##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number 1-10033
 
 WELLMAN, INC.
 
 
 Delaware
    
    04-1671740(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)1041 521 Corporate Center Drive 
Fort Mill, South Carolina
    
    29707(Address of principal executive offices)
    
    (Zip Code)
 (803) 835-2000
 þ o
  Large accelerated filer oAccelerated filer þNon-accelerated filer o(Do not check if a smaller reporting company)Smaller reporting company o o þ




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##### 



WELLMAN, INC.
(Debtor-in-Possession)
 INDEX
 Page No.PART I  FINANCIAL INFORMATIONITEM 1  Financial Statements (Unaudited, except where noted)Condensed Consolidated Statements of Operations  For the three and nine months ended September 30, 2008 and 2007
    
    
    3Condensed Consolidated Balance Sheets  September 30, 2008 and December 31, 2007 (Audited)
    
    
    4Condensed Consolidated Statements of Stockholders  Deficit  For the nine months ended September 30, 2008 and the year ended December 31, 2007 (Audited)
    
    
    5Condensed Consolidated Statements of Cash Flows  For the nine months ended September 30, 2008 and 2007
    
    
    6Notes to Condensed Consolidated Financial Statements
    
    
    7ITEM 2  Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    23ITEM 3  Quantitative and Qualitative Disclosures About Market Risk
    
    
    36ITEM 4  Controls and Procedures
    
    
    36PART II  OTHER INFORMATIONITEM 1  Legal Proceedings
    
    
    36ITEM 3  Defaults Upon Senior Securities
    
    
    37ITEM 6  Exhibits
    
    
    38SIGNATURES
    
    
    41Ex-10.10 Amendment to the Credit Agreement, dated August 15, 2008Ex-10.11 Amendment to the Credit Agreement, dated August 28, 2008Ex-10.12 Amendment to the Credit Agreement, dated September 8, 2008Ex-10.14 Amendment to the Credit Agreement, dated October 7, 2008Ex-10.15 Amendment to the Credit Agreement, dated October 20, 2008Ex-10.16 Amendment to the Credit Agreement, dated October 27, 2008Ex-10.17 Amendment to the Credit Agreement, dated November 4, 2008Ex-10.18 Amendment to the Credit Agreement, dated November 12, 2008Ex-31.1 Certification of the Chief Executive Officer pursuant to Section 302Ex-31.2 Certification of the Chief Financial Officer pursuant to Section 302Ex-32.1 Certification of the Chief Executive Officer pursuant to Section 906Ex-32.2 Certification of the Chief Financial Officer pursuant to Section 906
  2




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##### Table of Contents



ITEM 1. FINANCIAL STATEMENTS
 
 WELLMAN, INC.
(Debtor-in-Possession)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
 Three Months
    
    
    Nine MonthsEnded September 30,
    
    
    Ended September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net sales
    
    $
    233.6
    
    
    $
    270.8
    
    
    $
    754.7
    
    
    $
    889.9Cost of sales
    
    
    255.1
    
    
    
    271.2
    
    
    
    765.0
    
    
    
    878.5Gross profit
    
    
    (21.5
    )
    
    
    (0.4
    )
    
    
    (10.3
    )
    
    
    11.4Selling, general and administrative expenses
    
    
    6.6
    
    
    
    10.9
    
    
    
    22.5
    
    
    
    32.5Restructuring charges
    
    
    7.4
    
    
    
    
    
    
    
    7.4
    
    
    
    3.1Provision for uncollectible accounts
    
    
    3.9
    
    
    
    0.2
    
    
    
    4.7
    
    
    
    0.5Other income, net
    
    
    
    
    
    
    (1.6
    )
    
    
    (0.2
    )
    
    
    (12.8
    )Operating loss
    
    
    (39.4
    )
    
    
    (9.9
    )
    
    
    (44.7
    )
    
    
    (11.9
    )Interest expense, net (contractual interest of $13.3 and
$41.7
for the three and nine-month periods ended September 30,
2008)
    
    
    3.3
    
    
    
    16.0
    
    
    
    17.4
    
    
    
    46.3Loss from continuing operations before reorganization
items
and income taxes
    
    
    (42.7
    )
    
    
    (25.9
    )
    
    
    (62.1
    )
    
    
    (58.2
    )Reorganization items, net
    
    
    7.8
    
    
    
    
    
    
    
    22.0
    
    
    
    Loss from continuing operations before income taxes
    
    
    (50.5
    )
    
    
    (25.9
    )
    
    
    (84.1
    )
    
    
    (58.2
    )Income tax benefit
    
    
    
    
    
    
    (3.6
    )
    
    
    
    
    
    
    (3.6
    )Loss from continuing operations
    
    
    (50.5
    )
    
    
    (22.3
    )
    
    
    (84.1
    )
    
    
    (54.6
    )Earnings from discontinued operations, net of income taxes
    
    
    
    
    
    
    4.3
    
    
    
    
    
    
    
    0.9Net loss
    
    $
    (50.5
    )
    
    $
    (18.0
    )
    
    $
    (84.1
    )
    
    $
    (53.7
    )Net loss attributable to common stockholders:Net loss
    
    $
    (50.5
    )
    
    $
    (18.0
    )
    
    $
    (84.1
    )
    
    $
    (53.7
    )Accretion
    
    
    
    
    
    
    (4.0
    )
    
    
    (2.3
    )
    
    
    (11.5
    )Net loss attributable to common stockholders
    
    $
    (50.5
    )
    
    $
    (22.0
    )
    
    $
    (86.4
    )
    
    $
    (65.2
    )Basic and diluted net loss per common share:Net loss attributable to common stockholders from
continuing operations
    
    $
    (1.56
    )
    
    $
    (0.81
    )
    
    $
    (2.67
    )
    
