ICO, Inc. Announces Financial Results for

Third Quarter Ended June 30, 2009

HOUSTON, TEXAS, August 6, 2009 – ICO, Inc. (NASDAQ: ICOC), global producer of custom polymer powders and plastic film concentrates, today announced its results for the quarter ended June 30, 2009.

Third Quarter Highlights

·   Cash flow from operating activities of continuing operations in the third quarter of $8.8 million, compared to $13.5 million in the prior year third quarter

·   Fifth consecutive quarter of generating positive cash flow from operating activities less cash used for investing activities

·   Net debt (total debt outstanding less cash) decreased $34.4 million from September 30, 2008 and $8.2 million from March 31, 2009, to $9.9 million

·   Revenues of $70.0 million, a decrease of $45.7 million or 40% from the prior year

·   Volumes declined 20% compared to the prior year due to global economic downturn

·   Operating income of $2.2 million compared with operating income of $6.5 million in the prior year third quarter

·   Net income of $1.3 million, or $.05 per share

Third Quarter 2009 vs. Third Quarter 2008

Revenues for the three months ended June 30, 2009 were $70.0 million, a decrease of $45.7 million or 40% compared to the same quarter of the previous year.  The revenue decline was caused by several factors.  Volumes, which fell 20%, reduced revenues by $24.6 million.  The volume decline was a result of reduced customer demand as a result of the global economic slowdown.  Lower resin prices, which fell dramatically in the first quarter of fiscal year 2009 but trended upward in the third quarter, reduced revenues by $11.7 million.  Finally, the translation effect of a stronger U.S. Dollar reduced revenues by $9.4 million.

Net income was $1.3 million or $.05 per share in the three months ended June 30, 2009 compared with net income of $4.6 million or $.17 per share in the third quarter of fiscal year 2008.  The decline in net income of 73% was primarily caused by the decline in volumes.  The impact from lower volumes was partially offset by an increase in gross margin from 16.0% to 18.0%.

“Once again, our management team excelled during difficult economic conditions,” stated A. John Knapp, Jr., President and CEO.  “We were able to generate positive net income and strong cash flows during the past quarter.  We are very encouraged by the trend in our business we saw last quarter.  The month of June was by far the strongest month of the quarter, with volumes increasing 16% from the month of May and our gross margins in the month of June were the highest of all three months in the quarter.  We are also excited about the Chroma

transaction announced during the quarter.  We remain optimistic that the trend in business volumes we experienced in the month of June is a sign that we are in the process of recovery.”

Third Quarter 2009 vs. Second Quarter 2009

Revenues were essentially flat compared to the second quarter.  Our gross margins improved from 16.9% to 18.0%, and led to higher operating income, which improved from $1.1 million, as adjusted, to $2.2 million.  The second quarter included a non-cash goodwill impairment charge of $3.5 million related to the Company’s goodwill in its Australia and New Zealand subsidiaries.  Net income, as adjusted, improved 191% from $0.4 million or $.02 per share in the second quarter of 2009 to $1.3 million or $.05 per share.

Balance Sheet and Liquidity

Our cash balance at June 30, 2009 was $23.6 million, a sequential increase of $6.5 million, or 38%.  Net debt (equal to outstanding debt less cash) improved $8.2 million or 45% from $18.1 million at March 31, 2009 to $9.9 million at June 30, 2009.  These improvements were accomplished by positive cash flow from operating activities of continuing operations of $8.8 million during the quarter.  Our available global borrowing capacity at June 30, 2009 was $46.9 million.

Conference Call on the Web

A live Internet broadcast of ICO, Inc.’s conference call regarding fiscal year 2009 third quarter results can be accessed at 10:00 a.m. Central Standard Time on Friday, August 7, 2009 at http://www.videonewswire.com/event.asp?id=60457 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 24942372.  A replay of the conference call will be available by dialing 630-652-3044, passcode 24942372.

Use of Non-GAAP Financial Measures

This earnings release includes the use of both GAAP (generally accepted accounting principles) and non-GAAP financial measures.  The non-GAAP financial measures are net income (loss), as adjusted, net income (loss) per common share, as adjusted, operating income (loss), as adjusted, and net debt.  The Company uses these financial measures to monitor and evaluate the ongoing performance of the Company, and believes that the additional non-GAAP measures are useful to investors for financial analysis.  There are limitations associated with the use of these measures.  These non-GAAP financial measures are not prepared in accordance with GAAP, may not be reported by all of the Company’s competitors and may not be directly comparable to similarly titled measures of the Company’s competitors due to potential differences in the exact method of calculation.  The Company compensates for these limitations by using these non-GAAP financial measures as supplements to GAAP financial measures and by providing the reconciliations of the non-GAAP financial measures to their most comparable GAAP financial measures.

