Good morning and welcome to the PolyOne Second Quarter 2008 earnings conference call. Before we begin, the Company will like do remind you that statements made during this conference call which are not historical facts may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements will give current expectations or forecast to future events and are not guarantees of future performance. They are 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. The company recommends that you review the updated risk factors in today's press release. During the discussion today, the company will use both GAAP and non-GAAP financial measures. Please refer to the earnings release where the company describes the non-GAAP measures and provides a reconciliation of them to the most comparable GAAP financial measures. Now I will turn the call over to Mr. Steve Newlin, Chairman, President and CEO. Please proceed, sir.

Well, thanks [D’Wanda], and thank you to everyone who is joining us on the call this morning. I really welcome the opportunity to speak to you today about the recent performance of PolyOne, as well as, our expectations for the balance of this year. And here with me today is our new CFO, Bob Patterson. Prior to joining PolyOne, Bob was vice president and treasurer for Novelis. That is an $11 billion manufacturer of aluminum rolled products. And prior to that he held a number of financial leadership positions with SPX Corporation. Bob joined PolyOne almost three months ago and he has quickly immersed himself in the business. He is already contributing to our transformation strategy, and I am very pleased to have him with us at the company, as well as, here today for his first conference call with our shareholders and analysts. Before I hand the call over the Bob to review the results of our operations for the quarter, I want to take this opportunity to thank our former CFO Dave Wilson, who, as you know, is retiring from PolyOne later this month. Dave was with PolyOne and its predecessor companies for over 30 years, and has been a tireless partner to me during my tenure. Dave, thanks for your years of service and contributions, your unwavering dedication and commitment to PolyOne and for ensuring a really smooth transition with Bob, and I know I speak on behalf of everyone at PolyOne when I say we are going to miss you and we wish you and Bonnie many years of happiness and health. With that I will turn the call over to Bob.

Thanks, Steve. It is hard to believe that three months have already passed. As you know I have been diligently working to fill Dave's shoes, and I too would like to thank him for going out of his way to help me during my transition, and I wish Dave well in his retirement. Before I being, let my preface my comments by saying that unless other times are specifically stated or referenced throughout the call, we will be comparing the results of operations for the second quarter of 2008 with the second quarter of 2007. I am pleased to report that we are continuing to show progress with our transformational strategy despite a challenging economic environment. For the second quarter of 2008, consolidated sales increased 8.6% to $748 million, including the benefit of acquisition growth and foreign exchange. Net income was 8.8 million or $0.09 per diluted share for the second quarter of 2008 compared with a loss of $5.4 million or $0.06 per diluted share for the same period a year ago. Excluding special items from both periods, we reported $0.12 per share in the second quarter of 2008, compared to $0.10 per share in the second quarter of last year. This earnings improvement was driven by our Specialty platform businesses, which reported a nearly 70% increase in operating income resulting from our specialization strategy. Combined with lower corporate costs and interest expense, we were able to overcome the decline in the performance products and solutions segment resulting primarily from continued weak demand in North America housing, construction and automotive markets. Our earnings improvement is not an inconsequential accomplishment, and I would like to provide some further highlights of our specialty business performance. First, I would like to remind everyone that our specialty platform is comprised of three operating…

Bob, thanks. I would like to begin by thanking the PolyOne leadership team and all of our employees for delivering a strong quarter. It has been two years since I joined the company; we began our journey of value creation. And during this time we focused on transforming the company from a commodity-based compounder to a premier global provider for value-added specialized polymer materials, services and solutions. I am convinced that our transformation process is working, and there is no better evidence than our results for the second quarter. Today, we are facing the most challenging economic headwinds that this generation has ever seen, including unprecedented increase in raw material and energy costs, coupled with demand declines in our key markets, such as housing, construction and automotive. Yet we were able to report earnings growth for our shareholders. Our specialization strategy has led us to move our business mix away from commodities toward higher margin sustainable businesses, and as Bob mentioned earlier, a great example of this is our expanded market presence in healthcare. During the first half of 2008, our healthcare customer revenues increased approximately 25% over the prior year. On an annualized basis, sales from this market are approaching a $180 million, and that is an increase of almost 60% from 2006. Our active sales projects in this market have increased by over $80 million since the end of last year, and our efforts to globalize the new healthcare business team allow us to build strong momentum with new programs and technologies that are focused on metal and lead replacements, medical device innovations and an ability to reduce medical product costs associated with surface preparation. We have invested in and lifted the skills of our global sales force to be more effective at pricing, selling and capturing value.…

