Exhibit 99
[SPARTECH LOGO]
SPARTECH CORPORATION
Company Contacts:
Bradley B. Buechler Randy C. Martin
Chairman, President and Executive Vice President and
Chief Executive Officer Chief Financial Officer
(314) 721-4242 (314) 721-4242
For Immediate Release
Thursday, March 4, 2004
SPARTECH CORPORATION ANNOUNCES
FIRST QUARTER FISCAL 2004 SALES AND EARNINGS INCREASES
_______________________
First Quarter Highlights:
Net sales increased by 13% to $241.5 million
Operating earnings were up 19% to $18.8 million
Interest expense increased by a modest 4% to $6.3 million
Net earnings increased by 25% to $7.7 million
Earnings per diluted share was $.26 vs. $.21 per share last year
Financial Summary (Unaudited)
(Dollars in thousands, except per share data)
Quarter Ended %
01/31/04 02/01/03 Change
OPERATING RESULTS
Net Sales $241,463 $213,700 13%
Operating Earnings $ 18,799 $ 15,743 19%
Net Earnings $ 7,706 $ 6,158 25%
Earnings Per Share:
Basic $ 0.26 $ 0.21 24%
Diluted $ 0.26 $ 0.21 24%
PERFORMANCE RATIOS
Operating Earnings Per Pound Sold $0.59 $0.55
Operating Return on Net Sales 7.8% 7.4%
Total Debt to Total Debt and Equity 54.7% 57.7%
Return on Average Equity 9.5% 8.4%
" We are pleased to report that our first quarter produced substantially
improved results over the similar three-month period last year, and recent
economic news, coupled with our record first quarter 43 new product
transformation registrations, points toward a continuation of this trend
through the balance of 2004."
- Bradley B. Buechler, Chairman, President and Chief Executive Officer -
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SPARTECH CORPORATION
FIRST QUARTER 2004 EARNINGS
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SPARTECH CORPORATION ANNOUNCES
FIRST QUARTER FISCAL 2004 SALES AND EARNINGS INCREASES
ST. LOUIS, March 4, 2004 - Spartech Corporation (NYSE:SEH) announced
today increases in both sales and earnings for its first quarter ended
January 31, 2004.
Spartech's Chairman, President and CEO, Bradley B. Buechler, reported
that sales for the first three months of fiscal 2004 were $241.5 million, a
13% increase from the Company's first quarter sales last year of $213.7
million. In addition, the Company's fiscal 2004 first quarter operating
earnings rose to $18.8 million or 19% greater than the $15.7 million
reported for the same quarter last year. These sales and operating results
produced first quarter net earnings of $7.7 million or $.26 per diluted
share, compared to $6.2 million, or $.21 per diluted share generated in
last year's first quarter.
Commenting on the results, Mr. Buechler stated, "We are pleased to
report that our first quarter produced substantially improved results over
the similar three-month period last year, and recent economic news, coupled
with our record first quarter 43 new product transformation registrations,
points toward a continuation of this trend through the balance of 2004.
Volume shipped during the quarter totaled just over 317 million pounds,
representing record first quarter volume for us and exceeding our prior
year's similar period volume by 10%. First quarter fiscal 2004 net
earnings, though not a record, also rebounded favorably compared to last
year, producing a 25% increase in net earnings as capacity utilization rate
increases and 2003 conversion cost reductions began to take hold."
SEGMENT RESULTS
Custom Sheet & Rollstock - Our Custom Sheet & Rollstock segment reported
strong sales during the first quarter of 2004, principally due to a
combination of rebounds in the transportation and building &
construction markets we serve and new volume from our 2003 acquisitions
of PEP and TriEnda. And more importantly, the group's operating margin
improved modestly to 9.4%, with our focused conversion cost reduction
efforts beginning to pay off, as evidenced by the segment's gross margin
increase of more than one-half of a percentage point during the quarter.
The group's capacity utilization rate grew each month during the period,
which bodes well for the segment's second quarter.
(In Millions)
First Quarter
2004 2003
Net Sales $160.1 $139.8
Operating Earnings $ 15.1 $ 12.6
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Color & Specialty Compounds - Our Color & Specialty Compounds segment
saw reasonably solid orders from/sales to most markets served, with the
exception of consumer electronics where the group's largest consumer
products customer lost a portion of its business during fiscal 2003.
This loss, which has its most significant impact when comparing the
first quarter 2004 to the prior year similar period, all but offset the
segment's solid gains in most other markets. The margin loss from this
customer.approximately $.9 million or 1.3% of sales.offset a large part
of the improvements in several other areas and resulted in a modest
(.6%) decline in operating margin for the segment. Our late 2003
Creating Positive Change efforts have just started to positively effect
our production efficiencies within the group and should help improve
margins as the year progresses.
