HOUSTON, May 7 /PRNewswire-FirstCall/ -- ICO, Inc. (NASDAQ:ICOC),
global producer of custom polymer powders and plastic film
concentrates, today announced its results for the quarter ended
March 31, 2009. (Logo:
http://www.newscom.com/cgi-bin/prnh/20030509/ICOCLOGO) Second
Quarter Highlights -- Cash flow from operating activities of
continuing operations in the second quarter of $13.8 million, up
from $1.8 million in the prior year second quarter -- Fourth
consecutive quarter of generating positive cash flow from operating
activities less cash used for investing activities -- Net debt
(total debt outstanding less cash) decreased $26.2 million or 59%
from September 30, 2008 and $13.8 million or 43%, from December 31,
2008, to $18.1 million -- Revenues of $70.1 million, a decrease of
$42.0 million or 37% from the prior year -- Volumes declined 23%
compared to the prior year due to global economic downturn --
Operating income, as adjusted of $1.1 million excluding goodwill
impairment of $3.5 million and an operating loss of $2.3 million
including the goodwill impairment, compared with operating income
of $8.6 million in the prior year second quarter -- Net income of
$432,000, as adjusted to exclude goodwill impairment, or $.02 per
share Second Quarter 2009 vs. Second Quarter 2008 Revenues for the
three months ended March 31, 2009 were $70.1 million, a decrease of
$42.0 million or 37% compared to the same quarter of the previous
year. Several factors contributed to the decline in revenues.
Volumes, which fell 23%, reduced revenues by $18.0 million. The
volume decline was a result of reduced customer demand as a result
of the global economic slowdown. Lower resin prices, which fell
dramatically in the first quarter of fiscal year 2009, reduced
revenues by $13.8 million. Finally, the translation effect of a
stronger U.S. Dollar reduced revenues by $10.2 million. Net loss
was $3.0 million or $.11 per share in the three months ended March
31, 2009 compared with net income of $5.0 million or $.18 per share
in the second quarter of fiscal year 2008. Included in the results
for the second quarter of fiscal year 2009 is a non-cash goodwill
impairment charge of $3.5 million. Adjusting out the goodwill
impairment charge, net income, as adjusted, was $0.4 million, or
$.02 per share. The decline in net income, as adjusted, of 91% was
primarily caused by the decline in volumes, as well as the results
for the second quarter of fiscal year 2008 including a net benefit
from insurance proceeds of $1.6 million. During the second quarter
of fiscal 2009, the Company also recognized $0.5 million of bad
debt expense and $0.2 million of severance costs. The non-cash
goodwill impairment charge relates to the Company's goodwill in its
Australia and New Zealand subsidiaries. The Company has experienced
operating losses in these two subsidiaries in a challenging market.
The Company is in the process of restructuring both locations to
improve their operating performance. "Excluding the non-cash
goodwill impairment charge, we were able to generate positive net
income in very challenging times," stated A. John Knapp, Jr.,
President and CEO. "We are watching our costs carefully and have
reduced our headcount by 12% from the level at September 30, 2008,
and we have reduced the shifts in several of our plants to better
match our customers' demands. Our balance sheet continued to
strengthen as we reduced our net debt by $13.8 million during the
quarter. We believe the changes we are making in our operations in
Australia and New Zealand and our strong balance sheet will put us
in a very good position when the economy recovers as well as to
take advantage of opportunities as they come our way." Second
Quarter 2009 vs. First Quarter 2009 Comparing the sequential
quarterly results, revenues declined $9.2 million or 12%. The
revenue decline was primarily a result of lower average selling
prices due to lower resin prices which reduced revenues by $13.3
million, partially offset by an improvement in our product sales
volumes which increased revenues $5.3 million. Our fiscal first
quarter is typically impacted by seasonality factors due to the
holiday period in December. Our gross margins improved from 12.7%
to 16.9% as a result of resin prices stabilizing in the second
quarter compared to the dramatic and historic fall in resin prices
experienced in the first quarter. This fact, along with the
improved product sales volumes, caused the increase in net income,
