COMPANY CONTACTS:
Bradley B. Buechler David B. Mueller Randy C. Martin
Chairman, President and Executive Vice President and Vice President-
Chief Executive Officer Chief Operating Officer Finance and Chief
Financial Officer
(314) 721-4242 (314) 721-4242 (314) 721-4242
FOR IMMEDIATE RELEASE
TUESDAY, MAY 25, 1999
SPARTECH CORPORATION REPORTS
THIRTIETH CONSECUTIVE QUARTER OF IMPROVED RESULTS
_________________________________________
Second Quarter Highlights:
- - Sales up 19% to $196.9 million
- - Operating margin at 11.6% of sales
- - Net earnings a record $11.1 million, 25% greater than the prior year
- - Earnings Per Share of 38 cents, up 23% from last year
Financial Summary (Unaudited)
(Dollars in thousands, except per share data)
Three Months Ended Six Months Ended
% %
05/01/99 05/02/98 Change 05/01/99 05/02/98 Change
OPERATING RESULTS
Sales $196,937 $165,707 19% $364,738 $298,788 22%
Operating Earnings $22,780 $17,841 28% $41,855 $31,619 32%
Net Earnings $11,105 $8,863 25% $20,262 $15,884 28%
EPS-Diluted $.38 $.31 23% $.70 $.56 25%
PERFORMANCE RATIOS
Gross Margin 17.8% 16.8% 17.9% 16.9%
S,G & A as % of Sales 5.7% 5.7% 5.9% 5.9%
Operating Return on
Sales 11.6% 10.8% 11.5% 10.6%
Return on Average
Equity 27.2% 25.8% 25.4% 23.4%
"Our strong gains in second quarter sales and earnings were fueled by a
combination of increasing 'Alloy Plastics and Product Transformation' sales,
ongoing productivity improvements, and benefits realized from our 1998
acquisition of Polycom Huntsman."
--Bradley B. Buechler, Chairman, President and Chief Executive Officer--
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SPARTECH CORPORATION
SECOND QUARTER 1999 EARNINGS
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SPARTECH CORPORATION ANNOUNCES THIRTIETH
CONSECUTIVE QUARTER OF INCREASED YEAR-OVER-YEAR RESULTS
St. Louis, Missouri, May 25, 1999 -- Spartech Corporation (NYSE:SEH) today
announced sizable increases in both sales and net earnings for the second
quarter ended May 1, 1999--the Company's 30th consecutive quarter of increased
year-over-year results--citing increased "Alloy Plastics & Product
Transformation" sales, improved production efficiencies, and benefits realized
from recent acquisitions.
Net earnings for the second quarter of fiscal 1999 totaled $11.1 million,
or $.38 per diluted share, an approximate 25% increase from the $8.9 million, or
$.31 per diluted share, reported for the same period last year. Sales rose by
19% to $196.9 million for the three months ended May 1, 1999, from the $165.7
million reported in the comparable quarter of 1998.
For the first six months of fiscal 1999, net earnings were $20.3 million,
or $.70 per diluted share, a 28% increase from the $15.9 million, or $.56 per
diluted share, reported for the first half of 1998. Sales for the first six
months of fiscal 1999 were $364.7 million, compared to $298.8 million for the
same period of 1998.
Commenting on the improved results, Spartech's Chairman, President and CEO,
Bradley B. Buechler stated, "Strong gains in earnings for both the second
quarter and first half of fiscal 1999 were fueled by a combination of increasing
'Alloy Plastics and Product Transformation' sales, ongoing productivity improve-
ments, and benefits realized from our 1998 acquisition of Polycom Huntsman.
Capital investments of $35 million over the last twenty-four months, coupled
with expanded geographic sales & marketing coverage, allowed us to (1) improve
production efficiencies, (2) enter several new higher margin Alloy Plastics and
Product Transformation markets, and (3) produce an excellent gain in our overall
operating margin to 11.6%,
up from the 10.8% recorded in the second quarter of 1998."
Spartech's Executive Vice President and Chief Operating Officer, David B.
Mueller, further discussed the Company's second quarter results by business
segment:
Extruded Sheet & Rollstock
Spartech Plastics, the Company's Extruded Sheet & Rollstock group,
generated sales of $125.4 million during the second quarter of 1999, as
compared to $121.1 million during the same period last year. Base volume
increased by 7% during the second quarter, as a result of strong sales to
the packaging and recreation & leisure markets, while the recent
acquisition of Lustro Plastics added another
5% to sales. Price and product mix changes had a negative 8% effect on
sales during the quarter.
Operating margins for the Extruded Sheet & Rollstock unit improved to
11.6% from the 11.1% recorded in the second quarter of 1998. Ongoing
improvements in production efficiencies, coupled with volume increases at
most Spartech Plastics plants, allowed the group to post record operating
margins.
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SPARTECH CORPORATION
SECOND QUARTER 1999 EARNINGS
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Color & Specialty Compounds
Sales increased 70% for the Color & Specialty Compounds group to $57.1
million in the second quarter of 1999, including incremental revenues of
approximately $21.5 million generated by our 1998 acquisitions of Polycom
Huntsman and Plasticolour. The group's growth in base volume of 12% was
partially offset by a 6% price/mix decline in sales dollars.
The Color & Specialty Compounds division continued its string of
operating margin improvements, with 14.1% recorded in the second quarter of
1999 compared to 10.2% in 1998. A combination of strong cost containment
efforts and increased throughput in most plants, primarily related to the
Polycom acquisition, drove the unit's margin improvement.
Molded & Profile Products
The Company's Molded & Profile Products group generated $14.4 million
in sales and $2.3 million in operating earnings for the quarter. The
approximate 30% increase in both amounts, from the prior year, was
primarily due to the October 1998 acquisition of Anjac-Doron.
Finally, Mr. Buechler stated, "As we look forward to the balance of 1999,
we remain optimistic. Based upon the strength of our current backlog, benefits
anticipated from our recently-announced acquisitions of Lustro Plastics &
Alltrista's Plastic Packaging Division, along with ongoing productivity
improvement efforts, we expect our year-to-year earnings comparisons to continue
favorable through the second half of fiscal 1999."
Spartech is a leading producer of engineered thermoplastic materials,
polymeric compounds and molded & profile products, which today annually produces
more than one billion pounds from its 40 facilities located throughout North
America and Europe.
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 October 31, 1998, which is on file with the Securities
and Exchange Commission.
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SPARTECH CORPORATION
SECOND QUARTER 1999 EARNINGS
ADD 3
SPARTECH CORPORATION
(In Thousands, Except Per Share Data)
Three Months Ended (Unaudited) Six Months Ended
(Unaudited)
Percent Percent
May 1, May 2, Change May 1, May 2, Change
1999 1998 1999 1998
Sales $196,937 $165,707 19% $364,738 $298,788 22%
Operating $22,780 $17,841 28% $41,855 $31,619 32%
Earnings
Interest Expense
& Preferred
Stock $4,050 $2,995 35% $7,901 $5,340 48%
Distributions
Income Tax $7,625 $5,983 27% $13,692 $10,395 32%
Provision
Net Earnings $11,105 $8,863 25% $20,262 $15,884 28%
Earnings Per
Common Share - $.38 $ .31 23% $ .70 $.56 25%
Diluted
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