8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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)
August 15, 2008

Wellman, Inc.

(Exact name of registrant as specified in its charter)

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

1041 521 Corporate Center Drive
Fort Mill, South Carolina
(Address of principal executive offices) 29707
(Zip Code)

Registrant’s telephone number, including area code: (803) 835-2000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

EX-99.1 Wellman, Inc.'s Unaudited Monthly Operating Statements for the month ended July 31, 2008.

Item 1.01. –Entry into a Material Definitive Agreement.

     On August 15, 2008, Wellman, Inc. (the “Company”) and certain of its subsidiaries (collectively, the “Debtors”) entered into the ninth amendment of its senior secured super-priority Debtor in possession credit agreement dated February 26, 2008 (the “Credit Agreement”) among the Company and certain of its domestic subsidiaries, as borrowers, Deutsche Bank Securities Inc., as sole lead arranger and bookrunner, Deutsche Bank Trust Company Americas, as administrative agent and collateral agent, and the lenders that from time to time become party thereto. Under the default provision in Section 9.1(i)(xvi) of the Credit Agreement as amended, it would have been an event of default if the Company had not obtained approval of its disclosure statement by August 15, 2008, obtained an order confirming the Plan by September 26, 2008 and emerged from bankruptcy prior to October 6, 2008. The letter agreement amended the Credit Agreement so that these deadlines are August 29, 2008, October 10, 2008 and October 20, 2008, respectively.

     In addition, the Credit Agreement contains certain financial covenants and other covenants. One of these covenants is that we must maintain a Minimum EBITDA, which is measured based on the cumulative monthly EBITDA starting with the month of March 2008. EBITDA, as defined under the Credit Agreement, is calculated by adding Earnings (Loss) from continuing operations, income tax expense (benefit), interest expense, non-cash charges, and non-recurring fees, cash charges, and other cash expenses made or incurred in connection with entering into the Credit Agreement. We were not in compliance with the minimum cumulative EBITDA requirement for the months ending June 30^th and July 31^st 2008. The Administrative Agent, on behalf of the Majority Lenders, consented to waive compliance with the minimum EBITDA requirement set forth in Section 8.1(a) of the Credit Agreement for the period from August 15, 2008 through August 29, 2008.

Item 2.02. –Results of Operations and Financial Condition.

     The information set forth in Item 7.01 below is incorporated by reference in this Item 2.02 as if fully set forth herein.

Item 7.01. Regulation FD Disclosure.

     On August 20, 2008, Wellman, Inc. (the “Company”) and certain of its subsidiaries (collectively, the “Debtors”) filed their unaudited consolidated Monthly Operating Statements for the month ended July 31, 2008 (the “Monthly Operating Statements”), with the United States Bankruptcy Court for the Southern District of New York (the “U.S. Bankruptcy Court”) in the matter of In re Wellman, Inc., et al., Case No. 08-10595 (SMB). Exhibit 99.1 to this Current Report on Form 8-K contains the unaudited consolidated Monthly Operating Statements as filed with the United States Bankruptcy Court.

     The Monthly Operating Statements are limited in scope, cover a limited time period, and have been prepared solely for the purpose of complying with the monthly reporting requirements of the U.S. Bankruptcy Court. The financial information in the

Monthly Operating Statements is in a format required by the U.S. Bankruptcy Court and the Company’s Debtor-in-Possession credit agreement, is preliminary and unaudited and does not purport to show the financial statements of any of the Debtors in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Therefore, the Monthly Operating Statements may exclude items required by GAAP, such as certain reclassifications, eliminations, accruals, valuations and disclosure items. The Company cautions readers not to place undue reliance upon the Monthly Operating Statements. There can be no assurance that such information is complete and the Monthly Operating Statements may be subject to revision. The Monthly Operating Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007.

     These Monthly Operating Statements have been derived from the books and records of the Company. They, however, have not been subjected to procedures that would typically be applied to financial information presented in accordance with GAAP and, upon the application of such procedures, the Company believes that they could be subject to changes, and these changes could be material. The information furnished in the Monthly Operating Statements includes certain normal recurring adjustments but may not include all of the adjustments that would typically be made for quarterly financial statements in accordance with GAAP. In addition, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted.

     Access to documents filed with the U.S. Bankruptcy Court and other general information about the Chapter 11 cases is available at www.kccllc.net/wellman. The content of the foregoing website is not a part of this Report.

