They have provided the following information on changes to Adjusted EBITDA as a result of the February financings ("Financing Adjustments") and additionally have provided information to compare EBITDA on a comparable basis for the second quarter and first half of 2005 and 2004. ("Post Financing Adjusted EBITDA")."
They believe Adjusted EBITDA is an important financial measurement in evaluating their business because it is commonly used to measure financial performance from a credit perspective and is an important factor in evaluating a business.
Adjusted EBITDA is calculated by adding Net Earnings (Loss), Income Tax Expense (Benefit), Interest Expense, Depreciation & Amortization and Other Items (listed in the table above) all of which were included in Net Earnings (Loss).
Since they believe investors and analysts use trends in analyzing their business and since their Adjusted EBITDA is not comparable before and after their February 2004 financings, they have provided information on Post Financing Adjusted EBITDA.
This financial measure is calculated by adding Financing Adjustments and Adjusted EBITDA, and assumes that the February 2004 financings were completed before the start of the period.
Wellman's assets and long-term debt increased at the time of the financing because part of the financing included the purchase of PET resin assets located at their Palmetto Plant that were leased under a sale and leaseback transaction entered into in 1999, the purchase of accounts receivable previously sold under an asset securitization program and the prepayment of a raw material contract.
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