HOUSTON, Feb. 4 /PRNewswire-FirstCall/ -- ICO, Inc. (NASDAQ:ICOC),
global producer of custom polymer powders and plastic film
concentrates, today announced its results for the quarter ended
December 31, 2008. (Logo:
http://www.newscom.com/cgi-bin/prnh/20030509/ICOCLOGO) First
Quarter Highlights -- Revenues of $79.4 million, a decrease of
$31.5 million or 28% from the prior year -- Volumes declined 21%
compared to the prior year due to global economic downturn and
unfavorable resin price environment -- Operating loss of $0.4
million, compared with operating income of $6.5 million in the
prior year -- Net loss per share of $.04 -- Total debt outstanding
decreased $7.1 million, or 14%, sequentially -- Cash flow from
operating activities by continuing operations of $13.5 million, up
from cash outflow of $11.4 million in the prior year -- Cash on
hand of $11.0 million, up $5.4 million or 96% from September 30,
2008 First Quarter 2009 vs. First Quarter 2008 Revenues for the
three months ended December 31, 2008 were $79.4 million, a decrease
of $31.5 million or 28% compared to the same quarter of the
previous year. The global economic downturn and the unfavorable
resin price environment during the quarter were the primary causes
of lower demand in all of our segments, which in turn caused a
significant decrease in revenues. The unfavorable resin price
environment was characterized by resin prices reaching historically
high levels in the fourth quarter of fiscal year 2008, followed by
a rapid and dramatic decline during the first quarter of fiscal
year 2009. Downward resin price trends typically lead our customers
to de-stock their inventory, which has the effect of reducing their
demand for our products and services. Our total volumes sold
decreased 21% during the first fiscal quarter, negatively impacting
revenues by $18.3 million. The translation effect of the stronger
U.S. Dollar was responsible for $9.2 million of the revenue
decline, and the changes in prices and product mix negatively
impacted revenues by an additional $4.0 million. As a result of the
lower volumes sold and the unfavorable resin price environment,
gross margins declined from 17.2% to 12.7% compared to the same
quarter of the previous year, and gross profit declined from $19.1
million to $10.1 million over the same period. During the first
quarter of fiscal year 2009, selling, general and administrative
expenses ("SG&A") declined $1.5 million or 14% to $9.1 million
as a result of the translation effect of the stronger U.S. Dollar,
lower external professional fees and lower compensation costs.
During the first quarter of fiscal year 2009, we recognized $0.6
million of bad debt expense. We also recognized a net benefit in
impairment, restructuring and other costs (income) of $0.3 million
primarily as a result of an insurance reimbursement related to
financial losses resulting from the loss of power in September 2008
from Hurricane Ike at our Bayshore Industrial facility.
Year-over-year operating income declined from income of $6.5
million to a loss of $0.4 million as a result of the lower volumes
sold and the effect of the unfavorable resin price environment.
Interest expense declined $0.4 million due to lower average
borrowings. We also recognized a foreign currency loss of $0.3
million due to significant fluctuations in currencies during the
quarter. Net loss for the quarter was $1.1 million, down from net
income of $3.5 million in the prior year period. Net loss per share
was $.04, compared with net income per share of $.13 in the prior
year period. First Quarter 2009 vs. Fourth Quarter 2008 Comparing
the sequential quarterly results, revenues decreased $28.6 million
or 27%. A 12% reduction in volumes sold negatively impacted
revenues by $14.4 million. The translation effect of the stronger
U.S. Dollar contributed to $10.4 million of the reduction in
revenues. Lower average selling prices as a result of lower resin
prices had a $3.8 million negative impact on revenues. The
sequential volume reduction was caused by a reduction in customer
demand resulting from the global economic slowdown, the effect of
the unfavorable resin price environment, as well as seasonal
factors, as we usually experience reduced demand during our first
fiscal quarter due to the holiday period in December. The decline
in volumes and the unfavorable resin price environment led to a
sequential reduction in gross profit of $6.2 million, or 38%.