as adjusted, of $1.5 million. Balance Sheet and Liquidity Total
debt outstanding as of March 31, 2009 was $35.2 million, a decline
of $7.6 million or 18% from December 31, 2008. Our cash balance at
March 31, 2009 was $17.1 million, a sequential increase of $6.1
million, or 56%. Net debt (equal to outstanding debt less cash)
improved $13.8 million or 43% from $31.9 million at December 31,
2008 to $18.1 million at March 31, 2009. These improvements were
accomplished by positive cash flow from operating activities of
continuing operations of $13.8 million during the quarter. Our
available global borrowing capacity at March 31, 2009 was $47.3
million. Conference Call on the Web A live Internet broadcast of
ICO, Inc.'s conference call regarding fiscal year 2009 second
quarter results can be accessed at 10:00 a.m. Central Standard Time
on Friday, May 8, 2009 at
http://www.videonewswire.com/event.asp?id=58116 where the webcast
replay will be accessible for ninety days. The webcast replay will
also be accessible on the Company's website at
http://www.icopolymers.com/ for a period of twelve months. (Minimum
requirements to listen to the broadcast are: The Windows Media
Player software, downloadable free from
http://www.microsoft.com/windows/windowsmedia/player/download/download.aspx
and at least a 28.8Kbps connection to the Internet.) Investors are
invited to participate in the conference by dialing 847-413-3238,
passcode 24366896. A replay of the conference call will be
available by dialing 630-652-3044, passcode 24366896. Use of
Non-GAAP Financial Measures This earnings release includes the use
of both GAAP (generally accepted accounting principles) and
non-GAAP financial measures. The non-GAAP financial measures are
net income (loss), as adjusted, net income (loss) per common share,
as adjusted, operating income (loss), as adjusted, and net debt.
The Company uses these financial measures to monitor and evaluate
the ongoing performance of the Company, and believes that the
additional non-GAAP measures are useful to investors for financial
analysis. There are limitations associated with the use of these
measures. These non-GAAP financial measures are not prepared in
accordance with GAAP, may not be reported by all of the Company's
competitors and may not be directly comparable to similarly titled
measures of the Company's competitors due to potential differences
in the exact method of calculation. The Company compensates for
these limitations by using these non-GAAP financial measures as
supplements to GAAP financial measures and by providing the
reconciliations of the non-GAAP financial measures to their most
comparable GAAP financial measures. About ICO, Inc. With 20
locations in 9 countries, ICO produces custom polymer powders for
rotational molding and other polymer related businesses, such as
the textile, metal coating and masterbatch markets. ICO remains an
industry leader in size reduction, compounding and other tolling
services for plastic and non-plastic materials. ICO's Bayshore
Industrial subsidiary produces specialty compounds, concentrates
and additives primarily for the plastic film industry. Additional
information about ICO, Inc. can be found on the Company's website
at http://www.icopolymers.com/. Contact: CFO - Bradley T. Leuschner
at 713-351-4100. Certain matters discussed in this press release
are "forward-looking statements," involving certain risks,
uncertainties, and assumptions, intended to qualify for the safe
harbors from liability established by the Private Securities
Litigation Reform Act of 1995. The Company's statements regarding
trends in the marketplace and potential future results are examples
of such forward-looking statements. The forward-looking statements
include, but are not limited to: restrictions imposed by the
Company's outstanding indebtedness; changes in the cost and
availability of resins (polymers) and other raw materials; general
economic conditions; demand for the Company's services and
products; business cycles and other industry conditions;
international risks; operational risks; currency translation risks;
the Company's lack of asset diversification; the Company's ability
to manage inventories, develop technology and proprietary know-how,
and attract and retain key personnel; as well as other factors
detailed in the Company's form 10-K for the fiscal year ended
September 30, 2008 and its other filings with the Securities and
Exchange Commission. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those indicated.
