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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
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DATASOURCE: ICO, Inc.
CONTACT: Bradley T. Leuschner, CFO of ICO, Inc., +1-713-351-4100
Web Site: http://www.icopolymers.com/