The second quarter 2005 was adversely impacted by a decline in the PET resin market resulting from lower demand as customers reduced inventories in anticipation of lower raw material costs. This was exacerbated by the impact of declining raw material prices because the Company utilizes FIFO accounting for its inventories."
Wellman recorded a restructuring charge of approximately $0.6 million relating to its fiber operations. This charge relates to their strategic decision to reduce their stated annual capacity at their Johnsonville facility by approximately 80 million pounds and the related workforce reduction. Joseph Tucker, Vice President of Wellman's Fibers and Recycled Products Group stated, "They are rationalizing older high cost equipment and are maximizing their manufacturing efficiency by transferring the production of certain products to lower cost equipment while maintaining a full product line. Although there will be a decrease in their stated annual capacity, they expect their operating results to improve since they are improving their product mix by reducing lower margin sales and increasing the production of higher value added products and lowering their average unit costs."
Historical Adjusted EBITDA and Post Financing Adjusted EBITDA Keith Phillips, Wellman's Chief Financial Officer stated, "The financings they completed in February 2004 changed their capital structure and these changes affected Adjusted EBITDA, overall debt, depreciation and interest expense.
marketing@alchempro.com