Thanks, Steve. Over the next nine months we will close certain production facilities including seven in North America and one in the United Kingdom resulting in a net reduction of approximately 150 positions. Production at the effected facilities as well as several manufacturing lines will be moved to a limited number of the Company's more than 30 remaining plants. As a result of these actions, we expect to incur one-time charges of approximately $31 million, of which approximately $18 million are expected to be non-cash. These one-time charges will include costs related to severances and asset write-downs, which will be included in our financial results over the next three quarters. We expect these actions to generate pre-tax savings of approximately $17 million or $0.12 per share on an after-tax basis. These actions are part of our previously disclosed operational excellence target of $50 million in cumulative identified supply chain savings by 2011. We expect no disruption of service due to the company's focus on improved product quality, delivery systems and inventory management. In fact, we plan to invest approximately $12 million in additional capital expenditures at our remaining locations to support these changes and our ongoing customer requirements. In our earnings release today, we outlined the key elements of our outlook for the balance of the year as follows. We anticipate continued economic uncertainty as well as continued raw material and energy cost pressure. While second half 2008 revenues are expected to grow approximately 15%, including GLS, compared to the second half of 2007, these afore-mentioned factors are expected to put downward pressure on earnings primarily in the Performance Products and Solutions segment. Operating margin improvements in the Specialty and PolyOne Distribution platforms are expected to drive operating income growth for these platforms compared to third quarter 2007 levels. Third quarter operating income in the Performance Products and Solutions segment is projected to increase sequentially from the second quarter of this year, but remain below the year-ago level due to raw material cost inflation and continued weak end market demand. Resin and Intermediates operating income for the third quarter of 2008 is expected to approximate second quarter levels this year. Based on these projections, we expect full-year 2008 earnings before special items to exceed prior-year earnings before special items. Now I would like to hand the call back do Steve for some final remarks.

Okay. Thanks, Bob. Let me just summarize by saying that for the year we expect to deliver earnings growth. I believe this would be a significant accomplishment given the challenging economic environment that we face in key end markets. I would like to once again thank the PolyOne leadership team and all PolyOne employees. Their commitment and dedication have allowed us to improve earnings and drive shareholder value. Year-to-date, PolyOne's share price has increased roughly 25% while the S&P 500 has declined about 12%. And I believe that our share price can continue to advance at an accelerated pace as a result of the successful execution of our strategy. If you were inside this organization, you would clearly see that PolyOne is a dramatically different company than it was two years ago. While we still have plenty of room to improve on all fronts of our transformational evolution, we are not waiting for the US economy to turn around to create value for our shareholders. We are winning new business and improving our margins everyday by providing our customers with new and innovative products, services and solutions. And with that, I will turn the call back to the operator to open the line for questions. D’Wanda?

Thank you. (Operator Instructions) Your first question comes from the line of Mike Harrison with First Analysis. Please proceed, sir.

Hi, good morning.

Hi, Mike.

Good morning. Was wondering, as you look at your end markets right now, I think we generally have an idea for, so to speak, what 's hot and what's not. I was wondering if you could give us some idea of where you are seeing some signs of improvement and maybe if there are any areas where you are seeing weakening, both on an end market basis and on a geographic basis?

