##### 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 August 1, 2009
 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 jurisdiction 
of incorporation or organization)
    
    (SPARTECH LOGO)
    
    43-0761773(I.R.S. Employer
Identification 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




---



##### 



SPARTECH CORPORATION
FORM 10-Q FOR THE QUARTER AND NINE MONTHS ENDED AUGUST 1, 2009
TABLE OF CONTENTS
 PART I
    
    FINANCIAL INFORMATIONItem 1.
    
    Financial Statements:Consolidated Condensed Balance Sheets  As of:
August 1, 2009 (Unaudited) and November 1, 2008
    
    
    1Unaudited Consolidated Condensed Statements of Operations  For
the three and nine months ended August 1, 2009 and August 2, 2008
    
    
    2Unaudited Consolidated Condensed Statements of Cash Flows  For
the nine months ended August 1, 2009 and August 2, 2008
    
    
    3Unaudited Notes To Consolidated Condensed Financial Statements
    
    
    4Item 2.
    
    Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    10Cautionary Statements Concerning Forward-Looking Statements
    
    
    15Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    16Item 4.
    
    Controls and Procedures
    
    
    16PART II
    
    OTHER INFORMATIONItem 1A.
    
    Risk Factors
    
    
    17Item 5.
    
    Other Information
    
    
    17Item 6.
    
    Exhibits
    
    
    17Signatures
    
    
    18Certifications
    
    
    19EX-31.1EX-31.2EX-32.1EX-32.2




---



##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. FINANCIAL STATEMENTS
 
 SPARTECH CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
 August 1, 2009
    
    
    November 1,(Unaudited)
    
    
    2008AssetsCurrent assets:Cash and cash equivalents
    
    $
    437
    
    
    $
    2,118Trade receivables, net of allowances of $3,522, and $4,550, respectively
    
    
    128,706
    
    
    
    176,108Inventories
    
    
    71,596
    
    
    
    96,721Prepaid expenses and other current assets
    
    
    26,867
    
    
    
    24,665Total current assets
    
    
    227,606
    
    
    
    299,612Property, plant and equipment, net of accumulated depreciation of
$338,784 and $297,876, respectively
    
    
    256,303
    
    
    
    280,202Goodwill
    
    
    145,498
    
    
    
    145,498Other intangible assets, net of accumulated amortization of
$16,689 and $13,148, respectively
    
    
    29,429
    
    
    
    32,722Other long-term assets
    
    
    3,889
    
    
    
    4,385Total assets
    
    $
    662,725
    
    
    $
    762,419Liabilities and Shareholders EquityCurrent liabilities:Current maturities of long-term debt
    
    $
    20,071
    
    
    $
    20,428Accounts payable
    
    
    93,163
    
    
    
    155,594Accrued liabilities
    
    
    35,395
    
    
    
    42,676Total current liabilities
    
    
    148,629
    
    
    
    218,698Long-term debt, less current maturities
    
    
    219,167
    
    
    
    254,226Other long-term liabilities:Deferred taxes
    
    
    57,413
    
    
    
    56,516Other long-term liabilities
    
    
    6,649
    
    
    
    6,189Total liabilities
    
    
    431,858
    
    
    
    535,629Shareholders 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; Outstanding: 30,722,927 and
30,563,605 shares, respectively
    
    
    24,849
    
    
    
    24,849Contributed capital
    
    
    203,577
    
    
    
    202,656Retained earnings
    
    
    52,225
    
    
    
    53,588Treasury stock, at cost, 2,408,919 and 2,568,241 shares, respectively
    
    
    (54,961
    )
    
    
    (56,389
    )Accumulated other comprehensive income
    
    
    5,177
    
    
    
    2,086Total shareholders equity
    
    
    230,867
    
    
    
    226,790Total liabilities and shareholders equity
    
    $
    662,725
    
    
    $
    762,419
 See accompanying notes to consolidated condensed financial statements.
 1




---



##### Table of Contents



SPARTECH CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
 Three Months Ended
    