SG&A declined $0.7 million primarily due to the translation
effect of the stronger U.S. Dollar. Income from continuing
operations declined $3.3 million. "During the first quarter of
fiscal year 2009, we altered our focus from offense to defense,
protecting both our cash flow and the value of our Company," stated
A. John Knapp, Jr., President and CEO. "The decline in resin prices
during the quarter and the global economic slowdown impacted our
results for the first quarter. However, we lowered our inventory
position in the quarter, and with resin prices appearing to have
stabilized, we believe we are positioned to meet the challenges
ahead. During the first quarter we generated cash flow from
operating activities by continuing operations of $13.5 million less
capital expenditures of $1.4 million, which allowed us to decrease
our net debt (total debt less cash) by $12.5 million from September
30, 2008." Balance Sheet and Liquidity Total debt outstanding as of
December 31, 2008 was $42.8 million, a decline of $7.1 million from
September 30, 2008. Our cash balance at quarter-end was $11.0
million, a sequential increase of $5.4 million, or 96%. These
improvements were accomplished in part by positive cash flow from
operating activities by continuing operations of $13.5 million
during the quarter, less net capital expenditures of $1.4 million.
Approximately $0.6 million of the capital expenditures related to
our facility relocation from New Jersey to Pennsylvania, which is
now substantially complete. Our available global borrowing capacity
at December 31, 2008 was $55.3 million. Conference Call on the Web
A live Internet broadcast of ICO, Inc.'s conference call regarding
fiscal 2009 first quarter results can be accessed at 10:00 a.m.
Central Standard Time on Thursday, February 5, 2009 at
http://www.videonewswire.com/event.asp?id=54967 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.asp
x and at least a 28.8Kbps connection to the Internet.) Investors
are invited to participate in the conference by dialing
847-413-3238, passcode 23621551. A replay of the conference call
will be available by dialing 630-652-3044, passcode 23621551. 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 publically 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 December
31, September 30, ---------------------- ------------- 2008 2007
2008 ---------- ---------- ------------- Product Sales $71,857
$101,188 $99,274 Toll Services 7,501 9,677 8,718 ----------
---------- ---------- Total Revenues 79,358 110,865 107,992 Cost of
sales and services (exclusive of depreciation shown separately
below) 69,248 91,773 91,712 ---------- ---------- ---------- Gross
Profit (1) 10,110 19,092 16,280 Selling, general and administrative
expense 9,138 10,603 9,823 Depreciation and amortization 1,713
1,795 1,951 Impairment, restructuring and other costs (income)
(293) 198 408 ---------- ---------- ---------- Operating income
(loss) (448) 6,496 4,098 Other income (expense): Interest expense,
net (639) (1,023) (904) Other income (expense) (331) (133) (395)
---------- ---------- ---------- Income (loss) from continuing
operations before income taxes (1,418) 5,340 2,799 Provision
(benefit) for income taxes (342) 1,814 569 ---------- ----------
---------- Income (loss) from continuing operations (1,076) 3,526
2,230 Income (loss) from discontinued operations, net of income
taxes - (16) (52) ---------- ---------- ---------- Net income
(loss) $(1,076) $3,510 $2,178 Preferred Stock dividends - (1) -
---------- ---------- ---------- Net income applicable to Common
Stock $(1,076) $3,509 $2,178 ========== ========== ========== Basic
and diluted income (loss) from continuing operations per common
share $(0.04) $0.13 $0.08 ========== ========== ========== Basic
and diluted income (loss) per common share $(0.04) $0.13 $0.08
========== ========== ========== Basic weighted average shares
outstanding 27,099,000 26,914,000 27,474,000 ========== ==========
========== Diluted weighted average shares outstanding 27,099,000
28,008,000 27,864,000 ========== ========== ========== Gross Margin
(2) 12.7% 17.2% 15.1% (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) December 31, September 30, 2008 2008
------------ ------------- ASSETS ------ Current assets: Cash and
cash equivalents $10,975 $5,589 Trade receivables 59,884 75,756
Inventories 35,919 53,458 Deferred income taxes 2,314 2,056 Prepaid
and other current assets 8,495 10,514 -------- -------- Total
current assets 117,587 147,373 -------- -------- Property, plant
