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Wellman takes $24 million hit in settlement
Wellman (NYSE:WLM) is taking a pretax hit of $24 million in the second quarter of 2005 to cover the cost of a settlement with 33 purchasers of polyester staple fiber. The money will also cover expected future costs to defend or settle all other civil claims alleging that the company engaged in price fixing and customer allocation for sales of polyester staple fiber, the company said. The after-tax effect of the charge will be $15.6 million.
The company was accused of price fixing in North America between April 1999 to July 2001. The settlement agreement states that Wellman denies any wrongdoing and acknowledges that it has strong defenses to any claims. Despite that, it is entering into the settlement agreement to minimize future expenses, risk and disruption of business that occurs with any litigation. Those involved in the settlement have agreed to release any future claims. Wellman also agreed to increase the settlement payment if it agrees to settle other similar claims for a greater amount.
“Even though the company did not engage in any illegal actions, this settlement is a prudent action to eliminate a substantial number of claims,” said CEO Thomas Duff in a statement.
Rossignol reports year-end net loss
Skis Rossignol (SKIR.PA) — which is in the process of being bought by Quiksilver (NYSE: ZQK) — took a full-year net loss hit after restructuring charges and a slowdown in snowboarding sales.
Rossignol reported a net loss of Euro 25 million (USD $30.3 million) for the year ended March 31, after a Euro 7.2 million (USD $8.7 million) profit the previous year. The company said it had also been affected by currency variations, risk provisions and stock depreciation. Rossignol’s full-year operating profit fell to Euro 9.5 million (USD $11.5 million) from Euro 24.5 million (USD $29.6 million) in 2003/2004, on sales down 0.25 percent at Euro 477.7 million (USD $578.6 million). At the end of March, its debt was Euro 136.6 million (USD $165.4 million), up from Euro 118.4 million (USD $143.4 million) last year.
Quiksilver is buying the company for about USD $320 million, and the deal is expected to close in July.
(Conversion of Euros into U.S. dollars is for information only, is not necessarily relative to earnings, and is based on the currency rate as of June 16.)
West Marine president resigning
After 25 years with the company, Richard Everett, the president and COO of West Marine (Nasdaq: WMAR), said he is resigning to pursue other interests. He is also resigning from the company’s board of directors. He said he will remain with the company for an extended period to assure a smooth transition. CEO Peter Harris will assume the additional title of president, and Everett’s duties will be assumed by other senior executives.
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