Polymer Group, Inc. News
Polymer Group, Inc. Announces First Quarter Results
Operational highlights included: — Sales continued to increase to record levels with first quarter sales growing 2.5% to $273.8 million compared to the first quarter of 2007 and 3.1% compared to $265.4 million in the fourth quarter of 2007 — Gross profit increased 10.4% compared to the fourth quarter of 2007 and the gross profit margin increased from 14.6% to 15.7% during the same time period — Total debt levels were reduced by over $14 million during the quarter supported by improvements in cash flow from operations — The new spunbond line in Argentina began commercial production during the quarter.
Net sales for the first quarter of 2008 were
Reductions in overhead costs, including lower depreciation costs as a result of special charges taken in the fourth quarter of 2007, resulted in an improvement in gross profit compared to the prior quarter. Gross profit was
Operating income for the first quarter of 2008 was
The company continued to successfully manage the balance sheet during the quarter. Total debt levels were reduced by
Net income for the quarter was
PGI's chief executive officer,
"The improvement will be supported by our new spunbond line in
Hagen added, "PGI has set its sights on market leadership by leveraging our core strengths of innovation, operational excellence, customer satisfaction and global capabilities. We have initiated global marketing efforts to refresh and improve our brand image and position in the market. This includes the development of a new logo that represents the brand character and provides a framework for how we interact in the marketplace."
ADJUSTED EBITDA
Adjusted EBITDA, a non-GAAP financial measure defined below, for the first quarter of 2008 was
NON-GAAP FINANCIAL MEASURE
Adjusted EBITDA (as defined below) is used in this release as a "non-GAAP financial measure," which is a measure of the company's financial performance that is different from measures calculated and presented in accordance with generally accepted accounting principles, or GAAP, within the meaning of applicable Securities and Exchange Commission rules. A non-GAAP financial measure, such as EBITDA or Adjusted EBITDA, should not be viewed as an alternative to GAAP measures of performance such as (1) net income determined in accordance with GAAP or (2) operating cash flows determined in accordance with GAAP. Our calculation of Adjusted EBITDA may not be comparable to the calculation of similarly titled measures reported by other companies.
As defined in the company's credit agreement, Adjusted EBITDA equals net income (loss) before income and franchise tax expense (benefit), interest expense net, depreciation and amortization, minority interests net of cash distributions, write-off of loan acquisition costs, non-cash compensation, foreign currency gain and losses, net, and special charges net of unusual or non-recurring gains. The company presents Adjusted EBITDA as defined in its credit facility as the measurement is used as a basis for determining our compliance with several covenants thereunder. It is also generally consistent with the metric used by management as a performance measurement for certain performance-based incentive compensation plans. In addition, the company considers Adjusted EBITDA an important supplemental measure of our performance and believes it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. The company has conformed its definition of Adjusted EBITDA this period to the definition in its senior secured credit facility as the company believes such measurement is more relevant to evaluating the results of the business.
Included in this release is a reconciliation of net income (loss) to Adjusted EBITDA, which illustrates the difference in these measures of operating performance.
Polymer Group, Inc., one of the world's leading producers of nonwovens, is a global, technology-driven developer, producer and marketer of engineered materials. With the broadest range of process technologies in the nonwovens industry, PGI is a global supplier to leading consumer and industrial product manufacturers. The company operates 18 manufacturing and converting facilities in 8 countries throughout the world.
Safe Harbor Statement
Except for historical information contained herein, the matters set forth in this press release are forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements speak only as of the date of this release. Important factors that could cause actual results to differ materially from those discussed in such forward-looking statements include: general economic factors including, but not limited to, changes in interest rates, foreign currency translation rates, consumer confidence, trends in disposable income, changes in consumer demand for goods produced, and cyclical or other downturns; substantial debt levels and potential inability to maintain sufficient liquidity to finance the company's operations and make necessary capital expenditures; inability to meet existing debt covenants; information and technological advances; changes in environmental laws and regulations; cost and availability of raw materials, labor and natural and other resources and the inability to pass raw material cost increases along to customers; changes in selling prices to customers which are based, by contract, on changes to an underlying index; domestic and foreign competition; reliance on major customers and suppliers; inability to achieve successful or timely start-up on new or modified production lines; achievement of objectives for strategic acquisitions and dispositions; and risks related to operations in foreign jurisdictions. Investors and other readers are directed to consider the risks and uncertainties discussed in documents filed by Polymer Group, Inc. with the Securities and Exchange Commission, including the company's Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q.