and equipment, net 59,001 61,164 Goodwill 8,154 8,689 Other assets
3,799 3,870 -------- -------- Total assets $188,541 $221,096
======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------ Current liabilities:
Short-term borrowings under credit facilities $6,009 $9,607 Current
portion of long-term debt 13,629 15,201 Accounts payable 24,689
37,674 Accrued salaries and wages 4,568 5,978 Other current
liabilities 10,194 11,912 -------- -------- Total current
liabilities 59,089 80,372 -------- -------- Long-term debt, net of
current portion 23,207 25,122 Deferred income taxes 4,727 5,039
Other long-term liabilities 2,295 2,728 -------- -------- Total
liabilities 89,318 113,261 -------- -------- Commitments and
contingencies - - Stockholders' equity: Undesignated preferred
stock - - Common stock 55,247 54,756 Treasury stock (3,017) (543)
Additional paid-in capital 72,428 72,241 Accumulated other
comprehensive income (loss) (2,718) 3,022 Accumulated deficit
(22,717) (21,641) -------- -------- Total stockholders' equity
99,223 107,835 -------- -------- Total liabilities and
stockholders' equity $188,541 $221,096 ======== ======== OTHER
BALANCE SHEET DATA ------------------------ Working capital $58,498
$67,001 Current ratio 2.0 1.8 Total debt $42,845 $49,930
Debt-to-capitalization 30.2% 31.6% ICO, Inc. Supplemental Segment
Information (Unaudited and in thousands, except percentages)
Revenues Three Months Ended % of % of December 31: 2008 Total 2007
Total Change % ------- ----- ------- ----- ------ --- ICO Europe
$34,762 44% $46,313 42% $(11,551) (25%) Bayshore Industrial 18,330
23% 31,777 29% (13,447) (42%) ICO Asia Pacific 14,481 18% 17,945
16% (3,464) (19%) ICO Polymers North America 8,889 11% 10,331 9%
(1,442) (14%) ICO Brazil 2,896 4% 4,499 4% (1,603) (36%) -------
--- -------- --- -------- Consolidated $79,358 100% $110,865 100%
$(31,507) (28%) ======= === ======== === ======== Operating income
(loss) Three Months Ended December 31: 2008 2007 Change % ------
------ ------ --- ICO Europe $(149) $2,998 $(3,147) (105%) Bayshore
Industrial 1,718 3,928 (2,210) (56%) ICO Asia Pacific (1,287) 862
(2,149) (249%) ICO Polymers North America 582 446 136 30% ICO
Brazil (58) 137 (195) (142%) ------ ------ ------- Total Operations
806 8,371 (7,565) (90%) Unallocated General Corporate Expense
(1,254) (1,875) 621 (33%) ------ ------ ------- Consolidated $(448)
$6,496 $(6,944) (107%) ====== ====== ======= Operating income
(loss) as a percentage of revenues Three Months Ended December 31,
------------------- 2008 2007 Change ---- ---- ------ ICO Europe 0%
6% (6%) Bayshore Industrial 9% 12% (3%) ICO Asia Pacific (9%) 5%
(14%) ICO Polymers North America 7% 4% 3% ICO Brazil (2%) 3% (5%)
Consolidated (1%) 6% (7%) ICO, Inc. Supplemental Segment
Information (cont'd.) (Unaudited and in thousands, except
percentages) Revenues Three Months Ended
----------------------------------------------- December 31,
September 30, -------------- -------------- % of % of 2008 Total
2008 Total Change % ------- ----- -------- ----- -------- --- ICO
Europe $34,762 44% $48,489 45% $(13,727) (28%) Bayshore Industrial
18,330 23% 19,173 18% (843) (4%) ICO Asia Pacific 14,481 18% 23,401
22% (8,920) (38%) ICO Polymers North America 8,889 11% 10,119 9%
(1,230) (12%) ICO Brazil 2,896 4% 6,810 6% (3,914) (57%) -------
--- -------- --- -------- Consolidated $79,358 100% $107,992 100%
$(28,634) (27%) ======= === ======== === ======== Operating income
(loss) Three Months Ended ----------------------------------------
December 31, September 30, 2008 2008 Change % -----------
------------ ------ --- ICO Europe $(149) $2,782 $(2,931) (105%)
Bayshore Industrial 1,718 1,486 232 16% ICO Asia Pacific (1,287)
210 (1,497) (713%) ICO Polymers North America 582 424 158 37% ICO
Brazil (58) 429 (487) (114%) ------ ------ ------- Total Operations
806 5,331 (4,525) (85%) Unallocated General Corporate Expense
(1,254) (1,233) (21) 2% ------ ------ ------- Consolidated $(448)
$4,098 $(4,546) (111%) ====== ====== ======= Operating income
(loss) as a percentage of revenues Three Months Ended
---------------------------------- December 31, September 30, 2008
2008 Change ------------ ------------ ------ ICO Europe 0% 6% (6%)
Bayshore Industrial 9% 8% 1% ICO Asia Pacific (9%) 1% (10%) ICO
Polymers North America 7% 4% 3% ICO Brazil (2%) 6% (8%)
Consolidated (1%) 4% (5%)
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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