HOUSTON, Aug. 6 /PRNewswire-FirstCall/ -- ICO, Inc. (NASDAQ:ICOC),
global producer of custom polymer powders and plastic film
concentrates, today announced its results for the quarter ended
June 30, 2009. (Logo:
http://www.newscom.com/cgi-bin/prnh/20030509/ICOCLOGO) Third
Quarter Highlights -- Cash flow from operating activities of
continuing operations in the third quarter of $8.8 million,
compared to $13.5 million in the prior year third quarter -- Fifth
consecutive quarter of generating positive cash flow from operating
activities less cash used for investing activities -- Net debt
(total debt outstanding less cash) decreased $34.4 million from
September 30, 2008 and $8.2 million from March 31, 2009, to $9.9
million -- Revenues of $70.0 million, a decrease of $45.7 million
or 40% from the prior year -- Volumes declined 20% compared to the
prior year due to global economic downturn -- Operating income of
$2.2 million compared with operating income of $6.5 million in the
prior year third quarter -- Net income of $1.3 million, or $.05 per
share Third Quarter 2009 vs. Third Quarter 2008 Revenues for the
three months ended June 30, 2009 were $70.0 million, a decrease of
$45.7 million or 40% compared to the same quarter of the previous
year. The revenue decline was caused by several factors. Volumes,
which fell 20%, reduced revenues by $24.6 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 but trended
upward in the third quarter, reduced revenues by $11.7 million.
Finally, the translation effect of a stronger U.S. Dollar reduced
revenues by $9.4 million. Net income was $1.3 million or $.05 per
share in the three months ended June 30, 2009 compared with net
income of $4.6 million or $.17 per share in the third quarter of
fiscal year 2008. The decline in net income of 73% was primarily
caused by the decline in volumes. The impact from lower volumes was
partially offset by an increase in gross margin from 16.0% to
18.0%. "Once again, our management team excelled during difficult
economic conditions," stated A. John Knapp, Jr., President and CEO.
"We were able to generate positive net income and strong cash flows
during the past quarter. We are very encouraged by the trend in our
business we saw last quarter. The month of June was by far the
strongest month of the quarter, with volumes increasing 16% from
the month of May and our gross margins in the month of June were
the highest of all three months in the quarter. We are also excited
about the Chroma transaction announced during the quarter. We
remain optimistic that the trend in business volumes we experienced
in the month of June is a sign that we are in the process of
recovery." Third Quarter 2009 vs. Second Quarter 2009 Revenues were
essentially flat compared to the second quarter. Our gross margins
improved from 16.9% to 18.0%, and led to higher operating income,
which improved from $1.1 million, as adjusted, to $2.2 million. The
second quarter included a non-cash goodwill impairment charge of
$3.5 million related to the Company's goodwill in its Australia and
New Zealand subsidiaries. Net income, as adjusted, improved 191%
from $0.4 million or $.02 per share in the second quarter of 2009
to $1.3 million or $.05 per share. Balance Sheet and Liquidity Our
cash balance at June 30, 2009 was $23.6 million, a sequential
increase of $6.5 million, or 38%. Net debt (equal to outstanding
debt less cash) improved $8.2 million or 45% from $18.1 million at
March 31, 2009 to $9.9 million at June 30, 2009. These improvements
were accomplished by positive cash flow from operating activities
of continuing operations of $8.8 million during the quarter. Our
available global borrowing capacity at June 30, 2009 was $46.9
million. Conference Call on the Web A live Internet broadcast of
ICO, Inc.'s conference call regarding fiscal year 2009 third
quarter results can be accessed at 10:00 a.m. Central Standard Time
on Friday, August 7, 2009 at
http://www.videonewswire.com/event.asp?id=60457 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 24942372. A replay of the conference call
