##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 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 April 1, 2006
 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: 1-32266
 POLYPORE INTERNATIONAL, INC.
  Delaware
    
    43-2049334(State or Other Jurisdiction of
    
    (IRS EmployerIncorporation or Organization)
    
    Identification No.)
 13800 South Lakes DriveCharlotte, North Carolina
    
    28273(Address of Principal Executive Offices)
    
    (Zip Code)
 (704) 587-8409
 
  þ o
  o Large accelerated filer
    
    o Accelerated filer
    
    þ Non-accelerated filer
 o þ




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##### 



Polypore International, Inc.
Index to Quarterly Report on Form 10-Q
For the Quarter Ended April 1, 2006
 PagePART I FINANCIAL INFORMATIONItem 1.Financial Statements
    
    
    4Item 2.Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    14Item 3.Quantitative and Qualitative Disclosures About Market Risk
    
    
    22Item 4.Controls and Procedures
    
    
    23PART II OTHER INFORMATIONItem 1.Legal Proceedings
    
    
    23Item 6.Exhibits
    
    
    23SIGNATURESEX-31.1EX-31.2EX-32.1EX-32.2
   2




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##### Table of Contents



Forward-looking Statements
   
    
    the highly competitive nature of the markets in which we sell our products;
    
    the failure to continue to develop innovative products;
    
    the failure to successfully manage the transition in hemodialysis from cellulosic to
synthetic filtration membranes;
    
    the loss of our customers;
    
    the vertical integration by our customers of the production of our products into
their own manufacturing process;
    
    increases in prices for raw materials or the loss of key supplier contracts;
    
    employee slowdowns, strikes or similar actions;
    
    product liability claims exposure;
    
    risks in connection with our operations outside the United States;
    
    the incurrence of substantial costs to comply with, or as a result of violations of,
or liabilities under, environmental laws;
    
    the failure to protect our intellectual property;
    
    the failure to replace lost senior management;
    
    the incurrence of additional debt, contingent liabilities and expenses in connection
with future acquisitions;
    
    the failure to effectively integrate newly acquired operations; and
    
    the absence of expected returns from the amount of intangible assets we have recorded.
  3




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 Polypore International, Inc.
Condensed Consolidated Balance Sheets
 April 1, 2006(in thousands)
    
    (unaudited)
    
    December 31, 2005*AssetsCurrent assets:Cash and equivalents
    
    $
    40,150
    
    
    $
    28,060Accounts receivable, net
    
    
    97,688
    
    
    
    88,347Inventories
    
    
    63,803
    
    
    
    60,539Prepaid and other
    
    
    10,653
    
    
    
    9,035Total current assets
    
    
    212,294
    
    
    
    185,981Property, plant and equipment, net
    
    
    372,832
    
    
    
    370,871Goodwill
    
    
    567,587
    
    
    
    567,587Intangibles and loan acquisition costs, net
    
    
    218,212
    
    
    
    222,666Environmental indemnification receivable
    
    
    16,046
    
    
    
    16,366Other
    
    
    1,400
    
    
    
    1,105Total assets
    
    $
    1,388,371
    
    
    $
    1,364,576Liabilities and shareholders equityCurrent liabilities:Revolving credit obligations
    
    $
    
    
    
    $
    Accounts payable
    
    
    23,095
    
    
    
    23,209Accrued liabilities
    
    
    48,955
    
    
    
    32,804Income taxes payable
    
    
    6,101
    
    
    
    4,284Current portion of debt
    
    
    2,087
    
    
    
    1,224Current portion of capital lease obligation
    
    
    1,335
    
    
    
    1,326Total current liabilities
    
    
    81,573
    
    
    
    62,847Debt, less current portion
    
    
    1,005,295
    
    
    
    994,270Capital lease obligation, less current portion
    
    
    5,792
    
    
    
    6,018Pension and postretirement benefits
    
    
    52,373
    
    
    
    51,386Postemployment benefits
    
    
    4,654
    
    
    
    7,096Environmental reserve, less current portion
    
    
    21,933
    
    
    
    22,264Deferred income taxes
    
    
    122,460
    
    
    
    125,501Other
    
    
    1,119
    
    
    
    1,862Commitments and contingencies
    
    
    
    
    
    
    Shareholders equity:Common stock
    
    
    2
    
    
    
    2Paid-in capital
    
    
    124,553
    
    
    
