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Spartech Corp. Reports Operating Results (10-K)

December 17, 2012 | About:
10qk

10qk

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Spartech Corp. (SEH) filed Annual Report for the period ended 2012-11-03.

Spartech Corporation has a market cap of $274.7 million; its shares were traded at around $8.825 with a P/E ratio of 49.6 and P/S ratio of 0.3.

Highlight of Business Operations:

We reported net earnings from continuing operations of $2.7 million or $0.09 per diluted share in 2012, which compared to a loss of $23.4 million or $0.76 per diluted share in 2011. Excluding special items, we reported net earnings from continuing operations of $8.6 million or $0.28 per diluted share in 2012, compared to $6.3 million or $0.20 per diluted share in 2011. The increase was due to impact of the Company's turnaround efforts, shift to higher margin business, production efficiencies and an additional week in 2012.

Operating earnings excluding special items were $30.4 million in 2012 compared to $24.9 million in 2011. The increase in operating earnings was attributable to an increased mix of higher margin products and operating improvements such as increased production yield and regrind material usage, which were slightly offset by increased costs related to labor and variable pay. This increase overcame a $3.2 million change in bad debt expense from reversals in the prior year.

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 $6.3 million or $0.20 per diluted share in 2011, compared to $6.6 million or $0.21 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.

Operating earnings excluding special items were $3.3 million in 2011 compared to $2.3 million in 2010. The increase in operating earnings reflects the increase in sales volume, benefits from improvements on our key priorities and $0.6 million of lower bad debt expense from favorable developments on a contingency, which more than offset the impact of production inefficiencies caused by plant consolidation efforts that continued during the first half of 2011 and cost increases.

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