8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K
CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 24, 2003

Wellman, Inc.

(Exact name of registrant as specified in its charter)

Delaware	1-10033	04-1671740
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)
595 Shrewsbury Avenue, Shrewsbury, NJ		07702
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code 732-212-3300

TABLE OF CONTENTS

	Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
	Item 12. Results of Operations and Financial Condition
SIGNATURES
Ex-99.1 Press Release, dated April 24, 2003
Ex-99.2 Slide Show to be used on April 24, 2003

Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.

(c)	Exhibits
99.1	Press Release dated April 24, 2003
99.2	Slide Show to be used on April 24, 2003

Item 12. Results of Operations and Financial Condition

The Registrant issued a press release on April 24, 2003, which is attached hereto as exhibit 99.1, and will use a slide show, which is attached hereto as exhibit 99.2, on April 24, 2003.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

April 25, 2003
	Wellman, Inc.
	By:	/s/ Mark J. Rosenblum
	Mark J. Rosenblum Vice President, Chief Accounting Officer and Controller

EX-99.1 3 b46428wiexv99w1.htm EX-99.1 PRESS RELEASE, DATED APRIL 24, 2003

Exhibit 99.1

Contact: Dennis Sabourin
Investor Relations Manager
(732) 212-3321

FOR IMMEDIATE RELEASE

WELLMAN’S FIRST QUARTER 2003 RESULTS EXCEED PRIOR YEAR

April 24, 2003, Shrewsbury, NJ – Wellman, Inc. (NYSE: WLM) today reported normalized earnings from continuing operations for the quarter ended March 31, 2003 of $6.5 million, or $0.20 cents per diluted share. Normalized earnings from continuing operations exclude restructuring charges of $0.8 million, or $0.02 per diluted share, since the Company only incurs restructuring charges when it believes it can improve its future operating income by incurring current costs that improve its business operations. Earnings from continuing operations, which are net of the restructuring charges, were $5.7 million, or $0.18 per diluted share, for the first quarter 2003 compared with $5.6 million, or $0.18 per diluted share, for the same period in 2002. In the first quarter 2003, net earnings were $5.8 million, or $0.18 per diluted share. In the comparable period in 2002, there was a net loss of $211.6 million, or $6.61 per diluted share.

The following table summarizes the results for the first quarter 2003 and 2002.

THREE-MONTH SALES AND EARNINGS

($ Millions except per share data)	1Q03		1Q02
Sales	$	286.7	$	240.0

NORMALIZED EARNINGS FROM CONTINUING OPERATIONS**

Total	$	6.5	$	5.6
Per diluted share	$	0.20	$	0.18

RESTRUCTURING CHARGES**

Total	$	(0.8	)	—
Per diluted share	$	(0.02	)	—

EARNINGS FROM CONTINUING OPERATIONS**

Total	$	5.7	$	5.6
Per diluted share	$	0.18	$	0.18

EARNINGS (LOSS) FROM DISCONTINUED OPERATIONS**

Total	$	0.1	$	(20.1	)*
Per diluted share	$	0.00	$	(0.63	)

CUMULATIVE EFFECT OF ACCOUNTING CHANGE**

Total	—	$	(197.1	)
Per diluted share	—	$	(6.16	)

NET EARNINGS (LOSS)**

Total	$	5.8	$	(211.6	)
Per diluted share	$	0.18	$	(6.61	)

*	Includes an impairment charge of $19.0 million (net of appropriate taxes) to reduce certain long-lived assets to fair value less estimated cost of disposal.
**	Net of tax

In 2003, the Company is restructuring its operations to reduce costs. In the first quarter, the Company reduced headcount by over 100 individuals and incurred a restructuring charge of $0.8 million. We expect to incur additional restructuring charges during the remainder of 2003. In the first quarter of 2002, Wellman discontinued two businesses and these earnings (losses) are reflected as discontinued operations. The cumulative effect of an accounting change in 2002 was the result of adopting the new rules on accounting for goodwill and other intangibles.

2

Chairman and CEO Thomas M. Duff stated, “We experienced a significant run-up in raw material and energy costs in the first quarter 2003 and expect significant fluctuations in these costs for the remainder of the year. Our first quarter results were driven by the strong volume growth in our domestic PET resins business, which increased 22% over the same period in 2002, due to high industry capacity utilization and continued growth in demand. Overall, we expect our profitability from continuing operations for full year of 2003 to exceed 2002.”