    124,924Retained deficit
    
    
    (23,536
    )
    
    
    (22,207
    )Accumulated other comprehensive loss
    
    
    (7,847
    )
    
    
    (9,387
    )93,172
    
    
    
    93,332Total liabilities and shareholders equity
    
    $
    1,388,371
    
    
    $
    1,364,576
 
 *
    
    Derived from audited consolidated financial statements
 See notes to condensed consolidated financial statements
 4




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Polypore International, Inc .  Condensed Consolidated Statements of Income (Unaudited)
 Three Months Ended(in thousands, except share and per share data)
    
    April 1, 2006
    
    April 2, 2005Net sales
    
    $
    115,293
    
    
    $
    112,498Cost of goods sold
    
    
    74,980
    
    
    
    73,609Gross profit
    
    
    40,313
    
    
    
    38,889Selling, general and administrative expenses
    
    
    22,498
    
    
    
    18,439Business restructuring
    
    
    772
    
    
    
    Operating income
    
    
    17,043
    
    
    
    20,450Other (income) expense:Interest expense, net
    
    
    22,100
    
    
    
    20,258Change in accounting principle related to postemployment benefits
    
    
    (2,593
    )
    
    
    Foreign currency and other
    
    
    699
    
    
    
    (1,571
    )20,206
    
    
    
    18,687Income (loss) before income taxes and the cumulative effect of a
change
in accounting principle
    
    
    (3,163
    )
    
    
    1,763Income taxes
    
    
    (1,603
    )
    
    
    122Income (loss) before the cumulative effect of a change in accounting
principle
    
    
    (1,560
    )
    
    
    1,641Cumulative effect of a change in accounting principle related to
stock compensation, net of income
taxes of $139
    
    
    231
    
    
    
    Net income (loss)
    
    $
    (1,329
    )
    
    $
    1,641Net income
(loss) per share  basic and diluted:Income (loss) before cumulative effect of a change in accounting
principle
    
    $
    (9.10
    )
    
    $
    9.57Cumulative effect of a change in accounting principle related to
stock compensation, net of income taxes
    
    
    1.35
    
    
    
    Net income (loss) per share
    
    $
    (7.75
    )
    
    $
    9.57Weighted average shares outstanding  basic and diluted
    
    
    171,421
    
    
    
    171,421
 See notes to condensed consolidated financial statements
 5




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##### Table of Contents



Polypore International, Inc.
Condensed Consolidated Statements of Cash Flows (unaudited)
 Three Months Ended(in thousands)
    
    April 1, 2006
    
    April 2, 2005Operating activities:Net income (loss)
    
    $
    (1,329
    )
    
    $
    1,641Adjustments to reconcile net income (loss) to net cash provided by operating activities:Depreciation expense
    
    
    10,160
    
    
    
    9,856Amortization expense
    
    
    4,400
    
    
    
    4,472Amortization of loan acquisition costs
    
    
    748
    
    
    
    670Amortization of debt discount
    
    
    5,793
    
    
    
    5,316Stock compensation
    
    
    
    
    
    
    96Loss on disposal of property, plant and equipment
    
    
    33
    
    
    
    Foreign currency and other
    
    
    (1,068
    )
    
    
    (1,618
    )Deferred income taxes
    
    
    (3,313
    )
    
    
    (797
    )Business restructuring
    
    
    772
    
    
    
    Change in accounting principle related to postemployment benefits
    
    
    (2,593
    )
    
    
    Cumulative effect of change in accounting principle related to
stock compensation
    
    
    (370
    )
    
    
    Changes in operating assets and liabilities:Accounts receivable
    
    
    (7,701
    )
    
    
    4,638Inventories
    
    
    (2,097
    )
    
    
    (1,702
    )Prepaid and other current assets
    
    
    (1,510
    )
    
    
    (1,852
    )Accounts payable and accrued liabilities
    
    
    13,140
    
    
    
    3,102Income taxes payable
    
    
    507
    
    
    
    4,175Other, net
    
    
    453
    
    
    
    917Net cash provided by operating activities
    
    
    16,025
    
    
    
    28,914Investing activities:Purchases of property, plant and equipment
    
    
    (3,989
    )
    
    
    (3,097
    )Net cash used in investing activities
    
    
    (3,989
    )
    
    
    (3,097
    )Financing activities:Principal payments on debt
    
    
    (303
    )
    
