Spartech – SEH – Operating results for the third quarter of 2012

Spartech Corporation (NYSE:SEH), a leading producer of plastic sheet, compounds, and packaging solutions, announced operating results for the third quarter of 2012.

SEH – Highlights for the Third Quarter 2012

• SEH – Net sales decreased by 3% from the prior year quarter to $282.4 million on lower volume.
• Operating earnings decreased to $5.1 million from $8.3 million in the prior year period.  Operating earnings excluding special items decreased to $6.0 million from $8.5 million in the prior year period.  A $2.2 million change in bad debt expense from a reversal in the prior year period accounted for the principal difference in the quarterly comparison.
• The Custom Sheet and Rollstock segment operating earnings excluding special items improved by 24% over the prior period, primarily from an increased mix of higher margin products and operational improvements during the quarter.
• Diluted earnings per share from continuing operations were $0.06 per share compared to $0.10 per share in the prior year period.  Diluted earnings per share from continuing operations excluding special items (restructuring and exit costs) were $0.08 per share, compared to $0.10 per share in the prior year period.  The current year third quarter earnings per share measures benefited from a lower effective tax rate (6%) compared to a higher effective tax rate (46%) in the previous period.  These rates compare to our statutory rate of 35%.
• Generated $20.3 million of cash flow from operations which was used to pay down $15.1 million of debt.

Vicki Holt, Spartech’s President and Chief Executive Officer, said, “Although we continue to make progress on new customer programs in the Packaging Technologies segment, the results for the quarter fell short of our expectations due to lower sales in graphic arts and higher development costs for new programs.  The growth and financial performance of our Packaging Technologies segment have not scaled up as quickly as anticipated, but we are successfully executing our strategy to expand our customer base and new commercial applications that will benefit the future sales potential of this segment.”

Holt added, “We continue to be confident in our initiatives to enhance margins, accelerate growth, and manage our cost structure.  The Custom Sheet and Rollstock segment continues to execute operational improvements and we are delivering measurable earnings improvements in this segment.  We are on track to complete by calendar year end the two strategic actions we announced last quarter: the consolidation of our Custom Sheet and Rollstock facilities in Canada and the expansion of our Muncie, Indiana packaging facility.”

About Spartech Corporation – SEH

Spartech Corporation (SEH) is a leading producer of plastic products including polymeric compounds, concentrates, custom extruded sheet and rollstock products and packaging technologies for a wide spectrum of customers.  SEH’s three business segments, which operate facilities in the United States, Mexico, Canada, and France, annually process approximately one billion pounds of plastic resins, specialty plastic alloys, and color and specialty compounds.

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Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.