Well, I would say that we are not seeing a lot of change based on -- you hear this as well as we do. Housing obviously is in deep trouble and about 950,000 units, looks like about where the year is going to end at, that really isn't changing much. Auto is down, and we all know about that, and it is shifting, the mix in auto is shifting. So you have to be on top of which applications you are pursuing. If you are going after SUVs right now, you may be in the wrong spot. And the other more -- the less cyclical businesses of healthcare and, frankly even consumer, we are not seeing much change whatsoever. So appliances, a little softening; wire and cable, we see some softness in certain segments of that business. And if you want to walk around the globe now -- I think we reported -- and I think we were fairly early to report last quarter, we mentioned that we saw signs of slowing in Asia for the first time in quite some time based on not domestic consumption, but based on exports, products that were being exported to the US, and we have continued to see that same softening in some of the electronics fields and other applications where primarily US -based multinationals are producing and shipping to the US. Europe held up for us. We keep hearing about some softening in Europe, and we are cautious about it. So we are trying to be very careful about where we go with our business in Europe, and continue to balance pruning existing customers with finding new more attractive applications for our business. That kind of takes you around the globe and across the markets that we are seeing. Clearly the bellwether of distribution sees softening in the same markets I just described, and people have often asked well how are they growing their business when they are so North American based and their end markets are predominantly declining? And the answer to that is - places like healthcare, it is gaining share with the existing business that they have. If you look at it on a sort of -- if you looked at this more like Home Depot on a same-store sales basis, our existing accounts are down because they are producing less. But we are winning plenty of new business that is not only offsetting the erosion, but it is helping us grow quite substantially. So that kind of -- I hope that answers your question, Mike. If not revise it, and I will attempt to get it?

I appreciate the color there. Was also wondering if you could give us some more details on the market dynamics and plasticizers. Are phthalates the primary plasticizer that is used in PVC compounding? And maybe what portion of your customers right now are using the Epic products that you have mentioned? And as Epic -- are those products something you can use as an alternative in pretty much every application, or are there certain types of products where you have to use phthalates?

Right now, plasticizers are used extensively in vinyl based compounds, and plastisol is in inks as well, and even our specialty resin customers. I would say about 90% of the plasticizer industry is based on phthalate chemistry. And they're under attack, there is no question about it. And that is why we are very pleased to be proactive and out in front and have alternatives for these applications. That said, the recent news that you have seen, and the legislation has been focused around a very specific class, and they are really trying at this point to get after things like toys, areas that are going to be exposed to children, predominantly under the age of 12, and there is some overriding state legislations that don't exactly line up with this as well. So it is fairly dynamic and off the press. But we didn't see the legislation coming, but we saw the opportunity, and that is why we have been positioning well for this. This Battelle technology license agreement is going to help us, and we are very pleased to have an exclusive arrangement on that that lasts through the duration of patents, which is going to take us out into the years 2021 and 2028. So we think we are in a real strong position. If you look at the products that we sell, from PolyOne's total portfolio, whether we sell products that have plasticizers, it is probably around 12% of our total revenues. And if you zero in on that a little deeper and look at the revenues that are associated that could be impacted by this legislation, it is probably more like 2% to 2.5%. Honestly, we wouldn't mind it being higher because as we replace and cannibalize our own business, we have, I think, our opportunities to replace those products with replacement products that are more attractive to us as well as our customers. They are a little more expensive, they are a little more profitable for us, and we like that, because we think it's, in some cases, unique solutions for our customers. Epic is specifically an inks-related application. So this is going on in garments, and while the legislation hasn't been completed in that arena yet and may not be, leading-edge companies want to get there first, and they don't want to take the chances either for image and reputation and brand-protection reasons or potentially even for litigation-based reasons. But the leaders are out in front of this saying, you know, "help us now. We know we don't have do, but we want to. And so we are in a strong position there. And that is where products like Epic, and we have another one that is water-based called Oasis. So we think we are in a really good position now to capitalize on the changes, however wide and deep they may be on this front. I hope that answers your question, Mike?

It does. And if I could just sneak in one more, looking at the balance sheet, accounts receivable was up about $100 million versus the end of last quarter. Are you seeing customers with credit issues or is there a another explanation for that?

It is just the AR securitization facility. If you recall, Mike, we replaced that with $80 million of senior notes in April.

All right. Thanks very much.

Your next question comes from the line of Rosemarie Morbelli with Ingalls & Snyder. Please proceed. Rosemarie Morbelli - Ingalls & Snyder Good morning, all.