    
    (26,924
    )Loan acquisition costs
    
    
    (15
    )
    
    
    (93
    )Net cash used in financing activities
    
    
    (318
    )
    
    
    (27,017
    )Effect of exchange rate changes on cash and equivalents
    
    
    372
    
    
    
    (1,305
    )Net increase (decrease) in cash and equivalents
    
    
    12,090
    
    
    
    (2,505
    )Cash and equivalents at beginning of period
    
    
    28,060
    
    
    
    33,149Cash and equivalents at end of the period
    
    $
    40,150
    
    
    $
    30,644
 See notes to condensed consolidated financial statements
 6




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Polypore International, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
 1. Description of Business and Basis of Presentation
 Description of Business 
  Basis of Presentation
 2. Accounting Pronouncements
 Accounting Changes and Error
Corrections
 Accounting for Early Retirement or
Postemployment Programs with Specific Features (Such As Terms Specified in Altersteilzeit Early
Retirement Arrangements)
 7




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Polypore International, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
 Inventory Costs Inventory Pricing
 Share-Based Payment Accounting for
Stock Based Compensation
 3. Inventories
  (in thousands)
    
    April 1, 2006
    
    December 31, 2005Raw materials
    
    $
    21,946
    
    
    $
    21,485Work-in-process
    
    
    9,594
    
    
    
    7,171Finished goods
    
    
    32,263
    
    
    
    31,883Total
    
    $
    63,803
    
    
    $
    60,539
 4. Debt
  (in thousands)
    
    April 1, 2006
    
    December 31, 2005Senior credit facilities:Revolving credit facility
    
    $
    
    
    
    $
    Term loan facilities
    
    
    366,812
    
    
    
    365,7358.75% senior subordinated notes
    
    
    407,025
    
    
    
    401,95510.50% senior discount notes, net of
unamortized original issue discount
of
$67,696 and $73,489, respectively
    
    
    232,304
    
    
    
    226,511Other
    
    
    1,241
    
    
    
    1,2931,007,382
    
    
    
    995,494Less current maturities
    
    
    2,087
    
    
    
    1,224Long-term debt
    
    $
    1,005,295
    
    
    $
    994,270
 8




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##### Table of Contents



Polypore International, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
 5. Pension and Other Postretirement Benefits
   Pension Plans
    
    Other Postretirement BenefitsThree Months Ended
    
    Three Months Ended(in thousands)
    
    April 1, 2006
    
    April 2, 2005
    
    April 1, 2006
    
    April 2, 2005Service cost
    
    $
    719
    
    
    $
    578
    
    
    $
    8
    
    
    $
    7Interest cost
    
    
    763
    
    
    
    759
    
    
    
    29
    
    
    
    29Expected return on plan assets
    
    
    (192
    )
    
    
    (213
    )
    
    
    
    
    
    
    Recognized net actuarial loss
    
    
    9
    
    
    
    14
    
    
    
    1
    
    
    
    Net periodic benefit cost
    
    $
    1,299
    
    
    $
    1,138
    
    
    $
    38
    
    
    $
    36
 6. Environmental Matters
      9




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Polypore International, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
 7. Business Restructuring
 2005 Restructuring Plan
  Accounting for Costs Associated with Exit or Disposal Activities
 2004 Restructuring Plan
   Balance at
    
    
    
    
    
    
    
    
    
    ForeginDecember 31,
    
    Restructuring
    
    Cash
    
    Currency
    
    Balance at(in thousands)
    
    2005
    
    Charges
    
    Payments
    
    Translation
    
    April 1, 20062005 Restructuring Plan:Severance and benefit costs
    
    $
    1,506
    
    
    $
    163
    
    
    $
    (198
    )
    
    $
    42
    
    
    $
    1,513Other
    
    
    
    
    
    
    127
    
    
    
    (127
    )
    
    
    
    
    
    
    1,506
    
    
    
    290
    
    
    
    (325
    )
    
    
    42
    
    
    
    1,5132004 Restructuring Plan:Severance and benefit costs
    
    
    4,069
    
    
    
    
    
    
    
    (2,212
    )
    
    
    97
    
    
    
    1,954Raw materials
    
    
    32
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    33Other
    
    
    265
    
    
    
    482
    
    
    
    (693
    )
    
    
    5
    
    
    
    594,366
    
    
    
