UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended October 28, 1995.
OR
[] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _________ to _________
Commission file number 1-5911
SPARTECH CORPORATION
(Exact name of Registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
43-0761773
(I.R.S. Employer Identification Number)
7733 FORSYTH, SUITE 1450, CLAYTON, MISSOURI 63105-1817
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (314) 721-4242
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which Registered
Common Stock, $.75 par value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. YES X NO
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this
Form 10-K. [ ]
There were 23,338,916 shares of common stock outstanding as of December 31,
1995. The aggregate market value of the voting stock held by non-affiliates of
the Registrant was approximately $50,539,932 on December 31, 1995.
Documents incorporated by references:
- Portions of the 1995 Annual Report to Shareholders are
incorporated by reference into Parts II and IV.
- Portions of the Definitive Proxy Statement for the
1996 Annual Meeting of Shareholders are incorporated
by reference into Part III.
10K - page 1
PART I
Item 1. BUSINESS
General
Spartech Corporation, together with its subsidiaries ("Spartech" or the
"Company"), is in the plastics processing business, with its two lines of
business being:
Extruded Sheet & Rollstock - which sells its products to various manufacturers
who use plastic components in their industrial products. The principal uses of
the Company's extruded sheet & rollstock are vehicle interiors, signs, spas and
showers, food packaging products, burial vault liners, boats and private
watercraft, and refrigerators. The Company is North America's largest custom
extruder of rigid plastic sheet & rollstock, operating ten plants nationwide
under the name Spartech Plastics; and
Merchant Compounding - which sells specialty alloys, compounds and color
concentrates principally to manufacturers of specialized footwear, shutters,
loose-leaf binders, cosmetic packaging products, and numerous other custom
plastic applications. The Company produces and distributes these products from
four plants under the names Spartech Compounding and Spartech Vy-Cal Plastics.
The Company's principal executive office is located at 7733 Forsyth
Boulevard, Suite 1450, Clayton, Missouri 63105-1817, telephone (314) 721-4242.
The Company was incorporated in 1968, succeeding a business which had commenced
operations in 1960. In late 1983, the Company began a restructuring program,
focusing on its plastics processing business and disposing of all of its non-
plastics operating businesses. Since 1983, the Company has expanded its
plastics business, most notably through acquisitions. The acquisitions that
comprise the Company's current operating facilities include:
Date
Acquired Business Acquired Principal Product
May 1984 Southwest Converting, Inc. Extruded Sheet & Rollstock
January 1986 Franklin/Vy-Cal Plastics Specialty Alloys & Compounds
December 1986 Atlas Plastics Corp. Extruded Sheet & Rollstock
December 1986 The Resin Exchange, Inc. Specialty Alloys & Compounds
July 1987 Eagle Plastics, Inc. Extruded Sheet & Rollstock
January 1993 Penda Corporation's Custom
Extrusion Division* Extruded Sheet & Rollstock
February 1994 Product Components, Inc. Extruded Sheet & Rollstock
November 1994 Pawnee Industries, Inc.** Extruded Sheet & Rollstock
and Color Concentrates
* Includes Penda's Polystyrene, Print Grade Lithographic Styrene and PET
businesses.
** Includes only Pawnee's Extrusion and Color Divisions.
10K - page 2
Extruded Sheet & Rollstock
The Company's extruded sheet & rollstock group operates under the name
Spartech Plastics and is the nation's largest extruder of rigid sheet &
rollstock, manufacturing and marketing both single and multilayer co-extruded
plastic sheet for many applications. The group, operating 60 extrusion lines,
annually produces nearly 300 million pounds of extruded sheet & rollstock from
several types of resin, including acrylonitrile butadiene styrene ("ABS"),
polycarbonate, polypropylene, acrylic, polyethylene terephthalate (PET),
polystyrene, and polyethylene, on a custom basis for end product manufacturers.
Net sales and operating earnings (consisting of earnings before interest,
taxes and corporate operations/allocations) of the extruded sheet & rollstock
group for fiscal years 1995, 1994, and 1993 are as follows:
Fiscal Year
(Dollars in millions)
1995 1994 1993
Net Sales $283.2 $210.0 $150.1
Operating Earnings $25.7 $18.8 $11.7
Products - Customers of the extruded sheet & rollstock group use the
Company's plastic sheet & rollstock principally in the manufacture of vehicle
interiors, signs, spas and showers, food packaging products, burial vault
liners, boats and private watercraft, and refrigerators. Most of the Company's
customers thermoform, cut, and trim their plastic sheet for various end uses.