Wellman, Inc. manufactures and markets high-quality polyester products, including PermaClear® and EcoClear® brand PET (polyethylene terephthalate) packaging resins, and Fortrel® brand polyester fibers. The world’s largest PET plastic recycler, Wellman utilizes a significant amount of recycled raw materials in its manufacturing operations.

Forward-Looking Statements
Statements contained in this release that are not historical facts are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In addition, words such as “believes,” “expects,” “anticipates,” and similar expressions are intended to identify forward-looking statements. These statements are made as of the date hereof based upon current expectations and we undertake no obligation to update the information contained herein. These forward-looking statements involve certain risks and uncertainties, including but not limited to: demand and competition for polyester fiber and PET resins; the financial condition of our customers; availability and cost of raw materials; availability and cost of petrochemical feedstock necessary for the production process; availability of financing, changes in financial markets, interest rates, credit ratings, and foreign currency exchange rates; U.S., European, Far Eastern and global economic conditions; prices and volumes of imports; work stoppages; levels of production capacity and profitable operation of assets; changes in laws and regulations; prices of competing products; natural disasters; acts of terrorism; maintaining the operations of our existing production facilities; and the impact of a governmental investigation of pricing practices in the polyester staple fiber industry. Actual results may differ materially from those expressed herein. Results of operations in any past period should not be considered indicative of results to be expected in future periods. Fluctuations in operating results may result in fluctuations in the price of our common stock. For a more complete description of the prominent risks and uncertainties inherent in our business, see our Form 10-K for the year ended December 31, 2002.

###

3

Wellman, Inc
Condensed Consolidated Statement of Operations
(In Millions, except per share data)

			(Unaudited)
			Quarter Ended
			March 31
			2003		2002
Net Sales			$	286.7	$	240.0
Cost of Sales				256.5		213.5
Gross Profit				30.2		26.5
Selling, General and Administrative Expenses				18.5		16.2
Restructuring Charge				1.2		—
Operating Income				10.5		10.3
Interest Expense, Net				2.0		2.8
Earnings From Continuing Operations Before Income Taxes				8.5		7.5
Income Taxes				2.8		1.9
Earnings From Continuing Operations				5.7		5.6
Earnings (Loss) From Discontinued Operations				0.2		(31.0	)
Income Taxes (Benefit) From Discontinued Operations				0.1		(10.9	)
Earnings (Loss) Before Cumulative Effect of Accounting Change				5.8		(14.5	)
Cumulative Effect of Accounting Change, Net of Tax				—		(197.1	)
Net Earnings (Loss)			$	5.8		($211.6	)
Basic Net Earnings (Loss) Per Common Share:
	Continuing Operations		$	0.18	$	0.18
	Discontinued Operations			0.00		(0.64	)
	Cumulative Effect of Accounting Change			—		($6.24	)
		Net Earnings (Loss)	$	0.18		($6.70	)
Diluted Net Earnings (Loss) Per Common Share:
	Continuing Operations		$	0.18	$	0.18
	Discontinued Operations			0.00		(0.63	)
	Cumulative Effect of Accounting Change			—		($6.16	)
		Net Earnings (Loss)	$	0.18		($6.61	)
Average Common Shares — (Basic)				31.6		31.6
Average Common Shares — (Diluted)				31.9		32.0

WELLMAN, INC.
SUPPLEMENTAL INFORMATION*

						1Q/1Q					1Q/4Q
SALES BY GROUP		1Q03		1Q02		% Chg.			4Q02		% Chg.
Million $
Fibers & Recycled Products Group		$	120.2	$	117.1		3	%	$	118.2		2	%
Packaging Products Group		$	166.5	$	122.9		35	%	$	130.5		28	%
	Total Sales	$	286.7	$	240.0		19	%	$	248.7		15	%

BALANCE SHEET DATA	3/31/2003
Million $
Cash	$	4.0
Inventories	$	117.4
Total Debt	$	255.5
Stockholders’ Equity	$	434.4
Total Debt-to-Capital		37.0	%