will be available by dialing 630-652-3044, passcode 24942372. 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, potential future results, and any
proposed transaction and its timing and effects are examples of
such forward-looking statements. The following is a non-exclusive
list of risks and uncertainties, and circumstances that present
risks, that could cause the forward-looking statements to become
untrue or otherwise affect the outcome thereof: restrictions
imposed by the Company's outstanding indebtedness; changes in the
cost and availability of resins (polymers) and other raw materials;
changes in demand for the Company's services and products; business
cycles and other industry conditions; general economic conditions;
international risks; operational risks; currency translation risks;
the Company's lack of asset diversification; the Company's ability
to manage global inventory, develop technology and proprietary
know-how, and attract and retain key personnel; failure of closing
conditions in any transaction to be satisfied; integration of
acquired businesses; 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 such 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 June 30, March 31, ---------------- ------------
2009 2008 2009 ----- ---- ----- Product Sales $62,870 $105,494
$63,417 Toll Services 7,127 10,224 6,713 ----- ------ ----- Total
Revenues 69,997 115,718 70,130 Cost of sales and services
(exclusive of depreciation shown separately below) 57,383 97,234
58,247 ------ ------ ------ Gross Profit (1) 12,614 18,484 11,883
Selling, general and administrative expense 8,677 10,441 9,010
Depreciation and amortization 1,835 1,932 1,719 Goodwill Impairment
- - 3,450 Impairment, restructuring and other costs (income) (87)
(356) 20 --- ---- -- Operating income (loss) 2,189 6,467 (2,316)
Other income (expense): Interest expense, net (539) (1,039) (535)
Other income (expense) (192) 165 (48) ---- --- --- Income (loss)
from continuing operations before income taxes 1,458 5,593 (2,899)
Provision (benefit) for income taxes 199 960 119 --- --- --- Income
(loss) from continuing operations 1,259 4,633 (3,018) Income (loss)
from discontinued operations, net of income taxes - - - --- --- ---
Net income (loss) $1,259 $4,633 $(3,018) Preferred Stock dividends
- - - --- --- --- Net income (loss) applicable to Common Stock
$1,259 $4,633 $(3,018) ====== ====== ======= Basic income (loss)
from continuing operations per common share $0.05 $0.17 $(0.11)
===== ===== ====== Basic net income (loss) per common share $0.05
$0.17 $(0.11) ===== ===== ====== Diluted income (loss) from
continuing operations per common share $0.05 $0.17 $(0.11) =====
===== ====== Diluted net income (loss) per common share $0.05 $0.17
$(0.11) ===== ===== ====== Basic weighted average shares
outstanding 27,077,000 27,433,000 27,072,000 ========== ==========
========== Diluted weighted average shares outstanding 27,221,000
27,975,000 27,072,000 ========== ========== ========== Gross Margin
(2) 18.0% 16.0% 16.9% Nine Months Ended June 30, ----------------
2009 2008 ----- ---- Product Sales $198,144 $308,802 Toll Services
21,341 29,907 ------ ------ Total Revenues 219,485 338,709 Cost of
sales and services (exclusive of depreciation shown separately
below) 184,878 281,845 ------- ------- Gross Profit (1) 34,607
56,864 Selling, general and administrative expense 26,825 31,431
Depreciation and amortization 5,267 5,580 Goodwill Impairment 3,450
- Impairment, restructuring and other costs (income) (360) (1,756)
---- ------ Operating income (loss) (575) 21,609 Other income
(expense): Interest expense, net (1,713) (3,158) Other income
(expense) (571) (36) ---- --- Income (loss) from continuing
operations before income taxes (2,859) 18,415 Provision (benefit)
for income taxes (24) 5,263 --- ----- Income (loss) from continuing
operations (2,835) 13,152 Income (loss) from discontinued
operations, net of income taxes - (16) --- --- Net income (loss)