Hi, Rosemarie. Rosemarie Morbelli - Ingalls & Snyder: The recent realignment, you briefly talked about on the conference, is that mostly linked to the Performance Product and Solutions, or are there other particular areas of your business which will be effected? And then, linked to that, as you spend $12 million on the facilities that are you are going to keep, I am assuming that some of the capacity is just going to be produced somewhere else. So net-net, how much are you really eliminating, and is there more to come? Rosemarie Morbelli - Ingalls & Snyder: There are several questions there, let me try to answer all of those. First, the realignment actions do take place across more than just the Performance Products and Solutions segment. We don't have plans to disclose capacity or capacity utilization. And with respect to the $12 million of additional capital expenditures, I think your observation is spot-on in the sense that manufacturing would go to our existing plants. And we further expect that the majority of that $12 million would be incurred by the end of this year. Rosemarie Morbelli - Ingalls & Snyder: So this means that while you may improve your manufacturing efficiency by producing more at a given plant, you are not necessarily eliminating a lot of capacity, or am I wrong?

We are eliminating a substantial chunk of capacity. In some cases, we need certain equipment to deal with mix, and so we will be upgrading some equipment to sort of more modern equipment to make sure that we can be efficient. But we are clearly taking out a fair bit of capacity. At the same time, when you have machines that are in a facility and they are not running at anywhere near capacity and you move those, your shifts don't really change. We are really going to save a lot of money on people. We just have -- we want to keep our plants running smoothly and running with some degree of efficiency, and the way to do that is by consolidating some of them. And I would also add to the earlier part of your question, Rosemarie, it is true that this is affecting several businesses. I tell you we have been extremely sensitive to our color business, because it's such a real speed, rapid response oriented, customer-oriented business, and there is only one very small plant that is affected by this change that is a color plant. Rosemarie Morbelli - Ingalls & Snyder: Okay. And still staying on the Performance Product Solution, the operating margin this quarter was 1.9% compared to 3.2% in the first quarter. Given the fact that -- are you doing enough in-house to actually have this 1.9% the bottom regardless of what happens based on the steps you are taking?

Well, the first thing that I would mention, Rosemarie, is that we did have $1 million of specific discrete customer claims that were resolved during the quarter. So, on a recurring basis, you can add that back to get to, I would say, a more normalized operating margin percent. With respect to your question about -- I am not sure if it was whether or not this is a bottom, but we have certainly experienced continued raw material cost increases and that has put pressure on margins in that business this quarter. Rosemarie Morbelli - Ingalls & Snyder: And with the price of oil -- if I may sneak this one in as well, as oil prices are declining, do you still expect for material costs to go up -- to continue rising considering that demand is also particularly weak?

We are going to continue to see escalating Ros and it will moderate the degree and the amplitude somewhat by this recent pullback. But, you know, you have to -- there is sort of been a pent-up cost that certain companies have been absorbing. They first try to take out through productivity initiatives, hold pricing and it got way away from folks. You really kind of have to roll the clock back to last fall, to maybe $65 to $90 oil pricing, to kind of get the basis upon which a lot of these costs are being dealt with today. So if we go to $1.10 or $1.20 or $100, I don't know. There is still going to be increases that we have an obligation to deal with and to pass through. So we are going to manage that. We keep really close tabs on the escalation of our raw materials as well as our manufacturing costs, and it is our duty to make sure that our customers pay us appropriately for the products and services we provide. So, you can't really predict -- nobody can predict what is going on in this -- in the oil field right now with regard to oil prices, nobody that -- you know, a few people have been accurate, but we like the direction it is in right now. Certainly it helps more, it eases things when we get reductions like we have seen recently. But we are going to be flexible and agile, and we are going to adapt to whatever conditions that we can't control whatever prevails. Rosemarie Morbelli - Ingalls & Snyder: Okay. Thanks.

Thank you.

Again, ladies and gentlemen, as a reminder, please initially limit your questions to two questions. And if time permits you will be able to re-enter the queue to ask additional questions. Your next question comes from the line of Roger Smith with Merrill Lynch. Please proceed, sir.

Hey, good morning, guys.

Hi, Roger.

Hi Roger.

Hey could you update 2008 CapEx guidance, which, perhaps includes the majority of the $12 million of extra CapEx from the closures and what you think normalized CapEx would be in the future? I didn't see that, perhaps, in the Q that you just put out?