Limitation on Incorporation by Reference

     The Monthly Operating Statements are being furnished for information purposes only and are not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) or otherwise subject to the liabilities of that section and shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”). Registration statements or other documents filed with the SEC shall not incorporate the Monthly Operating Statements or any other information set forth in this Report by reference, except as otherwise expressly stated in such filing. This Report will not be deemed an admission to the materiality of any information that is required to be disclosed solely by Regulation FD.

Forward-Looking Statements

     In addition to historical information, this Report contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Words such as “believe,” “intend”, “expect,” “anticipate,” “plan,” “may,” “will,” and similar expressions are intended to identify forward-looking statements. Such statements include, among others, those concerning the Company’s expected financial performance, as well as all assumptions, expectations, predictions, intentions or beliefs about future events. These Statements are made as of the date of this Report based upon current expectations, and we undertake no obligation to update this information, whether as a result of new information, future developments or otherwise. These forward-looking statements involve certain risks and uncertainties, including, but not limited to: our substantial liquidity needs and liquidity pressure; our substantial indebtedness and its impact on our financial health and operations; risks associated with our indebtedness containing floating interest rate provisions and its effect on our financial health if rates rise significantly; our ability to obtain additional financing in the future; risks associated with claims not discharged in the Chapter 11 cases and their effect on our results of operations and profitability; risks associated with the transfers of our equity, or issuances of equity in connection with our reorganization and our ability to utilize our federal income tax net operating loss carry-forwards in the future; our dependence on our management and employees; the adverse effect of competition on our performance; reduced raw material margins; availability and cost of raw materials; reduced sales volumes; increase in costs; volumes of textile imports; prices and volumes of polyester staple fiber and PET resin imports; the financial condition of our customers; change in tax risks; environmental risks; natural disasters; regulatory changes; U.S., European, Asian and global economic conditions; work stoppages; levels of production capacity and profitable operations of assets; prices of competing products; acts of terrorism; and maintaining the operations of our existing production facilities. 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.

Item 9.01. Financial Statements and Exhibits.

          (a) Not applicable.

          (b) Not applicable.

          (c) Exhibits

 99.1 Wellman, Inc.’s Unaudited Monthly Operating Statements for the month ended July 31, 2008.

2

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 hereunto duly authorized.

	Wellman, Inc.
August 20, 2008	/s/ Keith R. Phillips
	Keith R. Phillips
	Vice President, Chief Financial Officer

3

EXHIBIT INDEX

Exhibit
Number		Description
	99.1	Wellman, Inc.’s Unaudited Monthly Operating Statements for the month ended July 31, 2008.

4

EX-99.1

Exhibit 99.1

Wellman, Inc.
Debtor-in-Possession
Analysis of Financial Statements for DIP Compliance
July 2008

An analysis of the July 2008 operating results of Wellman, Inc. and subsidiaries (also referred to as “Wellman”, “we”, “our” and “us”) are presented below. Wellman, Inc. and certain subsidiaries filed for bankruptcy protection under the provisions of Chapter 11 on February 22, 2008. References to pre-petition and post-petition amounts are with respect to the February 22, 2008 filing date. In addition, reference to full year 2008 operating results reflects pre-petition and post-petition results.

Consolidated Statement of Operations

The $5.5 million decrease in gross profit (from a profit of $0.5 million in June to a loss of $5.0 million in July) was primarily attributable to a decrease in the gross profit of the chemical-based segment. In July, the chemical-based segment’s sales volumes decreased by approximately 24.0 million pounds due primarily to liquidity constraints. We recorded a lower of cost or market reserve of approximately $3.0 million in July due to raw material costs reaching the highest levels of the year and then declining in early August. The remaining decrease in gross profit in July is principally due to unabsorbed costs resulting from lower production, including the shutdowns of certain fiber lines. As a result of the above items, we reported an operating loss of $7.4 million in July, compared to a $1.7 million operating loss in June. Interest expense was $1.2 million in July and $1.0 million in June. Interest expense was calculated only on the amount borrowed under our Debtor-in-Possession Credit Agreement (the “DIP Facility”). Reorganization costs, which consisted primarily of legal fees related to the Chapter 11 filing, increased to $3.9 million in July, compared to $2.4 million in June. As a result, our net loss was $12.5 million in July, compared to $5.1 million for June 2008.

