A. Schulman (SHLM) Reports Mixed Q3 Results; Maintains $0.15 Dividend; to Cut Capacity at Int'l Operations; Comments on Q4 Outlook
A. Schulman (Nasdaq: SHLM) reports Q3 adj-EPS of $0.36, versus the analyst estimate of $0.09. Revenue for the quarter was $297.7 million, versus the consensus of $353.20 million.
Will maintain its $0.15 per share quarterly dividend.
In keeping with the Company's strategic goal of right-sizing its international facilities, the Company has initiated further plans to reduce capacity and headcount at certain international operations. As a result of these plans, the Company expects to incur before-tax costs of approximately $1.0 million to $2.3 million, including approximately $0.6 million to $1.3 million for employee termination costs and approximately $0.4 million to $1.0 million of charges related to fixed assets at the affected locations. These plans, initiated in July 2009, are expected to be completed primarily in the fourth quarter of fiscal 2009 and into early fiscal 2010. These plans are expected to result in annual pre-tax savings of approximately $0.6 million to $0.8 million beginning in fiscal 2010.
"We expect to continue to make progress with our strategic plan, which includes becoming the leading global player in both the masterbatch and rotomolding compounding markets, using our compounding expertise to strengthen our position in engineered plastics, and continuing to aggressively control costs and improve efficiency," Gingo said. "During the third quarter, we announced two examples of how we are moving forward with our strategy to develop new alliances as well as leverage our existing technology to achieve growth in new markets. In April, we announced our strategic alliance with Add the Flavor, LLC, to focus on commercializing Polyflav(TM), a masterbatch or additive product for plastic applications requiring custom taste and scent enhancements. In May, we introduced the expansion of our Sunprene Elastomers product line to serve the specific needs of the industrial, specialty wire and cable, and heavy truck markets."
Commenting on the Company's financial outlook, Gingo said, "For the fourth quarter, while our ongoing reorganization activities and realignment of resources should further enhance our performance, we must temper our outlook somewhat because our markets in the fourth quarter are typically slower than in the third quarter. We are convinced that we are moving in the right direction for improved performance in fiscal 2010 and for long-term profitable growth when the economy exhibits a sustainable recovery. We will continue to leverage our technology expertise by investing judiciously in high-value products targeted toward high-growth niche markets."
Will maintain its $0.15 per share quarterly dividend.
In keeping with the Company's strategic goal of right-sizing its international facilities, the Company has initiated further plans to reduce capacity and headcount at certain international operations. As a result of these plans, the Company expects to incur before-tax costs of approximately $1.0 million to $2.3 million, including approximately $0.6 million to $1.3 million for employee termination costs and approximately $0.4 million to $1.0 million of charges related to fixed assets at the affected locations. These plans, initiated in July 2009, are expected to be completed primarily in the fourth quarter of fiscal 2009 and into early fiscal 2010. These plans are expected to result in annual pre-tax savings of approximately $0.6 million to $0.8 million beginning in fiscal 2010.
"We expect to continue to make progress with our strategic plan, which includes becoming the leading global player in both the masterbatch and rotomolding compounding markets, using our compounding expertise to strengthen our position in engineered plastics, and continuing to aggressively control costs and improve efficiency," Gingo said. "During the third quarter, we announced two examples of how we are moving forward with our strategy to develop new alliances as well as leverage our existing technology to achieve growth in new markets. In April, we announced our strategic alliance with Add the Flavor, LLC, to focus on commercializing Polyflav(TM), a masterbatch or additive product for plastic applications requiring custom taste and scent enhancements. In May, we introduced the expansion of our Sunprene Elastomers product line to serve the specific needs of the industrial, specialty wire and cable, and heavy truck markets."
Commenting on the Company's financial outlook, Gingo said, "For the fourth quarter, while our ongoing reorganization activities and realignment of resources should further enhance our performance, we must temper our outlook somewhat because our markets in the fourth quarter are typically slower than in the third quarter. We are convinced that we are moving in the right direction for improved performance in fiscal 2010 and for long-term profitable growth when the economy exhibits a sustainable recovery. We will continue to leverage our technology expertise by investing judiciously in high-value products targeted toward high-growth niche markets."
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