Polypore International Inc. (PPO, Financial) filed Quarterly Report for the period ended 2009-04-04.
Polypore Inc. a subsidiary of Polypore International Inc. is a worldwide developer manufacturer and marketer of highly specialized polymer-based membranes used in separation and filtration processes. Polypore International Inc. has a market cap of $356.8 million; its shares were traded at around $8.04 with a P/E ratio of 8.4 and P/S ratio of 0.6.
At April 4, 2009, a .5% increase in the discount rate would have resulted in a reduction in fair values of $42.2 million for our energy storage segment and $17.3 million for our separations media segment. For the energy storage segment, the .5% increase in the discount rate would have resulted in the carrying value of the lead-acid battery separator reporting unit exceeding its fair value by $9.1 million and would require a step two analysis to determine the amount of goodwill impairment, if any.
Certain assumptions are used in the calculation of the actuarial valuation of our defined benefit pension plans and other postretirement benefits. Two critical assumptions, discount rate and expected return on assets, are important elements of plan expense and/or liability measurement and differences between actual results and these two actuarial assumptions can materially affect our projected benefit obligation or the valuation of our plan assets. Other assumptions involve demographic factors such as retirement, expected increases in compensation, mortality and turnover. The discount rate enables us to state expected future cash flows at a present value on the measurement date. The discount rate assumptions are based on the market rate for high quality fixed income investments, and are thus subject to change each year. At January 3, 2009, a 1% decrease in the discount rate would increase our projected benefit obligations and the unfunded status of our pension plans by $12.8 million. The expected rates of return on our pension plans assets are based on the asset allocation of each plan and the long-term projected return of those assets. At January 3, 2009, if the expected rate of return on pension plan assets were reduced by 1%, the result would have increased our net periodic benefit expense for fiscal 2008 by $0.2 million dollars. At January 3, 2009, if the actual plan assets were reduced by 1%, the unfunded status of our pension plans would increase by $0.2 million.
Net sales. Net sales for the three months ended April 4, 2009 were $108.9 million, a decrease of $36.4 million, or 25.1%, from same period in the prior year. Energy storage sales for the three months ended April 4, 2009 were $73.7 million, a decrease of $30.2 million, or 29.1%. Energy storage sales of lead-acid and lithium battery separators decreased by 30.0% and 26.0%, respectively, due to current macro-economic conditions, customers reducing inventory levels to manage working capital and the negative impact of dollar/euro exchange rate fluctuations of $4.8 million. Lead-acid separator sales were also impacted by the loss of a customer at the end of fiscal 2008.
Separations media sales for the three months ended April 4, 2009 were $35.2 million, a decrease of $6.2 million, or 15.0% from the same period in the prior year, primarily due to the negative impact of dollar/euro exchange rate fluctuations of $4.3 million. Healthcare sales decreased 8.6% as the impact of higher sales volumes of synthetic hemodialysis membranes was more than offset by the negative impact of dollar/euro exchange rate fluctuations. Filtration and specialty product sales decreased by 27.4% due to current macro-economic conditions and the negative impact of dollar/euro exchange rate fluctuations.
The plan includes closing our facility in Potenza, Italy, streamlining production at our facility in Owensboro, Kentucky and reducing selling, general and administrative resources associated with the lead-acid separator business. The total cost of the restructuring plan, including environmental costs included in the environmental reserve of $18.6 million, is expected to be approximately $61.6 million. The plan was implemented and a restructuring charge of $59.9 million was recorded in the fourth quarter of 2008. The restructuring plan includes the termination of approximately 175 employees, consisting of production employees at Potenza, Italy and Owensboro, Kentucky and certain selling, general and administrative employees. The total cost of severance and benefits is expected to be approximately $10.3 million. The Company estimates that other costs, consisting primarily of costs associated with closing the Potenza, Italy facility, are expected to be approximately $3.7 million, of which $2.7 million has been recognized through April 4, 2009 and the remainder will be recognized over the next three years. The restructuring charge recorded in the fourth quarter of 2008 also included a non-cash impairment charge of $28.9 million for buildings and machinery and equipment that will no longer be used in Potenza, Italy. Cash payments for severance and other exit costs are expected to be paid over the next three years. The timing, scope and costs of these restructuring measures are subject to change as we implement the plan and continue to evaluate our business needs and costs.
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Polypore Inc. a subsidiary of Polypore International Inc. is a worldwide developer manufacturer and marketer of highly specialized polymer-based membranes used in separation and filtration processes. Polypore International Inc. has a market cap of $356.8 million; its shares were traded at around $8.04 with a P/E ratio of 8.4 and P/S ratio of 0.6.