    
    Nine Months EndedAugust 1,
    
    
    August 2,
    
    
    August 1,
    
    
    August 2,2009
    
    
    2008
    
    
    2009
    
    
    2008Net sales
    
    $
    241,736
    
    
    $
    347,459
    
    
    $
    722,740
    
    
    $
    1,043,135Costs and expenses:Cost of sales
    
    
    206,861
    
    
    
    313,041
    
    
    
    629,403
    
    
    
    950,421Selling, general and administrative expenses
    
    
    19,642
    
    
    
    21,706
    
    
    
    61,074
    
    
    
    66,671Amortization of intangibles
    
    
    1,098
    
    
    
    1,249
    
    
    
    3,427
    
    
    
    3,889Restructuring and exit costs
    
    
    1,130
    
    
    
    857
    
    
    
    5,556
    
    
    
    1,693228,731
    
    
    
    336,853
    
    
    
    699,460
    
    
    
    1,022,674Operating earnings
    
    
    13,005
    
    
    
    10,606
    
    
    
    23,280
    
    
    
    20,461Interest, net of interest income of $0,
$122, $22 and $334, respectively
    
    
    3,845
    
    
    
    5,223
    
    
    
    12,597
    
    
    
    15,328Earnings from continuing operations before income
taxes
    
    
    9,160
    
    
    
    5,383
    
    
    
    10,683
    
    
    
    5,133Income tax expense
    
    
    4,448
    
    
    
    1,023
    
    
    
    6,388
    
    
    
    122Net earnings from continuing operations
    
    
    4,712
    
    
    
    4,360
    
    
    
    4,295
    
    
    
    5,011(Loss) / earnings of discontinued operations,
net of tax
    
    
    (3,219
    )
    
    
    50
    
    
    
    (4,130
    )
    
    
    274Net earnings
    
    $
    1,493
    
    
    $
    4,410
    
    
    $
    165
    
    
    $
    5,285Basic earnings per share:Earnings from continuing operations
    
    $
    .16
    
    
    $
    .14
    
    
    $
    .14
    
    
    $
    .17(Loss) / earnings of discontinued operations
    
    
    (.11
    )
    
    
    .01
    
    
    
    (.13
    )
    
    
    Net earnings
    
    $
    .05
    
    
    $
    .15
    
    
    $
    .01
    
    
    $
    .17Diluted earnings per share:Earnings from continuing operations
    
    $
    .15
    
    
    $
    .14
    
    
    $
    .14
    
    
    $
    .17(Loss) / earnings of discontinued operations
    
    
    (.10
    )
    
    
    .01
    
    
    
    (.13
    )
    
    
    Net earnings
    
    $
    .05
    
    
    $
    .15
    
    
    $
    .01
    
    
    $
    .17Dividends declared per share
    
    $
    
    
    
    $
    .05
    
    
    $
    .05
    
    
    $
    .32
 See accompanying notes to consolidated condensed financial statements.
 2




---



##### Table of Contents



SPARTECH CORPORATION AND SUBSIDIARIES


CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
 Nine Months EndedAugust 1,
    
    
    August 2,2009
    
    
    2008Cash flows from operating activitiesNet earnings
    
    $
    165
    
    
    $
    5,285Adjustments to reconcile net earnings to cash
provided by operating activities:Depreciation and amortization expense
    
    
    33,025
    
    
    
    35,496Provision for bad debt expense
    
    
    4,064
    
    
    
    2,110Restructuring and exit costs
    
    
    2,677
    
    
    
    296Stock-based compensation expense
    
    
    2,350
    
    
    
    2,469Other, net
    
    
    1,465
    
    
    
    (942
    )Change in current assets and liabilities
    
    
    2,387
    
    
    
    6,062Net cash provided by operating activities
    
    
    46,133
    
    
    
    50,776Cash flows from investing activitiesCapital expenditures
    
    
    (6,722
    )
    
    
    (13,850
    )Business acquisitions
    
    
    
    
    
    
    (792
    )Proceeds from disposition of assets
    
    
    102
    
    
    
    571Net cash used for investing activities
    
    
    (6,620
    )
    
    
    (14,071
    )Cash flows from financing activitiesPayments on bank credit facility, net
    
