From Insider Score: The chief executive officer of polymers maker ICO, Inc. (ICOC) took advantage of some weakness in the company's stock and bought shares on Friday. President & CEO John Knapp bought 10K shares at $4.95 on May 12th, upping his stake in ICOC to approximately 903.8K shares.
Knapp, a board member since 2001 and the president of Andover Group, a Houston-based private real estate investment and development company, was named to his current position in September 2005. Knapp's most recent purchase was for his SEP-IRA, and he also holds shares directly, in a trust for his children, through Andover Group (for which he is the majority owner), and through an investment vehicle that he claims sole ownership of.
Since he was named CEO, Knapp has made five open market purchases, and since December 2003, he's bought shares of ICOC on 23 occasions (not including purchases made over multiple days but consolidated on one Form 4), most recently in March at $3.79 per share. A Chartered Financial Analyst, Knapp also holds options on 365K shares of ICOC, with strike prices ranging from $1.20 to $3.41, and expirations beginning in 2011 (two-thirds of the options will have vested by the end of 2006).
Shares of ICOC fell -6% on Friday, and the stock is now down more than -19% since hitting an all-time high of $6.18 on April 25th (ICOC has been publicly traded since 1990). Even with the recent drop, ICOC is up more than 135% over the past 52 weeks.
Houston-based ICOC produces custom polymer powders for rotational molding and other polymers segments, including textiles, metal coatings, and masterbatch. A subsidiary produces specialty compounds, concentrates, and additives primarily for the plastic film industry, and the company says it "remains an industry leader in size reduction, compounding, and other tolling services for plastic and non-plastic materials."
Two weeks ago, ICOC announced first-quarter earnings, reporting net income from continuing operations of $3M, or 12 cents per share, on revenues of $79.5M. Revenues were up 2% from a year ago, while net income grew more than 3X. Sequentially, revenue grew 6%, while operating income was down -3% and net income dropped -4% on margin pressures.
"The first half of fiscal 2006 has started strong. Our volumes and margins are growing compared to the prior year and our SG&A expenses are down. All of our regions are showing improvements in operating income for the first half of fiscal 2006, compared to the first half of fiscal 2005. Fiscal third-quarter business levels should continue to be strong led by continuing robust customer demand for Bayshore Industrial and ICO Polymers North America. We expect operating income, excluding charges, for the three months ended June 30th, 2006 to significantly exceed the operating income of the same quarter of fiscal year 2005," Knapp said on May 3rd.
Worth Noting: In 2001, investment firm Travis Street Partners made a hostile and ultimately unsuccessful bid to takeover ICOC, whose management team responded with their own acquisition offer. Travis Street Partners did win a proxy fight to get representatives on ICOC's board, but the group sold out of its stake in ICOC in 2004. Knapp, however, was part of the Travis Street group, and at least one other member of the investment group remains on ICOC's board.