Pregis 3Q net sales up 7.2 percent
Price increases and a favorable foreign currency exchange pushed Deerfield-based Pregis Corporation's third quarter net sales up 7.2 percent.
The company's net sales from continuing operations was $212 million, up from $197.7 million during the same period last year. Excluding the foreign exchange, net sales increased 2.9 percent compared to the same period in 2010.
Gross margin as a percent of net sales decreased year-over-year to 19.9 percent for the third quarter of 2011, compared to 20.5 percent for the same period of 2010. The year-over-year decline in gross margin as a percentage of net sales was due to cost increases of over $5 million in key raw materials offset by the impact of selling price increases implemented during the past twelve months, the company said in a statement. Plastic resins, a key material in Pregis' product line, increased by approximately 10 percent in North America and 17 percent in Europe, the company said.
Pregis generated net sales of $241.1 million during the period, an increase of 7.8 percent from $223.7 million last year. Gross margin as a percent of net sales was 20.9 percent for the third quarter of 2011 compared to 21.2 percentfor the same period last year.
“I am very pleased with our strong third quarter performance,” said Glenn Fischer, president and chief executive officer. “We were able to drive year-over-year EBITDA improvement by continuing to reduce our cost structure, as well as offsetting significant resin cost increases with the impact of our selling price initiatives over the past twelve months.”
In October, Pregis sold its Hecacomb unit to Boise Paper Holding LLC for $125 million and its Kobusch Sengewald unit to Sun European Partners LLP for approximately $220 million. The company said proceeds from both sales will be used to repay a portion of its ABL credit facility and other debt repayment.
“The divestment of these businesses will allow us to focus our energy on driving the operating performance of our core global protective packaging business,” Fischer said.