Wellman triples 2Q profits to $9.4M
August 5, 2002,
Lifted by stronger margins, modestly higher sales and deep cuts in interest expense, polyester producer Wellman Inc. more than tripled second-quarter profits, to $9.4 million from $3.1 million last year, marking a second quarterly improvement in operations.
"While we anticipated the improvement in our resins business, our fibers business has performed above expectations," said Tom Duff, chairman and ceo.
But looking ahead, the outlook is more muted, he observed. "In the third quarter, we expect income from continuing operations to be lower than the second quarter as a result of lower volumes, due to seasonality and higher product costs."
Helping to fuel the big improvement in profits, average gross margin widened substantially, by 310 basis points, or 3.1 percentage points, to 14.3 percent from 11.2 percent a year ago. Gross margin dollars shot up by 29.5 percent. Operating costs held relatively steady, edging up by 10 basis points, to 18.4 percent of sales from 18.3 percent a year ago.
In another lift to the bottom line, interest costs were slashed in half, reduced by 51.1 percent, to $2.3 million from $4.7 million a year ago. Further boosting profits, Wellman recorded a $1.8 million income-tax benefit from discontinued operations, compared with a year-ago benefit of $1.0 million.
Wellman more than doubled earnings from continuing operations, which shot up by 156.0 percent, to $12.8 million from $5.0 million last year. The loss from discontinued operations widened substantially, to $5.2 million from $2.9 million the preceding year.
|Qtr. 6/30 (x000)||2002||2001||% change|
a-Second-quarter results include a $12.8 million after-tax profit from discontinued operations, up 156.0 percent from $5.0 million last year, partially offset by a $5.2 million loss from discontinued operations, compared with a prior-year loss of $2.9 million; and an income-tax benefit of $1.8 million vs. $1.0 million last year.
b-Six-month results include an after-tax profit of $18.4 million from continuing operations, up 106.7 percent from $8.9 million last year; a $36.2 million loss from discontinued operations, compared with a $4.6 million deficit the prior year; an income-tax benefit of $12.7 million vs. $1.6 million in the same period a year ago; and a $197.1 million after-tax charge stemming from a change in accounting.
|Oper. income (EBIT)||19,800||11,200||76.8|
|Per share (diluted)||0.29||0.10||—|
|Average gross margin||14.3%||11.2%||—|
|Oper. income (EBIT)||30,100||22,100||36.2|
|Per share (diluted)||(6.31)||0.18||—|
|Average gross margin||12.8%||10.9%||—|