<PAGE>
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 November 30, 2000 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.
--------------------------------------------------------------------------------
(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 December 31, 2000 - 29,169,922
- 1 -
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
A. SCHULMAN, INC.
STATEMENT OF CONSOLIDATED NET INCOME (LOSS) (Notes 1 and 2)
(In Thousands except per share data)
<TABLE>
<CAPTION>
For the three months ended
November 30,
--------------------------
2000 1999
-------- --------
Unaudited
---------
<S> <C> <C>
Net sales $256,616 $273,685
Interest and other income (Note 7) 415 1,828
-------- --------
257,031 275,513
-------- --------
Cost and expenses:
Cost of goods sold 221,074 226,808
Cost of plant closure
- Akron, Ohio (Note 8) 4,635 -
Selling, general and
administrative expense 26,980 27,650
Interest expense 1,641 1,665
Foreign currency transaction
gain (893) (645)
Minority interest 343 545
-------- --------
253,780 256,023
-------- --------
Income before taxes 3,251 19,490
Provision for income taxes (Note 11) 3,978 7,548
-------- --------
Net income (loss) (727) 11,942
Less: Preferred stock dividends (13) (13)
-------- --------
Net income (loss) applicable to
common stock $ (740) $ 11,929
======== ========
Weighted average number of
shares outstanding (Note 5):
Basic 29,203 30,992
Fully diluted 29,203 30,992
Basic and diluted earnings (loss) per
common share (Note 5): $ (0.03) $ 0.38
======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
- 2 -
<PAGE>
A. SCHULMAN, INC.
CONSOLIDATED BALANCE SHEET (Notes 1 and 2)
(In Thousands except per share data )
<TABLE>
<CAPTION>
November 30, August 31,
2000 2000
------------ ----------
Unaudited
---------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents (Note 3) $ 27,229 $ 26,866
Accounts receivable, less allowance
for doubtful accounts of $4,946 at
November 30, 2000 and $4,535 at
August 31, 2000 175,357 162,074
Inventories, average cost or market,
whichever is lower 190,521 184,768
Prepaids, including tax effect of
temporary differences 18,594 16,122
-------- --------
Total current assets 411,701 389,830
Other assets:
Cash surrender value of life insurance 591 594
Deferred charges, etc., including tax effect
of temporary differences 23,714 22,555
-------- --------
24,305 23,149
Property, plant and equipment, at cost:
Land and improvements 10,736 10,849
Buildings and leasehold improvements 80,135 79,545
Machinery and equipment 205,626 221,664
Furniture and fixtures 23,204 23,296
Construction in progress 13,112 11,631
-------- --------
332,813 346,985
Accumulated depreciation and investment grants
of $890 at November 30, 2000 and
$921 at August 31, 2000 173,911 187,074
-------- --------
158,902 159,911
-------- --------
$594,908 $572,890
======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
- 3 -
<PAGE>
A. SCHULMAN, INC.
CONSOLIDATED BALANCE SHEET (Notes 1 and 2)
(In Thousands except per share data)
<TABLE>
<CAPTION>
November 30, August 31,
2000 2000
------------ ----------
Unaudited
---------
<S> <C> <C>
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable $ 2,960 $ 7,960
Accounts payable 84,591 61,628
U.S. and foreign income taxes payable 11,273 9,456
Accrued payrolls, taxes and related benefits 18,142 17,243
Other accrued liabilities 20,874 16,337
-------- --------
Total current liabilities 137,840 112,624
Long-term debt 91,483 83,638
Other long-term liabilities 39,653 39,448
Deferred income taxes 8,788 8,788
Minority interest 5,274 4,931
Stockholders' equity (Note 4):
Preferred stock, 5% cumulative, $100
par value, authorized, issued and
outstanding - 10,567 shares at November 30,
2000 and August 31, 2000 1,057 1,057
Special stock 1,000,000 shares authorized
none outstanding - -
Common stock, $1 par value
Authorized - 75,000,000 shares
Issued - 38,381,017 shares at November 30,
and August 31, 2000 38,381 38,381
Other capital 47,652 47,652
Accumulated other comprehensive income (53,249) (48,003)
Retained earnings 444,653 449,368
Treasury stock, at cost, 9,211,095 shares at
November 30, 2000 & 9,050,195 shares at
August 31, 2000 (164,231) (162,391)
Unearned stock grant compensation (2,393) (2,603)
-------- --------
Common stockholders' equity 310,813 322,404
-------- --------
Total stockholders' equity 311,870 323,461
-------- --------
$594,908 $572,890
======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
- 4 -
<PAGE>
A. SCHULMAN, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS (Notes 1 and 2)
(In Thousands)
<TABLE>
<CAPTION>
For the three months ended
November 30,
--------------------------
2000 1999
-------- --------
Unaudited
---------
<S> <C> <C>
Provided from (used in) operations:
Net income (loss) $ (727) $ 11,942
Items not requiring the current use of cash:
Depreciation 5,516 6,049
Non-current deferred taxes 93 (855)
Pension and other deferred compensation 2,304 672
Postretirement benefit obligation (1,555) 291
Changes in working capital:
Accounts receivable (17,896) (30,052)
Inventories (8,219) (14,275)
Prepaids (2,670) 1,697
Accounts payable 23,549 15,961
Income taxes 1,913 709
Accrued payrolls and other accrued liabilities 6,532 1,858
Changes in other assets and other
long-term liabilities (3,501) 118
-------- --------
Net cash provided from (used in) operating activites 5,339 (5,885)
-------- --------
Provided from (used in) investing activites:
Expenditures for property, plant and equipment (9,416) (4,974)
Disposals of property, plant and equipment 3,281 507
-------- --------
Net cash used in investing activites (6,135) (4,467)
-------- --------
Provided from (used in) financing activities:
Cash dividends paid (3,988) (3,918)
Increase (decrease) of notes payable (3,347) 3,507
Increase of long-term debt 8,000 10,387
Reduction in long-term debt (125) -
Minority interest 343 (55)
Purchase of preferred stock - (2)
Purchase of treasury stock (1,841) (4,010)
Foreign investments grants - 846
-------- --------
Net cash provided from (used in) financing activities (958) 6,755
-------- --------
Effect of exchange rate changes on cash 2,117 (1,509)
-------- --------
Net increase (decrease) in cash and cash equivalents 363 (5,106)
Cash and cash equivalents at beginning of period 26,866 56,836
-------- --------
Cash and cash equivalents at end of period $ 27,229 $ 51,730
======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
- 5 -
<PAGE>
A. SCHULMAN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) The results of operations for the three months ended November 30, 2000 are
not necessarily indicative of the results expected for the year ended
August 31, 2001.
(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
$10,472,000 at November 30, 2000 and $6,003,000 at August 31, 2000.
- 6 -
<PAGE>
A. SCHULMAN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(4) A summary of the stockholders' equity section for the three months ended
November 30, 2000 and 1999 is as follows:
(In Thousands)
--------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
Accumulated Total
Other Unearned Compre-
Common Other Retained Comprehensive Stock Grant hensive
Stock Capital Earnings Income Compensation Income
----- ------- -------- ------ ------------ ------
<S> <C> <C> <C> <C> <C> <C>
Balance-September 1, 2000 $38,381 $47,652 $449,368 $(48,003) $(2,603)
Comprehensive income
Net loss - - (727) - -
Foreign currency
translation loss - - - (5,246) -
Total Comprehensive
income $(5,973)
=======
Dividends paid or accrued:
Preferred - - (13) - -
Common, $.135 per share - - (3,975) - -
Amortization of
restricted stock - - - - 210
------- ------- -------- -------- -------
Balance-November 30, 2000 $38,381 $47,652 $444,653 $(53,249) $(2,393)
======= ======= ======== ======== =======
Balance-September 1, 1999 $38,381 $46,694 $427,880 $(17,191) $(2,296)
Comprehensive income
Net income - - 11,942 - -
Foreign currency
translation loss - - - (8,107) -
Total Comprehensive
income $ 3,835
=======
Dividends paid or accrued:
Preferred - - (13) - -
Common, $.125 per share - - (3,904) - -
Amortization of
restricted stock - - - - 163
------- ------- -------- -------- -------
Balance-November 30, 1999 $38,381 $46,694 $435,905 $(25,298) $(2,133)
======= ======= ======== ======== =======
</TABLE>
(5) During the three months ended November 30, 2000, the Company repurchased
160,900 shares of its common stock for $1,841,000. The Company may
repurchase additional common stock in fiscal year 2001 subject to market
conditions.
