##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended July 31, 2010
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 1-5911
 (Commission File Number)
 SPARTECH CORPORATION
 (Exact name of Registrant as specified in its charter)
  Delaware(State or other jurisdictionof incorporation or organization)
    (SPARTECH LOGO)
    43-0761773(I.R.S. EmployerIdentification No.)
 120 S. Central Avenue, Suite 1700
Clayton, Missouri 63105  (Address of principal executive offices) (Zip Code)
 (314) 721-4242  (Registrants telephone number, including area code)
 þ o
 o o
  Large accelerated filer o
Accelerated filer þ
Non-accelerated filer o(Do not check if a smaller reporting company)
Smaller reporting company o o þ




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##### Table of Contents



Cautionary Statements Concerning Forward-Looking Statements
  (a)
    
    adverse changes in economic or industry conditions, including global supply and demand
conditions and prices for products of the types we produce;(b)
    
    our ability to compete effectively on product performance, quality, price,
availability, product development, and customer service;(c)
    
    adverse changes in the markets we serve, including the packaging, transportation,
building and construction, recreation and leisure, and other markets, some of which tend to
be cyclical;(d)
    
    volatility of prices and availability of supply of energy and of the raw materials that
are critical to the manufacture of our products, particularly plastic resins derived from
oil and natural gas, including future effects of natural disasters;(e)
    
    our inability to manage or pass through to customers an adequate level of increases in
the costs of materials, freight, utilities, or other conversion costs;(f)
    
    our inability to achieve and sustain the level of cost savings, productivity
improvements, gross margin enhancements, growth or other benefits anticipated from our
improvement initiatives;(g)
    
    our inability to collect all or a portion of our receivables with large customers or a
number of customers;(h)
    
    loss of business with a limited number of customers that represent a significant
percentage of the Companys revenues;(i)
    
    restrictions imposed on us by instruments governing our indebtedness, the possible
inability to comply with requirements of those instruments, and inability to access capital
markets;(j)
    
    possible asset impairment charges;(k)
    
    our inability to predict accurately the costs to be incurred, time taken to complete,
operating disruptions therefrom, potential loss of business or savings to be achieved in
connection with announced production plant restructurings;(l)
    
    adverse findings in significant legal or environmental proceedings or our inability to
comply with applicable environmental laws and regulations;(m)
    
    our inability to develop and launch new products successfully; and(n)
    
    possible weaknesses in internal controls.




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##### 



SPARTECH CORPORATION
FORM 10-Q FOR THE QUARTER AND NINE MONTHS ENDED JULY 31, 2010
TABLE OF CONTENTS
 PART I
    
    FINANCIAL INFORMATIONItem 1.
    
    Financial Statements:Consolidated Condensed Balance Sheets 
As of July 31, 2010 (Unaudited) and October 31, 2009
    
    
    1Unaudited Consolidated Condensed Statements of Operations 
For the three and nine months ended July 31, 2010 and August 1, 2009
    
    
    2Unaudited Consolidated Condensed Statements of Cash Flows 
For the nine months ended July 31, 2010 and August 1, 2009
    
    
    3Unaudited Notes to the Financial Statements
    
    
    4Item 2.
    
    Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    13Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    18Item 4.
    
    Controls and Procedures
    
    
    19PART II
    
    OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    20Item 1A.
    
    Risk Factors
    
    
    20Item 6.
    
    Exhibits
    
    
    20Signatures
    
    
    21Certifications
    
    
    22EX-31.1EX-31.2EX-32.1EX-32.2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. FINANCIAL STATEMENTS
 
 SPARTECH CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
 (Unaudited)July 31,
    
    
    October 31,2010
    
    
    2009AssetsCurrent assets:Cash and cash equivalents
    
    $
    1,766
    
    
    $
    26,925Trade receivables, net of allowances of $9,961 and $2,470, respectively
    
    
    143,712
    
    
    
    130,355Inventories, net of inventory reserves of $5,728 and $5,430, respectively
    
    
    83,927
    
    
    
    62,941Prepaid expenses and other current assets
    
    
    18,381
    
    
    
    24,916Assets held for sale
    
    
    3,951
    
    
    
    2,907Total current assets
    
    
    251,737
    
    
    
    248,044Property, plant, and equipment, net of accumulated depreciation of
$322,287 and $304,424, respectively
    
    
    211,825
    
    
    
    229,003Goodwill
    
    
    144,070
    
    
    
    144,345Other intangible assets, net of accumulated amortization of
$20,524 and $17,720, respectively
    