Manufacturing and Production - The principal raw materials used in
manufacturing extruded sheet & rollstock are plastic resins in pellet form,
which are crude oil or natural gas derivatives. The Company extrudes a wide
variety of plastic resins, including ABS, polycarbonate, polypropylene,
acrylic, PET, polystyrene and polyethylene.
The Company produces plastic sheet of up to three layers using a
co-extrusion process, combining the materials in distinct layers as it is
extruded through the die into a sheet form. More than half of the Company's
plastic sheet is produced using this co-extrusion process. The remainder is
produced in a single layer using conventional extrusion processes. In some
cases, the Company will coat the plastic sheet or laminate sheets together in
order to achieve performance characteristics desired by customers for
particular applications.
Marketing, Sales and Distribution - The custom sheet extrusion business has
generally been a regional business supplying manufacturers within an estimated
500 mile radius of each of the group's ten plants because of shipping costs for
rigid plastic material and the need for prompt response to customer
requirements and specifications. The outdoor sign and spa businesses, however,
are slightly more national in scope.
10K - page 3
The Company markets its extruded sheet & rollstock products principally
through its own sales force, but also uses a limited number of independent
sales representatives. The Company generally does not sell products of the
extruded sheet & rollstock group under long-term contracts. During fiscal
1995, the extruded sheet & rollstock group sold its products to
approximately 1,200 customers.
Merchant Compounding
The Company's merchant compounding group is comprised of Spartech
Compounding and Spartech Vy-Cal Plastics.
The merchant compounding group primarily manufactures plastic alloys,
compounds and color concentrates for end product manufacturers. In addition,
the Spartech Compounding-Cape Girardeau facility distributes thermoplastic
resins purchased from other resin suppliers. Spartech Vy-Cal Plastics operates
a vinyl calender, supplying finished PVC film to manufacturers of loose-leaf
binders, decorator grade wallcoverings, and packaging products for the medical
industry. The group annually produces/distributes approximately 90 million
pounds of thermoplastic compounds, color concentrates and PVC film, selling to a
number of large and small manufacturers of precision plastic products.
Net sales and operating earnings (consisting of earnings before interest,
taxes and corporate operations/allocations) of the merchant compounding group
for fiscal years 1995, 1994, and 1993 are as follows:
Fiscal Year
(Dollars in millions)
1995 1994 1993
Net Sales $69.1 $46.6 $39.3
Operating Earnings $4.6 $2.8 $2.2
Products - Customers of the merchant compounding group include both
extrusion and injection molding businesses. The group's compounds are
principally used in the manufacture of specialized footwear, shutters, loose-
leaf binders, cosmetic packaging products, and numerous other custom plastic
applications.
Spartech Compounding produces a highly diversified range of compounds,
including: FDA clear compounds for food, beverage, and medical applications;
phosphorescent and fluorescent compounds; PVC combinations incorporating
nitrile, elvaloy, and polyurethane for chemical and abrasion resistance for
footwear, color compounds and other specialty applications.
Spartech Vy-Cal Plastics operates as a custom specialty house with its own
laboratory facility for quality testing of color, thickness, texture, tensile
strength, and dimensional stability of its specialized film output.
10K - page 4
Manufacturing and Production - The principal raw materials used in
manufacturing specialty plastic alloys, compounds and color concentrates are
plastic resins in powder and pellet form, primarily PVC and ABS, with colorants,
stabilizers, and several other additives used to obtain particular qualities in
the plastic resin once it is heated and extruded or molded into end products.
The group has well-equipped laboratory facilities, with experimental
extruders and various types of chemical analysis and testing equipment. In
addition to compounding technology, the group has developed enhanced
capabilities to produce color concentrates and additives.
Marketing, Sales and Distribution - The merchant compounding group markets
most of its products to East Coast and Midwest customers. The group markets
its products principally through its own sales force, but also uses independent
sales representatives. During fiscal 1995, the merchant compounding group sold
its products to approximately 600 customers.