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 subsidiary 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.   Contact:  CFO – Bradley T. Leuschner at 713-351-4100.

Certain matters discussed in this press release are “forward-looking statements,” involving certain risks, uncertainties, and assumptions, intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995.  The Company’s statements regarding trends in the marketplace, potential future results, and any proposed transaction and its timing and effects are examples of such forward-looking statements.  The following is a non-exclusive list of risks and uncertainties, and circumstances that present risks, that could cause the forward-looking statements to become untrue or otherwise affect the outcome thereof: restrictions imposed by the Company’s outstanding indebtedness; changes in the cost and availability of resins (polymers) and other raw materials; changes in demand for the Company's services and products; business cycles and other industry conditions; general economic 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; failure of closing conditions in any transaction to be satisfied; integration of acquired businesses; as well as other factors detailed in the Company's form 10-K for the fiscal year ended September 30, 2008 and its other filings with the Securities and Exchange Commission.

Should one or more of such risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated.  Any forward-looking statements are made only as of the date of this press release, and the Company undertakes no obligation to publicly update any such forward-looking statements to reflect subsequent events or circumstances.

[

ICO, Inc.
Consolidated Statement of Operations
(Unaudited and in thousands, except per share data and percentages)
	Three Months Ended									Nine Months Ended
	June 30,						March 31,			June 30,
	2009			2008			2009			2009			2008
Product Sales	$	62,870		$	105,494		$	63,417		$	198,144		$	308,802
Toll Services		7,127			10,224			6,713			21,341			29,907
Total Revenues		69,997			115,718			70,130			219,485			338,709
Cost of sales and services (exclusive of depreciation shown
separately below)		57,383			97,234			58,247			184,878			281,845
Gross Profit (1)		12,614			18,484			11,883			34,607			56,864
Selling, general and administrative expense		8,677			10,441			9,010			26,825			31,431
Depreciation and amortization		1,835			1,932			1,719			5,267			5,580
Goodwill Impairment		-			-			3,450			3,450			-
Impairment, restructuring and other costs (income)		(87	)		(356	)		20			(360	)		(1,756	)
Operating income (loss)		2,189			6,467			(2,316	)		(575	)		21,609
Other income (expense):
Interest expense, net		(539	)		(1,039	)		(535	)		(1,713	)		(3,158	)
Other income (expense)		(192	)		165			(48	)		(571	)		(36	)
Income (loss) from continuing operations before income taxes		1,458			5,593			(2,899	)		(2,859	)		18,415
Provision (benefit) for income taxes		199			960			119			(24	)		5,263
Income (loss) from continuing operations		1,259			4,633			(3,018	)		(2,835	)		13,152
Income (loss) from discontinued operations, net of income taxes		-			-			-			-			(16	)
Net income (loss)	$	1,259		$	4,633		$	(3,018	)	$	(2,835	)	$	13,136
Preferred Stock dividends		-			-			-			-			(1	)
Net income (loss) applicable to Common Stock	$	1,259		$	4,633		$	(3,018	)	$	(2,835	)	$	13,135
Basic income (loss) from continuing operations per common share	$	0.05		$	0.17		$	(0.11	)	$	(0.10	)	$	0.48
Basic net income (loss) per common share	$	0.05		$	0.17		$	(0.11	)	$	(0.10	)	$	0.48
Diluted income (loss) from continuing operations per common share	$	0.05		$	0.17		$	(0.11	)	$	(0.10	)	$	0.47
Diluted net income (loss) per common share	$	0.05		$	0.17		$	(0.11	)	$	(0.10	)	$	0.47
Basic weighted average shares outstanding		27,077,000			27,433,000			27,072,000			27,083,000			27,202,000
Diluted weighted average shares outstanding		27,221,000			27,975,000			27,072,000			27,083,000			27,975,000
Gross Margin (2)		18.0	%		16.0	%		16.9	%		15.8	%		16.8	%

 (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)

