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): July 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 9. REGULATION FD DISCLOSURE.
SIGNATURES
EX-99.1 PRESS RELEASE DATED 07-24-03
EX-99.2 SLIDE SHOW TO BE USED ON JULY 24, 2003

Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.

(c)	Exhibits
99.1	Press Release dated July 24, 2003.
99.2	Slide show to be used on July 24, 2003.

Item 9. REGULATION FD DISCLOSURE.

In accordance with SEC Release No. 33-8216, the following information, required to be furnished under “Item 12. Results of Operations and Financial Condition,” is furnished under Item 9. Regulation FD Disclosure.”

On July 24, 2003, Wellman, Inc. announced via press release the Company’s preliminary results for its second quarter 2003 results. A copy of the Company’s press release is attached hereto as Exhibit 99.1. In addition, the Company will use a slide show, which is attached hereto as Exhibit 99.2. This Form 8-K and the attached exhibits are provided under Item 12 of Form 8-K and are furnished to, but not filed with, the Securities and Exchange Commission.

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.

July 24, 2003	Wellman, Inc.
	By: /s/ Mark J. Ruday
	Mark J. Ruday Vice President, Chief Accounting Officer and Controller

EX-99.1 3 b47297wiexv99w1.htm EX-99.1 PRESS RELEASE DATED 07-24-03

Exhibit 99.1

Contact: Dennis Sabourin
Investor Relations Officer
(732) 212 – 3321

FOR IMMEDIATE RELEASE

WELLMAN REPORTS SECOND QUARTER 2003 RESULTS

July 24, 2003, Shrewsbury, NJ – Wellman, Inc. (NYSE: WLM) today reported normalized net earnings from continuing operations for the quarter ended June 30, 2003 of $1.1 million, or $0.04 per diluted share. Normalized net earnings from continuing operations exclude a cost incurred related to the preferred stock investment and restructuring costs, which total $0.8 million, or $0.03 per diluted share. The cost related to this investment resulted from the accelerated vesting of outstanding stock options, which we do not expect to be a recurring charge. 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 include these costs, were $0.3 million, or $0.01 per diluted share. This compares to net earnings from continuing operations of $12.8 million, or $0.40 per diluted share, for the quarter ended June 30, 2002. Net earnings available for common stockholders in second quarter 2003, after the effect of the preferred stock accretion, were $0.2 million or $0.01 per diluted share, compared to $9.4 million or $0.29 per diluted share in the second quarter 2002 (see table below).

Normalized earnings from continuing operations for the first six months of 2003 were $7.7 million, or $0.24 per diluted share, compared to normalized net earnings from continuing operations, of $18.4 million, or $0.57 per diluted share, for the same period in 2002. The table below summarizes the effects of restructuring and accelerated stock option vesting, discontinued operations, a change in accounting principle and preferred stock accretion. Including the above, net income available for common stockholders was $6.0 million, or $0.19 per diluted share, for the first half of 2003 compared to a net loss available to common stockholders of $202.2 million, or $6.31 per diluted share in the same period in 2002.

Second quarter 2003 earnings were negatively impacted by volatile chemical raw material costs, lower volumes, and competitive pressures, particularly in our domestic PET resins business. In response to current business conditions, the Company is immediately implementing significant cost reduction programs.

Tom Duff, Chairman and CEO, stated, “Our strong first quarter earnings were offset by weak earnings in the second quarter. While poor market conditions and volatile chemical raw material costs are concerns for the remainder of 2003, our cost reduction programs will have a meaningful impact in that period. We expect market conditions in the

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domestic PET resin industry to improve in 2004, driven by increased capacity utilization as growing demand absorbs the recent capacity increases. “