    
    25,402
    
    
    
    28,404Other long-term assets
    
    
    4,100
    
    
    
    3,892Total assets
    
    $
    637,134
    
    
    $
    653,688Liabilities and shareholders equityCurrent liabilities:Current maturities of long-term debt
    
    $
    477
    
    
    $
    36,079Accounts payable
    
    
    137,434
    
    
    
    103,484Accrued liabilities
    
    
    23,364
    
    
    
    31,122Total current liabilities
    
    
    161,275
    
    
    
    170,685Long-term debt, less current maturities
    
    
    165,054
    
    
    
    180,355Other long-term liabilities:Deferred taxes
    
    
    57,125
    
    
    
    58,736Other long-term liabilities
    
    
    5,626
    
    
    
    7,033Total liabilities
    
    
    389,080
    
    
    
    416,809Shareholders equityPreferred stock (authorized: 4,000,000 shares, par value $1.00)

Issued: None
    
    
    
    
    
    
    Common stock (authorized: 55,000,000 shares, par value $0.75) 

Issued: 33,131,846 shares; Outstanding: 30,855,240

and 30,719,277 shares, respectively
    
    
    24,849
    
    
    
    24,849Contributed capital
    
    
    204,778
    
    
    
    204,183Retained earnings
    
    
    65,738
    
    
    
    60,411Treasury stock, at cost, 2,276,606 and 2,412,569 shares, respectively
    
    
    (52,730
    )
    
    
    (54,860
    )Accumulated other comprehensive income
    
    
    5,419
    
    
    
    2,296Total shareholders equity
    
    
    248,054
    
    
    
    236,879Total liabilities and shareholders equity
    
    $
    637,134
    
    
    $
    653,688
 See accompanying notes to consolidated condensed financial statements.
 1




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SPARTECH CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
 Three Months Ended
    
    
    Nine Months EndedJuly 31,
    
    
    August 1,
    
    
    July 31,
    
    
    August 1,2010
    
    
    2009
    
    
    2010
    
    
    2009Net sales
    
    $
    269,635
    
    
    $
    230,506
    
    
    $
    763,322
    
    
    $
    684,219Costs and expensesCost of sales
    
    
    241,706
    
    
    
    198,313
    
    
    
    677,680
    
    
    
    599,847Selling, general and administrative expenses
    
    
    26,725
    
    
    
    18,923
    
    
    
    65,593
    
    
    
    58,781Amortization of intangibles
    
    
    961
    
    
    
    1,097
    
    
    
    2,889
    
    
    
    3,427Restructuring and exit costs
    
    
    2,902
    
    
    
    872
    
    
    
    5,168
    
    
    
    5,297Total costs and expenses
    
    
    272,294
    
    
    
    219,205
    
    
    
    751,330
    
    
    
    667,352Operating (loss) earnings
    
    
    (2,659
    )
    
    
    11,301
    
    
    
    11,992
    
    
    
    16,867Interest, net of interest income
    
    
    2,799
    
    
    
    3,597
    
    
    
    9,566
    
    
    
    11,728Debt extinguishment costs
    
    
    729
    
    
    
    
    
    
    
    729
    
    
    
    (Loss) earnings from continuing operations before income taxes
    
    
    (6,187
    )
    
    
    7,704
    
    
    
    1,697
    
    
    
    5,139Income tax (benefit) expense
    
    
    (2,361
    )
    
    
    3,794
    
    
    
    (3,754
    )
    
    
    4,023Net (loss) earnings from continuing operations
    
    
    (3,826
    )
    
    
    3,910
    
    
    
    5,451
    
    
    
    1,116Loss from discontinued operations, net of tax
    
    
    (43
    )
    
    
    (2,418
    )
    
    
    (123
    )
    
    
    (951
    )Net (loss) earnings
    
    $
    (3,869
    )
    
    $
    1,492
    
    
    $
    5,328
    
    
    $
    165Basic earnings (loss) per share:(Loss) earnings from continuing operations
    
    $
    (0.12
    )
    
    $
    0.13
    
    
    $
    0.18
    
    
    $
    0.04Loss from discontinued operations, net of tax
    
    
    
    
    
    
    (0.08
    )
    
    
    (0.01
    )
    
    
    (0.03
    )Net (loss) earnings per share
    
    $
    (0.12
    )
    
    $
    0.05
    
    
    $
    0.17
    
    
    $
    0.01Diluted earnings (loss) per share:(Loss) earnings from continuing operations
    
    $
    (0.12
    )
    
