Shrewsbury, NJ, Feb. 27--Wellman, Inc. has reported a net loss from continuing operations of $98.1 million for the fourth quarter and $96.7 million for the full year ended December 31, 2003.
In 2002, net earnings from continuing operations for the fourth quarter and full year were $3.3 million and $26.4 million, respectively.
Thomas Duff, Chairman and Chief Executive Officer, stated, "NAFTA PET resin market conditions in 2003 were very competitive, particularly in the second half of the year; margins in our PET resin business were at all time lows during the seasonally-weak fourth quarter.
"These market conditions resulted from the significant mid-year PET resin capacity increases combined with an unexpected drop in demand related to the poor summer weather in the Eastern United States and an associated reduction in customers' inventory levels.
"Normal fourth quarter seasonal weakness -- related to winter buying patterns of our North American beverage packaging customers, the resulting lower-margin exports, and pricing pressure associated with annual contract negotiations -- was aggravated by the weak market environment. In the first quarter of 2004, we announced and implemented selling price increases in both our PET resins and polyester fibers businesses, but our raw material costs have also increased.
"As part of our continuing cost reduction program, we reduced controllable costs by $5 million in the fourth quarter of 2003 compared to the prior quarter. Our cost reduction efforts continue in 2004, and we expect to reduce controllable costs by $4 million in the first quarter of 2004 compared to the fourth quarter of 2003. We expect operating results to improve in 2004 and 2005, driven by increased capacity utilization in the North American PET resin industry and the cost reduction programs that we have implemented."
Wellman, Inc. manufactures and markets high-quality polyester products; including PermaClear and EcoClear brand PET (polyethylene terephthalate) packaging resins, Fortrel brand polyester fibers and Wellamid engineering resins. One of the world's largest PET plastic recyclers, Wellman utilizes a significant amount of recycled raw materials in its manufacturing operations.
