EX-99.1 3 a2075128zex-99_1.htm PRESS RELEASE DATED MARCH 27, 2002
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Exhibit 99.1

 
    
     
LOGO   Polymer Group, Inc.
P.O. Box 5069
N. Charleston, SC 29405
Contact: Robert Johnston
843-566-7293

PGI Investor Relations News Release

Polymer Group, Inc. Announces Fourth Quarter and Year End Results

For Immediate Release

Wednesday, March 27, 2002

        [North Charleston, SC]—Polymer Group, Inc. (NYSE: PGI) announced today results of operations for the Company's fourth quarter and fiscal year ended December 29, 2001.

        Net sales for the fourth quarter decreased $5.2 million to $197.5 million, down from $202.8 million in the fourth quarter of 2000. For fiscal year 2001, net sales decreased 5.4%, to $815.6 million, down from $862.0 million in fiscal year 2000.

        Gross profit for the fourth quarter decreased $13.6 million, to $34.2 million, down from $47.8 million during the fourth quarter of 2000. For fiscal year 2001, gross profit decreased $53.3 million to $138.7 million, down from $192.0 million in fiscal year 2000.

        During the fourth quarter, the Company recognized a number of unusual and special charges including a non-cash $181.2 million write-down of assets ($100.4 million goodwill write-down and $80.8 million write-down of property, plant & equipment). The write-down in assets was a result of a comprehensive review of the Company's assets prompted in part by the extremely competitive conditions currently facing the Company. The Company also incurred $5.8 million of plant realignment costs related to the operational restructuring announced in November 2001. During the quarter, the Company also incurred special charges of $1.9 million for professional service fees related to the comprehensive financial restructuring announced on March 15, 2002. In addition, as a result of the Company's determination that the decline in its short-term investment portfolio was other than temporary during the fourth quarter of 2001, a non-cash unrealized investment loss of $5.3 million was recorded on the income statement under the caption "other expense (income)." Previously, the decline in the market price of such securities resulting in a loss was recorded as a component of other comprehensive income (loss) within shareholders' equity (deficit).

        As a result of the unusual charges discussed above, the operating loss for fourth quarter and fiscal year 2001 was $182.9 million and $163.3 million, respectively. Excluding these unusual charges, operating income for the fourth quarter decreased $16.5 million, to $5.9 million, down from $22.4 million in the fourth quarter of 2000. Fiscal year 2001 operating income was $27.2 million, excluding unusual charges, compared to $84.6 million in fiscal year 2000, a decrease of $57.4 million.

        Fourth quarter EBITDA (defined as operating income before plant realignment, asset impairment and special charges plus depreciation and amortization) decreased $15.8 million to $24.5 million, down from $40.3 million in the fourth quarter of 2000. For fiscal year 2001, EBITDA decreased $51.3 million to $105.5 million, down from $156.8 million in fiscal year 2000.

        The Company reported a fourth quarter net loss of $204.4 million due primarily to the unusual charges. Excluding the impact of the unusual charges, the fourth quarter net loss was $13.9 million compared to a net loss of $2.2 million for the fourth quarter of 2000. For fiscal 2001, the net loss including the unusual charges was $247.6 million. Excluding the impact of the unusual charges, the net loss for fiscal 2001 was $55.9 million compared to a net loss of $4.3 million in fiscal 2000.

        On a per share basis, the fourth quarter net loss was $6.39. Fourth quarter net loss per share excluding the unusual charges was $0.43 compared to a net loss per share of $0.07 for the fourth quarter of 2000. For fiscal year 2001, the net loss per share was $7.74. Fiscal 2001 net loss per share excluding the unusual charges was $1.75 compared to a net loss per share before extraordinary item of $0.14 for fiscal 2000.

        At quarter end, the Company had cash and short-term investments of $46.5 million on hand.

        Commenting on fourth quarter and fiscal year-end results, Jerry Zucker, Polymer Group Chairman, President and CEO stated,"Our fourth quarter and fiscal 2001 results were negatively impacted by an aggressive competitive environment which was made materially more difficult by reaction to our need to financially restructure. The operational improvements announced last November will enhance our operating performance going forward while the comprehensive financial restructuring announced earlier this month will provide the Company with a solid capital structure."

        PGI has been advised by the New York Stock Exchange that the Company fell below the NYSE's continued listing criteria relating to minimum share price, requiring an average closing price of not less than $1.00 over a consecutive 30 day trading period, and total market capitalization, requiring a minimum market capitalization of $15 million over a 30-day trading period. Pursuant to this notification, the Company is working to respond, within the required timeframe, with a business plan acceptable to the NYSE demonstrating a return to compliance within 18 months. In addition, the Company must take action to bring its share price and average share price above $1.00 within six months.

        The Company anticipates filing a request with the Securities and Exchange Commission to delay the filing date of its Annual Report on Form 10-K to April 15, 2002.