Any forward-looking statements are made only as of the date of this
press release, and the Company undertakes no obligation to publicly
update any such forward-looking statements to reflect subsequent
events or circumstances. ICO, Inc. Consolidated Statement of
Operations (Unaudited and in thousands, except per share data and
percentages) Three Months Ended Six Months Ended December March 31,
31, March 31, --------- -------- --------- 2009 2008 2008 2009 2008
---- ---- ---- ---- ---- Product Sales $63,417 $102,120 $71,857
$135,274 $203,308 Toll Services 6,713 10,006 7,501 14,214 19,683
----- ------ ----- ------ ------ Total Revenues 70,130 112,126
79,358 149,488 222,991 Cost of sales and services (exclusive of
depreciation shown separately below) 58,247 92,838 69,248 127,495
184,611 ------ ------ ------ ------- ------- Gross Profit (1)
11,883 19,288 10,110 21,993 38,380 Selling, general and
administrative expense 9,010 10,387 9,138 18,148 20,990
Depreciation and amortization 1,719 1,853 1,713 3,432 3,648
Goodwill impairment 3,450 - - 3,450 - Impairment, restructuring and
other costs (income) 20 (1,598) (293) (273) (1,400) --- ------ ----
---- ------ Operating income (loss) (2,316) 8,646 (448) (2,764)
15,142 Other income (expense): Interest expense, net (535) (1,096)
(639) (1,174) (2,119) Other income (expense) (48) (68) (331) (379)
(201) --- --- ---- ---- ---- Income (loss) from continuing
operations before income taxes (2,899) 7,482 (1,418) (4,317) 12,822
Provision (benefit) for income taxes 119 2,489 (342) (223) 4,303
--- ----- ---- ---- ----- Income (loss) from continuing operations
(3,018) 4,993 (1,076) (4,094) 8,519 Income (loss) from discontinued
operations, net of income taxes - - - - (16) --- --- --- --- ---
Net income (loss) $(3,018) $4,993 $(1,076) $(4,094) $8,503
Preferred Stock dividends - - - - (1) --- --- --- --- --- Net
income (loss) applicable to Common Stock $(3,018) $4,993 $(1,076)
$(4,094) $8,502 ======= ====== ======= ======= ====== Basic income
(loss) from continuing operations per common share $(0.11) $0.18
$(0.04) $(0.15) $0.31 ====== ===== ====== ====== ===== Basic net
income (loss) per common share $(0.11) $0.18 $(0.04) $(0.15) $0.31
====== ===== ====== ====== ===== Diluted income (loss) from
continuing operations per common share $(0.11) $0.18 $(0.04)
$(0.15) $0.30 ====== ===== ====== ====== ===== Diluted net income
(loss) per common share $(0.11) $0.18 $(0.04) $(0.15) $0.30 ======
===== ====== ====== ===== Basic weighted average shares outstanding
27,072,000 27,263,000 27,099,000 27,086,000 27,088,000 ==========
========== ========== ========== ========== Diluted weighted
average shares outstanding 27,072,000 27,949,000 27,099,000
27,086,000 27,978,000 ========== ========== ========== ==========
========== Gross Margin (2) 16.9% 17.2% 12.7% 14.7% 17.2% (1)
Calculated as Total Revenues minus Cost of Sales and Services,
exclusive of Depreciation Expense. (2) Calculated as Gross Profit
divided by Total Revenues. ICO, Inc. Consolidated Balance Sheet
(Unaudited and in thousands, except share data and ratios) March
31, September 30, 2009 2008 ---- ---- ASSETS ------ Current assets:
Cash and cash equivalents $17,096 $5,589 Trade receivables 50,171
75,756 Inventories 32,817 53,458 Deferred income taxes 1,894 2,056
Prepaid and other current assets 4,903 10,514 ----- ------ Total
current assets 106,881 147,373 ------- ------- Property, plant and
equipment, net 56,455 61,164 Goodwill 4,549 8,689 Deferred income
taxes 3,356 2,709 Other assets 1,279 1,161 ----- ----- Total assets
$172,520 $221,096 ======== ======== LIABILITIES AND STOCKHOLDERS'