CASH FLOW DATA
Million $		1Q03
Depreciat	$	11.5
Amortizat	$	0.2
Total D&A	$	11.7
Cap. Exps	$	3.6

*Preliminary

EX-99.2 4 b46428wiexv99w2.htm EX-99.2 SLIDE SHOW TO BE USED ON APRIL 24, 2003

Exhibit 99.2

First Quarter 2003 Review Wellman, Inc. Investor Relations April 24, 2003

Forward-Looking Statement & Copyright Statements contained in this presentation that are not historical facts are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In addition, words such as "believes," "expects," "anticipates," and similar expressions are intended to identify forward-looking statements. These statements are made as of the date hereof based upon current expectations, and we undertake no obligation to update this information. These forward-looking statements involve certain risks and uncertainties, including, but not limited to: demand and competition for polyester fiber and PET resins; the financial condition of our customers; availability and cost of raw materials; availability and cost of petrochemical feedstock necessary for the production process; availability of financing, changes in financial markets, interest rates, credit ratings, and foreign currency exchange rates; U.S., European, Far Eastern and global economic conditions; prices and volumes of imports; work stoppages; levels of production capacity and profitable operation of assets; changes in laws and regulations; prices of competing products; natural disasters and acts of terrorism; maintaining the operations of our existing production facilities; and impact of governmental investigation of pricing practices in polyester staple fiber industry. Actual results may differ materially from those expressed herein. Results of operations in any past period should not be considered indicative of results to be expected in future periods. Fluctuations in operating results may result in fluctuations in the price of our common stock. For a more complete description of the prominent risks and uncertainties inherent in our business, see our Form 10-K for the year ended December 31, 2002. This presentation is copyrighted by Wellman. It cannot be reprinted, recorded or broadcast without Wellman's express permission.

1Q98 2Q98 3Q98 4Q98 1Q99 Fibers Group 100.1 91.794 88 75.5 74.285 Recycled Products Group 104.6 98.221 81.7 81 82.041 Packaging Products Group 58.4 71.253 64.7 67.4 62.565 Financial Update

First Quarter Financial Results ($ Millions except per share data) *Normalized earnings from continuing operations excludes restructuring charge of $0.8 million, or $.02 per share, because the company only incurs restructuring charges when it believes it can improve its future operating income by incurring current costs that improve its business operations **Net of tax

Quarterly Sales* 1Q01 2Q01 1Q02 2Q02 3Q02 4Q02 1Q03 Fibers & Recycled Products 132.7 120.936 117.1 129.7 124.2 118.2 120.2 Packaging Products 135.6 141.4 122.9 138.3 133.1 130.5 166.5 Group Sales - 1Q03 $MM PPG FRPG 1ST QTR 03 166.5 120.2 240.0 *Restated for Discontinued Operations 268.0 257.3 248.7 286.7

Operating Income From Continuing Operations 1Q00 2Q00 3Q00 4Q00 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 4Q02 1Q03 Operating Income 11.919 18.711 18.608 17.702 10.955 11.196 9.536 3.546 10.261 19.817 8.182 7.428 10.527 $ MM *Restated for change from LIFO to FIFO & Discontinued Operations

Debt Reduction Debt Reduction 3/31/00 - 3/31/03 ... $180 Million 3/31/02 - 3/31/03 ... $76 Million 1Q00 1Q01 1Q02 1Q03 Debt 416 372.3 313.7 255.5 Securitizations 225 224.4 223 205.2 $ MM Significant Cash Flow and Debt Repayment

1Q98 2Q98 3Q98 4Q98 1Q99 Fibers Group 100.1 91.794 88 75.5 74.285 Recycled Products Group 104.6 98.221 81.7 81 82.041 Packaging Products Group 58.4 71.253 64.7 67.4 62.565 Raw Material Update

Far East PX Cost 2002 - April 2003 1Q02 2Q02 3Q02 4Q02 1/1/2003 2/1/2003 3/1/2003 4/1/2003 PX Cost 18.6 20.2 20.1 20.4 21.1 26.3 36.3 34.9 Source: PCI Note: Prices are on a CFR basis. Cents / Pound

