Hedge fund Barington Capital revealed their disappointment with A. Schulman, Inc. (NDAQ:SHLM) today in an amended 13D filing with the SEC. In the filing, Barington enclosed a letter to the Chairman of the Board expressing his disappointment at the lack of progress that the company has made since the two parties met last year.

The filing noted that:

"On October 9, 2006, James A. Mitarotonda, the Chairman and Chief Executive Officer of Barington and a member of the Company’s Board of Directors, sent a letter to Terry L. Haines, the Company’s Chairman, President and Chief Executive Officer. The letter notes that as a result of the past performance of the Board, including with respect to the matters detailed in the letter, the Reporting Entities lack confidence in the ability of the incumbent directors to improve shareholder value for the Company’s stockholders. Therefore, in order to ensure that stockholder interests are preserved, Barington intends to nominate four (4) individuals for election to the Board at the Company’s 2006 Annual Meeting of Stockholders."

According to the terms of the October 21, 2005 settlement agreement entered into between the Company and the Barington Group (the “Settlement Agreement”), the Business Plan is required to include measures to:

• return the Company’s North American operations to pre-tax profitability;
• reduce the Company’s effective income tax rates;
• reduce the Company’s working capital;
• reduce the Company’s selling, general and administrative expenses; and
• improve the Company’s gross margins.

If Barington Capital is able to replace the Board with its own members and successfully execute its plan, then this stock may be one worth keeping an eye on for the long-term picture as it is trading below enterprise value with a forward PE of 17x.

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