$(2,835) $13,136 Preferred Stock dividends - (1) --- -- Net income
(loss) applicable to Common Stock $(2,835) $13,135 ======= =======
Basic income (loss) from continuing operations per common share
$(0.10) $0.48 ====== ===== Basic net income (loss) per common share
$(0.10) $0.48 ====== ===== Diluted income (loss) from continuing
operations per common share $(0.10) $0.47 ====== ===== Diluted net
income (loss) per common share $(0.10) $0.47 ====== ===== Basic
weighted average shares outstanding 27,083,000 27,202,000
========== ========== Diluted weighted average shares outstanding
27,083,000 27,975,000 ========== ========== Gross Margin (2) 15.8%
16.8% (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) June 30, September 30, 2009 2008 ---- ---- ASSETS --------
Current assets: Cash and cash equivalents $23,589 $5,589 Trade
receivables 54,155 75,756 Inventories 34,886 53,458 Deferred income
taxes 1,844 2,056 Prepaid and other current assets 5,379 10,514
----- ------ Total current assets 119,853 147,373 ------- -------
Property, plant and equipment, net 57,321 61,164 Goodwill 4,549
8,689 Deferred income taxes 3,785 2,709 Other assets 1,316 1,161
----- ----- Total assets $186,824 $221,096 ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
-------------------------------------- Current liabilities:
Short-term borrowings under credit facilities $159 $9,607 Current
portion of long-term debt 13,138 15,201 Accounts payable 32,215
37,674 Accrued salaries and wages 4,604 5,978 Other current
liabilities 8,402 11,912 ----- ------ Total current liabilities
58,518 80,372 ------ ------ Long-term debt, net of current portion
20,214 25,122 Deferred income taxes 4,644 5,039 Other long-term
liabilities 2,472 2,728 ----- ----- Total liabilities 85,848
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 72,814 72,241 Accumulated other comprehensive income 408
3,022 Accumulated deficit (24,476) (21,641) ------- ------- Total
stockholders' equity 100,976 107,835 ------- ------- Total
liabilities and stockholders' equity $186,824 $221,096 ========
======== OTHER BALANCE SHEET DATA --------------------------
Working capital $61,335 $67,001 Current ratio 2.0 1.8 Total debt
$33,511 $49,930 Debt-to-capitalization 24.9% 31.6% ICO, Inc.
Supplemental Segment Information (Unaudited and in thousands,
except percentages) Revenues Three Months Ended June 30: 2009 % of
Total 2008 % of Total Change % ---- ---------- ---- ----------
------ --- ICO Europe $31,724 45% $58,226 50% $(26,502) (46%)
Bayshore Industrial 16,003 23% 19,044 16% (3,041) (16%) ICO Asia
Pacific 11,974 17% 21,417 19% (9,443) (44%) ICO Polymers North
America 7,113 10% 12,081 10% (4,968) (41%) ICO Brazil 3,183 5%
4,950 5% (1,767) (36%) ----- --- ----- --- ------ Consolidated
$69,997 100% $115,718 100% $(45,721) (40%) ======= === ======== ===
======== Nine Months Ended June 30: 2009 % of Total 2008 % of Total
Change % ---- ---------- ---- ---------- ------ --- ICO Europe
$99,111 45% $158,720 47% $(59,609) (38%) Bayshore Industrial 50,175
23% 71,563 21% (21,388) (30%) ICO Asia Pacific 37,637 17% 58,989
18% (21,352) (36%) ICO Polymers North America 23,759 11% 34,971 10%
(11,212) (32%) ICO Brazil 8,803 4% 14,466 4% (5,663) (39%) -----
--- ------ --- ------ Consolidated $219,485 100% $338,709 100%
$(119,224) (35%) ======== === ======== === ========= Operating
income (loss) Three Months Ended June 30: 2009 2008 Change % ----
---- ------ --- ICO Europe $1,342 $3,901 $(2,559) (66%) Bayshore
Industrial 1,772 2,045 (273) (13%) ICO Asia Pacific 171 (11) 182
N.M.* ICO Polymers North America 210 1,811 (1,601) (88%) ICO Brazil
(10) 224 (234) (105%) --- --- ---- Total Operations 3,485 7,970
(4,485) (56%) Unallocated General Corporate Expense (1,296) (1,503)
207 (14%) ------ ------ --- Consolidated $2,189 $6,467 $(4,278)
(66%) ====== ====== ======= *Not meaningful. Nine Months Ended June
30: 2009 2008 Change % ---- ---- ------ --- ICO Europe $3,108
$10,419 $(7,311) (70%) Bayshore Industrial 5,090 8,755 (3,665)
(42%) ICO Asia Pacific (6,120) 1,612 (7,732) (480%) ICO Polymers
