8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  December 8, 2008

____________________

ICO, INC.

(Exact name of registrant as specified in its charter)

Texas (State or other jurisdiction of incorporation) 0-10068 (Commission File Number) 76-0566682 (I.R.S. Employer Identification No.)

1811 Bering Drive, Suite 200

Houston, Texas 77057

(Address of principal executive offices and zip code)

(713) 351-4100

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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ITEM 2.02                      Results of Operations and Financial Condition

On December 8, 2008 (after the close of market), ICO, Inc. (the “Company”) issued a press release announcing its financial results for the fourth quarter and year ending September 30, 2008.  A copy of the press release is attached herewith as Exhibit 99.1 and incorporated herein by reference.

As provided in General Instruction B.2 to Form 8-K, the information contained in Item 2.02 and Exhibit 99.1 of this Current Report on Form 8-K is being furnished to the Securities and Exchange Commission and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into a filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

ITEM 7.01                      Regulation FD Disclosure

On December 9, 2008, at 10:00 a.m., Central Standard Time, the Company will hold a conference call to discuss its financial results for the fourth quarter and year ending September 30, 2008.  This scheduled call and instructions for accessing the call were previously announced in a press release issued on November 19, 2008, and again in the press release that was issued on December 8, 2008, which is attached as Exhibit 99.1 hereto.

A replay of the call will be accessible until March 9, 2009: (i) by calling 630-652-3044, and entering access code 23273960; (ii) at http://www.videonewswire.com/event.asp?id=53584; or (iii) by a link on the landing page of the Company’s website at www.icopolymers.com.  The replay of the call will also be accessible for at least twelve (12) months after the date of the call on the Company’s website at www.icopolymers.com.

As provided in General Instruction B.2 to Form 8-K, the information contained in Item 7.01 and Exhibit 99.1 of this Current Report on Form 8-K is being furnished to the Securities and Exchange Commission and shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into a filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

ITEM 9.01                      Financial Statements and Exhibits

(d)           Exhibits

99.1           Press Release dated December 8, 2008.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ICO, INC.
Date:  December 8, 2008	By:	/s/ Bradley T. Leuschner
	Name:	Bradley T. Leuschner
	Title:	Chief Financial Officer and
		Treasurer

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EX-99.1

ICO, Inc. Announces Financial Results for

Fourth Quarter Ended September 30, 2008

HOUSTON, TEXAS, December 8, 2008 – ICO, Inc. (NASDAQ: ICOC), global producer of custom polymer powders and plastic film concentrates, today announced its results for the year ended September 30, 2008 and the fourth quarter ended September 30, 2008.

Fourth Quarter Highlights

·   Revenues of $108.0 million, a decrease of $15.6 million or 13% from the prior year

·   Volumes declined 21% compared to the fourth quarter of fiscal 2007 due to slowing economy and hurricanes in the Gulf Coast

·   Operating income of $4.1 million, down 58% year-over-year

·   Net income per share of $.08 fully diluted

·   Total debt outstanding decreased $8.5 million or 15% sequentially as a result of positive cash flow and stronger U.S. Dollar

Fourth Quarter 2008 vs. Fourth Quarter 2007

Revenues for the three months ended September 30, 2008 were $108.0 million, a decrease of $15.6 million or 13% compared to the same quarter of the previous year.  A 21% decrease in volumes sold negatively impacted revenues by $20.3 million, and changes in product mix and prices negatively impacted revenues by $2.7 million.  The volume reduction was most notable at the Company’s Bayshore Industrial and Australian locations.  The decline in revenues from the volume reduction was partially offset by the translation effect of stronger foreign currencies which benefited revenues by $7.4 million.

Gross margin declined from 17.3% to 15.1%, primarily as a result of lower volumes sold.  During the fourth quarter of fiscal 2008, the Company decided to close its plant in the United Arab Emirates and recognized an impairment charge of $0.4 million.  In the fourth quarter of fiscal 2007, the Company recognized a net benefit of $0.3 million in impairment, restructuring and other income. The decline in gross margin and the higher impairment, restructuring and other costs of $0.7 million contributed to a decline in operating income of $5.6 million or 58% compared to the prior year quarter.  Income tax expense decreased $2.3 million or 80% primarily due to the decrease in income before taxes.  As a result of the above, income from continuing operations decreased $3.8 million or 63%, compared to the prior year quarter, to $.08 per share.

