Polymer Group announces results of operations for Q1
11 May '07
4 min read
The company successfully improved profitability as a result of higher volumes, product mix improvements and improved manufacturing efficiencies resulting in lower unit costs. The manufacturing cost improvements were experienced across the business, in part due to cost improvement programs implemented in 2006. Raw material costs were relatively flat compared to the prior year and the prior quarter.
Operating income for the first quarter of 2007 was $11.7 million, which included $6.4 million of special charges associated with the company's plans to consolidate plants in the U.S. and non-cash pension settlement costs in Canada as the company converted a portion of a defined benefit plan to a defined contribution plan.
Selling, general and administrative (SG&A) expenses were approximately $4.0 million lower in the first quarter compared to the prior year, primarily as a result of lower non-cash stock compensation expenses recognized in the first quarter of 2007 of $0.7 million versus $3.8 million in the comparable period of 2006.
The higher non-cash compensation costs during the first quarter of 2006 were the result of an initial grant of restricted stock associated with the 2005 Employee Restricted Stock Plan. SG&A expenses represented 10.7% of sales in the first quarter of 2007 compared to 12.4% the prior year.
Polymer Group's chief executive officer, Veronica (Ronee) M. Hagen, stated, "PGI's business re-established its trend of year-over-year growth and profitability this quarter. The nonwovens business continues to show strength in all regions, both as a result of the strategic capacity expansions implemented in 2006 and an encouraging continuation of improvement in the base business. The company's focus on cost control was evident in the improvement in our overall profit margins."
"PGI is intensely focused on becoming the industry leader through growth and innovation. The company has a strong track record of investment in both the developed and developing regions, and we expect to continue that commitment to our customers."
Our new line being installed in Argentina is progressing and is expected to be complete in the latter portion of this year. Additionally, the company recently rolled out its new Spinlace material at the IDEA 2007 trade show and received a strong response from the market.
"Our first Spinlace line is due to be completed in the second half of 2007, providing customers with a new wiping application. My goal is to ensure PGI has the right strategy, structure and competencies to achieve our strategic objectives in the years to come," Hagen said.