<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[x] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended May 31, 1999 or
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
------------- --------------
Commission file number: 0-7459
------
A. Schulman, Inc. and its Consolidated Subsidiaries
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware 34-0514850
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
3550 West Market Street, Akron, Ohio 44333
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(330) 666-3751
- --------------------------------------------------------------------------------
(Registrant's Telephone Number, including Area Code)
- --------------------------------------------------------------------------------
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last
Report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
Number of common shares outstanding
as of June 30, 1999 - 31,131,505
<PAGE> 2
A. SCHULMAN, INC.
STATEMENT OF CONSOLIDATED INCOME (Notes 1 and 2)
<TABLE>
<CAPTION>
For the three months ended For the nine months ended
--------------------------------- ---------------------------------
May 31, May 31, May 31, May 31,
1999 1998 1999 1998
------------- ------------- ------------- -------------
Unaudited Unaudited
--------- ---------
<S> <C> <C> <C> <C>
Net Sales (Note 8) $ 250,450,000 $ 256,810,000 $ 744,294,000 $ 760,858,000
Interest and other income 501,000 821,000 2,263,000 2,424,000
------------- ------------- ------------- -------------
250,951,000 257,631,000 746,557,000 763,282,000
------------- ------------- ------------- -------------
Costs and expenses:
Cost of goods sold 205,186,000 212,821,000 610,088,000 632,172,000
Selling, general and
administrative expenses 26,127,000 22,829,000 78,357,000 68,528,000
Interest expense 915,000 624,000 2,538,000 1,307,000
Foreign currency transaction
(gains) losses (109,000) (777,000) 613,000 (1,133,000)
Minority interest 557,000 48,000 1,260,000 599,000
------------- ------------- ------------- -------------
232,676,000 235,545,000 692,856,000 701,473,000
------------- ------------- ------------- -------------
Income before taxes and cumulative
effect of accounting change 18,275,000 22,086,000 53,701,000 61,809,000
Provision for income taxes 6,978,000 8,554,000 20,946,000 24,758,000
------------- ------------- ------------- -------------
Income before cumulative effect
of accounting change 11,297,000 13,532,000 32,755,000 37,051,000
Cumulative effect of accounting
change (Note 6) -- -- -- (2,007,000)
------------- ------------- ------------- -------------
Net income 11,297,000 13,532,000 32,755,000 35,044,000
Less: Preferred stock dividends (13,000) (13,000) (40,000) (40,000)
------------- ------------- ------------- -------------
Net income applicable to
common stock $ 11,284,000 $ 13,519,000 $ 32,715,000 $ 35,004,000
============= ============= ============= =============
Weighted average number of
shares outstanding (Note 7):
Basic 31,285,838 35,267,750 31,852,005 35,687,407
Diluted 31,285,838 35,321,785 31,859,917 35,739,712
Basic and diluted earnings per
common share (Note 7):
Income before cumulative effect
of accounting change $ .36 $ .38 $ 1.03 $ 1.04
Cumulative effect of accounting
change -- -- -- (.06)
------------- ------------- ------------- -------------
Net income $ .36 $ .38 $ 1.03 $ .98
============= ============= ============= =============
</TABLE>
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<PAGE> 3
A. SCHULMAN, INC.
CONSOLIDATED BALANCE SHEET (Notes 1 and 2)
<TABLE>
<CAPTION>
May 31, August 31,
Assets 1999 1998
------------ ------------
Unaudited
---------
<S> <C> <C>
Current Assets:
Cash and cash equivalents (Note 3) $ 54,363,000 $ 60,766,000
Accounts receivable, less allowance
for doubtful accounts of $4,788,000 at
May 31, 1999 and $4,778,000 at
August 31, 1998 169,052,000 148,838,000
Inventories, average cost or market,
whichever is lower 167,803,000 165,661,000
Prepaids, including tax effect of
temporary differences 17,363,000 20,220,000
------------ ------------
Total current assets 408,581,000 395,485,000
------------ ------------
Other assets:
Cash surrender value of life insurance 485,000 500,000
Deferred charges, etc., including tax effect
of temporary differences 21,336,000 17,752,000
------------ ------------
21,821,000 18,252,000
------------ ------------
Property, plant and equipment, at cost:
Land and improvements 8,945,000 9,253,000
Buildings and leasehold improvements 70,633,000 69,178,000
Machinery and equipment 210,739,000 202,199,000
Furniture and fixtures 22,728,000 22,422,000
Construction in progress 27,109,000 18,854,000
------------ ------------
340,154,000 321,906,000
Accumulated depreciation and investment grants
of $244,000 at May 31, 1999 and
$355,000 at August 31, 1998 182,711,000 173,723,000
------------ ------------
157,443,000 148,183,000
------------ ------------
$587,845,000 $561,920,000
============ ============
</TABLE>
-3-
<PAGE> 4
A. SCHULMAN, INC.
CONSOLIDATED BALANCE SHEET (Notes 1 and 2)
<TABLE>
<CAPTION>
May 31, August 31,
Liabilities and Stockholders' Equity 1999 1998
-------------- ------------
Unaudited
---------
<S> <C> <C>
Current liabilities:
Notes payable .............................. $ 14,935,000 $ 4,000,000
Accounts payable ........................... 71,684,000 58,640,000
U.S. and foreign income taxes payable ...... 8,207,000 9,865,000
Accrued payrolls, taxes and related
benefits ................................. 20,507,000 18,073,000
Other accrued liabilities .................. 18,045,000 16,607,000
------------- -------------
Total current liabilities ................ 133,378,000 107,185,000
------------- -------------
Long-term debt ............................... 62,000,000 40,000,000
Other long-term liabilities .................. 36,692,000 35,704,000
Deferred income taxes ........................ 9,285,000 9,852,000
Minority interest ............................ 2,817,000 2,908,000
Stockholders' equity (Note 4):
Preferred stock, 5% cumulative, $100
par value, authorized, issued and
outstanding - 10,689 shares at May 31,
1999 and August 31, 1998 ................. 1,069,000 1,069,000
Special stock, 1,000,000 shares authorized,
none outstanding ......................... -- --
Common stock, $1 par value
Authorized - 75,000,000 shares
Issued - 38,347,367 shares at May 31, 1999
and August 31, 1998 ...................... 38,347,000 38,347,000
Other capital ................................ 45,778,000 45,778,000
Cumulative foreign currency translation
adjustment ................................. (20,182,000) (8,917,000)
Retained earnings ............................ 416,771,000 395,746,000
Treasury stock, at cost, 7,152,862 shares at
May 31, 1999 and 5,068,862 shares at
August 31, 1998 (Note 5) ................... (136,596,000) (103,758,000)
Unearned stock grant compensation ............ (1,514,000) (1,994,000)
Common stockholders' equity .............. 342,604,000 365,202,000
------------- -------------
Total stockholders' equity ............... 343,673,000 366,271,000
------------- -------------
$ 587,845,000 $ 561,920,000
============= =============
</TABLE>
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<PAGE> 5
A. SCHULMAN, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS (Notes 1 and 2)
<TABLE>
<CAPTION>
Nine months ended
-----------------
May 31, May 31,
1999 1998
---- ----
Unaudited
---------
<S> <C> <C>
Provided from (used in) operating activities:
Net income ...................................... $ 32,755,000 $ 35,044,000
Items not requiring the current use of cash:
Cumulative effect of accounting change (Note 6) -- 2,007,000
Depreciation .................................. 15,988,000 14,098,000
Non-current deferred taxes .................... 378,000 (128,000)
Foreign pension and other deferred compensation 2,103,000 1,919,000
Postretirement benefit obligation ............. 890,000 912,000
Changes in working capital:
Accounts receivable ........................... (29,654,000) (15,957,000)
Inventories ................................... (7,018,000) (15,701,000)
Prepaids ...................................... 2,615,000 1,048,000
Accounts payable .............................. 20,012,000 13,231,000
Income taxes .................................. (1,478,000) (2,638,000)
Accrued payrolls and other accrued liabilities 5,353,000 6,942,000
Changes in other assets and other
long-term liabilities ......................... (5,581,000) (971,000)
------------ ------------
Net cash provided from
operating activities ...................... 36,363,000 39,806,000
------------ ------------
Provided from (used in) investing activities:
Expenditures for property, plant and equipment .. (28,554,000) (21,475,000)
Disposals of property, plant and equipment ...... 375,000 470,000
Purchases of short-term investments ............. -- (8,145,000)
Proceeds from sales of short-term investments ... -- 10,937,000
------------ ------------
Net cash used in
investing activities ....................... (28,179,000) (18,213,000)
------------ ------------
Provided from (used in) financing activities:
Cash dividends paid ............................. (11,638,000) (11,985,000)
Increase (decrease) of notes payable ............ 11,176,000 (400,000)
Increase of long-term debt ...................... 22,000,000 15,000,000
Reduction of long-term debt ..................... -- (27,000)
Decrease in minority interest ................... (90,000) (451,000)
Purchase of treasury stock ...................... (32,838,000) (30,066,000)
Exercise of stock options ....................... -- 101,000
------------ ------------
Net cash used in
financing activities ........................ (11,390,000) (27,828,000)
------------ ------------
Effect of exchange rate changes on cash ........... (3,197,000) 823,000
------------ ------------
Net decrease in cash and cash equivalents ......... (6,403,000) (5,412,000)
Cash and cash equivalents at beginning of period .. 60,766,000 69,147,000
------------ ------------
Cash and cash equivalents at end of period ........ $ 54,363,000 $ 63,735,000
============ ============
</TABLE>
-5-
<PAGE> 6
A. SCHULMAN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) The results of operations for the nine months ended May 31, 1999 are not
necessarily indicative of the results expected for the year ended August 31,
1999.