Far East MEG Cost 2002 - April 2003 1Q02 2Q02 3Q02 4Q02 1/1/2003 2/1/2003 3/1/2003 4/1/2003 MEG Contract Cost 16.2 20.9 22.4 23.7 23.6 27.7 32.7 35.4 Source: PCI Note: Taiwan prices are on a contract delivered basis. Cents / Pound

1Q98 2Q98 3Q98 4Q98 1Q99 Fibers Group 100.1 91.794 88 75.5 74.285 Recycled Products Group 104.6 98.221 81.7 81 82.041 Packaging Products Group 58.4 71.253 64.7 67.4 62.565 Fibers Update

U.S. Polyester Staple Industry Shipments 1997 1998 1999 2000 1Q01* 2Q01* 3Q01* 4Q01* 1Q02* 2Q02* 3Q02* 4Q02* 1Q03* Domestic Industry Shipments 2466 2337 2372 2398 2266 2065.2 2048.8 1927.6 2038.2 2170 2003.6 1958.7 2065.4 MM Lbs. Source: FEB and Wellman * Annualized

U.S. Textile and Apparel Imports 1996 1997 1998 1999 2000 2001 2002 Jan 02 - Feb 02* Jan 03 - Feb 03* Textile & Apparel 19063 22895 25944 28615 32864 32809 38285 33035 39380 Million Square Meter Equivalents Source: US Commerce Department *Annualized

Polyester Staple Imports 1996 1997 1998 1999 2000 2001 2002 Jan 03 - Feb 03* Poylester Staple Imports 488.2 555.2 662 688.9 619.5 636.2 757.7 777.6 MM Lbs. Source: US Commerce Department *Annualized

Wellman Fiber Shipments 1997 1998 1999 2000 1Q01* 2Q01* 3Q01* 4Q01* 1Q02* 2Q02* 3Q02* 4Q02* 1Q03* Wellman Domestic 780.8 754.8 721.7 693.8 689.2 613.2 611.2 552.4 637.2 710.3 659 616.4 563.4 Wellman Europe 169.4 179.7 191.1 190.2 200 193.2 170.4 186 181.6 176.9 175.4 179.4 184.5 MM Lbs *Annualized

1Q98 2Q98 3Q98 4Q98 1Q99 Fibers Group 100.1 91.794 88 75.5 74.285 Recycled Products Group 104.6 98.221 81.7 81 82.041 Packaging Products Group 58.4 71.253 64.7 67.4 62.565 PET Resins Update

Wellman PET Resin Sales 1997 1998 1999 2000 1Q01* 2Q01* 3Q01* 4Q01* 1Q02* 2Q02* 3Q02* 4Q02* 1Q03* Wellman Domestic 422.6 448.4 739.4 889.4 962.4 948.8 971.6 904 1040 1096.8 1086.4 1077.1 1268 Wellman Europe 154.9 112.1 118.7 126.5 150 153.6 156.8 150 143.4 142.4 112.8 122.2 138 MM Lbs *Annualized CAGR 1997 - 1Q03 = 16%

Wellman PET Resin NAFTA Capacity Share 1994 1995 1996 1997 1998 1999 2000 2001 2002 1Q03 Share of Market 2.8 5.4 6.2 8.7 9.4 14.3 16.6 15.7 15.3 17 % of North American Capacity Source: CCI *Annualized

NAFTA PET Resin Consumption 1999 - 2006 1998 1999 2000 2001 2002 2003E 2004E 2005E 2006E Consumption 4505 4914 5271 5805 6274 6736 7307 7833 8405 MM Lbs. 8% CAGR (1999-2006) 9% 7% 10% 8% 7% 8% Source: CCI 7% 7%

PET Resin Issues M & G / DAK Start-Up Raw Material Swings

Wellman's 1Q03 Energy Cost In 1Q03 $1.07 Increase in DEK Over Plan Each Dollar Increase per DEK Increases Cost by Approximately $5.0 Million Annually 1Q03 Plan 1Q03 Actual Plan 5.14 5.14 Update 1.07 $ / DEK* *DEK = 1.0 Million BTU's

EX-99.1

Ex-99.1 Press Release, dated April 24, 2003

EX-99.2

Ex-99.2 Slide Show to be used on April 24, 2003