The spunmelt line in Suzhou, China was fully installed and began shipping small quantities in the third quarter, but did not contribute materially to profits.
Sales volumes are expected to increase throughout the fourth quarter as the line ramps up, but the ramp up is being impacted by the time required to qualify finished high-grade medical fabrics. The company expects the new China line to begin to significantly contribute to profits in 2007.
As a result of the above, net sales for the third quarter of 2006 were $248.6 million, up $20.4 million or 8.9 percent compared to $228.2 million in the third quarter of 2005 and essentially flat compared to the second quarter of 2006 at $248.7 million.
The company continued to experience higher year-over-year volumes in its nonwovens business, primarily as a result of new capacity installations.
Operating income in the first nine months of 2006 was $13.0 million compared to $45.3 million for the first nine months of the previous year.
For the first nine months of 2006, the company's operating income was negatively impacted by asset impairment charges of $7.9 million, restructuring and plant realignment costs of $5.1 million, and abandoned acquisition costs of $3.8 million.
There were no(Paid-In-Kind)PIK dividends accrued or paid in 2006. As a result, the net loss applicable to common shareholders for the nine months ended September 30, 2006 was $15.7 million compared to a net loss applicable to common shareholders for the first nine months of 2005 of $18.6 million.
marketing@alchempro.com