- 7 -
<PAGE>
A. SCHULMAN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(6) The Company is engaged in the sale of plastic resins in various forms,
which are used as raw materials by its customers. The Company operates in
two geographic business segments, North America and Europe. A
reconciliation of segment income to consolidated income before tax is
presented below.
(In Thousands)
--------------
(Unaudited)
-----------
<TABLE>
<CAPTION>
North
America Europe Other Consolidated
------- ------ ----- ------------
<S> <C> <C> <C> <C>
Three months ended November 30, 2000
Sales to unaffiliated customers $107,631 $148,985 - $256,616
-------- -------- ------- --------
Gross Profit $ 10,877 $ 24,665 - $ 35,542
-------- -------- ------- --------
Operating income (loss) $ (1,406) $ 10,591 - $ 9,185
Cost of plant closure - (Note 8) $ - $ - $(4,635) $ (4,635)
Interest expense, net $ - $ - $(1,299) $ (1,299)
-------- -------- ------- --------
Income (loss) before taxes $ (1,406) $ 10,591 $(5,934) $ 3,251
-------- -------- ------- --------
Three months ended November 30, 1999
Sales to unaffiliated customers $116,356 $157,329 - $273,685
-------- -------- ------- --------
Gross Profit $ 16,563 $ 30,314 - $ 46,877
-------- -------- ------- --------
Operating income (Note 7) $ 4,345 $ 16,179 - $ 20,524
Interest expense, net $ - $ - $(1,034) $ (1,034)
-------- -------- ------- --------
Income before taxes $ 4,345 $ 16,179 $(1,034) $ 19,490
-------- -------- ------- --------
</TABLE>
(7) Other income for the three months ended November 30, 1999, includes
$1,211,000 in North America from the settlement of an insurance claim
resulting from equipment problems at a facility in North America. Net
income includes $787,000 or $.02 per share related to this event.
(8) During the first quarter of fiscal 2000, the Company announced its plan to
terminate manufacturing at its plant in Akron, Ohio. Manufacturing was
terminated as of December 31, 2000. As a result, the Company recorded a
one-time, pre-tax charge of $4,635,000 in the quarter ended November 30,
2000, of which $1,035,000 related to employee severance costs and the
balance was other exit costs. The charge was primarily non-cash and
included the write-off of equipment to be scrapped and other assets
related to the manufacturing
- 8 -
<PAGE>
A. SCHULMAN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
operations and employee severance costs for 85 hourly and 33 salaried
employees. The severance costs included mainly pension benefits,
post-retirement adjustments and medical insurance. At November 30, 2000 the
Company has remaining reserves of $1,845,000 related to cash out-flows
primarily for employee severance costs, which are expected to be paid
during the next twelve months.
(9) Effective September 1, 2000 the Company adopted the provisions of Statement
of Financial Accounting Standards (SFAS) No. 133, "Accounting for
Derivative Instruments and Hedging Activities." The standard requires all
derivatives whether designated in hedging relationships or not, to be
recorded on the balance sheet at fair value. Due to the short-term nature
of the Company's forward exchange contracts outstanding at November 30,
2000, the derivatives were adjusted to their fair market value through the
income statement. Due to the immaterial amount of derivative and hedging
activity and the short-term nature of the derivatives outstanding, the
effect of adopting SFAS 133 on the Company's results of operations and
financial position was immaterial.