EQUITY ------------------------------------ Current liabilities:
Short-term borrowings under credit facilities $1,147 $9,607 Current
portion of long-term debt 12,884 15,201 Accounts payable 23,863
37,674 Accrued salaries and wages 3,708 5,978 Other current
liabilities 8,521 11,912 ----- ------ Total current liabilities
50,123 80,372 ------ ------ Long-term debt, net of current portion
21,181 25,122 Deferred income taxes 4,463 5,039 Other long-term
liabilities 2,223 2,728 ----- ----- Total liabilities 77,990
113,261 ------ ------- Commitments and contingencies - -
Stockholders' equity: Undesignated preferred stock - - Common stock
55,247 54,756 Treasury stock (3,017) (543) Additional paid-in
capital 72,697 72,241 Accumulated other comprehensive income (loss)
(4,662) 3,022 Accumulated deficit (25,735) (21,641) ------- -------
Total stockholders' equity 94,530 107,835 ------ ------- Total
liabilities and stockholders' equity $172,520 $221,096 ========
======== OTHER BALANCE SHEET DATA ------------------------ Working
capital $56,758 $67,001 Current ratio 2.1 1.8 Total debt $35,212
$49,930 Debt-to-capitalization 27.1% 31.6% ICO, Inc. Supplemental
Segment Information (Unaudited and in thousands, except
percentages) Revenues Three Months Ended March % of % of 31: 2009
Total 2008 Total Change % ---- ------ ---- ----- ------ --- ICO
Europe $32,624 46% $54,181 48% $(21,557) (40%) Bayshore Industrial
15,843 23% 20,742 18% $(4,899) (24%) ICO Asia Pacific 11,182 16%
19,627 18% (8,445) (43%) ICO Polymers North America 7,757 11%
12,559 11% (4,802) (38%) ICO Brazil 2,724 4% 5,017 5% (2,293) (46%)
----- --- ----- --- ------ Consolidated $70,130 100% $112,126 100%
$(41,996) (37%) ======= === ======== === ======== Six Months Ended
% of % of March 31: 2009 Total 2008 Total Change % ---- ----- ----
----- ------ --- ICO Europe $67,386 45% $100,494 45% $(33,108)
(33%) Bayshore Industrial 34,173 23% 52,519 24% (18,346) (35%) ICO
Asia Pacific 25,663 17% 37,572 17% (11,909) (32%) ICO Polymers
North America 16,646 11% 22,890 10% (6,244) (27%) ICO Brazil 5,620
4% 9,516 4% (3,896) (41%) ----- --- ----- --- ------ Consolidated
$149,488 100% $222,991 100% $(73,503) (33%) ======== === ========
=== ======== Operating income (loss) Three Months Ended March 31:
2009 2008 Change ---- ---- ------ ICO Europe $1,915 $3,520 $(1,605)
Bayshore Industrial 1,600 2,782 (1,182) ICO Asia Pacific (5,004)
761 (5,765) ICO Polymers North America 661 2,937 (2,276) ICO Brazil
28 192 (164) --- --- ---- Total Operations (800) 10,192 (10,992)
Unallocated General Corporate Expense (1,516) (1,546) 30 ------
------ --- Consolidated $(2,316) $8,646 $(10,962) ======= ======
======== Six Months Ended March 31: 2009 2008 Change ---- ----
------ ICO Europe $1,766 $6,518 $(4,752) Bayshore Industrial 3,318
6,710 (3,392) ICO Asia Pacific (6,291) 1,623 (7,914) ICO Polymers
North America 1,243 3,383 (2,140) ICO Brazil (30) 329 (359) --- ---
---- Total Operations 6 18,563 (18,557) Unallocated General
Corporate Expense (2,770) (3,421) 651 ------ ------ ---
Consolidated $(2,764) $15,142 $(17,906) ======= ======= ========
Operating income (loss) as a percentage of revenues Three Months
Ended Six Months Ended March 31, March 31, --------- --------- 2009
2008 Change 2009 2008 Change ---- ---- ------ ---- ---- ------ ICO
Europe 6% 6% 0% 3% 6% (3%) Bayshore Industrial 10% 13% (3%) 10% 13%
(3%) ICO Asia Pacific (45%) 4% (49%) (25%) 4% (29%) ICO Polymers
North America 9% 23% (14%) 7% 15% (8%) ICO Brazil 1% 4% (3%) (1%)
3% (4%) Consolidated (3%) 8% (11%) (2%) 7% (9%) ICO, Inc.
