Pliant Continues Its Successful Modernization, Cost Reduction & Debt Reduction Plans
SCHAUMBURG, Ill., April 29 /PRNewswire/ -- Pliant Corporation announced the next steps in its on-going improvement plans. These changes will lower its financial leverage to the lowest in its corporate history. Pro-forma financial leverage will be 6.5x as a result of the action.
Equipment Modernization & Capability Advancement
-- Over the last four years, Pliant has modernized over 700 million
pounds of its capacity, resulting in the following enhanced
capabilities to offer its customers
-- Films made with recycled plastic content
-- Films that are degradable
-- Films with extremely precise gauge control
-- Films that deliver lowest material content per square meter
-- Retail and Foodservice cutter boxes
-- Films with extremely precise coefficient-of-friction (COF)
control
-- Films printed in-line
-- Films with extruded colors
-- Films with state-of-the-art off-line 8 and 10 color
flexographic and rotogravure process
-- State-of-the-art bag production
-- State-of-the-art pouch production
-- Film-to-film laminations, including microwaveable cook-in
package films
-- Multi-layer films to provide improved barrier, shrink, and
optical properties
-- Coating, plasma deposition and steam chambers to deliver
superior film attributes and performance
-- A full service, in-house graphics center with state-of-the-art
technology including direct-to-plate graphics capability
-- This program has been implemented one step at a time and the next
round is being announced today
-- 100 million pounds of capacity will be upgraded, modernized and
reinstalled in lower cost plant locations
-- State of the art upgrades include: faster throughput speeds,
improved gauge control, enhanced inspection systems, flexible
die designs and expanded material blending characteristics
Medical Products Center of Excellence Created
-- The company is consolidating its successful medical packaging business
-- This $50 million business is growing fast, and this consolidation will
position the company as a full service provider of formable device
packages as well as gown, drape, and cover film and composites
Low Cost Plant Network
-- Over the last five years, Pliant has consolidated 7 of its highest
cost locations or approximately 25%, to improve operating scale and
reduce fixed costs
-- The next set of locations being consolidated as part of this
modernization plan
-- Deerfield, MA
-- Dalton, GA
-- Harrington, DE
-- Newport News, VA
-- This effectively completes the company's current consolidation plans.
Pliant is already an industry leader in Lean Manufacturing, systematic
improvements in material flexibility, inventory management techniques,
and continuous improvement in operational cost modeling. The
consolidation of facilities will accelerate the pace of inventory
reductions through improved vertical integration of value-added
products within the converting plants, in addition to the natural
benefits of raw material and finished goods being produced in fewer
locations.
-- Additionally, the company is in active discussions to implement new
production locations in the Middle East and Eastern Europe to support
its fast growth in those geographies
Profit Rate Improvement
-- Over the last 4 years, Pliant has closed its profit rate gap versus
the industry median profit rate
Historical EBITDA Margins with
Pro-Forma Restructuring Benefit
2004 2005 2006 2007
Median 13.7% 11.4% 9.5% 9.9%
Pliant 9.8% 8.6% 9.0% 8.8%
Pliant pro-forma 10.2%
-- These actions will put Pliant's pro-forma profit rate above the
industry median for the first time
$80 Million Debt Reduction and Will Reduce Leverage to 6.5x
-- Pliant's maintenance capex and working capital requirements will be
reduced as a result of these manufacturing footprint optimization
actions
-- Additionally, the Company will take the opportunity to sale-leaseback
some of its facilities and/or equipment and is working with the
Staubach Corporation to accomplish this
-- The Company will be able to reduce its debt by $80 million over the
next 14 months
-- This will immediately deleverage the Company and increase shareholder
value
-- The Company's pro-forma leverage will be 6.5x after completion of
these improvements
-- This is the lowest leverage since the Company's inception in June 2000
Pliant Leverage Trend
2000 - 2009
Leverage
2000 7.4
2001 7.5
2002 10.7
2003 11.3
2004 13.6
2005 10.7
2006 7.1
2007 7.8
6/30/2009 6.5
Summary
-- These actions will reduce Pliant's cost structure by an incremental
$15 million pro-forma.
-- A significant amount of pre-planning costs, line cross-qualifications,
capacity planning, and site preparation was completed in the fourth
quarter of 2007 and the first quarter of 2008 to insure both a well
funded and seamless transition for our valued customers.
-- Once completed, every operating complex in the Pliant network will
have been modernized within the past five years.
These actions will significantly increase Pliant's competitiveness across its product and geographic reach and accelerate its growth prospects in key focus areas. Additionally, this is an important step forward in the company's debt reduction programs, which will reduce projected leverage to 6.5 turns. This rate will be the lowest leverage in Pliant's history. This improvement in our credit profile will have a positive impact as we refinance our bonds. These changes will also maintain Pliant's cash flow to retain our core philosophy of continuous investment in our people, products, and processes to deliver industry leading solutions to our customers.
Cautionary Statement for Forward-Looking Information
Any disclosures in this release that are not historical facts are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These forward-looking statements are subject to risks and uncertainties and are subject to change based upon a variety of factors that could cause actual results to differ materially from those we currently anticipate. Factors that could have a material and adverse impact on actual results are identified in Pliant's Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission (the "SEC") on March 19, 2008 and in the reports and documents Pliant files from time to time with the SEC. Pliant undertakes no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after today or to reflect the occurrence of unanticipated events.
About Pliant:
Pliant Corporation is a leading producer of value-added film and flexible packaging products for personal care, medical, food, industrial and agricultural markets. The Company operates 21 manufacturing and research and development facilities around the world, and employs approximately 2,900 people.
First Call Analyst:
FCMN Contact:
Source: Pliant Corporation
CONTACT: Stephen T. Auburn, Vice President and General Counsel of Pliant
Corporation, +1-847-969-3319, Steve.auburn@pliantcorp.com
Web site: http://www.pliantcorp.com/
2008-04-29 18:18:57 0348449 PRNEWSWIRE