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Schawk Inc. Common Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: October 31, 2012 05:05PM

Schawk Inc. Common (SGK) filed Quarterly Report for the period ended 2012-09-30. Schawk, Inc. has a market cap of $317.9 million; its shares were traded at around $12.34 with a P/E ratio of 22.7 and P/S ratio of 0.7. The dividend yield of Schawk, Inc. stocks is 2.6%.



Highlight of Business Operations:

Net sales decreased $1.5 million or 1.3 percent in the third quarter of 2012 to $110.8 million from $112.3 million in the third quarter of 2011. The sales decrease in the third quarter of 2012 compared to the prior year s quarter reflects a decrease in promotional activity from the Company s advertising and retail and entertainment accounts partially offset by an increase in sales from the Company s consumer products packaging accounts. Sales attributable to acquisitions for the quarter ended September 30, 2012 were $5.5 million, or 5.0 percent of total sales. Excluding the impact of acquisitions, revenue would have decreased by $7.0 million or 6.2 percent. Sales in the current quarter compared to the prior year s quarter were negatively impacted by changes in foreign currency translation rates of approximately $0.6 million, as the U.S. dollar increased in value relative to the local currencies of certain of the Company s non-U.S. subsidiaries. Net sales increased in the Europe and Asia Pacific segments in the third quarter of 2012 compared to the prior year s quarter, but were offset by a decrease in sales in the Americas segment. The Americas segment decreased by $3.4 million, or 3.6 percent. The Europe segment increased by $1.3 million, or 7.0 percent and the Asia Pacific segment increased by $2.0 million, or 23.7 percent. The Company s inventories, composed principally of the cost of unbilled client services, increased $1.3 million at September 30, 2012 compared to June 30, 2012.

The Company recorded an operating loss of $1.5 million in the third quarter of 2012 compared to an operating profit of $8.2 million in the third quarter of 2011, a decrease of $9.7 million. The decline in operating income in the current quarter compared to the prior year s quarter is due in part to the lower gross profit in the third quarter of 2012 compared to the third quarter of 2011 and an impairment of long-lived assets of $4.3 million as further described below, as well as the following items: Selling, general and administrative expenses increased $1.3 million, or 4.2 percent, in the third quarter of 2012 to $32.5 million from $31.1 million in the third quarter of 2011. The increase in selling, general and administrative expenses in the third quarter of 2012, compared to the third quarter of 2011, is principally due to increases in employee-related costs associated with the expansion of client service offerings. Business and systems integration expenses related to the Company s information technology and business process improvement initiative increased $1.0 million to $3.0 million in the third quarter of 2012 from $2.0 million in the third quarter of 2011. Acquisition integration and restructuring expenses, related to the Company s cost reduction and capacity utilization initiatives, were $1.2 million in the third quarter of 2012 compared to $0.5 million in the third quarter of 2011.

Net sales in the third quarter of 2012 were $110.8 million compared to $112.3 million in the third quarter of 2011, a decrease of $1.5 million, or 1.3 percent. The sales decrease in the third quarter of 2012 compared to the prior year s quarter reflects a decrease in promotional activity from the Company s advertising and retail and entertainment accounts, partially offset by an increase in sales from the Company s consumer products packaging accounts. Sales attributable to acquisitions for the quarter ended September 30, 2012 were $5.5 million, or 5.0 percent of total sales. Excluding the impact of acquisitions, revenue would have decreased by $7.0 million or 6.2 percent. Sales in the current quarter compared to the prior year s quarter were negatively impacted by changes in foreign currency translation rates of approximately $0.6 million, as the U.S. dollar increased in value relative to the local currencies of certain of the Company s non-U.S. subsidiaries. Net sales increased in the Europe and Asia Pacific segments in the third quarter of 2012 compared to the prior year s quarter, but were offset by a decrease in sales in the Americas segment. The Americas segment decreased by $3.4 million, or 3.6 percent. The Europe segment increased by $1.3 million, or 7.0 percent and the Asia Pacific segment increased by $2.0 million, or 23.7 percent.

Net sales in the first nine months of 2012 were $339.9 million compared to $332.9 million in the first nine months of 2011, an increase of $7.0 million, or 2.1 percent. The sales increase in the first nine months of 2012 compared to the prior year s period reflects an increase in consumer products packaging accounts sales, offset by a decrease in promotional activity from the Company s retail and advertising and entertainment accounts. Sales attributable to acquisitions for the first nine months ended September 30, 2012 were $20.6 million, or 6.1 percent of total sales. Excluding acquisitions, revenue would have decreased by $13.6 million or 4.1 percent. Sales in the first nine months compared to the prior year s period were negatively impacted by changes in foreign currency translation rates of approximately $2.9 million, as the U.S. dollar increased in value relative to the local currencies of certain of the Company s non-U.S. subsidiaries. Net sales increased in the Europe and Asia pacific segments in the first nine months of 2012 compared to the prior year s period, but decreased in the Americas segment. The Americas segment decreased by $1.9 million, or 0.7 percent. The Europe segment increased by $9.5 million, or 17.8 percent and the Asia Pacific segment increased by $5.0 million, or 21.1 percent.

Cost of sales was $223.7 million, or 65.8 percent of sales, in the first nine months of 2012, an increase of $13.1 million, or 6.2 percent, from $210.6 million, or 63.3 percent of sales, in the first nine months of 2011. The increase in cost of sales period-over-period was mainly due to an increase in labor costs and fringe benefits, from $137.4 million in the first nine months of 2011 to $156.0 million in the first nine months of 2012, an increase of $18.6 million, reflecting the Company s recent acquisitions and expansion of client service offerings. The increase in labor and fringe benefits was partially offset by a $2.4 million decrease in production services purchased from outside contractors and decreases in various other production overhead expenses.

Read the The complete Report



Stocks Discussed: SGK,
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