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Profits Up At PGI

June 1, 2009

Polymer Group, Inc. (PGI) has an­nounced the results of operations for the first quarter ended April 4, 2009. Sales of $227.2 million for the first quarter were 17% lower than the prior year due primarily to a reduction in industrial sales volumes combined with changes in foreign currency exchange rates and lower selling prices reflecting lower raw material costs. Net income for the quarter was $9.6 million compared to $1.4 million for the same period the prior year.

Profitability improved significantly over the prior year with first quarter gross profit up 22.7% to $52.6 million, representing a gross profit margin of 23.2% compared to 15.7% for the first quarter of 2008. Operating income for the quarter was $22.2 million, 83% higher than the prior year period, and net income attributable to PGI was $9.6 million compared to $1.4 million in the first quarter of 2008.

During the month of April, the company completed the installation of its state-of-the-art spunmelt line in Mexico to serve the North American hygiene and medical markets.

In the Nonwovens segment, volumes declined $18.4 million, predominantly in the U.S. and Europe. The sales volume declines in the U.S. and Europe were primarily due to a U.S. plant closure in the third quarter of fiscal 2008, and recessionary impacts that are negatively affecting the industrial and wiping businesses located in the U.S. and European regions. However, U.S. nonwoven roll goods volume in the industrial markets was up 5% in aggregate year-over-year. This was the net result of a 54% increase in spunbond industrial volumes and a 46% decrease in fiber-based product volumes representing the company’s efforts to improve its profit profile in the U.S. industrial markets and develop new applications for existing technology.

Sales in the Nonwovens segment were also negatively impacted by lower selling prices of $11.9 million primarily due to price decreases resulting from the pass­through of lower raw material costs.
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