8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 12, 2003

Wellman, Inc.
(Exact name of registrant as specified in its charter)

Delaware	1-10033	04-1671740
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

595 Shrewsbury Avenue, Shrewsbury, NJ
(Address or principal executive offices) 07702
(Zip Code)

Registrant's telephone number, including area code 732-212-3300

Item 5. Other Events and Regulation FD Disclosure

(a) Private Equity Investment

On February 12, 2003, Wellman, Inc. ("Wellman") issued a press release announcing that it entered into an agreement to sell up to $125.4 million of perpetual convertible preferred stock to Warburg Pincus, a global private equity firm. The release further stated that Oliver M. Goldstein, a Warburg Pincus Vice President, was named a director of Wellman, increasing to nine the number of directors on Wellman's board. This press release is attached as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.

(b) Fourth Quarter and Full Year 2002 Earnings

On February 12, 2003, Wellman issued a press release reporting its financial results for the quarter and year ended December 31, 2002. This press release is attached as Exhibit 99.2 to this Form 8-K and is incorporated herein by reference.

Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.

(c) Exhibits.

Exhibit No. Title

99.1	Press Release, dated February 12, 2003, announcing $125 million private equity investment
99.2	Press Release, dated February 12, 2003, announcing fourth quarter and full year 2002 earnings

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

WELLMAN, INC.

DATED: February 13, 2003 By: /s/Keith R. Phillips
Keith R. Phillips
Chief Financial Officer

EX-99.1

TITLE>wlmex99-1

1. [Logo]

Contact: Dennis Sabourin
Investor Relations Officer
(732) 212-3321

FOR IMMEDIATE RELEASE

WELLMAN, INC. ANNOUNCES $125 MILLION PRIVATE EQUITY INVESTMENT

Shrewsbury, NJ, February 12, 2003 - Wellman, Inc. (NYSE:WLM) today announced that it has entered into an agreement to sell up to $125.4 million of perpetual convertible preferred stock ("Preferred Stock") to Warburg Pincus, the global private equity firm. With the signing of this agreement, Warburg Pincus is investing $20 million in Wellman in the form of a convertible subordinated note that will be exchanged into Preferred Stock upon shareholder approval, and receive warrants to purchase 1.25 million shares of Wellman common stock at an exercise price of $11.25 per share. In addition, Oliver M. Goldstein, a Warburg Pincus Vice President, was named a director of Wellman, Inc., increasing to nine the number of directors on Wellman's Board.

Tom Duff, Wellman's Chairman and Chief Executive Officer, said, "We are excited to have Warburg Pincus, a premier private equity firm, as our financial partner. We believe this investment substantially improves our financial flexibility and positions us to expand, prosper, and to build upon our strong competitive positions in the PET resin and polyester fiber businesses."

Proceeds from the transaction will be used primarily to pay down existing debt. Wellman anticipates that the issuance of the Preferred Stock will strengthen its balance sheet and facilitate the refinancing of a significant amount of debt that is maturing over the next 18 months.

The sale of Preferred Stock is subject to certain conditions, including shareholder approval. Wellman intends to have a special meeting of its shareholders in the second quarter of 2003 to approve the transaction. The Preferred Stock issuance is also subject to Wellman obtaining a new $175 million credit facility to replace its existing $275 million credit facility, which matures in September 2003. The company's lead banks, JP Morgan Chase Bank and Fleet National Bank, will arrange and have committed to participate in the new facility.

"We expect the issuance of the Preferred Stock to provide a layer of equity capital that will substantially improve our capital structure and financial flexibility," said Keith Phillips, Wellman's Chief Financial Officer. "We believe the proceeds from this transaction will enable us to refinance our maturing debt on attractive terms and conditions."

After shareholder approval, Warburg Pincus will exchange its $20 million subordinated note and invest up to an additional $105.4 million for approximately 11.1 million shares of Preferred Stock, of which approximately 4.4 million shares will be convertible into Wellman common stock at $11.25 per share and 6.7 million shares will be convertible at $11.25 per share or, if lower, 10% over the average market price of Wellman common stock for the 20 trading days before the closing. Warburg Pincus will also receive warrants to purchase an additional 1.25 million shares of Wellman common stock at an exercise price equal to the conversion price of the 6.7 million share tranche of Preferred Stock. There are restrictions on when the Preferred Stock can be converted into common stock. The conversion price is subject to adjustment if specified share price performance is not achieved within four years, as well as standard anti-dilution protection.