        Polymer Group, Inc., the world's third largest producer of nonwovens, is a global, technology-driven developer, producer and marketer of engineered materials. With the broadest range of process technologies in the nonwovens industry, PGI is a global supplier to leading consumer and industrial product manufacturers. The Company employs approximately 4,000 people and operates 25 manufacturing facilities throughout the world. Polymer Group, Inc. is the exclusive manufacturer of Miratec® fabrics, produced using the Company's proprietary advanced APEX® laser and fabric forming technologies. The Company believes that Miratec® has the potential to replace traditionally woven and knit textiles in a wide range of applications. APEX® and Miratec® are registered trademarks of Polymer Group, Inc.

        Except for historical information contained herein, the matters set forth in this press release are forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Factors that may cause actual results to differ from those indicated in forward-looking statements can include, but are not limited to, the following: (i) increased competition in markets in which the Company competes, (ii) increased costs, (iii) changes in conditions of the general economy (iv) the Company's substantial leverage position and (v) the existing defaults in the Company's outstanding long-term indebtedness. Investors and other readers are directed to consider the risks and uncertainties discussed in documents filed by Polymer Group, Inc. with the Securities and Exchange Commission, including the Company's 2000 Annual Report on Form 10-K.

For further information, please contact:

      Robert Johnston or
      Dennis Norman
      Investor Relations
      Polymer Group, Inc.
      P.O. Box 5069
      North Charleston, South Carolina, 29405
      Telephone No.: (843) 566-7293
      E-mail:                      johnstonr@pginw.com    Web: www.polymergroupinc.com

Results for the fourth quarter and fiscal year 2001 are summarized below.

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Polymer Group, Inc.
Consolidated Statements of Operations (Unaudited)
(In Thousands, Except Per Share Data)

 
   Three Months Ended
   Twelve Months Ended
  
 
   December 29,
2001
   December 30,
2000
   December 29,
2001
   December 30,
2000
  
                           
Net sales   $ 197,542   $ 202,766   $ 815,566   $ 862,035  
Cost of goods sold     163,308     154,935     676,871     670,012  
   
 
 
 
 
Gross profit     34,234     47,831     138,695     192,023  
Selling, general and administrative expenses     28,345     25,391     111,474     107,460  
Asset impairment     181,190     —     181,190     —  
Plant realignment costs(1)     5,781     —     7,441     —  
Special charges(2)     1,850     —     1,850     —  
   
 
 
 
 
Operating income (loss)     (182,932 )   22,440     (163,260 )   84,563  

Other expense (income):
 
 
 
 
 
 
 
 
 
 
 
 
 
  Interest expense, net     23,114     25,928     99,406     91,805  
  Unrealized investment valuation loss(3)     5,290     —     5,290     —  
  Foreign currency and other     2,074     (50 )   5,408     549  
   
 
 
 
 
      30,478     25,878     110,104     92,354  
   
 
 
 
 
Loss before income tax benefit and extraordinary item     (213,410 )   (3,438 )   (273,364 )   (7,791 )
Income tax benefit     (9,016 )   (1,204 )   (25,803 )   (2,727 )
   
 
 
 
 
Loss before extraordinary item     (204,394 )   (2,234 )   (247,561 )   (5,064 )
Extraordinary item, gain on debt extinguishment     —     —     —     741  
   
 
 
 
 
Net loss   $ (204,394 ) $ (2,234 ) $ (247,561 ) $ (4,323 )
   
 
 
 
 
Net loss per common share—basic and diluted:                          
  Net loss per common share   $ (6.39 ) $ (0.07 ) $ (7.74 ) $ (0.14 )
  Net loss per common share before unusual charges and extraordinary item   $ (0.43 ) $ (0.07 ) $ (1.75 ) $ (0.16 )
Cash Dividends   $ —   $ 0.02   $ 0.02   $ 0.08  
(1)
Plant realignment costs relate to headcount reductions and the realignment of certain assets and operations associated with the Company's restructuring.

(2)
Special charges relate to professional fees incurred as a result of the Company's restructuring.

(3)
Represents unrealized, non-cash valuation loss on short term investments deemed to be "other than temporary" under Staff Accounting Bulletin No. 59 during the fourth quarter of 2001. Such losses were previously classified as a component of Other Cornprenensive income (Loss) in the equity section of the balance sheet pursuant to SFAS No. 115 "Accounting for Certain Investments in Debt and Equity Securities."

