EXHIBIT 99.1
PRESS RELEASE DATED NOVEMBER 16, 2005
[SPARTECH logo]
COMPANY CONTACTS:
George A. Abd Randy C. Martin
President and Executive Vice President and
Chief Executive Officer Chief Financial Officer
(314) 721-4242 (314) 721-4242
FOR IMMEDIATE RELEASE
WEDNESDAY, NOVEMBER 16, 2005
SPARTECH PREVIEWS OPERATING RESULTS FOR FOURTH QUARTER 2005
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ST. LOUIS, NOVEMBER 16, 2005 - Spartech Corporation (NYSE: SEH) announced
today that sales for its recently completed fourth quarter were $367
million, up 20% from last year's fourth quarter including approximately 7%
related to two additional months of sales from the 2004 VPI acquisition and
a strong impact of price and mix affects. Sales for the full year were
$1,398 million, an increase of 25% from 2004. In addition, the company
generated strong cash flows from operations for the second consecutive
quarter enabling debt pay-down of $46 million in the quarter and $84 million
for the second half.
"Sales were in line with our expectations for the quarter and we continue to
make progress on our restructuring activities," commented President and CEO
George A. Abd. "Our debt pay-down of $84 million in the past six months is
not only the best half year performance but also far exceeds our best
previous performance in any full year of $55 million, demonstrating the
strong cash generation capability of our business as well as our focused
commitment to working capital management."
"While our year end close and audit process are not complete, we are
revising our earnings guidance for the fourth quarter to $0.31-$0.36 per
share before special items, compared to our previous guidance of $0.26-$0.31
before special items. This performance was achieved despite the negative
impact of Hurricane Rita which forced a three week shutdown of our plant in
Lake Charles, Louisiana and the severe price increases and raw material
supply problems initiated by Hurricane Katrina. Contributing to offset those
negatives were unanticipated short term increases in sales to some markets,
specifically manufactured housing and recreational vehicles which were
spurred by the same disasters."
The company substantially completed the consolidation, shutdown, or sale of
the operations it announced in February of 2005. These activities included
the sale of its Corrugated Sheet business in Cornwall, Ontario as well as
the sale of properties in Redlands, CA, Goddard, KS, Conshohoken, PA, and
Taylorville, IL during the quarter as part of its restructuring efforts. The
company announced a further plant shutdown in its September 6 earnings
release which will occur in early 2006.
Mr. Abd further stated, "While we are pleased with our progress in our
restructuring and profit improvement efforts to date, we have significant
concerns related to energy and freight costs, and increasing interest rates
and the affect that those will have on underlying demand in 2006. As a
result we are maintaining our guidance for 2006 of $1.23 to $1.33 diluted
earnings per share before the effect of implementation of stock option
expensing outlined in Statement of Financial Accounting Standards No. 123R."
Spartech is scheduled to present to investors at the First Analysis
Investment Conference in New York on November 17, 2005 and at the Morgan
Stanley Small Cap Chemicals Roundtable also in New York on December 1, 2005.
SPARTECH CORPORATION
PREVIEW OF OPERATING RESULTS FOR FOURTH QUARTER
The company will release its full fiscal 2005 results and conduct its fourth
quarter conference call on Thursday, December 15, 2005. The conference call
with investors and financial analysts will be hosted by George A. Abd and
Randy C. Martin, Executive Vice President and CFO, and will begin at 11:00
AM EDT. Investors can listen to the call live via a Web cast by logging on
to www.spartech.com, or via phone by dialing 888-632-5950 and requesting the
Spartech conference call. International callers may dial 713-481-1320.
Spartech Corporation is a leading producer of engineered thermoplastic sheet
materials, polymeric compounds and concentrates, and engineered product
solutions. The company has 43 facilities located throughout the United
States, Canada, Mexico, and Europe with sales of approximately $1.4 billion,
annually.
Safe Harbor For Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995. Forward-looking
statements relate to future events and expectations and include those
containing such words as "expects," "will," and similar expressions.
Forward-looking statements are based on management's current expectations
and include known and unknown risks, uncertainties and other factors, many
of which management is unable to predict or control, that may cause actual
results, performance or achievements to differ materially from those
expressed or implied in the forward-looking statements.
Important factors that could cause actual results to differ materially from
those in the forward-looking statements include: (a) adverse changes in
economic or industry conditions generally, including global supply and
demand conditions and prices for products of the types we produce including
the impact of rising interest rates on the markets we serve; (b) material
adverse changes in demand from the markets we serve, including the
transportation, packaging, building and construction, recreation and
leisure, and other markets, some of which tend to be cyclical; (c) our
inability to achieve the level of cost savings, productivity improvements,
synergies, growth or other benefits anticipated from acquired businesses and
their integration; (d) volatility of prices and availability of supply of
energy and of the raw materials that are critical to the manufacture of our
products, particularly plastic resins derived from oil and natural gas
including future effects of the natural disasters that have caused price
increases and supply problems in plastic resins; (e) our inability to manage
or pass through an adequate level of increases in the cost of freight,
utilities, or other conversion costs; (f) our inability to predict
accurately the costs to be incurred or savings to be achieved in connection
with announced production plant restructurings; (g) adverse findings in
significant legal or environmental proceedings or our inability to comply
with applicable environmental laws and regulations; (h) our inability to
achieve operational efficiency goals or cost reduction initiatives; (i) our
inability to develop and launch new products successfully; (j) restrictions
imposed on us by instruments governing our indebtedness, and the possible
inability to comply with requirements of those instruments; (k) weaknesses
in internal controls; and (l) other risk factors summarized in reports we
file with the Securities and Exchange Commission.
The company assumes no duty to update its forward-looking statements.
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