for colorants and additives, for food and beverage packaging, as well as for composites. And we also saw an increase in demand for some of our materials in outdoor solutions. I'm sure none of this comes as a surprise to anyone when you consider what has unfolded in the last six weeks, with stay-at-home orders across the world and significant slowdowns and even shutdowns of certain industries. I'll have some additional comments in a moment. But for now, I'll turn the call over to Brad for some additional details on our performance for the first quarter. Brad Pacheco- Well, thank you, Bob, and good morning, everyone.