SPARTECH CORP. is in the plastics processing business with its two lines of business being: Extruded Sheet & Rollstock - which sells its products to various manufacturers who use plastic components in their industrial products. Merchant Compounding - which sells specialty alloys compounds and color concentrates principally to manufacturers of specialized footwear shutters loose-leaf binders cosmetic packaging products and numerous other custom plastic applications. Spartech Corp. has a market cap of $176 million; its shares were traded at around $5.76 with a P/E ratio of 30.3 and P/S ratio of 0.1. Spartech Corp. had an annual average earning growth of 0.3% over the past 10 years. Highlight of Business Operations: We reported operating earnings of $11.6 million and $9.0 million in our second quarter and first six months of 2009 which compared to $11.9 million and $10.3 million in the same periods of the prior year. In addition, we paid down $17.9 million of debt in the second quarter bringing the six months 2009 total to $11.3 million.
Selling, general and administrative expenses were $19.0 million and $42.1 million in the second quarter and first six months of 2009 compared to $22.4 million and $45.5 million in the same periods of the prior year. For both period comparisons, the benefits associated with our improvement initiatives were partially offset by the impact of higher bad debt expense. Additionally, we recognized a one-time reduction in our selling, general and administrative expenses of $1.1 million in the second quarter of 2009 from the change in our vacation policy.
Amortization of intangibles was $1.2 million and $2.3 million in the second quarter and first six months of 2009 compared to $1.3 and $2.6 million in the same periods of the prior year. The decreases in both period comparisons reflect the benefits derived from intangibles which were fully amortized by the end of 2008.
Restructuring and exit costs were $3.7 million and $4.5 million in the second quarter and first six months of 2009 compared to $0.6 million and $0.8 million in the same periods of the prior year. The costs during the second quarter and first six months of 2009 are mostly comprised of employee severance, facility consolidation and shut-down costs and accelerated depreciation resulting from our cost reduction efforts. We expect to incur approximately $1.8 million of additional restructuring expenses for initiatives announced through May 2, 2009 which will be mostly comprised of cash employee severance, facility consolidation and shut-down costs. In the future, we expect to announce additional cost reduction activities to address our end-market demand environment and support our improvement initiatives.
Interest expense, net of interest income, was $4.2 million and $8.9 million in the second quarter and first six months of 2009 compared to $5.1 million and $10.2 million in the same periods of the prior year. These decreases were primarily driven by the $76.9 million debt paydowns during the last 12 months.
Net cash used for financing activities was $14.4 million in the first six months of 2009, compared to $6.7 million for the same period of 2008. The cash used for financing activities in the current period reflects $11.3 million to pay down debt and $3.1 million used to pay dividends. The $6.7 million of cash used for financing activities in the same period of the prior year reflects $9.7 million of treasury share purchases and $8.3 million to pay dividends, partially offset by $8.3 million of borrowings and $2.8 million received from a director purchase of common stock. We suspended our cash dividend during the second quarter of 2009.
Read the The complete ReportSEH is in the portfolios of Arnold Schneider of Schneider Capital Management, Charles Brandes of Brandes Investment.