    $
    (2.05
    )Net earnings attributable to common stockholders from
discontinued operations
    
    
    
    
    
    
    0.13
    
    
    
    
    
    
    
    0.03Net loss attributable to common stockholders
    
    $
    (1.56
    )
    
    $
    (0.68
    )
    
    $
    (2.67
    )
    
    $
    (2.02
    )Dividends per common share
    
    $
    
    
    
    $
    0.02
    
    
    $
    
    
    
    $
    0.06
  3




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WELLMAN, INC.
(Debtor-in-Possession)
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
 September 30,
    
    
    December 31,2008
    
    
    2007(Unaudited)
    
    
    (Note 1)ASSETS:Current assets:Cash and cash equivalents
    
    $
    2.1
    
    
    $
    Accounts receivable, less allowance of $7.7 in 2008 and $3.1 in 2007
    
    
    115.3
    
    
    
    129.0Inventories
    
    
    45.3
    
    
    
    97.0Prepaid expenses and other current assets
    
    
    27.1
    
    
    
    25.0Total current assets
    
    
    189.8
    
    
    
    251.0Property, plant and equipment, at cost:Land, buildings and improvements
    
    
    90.4
    
    
    
    90.4Machinery and equipment
    
    
    339.4
    
    
    
    336.7Construction in progress
    
    
    4.2
    
    
    
    5.4434.0
    
    
    
    432.5Less accumulated depreciation
    
    
    199.4
    
    
    
    190.7Property, plant and equipment, net
    
    
    234.6
    
    
    
    241.8Other assets, net
    
    
    11.7
    
    
    
    10.4$
    436.1
    
    
    $
    503.2LIABILITIES AND STOCKHOLDERS DEFICIT:Current liabilities:Accounts payable
    
    $
    1.7
    
    
    $
    69.7Accrued liabilities
    
    
    24.5
    
    
    
    23.3Debt, current
    
    
    108.6
    
    
    
    554.3Total current liabilities
    
    
    134.8
    
    
    
    647.3Deferred income taxes and other liabilities
    
    
    37.7
    
    
    
    41.5Total liabilities not subject to compromise
    
    
    172.5
    
    
    
    688.8Liabilities subject to compromise
    
    
    532.0
    
    
    
    Stockholders deficit:Series A preferred stock, $0.001 par value, 5,000,000 shares authorized,
4,502,143
shares issued and outstanding
    
    
    74.7
    
    
    
    73.8Series B preferred stock, $0.001 par value; 6,700,000 shares authorized,
issued and
outstanding
    
    
    111.1
    
    
    
    109.7Class A common stock, $0.001 par value; 100,000,000 shares authorized,
35,255,284 shares issued in 2008 and 35,372,382 in 2007
    
    
    
    
    
    
    Class B common stock, $0.001 par value, 5,500,000 shares authorized; no shares
issued
    
    
    
    
    
    
    Paid-in capital
    
    
    248.5
    
    
    
    248.6Common stock warrants
    
    
    4.9
    
    
    
    4.9Accumulated other comprehensive loss
    
    
    
    
    
    
    (1.4
    )Accumulated deficit
    
    
    (658.1
    )
    
    
    (571.7
    )Less common stock in treasury at cost: 2,500,000 shares
    
    
    (49.5
    )
    
    
    (49.5
    )Total stockholders deficit
    
    
    (268.4
    )
    
    
    (185.6
    )Total liabilities and stockholders deficit
    
    $
    436.1
    
    
    $
    503.2
  4




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##### Table of Contents



WELLMAN, INC.
(Debtor-in-Possession)
CONSOLIDATED STATEMENTS OF STOCKHOLDERS DEFICIT
 Series A
    
    
    Series B
    
    
    Class A
    
    
    
    
    
    
    
    
    
    
    AccumulatedPreferred
    
    
    Preferred
    
    
    Common
    
    
    
    
    
    
    Common
    
    
    OtherStock Issued
    
    
    Stock Issued
    
    
    Stock Issued
    
    
    Paid-In
    
    
    Stock
    
    
    Comprehensive
    
    
    Accumulated
    
    
    Treasury(in millions)
    
    Shares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Capital
    
    
    Warrants
    
    
    Income/(Loss)
    
    
    Deficit
    
    
    Stock
    
    
    TotalBalance at December 31, 2006
    
    
    4.5
    
    
    $
    67.5
    
    
    
    6.7
    
    
    $
    100.4
    
    
    
    35.2
    
    
    $
    
    
    
    $
    248.3
    
    
    $
    4.9
    
    
    $
    28.4
    
    
    $
    (192.9
    )
    
    $
    (49.5
    )
    
    $
    207.1Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (361.3
    )
    
    
    
    
    
    
    (361.3
    )Currency translation
adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (27.3
    )
    
    
    
    
    
    
    
    
    
    
    (27.3
    )Fair value of derivatives
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2.5
    )
    
    
    
    
    
    
    
    
    
    
    (2.5
    )Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (391.1
    )Cash dividends ($0.06 per
share)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1.9
    )
    
    
    
    
    
    
    (1.9
    )Accretion
    
    
    
    
    
    
    6.3
    
    
    
    
    
    
    
    9.3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15.6
    )
    
    
    
    
    
    
    Issuance of restricted stock,
net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.2
    
    
    
    
    
    
    
    0.3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.3Balance at December 31, 2007
    
    
    4.5
    
    
    
    73.8
    
    
    
    6.7
    
    
    
    109.7
    
    
    
    35.4
    
    
    
    
    
    
    
    248.6
    
    
    
    4.9
    
    
    
    (1.4
    )
    
    
    (571.7
    )
    
    
    (49.5
    )
    
    
    (185.6
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (84.1
    )
    
    
    
    
    
