Wellman down in 3Q

By Staff -- Home Textiles Today, 10/27/2003 12:00:00 AM

SHREWSBURY, NJ —

With sales under pressure in an increasingly competitive environment for polyester fibers and products, and margins under pressure from rising raw material costs, Wellman Inc. recorded a third-quarter loss of $7.5 million, compared with a year-before profit of $4.5 million.

Slowing down, sales edged up by 1.9 percent, to $262.1 million from $257.3 million last year. Reflecting stronger sales during the first half of the year, nine-month sales advanced by a sturdy 8.9 percent, to $883.4 million from $765.3 million.

Squeezed by rising raw material costs, average gross margin narrowed by 350 basis points, or 3.5 percentage points, to 6.3 percent from 9.8 percent a year ago. Costs climbed higher as a percentage of sales, to 7.7 percent from 6.6 percent a year ago.

Tom Duff, chairman and ceo, said results "were primarily the result of increases in raw material costs and extremely competitive conditions in the NAFTA PET resins market," stemming from recent capacity increases and a third-quarter drop in demand due to poor weather in the eastern United States.

Wellman Inc.