    
    (18,000
    )
    
    
    (19,352
    )Payments on notes and bank term loan
    
    
    (18,936
    )
    
    
    (Payments) / borrowings on bonds and leases, net
    
    
    (887
    )
    
    
    990Debt issuance costs
    
    
    (191
    )
    
    
    Cash dividends on common stock
    
    
    (3,057
    )
    
    
    (12,397
    )Issuance of common stock
    
    
    
    
    
    
    2,812Stock options exercised
    
    
    
    
    
    
    16Treasury stock acquired
    
    
    
    
    
    
    (9,667
    )Net cash used for financing activities
    
    
    (41,071
    )
    
    
    (37,598
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    (123
    )
    
    
    4Decrease in cash and cash equivalents
    
    
    (1,681
    )
    
    
    (889
    )Cash and cash equivalents at beginning of year
    
    
    2,118
    
    
    
    3,409Cash and cash equivalents at end of period
    
    $
    437
    
    
    $
    2,520
 See accompanying notes to consolidated condensed financial statements.
 3




---



##### Table of Contents



NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited and Dollars in thousands, except per share amounts)
 1) Basis of Presentation
   2) Discontinued Operations
  Three Months Ended
    
    
    Nine Months EndedAugust 1,
    
    
    August 2,
    
    
    August 1,
    
    
    August 2,2009
    
    
    2008
    
    
    2009
    
    
    2008Net sales
    
    $
    351
    
    
    $
    2,886
    
    
    $
    2,830
    
    
    $
    9,663(Loss) / earnings of discontinued operations before
income taxes
    
    
    (5,031
    )
    
    
    78
    
    
    
    (6,454
    )
    
    
    428Income tax
(benefit) / expense
    
    
    (1,812
    )
    
    
    28
    
    
    
    (2,324
    )
    
    
    154(Loss) / earnings of discontinued operations, net of tax
    
    $
    (3,219
    )
    
    $
    50
    
    
    $
    (4,130
    )
    
    $
    274
  August 1,
    
    
    November 1,2009
    
    
    2008AssetsCurrent Assets:Trade receivables, net
    
    $
    58
    
    
    $
    1,319Inventories
    
    
    140
    
    
    
    1,532Prepaids and other current assets
    
    
    342
    
    
    
    41Current assets of discontinued operations
    
    
    540
    
    
    
    2,892Property, plant, and equipment, net
    
    
    
    
    
    
    2,498Other assets of discontinued operations
    
    
    24
    
    
    
    24Total assets of discontinued operations
    
    $
    564
    
    
    $
    5,414
 4




---



##### Table of Contents



August 1,
    
    
    November 1,2009
    
    
    2008LiabilitiesAccounts payable
    
    $
    61
    
    
    $
    399Accrued liabilities
    
    
    1,678
    
    
    
    482Current liabilities of discontinued operations
    
    $
    1,739
    
    
    $
    881
  3) Inventories
  August 1,
    
    
    November 1,2009
    
    
    2008Raw materials
    
    $
    38,033
    
    
    $
    54,052Production supplies
    
    
    8,397
    
    
    
    8,725Finished goods
    
    
    25,166
    
    
    
    33,944Total inventories
    
    $
    71,596
    
    
    $
    96,721
 4) Restructuring and Exit Costs
  Three Months Ended
    
    
    Nine Months EndedAugust 1,
    
    
    August 2,
    
    
    August 1,
    
    
    August 2,2009
    
    
    2008
    
    
    2009
    
    
    2008Restructuring and exit costs:Custom Sheet and Rollstock
    
    $
    950
    
    
    $
    228
    
    
    $
    2,807
    
    
    $
    666Packaging Technologies
    
    
    56
    
    
    
    558
    
    
    
    1,172
    
    
    
    681Color and Specialty Compounds
    
    
    124
    
    
    
    71
    
    
    
    1,271
    
    
    
    343Engineered Products
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Corporate
    
    
    
    
    
    
    
    
    
    
    306
    
    
    
    3Total Restructuring and exit costs
    
    
    1,130
    
    
    
    857
    
    
    