    
    (84.1
    )Fair value of derivatives
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1.4
    
    
    
    
    
    
    
    
    
    
    
    1.4Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (82.7
    )Accretion
    
    
    
    
    
    
    0.9
    
    
    
    
    
    
    
    1.4
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2.3
    )
    
    
    
    
    
    
    Tax effect of options cancelled
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.1
    )Forfeit of restricted stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.1
    )
    
    
    
    
    
    
    (0.7
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.7
    )Tax effect of restrictions
lapsing
on restricted stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.5
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.5
    )Amortization of deferred
compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1.2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1.2Balance at September 30, 2008
(unaudited)
    
    
    4.5
    
    
    $
    74.7
    
    
    
    6.7
    
    
    $
    111.1
    
    
    
    35.3
    
    
    $
    
    
    
    $
    248.5
    
    
    $
    4.9
    
    
    $
    
    
    
    $
    (658.1
    )
    
    $
    (49.5
    )
    
    $
    (268.4
    )
  5




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WELLMAN, INC.
(Debtor-in-Possession)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007
(UNAUDITED)
(In millions)
 2008
    
    
    2007Cash flows from operating activities:Net loss
    
    $
    (84.1
    )
    
    $
    (53.7
    )Adjustments to reconcile net loss to net cash provided by (used in) operating
activities:Earnings from discontinued operations, net of tax
    
    
    
    
    
    
    (0.9
    )Depreciation
    
    
    9.9
    
    
    
    32.3Amortization
    
    
    0.6
    
    
    
    1.0Amortization in interest expense, net
    
    
    3.5
    
    
    
    3.2Amortization of acquisition costs of long-term raw material contract
    
    
    11.8
    
    
    
    11.8Gain on sale of assets
    
    
    (0.2
    )
    
    
    Deferred income taxes and other
    
    
    
    
    
    
    (3.2
    )Johnsonville fibers disposal costs, net
    
    
    
    
    
    
    (4.1
    )Reorganization items
    
    
    22.0
    
    
    
    Payments of reorganization items
    
    
    (18.2
    )
    
    
    Changes in assets and liabilities
    
    
    60.5
    
    
    
    0.7Net cash provided by (used in) operating activities
    
    
    5.8
    
    
    
    (12.9
    )Cash flows from investing activities:Additions to property, plant and equipment
    
    
    (2.8
    )
    
    
    (8.4
    )Proceeds from sale of assets
    
    
    0.3
    
    
    
    Net cash used in investing activities
    
    
    (2.5
    )
    
    
    (8.4
    )Cash flows from financing activities:Proceeds from DIP Credit Agreement, net
    
    
    108.7
    
    
    
    (Repayments) borrowings under pre-petition debt, net
    
    
    (105.2
    )
    
    
    1.9Dividends paid on common stock
    
    
    
    
    
    
    (1.9
    )Debt issuance costs related to the DIP Credit Agreement
    
    
    (4.7
    )
    
    
    Net cash used in financing activities
    
    
    (1.2
    )
    
    
    Discontinued Operations:Operating activities
    
    
    
    
    
    
    (8.1
    )Investing activities
    
    
    
    
    
    
    33.4Financing activities
    
    
    
    
    
    
    (1.7
    )Net cash provided by discontinued operations
    
    
    
    
    
    
    23.6Increase in cash and cash equivalents
    
    
    2.1
    
    
    
    2.3Cash and cash equivalents at beginning of period
    
    
    
    
    
    
    Cash and cash equivalents at end of period
    
    $
    2.1
    
    
    $
    2.3Supplemental cash flow data:Cash paid during the period for:Interest, net
    
    $
    19.5
    
    
    $
    43.8Income taxes
    
    $
    0.6
    
    
    $
    0.6
  6




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WELLMAN, INC.
(Debtor-in-Possession)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(In millions, except per share data)
 1.
    
    BASIS OF PRESENTATION
     ®
 7




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2.
    
    ACCOUNTING CHANGES AND RECENTLY-ISSUED PRONOUNCEMENTS
 New Accounting Standards Adopted
    Recently Issued Accounting Pronouncements
   8




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3.
    
    PROCEEDINGS UNDER CHAPTER 11 OF THE BANKRUPTCY CODE
  9




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(In millions)Accounts payable  trade
    
    $
    78.2First Lien Term Loan
    
    
    185.0Second Lien Term Loan
    
    
    263.3Accrued interest on First and Second Lien Term Loans
    
    
    2.5Other
    
    
    3.0Total liabilities subject to compromise
    
    $
    532.0
  10




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11




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12




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
    
    Provide an acceptable executed backstop agreement to a rights offering
which provides $90 million in proceeds to the Debtors as part a Plan of
Reorganization by November 25, 2008;
    
    Have the Plan of Reorganization confirmed by December 16, 2008; and
    
    Consummate the Plan of Reorganization by December 31, 2008.
    13




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4.
    
    INVENTORIES
  September 30,
    
    
    December 31,(In millions)
    
    2008
    
    
    2007Raw materials
    
    $
    13.5
    
    
    $
    29.7Finished and semi-finished goods
    
    
    28.2
    
    
    
    63.0Supplies
    
    
    3.6
    
    
    
    4.3$
    45.3
    
    
    $
    97.0
 5.
    
