PGI experiences top line growth in Q1
Polymer Group, Inc. reported results of operations for the first quarter ended April 3, 2010.
• Top Line Results Up on Volumes, Pricing and Mix
o Net sales were $280.6 million compared with sales from continuing operations of $243.6 million in the fourth quarter of 2009 and sales from continuing operations of $210.0 million for the first quarter of 2009, reflecting strong gains in volume in Asia and Latin America, a better-than-expected contribution from the acquisition in Spain, higher selling prices due to the pass through of higher raw material costs and increased sales of higher grade medical products in Asia.
• Profitability Improved Sequentially
o Gross profit improved to $47.6 million from $44.5 million in the fourth quarter of 2009 and decreased from $49.4 million in the prior-year period.
o Raw material costs continued their rapid rise since the second quarter of 2009 with cost increases of as high as 27% through April in North America compared to the opposite result in the first quarter of 2009 as significantly lower raw material costs contributed to dramatic improvement in profitability in the first quarter of 2009.
o Operating income was $9.2 million, reversing an operating loss of $3.3 million in the fourth quarter of 2009. The company reported operating income of $20.0 million in the prior-year period.
o Adjusted EBITDA was $27.8 million compared with $22.6 million in the fourth quarter of 2009 and $37.8 million in the prior-year period. Adjusted EBITDA, a non-GAAP financial measure, is defined and reconciled to net income below.
• Investing in Growth
o The company's December 2009 acquisition of a nonwovens business in Spain contributed significantly to volumes and profitability in the first quarter of 2010. PGI Spain strengthened the company's position as a global leader in the hygiene market and gave it a new presence in Europe with state-of-the-art technology.
o The company initiated the expansion of its new proprietary high barrier spunmelt capacity at its facility in Suzhou, China during the first quarter of 2010 and continued to make progress toward installation of a similar spunmelt line in the U.S. Both capacity expansions are expected to be online in mid-2011.
PGI's chief executive officer, Veronica (Ronee) M. Hagen, stated, "The top line growth we experienced in the first quarter highlights the growth investments we have made in Latin America and Asia, better-than-expected results from our recent acquisition in Spain and stability in demand in Europe and the U.S. The rapid and significant increase in raw material costs year-to-date is consistent with the climate of volatility we expected heading into the year, but we are confident our initiatives to reduce the impact and maintain spreads will keep us on the right course for delivering underlying improvement in 2010. The increasing demand in our consumer markets across all regions andthe stabilization occurring in industrial durables are encouraging. We will look to build on this progress and continue to invest in driving growth."