(2) The interim financial statements furnished reflect all adjustments which
are, in the opinion of management, necessary to a fair presentation of the
results of the interim period presented. All such adjustments are of a normal
recurring nature.
(3) All highly liquid investments purchased with a maturity of three months or
less are considered to be cash equivalents. Such investments amounted to
$40,200,000 at May 31, 1999 and $40,036,000 at August 31, 1998. Investments
with maturities between three and twelve months are considered to be short-term
investments.
(4) A summary of the stockholders' equity accounts for the nine months ended
May 31, 1999 is as follows:
<TABLE>
<CAPTION>
Foreign Unearned
Currency Stock
Common Other Retained Translation Grant
Stock Capital Earnings Adjustment Compensation
----- ------- -------- ----------- ------------
<S> <C> <C> <C> <C> <C>
Balance-September 1, 1998 $38,347,000 $45,778,000 $395,746,000 $ (8,917,000) $(1,994,000)
Net income 32,755,000
Dividends paid or accrued:
Preferred (40,000)
Common, $.365 per share (11,690,000)
Foreign currency
translation adjustment (11,265,000)
Amortization of
restricted stock 480,000
----------- ----------- ------------ ------------ -----------
Balance-May 31, 1999 $38,347,000 $45,778,000 $416,771,000 $(20,182,000) $(1,514,000)
=========== =========== ============ ============ ===========
</TABLE>
(5) During the nine months ended May 31, 1999, the Company repurchased
2,084,000 shares of its common stock for $32,838,000. Subject to market
conditions, the Company intends to continue repurchasing its common stock in
1999.
(6) On November 20, 1997, the FASB Emerging Issues Task Force issued a new
ruling which requires the write-off of business process re-engineering costs.
Accordingly, the Company wrote-off, in fiscal 1998, $3,237,000 of such costs
which were capitalized as of August 31, 1997. This write-off, net of income
taxes, amounted to $2,007,000 or $.06 per share and is accounted for as a
cumulative effect of a change in accounting method for fiscal 1998.
(7) Effective February 28, 1998, the Company adopted Statement of Financial
Accounting Standards No. 128, "Earnings Per Share." This statement requires two
presentations of earnings per share - "basic" and "diluted." Basic earnings per
share is computed by dividing income available to common shareholders by the
weighted-average number of common shares outstanding for the period. Diluted
earnings per share reflects the potential dilution that could occur if common
stock equivalents were exercised and then shared in the earnings of the
Company. Any difference between basic and diluted weighted-average common
shares results from the assumed exercise of outstanding stock options and
grants of restricted stock, calculated using the treasury stock method.
(8) Revenues are recognized when product is shipped.
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<PAGE> 7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Material Changes in Results of Operations
- -----------------------------------------
A comparison of net sales by classification for both the three month and
nine month periods ending May 31, 1999 and 1998 is as follows:
<TABLE>
<CAPTION>
(In Thousands)
Three Months Ended May 31, Nine Months Ended May 31,
------------------------- -------------------------
Increase Increase
1999 1998 (Decrease) 1999 1998 (Decrease)
---- ---- -------- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
Manufacturing $173,609 $169,524 $ 4,085 $511,520 $500,883 $ 10,637
Merchant 45,262 48,171 (2,909) 131,728 140,916 (9,188)
Distribution 31,579 39,115 (7,536) 101,046 119,059 (18,013)
-------- -------- ------- -------- -------- -------
$250,450 $256,810 $(6,360) $744,294 $760,858 $(16,564)
======== ======== ======= ======== ======== ========
</TABLE>
A major reason for the decline in sales was the low level of pricing in the
worldwide plastics market.
