Wellman retains Lazard Freres to explore alternatives
October 30, 2007,
Fort Mill, S.C. – Polyester resin and fiber producer Wellman Inc. has retained investment bank Lazard Freres & Co, to “explore strategic alternatives” for the company (a phrase that often signals the onset of a leveraged buyout), executives said today upon reporting third quarter 2007 results.
“Our board has decided to explore strategic alternatives for Wellman before we begin the task of refinancing our debt in 2008,” said Wellman chairman and ceo Tom Duff. “We are further streamlining our operations and expect to reduce our 2008 costs by $20 to $25 million compared to 2007 levels.”
Quarterly sales dropped to $270.8 million from $307.6 million one year ago – and a negative $400,000 gross profit was recorded, vs. a $10.0 million gain in last year’s third quarter.
“Our financial results in the third quarter were negatively impacted by increased competitive pressures as new PET resin capacities were fully introduced into the NAFTA market,” observed Duff.
On the brighter side, noted cfo Keith Phillips, Wellman reduced “our outstanding debt by $21.2 million, primarily as a result of the sale of our European recycled-based fiber business.”
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