A. Schulman Reduces Earnings Estimates for Its First Fiscal Quarter Ending November 30, 2000
21 December 2000
A. Schulman Reduces Earnings Estimates for Its First Fiscal Quarter Ending November 30, 2000
AKRON, Ohio--Dec. 21, 2000--A. Schulman Inc. announced today that net income per share for its first quarter of fiscal 2001 ending November 30, 2000 will be approximately 50 percent below the First Call consensus estimate of $.25 per share. The expected earnings exclude a first quarter charge relating to the previously announced closure of its manufacturing facility in Akron.Net income for last year's first quarter was $11,942,000 or $.38 per share, including $.02 per share of earnings from the settlement of an insurance claim.
In its October 20 release, the Company had indicated that earnings for the 2001 first fiscal quarter would be off at least 25 percent from last year's results. Since that time, volume has weakened, especially in the Company's automotive business. Conditions in Europe are also off, primarily in Germany and the United Kingdom. Profit margins are lower due to higher material costs and competitive price pressures. Although there has been some recent improvement in the value of the Euro, it is approximately 16 percent lower than last year and will have an adverse impact on earnings.
"Business is softer than originally anticipated and customers appear to be reducing inventories," said Terry L. Haines, president and chief executive officer. "Margins are lower than last year and it remains difficult to offset increased material costs with higher sales prices due to competitive conditions in the marketplace."
Haines added, "In light of the difficult economic environment, we have implemented a number of actions to reduce costs. We expect to realize $15 million in annualized cost reductions resulting from the closing of the Akron manufacturing facility, the shutdown of certain other manufacturing lines, and the closing of a number of sales offices. Accordingly, we anticipate some operating improvements in the latter part of our second quarter ending February 28, 2001."
A. Schulman will release its fiscal 2001 first-quarter results on January 11, 2001.
About A. Schulman Inc.
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 2,500 people and has 14 manufacturing facilities in North America, Europe, Mexico and the Asia-Pacific region. Revenues for the fiscal year ended August 31, 2000, 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 |