The translation effect of foreign currencies decreased sales by $3.8
million for the quarter and increased sales by $1.9 million for the nine month
period.
Total tonnage was up 2.3% for the quarter and approximately 1% for the
nine month period. Merchant tonnage increased 19.6% for the quarter and 12.9%
for the nine month period. These increases offset declines in manufacturing and
distribution tonnage.
Gross margins on sales for the quarter were 18.1% compared to 17.1% for
the same quarter last year. Gross margins on sales for the nine months ended
May 31, 1999 were 18% compared with 16.9% for the comparable nine month period
last year. An important factor for the increase in gross margins was lower
resin prices. In addition, Europe operated at near capacity levels throughout
the quarter. However, worldwide capacity utilization for the current quarter
was 90% compared with 97% for last year's third quarter. A comparison of gross
profit by classification for both the three month and nine month periods ending
May 31, 1999 and 1998 is as follows:
<TABLE>
<CAPTION>
(In Thousands)
Three Months Ended May 31, Nine Months Ended May 31,
------------------------- -------------------------
Increase Increase
1999 1998 (Decrease) 1999 1998 (Decrease)
---- ---- -------- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
Manufacturing $35,628 $33,268 $ 2,360 $103,592 $ 96,699 $ 6,893
Merchant 5,882 5,767 115 16,949 17,217 (268)
Distribution 3,754 4,954 (1,200) 13,665 14,770 (1,105)
-------- -------- ------- -------- -------- -------
$45,264 $43,989 $ 1,275 $134,206 $128,686 $ 5,520
======== ======== ======= ======== ======== =======
</TABLE>
Selling, general and administrative expenses increased in 1999. These
increases were the result of including the first quarter expense from a major
plastics trade show held every three years, additional personnel for future
growth and expansion into new areas of the world to better serve our customers
and costs arising from the implementation of new business systems.
Interest expense increased in 1999 due to higher levels of borrowing.
Foreign currency transaction gains and losses were primarily due to
changes in the value of currencies in major areas where the Company operates;
including the U.S. dollar, Euro, U.K. pound sterling, Canadian dollar, Mexican
peso and Indonesian rupiah.
Minority interest represents a 30% equity position of Mitsubishi Chemical
MKV Company in a partnership with the Company and a 35% equity position of P.T.
Prima
-7-
<PAGE> 8
Polycon Indah in an Indonesian joint venture with the Company.
Other income was down because of lower interest income resulting from a
reduction in European temporary investments. This decline more than offset a
settlement arising from the termination of a supplier arrangement in Europe
during the 1999 second quarter.
The effective tax rates for the respective three month periods were 38.2%
in 1999 and 38.7% in 1998. For the nine months ended May 31, the effective tax
rates were 39% in 1999 and 40.1% in 1998. The 1999 tax rates were lower
primarily due to a lower overall effective tax rate in Europe. The lower
European effective tax rate includes a reduction in the French statutory rate
from 41.6% to 40%.
The translation effect of foreign currencies reduced net income by
approximately $180,000 for the quarter and increased net income by
approximately $107,000 for the nine month period.
On November 20, 1997, the FASB Emerging Issues Task Force issued a new
ruling which requires the write-off of business process re-engineering costs.
Accordingly, the Company wrote-off, in fiscal 1998, $3,237,000 of such costs
which were capitalized as of August 31, 1997. This write-off, net of income
taxes, amounted to $2,007,000 or $.06 per share and was accounted for as a
cumulative effect of a change in accounting method for fiscal 1998.
Earnings in Europe for the quarter were off $686,000. Increases in gross
margins were offset by higher expenses including personnel and costs arising
from the implementation of new business processes.
Quarterly profits in North America were down $1,549,000. Gross margin
increases were offset by increased costs of personnel, higher interest and
costs arising from the implementation of new business processes.
The Company has seen some price improvement and a firming of orders,
especially in Europe. It is anticipated that fourth quarter profits will be
sequentially better than the just ended third quarter. The improvement in
overall order levels, along with good margins, should enable the Company to
absorb higher operating costs and the continued weakness of the Euro.