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Polymer Group, Inc.
Condensed Consolidated Balance Sheets
(In Thousands)

 
   December 29,
2001
   December 30,
2000(1)
 
   (Unaudited)

    
ASSETS
            
             
Current Assets:            
  Cash and short-term investments   $ 46,453   $ 30,588
  Accounts receivable, net     125,649     136,746
  Inventories     115,953     122,751
  Other     37,824     50,972
   
 
    Total current assets     325,879     341,057

Property, plant and equipment, net
 
 
711,567
 
 
858,338
Intangibles and loan acquisition costs, net     135,995     246,058
Other     58,773     62,541
   
 
    Total assets   $ 1,232,214   $ 1,507,994
   
 
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
            
Current Liabilities:            
  Accounts payable   $ 46,384   $ 61,579
  Accrued liabilities and other     62,403     56,856
  Current portion of long-term debt and short-term borrowings     1,089,428     32,163
   
 
    Total current liabilities     1,198,215     150,598
   
 
Long-term debt, less current portion     9,802     1,023,986
Deferred income taxes     53,106     82,574
Other non-current liabilities     19,953     24,601
Shareholders' equity (deficit)     (48,862 )   226,235
   
 
    Total liabilities and shareholders' equity (deficit)   $ 1,232,214   $ 1,507,994
   
 
(1)
The December 30, 2000 Condensed Consolidated Balance Sheet contains summarized information; as a result, such data does not include the same detail provided in the Company's 2000 Annual Report on Form 10-K.

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Polymer Group, Inc.
Segment and Other Selected Financial Data (Unaudited)
(In Thousands)

 
   Three Months Ended
   Twelve Months Ended
 
   December 29,
2001
   December 30,
2000
   December 29,
2001
   December 30,
2000
                         
Segment Data:                        
  Net sales:                        
    Consumer   $ 115,769   $ 109,641   $ 463,537   $ 486,328
    Industrial and specialty     81,773     93,125     352,029     375,707
   
 
 
 
    Total   $ 197,542   $ 202,766   $ 815,566   $ 862,035
   
 
 
 
Operating income (loss):                        
    Consumer   $ 8,493   $ 14,660   $ 29,072   $ 62,191
    Industrial and specialty     (2,604 )   7,780     (1,851 )   22,372
   
 
 
 
      5,889     22,440     27,221     84,563
    Asset impairment     (181,190 )   —     (181,190 )   —
    Plant realignment costs     (5,781 )   —     (7,441 )   —
    Special charges     (1,850 )   —     (1,850 )   —
   
 
 
 
    Operating income (loss)   $ (182,932 ) $ 22,440   $ (163,260 ) $ 84,563
   
 
 
 
Other Selected Financial Data:                        
  Depreciation and amortization   $ 18,611   $ 17,844   $ 78,283   $ 72,265
  EBITDA before asset impairment, plant realignment costs and special charges(1)     24,500     40,284     105,504     156,828
  Capital expenditures     4,791     9,545     21,440     86,022
(1)
EBITDA is defined as operating income (loss) before asset impairment, plant realignment costs and special charges plus depreciation and amortization.

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Polymer Group, Inc.
Supplemental Schedule Reconciling EBITDA Before Asset Impairment, Plant Realignment Costs and
Special Charges and Net Loss Before Unusual Charges (Unaudited)
(In Thousands, Except Per Share Data)

 
   Period Ended December 29, 2001(1)
  
 
   Three
Months
   Twelve
Months
  
               
EBITDA—Before Asset Impairment, Plant Realignment Costs and Special Charges              
  Operating loss determined in accordance with US GAAP   $ (182,932 ) $ (163,260 )
  Plus unusual charges:              
    Asset impairment     181,190     181,190  
    Plant realignment costs     5,781     7,441  
    Special charges     1,850     1,850  
   
 
 
      5,889     27,221  
  Plus depreciation and amortization     18,611     78,283  
   
 
 
  EBITDA—Before Asset Impairment, Plant Realignment Costs and Special Charges   $ 24,500   $ 105,504  
   
 
 
Net Loss Before Unusual Charges              
    Net loss determined in accordance with US GAAP   $ (204,394 ) $ (247,561 )
    Less income tax benefit from continuing operations     (9,016 )   (25,803 )
   
 
 
  Loss before income tax benefit   $ (213,410 ) $ (273,364 )
  Plus unusual charges:              
    Asset impairment     181,190     181,190  
    Plant realignment costs     5,781     7,441  
    Special charges     1,850     1,850  
    Unrealized investment valuation loss     5,290     5,290  
   
 
 
      194,111     195,771  
   
 
 
  Loss before income taxes and unusual charges     (19,299 )   (77,593 )
  Tax benefit attributable to loss before unusual charges     (5,404 )   (21,726 )
   
 
 
  Net loss before unusual charges   $ (13,895 ) $ (55,867 )
   
 
 
  Net Loss Before Unusual Charges—Per Share   $ (0.43 ) $ (1.75 )
   
 
 
(1)
Reconciling data for 2000 is not presented as the Company did not incur asset impairment charges, plant realignment costs, special charges or unrealized investment valuation losses during the three or twelve months ended December 30, 2000.

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QuickLinks

Polymer Group, Inc. Consolidated Statements of Operations (Unaudited) (In Thousands, Except Per Share Data)
Polymer Group, Inc. Condensed Consolidated Balance Sheets (In Thousands)
Polymer Group, Inc. Segment and Other Selected Financial Data (Unaudited) (In Thousands)
Polymer Group, Inc. Supplemental Schedule Reconciling EBITDA Before Asset Impairment, Plant Realignment Costs and Special Charges and Net Loss Before Unusual Charges (Unaudited) (In Thousands, Except Per Share Data)