Raw Materials
The various plastic resins used by the Company in its processing and
manufacturing operations are crude oil or natural gas derivatives and are
available from a number of domestic and foreign suppliers. Accordingly, the
Company's raw materials are only somewhat affected by supply and demand price
trends of the petroleum industry; pricing of the resins tends to follow its own
supply and demand equation except in periods of anticipated or actual shortages
of crude oil or natural gas. The Company is not aware of any trends in the
petroleum industry which will significantly affect its sources of raw materials
in fiscal 1996.
The Company does business with most of the major resin manufacturers and has
enjoyed good relationships with such suppliers over the past several years.
The Company has been able to adequately obtain all of its required raw materials
to date and expects to be able to continue to satisfy its requirements in fiscal
1996 and beyond.
Seasonality
The Company's sales volume has somewhat of a seasonal pattern, with the
period February through October of each year being the most active time. Fewer
orders are placed and less manufacturing activity occurs during the period
November through January. This seasonal variation tends to track the
manufacturing activities of the Company's various customers in each region.
Competition
The extruded sheet & rollstock and compounding industries are each highly
competitive. Since the Company manufactures a wide variety of products, it
competes in different areas with many other companies, some of which are much
larger than the Company and have more extensive production facilities, larger
sales and marketing staffs, and substantially greater financial resources than
the Company.
10K - page 5
Important competitive factors in each of the Company's businesses include the
ability to: (1) manufacture consistently to required quality levels, (2) provide
excellent customer service, including timely deliveries, (3) exercise skill in
raw material purchasing, and (4) achieve production line optimization to make
the products profitably.
The Company is an intermediate processor of extruded sheet & rollstock which
is sold to customers who shape it for their end use with thermoforming
equipment. Several of these customers have, or upon expansion may acquire,
extrusion machinery. Moreover, some customers are large enough to justify
building their own molds and shifting from thermoforming to an injection molding
process. Injection molded products are competitive whenever large quantities
are produced or fine detailing or contouring is required on the end product,
which is more difficult to obtain through thermoforming. However, thermoforming
techniques have been improved in recent years and are generally less expensive
than other manufacturing methods due to equipment costs and other associated
start-up expenses. In addition, several customers of the Company's merchant
compounding division have the capability to formulate their own alloys,
compounds and color concentrates. However, the Company expects to benefit from
a growing trend of out-sourcing of specialized semifinished materials by many
manufacturers.
Backlog
The Company estimates that the total dollar volume of its backlog as of
November 30, 1995, was approximately $23.2 million, which represents
approximately three weeks of production for both the extruded sheet & rollstock
and merchant compounding groups. The backlog at the same time in 1994 was
approximately $27.9 million.
Employees
The Company's total employment approximates 1,200. There are 900 production
personnel at the Company's 14 plants, approximately 30% of whom are union
employees covered by several collective bargaining agreements. There have been
no strikes in the past three years. Management personnel total approximately
300 supervisory/clerical employees, none of whom are unionized. The Company
believes that all of its employee and union relations are satisfactory.
Government Regulation
The Company is subject to various laws governing employee safety and
environmental matters. The Company believes it is in material compliance with
all such laws and does not anticipate large expenditures in fiscal 1996 to
comply with any applicable regulations. The Company is subject to federal,
state, and local laws and regulations governing the quantity of certain
specified substances that may be emitted into the air, discharged into
interstate and intrastate waters, and otherwise disposed of on and off the
properties of the Company. The Company has not incurred significant
expenditures in order to comply with such laws and regulations, nor does it
anticipate continued compliance therewith to materially affect its earnings or
competitive position.