Fourth Quarter 2008 vs. Third Quarter 2008

Comparing the sequential quarterly results, revenues decreased $7.7 million or 7%, caused primarily by a reduction in volumes sold due in part to the seasonal weakness in Europe on account of vacation periods, as well as by the effect from Hurricane Ike which hit the U.S. Gulf Coast in September 2008.  The decline in volumes sold led to a reduction in gross margin from 16.0% to 15.1%.  The decline in gross margin, as well as the impact from the impairment charges relating to the United Arab Emirates plant closure, led to a decline in operating income of $2.4 million or 37%.  Income from continuing operations declined $2.4 million or 52% as a result of the above.

“Our fiscal year fourth quarter was certainly a challenge for us,” stated A. John Knapp, Jr., the Company’s President and CEO.  “We were thankful that we did not sustain major damage from Hurricane Ike, but we were impacted from the loss of power at two of our facilities in the Gulf Coast area.  We also made the decision to close our plant in the United Arab Emirates and recognized an impairment charge of $0.4 million.  We believe the Middle East is still an important market for the Company and we believe we can serve the region better at the current time from our other locations around the world.  During the quarter, we generated satisfactory cash flow from operations of $7.4 million after capital expenditures.”

Balance Sheet and Liquidity

Total debt outstanding as of September 30, 2008 was $49.9 million, a decline of $8.5 million from June 30, 2008.  This reduction was accomplished in part by positive cash flow from operations of $10.0 million less net capital expenditures of $2.5 million.  Approximately $1.3 million of the capital expenditures related to our facility relocation from New Jersey to Pennsylvania.  Our available global borrowing capacity at September 30, 2008 was $62.8 million.

During the quarter ended September 30, 2008, the Company repurchased 90,329 shares of its Common Stock for $0.5 million pursuant to the Share Repurchase Program approved by the Board of Directors in September 2008.  In October 2008, the Company repurchased 487,752 shares of its Common Stock for total cash consideration of $2.5 million.  The specific timing and amount of future repurchases will vary based on market conditions and other factors, and the Share Repurchase program may be modified, extended or terminated at any time.

Conference Call on the Web

A live Internet broadcast of ICO, Inc.’s conference call regarding fiscal 2008 fourth quarter results can be accessed at 10:00 a.m. Central Time on Tuesday, December 9, 2008 at http://www.videonewswire.com/event.asp?id=53584 where the webcast replay will be accessible for ninety days.  The webcast replay will also be accessible on the Company’s website at www.icopolymers.com for a period of twelve months.  (Minimum requirements to listen to the broadcast are:  The Windows Media Player software, downloadable free from

http://www.microsoft.com/windows/windowsmedia/player/download/download.aspx and at least a 28.8Kbps connection to the Internet.)

Investors are invited to participate in the conference by dialing 847-413-3238, passcode 23273960.  A replay of the conference call will be available by dialing 630-652-3044, passcode 23273960.

About ICO, Inc.

With 20 locations in 9 countries, ICO produces custom polymer powders for rotational molding and other polymer related businesses, such as the textile, metal coating and masterbatch markets. ICO remains an industry leader in size reduction, compounding and other tolling services for plastic and non-plastic materials. ICO's Bayshore Industrial segment produces specialty compounds, concentrates and additives primarily for the plastic film industry.  Additional information about ICO, Inc. can be found on the Company’s website at www.icopolymers.com.

This press release contains forward-looking statements, which are not statements of historical facts and involve certain risks, uncertainties and assumptions. These include, but are not limited to, restrictions imposed by the Company’s outstanding indebtedness, changes in the cost and availability of resins (polymers) and other raw materials, demand for the Company's services and products, business cycles and other industry conditions, international risks, operational risks, currency translation risks, the Company’s lack of asset diversification, the Company’s ability to manage global inventory, develop technology and proprietary know-how, and attract and retain key personnel, as well as other factors detailed in the Company's form 10-K for the fiscal year ended September 30, 2007 and its other filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated.

 ICO, Inc.