    5,556
    
    
    
    1,693Income tax benefit
    
    
    (411
    )
    
    
    (311
    )
    
    
    (1,936
    )
    
    
    (551
    )Impact on net earnings from continuing operations
    
    $
    719
    
    
    $
    546
    
    
    $
    3,620
    
    
    $
    1,142
   Nine MonthsCumulative
    
    
    Ended
    
    
    Cumulativethrough 2008
    
    
    August 1, 2009
    
    
    To-DateEmployee severance
    
    $
    894
    
    
    $
    3,240
    
    
    $
    4,134Facility consolidation and shut-down costs
    
    
    258
    
    
    
    1,383
    
    
    
    1,641Accelerated depreciation
    
    
    667
    
    
    
    933
    
    
    
    1.600Total
    
    $
    1,819
    
    
    $
    5,556
    
    
    $
    7,375
 5




---



##### Table of Contents



5) Long-Term Debt
  August 1,
    
    
    November 1,2009
    
    
    20082006 Senior Notes
    
    $
    45,684
    
    
    $
    50,0002004 Senior Notes
    
    
    137,054
    
    
    
    150,000Bank credit facility
    
    
    23,600
    
    
    
    41,600Bank term loan
    
    
    19,391
    
    
    
    19,113Other
    
    
    13,509
    
    
    
    13,941239,238
    
    
    
    274,654Less current maturities
    
    
    20,071
    
    
    
    20,428$
    219,167
    
    
    $
    254,226
     6) Income Taxes
  6




---



##### Table of Contents



7) Fair Value of Financial Instruments
 Fair Value Measurements Effective Date of
Statement 157
 The Fair Value Option
for Financial Assets and Financial Liabilities  Including an Amendment of FASB Statement No. 115.
 Interim Disclosures about Fair Value and Financial Statements
  August 1, 2009
    
    November 1, 2008Carrying
    
    Estimated
    
    Carrying
    
    EstimatedAmount
    
    Fair Value
    
    Amount
    
    Fair ValueLong-term debt
(including bank
credit facilities)
    
    $
    239,238
    
    
    $
    232,681
    
    
    $
    274,654
    
    
    $
    259,832
   8) Commitments and Contingencies
  7




---



##### Table of Contents



9) Net Earnings Per Share
   Three Months Ended
    
    
    Nine Months EndedAugust 1,
    
    
    August 2,
    
    
    August 1,
    
    
    August 2,2009
    
    
    2008
    
    
    2009
    
    
    2008Basic and diluted net earnings:Net earnings from continuing operations
    
    $
    4,712
    
    
    $
    4,360
    
    
    $
    4,295
    
    
    $
    5,011(Loss) / earnings of discontinued operations
    
    
    (3,219
    )
    
    
    50
    
    
    
    (4,130
    )
    
    
    274Net earnings
    
    $
    1,493
    
    
    $
    4,410
    
    
    $
    165
    
    
    $
    5,285Weighted average shares outstanding:Basic weighted average common shares outstanding
    
    
    30,398
    
    
    
    30,306
    
    
    
    30,369
    
    
    
    30,250Add: Dilutive shares from equity instruments
    
    
    127
    
    
    
    
    
    
    
    
    
    
    
    4Diluted weighted average shares outstanding
    
    
    30,525
    
    
    
    30,306
    
    
    
    30,369
    
    
    
    30,254Basic net earnings per share:Net earnings from continuing operations per share
    
    $
    .16
    
    
    $
    .14
    
    
    $
    .14
    
    
    $
    .17Loss from discontinued operations per share
    
    
    (.11
    )
    
    
    .01
    
    
    
    (.13
    )
    
    
    Net earnings per share
    
    $
    .05
    
    
    $
    .15
    
    
    $
    .01
    
    
    $
    .17Diluted net earnings per share:Net earnings from continuing operations per share
    
    $
    .15
    
    
    $
    .14
    
    
    $
    .14
    
    
    $
    .17Loss from discontinued operations per share
    
    
    (.10
    )
    
    
    .01
    
    
    
    (.13
    )
    
