A. Schulman Inc. has wrapped up a challenging fiscal year in which sales roughly were flat as the firm returned to a profit.
Fairlawn, Ohio-based Schulman, a major producer of compounds and concentrates, rang up sales of $2.46 billion for the year ended Aug. 31. That's only 1.4 percent less than its total for fiscal 2016.
Profit for fiscal 2017 came in at $34.2 million, following a loss of $356 million in 2016. Most of the 2016 loss came from a goodwill impairment charge for its troubled 2015 acquisition of Citadel Plastics. Schulman has filed a lawsuit against Citadel's former owners for alleged fraudulent activity.
"In fiscal 2017, our goal was to reset the business, setting the stage for the progressive, long-term shareholder value creation our investors expect from A. Schulman," Chairman, President and CEO Joseph Gingo said in an Oct. 25 news release. "I am proud of the progress our team has made this past year."
"We have simplified our product family structure, and tackled several difficult operational and consolidation issues we faced," he added. "Further, we enhanced our sales resources and improved our pricing processes to drive improving operational and financial performance in fiscal 2018 and beyond."
"We have more work and opportunities ahead of us."
Schulman has been the subject of sale rumors since completing a comprehensive review of the business with Citigroup in late 2016. Its market capitalization on Oct. 25 was $1.06 billion. The firm also has almost $1 billion in debt.
Based on product categories, Schulman's fiscal 2017 sales in engineering composites grew almost 9 percent, while custom concentrates and services sales were flat and sales of performance materials fell 4 percent. Custom concentrates and services was Schulman's largest product category in fiscal 2017, generating 46 percent of total sales.
In geographies, Schulman in fiscal 2017 saw sales grow almost 12 percent in Asia Pacific and almost 5 percent in Latin America, but fall 2.5 percent in Europe/Middle East/Africa and more than 7 percent in the U.S. and Canada. EMEA was Schulman's largest sales geography in fiscal 2017, generating 49 percent of total sales.
"I believe fiscal 2018 will be the first year in our recovery as we deliver growth that generates strong cash flows and drives profit," said Gingo, who returned to Schulman in late 2016 after a two-year absence, replacing Bernard Rzepka. Gingo had led the firm from 2008-14.
"If we execute our plan properly and capture the opportunities we've created for ourselves," he added, "we will return A. Schulman to a sustainable growth and profitability trajectory that we experienced prior to fiscal 2015."
On Wall Street, Schulman's per-share stock price was near $34.40 in January and closed at $36.25 on Oct. 25 for a gain of more than 5 percent.