    $
    0.13
    
    
    $
    0.18
    
    
    $
    0.04Loss from discontinued operations, net of tax
    
    
    
    
    
    
    (0.08
    )
    
    
    (0.01
    )
    
    
    (0.03
    )Net (loss) earnings per share
    
    $
    (0.12
    )
    
    $
    0.05
    
    
    $
    0.17
    
    
    $
    0.01Dividends declared per share
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    0.05
 See accompanying notes to consolidated condensed financial statements.
 2




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SPARTECH CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
 Nine Months EndedJuly 31,
    
    
    August 1,2010
    
    
    2009Cash flows from operating activitiesNet earnings
    
    $
    5,328
    
    
    $
    165Adjustments to reconcile net earnings to net cash
provided by operating activities:Restructuring and exit costs
    
    
    1,979
    
    
    
    2,677Depreciation and amortization
    
    
    27,934
    
    
    
    33,025Provision for bad debt expense
    
    
    7,893
    
    
    
    4,064Deferred taxes
    
    
    (1,594
    )
    
    
    962Stock-based compensation expense
    
    
    2,905
    
    
    
    2,350Gain on disposition of assets
    
    
    (905
    )
    
    
    (102
    )Other, net
    
    
    (270
    )
    
    
    605Change in current assets and liabilities
    
    
    (8,131
    )
    
    
    2,387Net cash provided by operating activities
    
    
    35,139
    
    
    
    46,133Cash flows from investing activitiesCapital expenditures
    
    
    (13,013
    )
    
    
    (6,722
    )Proceeds from the disposition of assets
    
    
    2,884
    
    
    
    102Net cash used by investing activities
    
    
    (10,129
    )
    
    
    (6,620
    )Cash flows from financing activitiesBorrowing/(payments) on bank credit facility, net
    
    
    39,100
    
    
    
    (18,000
    )Payments on notes and bank term loan
    
    
    (87,582
    )
    
    
    (18,936
    )Payments on bonds and leases, net
    
    
    (393
    )
    
    
    (887
    )Employee stock option exercises
    
    
    (180
    )
    
    
    Debt issuance costs
    
    
    (1,174
    )
    
    
    (191
    )Cash dividends on common stock
    
    
    
    
    
    
    (3,057
    )Net cash used by financing activities
    
    
    (50,229
    )
    
    
    (41,071
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    60
    
    
    
    (123
    )Decrease in cash and cash equivalents
    
    
    (25,159
    )
    
    
    (1,681
    )Cash and cash equivalents at beginning of year
    
    
    26,925
    
    
    
    2,118Cash and cash equivalents at end of period
    
    $
    1,766
    
    
    $
    437
 See accompanying notes to consolidated condensed financial statements.
 3




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NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited and Dollars in thousands, except per share amounts)
 1) Basis of Presentation
  Discontinued Operations
 Segment Information
  2) Newly Adopted Accounting Standards
 Net Earnings Per Share,
 3) Discontinued Operations
 4




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Three Months Ended
    
    
    Nine Months EndedJuly 31,
    
    
    August 1,
    
    
    July 31,
    
    
    August 1,2010
    
    
    2009
    
    
    2010
    
    
    2009Net Sales
    
    $
    2
    
    
    $
    11,580
    
    
    $
    8
    
    
    $
    41,350Loss from discontinued operations
before income taxes
    
    
    (117
    )
    
    
    (3,575
    )
    
    
    (195
    )
    
    
    (909
    )Income tax (benefit) expense
    
    
    (74
    )
    
    
    (1,157
    )
    
    
    (72
    )
    
    
    42Loss from discontinued operations, net of tax
    
    $
    (43
    )
    
    $
    (2,418
    )
    
    $
    (123
    )
    
    $
    (951
    )
 4) Inventories, net
  July 31,
    
    
    October 31,2010
    
    
    2009Raw materials
    
    $
    47,110
    
    
    $
    34,288Production supplies
    
    
    6,945
    
    
    
    7,055Finished goods
    
    
    29,872
    
    
    
    21,598Total inventories, net
    
    $
    83,927
    
    
    $
    62,941
 5) Goodwill
 Basis of Presentation,
  Custom Sheet and
    
    
    Packaging
    
    
    Color and SpecialtyRollstock
    
    
    Technologies
    
    
    Compounds
    
    
    TotalGoodwill balance as of October 31, 2009
    
    $
    31,307
    
    
    $
    94,636
    
    
    $
    18,402
    
    
    $
    144,345Discontinuance of business
    
    
    (275
    )
    
