A. Schulman Inc. (SHLM, Financial) filed Quarterly Report for the period ended 2010-11-30.
A. Schulman Inc. has a market cap of $701.5 million; its shares were traded at around $22.28 with a P/E ratio of 13 and P/S ratio of 0.4. The dividend yield of A. Schulman Inc. stocks is 2.8%.SHLM is in the portfolios of Arnold Schneider of Schneider Capital Management, Chuck Royce of Royce& Associates, Paul Tudor Jones of The Tudor Group, Jim Simons of Renaissance Technologies LLC, Mario Gabelli of GAMCO Investors, Steven Cohen of SAC Capital Advisors, Jean-Marie Eveillard of First Eagle Investment Management, LLC.
EMEA operating income for the three months ended November 30, 2010 was $19.4 million compared with $25.2 million last year. Including the ICO effect, operating income decreased $7.6 million. The decline in operating income in fiscal 2011 was primarily due to lower gross profit per pound compared with last years exceptionally high first quarter results as EMEA selling, general and administrative expenses declined slightly. Although the EMEA business segments performance was below the Companys exceptional first quarter in fiscal 2010, the segment operating income improved $6.8 million sequentially over the prior quarter.
Total segment gross profit excluding asset write-downs and inventory step-up for the three months ended November 30, 2010 was $69.1 million, compared with $63.2 million last year. The foreign currency translation effect negatively impacted gross profit by $3.8 million. Including the ICO effect, gross profit for the three months ended November 30, 2010 decreased $6.9 million as discussed in the segment sections above. Overall gross profit per pound was 13.8 cents; lower than the 15.4 cents in last years first quarter including the ICO effect but significantly higher than the 11.6 cents per pound in the fourth quarter of 2010.
The Companys selling, general and administrative expenses, excluding the effect of foreign currency translation, increased $14.6 million. Including the ICO effect and excluding costs related to acquisitions, the increase in selling, general and administrative expenses was $2.4 million. The increase includes $1.8 million of costs for various consultants to aid the Company with certain global initiatives. These initiatives include the review of the Companys long-term business strategy, capital structure, process improvements and growth initiatives including continued merger and acquisition activities. In addition, the increase includes $1.5 million of incremental expense for stock-based compensation primarily as a result of mark-to-market adjustments which had declined significantly in the first quarter of fiscal 2010. Offsetting these increases are $1.2 million of favorable bad debt expense as well as synergies from the ICO acquisition.
Net income attributable to the Companys stockholders was $9.2 million and $17.0 million for the three months ended November 30, 2010 and 2009, respectively, a decline of $7.8 million. Net income was negatively impacted by foreign currency translation of $0.9 million for the three months ended November 30, 2010.
In conjunction with the merger with ICO, the Company reduced the workforce in the Houston, Texas office by approximately 17. ICO had preexisting arrangements regarding change-in-control payments and severance pay which were based on pre-merger service. The Company assumed $2.1 million in liabilities as a result of the merger related to these agreements, of which $2.0 million was paid by the Company during fiscal 2010. Since the merger, the Company announced the exit of certain senior managers in Europe in connection with the Companys ongoing integration of ICO operations. The Company recorded approximately $0.3 million primarily in pretax employee-related costs during the three months ended November 30, 2010 related to the integration of the ICO merger. The Company has approximately $0.5 million remaining accrued for the ICO merger plan as of November 30, 2010, to be paid in the second and third quarters of fiscal 2011. The Company expects minimal remaining charges to be incurred into late fiscal 2011.
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A. Schulman Inc. has a market cap of $701.5 million; its shares were traded at around $22.28 with a P/E ratio of 13 and P/S ratio of 0.4. The dividend yield of A. Schulman Inc. stocks is 2.8%.SHLM is in the portfolios of Arnold Schneider of Schneider Capital Management, Chuck Royce of Royce& Associates, Paul Tudor Jones of The Tudor Group, Jim Simons of Renaissance Technologies LLC, Mario Gabelli of GAMCO Investors, Steven Cohen of SAC Capital Advisors, Jean-Marie Eveillard of First Eagle Investment Management, LLC.
Highlight of Business Operations:
EMEA gross profit was $48.1 million for the three months ended November 30, 2010, down $2.5 million from last year. Foreign currency translation negatively impacted EMEA gross profit by $4.0 million. Including the ICO effect, gross profit decreased $8.0 million or 14.2%. Although average selling prices increased approximately 7% compared with the prior year including the ICO effect, the Company was not able to fully pass along cost increases during the first quarter. On a sequential basis, gross profit per pound improved approximately 30% compared with 11.7 cents per pound during the fourth quarter of fiscal 2010.EMEA operating income for the three months ended November 30, 2010 was $19.4 million compared with $25.2 million last year. Including the ICO effect, operating income decreased $7.6 million. The decline in operating income in fiscal 2011 was primarily due to lower gross profit per pound compared with last years exceptionally high first quarter results as EMEA selling, general and administrative expenses declined slightly. Although the EMEA business segments performance was below the Companys exceptional first quarter in fiscal 2010, the segment operating income improved $6.8 million sequentially over the prior quarter.
Total segment gross profit excluding asset write-downs and inventory step-up for the three months ended November 30, 2010 was $69.1 million, compared with $63.2 million last year. The foreign currency translation effect negatively impacted gross profit by $3.8 million. Including the ICO effect, gross profit for the three months ended November 30, 2010 decreased $6.9 million as discussed in the segment sections above. Overall gross profit per pound was 13.8 cents; lower than the 15.4 cents in last years first quarter including the ICO effect but significantly higher than the 11.6 cents per pound in the fourth quarter of 2010.
The Companys selling, general and administrative expenses, excluding the effect of foreign currency translation, increased $14.6 million. Including the ICO effect and excluding costs related to acquisitions, the increase in selling, general and administrative expenses was $2.4 million. The increase includes $1.8 million of costs for various consultants to aid the Company with certain global initiatives. These initiatives include the review of the Companys long-term business strategy, capital structure, process improvements and growth initiatives including continued merger and acquisition activities. In addition, the increase includes $1.5 million of incremental expense for stock-based compensation primarily as a result of mark-to-market adjustments which had declined significantly in the first quarter of fiscal 2010. Offsetting these increases are $1.2 million of favorable bad debt expense as well as synergies from the ICO acquisition.
Net income attributable to the Companys stockholders was $9.2 million and $17.0 million for the three months ended November 30, 2010 and 2009, respectively, a decline of $7.8 million. Net income was negatively impacted by foreign currency translation of $0.9 million for the three months ended November 30, 2010.
In conjunction with the merger with ICO, the Company reduced the workforce in the Houston, Texas office by approximately 17. ICO had preexisting arrangements regarding change-in-control payments and severance pay which were based on pre-merger service. The Company assumed $2.1 million in liabilities as a result of the merger related to these agreements, of which $2.0 million was paid by the Company during fiscal 2010. Since the merger, the Company announced the exit of certain senior managers in Europe in connection with the Companys ongoing integration of ICO operations. The Company recorded approximately $0.3 million primarily in pretax employee-related costs during the three months ended November 30, 2010 related to the integration of the ICO merger. The Company has approximately $0.5 million remaining accrued for the ICO merger plan as of November 30, 2010, to be paid in the second and third quarters of fiscal 2011. The Company expects minimal remaining charges to be incurred into late fiscal 2011.
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