Polymer Group Inc (PGI) reported results of operations for the third quarter and nine-month period ended September 30, 2006.
While product price increases were implemented during the third quarter on contracted business, raw material prices continued to increase, negatively impacting the company's profit margins.
Additional price increases were announced and took effect on October 1, 2006. The company is seeing signs of raw material cost abatement in the fourth quarter that should positively impact results for the rest of the year.
As previously reported, the company experienced lower volumes in certain of its consumer markets in the second quarter and expected those volumes to rebound in the latter portion of the year.
While volumes began to rebound at the end of the third quarter, the pace was slower than originally anticipated. Offsetting the increased consumer volume was weakness in certain specialty niche businesses in the company's industrial segment.
The housing market has also impacted the pace of some of the new product introductions in PGI's Oriented Polymers Division (OPD) that were expected to somewhat offset the lost lumberwrap business experienced during the year.
While macro market factors impacted the pace of the improvement during the quarter, the company's capacity installations in Colombia and North Carolina contributed positively to results in the third quarter and are expected to contribute further going forward.
marketing@alchempro.com
