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Sales volume grow 6.1% at Polymer Group in FY'12
29
Mar '13
Polymer Group, Inc. reported results of operations for the year and fourth quarter ended December 29, 2012.

As previously announced, Polymer Group, Inc. finalized the merger with an affiliate of the Blackstone Group, along with co-investors and certain members of the Company's management (the "Merger"), on January 28, 2011, and became a privately held company.

In the second quarter of 2012, we updated our organizational structure to better reflect how the overall business is managed.  As a result, we changed our reportable segments to reflect the combination of the United States and Latin America Nonwovens segments into the Americas Nonwovens segment.

Fiscal Year 2012 Highlights:

Increased Volumes Paced by Growth Investments in Americas and Asia

Total sales volumes (as measured in metric tonnes) grew 6.1% compared with the prior year, and were up 1.9% excluding volumes from the Colombia operations that were disrupted in fiscal year 2011.  The year-over-year volume growth reflected contributions from new capacity in the Americas and Asia segments, combined with improved demand in the healthcare markets as well as certain industrial markets.

Underlying volume growth was partially offset by reduced selling prices from the pass-through of lower raw material costs, unfavorable market pricing trends, and unfavorable impact of foreign currency translation.

Profit Profile Improves on Return to More Normalized Operating Environment and Contributions from Cost Savings Initiatives

Gross profit was 5.8% higher at $197.2 million for fiscal year 2012 compared with $186.5 million in the prior year, including purchase accounting adjustments and the effect of the flood in Colombia.

Overall profit was positively impacted higher volumes and cost reduction initiatives, which also resulted in lower SG&A costs.  These benefits were partially offset by certain volume-related manufacturing inefficiencies, a volatile raw material environment, increased lease expense associated with the new line in Virginia and higher depreciation expense.

- Strong Cash Generation and Disciplined Working Capital Management Continues

- Liquidity remained strong with cash balances of $97.9 million as of December 29, 2012.

- Operating working capital improved year-over-year to 2.6% of net sales as of year end compared with 4.6% of net sales as of December 31, 2011.

Fourth Quarter results

Net sales for the fourth quarter of 2012 were $273.7 million compared with $291.9 million for the fourth quarter of 2011.  The year-over-year decrease was primarily driven by lower net selling prices, resulting from our passing through lower raw material costs.  Volume increases across each of our Nonwoven segments were offset by a negative foreign currency translation impact.

Gross profit was $45.7 million for the fourth quarter of 2012 compared with $48.1 million for the fourth quarter of 2011.  Lower net spread over raw materials of $2.1 million was driven by a reduction in selling prices which more than offset lower year-over-year raw material costs during the quarter as the impact of rising raw material costs during the quarter and the associated lag to adjust selling prices negatively impacted profitability. 

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