Material Sciences Corporation (NASDAQ:MASC)

Second Quarter 2012 Results

• Net sales for the latest quarter rose 3.9 percent to $34.4 million versus $33.1 million for the same period last year.
• Net income, at $3.0 million, or 26 cents per common share, was down from last year's second quarter performance of $3.9 million, or 31 cents per common share on a non-adjusted basis. The prior-year quarter included a $1.9 million gain on sale of the Middletown facility and $0.4 million of shutdown costs related to the coil coating asset sale. Adjusting for the impact of these items, earnings per share in the second quarter of last year would have been 19 cents.

"Recent economic news has been less than encouraging, and automotive industry analysts disagree on the level of vehicle builds we can expect to see in the second half of our fiscal year," said Nastas. "However, the strategies we have used to improve Material Sciences' prospects for near-term performance and long-term growth should continue to serve us well in this environment. We intend to continue to improve our operating efficiencies, expand our product portfolio with innovative products, and increase demand for our existing products by reaching more customers around the world.  In addition, with the latest 1 million share repurchase authorization approved by our board of directors in September, we plan to continue to make strategic investments in our stock."

"Our focus over the past few years on right-sizing Material Sciences, operational excellence and introducing new innovative products is continuing to pay dividends as we experienced our sixth consecutive quarter of strong operating performance," said Clifford D. Nastas, chief executive officer. "During this period, Material Sciences enjoyed accelerating revenue from new products, and posted its best second quarter gross margin performance since fiscal 1997 while maintaining our targets for SG&A spending. In addition, the sale of non-strategic assets and strong cash generation from our operations has allowed us to both invest in growth strategies and reward shareholders through an active stock repurchase program."

Focus on Near- and Long-term Growth

"Over the last several years, our work has focused on removing the barriers that limited Material Sciences' opportunities for growth," Nastas said. "We entered fiscal 2012 with more efficient operations, a strong balance sheet, and several new innovative products.

"The cash we generated during that time of transition is now being invested to help us expand in areas that offer the greatest opportunity for profitable growth," Nastas continued. "This ranges from increasing our technical support capabilities in North America and Asia, to upgrading manufacturing facilities to improve our global competitiveness. In addition, during the first quarter we also used some of our funds to reward shareholders through the most aggressive stock repurchase program Material Sciences has seen in years.

"For the remainder of fiscal 2012, our focus will remain on keeping our operations competitive, continuing to introduce innovative products and expanding the market for our existing offerings, while making it easier for customers around the globe to do business with Material Sciences," Nastas concluded.

Second quarter 2010 results

• Net sales for the latest quarter improved 6.4 percent to $33.1 million compared to $31.1 million for the same period last year.
  
• Net income for the second quarter was $3.9 million, or 31 cents per common share, compared with a net loss of $3.6 million, equal to 28 cents per common share, for the year-ago period.

"A 117.9 percent increase in gross profit; a 26.9 percent decrease in selling, general and administrative expenses; and a $7.6 million improvement in net income were all achieved on 6.4 percent higher sales for the second quarter when compared to the prior-year period," said Clifford D. Nastas, chief executive officer. "While we recorded a $1.9 million gain from selling certain coil coating assets, most of the improvements came from following our plan for growth. We sold non-strategic assets, reduced the size of our operations to reflect current market opportunities, increased efficiencies at facilities around the world, introduced new products, and expanded our penetration of markets outside North America. Fortunately, the benefits from these actions were accelerated in the second quarter by a stronger automotive industry."