The biggest surprise I saw in my news searches this morning was a release from Spartech Corp. announcing that George Abd was leaving the company, citing "personal reasons." Abd was president, chief executive officer and a member of the board of directors. The resignation is effective immediately. Randy Martin, the company's chief financial officer, was named interim president and CEO. The company followed that up with an announcement updating its earnings guidance for the current fiscal year:
Spartech Chief Financial Officer and Interim President and Chief Executive Officer, Randy C. Martin, stated, "We indicated in our second quarter earnings release that our outlook for the rest of 2007 included an anticipation for a weaker overall demand environment, substantial weakness in the transportation and residential construction markets, and challenging comparisons to the prior year third quarter. We believe that in light of the other communication occurring today, it is appropriate to update our outlook and related guidance for the year." Mr. Martin added, "Our fiscal 2007 volumes sold through the month of June continued to be negatively impacted by a challenging demand environment particularly from weakness in the transportation and residential construction markets, which combined with strong volumes in the first portion of our prior year third quarter, has resulted in a difficult comparison for sales volume in our third quarter to date of this year. Our sales volume for the first two months of our fiscal third quarter is down 7% from the prior year comparative period. In addition, our third quarter earnings to date have been adversely impacted from foreign currency losses due to the continued weakening of the U.S. dollar against the Canadian dollar. Based upon this start to our third quarter, we are refining our estimated range for fiscal 2007 diluted earnings per share to $1.45 to $1.50, from our previous guidance of $1.55 to $1.62 per share. This revision considers our change in estimate for our third quarter performance. This guidance does not include the impact of entering into a separation agreement with our former Chief Executive Officer announced earlier today. The impact of the terms of the severance agreement on fiscal 2007 diluted earnings per share will be approximately four cents and will be included in special items."Most investors didn't like the news: Spartech's shares dropped nearly $5, or about 18.3 percent, in trading today, to close at $22.33 per share.