Yes. We have historically said, at least for this year, CapEx to be about $55 to $60 million, which is back end loaded. Our -- that did not exclude the $12 million that I just referenced for the realignment actions. We are going to try to get that $12 million dollars into the $55 to $60 million range for the full-year and we would expect, on a normalized recurring basis, that it is not that high, and perhaps in the $40 to $45 million range of which 50% is probably maintenance.

Keep in mind we have got an SAP upgrade project in this year that's $8.5, $9 million. It is a one-time. So I think, Bob is spot-on with the assessment of where we are going with the CapEx.

And that $8.5 to $9 was included in the $55 to $60.

That's correct.

Okay. Thank you for that. Working capital went down by nearly $7 million in Q2; actually a great result in the current inflationary environment. I see the payables days were up more than receivables days, but can you comment more broadly on how you achieved this, given the inflationary pressure? And do you expect to be pressured more in Q3 '08 or the second half of '08?

Yeah. What I would say -- perhaps I will do this in reverse order. I think that we do have a seasonality in our cash flow whereby we see higher levels of cash in the second half of the year, and we do expect working capital improvement as a result of that. And I think that relative to what we have been able to accomplish this year, I think it is just an ongoing concerted effort to manage risky accounts, and we have said ad nauseum today about housing, and construction and automotive and I think we have made a concerted effort to be proactive about those collections and to try steer clear of where we see a credit risk.

All right. Well, thank you very much, guys.

Thank you.

And your next question comes from the line of Saul Ludwig with KeyBanc. Please proceed, sir.

Good morning.

Hi, Saul.

Hi, Saul.

I assume the whole special $3.8 million was in corporate?

That's right.

Okay. In the performance sector, could you tell us -- on, let's say a cents per pound basis, how much is your, let's say, resins cost go up versus last year? And how much did your selling prices change on a price per pound basis? This would be on the vinyl compound arena to see whether you are seeing any compression in what I will call the variable margin?

Well, I guess, I would answer the question maybe first this way, and then we will go from there, but on the Performance Products and Solutions segment, that's obviously where we have been hurt the worst from a raw material perspective, and volume declines have offset any benefit that we would have received in pricing over raw materials. In fact, we are not really seeing that in that particular segment. In aggregate for the Company, Saul, we reported, just to put it into context, we reported $82.5 million of gross margin last year for the second quarter, and this year we will report $88.5, so about $6 million of improvement. And the way that I would like to characterize that improvement is as follows. We have obviously incremental gross margin from GLS and FX and let's call that $12. So we've got $12 million incremental year-over-year, and we have to explain a $6 million decline to get to our gross margin performance this quarter. About $12 of that comes from the Performance Products and Solutions segment, and so the $12 negative offset by a positives in Specialty and in Distribution where we are actually seeing a pricing improvement over the raw material cost inflation.

Just to go become to the question. Did the -- Performance Products, did your price per pound increase equal or was it less than your raw material costs per pound increase? Because I am trying to segregate the impact on profitability from volume versus price cost relationship?

Yes. If you want to get into -- we don't get in deep into material margin discussions, but we certainly look at our material margins. And we have held pretty solid in the vinyl compounds business, which is the bulk of Performance Products, we have had pretty solid performance on material margin. We have taken out a lot of manufacturing costs, but the demand decline has exceeded our ability to take those costs out. So the erosion has been more on volume and demand versus a price spread over the resin cost increases.

So relative to volume, could you comment on what your volume changes were second quarter-to-second quarter in the various categories?

Well, in aggregate, I would say our volume is down this year about 8%, and Distribution is relatively flat until the majority -- obviously the remainder of that is in PP&S and Specialty.

And how much was in Performance category? The vinyl?

The bulk of it.

The bulk of it.

And just finally, very nice performance on GLS. Can you comment on -- two parts to this; what was GLS's sales in the quarter? And secondly, if you removed the $3.7 million profit from GLS, the residual left Engineered Materials business actually got a little worse, and so I wondered if you could comment on what is going on there? So two questions, sales of GLS and profitability of core Engineered Materials?