Highlight of Business Operations:
A supply contract between our lead-acid battery separator business and Johnson Controls, Inc. (JCI) expired on December 31, 2008 and was not renewed. In response, we implemented a restructuring plan in our energy storage segment to align lead-acid battery separator production capacity with demand, reduce costs and position ourselves to meet future growth opportunities. The initial plan includes closing our facility in Potenza, Italy, streamlining production at our facility in Owensboro, Kentucky and reducing selling, general and administrative resources associated with the lead-acid separator business. The total estimated cost of the plan is expected to be approximately $61.6 million, including cash charges of $32.7 million for severance, environmental, and other exit costs and a non-cash impairment charge of $28.9 million. We began implementing the restructuring plan during the fourth quarter and recorded restructuring charges of $59.9 million.At April 4, 2009, a .5% increase in the discount rate would have resulted in a reduction in fair values of $42.2 million for our energy storage segment and $17.3 million for our separations media segment. For the energy storage segment, the .5% increase in the discount rate would have resulted in the carrying value of the lead-acid battery separator reporting unit exceeding its fair value by $9.1 million and would require a step two analysis to determine the amount of goodwill impairment, if any.
Certain assumptions are used in the calculation of the actuarial valuation of our defined benefit pension plans and other postretirement benefits. Two critical assumptions, discount rate and expected return on assets, are important elements of plan expense and/or liability measurement and differences between actual results and these two actuarial assumptions can materially affect our projected benefit obligation or the valuation of our plan assets. Other assumptions involve demographic factors such as retirement, expected increases in compensation, mortality and turnover. The discount rate enables us to state expected future cash flows at a present value on the measurement date. The discount rate assumptions are based on the market rate for high quality fixed income investments, and are thus subject to change each year. At January 3, 2009, a 1% decrease in the discount rate would increase our projected benefit obligations and the unfunded status of our pension plans by $12.8 million. The expected rates of return on our pension plans assets are based on the asset allocation of each plan and the long-term projected return of those assets. At January 3, 2009, if the expected rate of return on pension plan assets were reduced by 1%, the result would have increased our net periodic benefit expense for fiscal 2008 by $0.2 million dollars. At January 3, 2009, if the actual plan assets were reduced by 1%, the unfunded status of our pension plans would increase by $0.2 million.
Net sales. Net sales for the three months ended April 4, 2009 were $108.9 million, a decrease of $36.4 million, or 25.1%, from same period in the prior year. Energy storage sales for the three months ended April 4, 2009 were $73.7 million, a decrease of $30.2 million, or 29.1%. Energy storage sales of lead-acid and lithium battery separators decreased by 30.0% and 26.0%, respectively, due to current macro-economic conditions, customers reducing inventory levels to manage working capital and the negative impact of dollar/euro exchange rate fluctuations of $4.8 million. Lead-acid separator sales were also impacted by the loss of a customer at the end of fiscal 2008.
Separations media sales for the three months ended April 4, 2009 were $35.2 million, a decrease of $6.2 million, or 15.0% from the same period in the prior year, primarily due to the negative impact of dollar/euro exchange rate fluctuations of $4.3 million. Healthcare sales decreased 8.6% as the impact of higher sales volumes of synthetic hemodialysis membranes was more than offset by the negative impact of dollar/euro exchange rate fluctuations. Filtration and specialty product sales decreased by 27.4% due to current macro-economic conditions and the negative impact of dollar/euro exchange rate fluctuations.
The plan includes closing our facility in Potenza, Italy, streamlining production at our facility in Owensboro, Kentucky and reducing selling, general and administrative resources associated with the lead-acid separator business. The total cost of the restructuring plan, including environmental costs included in the environmental reserve of $18.6 million, is expected to be approximately $61.6 million. The plan was implemented and a restructuring charge of $59.9 million was recorded in the fourth quarter of 2008. The restructuring plan includes the termination of approximately 175 employees, consisting of production employees at Potenza, Italy and Owensboro, Kentucky and certain selling, general and administrative employees. The total cost of severance and benefits is expected to be approximately $10.3 million. The Company estimates that other costs, consisting primarily of costs associated with closing the Potenza, Italy facility, are expected to be approximately $3.7 million, of which $2.7 million has been recognized through April 4, 2009 and the remainder will be recognized over the next three years. The restructuring charge recorded in the fourth quarter of 2008 also included a non-cash impairment charge of $28.9 million for buildings and machinery and equipment that will no longer be used in Potenza, Italy. Cash payments for severance and other exit costs are expected to be paid over the next three years. The timing, scope and costs of these restructuring measures are subject to change as we implement the plan and continue to evaluate our business needs and costs.
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