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PGI Sales Top $1 Billion

March 12, 2007

Net sales topped $1 billion for the first time last year at nonwovens producer Polymer Group Inc. The company’s sales increased 7.7% to $1.02 billion. Meanwhile, fourth quarter sales also increased, 9.8%, to $263.9 million, and gross profit increased 12.8% to $41.4 million for the quarter. The company expects continued strength and improvement in 2007, as recent capacity expansions contribute to higher margins, coupled with productivity and cost improvements in North America, according to executives. “I am pleased to report that PGI ended 2006 on a strong note,” said PGI’s chairman and interim chief executive officer, William B. Hewitt.  “Our fourth quarter returned to a more acceptable level of performance and we have the right initiatives in place to continue on a steady trend of improvement going forward.  I am encouraged by the progress we are making with both our capacity expansions and new product introductions that will drive performance in 2007.”

In 2007, the company expects profits to improve as a result of the full year impact of capacity expansions that we re completed in 2006, new technology commercializations in the second half of 2007 and lower costs from restructuring and consolidation plans that have been initiated.
Earlier this year, the company announced a U.S. plant consolidation plan that will result in the closure of its Rogers, AR and Gainesville, GA plants by mid year.  These plans are expected to reduce fixed overhead by approximately $4 million to $6 million annualized, which is expected to have a partial benefit in the latter portion of 2007 and full year benefit in 2008.  The company has also implemented a number of restructuring initiatives in North America and Europe to improve its productivity and cost position, while managing the exit of certain low-margin product lines associated with the plant consolidation plans previously announced.