Sales from GLS are about $35 million and you are spot-on on the observation about Specialty Engineered Materials. So GLS is adding $3.7 million quarter-over-quarter, and for the total segment, we only added $3.6. So that means the remainder of our Engineered Materials is down about $100,000 year-over-year. And I think broadly, the way I would describe that is we have been focused on the acquisition with GLS this year, and we have obviously talked a lot about the transformation strategy; and in this particular segment I think it will take longer to see the results of that strategy than it will, say, in the Color business where we have a faster turnover in customer response. So on the Specialty Engineered Materials side we are focusing our efforts on trying the get spec'd into higher margin, sustainable business, and I think it is reasonable to expect that we are not going to see that initially this year, but will going forward.

We have added some investment also, Saul. We have got new sellers that are incremental to that EM team and they are out doing great work in not bringing home invoices. You have a purchase order just yet because of the long sales cycle they are dealing with, but we absolutely believe in those investments and they paid off for us in Distribution, clearly, and they are going to pay off in EM. It is just, you know, to get specs in your favor takes 18 to 24 months, and we got geared up on this probably more like six months or so ago. I would also add that bulk of the historical EM business has been general-purpose products that have gone into wire and cable business, and that is a soft business for us right now. It is a very difficult environment. We don't talk about that much because compared to housing and auto it is not as large for us, but to EM, wire and cable is a big piece of their business and it is in a real soft patch right now. So I am feeling good about EM and the team and the progress that they are making. And I think, stay tuned, because I believe that the investments in the sellers and the strategy to get after OEMs will certainly pay nice dividends. We could have made a choice and cut some of the investments or scaled back and we consciously decided not to. So that's our answer with regard to EM, your observations are correct.

And just finally, as you look at your forecast for the year to be better than last year, it would imply that your second half of the year earnings would have to be about the same as they were in the first half of the year, the $0.21. Normally there is a seasonal slowdown in the second half of the year. What is it that you are counting on in the second half of the year to be better than what would be the normal downturn in earnings that you typically experience in the second half of the year versus the first half of the year?

Saul, that's great question. I would answer it this way. Let me start by saying what we are not counting on. We are not counting on a rebound in housing and we are not counting on a rebound in auto. Okay. We are counting on the momentum that we are building, the new business flow that has come into our organization at an accelerated rate, and we are counting on doing a good job of capturing pricing and improving our mix. I think those are the prime elements that are going to drive us toward success in the second half of the year. We have great momentum in distribution. We have got outstanding momentum in our Specialty business. We are going to finally, in the fourth quarter, lap ourselves on a comparable basis for our PP&S business where we have had sharp declines, sort of, late Q3 of last year.

Great. Well, thank you very much, Steve.

Thank you, Saul.

Thanks Saul.

Your next question comes from the line of Mike Judd with Greenwich Consultants. Please proceed, sir.

Thanks. My question has been answered.

Okay.

All right, Mike.

Your next question comes from the line of Christopher Butler with Sidoti and Company. Please proceed, sir.

Hi. Good morning, guys.

Hi, Chris.

Hi, Chris.

I just wanted to step back to the plasticizer announcement. You had mentioned that these products are a little more expensive, and I know soybean oil is up in cost significantly. Is the eventual success of this business tied to making a cost competitive product, or is this a legislation play? Could you give a little color there?

I think these things often start out with -- they start it out with a, do you have a green conscience? And are your customers willing to pay a premium to feel good about their contributions toward the environment? And frankly, until recently, the answer has generally, in North America, been "no." It is kind of like why – you would say yes if all things were equal, why wouldn't you? But to pay a premium, geez, maybe it is not nice, but it is maybe not worth it. Legislation changes all of that. Mandates force you to do things that you might not ordinarily do that have some added economic cost to it, and I think we are beginning to see some of that. I would also suggest that as you begin to build more volumes and gain knowledge about using these alternative materials, that just kept competitive nature of business today begins to drive those costs down. I can't suggest, because I won't predict how some of these renewable resources will do with regard to cost, but I do believe that in some cases there just aren't viable options and customers are going to have to pay more for the options that exist. So, I think you have a little bit of both playing here, but when you are told you have to do something and it is a legal requirement, you are going to figure out a way to do it, and industry will be creative and innovative and figure out ways to do it in the most economical way and it may not always achieve parity with what the past has been. Sometimes it is better, sometimes it is lower cost, sometimes it is more cost. Right now we are at a point where it is a little bit more expensive, and some of these products we have had recently out and we had customers say, "This is really nice. We are glad you have it. We are not ready yet because we can't compete if we go there." But with a mandate and the playing field gets levelized, and it changes the game. So that would be my answer to your question. I hope I answered what you were driving at, Chris?