THREE AND SIX MONTH SALES AND EARNINGS

					2Q03			2Q02			YTD 03			YTD 02
($ Millions except per share data)
	Sales From Continuing Operations				$	284.6		$	268.0		$	571.3		$	508.0
NORMALIZED EARNINGS FROM CONTINUING OPERATIONS**
				Net earnings	$	1.1		$	12.8		$	7.7		$	18.4
		Earnings per diluted share			$	0.04		$	0.40		$	0.24		$	0.57
EFFECT OF RESTRUCTURING & ACCELERATED STOCK OPTION VESTING**
				Total		($0.8	)		—			($1.7	)		—
			Per diluted share			($0.03	)		—			($0.05	)		—
EARNINGS FROM CONTINUING OPERATIONS**
				Net earnings	$	0.3		$	12.8		$	6.0		$	18.4
		Earnings per diluted share			$	0.01		$	0.40		$	0.19		$	0.57
EFFECT OF DISCONTINUED OPERATIONS**
				Total		—			($3.4	)	$	0.1			($23.5	)*
			Per diluted share			—			($0.11	)	$	0.00			($0.73	)
EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE**
				Total		—			—			—			($197.1	)
			Per diluted share			—			—			—			($6.15	)
PREFERRED STOCK ACCRETION
				Accretion		($0.1	)					($0.1	)
Earnings effect per diluted share					$	0.00					$	0.00
NET EARNINGS (LOSS) FOR COMMON STOCKHOLDERS**
			Net earnings (loss)		$	0.2		$	9.4		$	6.0			($202.2	)
Earnings (loss) per diluted share					$	0.01		$	0.29		$	0.19			($6.31	)

*	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

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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.

Webcast of Conference Call

Wellman, Inc. will conduct a conference call, to review 2Q03 results at 1:00 p.m. EDT on Thursday, July 24, 2003. This call is available in a live Webcast on the Wellman, Inc. web page. To access the Webcast, log onto the Wellman, Inc. website at: http://www.wellmaninc.com, go to the Investor Relations page and follow the prompts. Replay of the Webcast will be available late afternoon July 24, 2003 and will remain on the website for 7 days. The replay can be accessed by following the same procedure, used above, for the live Webcast.

During our conference call, reference will be made to certain non-GAAP terms. Our definition of these terms and the importance to us can be found on the Wellman, Inc. website: http://www.wellmaninc.com in the Financial Information section under Financial Glossary,

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 PET resins and polyester fiber; the financial condition of our customers; availability and cost of raw materials; availability and cost of petrochemical feedstock necessary for the production process; the impact of a governmental investigation of pricing practices in the polyester staple fiber industry; availability of financing, changes in financial markets, interest rates, credit ratings, and foreign currency exchange rates; tax risk; U.S., European, Asian 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; and maintaining the operations of our existing production facilities. 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/A for the year ended December 31, 2002.

###

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WELLMAN, INC.
SUPPLEMENTAL INFORMATION*

						2Q/2Q					2Q/1Q
SALES BY GROUP		2Q03		2Q02		% Chg.			1Q03		% Chg.
$ Million
Fibers & Recycled Products Group		$	118.6	$	129.7		-9	%	$	120.2		-1	%
Packaging Products Group		$	166.0	$	138.3		20	%	$	166.5		0	%
	Total Sales	$	284.6	$	268.0		6	%	$	286.7		-1	%

BALANCE SHEET DATA	6/30/2003			CASH FLOW DATA
$ Million				$ Million		2Q03	YTD
Inventories	$	130.0		Depreciat	$	11.6	$	23.1
Total Debt	$	166.7		Amortizat		1.5		2.1
Stockholders’ Equity	$	560.2		Total D&A	$	13.1	$	25.2
Total Debt-to-Capital		22.9	%	Cap. Exps	$	2.5	$	6.1

SEGMENT PROFIT (LOSS)		2Q03
$ Million
PPG	$	6.6
FRPG		($3.9	)
Operating Income	$	2.7

*Preliminary

You are invited to listen to the live Webcast of the conference call by logging onto Wellman, Inc.’s home page: http://www.wellmaninc.com, go the Investor Relations page, and follow the prompts. The replay of the webcast will be available for one week starting late afternoon on July 24.

The call and tape contains copyrighted material. It cannot be recorded, rebroadcast or reprinted without Wellman’s express permission. Participation implies consent to the taping and above terms.

