CHARLOTTE, N.C., May 2, 2012 (GLOBE NEWSWIRE) -- Polypore International, Inc. (NYSE:PPO) today reported its financial results for the first quarter ended March 31, 2012.

For the first quarter:

• Sales were $173.7 million compared with $185.7 million in the prior-year period. Excluding the effect of foreign currency translation, sales decreased $8.9 million, or 5%.
• Segment Operating Income was $42.0 million compared with $50.2 million in the prior-year period. A table showing the reconciliation of Segment Operating Income to income before income taxes is included in this release.
• Adjusted Net Income and Adjusted EPS were $22.3 million and $0.47 per diluted share, compared with $27.9 million and $0.60 per diluted share in the prior-year period. Net income was $18.8 million and $0.40 per diluted share, compared with $25.7 million and $0.55 per diluted share in the prior-year period. A table showing the reconciliation of Adjusted Net Income and Adjusted EPS to U.S. GAAP amounts is included in this release.

"Results in the quarter were consistent with the outlook we discussed in February. We expect second quarter results in the lithium separator business to be similar to first quarter, turning stronger as we move into the second half of the year. Additionally, in the second quarter, we expect sequential improvement in our other businesses," said Robert B. Toth, President and Chief Executive Officer. "While we are not satisfied with current results, the long-term trends in all of our businesses remain positive and we are confident in the investments we have made to drive growth."

Adjusted EBITDA

Adjusted EBITDA was $55.7 million in the first quarter of 2012, compared with $62.4 million in the first quarter of 2011. For the twelve months ended March 31, 2012, Adjusted EBITDA was $244.2 million. Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA"), as defined in Polypore's senior secured credit agreement, is reconciled to net income in the attached table.

Energy Storage Business

Transportation and Industrial Segment

• Sales of lead-acid battery separators were $86.2 million, compared with $94.5 million in the prior-year quarter. Excluding the negative effect of foreign currency translation, sales decreased $6.8 million, or 7%. The decrease was due primarily to the previously disclosed effect of unseasonably warm winter weather experienced in North America and Europe, which impacted replacement battery sales.
• Segment Operating Income was $20.0 million and 23% of sales, compared with $25.8 million and 27% of sales for the prior-year quarter, as a result of lower sales and the costs associated with our capacity investments in China and Thailand.

Electronics and Electric Drive Vehicles ("EDVs") Segment

• Sales of lithium battery separators were $42.4 million compared with $42.1 million in the prior-year quarter. The sequential decline compared with the fourth quarter of 2011 was due to the previously disclosed impact from production schedule changes associated with two EDV customers.
• Segment Operating Income was $16.8 million and 40% of sales, compared with $18.4 million and 44% of sales for the prior-year quarter. The decrease was due to growth investments associated with new capacity, including an additional $1.3 million of non-cash depreciation expense.

Separations Media Segment

Sales were $45.1 million compared with $49.1 million in the prior-year quarter. Excluding the negative effect of foreign currency translation, sales decreased $2.4 million, or 5%.

• Sales of healthcare products were $27.5 million compared with $30.5 million in the prior-year quarter. As expected, the decline was associated primarily with customer production timing differences in 2012 compared with 2011, as well as the negative effect of foreign currency translation.
• Sales of filtration and specialty products were $17.6 million compared with $18.6 million in the prior-year quarter, including the negative effect of foreign currency translation.
• Segment Operating Income was $13.9 million and 31% of sales compared with $16.4 million and 33% of sales in the prior-year quarter. The decline was primarily due to lower sales volumes and the incremental costs associated with the recently added capacity for PUREMA^® hemodialysis membranes.

Outlook

"We're at the front end of substantial long-term trends that we expect to drive global demand for our products. We have a strong portfolio of businesses, as well as a step-change growth opportunity in Electric Drive Vehicles, where we have the preferred technology and an early leadership position," Toth added. "Based on updated customer forecasts and production schedules, we expect full-year growth in sales and earnings, with most of that occurring in the second half of the year. We are well-positioned and remain confident in the long-term growth potential of our business."