Consolidated Balance Sheet

Our current assets decreased by approximately $31 million, primarily as a result of lower accounts receivable (which resulted from lower sales volume) and inventory, all as a result of a plan to lower debt and maintain liquidity. The balance sheet at July 31, 2008, reflected $116.9 million in borrowings under the DIP Facility. This is $21.7 million lower than the comparable net amount in June.

Consolidated Statement of Cash Flows

Net cash flows from operations were $20.7 million, which is lower than the $26 million provided by operations in June, as a result of a higher net loss. This resulted in debt repayments of $21.7 million in July and $57.2 million for June and July. We paid $2.0 million and $2.7 million in July and June, respectively, for reorganization items.

Other

Our cumulative EBITDA, as defined, through July 31, 2008, was lower than the amount specified in the covenants of our DIP Facility. We have obtained a waiver of this covenant through August 29, 2008. We expect that the DIP Lenders will provide us with additional waivers as needed provided we continue to make satisfactory progress towards consummating a plan of reorganization and maintain sufficient collateral coverage.

Wellman, Inc.
(Debtor-in-Possession)
Consolidated Statements of Operations
(In Millions)

	July			June
	2008			2008
Net Sales	$	86.2		$	101.5
Cost of Sales		91.2			101.0
Gross Profit (Loss)		(5.0	)		0.5
Selling, General and Administrative Expenses		2.4			2.2
Other (Income) Loss		0.0			0.0
Operating Income (Loss)		(7.4	)		(1.7	)
Interest Expense, Net*		1.2			1.0
Earnings (Loss) from Continuing Operations Before Reorganization Items and Income Taxes		(8.6	)		(2.7	)
Reorganization Items, Net		3.9			2.4
Earnings (Loss) from Continuing Operations Before Income Taxes		(12.5	)		(5.1	)
Income Tax Expense (Benefit)		0.0			0.0
Earnings (Loss) from Continuing Operations		(12.5	)		(5.1	)
Earnings (Loss) from Discontinued Operations, Net of Tax		0.0			0.0
Net Earnings (Loss)		($12.5	)		($5.1	)

* - Interest expense subsequent to Feb 22, 2008 only reflects interest on the DIP financing. Interest on the compromised debt, per the debt agreements, was $3.4 for July and $3.3 for June. These amounts are not included in the financial statements.

Wellman, Inc.
(Debtor-in-Possession)
Consolidated Statements of Operations
(In Millions)

	For the Month Ended						For the Year-to-Date
	July						Period Ended July
	2008			2007			2008			2007
Net Sales	$	86.2		$	85.1		$	607.3		$	704.3
Cost of Sales		91.2			84.5			601.1			691.9
Gross Profit (Loss)		(5.0	)		0.6			6.3			12.4
Selling, General and Administrative Expenses		2.4			3.9			19.2			25.6
Other (Income) Loss		0.0			0.0			(0.2	)		(7.9	)
Operating Income (Loss)		(7.4	)		(3.3	)		(12.7	)		(5.3	)
Interest Expense, Net*		1.2			5.6			15.2			36.0
Earnings (Loss) from Continuing Operations Before Reorganization Items and Income Taxes		(8.6	)		(8.9	)		(27.9	)		(41.3	)
Reorganization Items, Net		3.9			0.0			18.1			0.0
Earnings (Loss) from Continuing Operations Before Income Taxes		(12.5	)		(8.9	)		(46.0	)		(41.3	)
Income Tax Expense (Benefit)		0.0			0.0			0.0			(0.2	)
Earnings (Loss) from Continuing Operations		(12.5	)		(8.9	)		(46.0	)		(41.1	)
Earnings (Loss) from Discontinued Operations, Net of Tax		0.0			2.1			0.0			(1.4	)
Net Earnings (Loss)		($12.5	)		($6.8	)		($46.0	)		($42.5	)

* - Interest expense subsequent to Feb 22, 2008 only reflects interest on the DIP financing. Interest on the compromised debt, per the debt agreements, was $3.4 for the month of July and $17.7 year-to-date after Feb 22, 2008. These amounts are not included in the financial statements.