10K - page 6
Item 2. PROPERTIES
The Company operates in plants and offices aggregating approximately
1,115,000 square feet of space. Approximately 525,000 square feet of plant and
office space is leased with the remaining 590,000 square feet owned by the
Company. A summary of the Company's principal operating facilities follows:
Size in
Square Owned/
Location Description Feet Leased
Extruded Sheet & Rollstock
Arlington, TX Extrusion plant & offices 126,000 Leased
Atlanta, GA Extrusion plant & offices 75,000 Leased
Cape Girardeau, MO Extrusion plant & offices 100,000 Owned
Clare, MI Extrusion plant & offices 27,000 Owned
La Mirada, CA Extrusion plant & offices 76,000 Leased
Mankato, MN Extrusion plant & offices 36,000 Owned
50,000 Leased
McMinnville, OR Extrusion plant & offices 40,000 Owned
Paulding, OH Extrusion plant & offices 68,000 Owned
20,000 Leased
Richmond, IN Extrusion plant & offices 52,000 Owned
40,000 Leased
Wichita, KS Extrusion plant & offices 63,000 Owned
102,000 Leased
Merchant Compounding
Cape Girardeau, MO Compounding plant & offices 57,000 Owned
30,000 Leased
Conshohocken, PA Calendering plant & offices 50,000 Owned
Goddard, KS Color Conc. plant & offices 38,000 Owned
Kearny, NJ Compounding plant & offices 59,000 Owned
In addition, the Company leases office facilities in St. Louis, Missouri, the
aggregate square footage of which is approximately 5,500.
The plants located at the premises listed above are equipped with 60 sheet
extrusion lines, 43 supplementary co-extruders, 9 compounding-milling lines, 5
color compounding lines, a calendering line, cutting and grinding machinery,
resin storage facilities, warehouse equipment, and quality laboratories at all
locations. The Company believes that the present facilities are adequate for
the level of business anticipated in fiscal year 1996.
The Company also owns plants and office facilities in Monroe, Louisiana, and
Brooklyn, New York, the aggregate square footage of which is approximately
128,000 and 65,000, respectively. The buildings are currently being leased to
independent third parties.
10K - page 7
Item 3. LEGAL PROCEEDINGS
On June 2, 1992, Mr. Lawrence M. Powers, a former Director and former
Chairman of the Board and Chief Executive Officer of the Company, filed a
lawsuit in the United States District Court for the Southern District of New
York against the Company and certain of its Directors and major shareholders.
In the suit, Mr. Powers claims that, by reason of the Company's April 30, 1992,
debt-to-equity restructuring, (which he had previously, on April 13, 1992, voted
in favor of as a Director) the Company should adjust his existing stock options,
provide for the issuance of additional shares of common stock to him, and award
to him attorney's fees and interest. Mr. Powers seeks judgment against the
Company and the other defendants: (1) in excess of $13 million plus punitive
damages, (2) requiring the Company to issue him an additional 167,744 shares of
common stock, (3) requiring an adjustment increasing his then outstanding
options to purchase the Company's common stock from 1,871,201 shares to
4,080,000 shares, and (4) for attorney's fees and interest. In June 1993, in
responding to the Company's request for summary judgment, the court ruled the
Board of Director's decision to not adjust Mr. Powers' options was "final,
binding and conclusive" unless Mr. Powers can establish that the Board was not
acting independently and that it could not have acted appropriately. Discovery
in the litigation has concluded, and the Company, together with the other
defendants, has moved for summary judgment dismissing the complaint. On January
9, 1996, Mr. Powers filed a similar lawsuit in the Circuit Court of St. Louis
County, Missouri against the Company and certain of its officers and directors.
The Company believes that this lawsuit is simply a repackaging of the claims
made in the 1992 lawsuit. The Company believes Mr. Powers' lawsuits are without
merit and will continue to defend against them vigorously.
The Company currently has no litigation with respect to any environmental
matters.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of the Company's security holders during
the fourth quarter of the fiscal year ended October 28, 1995.
PART II
Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The information entitled "Common Stock and Dividend Information" on page 24
of the 1995 Annual Report to Shareholders, attached hereto as Exhibit 13, is
incorporated by reference in response to this item.
Item 6. SELECTED FINANCIAL DATA
The information on page 21 of the 1995 Annual Report to Shareholders,
attached hereto as Exhibit 13, is incorporated by reference in response to this
item.
10K - page 8
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The information on pages 8 and 9 of the 1995 Annual Report to Shareholders,
attached hereto as Exhibit 13, is incorporated by reference in response to this
item.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information entitled "Quarterly Financial Information" on page 19 of the
1995 Annual Report to Shareholders, attached hereto as Exhibit 13, is
incorporated by reference in response to this item.