    482
    
    
    
    (2,905
    )
    
    
    103
    
    
    
    2,046Total
    
    $
    5,872
    
    
    $
    772
    
    
    $
    (3,230
    )
    
    $
    145
    
    
    $
    3,559
 10




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Polypore International, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
 ForeignBalance at
    
    Cash
    
    Currency
    
    Balance at(in thousands)
    
    January 1, 2005
    
    Payments
    
    Translation
    
    April 2, 20052004 Restructuring Plan:Severance and benefit costs
    
    $
    14,944
    
    
    $
    (4,249
    )
    
    $
    (562
    )
    
    $
    10,133Raw materials
    
    
    1,256
    
    
    
    
    
    
    
    (53
    )
    
    
    1,203Total
    
    $
    16,200
    
    
    $
    (4,249
    )
    
    $
    (615
    )
    
    $
    11,336
 8. Share-based Compensation Plans
   Weighted Average Assumptions2005
    
    2004Weighted-average expected life (years)
    
    
    4.00
    
    
    
    5.00Risk-free interest rate
    
    
    3.86
    %
    
    
    3.96
    %Expected volatility
    
    
    20.00
    %
    
    
    20.00
    %Dividend yield
    
    
    
    
    
    
    
     11




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##### Table of Contents



Polypore International, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
  Weighted-
    
    Weighted AverageAverage
    
    Remaining
    
    AggregateExercise
    
    Contractual
    
    Instrinsic ValueOptions
    
    Price
    
    Term (Years)
    
    (in thousands)Outstanding at December 31, 2005
    
    
    8,741
    
    
    $
    800
    
    
    
    9.0
    
    
    $
    814Forfeited
    
    
    (162
    )
    
    
    725Outstanding at April 1, 2006
    
    
    8,579
    
    
    
    801
    
    
    
    8.7
    
    
    
    1,124Vested and exercisable at April 1, 2006
    
    
    1,481
    
    
    
    832
    
    
    
    9.0
    
    
    
    148
   Income Taxes
  Comprehensive Income
  Three Months Ended(in thousands)
    
    April 1, 2006
    
    April 2, 2005Net income (loss)
    
    $
    (1,329
    )
    
    $
    1,641Other comprehensive loss, primarily foreign currency translation
    
    
    1,540
    
    
    
    (2,372
    )Comprehensive income (loss)
    
    $
    211
    
    
    $
    (731
    )
 11. Related Party Transactions
  12




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Polypore International, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
 12. Segment Information
    Three Months Ended(in thousands)
    
    April 1, 2006
    
    April 2, 2005Net sales to external customers:Energy storage
    
    $
    83,155
    
    
    $
    76,259Separations media
    
    
    32,138
    
    
    
    36,239Total net sales to external customers
    
    $
    115,293
    
    
    $
    112,498Operating income:Energy storage
    
    $
    15,357
    
    
    $
    12,914Separations media
    
    
    2,458
    
    
    
    7,585Corporate
    
    
    
    
    
    
    (49
    )Segment operating income
    
    
    17,815
    
    
    
    20,450Business restructuring
    
    
    772
    
    
    
    Total operating income
    
    
    17,043
    
    
    
    20,450Reconciling items:Interest expense, net
    
    
    22,100
    
    
    
    20,258Change in accounting principle related to postemployment benefits
    
    
    (2,593
    )
    
    
    Other
    
    
    699
    
    
    
    (1,571
    )Total consolidated income before income taxes and cumulative
effect of a change in accounting principle
    
    $
    (3,163
    )
    
    $
    1,763Depreciation and amortization:Energy storage
    
    $
    8,006
    
    
    $
    8,400Separations media
    
    
    6,554
    
    
    
    5,916Corporate
    
    
    
    
    
    
    12Total depreciation and amortization
    
    $
    14,560
    
    
    $
    14,328
 13




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations
 The following discussion of our financial condition and results of operations should be read
together with our unaudited consolidated financial statements and the related notes included
elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements
and the related notes included in our Annual Report on Form 10-K for the fiscal year ended December
31, 2005.
 Overview
   Wards Motor Vehicles Facts and Figures,
     14




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Critical accounting policies
  Results of Operations
  Percentage of SalesThree months ended
    
    
    Three months ended(in millions)
    
