• Separations Media and Transportation and Industrial segments generate solid performance
• Electronics and Electric Drive Vehicles ("EDVs") segment experiences very weak lithium battery separator demand in January and February, followed by marked improvement in March which continued into the second quarter
• Recent ramp-up of two new battery production facilities and new vehicle launches in the EDV end market reinforce confidence in improved performance as the year progresses

CHARLOTTE, N.C., May 8, 2013 (GLOBE NEWSWIRE) -- Polypore International, Inc. (NYSE:PPO) today reported its financial results for the first quarter ended March 30, 2013:

• Sales were $163.5 million compared with $173.7 million in the prior-year period.
• Segment Operating Income was $28.3 million compared with $42.0 million in the prior-year period. A table showing the reconciliation of Segment Operating Income to U.S. GAAP amounts is included in this release.
• Adjusted Net Income and Adjusted EPS were $12.9 million and $0.27 per diluted share, compared with $22.3 million and $0.47 per diluted share in the prior-year period. Net income was $9.0 million or $0.19 per diluted share, compared with $18.8 million or $0.40 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.

Commenting on the first quarter, Robert B. Toth, President and Chief Executive Officer, said, "Our Separations Media and Transportation and Industrial segments, which represent the majority of Polypore, delivered solid performance in the quarter. Sales in the Electronics and EDVs segment were challenging, with added pressure from customers carefully managing inventory in what was – for many – their fourth fiscal quarter of the year. Following a very weak January and February, we experienced improved order patterns in March and April and anticipate improving performance through the course of the year."

Adjusted EBITDA

Adjusted EBITDA was $42.5 million in the first quarter of 2013 compared with $55.7 million in the first quarter of 2012. For the twelve months ended March 30, 2013, Adjusted EBITDA was $200.9 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 $93.7 million, up 9% compared with $86.2 million in the prior-year period. This increase reflects strong growth in Asia and a more typical winter battery restocking season in North America and Europe.
• Segment Operating Income was $21.3 million and 23% of sales compared with $20.0 million and 23% of sales for the prior-year period. The increase in segment operating income was due to higher sales volumes.

Electronics and Electric Drive Vehicles ("EDVs") Segment

• Sales of lithium battery separators were $24.4 million compared with $42.4 million in the prior-year period. The decrease was primarily volume-related, reflecting weak demand in consumer electronics applications and EDVs early in the quarter, as well as customers reducing inventories associated with their fiscal year-ends.
• Segment Operating Loss was $2.5 million compared with Segment Operating Income of $16.8 million for the prior-year period, reflecting the lack of operating leverage from lower sales as well as higher year-over-year costs associated with added capacity investments.

Separations Media Segment

Sales were $45.4 million, up 1% compared with $45.1 million in the prior-year period.

• Sales of healthcare products were $29.5 million, up 7% compared with $27.5 million in the prior-year period due to higher hemodialysis volumes.
• Sales of filtration and specialty products were $15.9 million compared with $17.6 million in the prior-year period due to continued weakness in microelectronics end-market demand.
• Segment Operating Income of $15.5 million was very strong at 34% of sales compared with $13.9 million and 31% of sales in the prior-year period. The increase was primarily due to production timing and efficiencies.

Share Repurchase Update

As of March 30, 2013, the Company had repurchased 6,800 shares of common stock for a total cost of approximately $272,000, leaving 3,993,200 shares remaining under its recently announced repurchase authorization of 4 million shares.

Outlook

"We have a strong portfolio of businesses, with performance in lead-acid separators, healthcare, and filtration on track, and our growth expectations for our lithium separator business remain unchanged. The ramp-up of EDV battery and production facilities in the quarter—combined with new vehicle introductions and the improvement in order patterns experienced in March and April—give us confidence that sales of lithium battery separators will improve over the course of the year," Toth added. "We are also pleased that our strong cash position allowed us to pay down $25 million in debt, and we remain focused on creating shareholder value as our lithium business improves and as we drive growth." 

Conference Call

Polypore International, Inc. will hold a conference call to discuss the Company's first quarter 2013 financial results and business outlook today, Wednesday May 8, 2013, at 4:45 p.m. Eastern time. The number to call for this interactive teleconference is (631) 291-4526. Enter code 30374202. A replay of the conference call will be available through May 15, 2013, via telephone at (404) 537-3406. Enter code 30374202. 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 calculating covenant compliance under the terms of our credit agreement. 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; lithium market demand does not materialize as anticipated; 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.