The $11.25 conversion price was set at a premium over the market price of Wellman's common stock at the time the parties entered into a letter of intent with respect to this transaction. The liquidation preference of the Preferred Stock will accrete for at least the first five years. The annual accretion rate is 8.5% for the first five years, which would be reduced to 7.25% in the event that the Preferred Stock becomes eligible to participate in common stock dividends. After the fifth year, the rate will increase by 1.5% and may be paid in cash.

J.P. Morgan Securities, Inc., Fleet Securities, Inc. and Bear, Stearns & Co. Inc. are serving as Wellman's advisors on this transaction.

Mr. Goldstein, the Warburg Pincus Vice President, said, "We are pleased to make this substantial investment in Wellman. We look forward to partnering with this management team and its Board to continue to build the company and to drive shareholder value."

Wellman, Inc. manufactures and markets high-quality polyester products, including PermaClearÒ and EcoClearÒ brand PET (polyethylene terephthalate) packaging resins and FortrelÒ brand polyester fibers. The world's largest PET plastic recycler, Wellman utilizes a significant amount of recycled raw materials in its manufacturing operations.

Warburg Pincus LLC has been a leading private equity investor since 1971. The firm currently has nearly $10 billion under management, with approximately $6 billion available for investment globally in a range of sectors including chemicals and industrials, energy and natural resources, financial services and technologies, healthcare and life sciences, information and communications technology, media and real estate.

Webcast of Conference Call

Wellman, Inc. will conduct a conference call, to review 4Q and 2002 year-end results and a Private Equity Investment, as well as guidance for 2003, at 11:00 a.m. EST on Thursday, February 13, 2003. This call is available in a live Webcast on the Wellman, Inc. web page. To access the Webcast, log onto the Wellman, Inc. website at http://www.wellmaninc.com go to the Investor Relations page and follow the prompts. Replay of the Webcast will be available late afternoon February 13, 2003 and will remain on the website for 7 days. The replay can be accessed by following the same procedure, used above, for the live Webcast. Presentation slides for the conference call will be available at 11:00 a.m. Thursday, February 13, 2003 on the Wellman, Inc. website Investor Relation page under the Webcasts and Conferences section as well as part of the live webcast.

Forward-Looking Statements

Statements contained in this release that are not historical facts are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In addition, words such as "believes," "expects," "anticipates," and similar expressions are intended to identify forward-looking statements. These statements are made as of the date hereof based upon current expectations and we undertake no obligation to update the information contained herein. These forward-looking statements involve certain risks and uncertainties, including but not limited to: demand and competition for polyester fiber and PET resins; the financial condition of our customers; availability and cost of raw materials; availability and cost of petrochemical feedstock necessary for the production process; availability of financing, changes in financial markets, interest rates, credit ratings, and foreign currency exchange rates; U.S., Europea n, Far Eastern and global economic conditions; prices and volumes of imports; work stoppages; levels of production capacity and profitable operation of assets; changes in laws and regulations; prices of competing products; natural disasters; acts of terrorism; and maintaining the operations of our existing production facilities; and the impact of a governmental investigation of pricing practices in the polyester staple fiber industry. Actual results may differ materially from those expressed herein. Results of operations in any past period should not be considered indicative of results to be expected in future periods. Fluctuations in operating results may result in fluctuations in the price of our common stock. For a more complete description of the prominent risks and uncertainties inherent in our business, see our Form 10-K for the year ended December 31, 2001.

###

EX-99.2

1. [LOGO]

Contact: Dennis Sabourin
Investor Relations Officer
(732) 212-3321

FOR IMMEDIATE RELEASE

WELLMAN, INC. ANNOUNCES FOURTH QUARTER AND FULL YEAR 2002 EARNINGS

Shrewsbury, NJ, February 12, 2003 - Wellman, Inc. (NYSE:WLM) today announced its financial results for the quarter and year ended December 31, 2002. The Company reported net earnings for the fourth quarter 2002 of $3.3 million, or $0.11 per diluted share, an improvement from the net loss of $0.6 million, or $0.02 per diluted share, for the fourth quarter 2001. For the full year 2002, the Company reported a net loss of $194.4 million, or $6.07 per diluted share, compared to net earnings of $8.4 million, or $0.26 per diluted share, for the full year 2001. The 2002 results included a $197.1 charge related to goodwill impairment as described below.

The Company reported net earnings from continuing operations of $3.3 million, or $0.11 per diluted share, for the fourth quarter and $26.4 million, or $0.82 per diluted share, for the full year 2002. This compares to earnings of $0.3 million, or $0.01 per diluted share, and $13.4 million, or $0.42 per diluted share, for the fourth quarter and full year 2001, respectively.