    
    Net earnings per share
    
    $
    .05
    
    
    $
    .15
    
    
    $
    .01
    
    
    $
    .17
 10) Segment Information
  8




---



##### Table of Contents



Three Months Ended
    
    
    Nine Months EndedAugust 1,
    
    
    August 2,
    
    
    August 1,
    
    
    August 2,2009
    
    
    2008
    
    
    2009
    
    
    2008Net sales:Custom Sheet and Rollstock
    
    $
    122,302
    
    
    $
    161,677
    
    
    $
    342,332
    
    
    $
    475,656Packaging Technologies
    
    
    52,713
    
    
    
    70,268
    
    
    
    160,088
    
    
    
    205,790Color and Specialty Compounds
    
    
    54,372
    
    
    
    100,168
    
    
    
    178,403
    
    
    
    311,082Engineered Products
    
    
    12,349
    
    
    
    15,346
    
    
    
    41,917
    
    
    
    50,607Net sales (1)
    
    $
    241,736
    
    
    $
    347,459
    
    
    $
    722,740
    
    
    $
    1,043,135Operating earnings from continuing operations:Custom Sheet and Rollstock
    
    $
    9,335
    
    
    $
    6,751
    
    
    $
    13,327
    
    
    $
    12,684Packaging Technologies
    
    
    8,048
    
    
    
    4,505
    
    
    
    23,648
    
    
    
    14,149Color and Specialty Compounds
    
    
    2,706
    
    
    
    6,212
    
    
    
    5,027
    
    
    
    12,721Engineered Products
    
    
    2,638
    
    
    
    2,327
    
    
    
    8,882
    
    
    
    7,390Corporate expenses
    
    
    (9,722
    )
    
    
    (9,189
    )
    
    
    (27,604
    )
    
    
    (26,483
    )Operating earnings
    
    $
    13,005
    
    
    $
    10,606
    
    
    $
    23,280
    
    
    $
    20,461
 
 (1)
    
    Excludes discontinued operations and inter-segment sales of $11,741, $15,189, $33,228 and $45,102, respectively, primarily from
the Color and Specialty Compounds segment. 11) Comprehensive Income
  Three Months Ended
    
    
    Nine Months EndedAugust 1,
    
    
    August 2,
    
    
    August 1,
    
    
    August 2,2009
    
    
    2008
    
    
    2009
    
    
    2008Net earnings
    
    $
    1,493
    
    
    $
    4,410
    
    
    $
    165
    
    
    $
    5,285Foreign currency translation adjustments
    
    
    2,835
    
    
    
    (206
    )
    
    
    3,092
    
    
    
    (2,706
    )Total comprehensive income
    
    $
    4,328
    
    
    $
    4,204
    
    
    $
    3,257
    
    
    $
    2,579
 12) Subsequent Events
 Subsequent Events
  9




---



##### Table of Contents



MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
 Highlights
     Outlook
  Consolidated Results
  Three Months
    
    Nine MonthsUnderlying volume
    
    
    (25
    )%
    
    
    (30
    )%Price/Mix
    
    
    (5
    )
    
    
    (1
    )(30
    )%
    
    
    (31
    )%
   10




---



##### Table of Contents



Three Months Ended
    
    
    Nine Months EndedAugust 1,
    
    
    August 2,
    
    
    August 1,
    
    
    August 2,2009
    
    
    2008
    
    
    2009
    
    
    2008Dollars and Pounds (in millions)Net sales
    
    $
    241.7
    
    
    $
    347.5
    
    
    $
    722.7
    
    
    $
    1,043.1Cost of sales
    
    
    206.8
    
    
    
    313.1
    
    
    
    629.4
    
    
    
    950.4Gross margin
    
    $
    34.9
    
    
    $
    34.4
    
    
    $
    93.3
    
    
    $
    92.7Pounds Sold
    
    
    223.3
    
    
    
    296.6
    
    
    
    657.4
    
    
    
    936.5Dollars per Pound SoldNet sales
    
    $
    1.082
    
    
    $
    1.171
    
    
    $
    1.099
    
    
    $
    1.114Cost of sales
    
    
    .926
    
    
    
