A. Schulman Reports Increased Product Demand Worldwide
9 December 1999
A. Schulman Reports Increased Product Demand Worldwide
AKRON, Ohio--Dec. 9, 1999--Worldwide demand for plastics compounds and resins of A. Schulman Inc. is increasing, but profit margins have declined, Terry L. Haines, president and chief executive officer, said at today's annual stockholder meeting.Preliminary data for the first quarter ended November 30, 1999 indicate that volume should be up approximately 10 percent, compared with the same period a year ago. However, Haines said, "We are experiencing some erosion of margins because of a significant increase in resin prices during the last six months, mainly due to the higher cost of feedstocks. In addition, the decline in the value of the Euro will have an impact on earnings.
"Although the final results for the just-completed first quarter are not yet available, preliminary data indicate that earnings will be in the area of analysts' estimates of $0.38 to $0.39 per share," Haines said.
Haines said A. Schulman expects margin pressures to continue into its fiscal second quarter ending February 29, 2000. However, he said, there are indications that resin prices have recently started to stabilize.
In reviewing the accomplishments of the fiscal year ended August 31, 1999, Haines pointed out that earnings per share were $1.51, a new record for A. Schulman. During the year, he said, the Company added a major manufacturing line at its plant in Givet, France, and opened two technology centers in the Akron area. In addition, the Company is expanding manufacturing capacity at its plants in Germany, Belgium, Indonesia and Nashville, Tennessee, to keep pace with increased worldwide demand for its products.
"The global demand for specialty plastics continues to increase," Haines said. "These investments enable A. Schulman to keep pace with that demand in an efficient, cost-effective manner, despite the current erosion of margins. We continue to target high-growth and high-profit markets such as automotive, film and packaging, engineered manufacturing products, and merchant and distribution products. Our approach to product innovation and customer intimacy is unparalleled in the industry."
During the annual meeting, A. Schulman shareholders reelected the following members to the Board of Directors for three-year terms:
| -- | Alan L. Ockene, a director since 1992, a member of the Executive Committee of the Akron Regional Development Board, and a former executive with General Tire and Goodyear Tire & Rubber Company. |
| -- | Willard R. Holland, a director since 1995 and chairman of the Board of FirstEnergy Corp. |
| -- | Dr. Peggy Gordon Elliott, a director since 1994 who is president of South Dakota State University and a former president of the University of Akron. |
Stockholders also approved an amendment to the company's 1991 Stock Incentive Plan. The amendment provides an increase of 2 million shares of Common Stock available for grant by the corporation to attract, motivate and retain employees who have made or are expected to make material contributions to A. Schulman's success.
Also during the meeting, Haines said, "At last year's shareholders' meeting, a resolution was passed requesting our Board to consider declassifying itself. Both management and the Board took this recommendation very seriously, and the Board appointed a Special Committee of outside Directors to review the issue and make recommendations. The Committee deliberated at length on the subject and sought the advice of independent outside bankers and attorneys, after which it unanimously recommended that the Board should remain classified and the election of directors should continue to be staggered."
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 2,400 people and has 13 manufacturing facilities in North America, Europe, Mexico and the Asia-Pacific region. Revenues for the fiscal year ended August 31, 1999, were $986 million. 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 |