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PGI continues to experience stability in hygiene & medical markets
17 Aug '09
6 min read
Operating income for the second quarter of 2009 was $14.2 million compared to $13.6 million in the second quarter of 2008. Selling, general and administrative (SG&A) expenses decreased $3.7 million, from $29.5 million in 2008 to $25.8 million in 2009, due primarily to the movement of foreign currencies versus the U.S. dollar and lower overall costs in the U.S. and Europe. Included in operating income were special charges of $5.2 million in the second quarter of 2009 primarily associated with plant consolidation and cost reduction activities the U.S. and Europe. Special charges amounted to $1.4 million in the second quarter of 2008. For the first six months of 2009, operating income was $34.3 million compared to $25.8 million for the first six months of 2008. The improvement in operating income was driven by the combination of the above factors with lower SG&A expenses of $6.5 million, offset somewhat by higher special charges of $8.1 million compared to $2.8 million for the first six months of 2008. Depreciation and amortization expense included in operating income for the second quarter and six-month period ended July 4, 2009 was $12.1 million and $24.0 million, respectively compared to $12.2 million and $24.5 million, respectively for the second quarter and six-month periods in 2008.
Interest expense for the quarter was $6.8 million compared to $7.9 million for the second quarter of 2008. Year-to-date interest expense was $14.5 million compared to $16.7 million for the first six months of 2008. The lower costs were due primarily to lower overall debt balances combined with lower effective interest rates on floating rate debt balances.
The preliminary summary results above are subject to final validation of reconciling activities associated with intercompany balances and foreign currency transactions and income tax accounting. Currently, the company does not expect to file the Form 10-Q for the period ended July 4, 2009 within the extension time allowed under the filing requirements due to the complex nature of the company's intercompany structure and the activities required to reconcile the outstanding issues.
Robert J. Kocourek, PGI's chief financial officer, stated, "During the quarter close, certain matters were identified with respect to procedures relating to our accounting for income taxes, foreign currency effects attributable to intercompany loans and intercompany balance reconciliations. Accordingly, there will be a delay in our quarter close process until the impacts of such matters are analyzed. PGI is committed to maintaining effective reporting procedures and internal controls and we will appropriately modify our procedures to remedy the identified issues. With respect to our finances, the company's financial position remains strong with continued improvements in operating cash flow and lower net debt balances."
The company intends to hold its regularly scheduled investor conference call, including presentation slides, after it has filed the Form 10-Q for the period ended July 4, 2009. Additionally, the company does not intend to execute its previously announced amendment and extension transaction related to its senior secured credit facility until after the Form 10-Q is filed.
Interest expense for the quarter was $6.8 million compared to $7.9 million for the second quarter of 2008. Year-to-date interest expense was $14.5 million compared to $16.7 million for the first six months of 2008. The lower costs were due primarily to lower overall debt balances combined with lower effective interest rates on floating rate debt balances.
The preliminary summary results above are subject to final validation of reconciling activities associated with intercompany balances and foreign currency transactions and income tax accounting. Currently, the company does not expect to file the Form 10-Q for the period ended July 4, 2009 within the extension time allowed under the filing requirements due to the complex nature of the company's intercompany structure and the activities required to reconcile the outstanding issues.
Robert J. Kocourek, PGI's chief financial officer, stated, "During the quarter close, certain matters were identified with respect to procedures relating to our accounting for income taxes, foreign currency effects attributable to intercompany loans and intercompany balance reconciliations. Accordingly, there will be a delay in our quarter close process until the impacts of such matters are analyzed. PGI is committed to maintaining effective reporting procedures and internal controls and we will appropriately modify our procedures to remedy the identified issues. With respect to our finances, the company's financial position remains strong with continued improvements in operating cash flow and lower net debt balances."
The company intends to hold its regularly scheduled investor conference call, including presentation slides, after it has filed the Form 10-Q for the period ended July 4, 2009. Additionally, the company does not intend to execute its previously announced amendment and extension transaction related to its senior secured credit facility until after the Form 10-Q is filed.
Polymer Group Inc
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