    
    
    
    
    
    
    
    
    
    (275
    )Segment reorganization
    
    
    9,423
    
    
    
    (2,370
    )
    
    
    (7,053
    )
    
    
    Goodwill balance as of July 31, 2010
    
    $
    40,455
    
    
    $
    92,266
    
    
    $
    11,349
    
    
    $
    144,070
 6) Restructuring and Exit Costs
  5




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Three Months Ended
    
    
    Nine Months EndedJuly 31,
    
    
    August 1,
    
    
    July 31,
    
    
    August 1,2010
    
    
    2009
    
    
    2010
    
    
    2009Restructuring and exit costs:Custom Sheet and Rollstock
    
    $
    537
    
    
    $
    692
    
    
    $
    1,390
    
    
    $
    2,873Packaging Technologies
    
    
    
    
    
    
    56
    
    
    
    (719
    )
    
    
    1,172Color and Specialty Compounds
    
    
    2,309
    
    
    
    124
    
    
    
    4,412
    
    
    
    946Corporate
    
    
    56
    
    
    
    
    
    
    
    85
    
    
    
    306Total restructuring and exit costs
    
    
    2,902
    
    
    
    872
    
    
    
    5,168
    
    
    
    5,297Income tax benefit
    
    
    (1,088
    )
    
    
    (287
    )
    
    
    (1,936
    )
    
    
    (1,945
    )Impact on net earnings from continuing operations
    
    $
    1,814
    
    
    $
    585
    
    
    $
    3,232
    
    
    $
    3,352
  Cumulative
    
    
    Nine Monthsthrough
    
    
    Ended
    
    
    Cumulative2009
    
    
    July 31, 2010
    
    
    To-DateEmployee severance
    
    $
    3,977
    
    
    $
    1,583
    
    
    $
    5,560Facility consolidation and shut-down costs
    
    
    1,925
    
    
    
    2,373
    
    
    
    4,298Fixed asset valuation adjustments, net
    
    
    1,084
    
    
    
    1,212
    
    
    
    2,296Total
    
    $
    6,986
    
    
    $
    5,168
    
    
    $
    12,154
     6




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7) Long-Term Debt
  July 31,
    
    
    October 31,2010
    
    
    20092006 Senior Notes
    
    $
    
    
    
    $
    45,6842004 Senior Notes
    
    
    113,971
    
    
    
    137,054Credit facility
    
    
    39,100
    
    
    
    Euro Bank term loan
    
    
    
    
    
    
    20,292Other
    
    
    12,460
    
    
    
    13,404Total debt
    
    
    165,531
    
    
    
    216,434Less current maturities
    
    
    477
    
    
    
    36,079Total long-term debt
    
    $
    165,054
    
    
    $
    180,355
       8) Income Taxes
  7




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9) Fair Value of Financial Instruments
  July 31, 2010
    
    October 31, 2009Carrying
    
    Estimated
    
    Carrying
    
    EstimatedAmount
    
    Fair Value
    
    Amount
    
    Fair ValueTotal debt (including credit facilities)
    
    $
    165,531
    
    
    $
    170,462
    
    
    $
    216,434
    
    
    $
    205,776
  Restructuring
and Exit Costs
 10) Commitments and Contingencies
  .
 8




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9




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Net Earnings Per Share
   Three Months Ended
    
    Nine Months EndedJuly 31,
    
    August 1,
    
    July 31,
    
    August 1,2010
    
    2009
    
    2010
    
    2009Antidilutive SharesSSARs
    
    
    349
    
    
    
    551
    
    
    
    349
    
    
    
    958Stock options
    
    
    705
    
    
    
    1,165
    
    
    
    705
    
    
    
    1,165Unvested restricted stock
    
    
    104
    
    
    
    192
    
    
    
    104
    
    
    
    359Total antidilutive shares excluded from
diluted earnings per share
    
    
    1,158
    
    
    
    1,908
    
    
    
    1,158
    
    
    
    2,482
 Newly Adopted Accounting Standards
  Three Months Ended
    
    
    Nine Months EndedJuly 31,
    
    
    August 1,
    
    
    July 31,
    
    
    August 1,2010
    
    
    2009
    
    
    2010
    
    
    2009Basic and diluted net earnings:Net (loss) earnings from continuing operations
    
    $
    (3,826
    )
    
    $
    3,910
    
    
    $
    5,451
    
    
    $
    1,116Less: net (loss) earnings allocated to participating securities
    
    
    (50
    )
    
    
    17
    
    
    
