PGI, Charlotte, NC, has reported second quarter sales and earnings results. Sales reached record levels during the quarter, up 9% to $271 million over the second quarter of 2006 and up 5.7% for the first six months compared to the same period of the prior year. At $44.3 million, profitability improved with a 21.5% increase in second quarter profit and a 13.4% increase in gross profit for the first six months compared to the same periods of 2006. Additionally, the gross profit margin increased to 16.3% in the second quarter compared to 14.7% the prior year and 16.8% for the first six months compared to 15.7% for the first six months of 2006.
For the six months ended June 30, 2007, sales were $538.1 million, up $28.9 million, or 5.7%, from the same period in 2006. Higher sales volumes in Asia at the new Suzhou plant was the largest contributor to sales growth for the first six months accompanied by higher year-over-year hygiene volumes in the U.S. and stronger sales in Europe that were aided by stronger foreign currency translations.
Operating income for the second quarter of 2007 was $12.9 million compared to a loss of $5.8 million in the second quarter of 2006. PGI reported net income for the second quarter of $1.2 million compared to a net loss of $12.6 million in the second quarter of 2006. Net income for the first six months of 2007 amounted to $1.5 million compared to a loss of $14.2 million for the first six months of 2006.
PGI attributes sales growth primarily to higher volumes in the nonwovens segment, due to contributions from capacity installations, primarily in the U.S. and Asia. Additionally, the company began to see the benefit of new product sales, which included new acoustic material for the automotive sector and flame retardant materials being sold into the mattress segment as the new national flame test regulations took effect July 1, 2007. In Europe, cable and converted wipes demand have remained strong, offsetting lower hygiene volumes compared to the previous year.
According to PGI, significant contributors to the its ability to improve profitability were improved manufacturing efficiencies, improved sales volumes and lower start-up costs compared to the same period in 2006. These improvements were partially offset by higher raw material costs relative to changes in price and mix of the company's net sales compared to the prior year.
PGI’s CEO Veronica (Ronee) Hagen stated, "PGI delivered another quarter of strong performance driven by increased customer demand and positive results from our new programs. The company's key initiatives to achieving our targets for the year include the continued ramp up of our new facility in China, the installation of our new Spinlace product capacity in the third quarter, the successful execution of the plant consolidation plans, and continued success of new product platforms, such as our new automotive moldable substrates and flame-retardant products for mattress components.” Ms. Hagen said that all of these initiatives are progressing and are expected to contribute to a strong finish to the year as well as provide momentum into 2008.