HOUSTON, July 31, 2012 /PRNewswire/ --Kraton Performance Polymers, Inc. (KRA), a leading global producer of styrenic block copolymers, announces financial results for the quarter ended June 30, 2012.

2012 SECOND QUARTER HIGHLIGHTS

"Despite record first quarter 2012 sales volume and revenue, our sales volume in the second quarter was impacted by a number of factors including a late start to the North American paving season, wet weather in Europe, which had an adverse effect on roofing activity, continued volatility in raw material prices, which was reflected in purchase and inventory management activity by our customers, and slowing global demand across many regions and markets we serve. Nevertheless, our sales volume for the first half of 2012 was up 2% compared to the first half of 2011," said Kevin M. Fogarty, Kraton's President and Chief Executive Officer. "Of note in the second quarter were very robust sales in our Cariflex end use, serving medical applications, and volume increases in lubricant additive and oil gels applications within our Adhesive, Sealant, and Coatings end use. Innovation results continued to demonstrate we have the right strategy to combat general market headwinds. Specifically, our Vitality Index reflected that innovation-based sales were 13% of revenue for the trailing twelve month period ended June 30, 2012, as compared to 14% for the twelve months ending June 30, 2011. The consistency with which we apply this key operating metric dictates that we roll sales out of the calculation after five years. However, if we were to include the sales that rolled off during the TTM period, which still carry a margin premium, the Vitality Index would have been 17% for the twelve months ending June 2012," Fogarty added. "Lastly, although our second quarter 2012 unit margins benefited from price increases, announced in the first quarter, monomer prices continued to rise significantly through April, declined modestly in May, and then dropped significantly in June, resulting in average pricing for key monomers being higher in the second quarter 2012 than in the first quarter, and this served to limit margin expansion," said Fogarty. "More recently, following another sharp monomer price decline in July 2012, and based upon existing demand fundamentals, we believe that pricing for key monomers such as butadiene will remain relatively stable through the third quarter 2012, which in turn should return confidence to customers who had been focused on minimizing inventory levels in declining monomer environments."

Three Months Ended

June 30,

Six Months Ended

June 30,

(US $ in thousands, except per share amounts)

2012

2011

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Kraton Performance Polymers, Inc. Announces Second Quarter 2012 Results