Wellman, Inc.
(Debtor-in-Possession)
Condensed Consolidated Balance Sheet
(In millions)

	July 31,			June 30,
	2008			2008
Assets
Current assets:
Cash and cash equivalents	$	1.4		$	2.6
Accounts receivable		130.1			151.0
Inventories		73.7			81.5
Prepaid expenses and other current assets		27.4			28.8
Current assets held for sale		—			—
Total current assets		232.6			263.9
Property, plant and equipment:
Land, buildings and improvements		90.4			90.4
Machinery and equipment		339.9			339.7
CIP		4.6			4.7
		434.9			434.8
Less accumulated depreciation		198.6			197.8
Net property, plant and equipment		236.3			237.0
Other assets		11.6			11.5
Noncurrent assets held for sale		—			—
Total Assets	$	480.5		$	512.4
Liabilities and Stockholders’ Deficit
Liabilities Not Subject to Compromise
Current Liabilities:
Accounts payable — trade	$	0.5		$	1.2
Accrued liabilities		23.8			21.5
Debtor in possession credit agreement		116.9			138.6
Other debt		—			—
Current liabilities associated with assets held for sale		—			—
Total current liabilities		141.2			161.3
Liabilities subject to compromise		531.9			531.5
Long-term debt		—			—
Deferred income taxes and other noncurrent liabilities		37.8			37.7
Noncurrent liabilities associated with assets held for sale		—			—
Total Liabilities		710.9			730.5
Stockholders’ Deficit:
Common stock		—			—
Preferred stock		185.7			185.7
Paid-in capital		248.5			248.3
Common stock warrants		4.9			4.9
Accumulated other comprehensive loss		—			—
Accumulated deficit		(620.0	)		(607.5	)
Less common stock in treasury		(49.5	)		(49.5	)
Total Stockholders Deficit		(230.4	)		(218.1	)
	$	480.5		$	512.4

Wellman, Inc.
(Debtor-in-Possession)
Condensed Consolidated Balance Sheet
(In millions)

	July 31,			July 31,
	2008			2007
Assets
Current assets:
Cash and cash equivalents	$	1.4		$	—
Accounts receivable		130.1			165.1
Inventories		73.7			115.5
Prepaid expenses and other current assets		27.4			33.5
Current assets held for sale		—			—
Total current assets		232.6			314.1
Property, plant and equipment:
Land, buildings and improvements		90.4			83.8
Machinery and equipment		339.9			951.8
CIP		4.6			13.0
		434.9			1,048.6
Less accumulated depreciation		198.6			512.4
Net property, plant and equipment		236.3			536.2
Other assets		11.6			46.0
Noncurrent assets held for sale		—			—
Total Assets	$	480.5		$	896.3
Liabilities and Stockholders’ Deficit
Liabilities Not Subject to Compromise
Current Liabilities:
Accounts payable — trade	$	0.5		$	65.2
Accrued liabilities		23.8			34.6
Debtor in possession credit agreement		116.9			—
Other debt		—			0.3
Current liabilities associated with assets held for sale		—			—
Total current liabilities		141.2			100.1
Liabilities subject to compromise		531.9			—
Long-term debt		—			588.3
Deferred income taxes and other noncurrent liabilities		37.8			72.2
Noncurrent liabilities associated with assets held for sale		—			—
Total Liabilities		710.9			760.6
Stockholders’ Deficit:
Common stock		—			0.0
Preferred stock		185.7			176.7
Paid-in capital		248.5			248.0
Common stock warrants		4.9			4.9
Accumulated other comprehensive loss		—			0.1
Accumulated deficit		(620.0	)		(244.5	)
Less common stock in treasury		(49.5	)		(49.5	)
Total Stockholders Deficit		(230.4	)		135.7
	$	480.5		$	896.3

Wellman, Inc.
(Debtor-in-Possession)
Simplified Statement of Cash Flows
(in millions)

