ICO, Inc. Announces Financial Results For Quarter Ended December 31, 2009
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, 2009.
First Quarter Highlights
- Volumes increased 6% sequentially and 11% over prior year
- Revenues increased 6% sequentially and 8% over prior year
- Net income of $1.0 million, or $.04 per share, after merger related expenses of $0.9 million, or $.03 per share
- Net debt (total debt outstanding less cash) at $15.0 million as of December 31, 2009
First Quarter 2010 vs. First Quarter 2009Revenues for the three months ended December 31, 2009 were $85.4 million, an increase of $6.0 million or 8% compared with the same quarter of the previous year. Volumes, which increased 11%, increased revenues by $8.0 million. The volume increase was seen throughout the Company's business units, a good indication of the recovery the Company is experiencing. The translation effect of stronger foreign currencies increased revenues by $8.1 million. Lower average selling prices, as a result of lower resin prices, reduced revenues by $10.1 million. As a result of the volume and revenue improvements, gross profit increased $4.5 million or 44% to $14.6 million. Gross margins improved 440 basis points from 12.7% to 17.1%. This improvement was a result of the increased volumes as well as a more stable resin pricing environment. Selling, general and administrative expenses ("SG&A") increased $1.0 million or 11% primarily as a result of $0.9 million of merger related expenses. Operating income increased $2.7 million to $2.3 million as a result of the gross profit increase partially offset by the higher SG&A. Net income was $1.0 million or $.04 per share in the three months ended December 31, 2009 compared with a net loss of $1.1 million or $.04 per share in the first quarter of fiscal year 2009. The improvement in net income of $2.1 million was primarily caused by the increase in volumes. "Our business has continued to pick up as we recover from the global recession as evidenced by our volumes growing 11% compared to last year. Additionally, the first quarter was the second consecutive quarter to show sequential volume improvement, despite the fact that the first quarter is typically a seasonally slow quarter due to December," stated President and CEO, A. John Knapp, Jr. First Quarter 2010 vs. Fourth Quarter 2009 In the first quarter of fiscal year 2010, revenues increased 6% or $4.9 million over the revenues in the fourth quarter of fiscal year 2009. The revenue improvement was a result of an increase in demand, as volumes sold improved 6%, as well as from the translation effect from stronger foreign currencies. The benefit from the improved revenues was offset by a reduction in gross margin of 130 basis points. SG&A increased $0.3 million or 3% due to an increase in merger related expenses. As a result, operating income declined $0.4 million or 15%. Balance Sheet and Liquidity Liquidity remained strong as of December 31, 2009 with cash on hand of $13.9 million and available global borrowing capacity of $49.4 million. Total outstanding borrowings were $28.9 million, with net debt of $15.0 million. Capital expenditures were $1.0 million in the first quarter of fiscal year 2010. Common Stock Dividend The Company's Board of Directors has declared a cash dividend of $0.037 per common share, payable February 19, 2010, to shareholders of record on February 15, 2010. On December 2, 2009, the Company announced the execution of a merger agreement with A. Schulman, Inc. (Nasdaq: SHLM), which is expected to close in the spring of 2010. The merger is subject to approval from ICO shareholders and customary regulatory approvals. On January 18, 2010, the Company announced that the Federal Trade Commission granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The merger agreement allows for a quarterly dividend to the extent of the Company's earnings per share for the applicable prior fiscal quarter not to exceed $0.05 per common share. The Company also obtained the consent of KeyBank and Wells Fargo to pay the dividend. Conference Call on the Web A live Internet broadcast of ICO, Inc.'s conference call regarding quarter ended December 31, 2009 results can be accessed at 10:00 a.m. Central Standard Time on Friday, February 5, 2010 at http://www.videonewswire.com/event.asp?id=65602 where the webcast replay will be accessible for ninety days. The webcast replay will also be accessible on the Company's website at www.icopolymers.com for a period of twelve months. Investors are invited to participate in the conference by dialing 847-413-3235, passcode 26236658. A replay of the conference call will be available by dialing 630-652-3044, passcode 26236658.
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