Conference Call

Polypore International, Inc. will hold a conference call to discuss the Company's first quarter 2012 financial results and business outlook today, Wednesday May 2, 2012, at 4:45 p.m. Eastern time. The number to call for this interactive teleconference is (719) 457-2646. Enter code 8118404. A replay of the conference call will be available through May 9, 2012, via telephone at (719) 457-0820. Enter code 8118404. The call will also be webcast live and archived for 30 days in the Investor Relations section of the Company's website at http://investor.polypore.net/.

In addition, the Company filed a Current Report on Form 8-K with the Securities and Exchange Commission with Supplemental Financial Information that is located on the Company's website.

Non-GAAP Supplemental Information

Adjusted EBITDA, Adjusted Net Income and Adjusted EPS (earnings per share) are non-GAAP financial measures presented in this press release as supplemental disclosures to net income and reported results. Adjusted EBITDA is defined in our credit agreement and represents earnings before interest, taxes, depreciation and amortization and certain non-operating items, stock-based compensation and other non-cash or non-recurring charges. 

We define Adjusted Net Income as income from continuing operations excluding certain items. We define Adjusted EPS as Adjusted Net Income divided by the number of diluted shares of common stock outstanding. The adjustments used in calculating Adjusted Net Income and Adjusted EPS are consistent with the adjustments used in calculating Adjusted EBITDA, as defined in our credit agreement. 

For more information regarding the computation of Adjusted EBITDA, Adjusted Net Income and Adjusted EPS, the reconciliation of Adjusted EBITDA to net income, Adjusted Net Income to net income and Adjusted EPS to earnings per share, please see the attached financial tables.

We present these non-GAAP financial measures because we believe that they are useful indicators of our operating performance and facilitate the comparison of results between periods. Adjusted EBITDA is a measure used in our credit agreement to determine the availability of borrowings under our revolving credit facility. We also use Adjusted EBITDA to review and assess our operating performance in connection with employee incentive programs and the preparation of our annual budget and financial projections. Adjusted Net Income and Adjusted EPS exclude amounts we do not consider part of our ongoing operating results when assessing performance and are calculated consistent with the calculation of Adjusted EBITDA.

Adjusted EBITDA, Adjusted Net Income and Adjusted EPS are not measurements of financial performance under GAAP and such financial measures should not be considered as an alternative to net income, cash flows from operating activities or other measures of performance determined in accordance with GAAP. In addition, our calculation of these non-GAAP financial measures may not be comparable to the calculation of similarly titled measures reported by other companies.

Forward-Looking Statements

This release contains statements that are forward-looking in nature. Statements that are predictive in nature, that depend upon or refer to future events or conditions or that include words such as "expects," "anticipates," "intends," "plans," "believes," "estimates," and similar expressions are forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results and performance to be materially different from any future results or performance expressed or implied by these forward-looking statements. These factors include the following: the highly competitive nature of the markets in which we sell our products; the failure to continue to develop innovative products; the loss of our customers; the vertical integration by our customers of the production of our products into their own manufacturing process; increases in prices for raw materials or the loss of key supplier contracts; our substantial indebtedness; interest rate risk related to our variable rate indebtedness; our inability to generate cash; restrictions related to the senior secured credit agreement; employee slowdowns, strikes or similar actions; product liability claims exposure; risks in connection with our operations outside the United States, including compliance with applicable anti-corruption laws; the incurrence of substantial costs to comply with, or as a result of violations of, or liabilities under, environmental laws; the failure to protect our intellectual property; the loss of senior management; the incurrence of additional debt, contingent liabilities and expenses in connection with future acquisitions; the failure to effectively integrate newly acquired operations; the absence of expected returns from the intangible assets we have recorded; the adverse impact from legal proceedings on our financial condition; and natural disasters, epidemics, terrorist acts and other events beyond our control. Additional information concerning these and other important factors can be found in Item 1A. "Risk Factors" of our most recent Annual Report on Form 10-K and subsequent reports filed with the Securities and Exchange Commission. Such forward-looking statements speak only as of the date of this press release. Polypore expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Polypore's expectations with regard thereto or change in events, conditions or circumstances on which any statement is based.

Click to view pre-formatted text >>