    RESTRUCTURINGS
 2008 Reorganization
   Research & Development Realignment
  14




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Severance(In millions)
    
    AccrualAccruals recorded in fourth quarter of 2007
    
    $
    0.4Payments during 2007
    
    
    (0.1
    )Accrual balance at December 31, 2007
    
    
    0.3Payments during the first quarter of 2008
    
    
    (0.2
    )Accrual balance at March 31, June 30, and September
30, 2008
    
    $
    0.1
 2007 Organizational Restructuring
  Severance(In millions)
    
    AccrualAccruals recorded during the first quarter 2007
    
    $
    2.9Payments in first quarter 2007
    
    
    (1.5
    )Accrual balance at March 31, 2007
    
    
    1.4Payments in second quarter 2007
    
    
    (1.2
    )Accrual balance at June 30, 2007
    
    
    0.2Payments in third quarter 2007
    
    
    (0.1
    )Accrual balance at September 30, 2007
    
    
    0.1Adjustments to accrual during remainder of 2007
    
    
    (0.1
    )Accrual balance at December 31, 2007
    
    $
    
 6.
    
    DISCONTINUED OPERATIONS
   15




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For the Three MonthsEnded September 30,2007European(In millions)
    
    WIL
    
    
    PET ResinsNet sales
    
    $
    7.3
    
    
    $
    Loss from discontinued operations before income
taxes
    
    $
    (0.4
    )
    
    $
    Income tax expense
    
    
    
    
    
    
    Loss from discontinued operations, net
    
    
    (0.4
    )
    
    
    Gain on disposal of business
    
    
    3.1
    
    
    
    2.1Income tax expense
    
    
    0.5
    
    
    
    Gain on disposal of business, net
    
    
    2.6
    
    
    
    2.1Earnings from discontinued operations, net
    
    $
    2.2
    
    
    $
    2.1
 For the Nine Months EndedSeptember 30, 2007European(In millions)
    
    WIL
    
    
    PET ResinsNet sales
    
    $
    76.4
    
    
    $
    33.0Earnings (loss) from discontinued operations
before income tax expense
    
    $
    1.0
    
    
    $
    (0.9
    )Income tax expense
    
    
    0.3
    
    
    
    Earnings (loss) from discontinued operations, net
    
    
    0.7
    
    
    
    (0.9
    )Gain (loss) on disposal of business
    
    
    3.1
    
    
    
    (1.5
    )Income tax expense
    
    
    0.5
    
    
    
    Gain (loss) on disposal of business, net
    
    
    2.6
    
    
    
    (1.5
    )Earnings (loss) from discontinued operations, net
    
    $
    3.3
    
    
    $
    (2.4
    )
 7.
    
    OTHER INCOME, NET
  16




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##### Table of Contents



Three months ended
    
    
    Nine monthsSeptember 30,
    
    
    ended September 30,(in millions)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Hurricane Katrina (proceeds) costs, net
    
    $
    
    
    
    $
    
    
    
    $
    0.1
    
    
    $
    (5.9
    )Johnsonville fibers closure costs, net
    
    
    
    
    
    
    (1.0
    )
    
    
    
    
    
    
    (3.1
    )Legal and settlement costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1.9
    )Gain on sale of assets
    
    
    
    
    
    
    
    
    
    
    (0.2
    )
    
    
    (1.4
    )Proceeds relating to anti-dumping activities, net
    
    
    
    
    
    
    (0.1
    )
    
    
    (0.1
    )
    
    
    Other
    
    
    
    
    
    
    (0.5
    )
    
    
    
    
    
    
    (0.5
    )$
    
    
    
    $
    (1.6
    )
    
    $
    (0.2
    )
    
    $
    (12.8
    )
   8.
    
    NET LOSS PER COMMON SHARE
  Three Months
    
    
    Nine MonthsEnded
    
    
    EndedSeptember 30,
    
    
    September 30,(In millions)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Numerator for basic and diluted net loss attributable to common
stockholders per common share:Loss from continuing operations
    
    $
    (50.5
    )
    
    $
    (22.3
    )
    
    $
    (84.1
    )
    
    $
    (54.6
    )Accretion (a)
    
    
    
    
    
    
    (4.0
    )
    
    
    (2.3
    )
    
    
    (11.5
    )Net loss attributable to common stockholders from continuing
Operations
    
    
    (50.5
    )
    
    
    (26.3
    )
    
    
    (86.4
    )
    
    
    (66.1
    )Net loss attributable to common stockholders from
discontinued Operations
    
    
    
    
    
    
    4.3
    
    
    
    
    
    
    
    0.9Net loss attributable to common stockholders
    
    $
    (50.5
    )
    
    $
    (22.0
    )
    
    $
    (86.4
    )
    
    $
    (65.2
    )
 17




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##### Table of Contents



Three Months
    
    
    Nine MonthsEnded
    
    
    EndedSeptember 30,
    
    
    September 30,(In millions)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Denominator:Denominator for basic net loss attributable to common
stockholders per common share  weighted-average shares
    
    
    32.4
    
    
    
    32.3
    
    
    
    32.4
    
    
    
    32.3Effect of dilutive securities:Employee stock options, warrants, and restricted stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Preferred stock  if converted (b)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Denominator for diluted net loss attributable to common
stockholders per common share  adjusted
weighted-average
shares
    
    
    32.4
    
    
    
    32.3
    
    
    
    32.4
    
    
    
    32.3
 
 (a)
    
    Accretion is recorded based on the fair market value of the increase in the liquidation
preference of the preferred stock. Subsequent to our filing voluntary petitions in the United
States Bankruptcy Court on February 22, 2008, no accretion has been recorded. The liquidation
preference of the preferred stock was $197.0 million at September 30, 2008. For additional
information regarding the bankruptcy, see Note 3.(b)
    
    These shares were not included in the EPS calculation, since their effect would have been
anti-dilutive, but may be included under the if-converted method in future calculations. 9.
    
