|Pliant Accelerates Growth Capacity and Operational Restructuring Programs
|Schaumburg, Illinois, USA, 16 May 2007 -- /PRNewswire/ -- Pliant Corporation today released its results for the 1st quarter of 2007.
Growth Capacity and Operational Restructuring Program Accelerated
The company significantly accelerated its operational and growth capacity modernization and repositioning program in the first quarter of 2007. The company created the necessary bridge capacity to launch its first large-plant consolidation in five years -- the consolidation of its Langley, British Columbia, plant in Canada. The equipment that is being relocated out of this plant -- extrusion lines, printing presses, and bag machines -- will be modernized and then reinstalled into other Pliant facilities in the second half of 2007, thus permanently reducing Pliant's operational costs. This equipment will be reloaded with volume gained through the company's focused growth programs.
This capital intensive program is directly attributable to its new capital structure. The company intends to modernize and consolidate one or two plants per year for the next several years. The timing of these actions is 100% dependent on having the necessary bridge capacity available in the receiving plants as all of its current plants are large operations and operating at high utilization rates.
First quarter 2007 sales volume was about 2% to 2.5% below prior year sales volume, taking into account down-gauging. However, the company's net delta (net sales minus material and waste costs) improved in excess of 2% per pound in the same period which enabled gross profits to remain essentially flat quarter-to-quarter at USD 34.4 million. The company continued its successful programs in waste reduction and achieved a 4.1% net waste rate.
Additionally, the company continued to reorient its commercial activities towards differentiated packaging solutions, and to align its contracts and pricing actions more closely to resin cost changes. The company had several customer wins and several new product launches in the quarter that will increase run-rates throughout 2007 and continue to diversify the product mix on its newly refurbished and repositioned capacity.
EBITDA(R) for the first quarter was USD 23.7 million, slightly less than last year's first quarter of USD 24.1 million as a result of its slightly lower volume performance. EBITDA(R) in the fourth quarter will benefit from the USD 4+ million of annual savings resulting from this modernization and repositioning project and volume growth will increase when this capacity comes back on line in the second half of 2007.
Sales Growth and Innovation Programs
Pliant has leadership positions in each of its core markets and is focusing its efforts more than ever. The company has revamped its marketing programs and has focused its growth activities around 17 major programs. These programs are in various stages but several programs are showing solid success in 2007. These include:
-- Stratos(TM) high-yield stretch film
-- BullsEye(TM) printed shrink film
-- Blockade(TM) patent pending agricultural film
-- SteamQuick(TM) patent pending microwave-in-the-bag food packaging
-- FreshView(TM) windowed bakery bags
Full Year Update
The company is reconfirming its guidance of USD 110 to USD 114 million of EBITDA(R) for 2007 and will continue to improve its net liquidity year-over-year. The company will continue to gate its major programs to be in concert with overall cashflow and liquidity improvement objectives. All actions to this end are on or ahead of plan.
Pliant is a leading producer of value-added film and flexible packaging products for personal care, medical, food, industrial, and agricultural markets. Pliant operates 20 manufacturing and research and development facilities around the world and employs over 3000 people.
Source: Pliant Corporation