In addition, the financial statements of the Registrant filed herewith are
set forth as Item 14 included in Part IV of this Report.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information concerning Directors of the Company contained in the section
entitled "Election of Directors" of the Definitive Proxy Statement for the 1996
Annual Meeting of Shareholders to be filed with the Commission on or about
January 19, 1996, is incorporated herein by reference in response to this item.
In addition, the following table sets forth certain information with respect to
the Company's executive officers:
Position with the Company
Name Age and Date Appointed
Bradley B. Buechler 47 President (April 1987), Chief
Executive Officer (October 1991),
Chief Operating Officer (May 1985),
and Director (February 1984)
David B. Mueller 42 Vice President of Finance, Chief
Financial Officer (February
1988), Secretary (October 1991),
and Director (March 1994)
Daniel J. Yoder 54 Vice President - Engineering and
Technology (May 1990)
Randy C. Martin 33 Corporate Controller (September 1995)
10K - page 9
Mr. Buechler, a CPA, was with Arthur Andersen & Co. before the commencement
of his employment with the Company in 1981. Prior to the positions currently
held, he was the Company's Corporate Controller and Vice President - Finance
from 1981-1984.
Mr. Mueller, a CPA, was previously with Arthur Andersen & Co. for seven
years. He most recently was Corporate Controller of Apex Oil Company, a large
independent oil company, from 1981-1988.
Mr. Yoder was General Manager of the Company's Spartech Plastics Central
Region from 1986-1990. From 1983-1986 he was Vice President of Manufacturing
for Atlas Plastics, Corp., prior to its acquisition by the Company.
Mr. Martin, a CPA and CMA, was previously with KPMG Peat Marwick LLP for
eleven years.
Item 11. EXECUTIVE COMPENSATION
Cash Compensation
The information contained in the sections entitled "Executive Compensation"
and "Board of Directors and Committees" of the Definitive Proxy Statement for
the 1996 Annual Meeting of Shareholders to be filed with the Commission on or
about January 19, 1996 is incorporated herein by reference in response to this
item.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information contained in the sections entitled "Security Ownership of
Certain Beneficial Owners and Management" of the Definitive Proxy Statement for
the 1996 Annual Meeting of Shareholders to be filed with the Commission on or
about January 19, 1996 is incorporated herein by reference in response to this
item.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information contained in the section entitled "Election of Directors" and
"Executive Compensation" of the Definitive Proxy Statement for the 1996 Annual
Meeting of Shareholders to be filed with the Commission on or about January 19,
1996 is incorporated herein by reference in response to this item.
10K - page 10
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
The following financial statements, financial statement schedules and
exhibits are incorporated by reference from the 1995 Annual Report to
Shareholders and/or filed as part of this Form 10-K:
Page
Annual Report
Form 10-K to Shareholders
Report of Independent Public Accountants F-1 20
Financial Statements
Consolidated Balance Sheet - 10
Consolidated Statement of Operations - 11
Consolidated Statement of Shareholders' Equity - 12
Consolidated Statement of Cash Flows - 13
Notes To Consolidated Financial Statements - 14-19
Financial Statement Schedules
Schedule
Number Description
II. Valuation and Qualifying Accounts F-2 -
10K - page 11
Exhibits
Exhibits required to be filed by Item 601(a) of Regulation S-K are included
as Exhibits to this report as follows:
Exhibit
3* Articles of Incorporation and By-Laws
10(A)** Amended and Restated Employment Agreement dated July 1, 1995,
between Bradley B. Buechler and Spartech Corporation
10(B)** Amended and Restated Employment Agreement dated July 1, 1995,
between David B. Mueller and Spartech Corporation
10(C)** Amended and Restated Employment Agreement dated June 30, 1995,
between Daniel J. Yoder and Spartech Corporation
10(D)*** Spartech Corporation Incentive Stock Option Plan dated July 26,
1991
10(E)*** Spartech Corporation Restricted Stock Option Plan dated July 26,
1991
10(F)**** Asset Purchase and Sale Agreement between Spartech Corporation
(Buyer) and Pawnee Industries, Inc. (Seller)
11 Statement re Computation of Per Share Earnings
13 Pages 8 through 24 of 1995 Annual Report to Shareholders
21***** Subsidiaries of Registrant
23 Consent of Independent Public Accountants
24 Powers of Attorney
27 Financial Data Schedule
* Filed in response to the Commission's comments concerning the Company's
Proxy Statement relating to the Annual Meeting of Shareholders held June 10,
1992, filed with the Commission on May 27, 1992, and incorporated herein by
reference.
