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, June 3, 2004
SPARTECH CORPORATION ANNOUNCES
SECOND QUARTER FISCAL 2004 RESULTS AND DECLARES QUARTERLY DIVIDEND
Second Quarter Highlights:
*Net Sales increased by 15% to $287.6 million
*Operating Earnings rose by 25% to $28.1 million
*Interest Expense declined by 1% to $6.2 million
*Net Earnings increased by 28% to $13.5 million
*Earnings Per Diluted Share was $.41 vs. $.36 per share last year
Financial Summary (Unaudited)
(Dollars in thousands, except per share data)
Quarter Ended %
05/01/04 05/03/03 Change
OPERATING RESULTS
Net Sales $287,591 $250,488 15%
Operating Earnings $ 28,050 $ 22,456 25%
Net Earnings $ 13,519 $ 10,541 28%
Earnings Per Share:
Basic $ 0.42 $ 0.36 17%
Diluted $ 0.41 $ 0.36 14%
PERFORMANCE RATIOS
Operating Earnings Per Pound Sold $ 0.075 $ 0.068
Operating Return on Net Sales 9.8% 9.0%
Total Debt to Total Debt & Equity 47.2% 58.4%
Return on Average Equity 13.7% 14.1%
"We are pleased to report that our second quarter produced record sales in
both pounds and dollars, with renewed strength in practically every market we
serve. Our backlogs are solid as we move into our fiscal third quarter, and
this bodes well for a continuation of the excellent volumes we experienced
over the last three months."
-Bradley B. Buechler, Chairman, President & Chief Executive Officer-
-more-
SPARTECH CORPORATION
SECOND QUARTER FISCAL 2004 RESULTS & QUARTERLY DIVIDEND
ADD 1
SPARTECH CORPORATION ANNOUNCES
SECOND QUARTER FISCAL 2004 RESULTS AND DECLARES QUARTERLY DIVIDEND
ST. LOUIS, June 3, 2004 - Spartech Corporation (NYSE:SEH) announced today
increases in both sales and earnings for its second quarter ended May 1, 2004.
Spartech's Chairman, President and CEO, Bradley B. Buechler, reported that
sales for the second quarter of fiscal 2004 were $287.6 million, an increase of
15% from the $250.5 million reported in 2003. The Company's fiscal 2004 second
quarter operating earnings were $28.1 million or 25% greater than the $22.5
million reported for the same quarter last year. Second quarter 2004 net
earnings were $13.5 million, or $0.41 per diluted share, compared to the $10.5
million, or $0.36 per diluted share, reported in 2003.
Commenting on the results, Mr. Buechler stated, "We are pleased to report
that our second quarter produced record sales, in both pounds (375 million) and
dollars ($287.6 million), with the economy continuing to improve as the quarter
progressed. We saw a strengthening in practically every market served by us
during the quarter.especially strong were the building & construction and
transportation markets. And net earnings, though not a record at $13.5 million,
represented our 50th consecutive profitable quarter dating back to the first
quarter of fiscal 1992. Our overall capacity utilization rate was in the upper
80% range during the quarter, and our backlogs are solid as we move into the
third quarter. This bodes well for a continuation of the excellent volumes we
experienced during the last three months."
SEGMENT RESULTS
Custom Sheet & Rollstock - Our Custom Sheet & Rollstock segment saw sales
grow by nearly 16% during the quarter, with the increase being generated
roughly one-third from acquisitions and two-thirds from internal growth &
price/product mix changes. Continued strength in the building &
construction and sign & advertising markets we serve, combined with new
volume from our 2003 acquisitions of PEP and TriEnda, were the principal
reasons for the unit's sales increase to 184 million pounds for the
quarter. The segment's operating margin--both on a per pound and
percentage basis--saw continued increases during the quarter as well, with
our conversion cost reduction initiatives beginning to pay off.
(In Millions)
Second Quarter First Six Months
2004 2003 2004 2003
-------- ---------- --------- ---------
Net Sales $188.8 $163.3 $349.0 $303.0
======== ========== ========= =========
Operating Earnings $ 21.9 $ 18.0 $ 37.0 $ 30.6
======== ========== ========= =========
-more-
SPARTECH CORPORATION
SECOND QUARTER FISCAL 2004 RESULTS & QUARTERLY DIVIDEND
ADD 2
Color & Specialty Compounds - Sales for the Company's Color & Specialty
Compounds group also rose by double-digits (14%) during the second quarter.
Slightly more than three-fourths of this volume (in pounds) increase to 178
million came from internal growth as the segment picked up several new
customers which more than offset a decline in the group's tolling business.
Operating margin at 8.7% of sales, for this our second largest segment,
reflected a modest improvement over the prior year's 7.6% margin
(In Millions)
Second Quarter First Six Months
2004 2003 2004 2003
-------- ---------- --------- ----------
Net Sales $ 77.8 $ 68.0 $144.3 $127.9
======== ========== ========= ==========
Operating $ 6.7 $ 5.2 $ 12.3 $ 10.5
Earnings
======== ========== ========= ==========
Molded & Profile Products -The Company's Molded & Profile Products group
produced another solid performance during the second quarter, with sales
increasing by 9%, but more importantly operating earnings rising by
approximately 35%. Strong performances by the group's custom engineered
wheels and acrylic rods & tubes product lines led the way for this segment
during the second quarter.