    69
    
    
    
    2Net (loss) earnings from continuing operations attributable
to common shareholders
    
    
    (3,776
    )
    
    
    3,893
    
    
    
    5,382
    
    
    
    1,114Loss from discontinued operations, net of tax
    
    
    (43
    )
    
    
    (2,418
    )
    
    
    (123
    )
    
    
    (951
    )Net (loss) earnings attributable to common shareholders
    
    $
    (3,819
    )
    
    $
    1,475
    
    
    $
    5,259
    
    
    $
    163Weighted average shares outstanding:Basic weighted average common and participating
shares outstanding
    
    
    30,555
    
    
    
    30,398
    
    
    
    30,528
    
    
    
    30,369Add: Dilutive shares from equity instruments (a)
    
    
    154
    
    
    
    127
    
    
    
    149
    
    
    
    Diluted weighted average shares outstanding
    
    
    30,709
    
    
    
    30,525
    
    
    
    30,677
    
    
    
    30,369Basic earnings (loss) per share attributable
to common stockholders:(Loss) earnings from continuing operations
    
    $
    (0.12
    )
    
    $
    0.13
    
    
    $
    0.18
    
    
    $
    0.04Loss from discontinued operations, net of tax
    
    
    
    
    
    
    (0.08
    )
    
    
    (0.01
    )
    
    
    (0.03
    )Net (loss) earnings per share
    
    $
    (0.12
    )
    
    $
    0.05
    
    
    $
    0.17
    
    
    $
    0.01Diluted earnings (loss) per share attributable
to common shareholders:(Loss) earnings from continuing operations
    
    $
    (0.12
    )
    
    $
    0.13
    
    
    $
    0.18
    
    
    $
    0.04Loss from discontinued operations, net of tax
    
    
    
    
    
    
    (0.08
    )
    
    
    (0.01
    )
    
    
    (0.03
    )Net (loss) earnings per share
    
    $
    (0.12
    )
    
    $
    0.05
    
    
    $
    0.17
    
    
    $
    0.01
 
 (a)
    
    For the nine months ended August 1, 2009, all outstanding equity compensation
instruments were excluded from the calculation of diluted earnings per share because
they were antidilutive. 10




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12) Segment Information
    Three Months Ended
    
    
    Nine Months EndedJuly 31,
    
    
    August 1,
    
    
    July 31,
    
    
    August 1,2010
    
    
    2009
    
    
    2010
    
    
    2009Net sales (a)(b):Custom Sheet and Rollstock
    
    $
    143,480
    
    
    $
    133,225
    
    
    $
    419,225
    
    
    $
    372,407Packaging Technologies
    
    
    60,892
    
    
    
    51,294
    
    
    
    163,864
    
    
    
    157,291Color and Specialty Compounds
    
    
    65,263
    
    
    
    45,987
    
    
    
    180,233
    
    
    
    154,521Net sales
    
    $
    269,635
    
    
    $
    230,506
    
    
    $
    763,322
    
    
    $
    684,219Operating earnings (loss) from continuing operations:Custom Sheet and Rollstock
    
    $
    344
    
    
    $
    11,657
    
    
    $
    18,451
    
    
    $
    16,486Packaging Technologies
    
    
    6,701
    
    
    
    7,878
    
    
    
    18,172
    
    
    
    23,866Color and Specialty Compounds
    
    
    (1,459
    )
    
    
    1,500
    
    
    
    1,630
    
    
    
    4,102Corporate expenses
    
    
    (8,245
    )
    
    
    (9,734
    )
    
    
    (26,261
    )
    
    
    (27,587
    )Operating earnings
(loss) from
continuing
operations
    
    $
    (2,659
    )
    
    $
    11,301
    
    
    $
    11,992
    
    
    $
    16,867
 
 (a)
    
    Excludes intersegment sales of $14,209, $11,723, $37,742 and $33,107,
respectively.(b)
    
    Excludes discontinued operations. 13) Comprehensive Income (Loss)
  11




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Three Months Ended
    
    
    Nine Months EndedJuly 31,
    
    
    August 1,
    
    
    July 31,
    
    
    August 1,2010
    
    
    2009
    
    
    2010
    
    
    2009Net earnings
    
    $
    (3,869
    )
    
    $
    1,492
    
    
    $
    5,328
    
    
    $
    165Foreign currency translation adjustments
    
    
    (549
    )
    
    
    2,834
    
    
    
    3,123
    
    
    
    3,091Total comprehensive (loss) income
    
    $
    (4,418
    )
    