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

		Quarter Ended						Six Months Ended
		June 30,						June 30,
		2003			2002			2003			2002
Net Sales		$	284.6		$	268.0		$	571.3		$	508.0
Cost of Sales			261.4			229.8			517.8			443.3
Gross Profit			23.2			38.2			53.5			64.7
Selling, General and Administrative Expenses			20.4			18.4			38.9			34.6
Restructuring charges			0.1			—			1.3			—
Operating Income			2.7			19.8			13.3			30.1
Interest Expense, Net			2.3			2.3			4.4			5.1
Earnings From Continuing Operations Before Income Taxes			0.4			17.5			8.9			25.0
Income Taxes			0.1			4.7			2.9			6.6
Earnings From Continuing Operations			0.3			12.8			6.0			18.4
Income (Loss) From Discontinued Operations			—			(5.2	)		0.1			(36.2	)
Tax Benefit From Discontinued Operations			—			(1.8	)		0.0			(12.7	)
Earnings (Loss) Before Cumulative Effect of Accounting Change			0.3			9.4			6.1			(5.1	)
Cumulative Effect of Accounting Change, Net of Tax			—			—			—			(197.1	)
Net Earnings (Loss)		$	0.3		$	9.4		$	6.1			($202.2	)
Net Earnings (Loss) Available to Common Stockholders:
Net Earnings (Loss)		$	0.3		$	9.4		$	6.1			($202.2	)
Accretion of Preferred Stock Liquidation Preference			(0.1	)		—			(0.1	)		—
Accretion of Discount Related to Warrants			—			—			—			—
Net Earnings (Loss) Available to Common Stockholders		$	0.2		$	9.4		$	6.0			($202.2	)
Basic Net Earnings (Loss) Per Common Share:
	Net Earnings Available to Common Stockholders From Continuing Operations	$	0.01		$	0.40		$	0.19		$	0.58
	Net Loss Available to Common Stockholders From Discontinued Operations		—			(0.11	)		—			(0.75	)
	Cumulative Effect of Accounting Change		—			—			—			(6.23	)
	Net Earnings (Loss) Available to Common Stockholders	$	0.01		$	0.29		$	0.19			($6.40	)
Diluted Net Earnings (Loss) Per Common Share:
	Net Earnings Available to Common Stockholders From Continuing Operations	$	0.01		$	0.40		$	0.19		$	0.57
	Net Loss Available to Common Stockholders From Discontinued Operations		—			(0.11	)		—			(0.73	)
	Cumulative Effect of Accounting Change		—			—			—			(6.15	)
	Net Earnings (Loss) Available to Common Stockholders	$	0.01		$	0.29		$	0.19			($6.31	)
Average Common Shares — (Basic)			31.6			31.6			31.6			31.6
Average Common Shares — (Diluted)			31.9			32.1			31.9			32.0

EX-99.2 4 b47297wiexv99w2.htm EX-99.2 SLIDE SHOW TO BE USED ON JULY 24, 2003

Second Quarter 2003 Review Wellman, Inc. Investor Relations July 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 the information contained herein. These forward-looking statements involve certain risks and uncertainties, including but not limited to: demand and competition for PET resins and polyester fiber; the financial condition of our customers; availability and cost of raw materials; availability and cost of petrochemical feedstock necessary for the production process; the impact of a governmental investigation of pricing practices in the polyester staple fiber industry; availability of financing, changes in financial markets, interest rates, credit ratings, and foreign currency exchange rates; tax risk; U.S., European, Asian 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; and maintaining the operations of our existing production facilities. 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/A 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

Financial Results (in $ millions, except per share data) *Net of tax Unusual items include accelerated vesting of stock options of $0.8 and restructuring charges of $0.9 in the first half of 2003. In the second half of 2002 unusual items include a $2.6 increase in the allowance for uncollectible accounts and income from anti-dumping duties of $2.8.

Sales Review 1Q01 2Q01 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 1H02 2H02 1H03 Fibers & Recycled Products 132.7 120.936 117.1 129.7 124.2 118.2 120.2 118.6 246.8 242.4 238.8 Packaging Products 135.6 141.4 122.9 138.3 133.1 130.5 166.5 166 261.2 263.6 332.5 Group Sales - 1H03 $MM PPG FRPG 2H03 332.5 238.8 508 571 506

Earnings from Continuing Operations Before Interest, Taxes, Depreciation, and Amortization (EBITDA)

Debt Reduction From 1/1/00 - 6/30/03 Debt & Securitization Decreased by $254 Million Cash from Operations $137 Million Equity Investment $117 Million Reduction in Debt & Securitization $254 Million 12/31/99 12/31/00 12/31/01 12/31/02 6/30/03 Equity* 405 429 416 427 560 Debt 406 382 333 237 167 Securitizations 215 225 227 214 200 $ MM Significant Cash Flow and Debt Repayment