(In Millions)
Second Quarter First Six Months
2004 2003 2004 2003
-------- ---------- --------- ----------
Net Sales $ 21.0 $ 19.2 $ 35.8 $ 33.3
======== ========== ========= ==========
Operating Earnings $ 2.6 $ 1.9 $ 3.8 $ 2.5
======== ========== ========= ==========
Mr. Buechler added, "We continue to be encouraged by the overall economic
improvement, but remain cautiously optimistic due to fluctuating resin prices
and occasional supply concerns related to crude oil. However, on a more
positive note, we are also seeing an increase in potential acquisition
candidates coming to market. Based upon these factors and our solid backlog at
the end of the second quarter, we continue to believe that Spartech should
generate year-over-year improved earnings results in each of the final two
quarters of fiscal 2004. Our current guidance for the Company's full fiscal
2004 remains $1.38-$1.43 earnings per diluted share. As always, our guidance
does not give any positive effect for future acquisitions that could be
completed later this year."
-more-
SPARTECH CORPORATION
SECOND QUARTER FISCAL 2004 RESULTS & QUARTERLY DIVIDEND
ADD 3
Finally, Mr. Buechler announced that the Company's Board of Directors
declared a second quarter cash dividend of 11cents per common share, payable on
July 1, 2004, to common shareholders of record on June 17, 2004.
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 capacity of more than 1.3 billion pounds and sales of
approximately $1 billion, annually.
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.
-TABLE TO FOLLOW-
SPARTECH CORPORATION
SECOND QUARTER FISCAL 2004 RESULTS & QUARTERLY DIVIDEND
ADD 4
SPARTECH CORPORATION
(In Thousands, Except Per Share Amounts)
Operating Results
Three Months Ended (Unaudited) Six Months Ended (Unaudited)
May 1, May 3, Percent May 1, May 3, Percent
2004 2003 Change 2004 2003 Change
--------- -------- -------- --------- -------- -------
Net Sales $287,591 $250,488 15% $529,054 $464,188 14%
========= ======== ======== ========= ======== =======
Operating Earnings $ 28,050 $ 22,456 25% $ 46,849 $ 38,199 23%
========= ======== ======== ========= ======== =======
Interest $ 6,175 $ 6,265 (1%) $ 12,505 $ 12,371 1%
========= ======== ======== ========= ======== =======
Income Tax $ 8,356 $ 5,650 48% $ 13,119 $ 9,129 44%
Provision
========= ======== ======== ========= ======== =======
Net Earnings $ 13,519 $ 10,541 28% $ 21,225 $ 16,699 27%
========= ======== ======== ========= ======== =======
Earnings Per
Common
Share - Diluted $ .41 $ .36 14% $ .68 $ .57 19%
========= ======== ======== ========= ======== =======
Weighted Average
Common Shares
Outstanding -
Diluted 37,054 31,102 19% 32,768 29,484 11%
========= ======== ======== ========= ======== =======
SPARTECH CORPORATION
SECOND QUARTER FISCAL 2004 RESULTS & QUARTERLY DIVIDEND
ADD 5
SPARTECH CORPORATION
(In Thousands, Unaudited)
As Of
May 1, Nov. 1 Percent
2004 2003 Change
---------- --------- --------
Select Balance Sheet Data
Receivables, net $177,739 $149,546 19%
========= ======== ========
Inventories $117,348 $ 99,671 18%
========= ======== ========
Property, Plant and Equipment, net $281,883 $283,924 -
========= ======== ========
Accounts Payable & Accrued $132,998 $132,764 1%
Liabilities
========= ======== ========
Total Debt $356,552 $383,819
(7%)
========= ======== ========
Shareholders' Equity $399,612 $322,358 24%
========= ======== ========
Three Months Ended Six Months Ended
May 1, May 3, May 1, May 3,
2004 2003 2004 2003
-------------- ------------ ------------ -------------
Select Cash Flow Information
Cash Flow From Operations $ 1,518 $ 7,211 $ (1,750) $ 6,106
========= ========== ========== ==========
Capital Expenditures $ 7,283 $ 7,424 $ 12,514 $ 12,013
========= ========== ========== ==========
Depreciation & Amortization $ 8,634 $ 7,692 $ 16,968 $ 15,406
========= ========== ========== ==========
Borrowings(Payments) of Long- $(47,928) $ 3,733 $(37,684) $ 12,392
Term Debt, Excluding
Acquisitions
========= ========== ========== ==========
Dividends on Common Stock $ 3,534 $ 2,924 $ 6,763 $ 5,849
========= ========== ========== ==========
Treasury Stock Acquired,
(Net of Option Proceeds) $ (161) $ 261 $ (1,907) $ 1,446
========= ========== ========== ==========