    April 1, 2006
    
    
    April 2, 2005
    
    
    April 1, 2006
    
    
    April 2, 2005Net sales
    
    $
    115.3
    
    
    $
    112.5
    
    
    
    100.0
    %
    
    
    100.0
    %Gross profit
    
    
    40.3
    
    
    
    38.9
    
    
    
    35.0
    %
    
    
    34.6
    %Selling, general and administrative
expenses
    
    
    22.5
    
    
    
    18.4
    
    
    
    19.5
    %
    
    
    16.4
    %Business restructuring
    
    
    0.8
    
    
    
    
    
    
    
    0.7
    %
    
    
    
    %Operating income
    
    
    17.0
    
    
    
    20.5
    
    
    
    14.7
    %
    
    
    18.2
    %Interest expense, net
    
    
    22.1
    
    
    
    20.3
    
    
    
    19.2
    %
    
    
    18.0
    %Change in accounting principle related to
postemployment benefits
    
    
    (2.6
    )
    
    
    
    
    
    
    (2.3
    )%
    
    
    
    %Foreign currency and other
    
    
    0.7
    
    
    
    (1.6
    )
    
    
    0.6
    %
    
    
    (1.4
    )%20.2
    
    
    
    18.7
    
    
    
    17.5
    %
    
    
    16.6
    %Income (loss) before income taxes
    
    
    (3.2
    )
    
    
    1.8
    
    
    
    (2.8
    )%
    
    
    1.6
    %Income taxes
    
    
    (1.6
    )
    
    
    0.1
    
    
    
    (1.4
    )%
    
    
    0.1
    %Income (loss) before the cumulative effect
of a change in accounting principle
    
    
    (1.6
    )
    
    
    1.6
    
    
    
    (1.4
    )%
    
    
    1.4
    %Cumulative effect of a change in
accounting
principle, net of tax
    
    
    0.3
    
    
    
    
    
    
    
    0.3
    %
    
    
    
    %Net income
    
    $
    (1.3
    )
    
    $
    1.6
    
    
    
    (1.1
    )%
    
    
    1.4
    %
 Comparison of the three months ended April 1, 2006 with the three months ended April 2, 2005
 Net sales
   15




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##### Table of Contents



Gross Profit
   Selling, general and administrative expenses
  Interest expense
  Income taxes
  Business restructuring
 2005 Restructuring Plan
  16




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2004 Restructuring Plan
   Balance at
    
    
    
    
    
    
    
    
    
    ForeignDecember 31,
    
    Restructuring
    
    Cash
    
    Currency
    
    Balance at(in millions)
    
    2005
    
    Charges
    
    Payments
    
    Translation
    
    April 1, 20062005 Restructuring Plan:Severance and benefit costs
    
    $
    1.5
    
    
    $
    0.2
    
    
    $
    (0.2
    )
    
    $
    
    
    
    $
    1.5Other
    
    
    
    
    
    
    0.1
    
    
    
    (0.1
    )
    
    
    
    
    
    
    1.5
    
    
    
    0.3
    
    
    
    (0.3
    )
    
    
    
    
    
    
    1.52004 Restructuring Plan:Severance and benefit costs
    
    
    4.1
    
    
    
    
    
    
    
    (2.2
    )
    
    
    0.1
    
    
    
    2.0Raw materials
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    0.3
    
    
    
    0.5
    
    
    
    (0.7
    )
    
    
    
    
    
    
    0.14.4
    
    
    
    0.5
    
    
    
    (2.9
    )
    
    
    0.1
    
    
    
    2.1Total
    
    $
    5.9
    
    
    $
    0.8
    
    
    $
    (3.2
    )
    
    $
    0.1
    
    
    $
    3.6
  ForeignBalance at
    
    Cash
    
    Currency
    
    Balance at(in millions)
    
    January 1, 2005
    
    Payments
    
    Translation
    
    April 2, 20052004 Restructuring Plan:Severance and benefit costs
    
    $
    14.9
    
    
    $
    (4.2
    )
    
    $
    (0.6
    )
    
    $
    10.1Raw materials
    
    
    1.3
    
    
    
    
    
    
    
    (0.1
    )
    
    
    1.2Total
    
    $
    16.2
    
    
    $
    (4.2
    )
    
    $
    (0.7
    )
    
    $
    11.3
 Liquidity and Capital Resources
  Operating activities
  17




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##### Table of Contents



Investing activities
 Financing activities
      Twelve Months
    
    Three MonthsEnded
    
    Ended(in millions)
    