(In Millions)
First Quarter
2004 2003
Net Sales $ 66.5 $ 59.9
Operating Earnings $ 5.6 $ 5.4
Molded & Profile Products - Our Molded & Profile Products segment
produced some solid increases in both sales (6%) and operating earnings
($.7 million) in the first quarter. Operating margin for the group
experienced a nice rebound (3.9% to 8.3%) as volume improvement, notably
in our custom molded wheels unit, coupled with focused cost reductions,
produced some excellent results for this segment in the first quarter of
2004.
(In Millions)
First Quarter
2004 2003
Net Sales $ 14.8 $ 14.0
Operating Earnings $ 1.2 $ .5
Finally, Mr. Buechler stated, "As we move forward to our second quarter,
we continue to see signs that our economy is improving.larger order sizes and
more requests for quotes. We are also seeing an increase in acquisition
candidates coming to market. And in light of British Vita's recent sale of
its remaining ownership position in Spartech, we have expanded our geographic
reach for acquisitions as we begin our efforts to become a more global
company. Based upon all of the above, we currently believe that Spartech
should generate year-over-year improved earnings results in each quarter
during the remainder of fiscal 2004. Our current guidance for the full
fiscal 2004 is $1.38-$1.43 earnings per diluted share, after factoring in the
recent common stock offering, but before any additional acquisitions.
Reconciling this to our previous guidance of $1.42-$1.47 per share.issued
before our recent equity offering which generated proceeds for the Company of
approximately $61 million.this current guidance considers an 8 cents per
share reduction for dilution from the offering and a 3-4 cents per share
increase due to our improved first quarter performance and a better outlook
for the balance of the year. Once again, this guidance does not give any
positive effect for acquisitions likely to be made later this year."
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Spartech Corporation is a leading producer of engineered thermoplastic
materials, polymeric compounds, and molded & profile products, which has 47
facilities located throughout the United States, Canada, Mexico, and
Europe, with annual production and sales in its recently completed fiscal
year of more than 1.2 billion pounds and $950 million, respectively.
Safe Harbor For Forward-Looking Statements
Statements contained herein which are not historical facts are forward-
looking statements within the meaning of the Securities Act of 1933 and the
Securities Exchange Act of 1934 which are intended to be covered by the
safe harbors created thereby. For a summary of important facts, which
could cause the Company's actual results to differ materially from those
included in, or inferred by, the forward-looking statements, refer to the
Company's Form 10-K for the fiscal year ended November 1, 2003, which is on
file with the Securities and Exchange Commission.
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SPARTECH CORPORATION
FIRST QUARTER 2004 EARNINGS
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SPARTECH CORPORATION
(In Thousands, Except Per Share Amounts)
Three Months Ended
(Unaudited)
Jan. 31, Feb. 1, Percent
2004 2003 Change
Operating Results
Net Sales $241,463 $213,700 13%
Operating Earnings $ 18,799 $ 15,743 19%
Interest $ 6,330 $ 6,106
4%
Income Tax Provision $ 4,763 $ 3,479 37%
Net Earnings $ 7,706 $ 6,158 25%
Earnings Per Common Share-Diluted $ .26 $ .21 24%
Weighted Average Common
Shares Outstanding-Diluted 29,785 29,503 1%
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SPARTECH CORPORATION
(In Thousands, Unaudited)
As Of
Jan. 31, Nov. 1, Percent
2004 2003 Change
Select Balance Sheet Data
Receivables, net $147,069 $ 149,546 ( 2%)
Inventories $113,874 $ 99,671 14%
Property, Plant and $283,601 $283,924 -%
Equipment, net
Accounts Payable & Accrued $122,878 $132,764 ( 7%)
Liabilities
Total Debt $397,676 $383,819 4%
Shareholders' Equity $328,780 $322,358 2%
Three Months Ended
(Unaudited)
Jan. 31, Feb. 1,
2004 2003
Select Cash Flow Information
Cash Flow From Operations $ (3,268) $ (1,105)
Capital Expenditures $ 5,231 $ 4,589
Depreciation & Amortization $ 8,335 $ 7,714
Borrowings of Long-Term Debt,
Excluding Acquisitions $ (10,244) $ (8,659)
Dividends on Common Stock $ 3,229 $ 2,925
Treasury Stock Acquired,
Net of Option (Proceeds) $ (1,746) $ 1,185