Wellman, Inc. reported net earnings from continuing operations for the quarter of $5.6 million, compared to net earnings from continuing operations of $3.9 million for the same period in 2001.
In the first quarter Wellman decided to discontinue certain businesses -- its partially oriented yarn business located in Fayetteville, N.C. and its small polyester staple fibers business in Marion, S.C.
However, the company adopted new accounting rules for goodwill and other intangibles the beginning of this year. The new rules require that goodwill be evaluated for impairment and eliminate the amortization of goodwill. As a result of this evaluation, Wellman determined that goodwill allocated to its Fibers and Recycled Products Group segment should be reduced by about $197.0 million. Eliminating the amortization of goodwill reduced the total loss and increased net earnings from continuing operations for the first quarter by about $2.1 million when compared to net earnings for the same 2001 period.
As a result of the above, Wellman reported a net loss of $211.6 million for the first quarter.
Sales increased in the first quarter compared to the fourth quarter due to increased volumes. Profitability from continuing operations rebounded due to higher volumes, improved raw material margins and reduced unit costs. Thomas Duff, chairman and CEO, said, ``We experienced a significant improvement in our business in the first quarter 2002 when compared to the fourth quarter 2001. Our PET resin and polyester staple businesses are stronger as a result of increased end use demand and industry restocking of inventory. Overall, we expect our level of profitability from continuing operations for the remainder of 2002 to improve over first quarter levels.''