	June 30,			September 30,
	2009			2008
ASSETS
Current assets:
Cash and cash equivalents	$	23,589		$	5,589
Trade receivables		54,155			75,756
Inventories		34,886			53,458
Deferred income taxes		1,844			2,056
Prepaid and other current assets		5,379			10,514
Total current assets		119,853			147,373
Property, plant and equipment, net		57,321			61,164
Goodwill		4,549			8,689
Deferred income taxes		3,785			2,709
Other assets		1,316			1,161
Total assets	$	186,824		$	221,096
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings under credit facilities	$	159		$	9,607
Current portion of long-term debt		13,138			15,201
Accounts payable		32,215			37,674
Accrued salaries and wages		4,604			5,978
Other current liabilities		8,402			11,912
Total current liabilities		58,518			80,372
Long-term debt, net of current portion		20,214			25,122
Deferred income taxes		4,644			5,039
Other long-term liabilities		2,472			2,728
Total liabilities		85,848			113,261
Commitments and contingencies		-			-
Stockholders' equity:
Undesignated preferred stock		-			-
Common stock		55,247			54,756
Treasury stock		(3,017	)		(543	)
Additional paid-in capital		72,814			72,241
Accumulated other comprehensive income		408			3,022
Accumulated deficit		(24,476	)		(21,641	)
Total stockholders' equity		100,976			107,835
Total liabilities and stockholders' equity	$	186,824		$	221,096
OTHER BALANCE SHEET DATA
Working capital	$	61,335		$	67,001
Current ratio		2.0			1.8
Total debt	$	33,511		$	49,930
Debt-to-capitalization		24.9	%		31.6	%

ICO, Inc.

Supplemental Segment Information

 (Unaudited and in thousands, except percentages)

Revenues
Three Months Ended June 30:	2009			% of Total			2008			% of Total			Change			%
ICO Europe	$	31,724			45%		$	58,226			50%		$	(26,502	)		(46%	)
Bayshore Industrial		16,003			23%			19,044			16%			(3,041	)		(16%	)
ICO Asia Pacific		11,974			17%			21,417			19%			(9,443	)		(44%	)
ICO Polymers North America		7,113			10%			12,081			10%			(4,968	)		(41%	)
ICO Brazil		3,183			5%			4,950			5%			(1,767	)		(36%	)
Consolidated	$	69,997			100%		$	115,718			100%		$	(45,721	)		(40%	)
Nine Months Ended June 30:		2009		% of Total				2008		% of Total			Change			%
ICO Europe	$	99,111			45%		$	158,720			47%		$	(59,609	)		(38%	)
Bayshore Industrial		50,175			23%			71,563			21%			(21,388	)		(30%	)
ICO Asia Pacific		37,637			17%			58,989			18%			(21,352	)		(36%	)
ICO Polymers North America		23,759			11%			34,971			10%			(11,212	)		(32%	)
ICO Brazil		8,803			4%			14,466			4%			(5,663	)		(39%	)
Consolidated	$	219,485			100%		$	338,709			100%		$	(119,224	)		(35%	)
Operating income (loss)
Three Months Ended June 30:		2009			2008		Change			%
ICO Europe	$	1,342		$	3,901		$	(2,559	)		(66%	)
Bayshore Industrial		1,772			2,045			(273	)		(13%	)
ICO Asia Pacific		171			(11	)		182		N.M.*
ICO Polymers North America		210			1,811			(1,601	)		(88%	)
ICO Brazil		(10	)		224			(234	)		(105%	)
Total Operations		3,485			7,970			(4,485	)		(56%	)
Unallocated General Corporate Expense		(1,296	)		(1,503	)		207			(14%	)
Consolidated	$	2,189		$	6,467		$	(4,278	)		(66%	)
*Not meaningful.
Nine Months Ended June 30:		2009			2008		Change			%
ICO Europe	$	3,108		$	10,419		$	(7,311	)		(70%	)
Bayshore Industrial		5,090			8,755			(3,665	)		(42%	)
ICO Asia Pacific		(6,120	)		1,612			(7,732	)		(480%	)
ICO Polymers North America		1,453			5,194			(3,741	)		(72%	)
ICO Brazil		(40	)		553			(593	)		(107%	)
Total Operations		3,491			26,533			(23,042	)		(87%	)
Unallocated General Corporate Expense		(4,066	)		(4,924	)		858			(17%	)
Consolidated	$	(575	)	$	21,609		$	(22,184	)		(103%	)
Operating income (loss) as a percentage of revenues	Three Months Ended									Nine Months Ended
	June 30,									June 30,
		2009			2008		Change				2009			2008		Change
ICO Europe		4%			7%			(3%	)		3%			7%			(4%	)
Bayshore Industrial		11%			11%			0%			10%			12%			(2%	)
ICO Asia Pacific		1%			0%			1%			(16%	)		3%			(19%	)
ICO Polymers North America		3%			15%			(12%	)		6%			15%			(9%	)
ICO Brazil		0%			5%			(5%	)		0%			4%			(4%	)
Consolidated		3%			6%			(3%	)		0%			6%			(6%	)

ICO, Inc.