North America 1,453 5,194 (3,741) (72%) ICO Brazil (40) 553 (593)
(107%) --- --- ---- Total Operations 3,491 26,533 (23,042) (87%)
Unallocated General Corporate Expense (4,066) (4,924) 858 (17%)
------ ------ --- Consolidated $(575) $21,609 $(22,184) (103%)
===== ======= ======== Operating income (loss) as a percentage of
revenues Three Months Ended Nine Months Ended June 30, June 30,
-------- -------- 2009 2008 Change 2009 2008 Change ---- ----
------ ---- ---- ------ ICO Europe 4% 7% (3%) 3% 7% (4%) Bayshore
Industrial 11% 11% 0% 10% 12% (2%) ICO Asia Pacific 1% 0% 1% (16%)
3% (19%) ICO Polymers North America 3% 15% (12%) 6% 15% (9%) ICO
Brazil 0% 5% (5%) 0% 4% (4%) Consolidated 3% 6% (3%) 0% 6% (6%)
ICO, Inc. Supplemental Segment Information (cont'd.) (Unaudited and
in thousands, except percentages) Revenues Three Months Ended
----------------------------------------------- June 30, March 31,
--------- --------- % % of of 2009 Total 2009 Total Change % ----
----- ---- ----- ------ --- ICO Europe $31,724 45% $32,624 46%
$(900) (3%) Bayshore Industrial 16,003 23% 15,843 23% 160 1% ICO
Asia Pacific 11,974 17% 11,182 16% 792 7% ICO Polymers North
America 7,113 10% 7,757 11% (644) (8%) ICO Brazil 3,183 5% 2,724 4%
459 17% ----- --- ----- --- --- Consolidated $69,997 100% $70,130
100% $(133) 0% ======= === ======= === ===== Operating income
(loss) Three Months Ended -------------------------------------
June 30, March 31, 2009 2009 Change % ---- ---- ------ --- ICO
Europe $1,342 $1,915 $(573) (30%) Bayshore Industrial 1,772 1,600
172 11% ICO Asia Pacific 171 (5,004) 5,175 (103%) ICO Polymers
North America 210 661 (451) (68%) ICO Brazil (10) 28 (38) (136%)
--- -- --- Total Operations 3,485 (800) 4,285 (536%) Unallocated
General Corporate Expense (1,296) (1,516) 220 (15%) ------ ------
--- Consolidated $2,189 $(2,316) $4,505 (195%) ====== =======
====== Operating income (loss) as a percentage of revenues Three
Months Ended --------------------------- June 30, March 31, 2009
2009 Change ---- ---- ------ ICO Europe 4% 6% (2%) Bayshore
Industrial 11% 10% 1% ICO Asia Pacific 1% (45%) 46% ICO Polymers
North America 3% 9% (6%) ICO Brazil 0% 1% (1%) Consolidated 3% (3%)
6% 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: June 30, March 31, -------- --------- 2009 2008 2009 ----
---- ---- Net income (loss) applicable to common stock $1,259
$4,633 $(3,018) Goodwill impairment - - 3,450 --- --- ----- Net
income (loss), as adjusted $1,259 $4,633 $432 ====== ====== ====
Basic and diluted income (loss) per common share $0.05 $0.17
$(0.11) Goodwill impairment - - 0.13 --- --- ---- Basic and diluted
income per common share, as adjusted $0.05 $0.17 $0.02 ===== =====
===== Nine Months Ended: June 30, -------- 2009 2008 ---- ---- Net
income (loss) applicable to common stock ($2,835) $13,135 Goodwill
impairment 3,450 - ----- --- Net income (loss), as adjusted $615
$13,135 ==== ======= Basic net income (loss) per common share
($0.10) $0.48 Goodwill impairment 0.13 - ---- --- Basic net income
(loss) per common share, as adjusted $0.02(a) $0.48 ===== =====
Diluted income (loss) per common share ($0.10) $0.47 Goodwill
impairment 0.13 - ---- --- Diluted net income (loss) per common
share, as adjusted $0.02(a) $0.47 ===== ===== (a) Does not total
due to rounding. Operating Income (Loss) Reconciliation Three
months ended: June 30, March 31, -------- -------- 2009 2008 2009
---- ---- ---- Operating income (loss) $2,189 $6,467 $(2,316)
Goodwill impairment - - 3,450 --- --- ----- Operating income, as
adjusted $2,189 $6,467 $1,134 ====== ====== ====== Nine Months
Ended: June 30, -------- 2009 2008 ---- ---- Operating income
(loss) ($575) $21,609 Goodwill impairment 3,450 - ----- ---
Operating income, as adjusted $2,875 $21,609 ====== ======= Net
Debt Reconciliation June 30, September 30, 2009 2008 ---- ----
Total debt $33,511 $49,930 Less cash and cash equivalents 23,589
5,589 ------ ----- Net debt $9,922 $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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