    DEFINED BENEFIT PLANS
  Three Months
    
    
    Nine MonthsEnded
    

    
    EndedSeptember 30,
    
    
    September 30,(In millions)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Service cost
    
    $
    
    
    
    $
    
    
    
    $
    0.1
    
    
    $
    Interest cost
    
    
    0.9
    
    
    
    0.9
    
    
    
    2.7
    
    
    
    2.7Expected return on assets
    
    
    (1.0
    )
    
    
    (0.9
    )
    
    
    (2.9
    )
    
    
    (2.7
    )Total net periodic pension cost
    
    $
    (0.1
    )
    
    $
    0.0
    
    
    $
    (0.1
    )
    
    $
    
 Employer contributions
   10.
    
    COMMITMENTS AND CONTINGENCIES
  18




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##### Table of Contents



Nine Months endedSeptember 30,(In millions)
    
    2008
    
    
    2007Balance at beginning of period
    
    $
    5.4
    
    
    $
    5.1Changes in remediation costs
    
    
    0.8
    
    
    
    0.9Expenditures
    
    
    (0.1
    )
    
    
    (0.4
    )Balance at end of period
    
    $
    6.1
    
    
    $
    5.6
    19




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##### Table of Contents



11.
    
    FOREIGN CURRENCY TRANSLATION AND ACCUMULATED OTHER COMPREHENSIVE
INCOME (LOSS)
  12.
    
    SEGMENT INFORMATION
   
    
    PermaClear®, PermaClear HP®, and Thermaclear Ti®
solid-stated PET resin from chemical-based raw materials for use in the manufacturing of
plastic beverage bottles and other food packaging and Fortrel® chemical-based
polyester staple fiber for use in home furnishing, non-woven, apparel, and industrial
products.
  
    
    Wellamid® and Wellamid Ecolon® recycled-based nylon engineering
resin for use in the injection molding industry.
  20




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##### Table of Contents



Chemical-Based
    
    Recycled-Based(In millions)
    
    Segment
    
    Segment
    
    TotalThree months ended September 30, 2008Revenues
    
    $
    222.7
    
    
    $
    10.9
    
    
    $
    233.6Segment loss
    
    
    (12.5
    )
    
    
    (0.9
    )
    
    
    (13.4
    )Depreciation and amortization from continuing
Operations
    
    
    7.1
    
    
    
    0.1
    
    
    
    7.2Assets
    
    
    390.2
    
    
    
    13.0
    
    
    
    403.2Three months ended September 30, 2007Revenues
    
    $
    256.8
    
    
    $
    14.0
    
    
    $
    270.8Segment profit (loss)
    
    
    2.9
    
    
    
    (0.9
    )
    
    
    2.0Depreciation and amortization from continuing
Operations
    
    
    12.7
    
    
    
    0.6
    
    
    
    13.3Assets
    
    
    726.4
    
    
    
    42.8
    
    
    
    769.2Nine months ended September 30, 2008Revenues
    
    $
    718.0
    
    
    $
    36.7
    
    
    $
    754.7Segment profit (loss)
    
    
    1.9
    
    
    
    (1.5
    )
    
    
    0.4Depreciation and amortization from continuing
Operations
    
    
    21.9
    
    
    
    0.4
    
    
    
    22.3Nine months ended September 30, 2007Revenues
    
    $
    836.6
    
    
    $
    53.3
    
    
    $
    889.9Segment profit (loss)
    
    
    24.4
    
    
    
    (3.4
    )
    
    
    21.0Depreciation and amortization from continuing
Operations
    
    
    43.5
    
    
    
    1.6
    
    
    
    45.1
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(In millions)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Segment Profit (Loss)Total for reportable segments
    
    $
    (13.4
    )
    
    $
    2.0
    
    
    $
    0.4
    
    
    $
    21.0Interest expense, net
    
    
    (3.3
    )
    
    
    (16.0
    )
    
    
    (17.4
    )
    
    
    (46.3
    )Depreciation and amortization
    
    
    (7.2
    )
    
    
    (13.3
    )
    
    
    (22.3
    )
    
    
    (45.1
    )Permitted Adjustments (1)
    
    
    (26.6
    )
    
    
    1.4
    
    
    
    (44.8
    )
    
    
    12.2Loss from continuing operations before income tax
Benefit
    
    $
    (50.5
    )
    
    $
    (25.9
    )
    
    $
    (84.1
    )
    
    $
    (58.2
    )
 21




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##### Table of Contents



Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(In millions)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007AssetsTotal for reportable segments
    
    $
    403.2
    
    
    $
    769.2Corporate assets (2)
    
    
    32.9
    
    
    
    65.8$
    436.1
    
    
    $
    835.0
 
 (1)
    
    Permitted Adjustments are adjustments specified in our debt agreements, which are used
in the calculation of EBITDA, as defined, that is used to report our segment profit
(loss). Permitted adjustments included the following for the periods indicated: Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,(In millions)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Permitted Adjustments:Reorganization items
    
    $
    (7.8
    )
    
    $
    
    
    
    $
    (22.0
    )
    
    $
    Johnsonville fibers disposal costs, net
    
    
    
    
    
    
    1.0
    
    
    
    
    
    
    
    3.1Hurricane Katrina proceeds (costs), net (See Note 7)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5.9Legal and settlement costs (See Note 7)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1.9Gain on sale of assets (See Note 7)
    
    
    
    
    
    
    
    
    
    
    (0.2
    )
    
    
    1.4Non-cash inventory reserves
    
    
    (14.9
    )
    
    
    
    
    
    
    (17.3
    )
    
    
    Provision for uncollectible accounts
    
    
    (3.9
    )
    
    
    (0.2
    )
    
    
    (4.7
    )
    
    
    (0.5
    )Other
    
    
    
    
    
    
    0.6
    
    
    
    (0.6
    )
    
    
    0.4Total Permitted Adjustments
    
    $
    (26.6
    )
    
    $
    1.4
    
    
    $
    (44.8
    )
    
    $
    12.2
 
 (2)
    
    Corporate assets include cash, certain prepaid expenses, construction
in progress, and certain other assets not allocated to the segments. 13.
    