** Filed as an exhibit to the Company's quarterly report on Form 10-Q for the
quarter ended July 29, 1995, filed with the Commission on August 28, 1995, and
incorporated herein by reference.
*** Filed as an exhibit to the Company's annual report on Form 10-K for the
fiscal year ended November 2, 1991, filed with the Commission on February 18,
1992, and incorporated herein by reference.
**** Filed as an exhibit to the Company's Form 8-K, dated November 1, 1994,
filed with the Commission on November 16, 1994, and incorporated herein by
reference.
***** Filed as an exhibit to the Company's annual report on Form 10-K for the
fiscal year ended November 3, 1990, filed with the Commission on February 1,
1991, and incorporated herein by reference.
All other financial statements and schedules not listed have been omitted
since the required information is included in the consolidated financial
statements or the notes thereto, or is not applicable or required.
10K - page 12
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
SPARTECH CORPORATION
January 16, 1996 By: /S/ Bradley B. Buechler
(Date) Bradley B. Buechler
President, Chief Executive and
Chief Operating Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.
DATE SIGNATURES TITLE
January 16, 1996 /S/ Bradley B. Buechler President, Chief Executive and
Bradley B. Buechler Chief Operating Officer, and
Director (Principal Executive
Officer)
January 16, 1996 /S/ David B. Mueller Vice President of Finance and Chief
David B. Mueller Financial Officer, and Director
(Principal Financial and
Accounting Officer)
January 16, 1996 /S/ John F. Arning Director
John F. Arning*
January 16, 1996 /S/ Thomas L. Cassidy Director
Thomas L. Cassidy*
January 16, 1996 /S/ W. R. Clerihue Chairman of the Board and Director
W. R. Clerihue*
January 16, 1996 /S/ Francis J. Eaton Director
Francis J. Eaton*
January 16, 1996 /S/ Jackson W. Robinson Director
Jackson W. Robinson*
January 16, 1996 /S/ Rodney H. Sellers Director
Rodney H. Sellers*
* By Bradley B. Buechler as Attorney-in-Fact pursuant to Powers of Attorney
executed by the Directors listed above, which Powers of Attorney have been filed
with the Securities and Exchange Commission.
/S/ Bradley B. Buechler
Bradley B. Buechler
As Attorney-in-Fact
10K - page 13
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO SPARTECH CORPORATION
We have audited in accordance with generally accepted auditing standards, the
financial statements included in SPARTECH Corporation's 1995 Annual Report to
Shareholders incorporated by reference in this Form 10-K, and have issued our
report thereon dated December 6, 1995. Our audit was made for the purpose of
forming an opinion on those statements taken as a whole. Schedule II included
in this Form 10-K is presented for purposes of complying with the Securities and
Exchange Commission's rules and is not part of the basic financial statements.
This schedule has been subjected to the auditing procedures applied in our audit
of the basic financial statements and, in our opinion, fairly states in all
material respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
St. Louis, Missouri
December 6, 1995
10K - page F-1
SPARTECH CORPORATION AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
FOR FISCAL YEARS ENDED 1995, 1994 AND 1993
(Dollars in thousands)
ADDITIONS
AND
CHARGES
BALANCE AT TO COSTS BALANCE AT
BEGINNING AND END
DESCRIPTION OF PERIOD EXPENSES WRITE-OFFS OF PERIOD
October 28, 1995:
Allowance for
Doubtful Accounts $ 1,415 $ 840 $ (663) $ 1,592
October 29, 1994:
Allowance for
Doubtful Accounts $1,044 $ 1,477 $(1,106) $ 1,415
October 30, 1993:
Allowance for
Doubtful Accounts $845 $ 1,027 $ (828) $ 1,044
Reserve for
Discontinued Operations $497 $ - $ (497) $-
Fiscal year 1995 and 1994 additions and write-offs include activity relating
to the acquisition of certain of the businesses and assets of Pawnee
Industries, Inc. and Product Components, Inc. in November and February of 1994,
respectively.
10K - page F-2