Excluding the effects of unusual items described below, the Company reported net income from continuing operations, of $3.1 million, or $0.10 per diluted share, for the fourth quarter 2002 and $26.2 million, or $0.82 per diluted share, for the full year. This compares to a net loss from continuing operations, excluding unusual items, of $4.4 million, or $0.14 per diluted share, and net earnings of $16.0 million, or $0.50 per diluted share, for the fourth quarter and full year 2001, respectively.

"The past year was disappointing," said Tom Duff, Chairman and CEO. "PET resin margins in 2002 were below expectations. However, we expect our future margins and profitability to improve with increased capacity utilization in North America. Fiber margins continued to be adversely impacted by imports in 2002. We are continuing to implement our new fibers strategy to develop and market differentiated value added fibers. Raw material costs have increased rapidly in 2003 and we have implemented and announced selling price increases in both our PET resins and polyester fibers businesses. However, given the competitive nature of our businesses and other market influences, there can be no assurance that announced price increases will occur."

	4Q02	4Q01		FY 02	FY 01
($ Millions except per share data)
Sales From Continuing Operations	$ 250.2	$223.8		$1,014.0	$1,007.0
Earnings from Continuing Operations Excluding Unusual Items
Net Earnings (Loss) Earnings (Loss) per diluted share	$ 3.1 (2) (3) $ 0.10	($4.4) (1) ($0.14)		$ 26.2 (2) (3) $ 0.82	$ 16.0 (1) $ 0.50
Effect of Unusual Items
Net Earnings (Loss) Earnings (Loss) per diluted share	$ 0.2 $ 0.01	$ 4.7 $ 0.15		$ 0.2 $ 0.0	($2.6) ($0.08)
Earnings from Continuing Operations
Net Earnings Earnings per diluted share	$ 3.3 $ 0.11	$ 0.3 $ 0.01	$ 26.4 $ 0.82		$ 13.4 $ 0.42
Earnings from Discontinued Operations
Net Loss Loss per diluted share	- - - -	($ 0.9) ($0.03)		($23.7) ($0.73)	($5.0) ($0.16)
Effect of Change in Accounting Principle (4)
Net Loss Loss per diluted share	- - -	- - - -		($197.1) ($6.16)	- - - -
Total Earnings (Loss)
Net Earnings (Loss) Earnings (Loss) per diluted share	$3.3 $0.11	($0.6) ($0.02)		($194.4) ($6.07)	$8.4 $0.26

The following are the unusual items that occurred in 2001 and 2002:

(1) The net loss for the fourth quarter of 2001 included $4.7 million in income from business interruption insurance related to a production outage in the second quarter of 2001. Net income for the full year 2001 included the impact of the production outage in the second and third quarters and proceeds from business interruption insurance in the fourth quarter of 2001. The net impact of the outage on the full year 2001 was approximately $2.5 million including property damage, additional costs, lost profits, and insurance proceeds. Lost profits were calculated assuming the lost production was sold at the average selling price of comparable products in the second quarter.

(2) Net income in the fourth quarter and full year 2002 included $2.8 million in proceeds received under the Continued Dumping and Subsidy Offset Act (CDO) of 2002.

(3) Net income in the fourth quarter and full year 2002 included a charge of $2.6 million for expected losses on accounts receivable, including trade receivables from the entity that purchased the Company's POY business.

4. We adopted the new rules on accounting for goodwill and other intangibles effective January 1, 2002. The new rules require that goodwill be evaluated for impairment and eliminate the amortization of goodwill. As a result of this evaluation, Wellman determined that goodwill allocated to its Fibers and Recycled Products Group segment was impaired by approximately $197.1 million.

Wellman, Inc. manufactures and markets high-quality polyester products, including PermaClearÒ and EcoClearÒ brand PET (polyethylene terephthalate) packaging resins and FortrelÒ brand polyester fibers. The world's largest PET plastic recycler, Wellman utilizes a significant amount of recycled raw materials in its manufacturing operations.

Webcast of Conference Call

Wellman, Inc. will conduct a conference call, to review 4Q and 2002 year-end results and a Private Equity Investment, as well as guidance for 2003, at 11:00 a.m. EST on Thursday, February 13, 2003. This call is available in a live Webcast on the Wellman, Inc. web page. To access the Webcast, log onto the Wellman, Inc. website at: http://www.wellmaninc.com, go to the Investor Relations page and follow the prompts. Replay of the Webcast will be available late afternoon February 13, 2003 and will remain on the website for 7 days. The replay can be accessed by following the same procedure, used above, for the live Webcast. Presentation slides for the conference call will be available at 11:00 a.m. Thursday, February 13, 2003 on the Wellman, Inc. website Investor Relation page under the Webcasts and Conferences section as well as part of the live webcast.