For further information, please contact: Dennis Norman Vice President - Strategic Planning & Communication (704) 697-5186 normand@pginw.com P O L Y M E R G R O U P, I N C. Consolidated Statements of Operations (Unaudited) Three Months Ended March 29, 2008, Three Months Ended December 29, 2007 and Three Months Ended March 31, 2007 (In Thousands, Except Per Share Data) Three Months Three Months Three Months Ended Ended Ended March 29, December 29, March 31, 2008 2007 2007 Net sales $273,773 $265,425 $267,037 Cost of goods sold 230,867 226,559 220,999 Gross profit 42,906 38,866 46,038 Selling, general and administrative expenses 30,700 25,315 28,442 Special charges, net 1,363 31,487 6,377 Foreign currency (gain) loss, net (1,292) (118) (502) Operating income (loss) 12,135 (17,818) 11,721 Other expense (income): Interest expense, net 8,707 7,490 8,134 Other (gain) loss, net 487 (480) (1,802) Income (loss) before income tax expense and minority interests 2,941 (24,828) 5,389 Income tax expense (benefit) 1,624 (3,490) 4,589 Minority interests, net of tax (107) 431 510 Net income (loss) $1,424 $(21,769) $290 Average common shares outstanding 19,197 19,406 19,263 Income (loss) per common share: Basic $0.07 $(1.12) $0.02 Diluted $0.07 $(1.12) $0.01 P O L Y M E R G R O U P, I N C. Condensed Consolidated Balance Sheets (Unaudited) (In Thousands) March 29, December 29, 2008 2007 A S S E T S Current assets: Cash and cash equivalents $21,816 $32,766 Accounts receivable, net 147,626 139,505 Inventories 136,236 139,726 Other 35,283 27,838 Total current assets 340,961 339,835 Property, plant and equipment, net 397,496 395,394 Intangibles and loan acquisition costs, net 8,694 9,341 Other assets 7,769 6,101 Total assets $754,920 $750,671 L I A B I L I T I E S A N D S H A R E H O L D E R S' E Q U I T Y Current liabilities: Accounts payable and accrued liabilities $153,812 $150,365 Current portion of long-term debt and short-term borrowings 12,801 11,444 Other 3,751 2,069 Total current liabilities 170,364 163,878 Long-term debt 400,114 415,514 Other noncurrent liabilities 59,066 53,002 Total liabilities 629,544 632,394 Minority interests 19,637 19,745 Shareholders' equity 105,739 98,532 Total liabilities and shareholders' equity $754,920 $750,671 P O L Y M E R G R O U P, I N C. Selected Financial Data (Unaudited) (In Thousands) Three Months Three Months Three Months Ended Ended Ended March 29, December 29, March 31, 2008 2007 2007 Selected Financial Data Depreciation and amortization expense included in operating income $12,788 $14,062 $14,204 Noncash compensation costs included in operating income $1,849 $(2) $711 Amortization of loan acquisition costs $345 $352 $345 Capital expenditures $12,579 $14,347 $10,963 Special charges, net Asset Impairment charges - 24,954 - Restructuring and plant realignment costs 1,352 6,093 6,207 Other 11 440 170 $1,363 $31,487 $6,377 Adjusted EBITDA The following table reconciles Adjusted EBITDA to net income (loss) for the periods presented: Net income (loss) $1,424 $(21,769) $290 Income & franchise tax expense (benefit) 2,237 (3,137) 5,061 Interest expense, net 8,707 7,490 8,134 Depreciation and amortization included expense in operating income 12,788 14,062 14,204 Minority interests, net of tax & cash disbursements (107) (162) (1,370) Non-cash compensation 1,849 (2) 711 Foreign currency (gain) loss, net (991) 557 (542) Special charges, net 1,363 31,487 6,377 Other charges (gains), net 198 (1,088) (129) Adjusted EBITDA $27,468 $27,438 $32,736
SOURCE Polymer Group, Inc.
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