Spartech Corp. has a market cap of $131.9 million; its shares were traded at around $4.28 with a P/E ratio of 20.4 and P/S ratio of 0.1.
Highlight of Business Operations:We reported a net loss from continuing operations of $23.4 million or $0.76 per diluted share in 2011, which compared to a loss of $49.6 million or $1.63 per diluted share in 2010. Excluding special items, we reported net earnings from continuing operations of $6.4 million or $0.21 per diluted share in 2011, compared to $5.1 million or $0.16 per diluted share in 2010. The increase was mainly due to the lower selling, general and administrative expenses as previously discussed.
Operating earnings excluding special items were $24.9 million in 2011 compared to $28.4 million in 2010. The decrease in operating earnings reflected lower sales volume, production inefficiencies and higher costs which more than offset $9.2 million of lower bad debts expense. We reported $7.6 million of bad debt expense to establish reserves for two large customers in 2010 and recorded $2.5 million of income because of favorable developments on one of the large customers in 2011.
We reported a net loss from continuing operations of $49.6 million or $1.63 per diluted share in 2010, which compared to earnings of $3.3 million or $0.11 per diluted share in 2009. Excluding special items, we reported net earnings from continuing operations of $5.1 million or $0.16 per diluted share in 2010, compared to $9.0 million or $0.29 per diluted share in 2009. The decrease was mainly due to the previously discussed $7.7 million decrease in gross margin and $9.6 million increase in selling, general and administrative expenses (exclusive of CEO separation costs).
Net sales of $222.4 million in 2010 increased 18% versus the prior year, reflecting a 7% increase in volume, an 8% increase from price/mix changes and a 3% increase from previously eliminated sales to a divested business. The increase in underlying volume was mainly due to a significant increase in the automotive sector of the transportation end market and an increase in the agricultural products sector. Demand in the building and construction market was lower compared to the prior year. The price/mix increase was mostly caused by increases in selling prices to pass through increases in raw material costs, partially offset by a higher mix of lower margin products.
other holders are entitled to accept the rejected proceeds. Early principal payments made to Senior Note holders reduce the principal balance outstanding. The Company made excess cash flow payments in the second quarter of 2011 and 2010 of $0.4 million and $15.3 million, respectively, to the Senior Note holders. The Company also made an early principal payment to the Senior Note holders of $15.5 million in the first quarter of 2010 related to extraordinary receipts on the sales of businesses that occurred in 2009. The Company borrowed from its revolving credit facility to fund the required excess cash flow payments.
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