Polyester manufacturer Wellman Inc reported a net loss of $16.0 million or $0.61 per share for the quarter ended March 31st 2006. This compares to net earnings of $11.6 million, or $0.22 per share for the same period in 2005.
Tom Duff, Wellman's Chairman and CEO, stated, "Our first quarter sales and earnings were adversely impacted by the surge in PET resin and polyester staple fiber imports that were caused by the increased raw material cost advantage Asian polyester producers enjoyed compared to domestic producers during the latter part of 2005, primarily as a result of the Gulf Coast hurricanes. These imports continued into the first quarter due to advance purchases which reduced the demand for domestically produced polyester products and made it virtually impossible to implement announced selling price increases.”
“We believe we lost 25 million pounds of PET resin volume in the first quarter 2006 as a result of the increase in imports. We estimate that this decrease in volume, combined with our inability to implement announced selling price increases, adversely affected our operating results by approximately $9 million. We expect our sales volumes to increase with the start of our 300 million pound PET resin expansion at our Pearl River facility in the middle of the second quarter 2006," he added.
Keith Phillips, Wellman's CFO, stated "In the first quarter, we changed our accounting for actuarial gains and losses in our pension plans from deferring actuarial gains and losses to recognizing these gains and losses in the year they are incurred.”
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