    SUBSEQUENT EVENT
   22




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##### Table of Contents



ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
 FORWARD-LOOKING INFORMATION
   RECENT DEVELOPMENTS
 Proceedings Under Chapter 11 of the Bankruptcy Code
  23




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24




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##### Table of Contents




    
    Provide an acceptable executed backstop agreement to a rights offering which
provides $90 million in proceeds to the Debtors as part a Plan of Reorganization by
November 25, 2008;
    
    Have the Plan of Reorganization confirmed by December 16, 2008; and
    
    Consummate the Plan of Reorganization by December 31, 2008.
    GENERAL
  ® ®
 25




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##### Table of Contents



® ®
   IMPACT OF ACCOUNTING CHANGES AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
 New Accounting Standards Adopted
    26




---



##### Table of Contents



Recently Issued Accounting Pronouncements
      27




---



##### Table of Contents



RESULTS OF OPERATIONS
 THREE MONTHS ENDED SEPTEMBER 30, 2008 COMPARED TO THREE MONTHS ENDED SEPTEMBER 30, 2007
  (In millions)
    
    Chemical-Based
    
    
    Recycled-Based
    
    
    TotalNet SalesSales volumes
    
    $
    (71.7
    )
    
    $
    (4.1
    )
    
    $
    (75.8
    )Net selling prices
    
    
    37.7
    
    
    
    0.9
    
    
    
    38.6Decrease in net sales
    
    
    (34.0
    )
    
    
    (3.2
    )
    
    
    (37.2
    )Cost of SalesVolume effect
    
    $
    (69.0
    )
    
    $
    (3.2
    )
    
    $
    (72.2
    )Raw material unit costs
    
    
    42.3
    
    
    
    8.4
    
    
    
    50.7Plant-added unit costs
    
    
    5.2
    
    
    
    0.2
    
    
    
    5.4Increase (decrease) in cost of sales
    
    
    (21.5
    )
    
    
    5.4
    
    
    
    (16.1
    )Decrease in gross profit
    
    $
    (12.5
    )
    
    $
    (8.6
    )
    
    $
    (21.1
    )
   28




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##### Table of Contents



Three Months EndedSeptember 30,(In millions)
    
    2008
    
    
    2007Johnsonville fibers closure costs
    
    
    
    
    
    
    (1.0
    )Proceeds relating to anti-dumping activities,
net
    
    
    
    
    
    
    (0.1
    )Other
    
    
    
    
    
    
    (0.5
    )$
    
    
    
    $
    (1.6
    )
      29




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##### Table of Contents



NINE MONTHS ENDED SEPTEMBER 30, 2008 COMPARED TO NINE MONTHS ENDED
SEPTEMBER 30, 2007
  Chemical-
    
    
    Recycled-(In millions)
    
    Based
    
    
    Based
    
    
    TotalNet SalesSales volumes
    
    $
    (217.6
    )
    
    $
    (25.9
    )
    
    $
    (243.5
    )Net selling prices
    
    
    99.0
    
    
    
    9.3
    
    
    
    108.3Decrease in net sales
    
    
    (118.6
    )
    
    
    (16.6
    )
    
    
    (135.2
    )Cost of SalesVolume effect
    
    $
    (208.0
    )
    
    $
    (17.6
    )
    
    $
    (225.6
    )Raw material unit costs
    
    
    102.2
    
    
    
    8.9
    
    
    
    111.1Plant-added unit costs
    
    
    1.5
    
    
    
    (0.5
    )
    
    
    1.0Decrease in cost of sales
    
    
    (104.3
    )
    
    
    (9.2
    )
    
    
    (113.5
    )Decrease in gross profit
    
    $
    (14.3
    )
    
    $
    (7.4
    )
    
    $
    (21.7
    )
  30




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##### Table of Contents



Nine Months EndedSeptember 30,(In millions)
    
    2008
    
    
    2007Hurricane Katrina (proceeds) costs, net
    
    $
    0.1
    
    
    $
    (5.9
    )Johnsonville fibers closure costs
    
    
    
    
    
    
    (3.1
    )Legal and settlement costs
    
    
    
    
    
    
    (1.9
    )Gain on sale of assets
    
    
    (0.2
    )
    
    
    (1.4
    )Proceeds relating to anti-dumping activities,
net
    
    
    (0.1
    )
    
    
    Other
    
    
    
    
    
    
    (0.5
    )$
    (0.2
    )
    
    $
    (12.8
    )
  31




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##### Table of Contents



CAPITAL RESOURCES AND LIQUIDITY
 Historical Flow of Funds
  32




---



##### Table of Contents



Our Liquidity in Bankruptcy
     33




---



##### Table of Contents




    
    Provide an acceptable executed backstop agreement to a rights offering which
provides $90 million in proceeds to the Debtors as part a Plan of Reorganization by
November 25, 2008;
 34




---



##### Table of Contents




    
    Have the Plan of Reorganization confirmed by December 16, 2008; and
 
    
    Consummate the Plan of Reorganization by December 31, 2008.
     35




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##### Table of Contents



ITEM 3.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURE OF MARKET RISK
  
 ITEM 4.
    
    CONTROLS AND PROCEDURES
 (a)
    
    Based on an evaluation of the effectiveness of the Companys
disclosure controls and procedures as of September 30, 2008, both the
Chief Executive Officer and the Chief Financial Officer of the Company
concluded that the Companys disclosure controls and procedures, as
defined in Rules 13a14(c) and 15d14(c) promulgated under the
Securities Exchange Act of 1934, were effective on that date.(b)
    
    Based on an evaluation of whether any change in the Companys internal
control over financial reporting (as defined in Rule 13a-15(f)
promulgated under the Exchange Act) that materially affected, or is
reasonably likely to materially affect, such internal control occurred
during the period covered by this Report, both the Chief Executive
Officer and the Chief Financial Officer of the Company concluded that
no such change occurred.
 