(10) In December 1999, the Securities and Exchange Commission ("SEC") issued
Staff Accounting Bulletin No. 101 ("SAB 101"), "Revenue Recognition in
Financial Statements." SAB 101 summarizes the SEC's views in applying
generally accepted accounting principles to revenue recognition in
financial statements. The Company is required to adopt SAB 101 in the
fourth quarter of fiscal 2001. Management does not believe the adoption of
SAB 101 will have a material effect on the Company's operations or
financial position.
(11) A comparison of the effective tax rate for 2000 compared with 1999 is as
follows:
<TABLE>
<CAPTION>
For the three months ended
November 30,
--------------------------
(Unaudited) 2000 1999
---- ----
<S> <C> <C>
Effective tax rate 122.4% 38.7%
------ ------
A reconciliation of the tax rate is as follows:
(in $000's)
Pre-tax income $3,251
Cost of plant closure -
(no tax benefit provided) 4,635
------
Pre-tax income as adjusted 7,886
Tax provision $3,978
------
Effective tax rate without
cost of plant closure 50.4% 38.7%
------ ------
</TABLE>
The effective tax rate of 50.4% is greater than the statutory rate of 35%
primarily because no tax benefit is available or has been recognized on
losses in the United States.
- 9 -
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
MATERIAL CHANGES IN RESULTS OF OPERATIONS
Net sales for the three months ended November 30, 2000 were $256.6
million, a decrease of 6.2% over sales of $273.7 million for the comparable
period in 1999. A comparison of net sales by business segment for the three
months ended November 30, 2000 and 1999 is as follows:
<TABLE>
<CAPTION>
(In Thousands)
Three Months Ended November 30
------------------------------
2000 1999 Decrease
-------- -------- --------
<S> <C> <C> <C>
Europe $148,985 $157,329 $ (8,344)
North America 107,631 116,356 (8,725)
-------- -------- --------
$256,616 $273,685 $(17,069)
======== ======== ========
</TABLE>
The translation effect of foreign currencies decreased sales by 14.6% or
$29.6 million in 2000.
Worldwide tonnage was down 1.0% in 2000. Tonnage was up 3.3% in Europe and
down 6.8% in North America.
Price and product mix had the effect of increasing sales by 5.5%.
Gross margins on sales were 13.9% in 2000 compared with 17.1% in 1999. The
decrease in margins is primarily due to competitive price pressures, higher
energy and resin prices and lower volume. A comparison of gross margin by
business segment for the three months ended November 30, 2000 and 1999 is as
follows:
<TABLE>
<CAPTION>
(In Thousands)
Three Months Ended November 30
------------------------------
2000 1999 Decrease
-------- -------- --------
<S> <C> <C> <C>
Europe $ 24,665 $ 30,314 $ (5,649)
North America 10,877 16,563 (5,686)
-------- -------- --------
$ 35,542 $ 46,877 $(11,335)
======== ======== ========
</TABLE>
Selling, general and administrative expenses decreased $0.7 million in 2000
or 2.4%. The expenses were lower due to a $2.8 million reduction resulting from
the translation effect of foreign currencies.
Interest expense was flat in 2000 on higher levels of borrowings with lower
interest rates.
Foreign currency transaction gains were primarily due to changes in the
value of currencies in major areas where the Company operates. The major portion
of the gain in the 2000 quarter relates to the U.S. dollar and the Canadian
dollar.
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 Polycon in an Indonesian joint venture with the Company.
- 10 -
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
A comparison of the effective tax rate for 2000 compared with 1999 is as
follows:
<TABLE>
<CAPTION>
For the three months ended
November 30,
--------------------------
(Unaudited) 2000 1999
---- ----
<S> <C> <C>
Effective tax rate 122.4% 38.7%
------ ------
A reconciliation of the tax rate is as follows:
(in $000's)
Pre-tax income $3,251
Cost of plant closure -
(no tax benefit provided) 4,635
------
Pre-tax income as adjusted 7,886
Tax provision $3,978
------
Effective tax rate without
cost of plant closure 50.4% 38.7%
------ ------
</TABLE>
The effective tax rate of 50.4% is greater than the statutory rate of
35% primarily because no tax benefit is available or has been recognized on
losses in the United States.