Absolutely. And then shifting gears to the capacity reduction and your guidance for the second half, do you have any savings from some early moves that you've have made in the second half -- in your second half guidance?

That would be upside. We will strive for it, but we are going to be really careful with this, Chris, to not -- we try to do everything with speed here, but we try to do things right as well, and the last thing we are going to do is move so quickly that we cause a disruption with our customers. So, to the degree that we are able to move more quickly, that would be upside, we don't have it factored into this year. It is sort of the last three quarters of next year is the pace that we have this mapped out. So, I would say it is unlikely that we are going to see an economic benefit in 2008 from these changes.

And just quickly, the remediation expense in the quarter, was that an adjustment to estimates, or was that one-time completely off the books now?

That is one time. It is a discrete item that we resolved during the quarter. It is at a non-operational site. So we would expect that going forward those costs would be relatively consistent with our prior guidance of about 1.5 pre-tax per quarter.

Thank you for your time.

Yes.

(Operator Instructions) And your next question is a follow-up from the line of Rosemarie Morbelli with Ingalls & Snyder. Please proceed, ma’am. Rosemarie Morbelli - Ingalls & Snyder: Bob, you said that the $3.8 million special item was incorporated in the segments. Where is it in the P&L?

It is split between SG&A and gross margin, I mean, in SG&A and cost of sales and about $1.5 of that is in SG&A. Rosemarie Morbelli - Ingalls & Snyder: Okay. And could you give us the split between -- company wide between volume, price mix, currency and acquisition leading to your sales growth?

From a sales perspective, I would say that, yes, we have described the year-over-year growth as 8.6%. 5.2% of that is GLS, about 3.9% is FX. So on an organic basis we are just slightly down. Rosemarie Morbelli - Ingalls & Snyder: And when you talked about volume down 8%, was that company wide, or was it -- ?

That was company wide. Rosemarie Morbelli - Ingalls & Snyder: Okay. Thank you. And I was wondering on the bio-plasticizer technologies, Battelle licensing agreement. What do you have in terms of the time frame regarding the commercialization of those products, and when we see them at least on the top line?

You know, it is a great question, and we don't know yet, Rosemarie, that is a honest answer. We have got more R&D work that is required to optimize the chemistry, and that is what our people in our labs are working on right now. So we have this wide range of patents around this area, and what we have to keep working on - now that we have this agreement and the exclusive nature of it allows us to really put some resources behind this - and work with some other partners, by the way, to develop the alternatives. I can just tell we are all over it, and we are on it, and I am just not able to predict when we are going to be popping out new products that we will be able to invoice. But we are going to move with greatest degree of speed we can, and still get it right. Rosemarie Morbelli - Ingalls & Snyder: Okay. Thanks.

You are welcome. I think we have time for one more brief question.

And your final question comes from the line of Roger Smith with Merrill Lynch. Please proceed, sir.

Thanks. On GLS, would it be possible do give us sales and EBITDA for Q2 '07 and Q3 '07 so we can do our pro formas correctly?

I mean, roughly the performance is pretty consistent year-over-year, and what we have said historically, or at least we gave you sales, it is about $35 million, and earnings was $3.7 million, and the DNA, I believe, is adding about $1 million to that per quarter. Rosemarie Morbelli - Ingalls & Snyder: Okay. Great. And lastly, would you be willing to provide a breakdown of the $17 million pure savings by your segments?

No, we are not actually planning to disclose anything about those estimated saving beyond what we have said at this point. Rosemarie Morbelli - Ingalls & Snyder: All right. Thank you very much, guys.

Certainly.

Thank you all. Well, we appreciate you all participating in our call today, and we thank you very much. I know that Bob is going to be available later today if your questions weren't answered. He will be around, and be happy to take your call and discuss further our quarter. Thank you very much

Yes.

Ladies and gentlemen, thank you for joining today's conference. That concludes the presentation. You may now disconnect. Have a wonderful day.