    $
    4,326
    
    
    $
    8,451
    
    
    $
    3,256
   12




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MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
    Results
   Outlook
  Consolidated Results
  13




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##### Table of Contents



Three Months
    
    Nine MonthsEnded
    
    EndedUnderlying volume
    
    
    7
    %
    
    
    8
    %Sales volume to a divested business
    
    
    1
    %
    
    
    1
    %Price/Mix
    
    
    9
    %
    
    
    3
    %Total
    
    
    17
    %
    
    
    12
    %
    Three Months Ended
    
    
    Nine Months EndedJuly 31,
    
    
    August 1,
    
    
    July 31,
    
    
    August 1,2010
    
    
    2009
    
    
    2010
    
    
    2009Dollars and Pounds (in millions)Net sales
    
    $
    269.6
    
    
    $
    230.5
    
    
    $
    763.3
    
    
    $
    684.2Cost of sales
    
    
    241.7
    
    
    
    198.3
    
    
    
    677.7
    
    
    
    599.8Gross margin
    
    $
    27.9
    
    
    $
    32.2
    
    
    $
    85.6
    
    
    $
    84.4Pounds sold
    
    
    233.8
    
    
    
    216.4
    
    
    
    686.5
    
    
    
    632.3Dollars per Pound SoldNet sales
    
    $
    1.153
    
    
    $
    1.065
    
    
    $
    1.112
    
    
    $
    1.082Cost of sales
    
    
    1.034
    
    
    
    0.917
    
    
    
    0.987
    
    
    
    0.949Gross margin
    
    $
    0.119
    
    
    $
    0.148
    
    
    $
    0.125
    
    
    $
    0.133
   14




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##### Table of Contents



Comprehensive Income (Loss),
      Segment Results
  Custom Sheet and Rollstock Segment
  Three Months
    
    Nine MonthsEnded
    
    EndedUnderlying volume
    
    
    -3
    %
    
    
    11
    %Price/Mix
    
    
    11
    %
    
    
    2
    %Total
    
    
    8
    %
    
    
    13
    %
  15




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##### Table of Contents



Packaging Technologies
  Three Months
    
    Nine MonthsEnded
    
    EndedUnderlying volume
    
    
    3
    %
    
    
    -1
    %Price/Mix
    
    
    16
    %
    
    
    5
    %Total
    
    
    19
    %
    
    
    4
    %
   Color and Specialty Compounds Segment
  Three Months
    
    Nine MonthsEnded
    
    EndedUnderlying volume
    
    
    27
    %
    
    
    8
    %Sales volume to a divested business
    
    
    3
    %
    
    
    3
    %Price/Mix
    
    
    12
    %
    
    
    6
    %Total
    
    
    42
    %
    
    
    17
    %
  16




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##### Table of Contents



Corporate
  Liquidity and Capital Resources
 Cash Flow
  Nine Months EndedJuly 31,
    
    
    August 1,2010
    
    
    2009Cash Flows (in millions)Net cash provided by operating activities
    
    $
    35,139
    
    
    $
    46,133Net cash used by investing activities
    
    
    (10,129
    )
    
    
    (6,620
    )Net cash used by financing activities
    
    
    (50,229
    )
    
    
    (41,071
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    60
    
    
    
    (123
    )Decrease in cash and cash equivalents
    
    $
    (25,159
    )
    
    $
    (1,681
    )
    17




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##### Table of Contents



Financing Arrangements
         
 Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  18




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##### Table of Contents



Item 4. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
   Changes in Internal Control Over Financial Reporting
  19




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. LEGAL PROCEEDINGS
  
 Item 1A. RISK FACTORS
   
 Item 6. EXHIBITS
 Exhibits (listed by numbers corresponding to the Exhibit Table of Item 601 of Regulation S-K)
 31.1
    
    Section 302 Certification of CEO31.2
    
    Section 302 Certification of CFO32.1
    
    Section 1350 Certification of CEO32.2
    
    Section 1350 Certification of CFO
 20




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##### Table of Contents



SIGNATURES
  SPARTECH CORPORATION
(Registrant)Date: September 8, 2010
    By:
    /s/ Myles S. OdaniellMyles S. OdaniellPresident and Chief Executive Officer
(Principal Executive Officer)/s/ Randy C. MartinRandy C. MartinExecutive Vice President and Chief Financial Officer
(Principal Financial Officer)/s/ Michael G. MarcelyMichael G. MarcelySenior Vice President Planning and Controller
(Principal Accounting Officer) 21