WELLMAN’S QUARTER NET TO CARRY $4.4M CHARGE
NEW YORK — Polyester maker Wellman Inc. reported that it experienced mechanical problems in August that will result in a pretax charge of $4.4 million against earnings for the third quarter ending Sept. 30.
The Shrewsbury, N.J.-based company said that an electrical failure experienced in August would leave its production of polyethylene terephthalate, a component of resin, almost 20 percent less than anticipated for August and September.
The problems had no effect on Wellman’s production of polyester fiber.
Wellman said it expects the costs from the problem to come to about $6.4 million, with $3 million of that relating to equipment repairs. It expects to record a $2 million insurance receivable in the quarter for the repairs.
For the third quarter last year, the company posted earnings before taxes of $12.1 million and net income of $7.7 million. The company made the announcement after the close of trading Friday. In Tuesday’s trading on the New York Stock Exchange, Wellman shares closed at 16 1/16, up 3/8.