PGI Reports Record Sales In Q1 2008

Charlotte-based nonwovens producer Polymer Group Inc. (PGI) reported record sales and increased gross profit for the fiscal year 2008 first quarter (Q1) ended March 29, 2008.

Net sales increased to a record $273.8 million in Q1 2008 from $267 million in Q1 2007 and from $265.4 million in the fourth quarter (Q4) of 2007. Sales growth reflects the increased price of raw materials as well as the higher value of most foreign currencies against the US dollar. Also contributing to the increase were volume increases from PGI’s new China-based medical business and in Latin American markets, and increased sales in North America.

PGI reported a Q1 2008 gross profit of $42.9 million and gross profit margin of 15.7 percent, compared with a Q4 2007 gross profit of $38.9 million and 14.6-percent margin, and a $46 million profit and 17.2-percent margin in Q1 2007. The company noted increased raw material costs negatively impacted profitability in the last two quarters.

Q1 2008 net income was $1.4 million, compared with Q1 2007 net income of $0.3 million. The company also reduced debt levels by $14 million during the latest quarter to $412.9 million.

Veronica “Ronee” Hagen, CEO, said the company expects to improve its profit picture beginning in the second quarter of this year and into next year. “The improvement will be supported by our new spunbond line in Argentina and Spinlace™ line in the US, continued growth in the Asia medical business, and implementing initiatives to better match the way we buy and sell products,” she stated. “Additionally, we are continuing to invest for future growth with the initiation of construction on our previously announced barrier spunmelt capacity expansion in Mexico. This line is targeted to serve the hygiene and medical markets in the US as well as in Mexico and is projected to begin commercial production by mid-year 2009.”

May 13, 2008