Material Changes in Financial Condition
- ---------------------------------------
As of May 31, 1999, the current ratio was 3.1:1 and working capital was
$275 million. Accounts receivable has increased $20.2 million since August 31,
1998. During the 1999 first quarter, the Company purchased the assets of
Isopolymer, Inc., a distributor of the Company's products in Italy. As a result
of this purchase, the Company now sells directly to customers in Italy which
require longer sales terms than when the Company sold to Isopolymer. An
additional factor contributing to the accounts receivable increase is the
extension of longer payment terms to certain North American automotive-related
customers in response to competitive pressures.
During the nine months ended May 31, 1999, the Company expended $28.6
million for fixed assets. The largest project during this period was a building
addition and a new manufacturing line in Givet, France. This line, with an
annual capacity of 60 million pounds, commenced operation in June 1999 and was
a major addition to an existing facility.
During the nine months ended May 31, 1999, the Company repurchased
2,084,000 shares of its common stock for $32.8 million. Approximately 3.8
million shares remain under a 6 million share authorization approved by the
Board of Directors in August 1998. Subject to market conditions, the Company
intends to continue repurchasing its common stock in 1999.
The ratio of long-term liabilities to capital was 22.3% at May 31, 1999
and 17.1% at August 31, 1998. This ratio is calculated by dividing the sum of
long-term debt and other long-term liabilities by the sum of total
stockholders' equity, long-term debt and other long-term liabilities. A primary
factor contributing to the
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<PAGE> 9
increase of this ratio was an additional $22 million borrowing under the
revolving credit agreement.
The assets and liabilities of the Company's foreign subsidiaries are
translated into U.S. dollars using current exchange rates. Income statement
items are translated at average exchange rates prevailing during the period.
The resulting translation adjustments are recorded in the "cumulative foreign
currency translation adjustment" account in stockholders' equity. The
strengthening of the U.S. dollar during the nine months ended May 31, 1999
decreased this account by $11.3 million.
Year 2000
- ---------
The Year 2000 issue is the result of computer programs being written using
two digits rather than four to define a specific year. Any computer program
that has date sensitive software may recognize a date using "00" as the year
1900 rather than the year 2000. This could result in a temporary inability to
process transactions or engage in other business activities.
The Company has been addressing Year 2000 compliance related to the
following areas: enterprise-wide information systems; manufacturing equipment,
lab equipment and technical infrastructure related information systems;
remaining information systems; business critical suppliers; and other
non-critical suppliers.
The Company has been redesigning its business processes and implementing
enterprise-wide information systems in North America and Europe. Hardware and
software purchased and installed in conjunction with these systems are expected
to provide Year 2000 compliance for business critical commercial applications.
These systems, which are approximately 80% complete, are planned to be
installed, tested and operating by November 1, 1999, at those locations which
are relying on these enterprise-wide system implementations to address the
Year 2000 issue. The Company's Year 2000 compliance is approximately 85%
complete related to manufacturing and lab equipment. The Company expects this
process to be complete by September 30, 1999. The Company is also currently
addressing the remaining technical infrastructure areas which have potential
Year 2000 issues, primarily networks, desktop computers, and miscellaneous
business-critical desktop applications. The Year 2000 compliance related to
these remaining areas is approximately 75% complete, and is expected to be
complete by September 30, 1999.
The Company has been communicating with its business-critical suppliers to
determine the extent to which the Company may be vulnerable due to such
suppliers' failure to correct their own Year 2000 issues. Currently,
approximately 90% of the business critical suppliers relative to manufacturing
facilities and laboratories have confirmed their Year 2000 compliance. The
Company is discussing Year 2000 readiness with the remaining business-critical
suppliers, and expects to receive positive confirmation from them by August 31,
1999. The Company is currently identifying other non-critical suppliers related
to the Company's operations and assessing the status of their Year 2000
compliance and contingency planning requirements, if applicable. Currently, the
Company is approximately 70% complete relative to determining the other
non-critical suppliers' Year 2000 compliance. This process through follow-up
discussions is expected to be complete by September 30, 1999.