Supplemental Segment Information (cont'd.)

 (Unaudited and in thousands, except percentages)

Revenues	Three Months Ended
	June 30,						March 31,
	2009			% of Total			2009			% of Total			Change			%
ICO Europe	$	31,724			45%		$	32,624			46%		$	(900	)		(3%	)
Bayshore Industrial		16,003			23%			15,843			23%			160			1%
ICO Asia Pacific		11,974			17%			11,182			16%			792			7%
ICO Polymers North America		7,113			10%			7,757			11%			(644	)		(8%	)
ICO Brazil		3,183			5%			2,724			4%			459			17%
Consolidated	$	69,997			100%		$	70,130			100%		$	(133	)		0%
Operating income (loss)
	Three Months Ended
	June 30,			March 31,
		2009			2009		Change			%
ICO Europe	$	1,342		$	1,915		$	(573	)		(30%	)
Bayshore Industrial		1,772			1,600			172			11%
ICO Asia Pacific		171			(5,004	)		5,175			(103%	)
ICO Polymers North America		210			661			(451	)		(68%	)
ICO Brazil		(10	)		28			(38	)		(136%	)
Total Operations		3,485			(800	)		4,285			(536%	)
Unallocated General Corporate Expense		(1,296	)		(1,516	)		220			(15%	)
Consolidated	$	2,189		$	(2,316	)	$	4,505			(195%	)
Operating income (loss) as a percentage of revenues	Three Months Ended
	June 30,			March 31,
		2009			2009		Change
ICO Europe		4%			6%			(2%	)
Bayshore Industrial		11%			10%			1%
ICO Asia Pacific		1%			(45%	)		46%
ICO Polymers North America		3%			9%			(6%	)
ICO Brazil		0%			1%			(1%	)
Consolidated		3%			(3%	)		6%

[

ICO, Inc.

Reconciliation of Non-GAAP Financial Measures

(Unaudited and in thousands except per share data)

Net Income (Loss) and Income (Loss) Per Share Reconciliation
Three Months Ended:	June 30,						March 31,
	2009				2008		2009
Net income (loss) applicable to common stock	$	1,259			$	4,633	$	(3,018	)
Goodwill impairment		-				-		3,450
Net income (loss), as adjusted	$	1,259			$	4,633	$	432
Basic and diluted income (loss) per common share	$	0.05			$	0.17	$	(0.11	)
Goodwill impairment		-				-		0.13
Basic and diluted income per common share, as adjusted	$	0.05			$	0.17	$	0.02
Nine Months Ended:	June 30,
		2009				2008
Net income (loss) applicable to common stock	$	(2,835	)		$	13,135
Goodwill impairment		3,450				-
Net income (loss), as adjusted	$	615			$	13,135
Basic net income (loss) per common share	$	(0.10	)		$	0.48
Goodwill impairment		0.13				-
Basic net income (loss) per common share, as adjusted	$	0.02		(a)	$	0.48
Diluted income (loss) per common share	$	(0.10	)		$	0.47
Goodwill impairment		0.13				-
Diluted net income (loss) per common share,
as adjusted	$	0.02		(a)	$	0.47
(a)  Does not total due to rounding.
Operating Income (Loss) Reconciliation
Three months ended:	June 30,						March 31,
		2009				2008		2009
Operating income (loss)	$	2,189			$	6,467	$	(2,316	)
Goodwill impairment		-				-		3,450
Operating income, as adjusted	$	2,189			$	6,467	$	1,134
Nine Months Ended:	June 30,
		2009				2008
Operating income (loss)	$	(575	)		$	21,609
Goodwill impairment		3,450				-
Operating income, as adjusted	$	2,875			$	21,609
Net Debt Reconciliation	June 30,				September 30,
		2009				2008
Total debt	$	33,511			$	49,930
Less cash and cash equivalents		23,589				5,589
Net debt	$	9,922			$	44,341