Segment sales down again but brighter future awaits - Spartech
Net sales were $61.2m for the three months ended 3 November 2012, a 6% decrease from the prior year period.
Operating earnings excluding special items were $5.1m compared to $5.7m for the three months ended 29 October 2011.
The decrease can be attributable to the lower sales volume but Spartech said the segment continued to make progress in commercializing customer programs during the quarter.
Spartech said they were building on multi-layer barrier packaging and launching specialty products, including 1- Seal and Xtendalife to aggressively pursue expansion opportunities.
“While recent customer order patterns have remained stable and resin costs have experienced downward pressure, slow and uncertain demand in the markets we serve and dynamic raw material costs may impact our financial results in future periods,” said the firm.
“We expect low to moderate sales volume growth in 2013 as well as higher selling prices and a continued shift in mix to higher margin business which should result in solid improvement in our results for the full year 2013 compared to 2012.”
Spartech recognised $6.9m of merger and transaction costs in Q4 after the October announcement that PolyOne would acquire all outstanding shares of the company.
Vicki Holt, Spartech's president and chief executive officer, said: “We have received the clearance of our Hart Scott Rodino regulatory filing and are on track to complete the pending merger with PolyOne.
“We believe that our complementary growth strategies, and combined resources will accelerate our shift to specialty applications and create a more competitive cost structure, enhanced customer relationships, improved market access and increasingly innovative technologies.”
Restructuring and exit costs were $1.6m in the fourth quarter compared to $0.6m in the same period of the prior year.
She added: “We are near completion on the consolidation of our Custom Sheet and Rollstock facilities in Canada and are on track to complete the expansion of our Muncie, Indiana packaging facility by calendar year end.
“We have also announced a consolidation of our Stratford, Ontario Color and Specialty Compounds operation that we expect to be completed by April 2013."