	July			June
	2008			2008
Cash flow from operating activities:
Net earnings (loss)		($12.5	)		($5.1	)
Adjustments to reconcile net earnings (loss) to net cash used in operating activities:
Loss from discontinued operations, net of tax		0.0			0.0
Depreciation		1.0			1.1
Amortization		1.4			1.4
Amortization in interest expense		0.6			0.4
Deferred taxes on income		0.0			0.0
Reorganization Items		3.9			2.4
Payment of reorganization items		(2.0	)		(2.7	)
Gain on sale of assets		0.0			0.0
Changes in assets and liabilities:
Accounts receivable		20.9			6.0
Inventories		7.8			21.1
Prepaid expenses and other current assets		(0.5	)		6.2
Other assets		(0.1	)		(0.4	)
Accounts payable and accrued liabilities		0.2			(5.0	)
Other liabilities		(0.0	)		0.6
Other		0.0			0.0
Net cash provided (used) by operating activities		20.7			26.0
Cash flows from investing activities:
Additions to property, plant and equipment (net)		(0.2	)		(0.3	)
Proceeds from sale of assets		0.0			(0.0	)
Net cash used by investing activities		(0.2	)		(0.3	)
Cash flows from financing activities:
Borrowings (Repayments) of long-term debt		(21.7	)		(35.5	)
Dividends paid on common stock		0.0			0.0
Debt and equity issuance costs		0.0			(0.6	)
Net cash provided (used) by financing activities		(21.7	)		(36.1	)
Discontinued Operations:
Operating activities		0.0			0.0
Investing activities		0.0			0.0
Financing activities		0.0			0.0
Net cash provided (used) by discontinued operations		0.0			0.0
Increase (decrease) in cash and cash equivalents		(1.2	)		(10.4	)
Cash and cash equivalents at beginning of period		2.6			13.0
Cash and cash equivalents at end of period	$	1.4		$	2.6

Wellman, Inc.
(Debtor-in-Possession)
Simplified Statement of Cash Flows
July Fiscal Period
(in millions)

	For the Month						For the YTD Period
	Ended July						Ended July
	2008			2007			2008			2007
Cash flow from operating activities:
Net earnings (loss)		($12.5	)		($6.8	)		($46.0	)		($42.5	)
Adjustments to reconcile net earnings (loss) to net cash used in operating activities:
Loss from discontinued operations, net of tax		0.0			(2.1	)		0.0			1.3
Depreciation		1.0			2.8			7.8			26.3
Amortization		1.4			1.6			9.6			9.9
Amortization in interest expense		0.6			0.2			2.2			2.4
Deferred taxes on income		0.0			1.2			0.1			0.9
Johnsonville fibers disposal costs		0.0			0.0			0.0			(1.0	)
Payments made against Jville fiber disposal costs		0.0			0.0			0.0			(2.2	)
Reorganization Items		3.9			0.0			18.1			0.0
Payment of reorganization items		(2.0	)		0.0			(11.9	)		0.0
Gain on sale of assets		0.0			0.0			(0.2	)		0.0
Changes in assets and liabilities:
Accounts receivable		20.9			(8.9	)		(1.1	)		(1.8	)
Inventories		7.8			0.3			23.2			(0.1	)
Prepaid expenses and other current assets		(0.5	)		0.0			(7.6	)		1.1
Other assets		(0.1	)		0.6			(1.2	)		0.6
Accounts payable and accrued liabilities		0.2			(12.3	)		4.9			(16.6	)
Other liabilities		0.0			1.3			(1.4	)		(3.2	)
Other		0.0			(0.3	)		0.0			0.5
Net cash provided (used) by operating activities		20.7			(22.4	)		(3.5	)		(24.4	)
Cash flows from investing activities:
Additions to property, plant and equipment (net)		(0.2	)		(1.2	)		(2.4	)		(6.3	)
Proceeds from sale of assets		0.0			0.0			0.3			0.0
Net cash used by investing activities		(0.2	)		(1.2	)		(2.1	)		(6.3	)
Cash flows from financing activities:
Borrowings (Repayments) of long-term debt		(21.7	)		(9.4	)		11.7			12.2
Dividends paid on common stock		0.0			0.0			0.0			(1.3	)
Debt and equity issuance costs		0.0			0.0			(4.7	)		0.0
Net cash provided (used) by financing activities		(21.7	)		(9.4	)		7.0			10.9
Discontinued Operations:
Operating activities		0.0			43.1			0.0			34.2
Investing activities		0.0			(7.3	)		0.0			(10.4	)
Financing activities		0.0			(2.8	)		0.0			(4.0	)
Net cash provided (used) by discontinued operations		0.0			33.0			0.0			19.8
Increase (decrease) in cash and cash equivalents		(1.2	)		0.0			1.4			0.0
Cash and cash equivalents at beginning of period		2.6			0.0			0.0			0.0
Cash and cash equivalents at end of period	$	1.4		$	0.0		$	1.4		$	0.0