 PART II  OTHER INFORMATION
 
 ITEM 1.
    
    LEGAL PROCEEDINGS
  36




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##### Table of Contents



ITEM 3.
    
    DEFAULTS UPON SENIOR SECURITIES
   (In millions)Principal at
    
    
    Interest Owed atDescription
    
    September 30, 2008
    
    
    September 30, 2008 (c)First Lien Term Loan that
matures on February 10,
2009 and has an annual
interest rate of
three-month LIBOR plus
4.00% due quarterly
    
    $
    185.0
    
    
    $
    8.7Second Lien Term Loan that
matures on February 10,
2010 and has an annual
interest rate of
three-month LIBOR plus
6.75% due quarterly (a)
    
    
    265.0
    
    
    
    17.4Senior Secured
Superpriority
Debtor-In-Possession Credit
Agreement, dated as of
February 26, 2008, that
matures on February 25,
2009 and bears interest at
the Debtors option of the
Prime Rate ply 1.75% per
annum or at the Adjusted
LIBOR Rate plus 2.75% per
annum (b)
    
    
    108.6
    
    
    
    0.1Other
    
    
    1.0
    
    
    
    $
    559.6
    
    
    $
    26.2
 
 (a)
    
    This amount at September 30, 2008, is before any unamortized portion of the original
issue discount. Subsequent to our proceedings under Chapter 11 of the Bankruptcy Code, we
ceased amortization of the original issue discount, since the liability is compromised.
The .unamortized portion of the original issue discount was $1.7 million at February 22,
2008 and September 30, 2008.(b)
    
    We obtained an amendment, which provides that we must achieve the following to remain
in compliance: 1) Receive an acceptable backstop commitment to the rights offering before
November 25, 2008; 2) obtain an order confirming the Plan of Reorganization by December 16,
2008; and 3) emerge from bankruptcy prior to December 31, 2008. 37




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##### Table of Contents



(c)
    
    Interest expense recorded subsequent to February 22, 2008, consists only of interest
related to our DIP Credit Agreement. These amounts represent contractual interest owed at
September 30, 2008.  
 ITEM 6.
    
    EXHIBITS
  10.1
    
    Credit Agreement, dated as of February 26, 2008, among Wellman, Inc.
and the other Borrowers Named Herein, Debtors and Debtors in
Possession as Borrowers, with Wellman, Inc. as Funds Administrator,
the Lenders Signatory Hereto From Time to Time, as Lenders, and
Deutsche Bank Securities, Inc. as Lead Arranger and Book runner, JP
Morgan Chase Bank, National Association, as Syndication Agent,
General Electric Capital Corporation, LaSalle Business Credit, LLC,
Wachovia Capital Finance Corporation (Central) as Co-Documentation
Agents (Exhibit 10.1 of the Companys Form 8-K filed March 4, 2008,
incorporated by reference herein)10.2
    
    Amendment to the Credit Agreement, dated May 8, 2008, by and among
Wellman, Inc. as Funds Administrator and the other borrowers under
the Credit Agreement party hereto, each as Debtor and
Debtor-in-possession, Deutsche Bank Trust Company Americas, as
Administrative Agent, and the other financial institutions party
hereto (Exhibit 10.2 to the Companys Form 10-Q for the quarter
ended June 30, 2008, incorporated by reference herein).10.3
    
    Amendment to the Credit Agreement, dated May 14, 2008, by and among
Wellman, Inc. as Funds Administrator and the other borrowers under
the Credit Agreement party hereto, each as Debtor and
Debtor-in-possession, Deutsche Bank Trust Company Americas, as
Administrative Agent, and the other financial institutions party
hereto (Exhibit 10.3 to the Companys Form 10-Q for the quarter
ended June 30, 2008, incorporated by reference herein).10.4
    
    Amendment to the Credit Agreement, dated May 21, 2008, by and among
Wellman, Inc. as Funds Administrator and the other borrowers under
the Credit Agreement party hereto, each as Debtor and
Debtor-in-possession, Deutsche Bank Trust Company Americas, as
Administrative Agent, and the other financial institutions party
hereto (Exhibit 10.4 to the Companys Form 10-Q for the quarter
ended June 30, 2008, incorporated by reference herein).10.5
    
    Amendment to the Credit Agreement, dated June 5, 2008, by and among
Wellman, Inc. as Funds Administrator and the other borrowers under
the Credit Agreement party hereto, each as Debtor and
Debtor-in-possession, Deutsche Bank Trust Company Americas, as
Administrative Agent, and the other financial institutions party
hereto (Exhibit 10.5 to the Companys Form 10-Q for the quarter
ended June 30, 2008, incorporated by reference herein).10.6
    
    Amendment to the Credit Agreement, dated June 18, 2008, by and among
Wellman, Inc. as Funds Administrator and the other borrowers under
the Credit Agreement party hereto, each as
 38




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##### Table of Contents



Debtor and
Debtor-in-possession, Deutsche Bank Trust Company Americas, as
Administrative Agent, and the other financial institutions party
hereto (Exhibit 99.2 of the Companys Form 8-K filed June 19, 2008,
incorporated by reference herein).
 10.7
    
    Amendment to the Credit Agreement, dated July 16, 2008, by and among
Wellman, Inc. as Funds Administrator and the other borrowers under
the Credit Agreement party hereto, each as Debtor and
Debtor-in-possession, Deutsche Bank Trust Company Americas, as
Administrative Agent, and the other financial institutions party
hereto (Exhibit 10.7 to the Companys Form 10-Q for the quarter
ended June 30, 2008, incorporated by reference herein).10.8
    
