The new facility in Suzhou, China is complete and the line is fully installed. First shipments were made from the line in the third quarter and the line will continue to ramp up through the end of the year.
Polymer Group's CEO, James Schaeffer, stated, "During the second quarter, PGI experienced a number of factors that negatively impacted results. However, I believe the second quarter is not an accurate representation of the on-going performance potential of the company. We not only implemented specific initiatives to lower our costs and improve profitability, we also shifted to a commercialization focus on all three of our major capacity expansion projects during the quarter. We believe these efforts will result in improved relative performance building in the latter half of 2006 and into fiscal 2007."
Net sales for the second quarter of 2006 were $248.7 million, up $12.8 million over the second quarter of 2005. Sales growth was driven primarily by higher volumes, improved mix and the effects of higher selling prices as a result of higher raw material costs.
Gross profit decreased $5.5 million to $36.5 million for the second quarter due primarily to higher manufacturing costs as manufacturing inefficiencies resulted from lower volumes in the OPD businesses and at certain locations in the nonwovens business associated with the consumer volume decline.
For the six months ended July 1st 2006, sales were $509.1 million, up $28.9 million, or 6.0%, from the same period in 2005. Due primarily to the issues described above related to the second quarter, the company's year-to-date gross profit was $79.7 million compared to $85.9 million for the prior year six-month period. Operating income in the first six months of 2006 was $2.8 million and net loss applicable to shareholders for the first six months of 2006 amounted to $14.2 million.
marketing@alchempro.com
