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A. Schulman sees increase in sales and profit

By: Frank Esposito

April 9, 2013

FAIRLAWN, OHIO – Materials firm A. Schulman Inc. saw its sales and profit both increase in the first half of its 2013 fiscal year.

Schulman's sales for the six months ended Feb. 28 were up almost five percent to just under $1.06 billion, according to an April 8 news release from the Fairlawn, Ohio-based firm. First-half profit also grew almost 4 percent to just under $24.2 million.

But Schulman Chairman, President and CEO Joseph Gingo cautioned that slower growth in Schulman's fiscal second quarter could lead to additional consolidations to better align the firm's capacity with current market demand.

The fiscal second quarter "was the first quarter in quite some time where our Americas and Asia Pacific segments could not offset softness in our Europe, Middle East and Africa segment," Gingo said in the release. As a result of these expectations, Schulman decreased its full year adjusted net income outlook to $2.08-$2.13 per share.

Slowness in the Europe, Middle East and Africa (EMEA) segment particularly affects Schulman, since that region accounted for about 65 percent of the firm's first-half sales. EMEA sales grew about one percent in the first half, even though sales volume to that region in pounds essentially was flat.

Schulman's Americas sales volume in pounds had a much better fiscal first half, increasing almost 12 percent.

In the release, Gingo also addressed Schulman's ongoing negotiations to acquire specialty chemicals and plastcs maker Ferro Corp. Of Mayfield Heights, Ohio. "We believe our offer for Ferro merits serious consideration," he said. "And we continue to engage Ferro shareholders in hopes that we can enter into mutually beneficial conversations with their board."

Ferro officials rejected Schulman's initial bid to acquire the firm for $6.50 per share in a deal with a total value of more than $850 million.

Wall Street didn't respond well to Schulman's quarterly results, driving the firm's per-share stock price down almost 11 percent to $26.60 in early trading April 9.