A comparison of operating income (loss) by business segment for the three
months ended November 30, 2000 and 1999 is as follows:
(In Thousands)
<TABLE>
<CAPTION>
2000 1999
-------------------------------------------- -------------------------------------------
Operating Pretax
Income Income Operating Pretax
(Loss) Other (Loss) Income Other Income Decrease
------- ------- ------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Europe $10,591 115.3% $ - $10,591 $16,179 78.8% $ - $16,179 $ (5,588)
N. America (1,406) (15.3%) - (1,406) 4,345 21.2% - 4,345 (5,751)
(Note 7)
Cost of
plant closure - - (4,635) (4,635) - - - - (4,635)
(Note 8)
Interest
exp., net - - (1,299) (1,299) - - (1,034) (1,034) (265)
------- ----- ------- ------- ------- ------ ------- ------- --------
$ 9,185 115.3% $(5,934) $ 3,251 $20,524 100.0% $(1,034) $19,490 $(16,239)
======= ===== ======= ======= ======= ===== ======= ======= ========
</TABLE>
Operating results for North America reflected a loss of $1.4 million for
the 2000 quarter compared with income of $4.3 million in the 1999 quarter which
included a one-time gain of $1,211,000 from the settlement of an
- 11 -
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
insurance claim resulting from equipment problems at one of our North American
manufacturing facilities. The 2000 operating loss was impacted by a decline in
sales volume in the automotive markets and apparent reductions in inventories by
customers as well as a gross profit margin decline to 10.1% from 14.2% last year
due to lower volume, higher energy and material costs and continuing competitive
pricing pressures.
During the first quarter of fiscal 2001, the Company announced its plan
to terminate manufacturing at its plant in Akron, Ohio. Manufacturing was
terminated as of December 31, 2000. As a result, the Company recorded a
one-time, pre-tax charge of $4,635,000 in the quarter ended November 30,
2000. The was primarily non-cash and included the write-off of equipment and
other assets related to the manufacturing operations and employee severance
costs for 85 hourly and 33 salaried employees. The severance costs included
mainly pension benefits, post-retirement adjustments and medical insurance.
At November 30, 2000 the Company has remaining reserves of $1,845,000 related
to cash out-flows primarily for employee severance costs, which are expected
to be paid during the next twelve months. No tax benefit has been provided on
this charge.
Operating income in Europe was $10.6 million in 2000 or down $5.6 million
from the same period last year. The reduction in operating income was the result
of the weak Euro and lower gross profit margins, which declined to 16.6% from
19.3% in the same period last year.
The translation effect of foreign currencies decreased net income in 2000
by $1.4 million or $.05 per share.
There was a significant decline in earnings for the quarter. The Euro was
off approximately 16% from last year's levels and business was softer than
anticipated. Gross profit margins were lower than last year and it remains
difficult to offset increased material costs with higher sales prices due to
competitive conditions in the marketplace.
Since the end of the Company's 2001 first quarter, automotive sales have
weakened and the industry is reducing production schedules. Energy prices are
increasing and there could be pressure on our raw material costs, at least for
the next few months. Furthermore, demand by consumers is declining. There are
also indications of further weakening in our European operations.
In addition to closing the Akron manufacturing facility, the Company has
also taken a number of other actions to reduce costs. Certain other
manufacturing lines have been shutdown and a number of sales offices have been
closed. These actions will provide annual cost reductions of approximately $5
million. Worldwide, the Company is also evaluating other aspects of its
operations in order to reduce or contain costs.
The Company hopes to see some margin improvement in the months ahead and
there has been a 10% increase in the value of the Euro over the last few months.
These factors, coupled with cost reductions, should result in some operating
improvements. Nevertheless, with existing economic conditions and forecasts for
further slowing, the Company anticipates that compared with last fiscal year,
earnings will be off significantly in the second quarter and for the balance of
the fiscal year.
