A. Schulman Expects Earnings Drop
AKRON, Ohio -- A. Schulman Inc. announced today that net income for the fiscal second quarter ended February 28, 1999, will be less than $.33 per share, the current average of estimates by the financial community. Although final results are not yet available, current business conditions for the quarter indicate that earnings will be somewhat less than last year's second quarter earnings of $.31 per share.
Business in December 1998 encountered the traditional seasonal softening, but the extent of the recovery for subsequent periods was lower than expected, especially in Europe. In Europe, business has been softer than anticipated and profits are down from last year's levels. The decline in profits is due to the extremely low level of pricing in the worldwide plastics market and higher expenses.
Profits in North America are off from anticipated levels, primarily because of higher selling, general and administrative expenses resulting from implementation of new business processes and increased costs in salaries and other expenses.
"We have continued to be aggressive buyers of our stock under our existing repurchase program," said Terry L. Haines, president and chief executive officer. "We repurchased approximately 400,000 shares during the second quarter and 1,459,000 shares in the first half of the fiscal year." Currently, approximately 4.4 million shares can be repurchased under an existing authorization.
"With the weakness in Europe and the extremely low level of pricing in the plastics market, we believe that it will be a difficult environment during the second half of our fiscal year," said Haines. "Over the year, we have expanded into a number of new geographic areas and have provided new capabilities in many of our manufacturing facilities throughout the world. We are well positioned to meet new challenges and remain optimistic on the future of A. Schulman."
Headquartered in Akron, Ohio, A. Schulman is a leading international supplier of high-performance plastic compounds and resins. These materials are used in a variety of consumer, industrial, automotive and packaging applications. The Company employs about 2,300 people and has 13 manufacturing facilities in North America, Europe, Mexico and the Asia-Pacific region. Revenues for the fiscal year ended August 31, 1998 were approximately $1 billion. Additional information about A. Schulman can be found on the World Wide Web at www.aschulman.com.
Statements in this release which are not historical facts are forward looking statements which involve risks and uncertainties and actual events or results could differ materially from those expressed or implied in this release. These "forward-looking statements" are based on currently available information. They are also inherently uncertain, and investors must recognize that events could turn out to be significantly different from what was expected. Examples of such uncertainties include, but are not limited to, the following:
- Worldwide and regional economic, business and political conditions
- Fluctuations in the value of the currencies in major areas where the Company operates, i.e., the U.S. dollar, the Euro, U.K. pound sterling, Canadian dollar, Mexican peso and Indonesian rupiah
- Fluctuations in the prices of plastic resins and other raw materials
- Changes in customer demand and requirements