    1.055
    
    
    
    .957
    
    
    
    1.015Gross margin
    
    $
    .156
    
    
    $
    .116
    
    
    $
    .142
    
    
    $
    .099
      11




---



##### Table of Contents



Segment Results
 Custom Sheet and Rollstock Segment
  Three Months
    
    Nine MonthsUnderlying volume
    
    
    (12
    )%
    
    
    (23
    )%Price/Mix
    
    
    (12
    )
    
    
    (5
    )(24
    )%
    
    
    (28
    )%
   Packaging Technologies
  Three Months
    
    Nine MonthsUnderlying volume
    
    
    (15
    )%
    
    
    (18
    )%Price/Mix
    
    
    (10
    )
    
    
    (4
    )(25
    )%
    
    
    (22
    )%
   12




---



##### Table of Contents



Color and Specialty Compounds Segment
  Three Months
    
    Nine MonthsUnderlying volume
    
    
    (41
    )%
    
    
    (41
    )%Price/Mix
    
    
    (5
    )
    
    
    (2
    )(46
    )%
    
    
    (43
    )%
   Engineered Products Group
  Three Months
    
    Nine MonthsUnderlying volume
    
    
    (25
    )%
    
    
    (22
    )%Price/Mix
    
    
    5
    
    
    
    5(20
    )%
    
    
    (17
    )%
   Corporate
  13




---



##### Table of Contents



Liquidity and Capital Resources
 Cash Flow
  Nine Months EndedAugust 1,
    
    
    August 2,2009
    
    
    2008Cash Flows (in millions)Net cash provided by operating activities
    
    $
    46.1
    
    
    $
    50.8Net cash used for investing activities
    
    
    (6.6
    )
    
    
    (14.1
    )Net cash used for financing activities
    
    
    (41.1
    )
    
    
    (37.6
    )Effect of exchange rate changes
    
    
    (0.1
    )
    
    
    Decrease in cash and cash equivalents
    
    $
    (1.7
    )
    
    $
    (0.9
    )
    Financing Arrangements
     14




---



##### Table of Contents



Cautionary Statements Concerning Forward-Looking Statements
  (a)
    
    Further 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)
    
    adverse changes in the domestic automotive markets, including the bankruptcy filings
by the automobile original equipment manufacturers which could have a cascading effect on
our customers and adversely impact our business;(e)
    
    our inability to achieve the level of cost savings, productivity improvements, gross
margin enhancements, growth or other benefits anticipated from our planned improvement
initiatives;(f)
    
    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;(g)
    
    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;(h)
    
    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;(i)
    
    possible asset impairment charges;(j)
    
    our inability to predict accurately the costs to be incurred, time taken to complete,
operating disruptions therefrom, or savings to be achieved in connection with announced
production plant restructurings;(k)
    
    adverse findings in significant legal or environmental proceedings or our inability to
comply with applicable environmental laws and regulations;(l)
    
    our inability to develop and launch new products successfully;(m)
    
    possible weaknesses in internal controls; and(n)
    
    our ability to successfully complete the implementation of a new enterprise resource
planning computer system and to obtain expected benefits from our system.
  15




---



##### Table of Contents



Item 3.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  
 Item 4.
    
    CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
   Changes in Internal Control Over Financial Reporting
  16




---



##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1A.
    
    RISK FACTORS
  The bankruptcy filings by the automobile original equipment manufactures (OEMs) could have a
cascading effect on our customers and adversely impact our business.
  
 Item 5.
    
    OTHER INFORMATION
  
 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
 17




---



##### Table of Contents



SIGNATURES
  SPARTECH CORPORATION
(Registrant)Date: September 9, 2009
    /s/ Myles S. OdaniellMyles S. OdaniellPresident and Chief Executive Officer
(Principal Executive Officer)/s/ Randy C. MartinRandy C. MartinExecutive Vice President Corporate
Development and Chief Financial Officer
(Principal Financial Officer)/s/ Michael G. MarcelyMichael G. MarcelySenior Vice President Planning and
Controller
(Principal Accounting Officer) 18