PGI experiences strong performance in spunbond markets
Polymer Group Inc reported results of operations for the fourth quarter and fiscal year ended January 2, 2010.
• Sales from continuing operations were $882.7 million in fiscal 2009 compared to $1.07 billion in fiscal 2008 reflecting lower selling prices from significantly lower raw material costs in fiscal 2009 and lower volumes in the industrial segments, offset by improvement in Asia and Latin America.
• Gross profit increased 4.5% to $183.7 million in fiscal 2009 compared to the prior year. Gross profit margin increased over 400 basis points in fiscal 2009 to 20.8% compared with 16.4% for fiscal 2008.
• Operating income increased to $49.6 million in fiscal 2009 compared to operating income of $32.5 million in fiscal 2008.
• For fiscal 2009, cash flow from operations increased 70% to $100.8 million.
• Net income attributable to PGI for fiscal 2009 more than tripled to $18.2 million compared to net income attributable to PGI of $5.4 million in fiscal 2008.
• Adjusted EBITDA increased 12.0% to $124.4 million in fiscal 2009 compared to $111.1 million in fiscal 2008. Adjusted EBITDA, a non-GAAP financial measure, is defined and reconciled to net income below.
• Strong operating cash flows, the sale of FabPro Oriented Polymers and reduction in operating working capital allowed the company to reduce net debt (defined as total debt less cash balances) by $85 million at the end of the fiscal year to $283.1 million and improved the ratio of net debt to Adjusted EBITDA to 2.3 times from 3.3 times a year ago.
• The company's investments in growth initiatives and improvement in financial flexibility continued to yield strong returns during fiscal 2009. Global leadership of the nonwovens' medical and hygiene markets was achieved, commercialization of a new state-of-the-art facility in Mexico was accomplished ahead of schedule, acquisition of the minority portion of its joint venture in Argentina was completed and an expanded presence in Europe was gained with the acquisition of state-of-the-art spunmelt technology in Spain.
PGI's chief executive officer, Veronica (Ronee) M. Hagen, stated, "This was a year of significant achievement and solid execution of our strategic plan. Our goals were to become more valuable to our customers, operate more efficiently, pursue leadership positions in the core businesses, develop new growth opportunities in developing regions and enhance our financial flexibility. Although a very tall order in a period of economic uncertainty, we exceeded each of these objectives by stabilizing the businesses and aggressively managing our capital. As a result, we achieved sizable growth in net income and Adjusted EBITDA, improved gross margins by over 400 basis points, reduced our debt and invested in profitable growth in developing regions and existing markets."
"Despite the unfavorable raw material trend and the persistent weakness in some industrial end-markets, we experienced strong performance in spunbond markets in the U.S., higher sales volumes in Asia from greater conversion to medical sales, and reaped the benefit of new leadership in Argentina and better-than-expected results from our new line in Mexico. We also invested in continued expansion of our global footprint with the acquisition of the minority interest in our Argentina operation and the nonwovens business in Spain," Hagen said.