Early 2006 has been a busy time for A. Schulman Inc., as the leading compounder and distributor posted its best-ever fiscal first-half sales, while choosing a site for a plant in Ohio and starting a new production line in China.
Schulman also reorganized its business in North America and completed a stock buyback in which it spent more than $46 million to regain almost 2 million shares of common stock - more than 6 percent of total shares.
In a recent telephone interview, Schulman President and Chief Executive Officer Terry Haines said he is excited about the firm's new Invision-brand plastic sheet, to be produced at the new plant, and about prospects for the company in general.
``We're still concerned about the economy, of course, but we've got some real good areas of progress,'' Haines said.
Schulman chose Findlay, Ohio, as the site for its first commercial sheet plant. Invision is a multilayer sheet designed to eliminate the need for painting in various auto components. Schulman also had considered locations in Alabama and Indiana, Haines said.
``The other sites each had their merits, but Findlay is close to our customers in Detroit and our technical support in Akron,'' he said. ``The Findlay community has been very responsive as well.''
Schulman will receive a 60 percent state tax credit at the site for seven years, according to a news release from the Ohio Tax Credit Authority. The tax credit requires the firm to commit to the Findlay site for 14 years and will be worth more than $400,000 in total.
Schulman will spend $40 million on the project, including $30 million on new equipment. The plant is expected to create 50 jobs in its first three years of operation.
Haines said Schulman hopes to break ground in May, with production starting in mid-2007. The plant is expected to cover 100,000 square feet and start with a pair of commercial lines.
The basic Invision sheet product will consist of a clear ionomer layer; a second, colored ionomer layer; and an adhesive tie layer. Invision sheet has been used in bumper fascias on the 2005 DaimlerChrysler Neon. Schulman already can match 80 percent of the color palettes used by major automotive original equipment manufacturers, officials said.
In China, Schulman began production on a second compounding line at its plant in Dongguan. The $3.5 million line will make engineered products for automotive and other markets. Schulman began making color concentrates at the site in 2005 on a single line with 40 million pounds of annual capacity. The second line has capacity of about 30 million pounds, officials said. The 75,000-square-foot plant employs 40.
In other news:
* The company reported sales of $767.7 million, a record, for the first half of the current fiscal year, ended Feb. 28. The figure is almost 8 percent higher than that from the same period last year. Profit, however, fell 11 percent, to $16.2 million. The Fairlawn, Ohio, company blamed the exchange rate of foreign currencies, as well as stock-based compensation expenses, as reasons for the dip.
* Schulman promoted Barry Rhodes to executive vice president and chief operating officer for North America. Rhodes, a 22-year company veteran, previously served as vice president of sales and marketing in North America.
* Gary Elek was named vice president and controller for North America, and Alain Adam was appointed to the new position of vice president of global automotive market development. Elek joined Schulman in 2004, while Adam has been with the firm since 1985.
* Schulman also created a separate North American operating unit with its own financial functions. Those steps are intended to improve the unit's profitability and ability to respond to market changes, Haines said. Schulman's North American unit has posted losses in four of its past five fiscal years, losing more than $40 million in total during that period.
* The stock buyback was completed April 11. The company had planned to buy back as many as 8.75 million shares of stock at per-share prices of between $21 and $24. However, Schulman's stock price closed above $24 on 17 of the 29 trading days of the offer, which began March 1.
The buyback came after Barington Capital Group LP, a New York investment firm, bought up 9 percent of Schulman stock in 2005 and pushed for improved profitability and stock value.