Supplemental Segment Information (cont'd.) (Unaudited and in
thousands, except percentages) Revenues Three Months Ended
------------------ March 31, December 31, --------- ------------ %
of % of 2009 Total 2008 Total Change % ---- ----- ---- ----- ------
--- ICO Europe $32,624 46% $34,762 44% $(2,138) (6%) Bayshore
Industrial 15,843 23% 18,330 23% (2,487) (14%) ICO Asia Pacific
11,182 16% 14,481 18% (3,299) (23%) ICO Polymers North America
7,757 11% 8,889 11% (1,132) (13%) ICO Brazil 2,724 4% 2,896 4%
(172) (6%) ----- --- ----- --- ---- Consolidated $70,130 100%
$79,358 100% $(9,228) (12%) ======= === ======= === =======
Operating income (loss) Three Months Ended ------------------ March
31, December 31, 2009 2008 Change ---- ---- ------ ICO Europe
$1,915 $(149) $2,064 Bayshore Industrial 1,600 1,718 (118) ICO Asia
Pacific (5,004) (1,287) (3,717) ICO Polymers North America 661 582
79 ICO Brazil 28 (58) 86 --- --- --- Total Operations (800) 806
(1,606) Unallocated General Corporate Expense (1,516) (1,254) (262)
------ ------ ---- Consolidated $(2,316) $(448) $(1,868) =======
===== ======= Operating income (loss) as a Three Months Ended
percentage of ------------------ revenues March 31, December 31,
2009 2008 Change ---- ---- ------ ICO Europe 6% 0% 6% Bayshore
Industrial 10% 9% 1% ICO Asia Pacific (45%) (9%) (36%) ICO Polymers
North America 9% 7% 2% ICO Brazil 1% (2%) 3% Consolidated (3%) (1%)
(2%) ICO, Inc. Reconciliation of Non-GAAP Financial Measures
(Unaudited and in thousands except per share data) Net Income
(Loss) and Income (Loss) Per Share Reconciliation Three Months
Ended: March 31, December 31, --------- 2009 2008 2008 ---- ----
---- Net income (loss) applicable to common stock $(3,018) $4,993
$(1,076) Goodwill impairment 3,450 - - ----- --- --- Net income
(loss), as adjusted $432 $4,993 $(1,076) ==== ====== ======= Basic
and diluted income (loss) per common share $(0.11) $0.18 $(0.04)
Goodwill impairment 0.13 - - ---- --- --- Basic and diluted income
(loss) per common share, as adjusted $0.02 $0.18 $(0.04) =====
===== ====== Six Months Ended: March 31, --------- 2009 2008 ----
---- Net income (loss) applicable to common stock $(4,094) $8,502
Goodwill impairment 3,450 - ----- --- Net income (loss), as
adjusted $(644) $8,502 ===== ====== Basic net income (loss) per
common share $(0.15) $0.31 Goodwill impairment 0.13 - ---- ---
Basic net income (loss) per common share, as adjusted $(0.02) $0.31
====== ===== Diluted income (loss) per common share $(0.15) $0.30
Goodwill impairment 0.13 - ---- --- Diluted net income (loss) per
common share, as adjusted $(0.02) $0.30 ====== ===== Operating
Income (Loss) Reconciliation Three months ended: March 31, December
31, --------- 2009 2008 2008 ---- ---- ---- Operating income (loss)
$(2,316) $8,646 $(448) Goodwill impairment 3,450 - - ----- --- ---
Operating income (loss), as adjusted $1,134 $8,646 $(448) ======
====== ===== Six Months Ended: March 31, --------- 2009 2008 ----
---- Operating income (loss) $(2,764) $15,142 Goodwill impairment
3,450 - ----- --- Operating income (loss), as adjusted $686 $15,142
==== ======= Net Debt Reconciliation March 31, September 30, 2009
2008 ---- ---- Total debt $35,212 $49,930 Less cash and cash
equivalents 17,096 5,589 ------ ----- Net debt $18,116 $44,341
======= =======
http://www.newscom.com/cgi-bin/prnh/20030509/ICOCLOGO
http://photoarchive.ap.org/ DATASOURCE: ICO, Inc. CONTACT: Bradley
T. Leuschner, CFO of ICO, Inc., +1-713-351-4100 Web Site:
http://www.icopolymers.com/
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