    Amendment to the Credit Agreement, dated July 30, 2008, by and among
Wellman, Inc. as Funds Administrator and the other borrowers under
the Credit Agreement party hereto, each as Debtor and
Debtor-in-possession, Deutsche Bank Trust Company Americas, as
Administrative Agent, and the other financial institutions party
hereto (Exhibit 10.8 to the Companys Form 10-Q for the quarter
ended June 30, 2008, incorporated by reference herein).10.9
    
    Amendment to the Credit Agreement, dated August 4, 2008, by and
among Wellman, Inc. as Funds Administrator and the other borrowers
under the Credit Agreement party hereto, each as Debtor and
Debtor-in-possession, Deutsche Bank Trust Company Americas, as
Administrative Agent, and the other financial institutions party
hereto (Exhibit 10.9 to the Companys Form 10-Q for the quarter
ended June 30, 2008, incorporated by reference herein).10.10
    
    Amendment to the Credit Agreement, dated August 15, 2008, by and
among Wellman, Inc. as Funds Administrator and the other borrowers
under the Credit Agreement party hereto, each as Debtor and
Debtor-in-possession, Deutsche Bank Trust Company Americas, as
Administrative Agent, and the other financial institutions party
hereto.10.11
    
    Amendment to the Credit Agreement, dated August 28, 2008, by and
among Wellman, Inc. as Funds Administrator and the other borrowers
under the Credit Agreement party hereto, each as Debtor and
Debtor-in-possession, Deutsche Bank Trust Company Americas, as
Administrative Agent, and the other financial institutions party
hereto.10.12
    
    Amendment to the Credit Agreement, dated September 8, 2008, by and
among Wellman, Inc. as Funds Administrator and the other borrowers
under the Credit Agreement party hereto, each as Debtor and
Debtor-in-possession, Deutsche Bank Trust Company Americas, as
Administrative Agent, and the other financial institutions party
hereto.10.13
    
    Amendment to the Credit Agreement, dated September 15, 2008, by and
among Wellman, Inc. as Funds Administrator and the other borrowers
under the Credit Agreement party hereto, each as Debtor and
Debtor-in-possession, Deutsche Bank Trust Company Americas, as
Administrative Agent, and the other financial institutions party
hereto (Exhibit 10.1 of the Companys Form 8-K filed September 19,
2008, incorporated by reference herein).10.14
    
    Amendment to the Credit Agreement, dated October 7, 2008, by and
among Wellman, Inc. as Funds Administrator and the other borrowers
under the Credit Agreement party hereto, each as Debtor and
Debtor-in-possession, Deutsche Bank Trust Company Americas, as
Administrative Agent, and the other financial institutions party
hereto.10.15
    
    Amendment to the Credit Agreement, dated October 20, 2008, by and
among Wellman, Inc. as
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Funds Administrator and the other borrowers
under the Credit Agreement party hereto, each as Debtor and
Debtor-in-possession, Deutsche Bank Trust Company Americas, as
Administrative Agent, and the other financial institutions party
hereto.
 10.16
    
    Amendment to the Credit Agreement, dated as of October 27, 2008, by and
among Wellman, Inc. as Funds Administrator and the other borrowers
under the Credit Agreement party hereto, each as Debtor and
Debtor-in-possession, Deutsche Bank Trust Company Americas, as
Administrative Agent, and the other financial institutions party
hereto.10.17
    
    Amendment to the Credit Agreement, dated as of November 4, 2008, by and
among Wellman, Inc. as Funds Administrator and the other borrowers
under the Credit Agreement party hereto, each as Debtor and
Debtor-in-possession, Deutsche Bank Trust Company Americas, as
Administrative Agent, and the other financial institutions party
hereto.10.18
    
    Amendment to the Credit Agreement, dated as of
November 11, 2008, by and
among Wellman, Inc. as Funds Administrator and the other borrowers
under the Credit Agreement party hereto, each as Debtor and
Debtor-in-possession, Deutsche Bank Trust Company Americas, as
Administrative Agent, and the other financial institutions party
hereto.10.19
    
    Security Agreement, dated as of February 26, 2008, between Wellman,
Inc. and certain of its subsidiaries and Deutsche Bank Trust Company
Americas as collateral agent (Exhibit 10.2 of the Companys Form
10-K for the year ended December 31, 2007, incorporated by reference
herein)10.20
    
    Grant of Security Interest in U.S. Trademarks and Patents between
Wellman, Inc. and Fiber Industries, Inc. as debtors and debtors in
possession and Deutsche Bank Trust Company Americas as collateral
agent (Exhibit 10.3 of the Companys Form 10-K for the year ended
December 31, 2007, incorporated by reference herein)10.21
    
    Grant of Security Interest in U.S. Copyrights between Wellman, Inc.
MRF, Inc., and Fiber Industries, Inc. as debtors and debtors in
possession and Deutsche Bank Trust Company Americas as collateral
agent (Exhibit 10.4 of the Companys Form 10-K for the year ended
December 31, 2007, incorporated by reference herein)31.1
    
    Certification of the Chief Executive Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 200231.2
    
    Certification of the Chief Financial Officer pursuant to Section 302
of the Sarbanes-Oxley Act of 200232.1
    
    Certification of the Chief Executive Officer pursuant to Section 906
of the Sarbanes-Oxley Act of 200232.2
    
    Certification of the Chief Financial Officer pursuant to Section 906
of the Sarbanes-Oxley Act of 2002
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SIGNATURES
  WELLMAN, INC.Dated November 17, 2008
    By
    /s/ Keith R. PhillipsChief Financial Officer andVice President
(Principal Financial Officer and Principal
Accounting Officer) 41