Recent Events Equity Investment $126 Million Preferred Stock 8.5% Accretion Expected Shareholder Vote 80% Voted 81% of Votes Were in Favor New Revolving Credit Facility Size: $275 Million Term: 3 Years Interest Rate: LIBOR Grid Based on Ratings Current All-in Pricing - LIBOR +250 basis points

Pro forma Effect of Private Equity Transaction (in $ Millions, Except Earnings per Share) Note: Pro forma accretion based on stated rate. Actual accretion will be based on fair market value. Pro forma interest savings based on a net equity increase of $117 and a 5% interest rate. Actual results will be different. Minimum Annual Accretion is $11.6 million or $.36 per share. Impact of accretion will be partially offset by reduced interest costs.

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 - September 2003 1Q02 2Q02 3Q02 4Q02 1/1/2003 2/1/2003 3/1/2003 4/1/2003 5/1/2003 6/1/2003 7/1/2003 Aug-03E Sep-03E PX Contract Cost 18.6 20.2 20.1 20.4 21.1 26.3 36.3 23.8 23.8 23.8 25.8 26.8 26.8 Source: PCI Note: Prices are on a CFR basis. Cents / Pound

Far East MEG Cost 2002 - September 2003 1Q02 2Q02 3Q02 4Q02 1/1/2003 2/1/2003 3/1/2003 4/1/2003 5/1/2003 6/1/2003 7/1/2003 Aug-03E Sep-03E MEG Contract Cost 16.2 20.9 22.4 23.7 23.6 27.7 32.7 35.4 29.9 24.9 28.8 30.8 32.7 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

Wellman Fiber Shipments 1997 1998 1999 2000 2001 1Q01* 2Q01* 3Q01* 4Q01* 1Q02* 2Q02* 3Q02* 4Q02* 1Q03* 2Q03* Wellman Domestic 780.8 754.8 721.7 693.8 616.5 689.2 613.2 611.2 552.4 637.2 710.3 659 616.4 563.4 562.4 Wellman Europe 169.4 179.7 191.1 190.2 187.3 200 193.2 170.4 186 181.6 176.9 175.4 179.4 184.5 178 MM Lbs *Annualized Restated for Discontinued Operations

U.S. Polyester Staple Consumption 1997 1998 1999 2000 2001 2002 1st Half 02* 1st Half 03* Domestic Industry Shipments 2262 2123 2169 2189 1881 1823 1792 1653 Imports 555 662 689 620 636 763 757 827 MM Lbs. Source: FEB, U.S. Dept of Commerce and Wellman *Annualized Percentage is imports as a percent of U.S. Polyester Staple Consumption 20% 24% 24% 22% 25% 30% 33% 30%

U.S. Textile and Apparel Imports 1996 1997 1998 1999 2000 2001 2002 Jan 02 - May 02* Jan 03 - May 03* All Others 17419 20800 24001 26580 30646 30598 33322 31186 33106 China 1644 2095 1943 2035 2218 2211 4963 3434 6912 Million Square Meter Equivalents Source: US Commerce Department *Annualized Note: Textile imports from China began growing significantly in 2002 as a result of the elimination of quotas on certain product categories. 19,063 22,895 25,944 28,615 32,864 32,809 38,285 34,620 40,018

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 2001 1Q01* 2Q01* 3Q01* 4Q01* 1Q02* 2Q02* 3Q02* 4Q02* 1Q03* 2Q03* Wellman Domestic 422.6 448.4 739.4 889.4 946.9 962.4 948.8 971.6 904 1040 1096.8 1086.4 1077.1 1268 1146.8 Wellman Europe 154.9 112.1 118.7 126.5 152.7 150 153.6 156.8 150 143.4 142.4 112.8 122.2 138 127.2 MM Lbs *Annualized

NAFTA PET Resin Consumption 2000 - 2005 1998 1999 2000 2001 2002 2003E 2004E 2005E 2006E Consumption 4505 4914 5271 5805 6274 6741 7307 7823 8178 MM Lbs. 8% CAGR (2000-2005) 7% 10% 8% 7% 8% Source: CCI 7%

Source: CCI

Source: CCI

EX-99.1

EX-99.1 PRESS RELEASE DATED 07-24-03

EX-99.2

EX-99.2 SLIDE SHOW TO BE USED ON JULY 24, 2003