Forward-Looking Statements

Statements contained in this release that are not historical facts are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In addition, words such as "believes," "expects," "anticipates," and similar expressions are intended to identify forward-looking statements. These statements are made as of the date hereof based upon current expectations and we undertake no obligation to update the information contained herein. These forward-looking statements involve certain risks and uncertainties, including but not limited to: demand and competition for polyester fiber and PET resins; the financial condition of our customers; availability and cost of raw materials; availability and cost of petrochemical feedstock necessary for the production process; availability of financing, changes in financial markets, interest rates, credit ratings, and foreign currency exchange rates; U.S., Europea n, Far Eastern and global economic conditions; prices and volumes of imports; work stoppages; levels of production capacity and profitable operation of assets; changes in laws and regulations; prices of competing products; natural disasters; acts of terrorism; and maintaining the operations of our existing production facilities; and the impact of a governmental investigation of pricing practices in the polyester staple fiber industry. Actual results may differ materially from those expressed herein. Results of operations in any past period should not be considered indicative of results to be expected in future periods. Fluctuations in operating results may result in fluctuations in the price of our common stock. For a more complete description of the prominent risks and uncertainties inherent in our business, see our Form 10-K for the year ended December 31, 2001.

###

Wellman, Inc
Consolidated Statement of Operations
(In Millions, except per share data)
		(Unaudited)
		Quarter Ended				Year Ended
		December 31,				December 31,
		2002			2001	2002			2001
Net Sales		$250.2			$223.8	$1,014.0			$1,007.0
Cost of Sales		227.4			202.6	901.2			899.0
Gross Profit		22.8			21.2	112.8			108.0
Selling, General and Administrative Expenses		19.8			17.7	71.5			72.8
Other income		4.4				4.4
Operating Income		7.4			3.5	45.7			35.2
Interest Expense, Net		2.8			3.4	10.3			17.9
Earnings From Continuing Operations
Before Income Taxes		4.6			0.1	35.4			17.3
Income Taxes		1.3			(0.2)	9.0			3.9
Earnings From Continuing Operations		3.3			0.3	26.4			13.4
Earnings (Loss) From Discontinued Operations		0.1			(1.4)	(36.4)			(7.7)
Tax Benefit From Discontinued Operations		0.0			(0.5)	(12.7)			(2.7)
Earnings (Loss) Before Cumulative Effect of
Accounting Change		3.4			(0.6)	2.7			8.4
Cumulative Effect of Accounting Change, Net of Tax		--			--	(197.1)			--
Net Earnings (Loss)		$3.4			($0.6)	($194.4)			$8.4
Basic Net Earnings (Loss) Per Common Share:
Earnings From Continuing Operations		$0.11			$0.01	$0.84			$0.43
Loss From Discontinued Operations		0.00			(0.03)	(0.75)			(0.16)
Cumulative Effect of Accounting Change		--			--	(6.24)			--
Net Earnings (Loss)		$0.11			($0.02)	($6.15)			$0.27
Diluted Net Earnings (Loss) Per Common Share:
Earnings From Continuing Operations		$0.11			$0.01	$0.82			$0.42
Loss From Discontinued Operations		0.00			(0.03)	(0.73)			(0.16)
Cumulative Effect of Accounting Change		--			--	(6.16)			--
Net Earnings (Loss)		$0.11			($0.02)	($6.07)			$0.26
Average Common Shares - (Basic)		31.6			31.6	31.6			31.5
Average Common Shares - (Diluted)		32.0			32.0	32.0			32.0
WELLMAN, INC.
SUPPLEMENTAL INFORMATION*
				4Q/4Q				4Q/3Q
SALES BY GROUP	4Q02		4Q01	% Chg.			3Q02	% Chg.
Million $
Fibers & Recycled Products Group	$118.2		$107.3	10%			$124.2	-5%
Packaging Products Group	$132.0		$116.5	13%			$132.6	-0.5%
Total Sales	$250.2		$223.8	12%			$256.8	-3%
BALANCE SHEET DATA	12/31/2002			CASH FLOW DATA
Million $				Million $			4Q02	YTD
Cash	$0.0			Depreciation			$12.7	$56.3
Inventories	$113.3			Amortization			$0.2	$1.3
Total Debt	$233.6			Total D&A			$12.9	$57.6
Stockholders' Equity	$426.7			Cap. Exps.			$6.4	$21.7
Total Debt-to-Capital	35.4%
								*Preliminary