Consolidated Statement of Operations

(Unaudited and in thousands, except per share data and percentages)

	Three Months Ended									Twelve Months Ended
	September 30,						June 30,			September 30,
	2008			2007			2008			2008			2007
Product Sales	$	99,274		$	113,901		$	105,494		$	408,076		$	379,344
Toll Services		8,718			9,658			10,224			38,625			38,573
Total Revenues		107,992			123,559			115,718			446,701			417,917
Cost of sales and services (exclusive of depreciation shown
separately below)		91,712			102,195			97,234			373,557			344,171
Gross Profit (1)		16,280			21,364			18,484			73,144			73,746
Selling, general and administrative expense		9,823			10,236			10,441			41,254			37,676
Depreciation and amortization		1,951			1,785			1,932			7,531			7,251
Impairment, restructuring and other costs (income)		408			(343	)		(356	)		(1,348	)		(997	)
Operating income		4,098			9,686			6,467			25,707			29,816
Other income (expense):
Interest expense, net		(904	)		(926	)		(1,039	)		(4,062	)		(3,227	)
Other income (expense)		(395	)		181			165			(431	)		(115	)
Income from continuing operations before income taxes		2,799			8,941			5,593			21,214			26,474
Provision for income taxes		569			2,893			960			5,832			6,712
Income from continuing operations		2,230			6,048			4,633			15,382			19,762
Income (loss) from discontinued operations, net of income taxes		(52	)		(65	)		-			(68	)		1,356
Net income	$	2,178		$	5,983		$	4,633		$	15,314		$	21,118
Preferred Stock dividends		-			(82	)		-			(1	)		(554	)
Net gain on redemption of Preferred Stock		-			-			-			-			6,023
Net income applicable to Common Stock	$	2,178		$	5,901		$	4,633		$	15,313		$	26,587
Basic income from continuing operations per common share	$	0.08		$	0.23		$	0.17		$	0.56		$	0.97
Basic net income per common share	$	0.08		$	0.22		$	0.17		$	0.56		$	1.02
Diluted income from continuing operations per common share	$	0.08		$	0.22		$	0.17		$	0.55		$	0.71
Diluted net income per common share	$	0.08		$	0.21		$	0.17		$	0.55		$	0.76
Basic weighted average shares outstanding		27,474,000			26,312,000			27,433,000			27,271,000			26,030,000
Diluted weighted average shares outstanding		27,864,000			27,890,000			27,975,000			27,994,000			27,891,000
Gross Margin (2)		15.1	%		17.3	%		16.0	%		16.4	%		17.6	%
(1) Calculated as Total Revenues minus Cost of Sales and Services, exclusive of Depreciation Expense.
(2) Calculated as Gross Profit divided by Total Revenues.

ICO, Inc.

Consolidated Balance Sheet

 (Unaudited and in thousands, except share data and ratios)

	September 30,			September 30,
	2008			2007
ASSETS
Current assets:
Cash and cash equivalents	$	5,589		$	8,561
Trade receivables		75,756			95,142
Inventories		53,458			60,420
Deferred income taxes		2,056			1,778
Prepaid and other current assets		10,514			9,924
Total current assets		147,373			175,825
Property, plant and equipment, net		61,164			57,396
Goodwill		8,689			9,228
Other assets		3,870			3,768
Total assets	$	221,096		$	246,217
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings under credit facilities	$	9,607		$	16,133
Current portion of long-term debt		15,201			11,611
Accounts payable		37,674			66,906
Accrued salaries and wages		5,978			7,313
Other current liabilities		11,912			16,004
Total current liabilities		80,372			117,967
Long-term debt, net of current portion		25,122			29,605
Deferred income taxes		5,039			4,820
Other long-term liabilities		2,728			2,783
Total liabilities		113,261			155,175
Commitments and contingencies		-			-
Stockholders' equity:
Convertible exchangeable preferred stock		-			2
Undesignated preferred stock		-			-
Common stock		54,756			47,659
Additional paid-in capital		72,241			74,920
Accumulated other comprehensive income		3,022			5,416
Accumulated deficit		(21,641	)		(36,955	)
Treasury Stock		(543	)		-
Total stockholders' equity		107,835			91,042
Total liabilities and stockholders' equity	$	221,096		$	246,217
OTHER BALANCE SHEET DATA
Working capital	$	67,001		$	57,858
Current ratio		1.8			1.5
Total debt	$	49,930		$	57,349
Debt-to-capitalization		31.6	%		38.6	%

 ICO, Inc.

Supplemental Segment Information

 (Unaudited and in thousands, except percentages)

