3rd Quarter Conference Call

1
3rd Quarter Conference Call
Investor Presentation
September 10, 2009
2
Safe Harbor Statement

• SPARTECH FORWARD-LOOKING STATEMENTS
• This presentation contains "forward-looking
  statements" within the meaning of the Private
  Securities Litigation Reform Act of 1995.
  Forward-looking statements within the meaning
  of the Private Securities Litigation Reform Act
  of 1995 relate to future events and expectations,
  include statements containing such words as
  anticipates, believes, estimates,
  expects, would, should, will, will
  likely result, forecast, outlook,
  projects, and similar expressions.
  Forward-looking statements are based on
  managements current expectations and include
  known and unknown risks, uncertainties and other
  factors, many of which management is unable to
  predict or control, that may cause actual
  results, performance or achievements to differ
  materially from those expressed or implied in the
  forward-looking statements. Important factors
  which have impacted and could impact our
  operations and results include (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
  bankruptcies of one or more of the major
  automobile manufacturers or suppliers (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.
•  
• We assume no responsibility to update our
  forward-looking statements except as required by
  law.

3
Transforming and Leveraging Spartech
Building a Solid Foundation and Leadership
Leveraging Leadership for Growth
Transforming Spartech

• Build Core Strategy
• Develop One Culture / Values
• Enhance Systems Business Processes
• Organizational Upgrade
• Build a Low-Cost-to-Serve Model
• Complete Portfolio Review
• 2008 50 Million Financial Improvement Plan, 2009
  Resizing Plan (30M)
• Focus on Cash Flow Improvements and De-leverage

• Portfolio Restructuring / Investments in
  Packaging Platform
• Build out Centralization / Functional Expertise
• Rejuvenate Focus on Innovation Organic Growth
• Capitalize on Technology, Marketing, Commercial
  Development Investments
• Centers of Operational Excellence
• Capitalize on Highly Leveragable, Low Cost Model

• Successful Roll Up Strategy
• Critical Mass and Economies of Scale
• Diversity of End Markets
• Broad Expertise Materials, Processing and
  Product Capabilities
• Strong and Diversified Customer Base
• Vertical Integration
• Strong Balance Sheet and Cash Flow

1993 - 2007
2008/2009 2009 Forward
4
Comprehensive Products and Diverse Markets
Diverse End Markets
Comprehensive Product Portfolio and Materials
Expertise
Source Q3 2009 Actual Consolidated Sales
Source Estimated mix of sales by basic materials
5
Historical Quarterly Income Statement
Refer to non-GAAP disclosures at the end of
this presentation.
6
Q3 08 to Q3 09 EBITDA Bridge

• Impact of recessionary demand offset by the
  following improvement initiatives
• Structural cost reductions and other earnings
  improvement initiatives.
• Other shorter term actions temporary
  across-the-board salary reductions, suspension of
  401k match, and deferred comp.

7
2009 Challenges and Opportunities

• Continued Challenges
• Volume is weak across all markets
• Q3 2009 volume was down 30. While lower volumes
  across all of our segments and major end markets,
  most significant declines in the automotive,
  recreation and leisure, and building and
  construction markets.
• Sales to the automotive market represents
  approximately 9 of total Company sales today.
  We have approximately 9M of receivables
  outstanding (8M net of reserves).
• Opportunities
• Weak volume provides opportunity to accelerate
  operational improvement initiatives and realize
  substantial cost savings in 2009
• Packaging sector has significant growth potential
  with overall sector expected to show growth in
  2009
• Unique opportunity to improve cost footprint,
  restructure organization, and enhance commercial
  practices without relying on market recovery

8
Improvement Initiatives
Annualized Structural Cost Reductions and Other
Earnings Improvement Initiatives
2008 Actions (50M)
Initiatives
2009 Actions (30M)
StructuralManufacturing Cost and Footprint
Reduction
Additional 11 headcount reduction plant
consolidations
20 headcount reduction 3 plant consolidations
Commercial Processes, Segmentation, and Mix
Improved commercial practices and mix improvements
Product segmentation and focus on value added
products
Build world-class procurement organization /
centralize purchasing from 40 plants
Procurement Initiatives
Consolidate vendors / product specs transition
to strategic partnerships for
Organizational Redesign and Restructuring
2/3 leadership change / new operating leadership
and functional structure
Structural reduction in SGA and shared services
across Spartech
Working Capital and Cash Flow Management
Focus on working capital and debt pay down
suspend cash dividend and 2009 CapEx lt15M
Working capital below 11 of sales 2008 CapEx
lt17M
9
Gross Margin Performance

• Gross margins per pound reflecting 80M in
  expected annualized Improvement Initiatives
  (structural cost reductions and enhanced
  commercial practices.)
• Contribution margin on incremental volume today
  is approximately 0.25 to 0.30 per pound.
• Further opportunity to drive improvements with
  cost optimization and margin enhancement
  initiatives.

10
Supplemental
11
Historical Annual Income Statement

• Refer to non-GAAP disclosures at the end of
  this presentation.

12
Non-GAAP Financial Measures

• Within this presentation, we have included free
  cash flow and net earning, earnings before
  interest, taxes, depreciation and amortization
  (EBITDA), and net earnings per dilutive share
  excluding special items, which are non-GAAP
  measurements. Special items include goodwill
  impairments, fixed asset and other intangible
  asset impairments, restructuring and exit costs,
  former CEO separation expense, and charges for
  the early extinguishment of debt. We use these
  measurements to assess our ongoing operating
  results without the effect of these adjustments
  and compare such results to our planned operating
  results. We believe that these measurements are
  useful to investors because they help them
  compare our results to previous periods and
  provide an indication of underlying trends in the
  business. Such non-GAAP measurements are not
  recognized in accordance with generally accepted
  accounting principles (GAAP) and should not be
  viewed as an alternative to GAAP measures of
  performance. The following slides reconcile GAAP
  to non-GAAP measures with the exception of free
  cash flow which is reconciled within the
  presentation.

13
Non-GAAP Financial Measures