MATERIAL CHANGES IN FINANCIAL CONDITION
As of November 30, 2000, the current ratio was 3:1 and working capital was
$273.9 million. Accounts receivable increased $13.3 million at November 30, 2000
from the previous quarter ended August 31, 2000. The accounts receivable was
higher because of an increase in Europe where the number of
- 12 -
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
days sales outstanding in accounts receivable increased to 62 from 59 days
sales outstanding. This increase was due to slower collections in a number of
countries. Accounts payable increased $23.0 million compared with August 31,
2000 due to increases in inventory and the timing of vendor payments.
During the three months ended November 30, 2000, the Company repurchased
160,900 shares of its common stock for $1.8 million. Approximately 1.7 million
shares remain under a 6 million-share authorization approved by the Board of
Directors in August 1998. The Company may repurchase additional common stock in
fiscal year 2001 subject to market conditions.
The ratio of long-term liabilities to capital was 29.6% at November 30,
2000 and 27.6% at August 31, 2000. This ratio is calculated by dividing the
sum of long-term debt and other long-term liabilities by the sum total of
total stockholders' equity, long-term debt and other long-term liabilities.
The primary factors contributing to the increase of this ratio was an
additional $8.0 million borrowing under the revolving credit agreement in the
North American segment. The additional borrowing was used for capital
expenditures and working capital requirements.
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 adjustment are recorded in the "accumulated other
comprehensive income" account in stockholders' equity. The strengthening of the
U.S. dollar during the three months ended November 30, 2000 decreased this
account by $5.2 million.
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
- 13 -
<PAGE>
PART II - OTHER INFORMATION
Items 1 through 3 and 5 are not applicable or the answer to such items is
negative; therefore, the items have been omitted and no reference is required in
this Report.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The Company's annual meeting of stockholders was held on December 7, 2000.
(b) The following Directors were elected at such annual meeting, each for a
three-year term expiring in 2003:
James S. Marlen
Rene C. Rombouts
Robert A. Stefanko
Continuing Class III Directors serving until the 2001 annual meeting of
stockholders:
Terry L. Haines
Dr. Paul Craig Roberts
James A. Karman
Joseph M. Gingo
Continuing Class I Directors serving until the 2002 annual meeting of
stockholders:
Alan L. Ockene
Willard R. Holland
Dr. Peggy Gordon Elliott
John B. Yasinsky
(c) The following matters were voted on at the annual meeting of stockholders:
(1) Election of Class I Directors:
<TABLE>
<CAPTION>
Director Name Votes for Abstentions
------------- --------- -----------
<S> <C> <C>
James S. Marlen 24,457,820 1,322,646
Rene C. Rombouts 24,603,917 1,176,549
Robert A. Stefanko 24,597,807 1,182,659
</TABLE>
- 14 -
<PAGE>
(2) Proposal to approve the amendment of the A. Schulman, Inc. 1992
Non-Employee Director Stock Option Plan:
<TABLE>
<CAPTION>
Broker
Votes for Votes Against Abstentions Non-votes
--------- ------------- ----------- ---------
<S> <C> <C> <C>
21,697,180 3,986,822 96,464 0
</TABLE>
(3) Ratification of the selection of independent accountants for the
fiscal year ending August 31, 2001:
<TABLE>
<CAPTION>
Broker
Votes for Votes Against Abstentions Non-votes
--------- ------------- ----------- ---------
<S> <C> <C> <C>
25,699,170 57,308 23,988 0
</TABLE>
(4) Stockholder Proposal for the prompt sale of the Company:
<TABLE>
<CAPTION>
Broker
Votes for Votes Against Abstentions Non-votes
--------- ------------- ----------- ---------
<S> <C> <C> <C>
6,124,639 15,898,401 269,559 3,487,867
</TABLE>
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Exhibit
------ -------
<S> <C>
4.1 Fourth Amendment to A. Schulman, Inc. 1992 Non-Employee
Directors' Stock Option Plan.
</TABLE>
(b) REPORTS ON FORM 8-K
No Reports on Form 8-K have been filed during the quarter for which this
Report is filed.
- 15 -
<PAGE>
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 January 15, 2001 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)
- 16 -