Revenues
Three Months Ended September 30:	2008		% of Total			2007		% of Total			Change			%
ICO Europe	$	48,489		45	%	$	45,957		37	%	$	2,532			6	%
Bayshore Industrial		19,173		18	%		38,895		32	%		(19,722	)		(51	%)
ICO Asia Pacific		23,401		22	%		25,166		20	%		(1,765	)		(7	%)
ICO Polymers North America		10,119		9	%		9,891		8	%		228			2	%
ICO Brazil		6,810		6	%		3,650		3	%		3,160			87	%
Consolidated	$	107,992		100	%	$	123,559		100	%	$	(15,567	)		(13	%)
Fiscal Year Ended September 30:	2008		% of Total			2007		% of Total			Change			%
ICO Europe	$	207,209		46	%	$	170,135		41	%	$	37,074			22	%
Bayshore Industrial		90,736		20	%		108,360		26	%		(17,624	)		(16	%)
ICO Asia Pacific		82,390		19	%		84,790		20	%		(2,400	)		(3	%)
ICO Polymers North America		45,090		10	%		41,377		10	%		3,713			9	%
ICO Brazil		21,276		5	%		13,255		3	%		8,021			61	%
Consolidated	$	446,701		100	%	$	417,917		100	%	$	28,784			7	%

Operating income (loss)
Three Months Ended September 30:	2008			2007			Change			%
ICO Europe	$	2,782		$	2,449		$	333			14	%
Bayshore Industrial		1,486			5,716			(4,230	)		(74	%)
ICO Asia Pacific		210			1,753			(1,543	)		(88	%)
ICO Polymers North America		424			1,709			(1,285	)		(75	%)
ICO Brazil		429			34			395			1162	%
Total Operations		5,331			11,661			(6,330	)		(54	%)
Unallocated General Corporate Expense		(1,233	)		(1,975	)		742			(38	%)
Consolidated	$	4,098		$	9,686		$	(5,588	)		(58	%)
Fiscal Year Ended September 30:	2008			2007			Change			%
ICO Europe	$	13,201		$	9,008		$	4,193			47	%
Bayshore Industrial		10,241			15,358			(5,117	)		(33	%)
ICO Asia Pacific		1,822			5,914			(4,092	)		(69	%)
ICO Polymers North America		5,618			6,022			(404	)		(7	%)
ICO Brazil		982			301			681			226	%
Total Operations		31,864			36,603			(4,739	)		(13	%)
Unallocated General Corporate Expense		(6,157	)		(6,787	)		630			(9	%)
Consolidated	$	25,707		$	29,816		$	(4,109	)		(14	%)

Operating income (loss) as a percentage of revenues	Three Months Ended			Fiscal Year Ended
	September 30,			September 30,
	2008	2007	Change	2008	2007	Change
ICO Europe	6%	5%	1%	6%	5%	1%
Bayshore Industrial	8%	15%	(7%)	11%	14%	(3%)
ICO Asia Pacific	1%	7%	(6%)	2%	7%	(5%)
ICO Polymers North America	4%	17%	(13%)	12%	15%	(3%)
ICO Brazil	6%	1%	5%	5%	2%	3%
Consolidated	4%	8%	(4%)	6%	7%	(1%)

ICO, Inc.

Supplemental Segment Information (cont'd.)

 (Unaudited and in thousands, except percentages)

Revenues
	Three Months Ended
	September 30,					June 30,
	2008		% of Total			2008		% of Total			Change			%
ICO Europe	$	48,489		45	%	$	58,226		50	%	$	(9,737	)		(17	%)
Bayshore Industrial		19,173		18	%		19,044		16	%		129			1	%
ICO Asia Pacific		23,401		22	%		21,417		19	%		1,984			9	%
ICO Polymers North America		10,119		9	%		12,081		10	%		(1,962	)		(16	%)
ICO Brazil		6,810		6	%		4,950		5	%		1,860			38	%
Consolidated	$	107,992		100	%	$	115,718		100	%	$	(7,726	)		(7	%)

Operating income (loss)
	Three Months Ended
	September 30,			June 30,
	2008			2008			Change			%
ICO Europe	$	2,782		$	3,901		$	(1,119	)		(29	%)
Bayshore Industrial		1,486			2,045			(559	)		(27	%)
ICO Asia Pacific		210			(11	)		221		N.M.		*
ICO Polymers North America		424			1,811			(1,387	)		(77	%)
ICO Brazil		429			224			205			92	%
Total Operations		5,331			7,970			(2,639	)		(33	%)
Unallocated General Corporate Expense		(1,233	)		(1,503	)		270			(18	%)
Consolidated	$	4,098		$	6,467		$	(2,369	)		(37	%)

Operating income (loss) as a percentage of revenues	Three Months Ended
	September 30,	June 30,
	2008	2008	Change
ICO Europe	6%	7%	(1%)
Bayshore Industrial	8%	11%	(3%)
ICO Asia Pacific	1%	0%	1%
ICO Polymers North America	4%	15%	(11%)
ICO Brazil	6%	5%	1%
Consolidated	4%	6%	(2%)

*Not meaningful