    April 1, 2006
    
    April 1, 2006Net income
    
    $
    11.8
    
    
    $
    3.3Add:Depreciation and amortization
    
    
    54.4
    
    
    
    14.6Interest expense, net
    
    
    61.3
    
    
    
    16.3Provision for income taxes
    
    
    (4.5
    )
    
    
    (0.7
    )EBITDA
    
    
    123.0
    
    
    
    33.5Add:Foreign currency (gain) loss
    
    
    (1.8
    )
    
    
    0.6Operating lease payments on lease to be refinanced (1)
    
    
    2.7
    
    
    
    0.6Other non-cash charges (2)
    
    
    (2.2
    )
    
    
    (2.2
    )Business restructuring
    
    
    9.5
    
    
    
    0.8Loss on disposal of property, plant, and equipment
    
    
    0.6
    
    
    
    Adjusted EBITDA
    
    $
    131.8
    
    
    $
    33.3
 
 (1)
    
    Represents payments under an operating lease agreement that the Company intends to terminate
and purchase the equipment from the lessor during the second quarter of 2006.(2)
    
    Represents other income of $2.6 million resulting from a reduction of the postemployment
benefits accrual upon adoption of EITF 05-5 and compensation expense of $0.4 million recorded
under EITF 05-5 during the three and twelve months periods ended April 1, 2006.
 18




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##### Table of Contents



Twelve MonthsEnded(in millions)
    
    April 1, 2006Adjusted EBITDA
    
    $
    131.8Consolidated interest expense, as defined in the Credit Agreement
    
    
    58.5Actual interest coverage ratio
    
    
    2.25
    xPermitted minimum interest coverage ratio
    
    
    1.70
    x
  Date or Period
    
    RatioApril 1, 2006 through March 31, 2007
    
    1.70 to 1.00June 30, 2007
    
    1.75 to 1.00September 29, 2007 through June 28, 2008
    
    1.90 to 1.00September 27, 2008 through January 3, 2009
    
    2.00 to 1.00January 4, 2009 through January 2, 2010
    
    2.75 to 1.00April 3, 2010 and each fiscal quarter thereafter
    
    3.00 to 1.00
  Twelve MonthsEnded(in millions)
    
    April 1, 2006Indebtedness, as defined in the Credit Agreement
    
    $
    782.2Adjusted EBITDA
    
    
    131.8Actual leverage ratio
    
    
    5.93
    xPermitted maximum leverage ratio
    
    
    6.90
    x
  Date or Period
    
    RatioApril 1, 2006 through March 31, 2007
    
    6.90 to 1.00June 30, 2007
    
    6.75 to 1.00September 29, 2007
    
    6.50 to 1.00December 29, 2007
    
    6.25 to 1.00March 29, 2008
    
    6.00 to 1.00June 28, 2008
    
    5.75 to 1.00September 27, 2008 through January 3, 2009
    
    5.50 to 1.00January 4, 2009 through October 3, 2009
    
    4.25 to 1.00January 2, 2010 and each fiscal quarter thereafter
    
    4.00 to 1.00
   19




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##### Table of Contents



Foreign Operations
  Environmental matters
    20




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##### Table of Contents



Off-Balance Sheet Arrangements
  New Accounting Standards
 Accounting Changes and Error
Corrections
  Inventory Costs Inventory Pricing
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##### Table of Contents



Share-Based Payment Accounting for Stock Based Compensation
 
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
  Interest rate risk
  Currency risk
   Three Months EndedApril 1, 2006
    
    April 2, 2005Period end rate
    
    
    1.2135
    
    
    
    1.3050Period average rate
    
    
    1.2028
    
    
    
    1.3248
  22




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##### Table of Contents



Item 4. Controls and Procedures
   
 PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
   
 Item 6. Exhibits
 Exhibit No.
    
    Exhibit Description31.1
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1
    
    Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 200232.2
    
    Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
 23




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##### Table of Contents



SIGNATURES
  Date: May 16, 2006
    
    
    
    POLYPORE INTERNATIONAL, INC.(Registrant)By:
    
    /s/ Robert B. TothRobert B. Toth

President and Chief Executive Officer

(principal executive officer)By:
    
    /s/ Lynn AmosLynn AmosChief Financial Officer(principal financial officer and principal accounting officer)