The aggregate anticipated cost paid to third parties for implementing the
enterprise-wide information systems, and addressing Year 2000 issues in legacy
information systems is approximately $17 million, with the majority of such
cost relating to new enterprise-wide information technology systems and
software, underlying system platforms, and personal computer workstations. The
portion of such anticipated cost directly attributable to Year 2000 compliance
is approximately $6 million. Currently, approximately $15 million has been
incurred relative to these implementations, and approximately $5 million is
attributable to Year 2000 compliance. All Year 2000 costs paid to date have
been primarily funded through operations.
-9-
<PAGE> 10
Information systems maintenance or modification costs, and costs directly
attributable to Year 2000 remediation are expensed as incurred, while the cost
of new software and equipment is capitalized and amortized over the assets'
useful lives.
Although the Company does not anticipate any material adverse effects
related to the Year 2000, the Company's "most reasonably likely worst case
scenario" would be the disruption to some aspects of its operations as a result
of non-compliant systems utilized by unrelated third party entities such as
governments, utility providers, and other businesses which were included in the
review of suppliers' Year 2000 readiness. This type of failure could result in
the temporary inability of the Company to manufacture and distribute certain of
its products. The Company expects that any such failure would be temporary, due
to the Company's ability to purchase materials from various suppliers and the
Company's ability to shift production among various plants. The impact on the
Company's revenues, gross profit and net income due to the occurrence of the
"most reasonably likely worst case scenario" cannot be estimated.
The Company has commenced contingency planning and expects to formalize a
plan by August 31, 1999 related to business-critical systems. However, in
certain cases, especially global infrastructure failure related to utilities,
core transportation systems, etc., there would be no practical alternative
course of action available to the Company other than shifting production between
plants.
The above disclosures relative to Year 2000 are based upon information
currently available to management. The Company believes it will be Year 2000
compliant on a timely basis. However, business-critical third parties could
experience a Year 2000 related failure, which could result in an adverse effect
on the Company's results of operations and financial condition.
Cautionary Statements
- ---------------------
Statements in this report 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 report.
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 we had 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 currencies in major areas where the Company
operates, i.e. the U.S. dollar, Euro, U.K. pound sterling, Canadian
dollar, Mexican peso and Indonesian rupiah
- Fluctuations in prices of plastic resins and other raw materials
- Changes in customer demand and requirements
- 10 -
<PAGE> 11
Part II - Other Information
- ---------------------------
Items 1 through 5 are not applicable or the answer to such items is
negative; therefore, the items have been omitted and no reference it required in
this report.
Item 6 - Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibit
Number Exhibit
------ -------
27 Financial Data Schedule*
(b) No Reports on Form 8-K have been filed during the quarter for which this
report is filed.
- --------------
* Filed only in electronic format pursuant to Item 601(b)(27) of Regulation
S-K.
-11-
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date July 15, 1999 A. Schulman, Inc.
------------- -----------------------------------------
(Registrant)
/s/ R. A. Stefanko
-----------------------------------------
R. A. Stefanko, Executive Vice President-
Finance & Administration
(Signing on behalf of Registrant as a
duly authorized officer of Registrant
and signing as the Principal Financial
Officer of Registrant)
- 12 -
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AS OF MAY 31, 1999 AND AUGUST 31, 1998 AND THE
STATEMENT OF CONSOLIDATED INCOME FOR THE THREE MONTHS ENDED MAY 31, 1999 AND MAY
31, 1998 AND FOR THE NINE MONTHS ENDED MAY 31, 1999 AND MAY 31, 1998, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000087565
<NAME> A. Schulman, Inc.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> AUG-31-1999
<PERIOD-START> SEP-1-1998
<PERIOD-END> MAY-31-1999
<CASH> 54,363
<SECURITIES> 0
<RECEIVABLES> 169,052
<ALLOWANCES> 4,788
<INVENTORY> 167,803
<CURRENT-ASSETS> 408,581
<PP&E> 340,154
<DEPRECIATION> 182,711
<TOTAL-ASSETS> 587,845
<CURRENT-LIABILITIES> 133,378
<BONDS> 62,000
0
1,069
<COMMON> 38,347
<OTHER-SE> 304,257
<TOTAL-LIABILITY-AND-EQUITY> 587,845
<SALES> 744,294
<TOTAL-REVENUES> 746,557
<CGS> 610,088
<TOTAL-COSTS> 692,856
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,538
<INCOME-PRETAX> 53,701
<INCOME-TAX> 20,946
<INCOME-CONTINUING> 32,755
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 32,755
<EPS-BASIC> 1.03
<EPS-DILUTED> 1.03
</TABLE>