Wellman, Inc.
EBITDAR, as defined

     We have provided a non-GAAP measure, “EBITDAR, as defined,” because our DIP Credit Agreement uses this measurement as a key component. In accordance with our DIP Credit Agreement, we must maintain a minimum cumulative EBITDAR (cumulative monthly commencing March 1, 2008, and rolling into trailing twelve months) tested as of the last day of the applicable month, with a report due on the fifteenth day after the end of each month, commencing with the first full month following the Petition Date. We believe it is also an important measurement tool for (1) financial institutions that provide us with capital; (2) investors; and (3) our Board and management. In each instance, we used EBITDAR, as defined because it excluded items that are not expected to impact the long-term cash flow of the businesses and are not an indication of our ongoing operating performance. In addition, EBITDAR, as defined is a measure frequently used to value an enterprise and to enable investors to analyze the efficiency of our operations and to compare and/or rank use with other companies of differing capital structures.Our Board of Directors, CEO (our chief operating decision maker), and our senior management use EBITDAR, as defined to evaluate the operating performance of our segments and determine incentive compensation for employees throughout the organization. EBITDAR, as defined, under the DIP Credit Agreement is calculated by adding Earnings (loss) from continuing operations, income tax expense (benefit), interest expense, non-cash charges and non-recurring fees, cash charges, and other cash expenses made or incurred in connection with entering into the DIP Credit Agreement.

     The following table reconciles Loss from continuing operations to EBITDAR, as defined for each month and the seven months ending July 31, 2008.

																						Year-to-
	January			February			March			April			May			June			July			Date
	2008			2008			2008			2008			2008			2008			2008			July 2008
Loss from Continuing Operations	$	(5,038	)	$	(15,276	)	$	(2,388	)	$	(4,670	)	$	(1,083	)	$	(5,138	)	$	(12,452	)	$	(46,045	)
Income Tax Expense (Benefit)		—			—			—			—			—			—			—			—
Interest Expense, Net		4,675			5,505			925			903			999			1,065			1,166			15,238
Depreciation & Amortization		2,530			2,441			2,493			2,615			2,393			2,551			2,430			17,453
Permitted Adjustments:
Reorganization Items		—			3,349			2,798			3,098			2,583			2,390			3,877			18,095
Inventory Reserves		310			802			27			1,130			—			27			3,530			5,826
Claims Accrual Non-cash		—			—			—			—			353			—			—			353
Uncollectible Accounts		144			—			65			—			—			599			62			870
Hurricane Katrina Costs		—			63			—			—			—			—			—			63
Sale of Jville Assets		—			—			48			(232	)		—			19			—			(165	)
Environmental Reserve		—			—			—			—			—			615			—			615
Total permitted adjustments		454			4,214			2,938			3,996			2,936			3,650			7,469			25,657
EBITDAR, as defined	$	2,621		$	(3,116	)	$	3,968		$	2,844		$	5,245		$	2,128		$	(1,387	)	$	12,303

     Despite the importance of EBITDAR, as defined, we recognize that this non-GAAP financial measure does not replace the presentation of our GAAP financial results and are not intended to represent cash flows or an alternative to net earnings (loss). The EBITDAR, as defined information we provide is simply supplemental information and an additional measurement tool to assist our management and certain investors in analyzing our performance.

In re Wellman, Inc., et al.
Case No. 08-10595 (SMB)
Reporting Period: July 1 — July 31, 2008
Cash Disbursements by Petitioning Entity

		July 1 - July 31,
Petitioning Entities	Case Number:	2008
Wellman, Inc.	081-08-10595	$	89,290,934
Fiber Industries, Inc.	081-08-10607		—
Wellman of Mississippi, Inc.	081-08-10605		—
PTA Resources LLC	081-08-10596		—
Prince, Inc.	081-08-10604		34
ALG, Inc.	081-08-10599		34
Wellman Fibres Ltd.	081-08-10598		—
MRF, Inc.	081-08-10600		—
Warehouse Associates Inc.	081-08-10601		—
MED Resins, Inc.	081-08-10602		—
Carpet Recycling of Georgia Inc.	081-08-10603		—
Josdav, Inc.	081-08-10606		—
		$	89,291,002