Exhibit 99.1

 

NEWS RELEASE

 

Corporate Headquarters

 

4350 Congress Street

Suite 600

Charlotte, NC 28209

U.S.A.

www.glatfelter.com

 

 

For Immediate Release

Contacts:

 

 

Investors:

Media:

 

Ramesh Shettigar

Eileen L. Beck

 

(717) 225-2746

(717) 225-2793

 

ramesh.shettigar@glatfelter.com

eileen.beck@glatfelter.com

 

GLATFELTER REPORTS THIRD QUARTER 2020 RESULTS

~ Airlaid Materials delivers another quarter of record profitability ~

 

CHARLOTTE, North Carolina – November 9, 2020: Glatfelter Corporation (NYSE: GLT), a leading global supplier of engineered materials, today reported its results for the third quarter of 2020 which are summarized in the following table:

 

 

 

Three months ended September 30

 

 

 

2020

 

 

2019

 

In thousands, except per share

 

Amount

 

 

EPS

 

 

Amount

 

 

EPS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

6,527

 

 

$

0.15

 

 

$

12,224

 

 

$

0.28

 

Income from continuing operations

 

 

6,527

 

 

 

0.15

 

 

 

8,643

 

 

 

0.19

 

Adjusted earnings from continuing operations

 

 

7,041

 

 

 

0.16

 

 

 

9,731

 

 

 

0.22

 

 

On an adjusted basis, earnings from continuing operations for the three months ended September 30, 2020 and 2019, were $7.0 million, or $0.16 per share, compared with $9.7 million, or $0.22 per share, respectively. Adjusted earnings is a non-GAAP financial measure for which a reconciliation to the nearest GAAP-based measure is provided within this release. Consolidated net sales for the three months ended September 30, 2020 totaled $233.5 million compared with $232.5 million during the same period in 2019. On a constant currency basis, Composite Fibers’ and Airlaid Materials’ net sales decreased by 0.5% and 6.4%, respectively.

 

“Glatfelter delivered another quarter of solid results as both segments continued to safely produce and deliver essential engineered materials while maintaining a focus on operational excellence and cost discipline.” said Dante C. Parrini, Chairman and Chief Executive Officer. “Airlaid Materials continued to build on its strong results from the second quarter, achieving another quarter of record profit. Sequential quarter growth in Airlaid shipments was driven by a rebound in tabletop and steady demand in feminine hygiene and home care products. Composite Fibers’ shipments were also better than expected, increasing sequentially by 21%, as wallcover demand that had fallen at the beginning of the pandemic began to recover and remained steady through the quarter. Although volume growth in wallcover improved overall shipments for Composite Fibers, operating profit was impacted due to manufacturing downtime to manage inventory levels and optimize cash flow.”

 

Mr. Parrini continued, “Our steady performance during these uncertain times is a testament to the resilience of our employees and the agility of our business model, which is emblematic of the New Glatfelter. We continue to maintain our vigilant efforts to keep Glatfelter PEOPLE safe and ensure the uninterrupted availability of our products despite the challenging market conditions and volatility caused by the COVID-19 pandemic. Looking ahead, we remain focused on operational excellence and continuing our positive momentum to finish the year strong.”

 

 


Glatfelter Reports Third Quarter 2020 Results

page 2

 

Third Quarter Results

 

The following table sets forth a reconciliation of results on a GAAP basis to an adjusted earnings basis, a non-GAAP measure:

 

 

 

Three months ended September 30

 

 

 

2020

 

 

2019

 

In thousands, except per share

 

Amount

 

 

EPS

 

 

Amount

 

 

EPS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

6,527

 

 

$

0.15

 

 

$

12,224

 

 

$

0.28

 

Exclude: Income from discontinued operations, net of tax

 

 

 

 

 

 

 

 

(3,581

)

 

 

(0.09

)

Income from continuing operations

 

 

6,527

 

 

 

0.15

 

 

 

8,643

 

 

 

0.19

 

Adjustments (pre-tax)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring charge - Metallized operations

 

 

57

 

 

 

 

 

 

 

 

 

 

 

 

Cost optimization actions

 

 

1,270

 

 

 

 

 

 

 

1,736

 

 

 

 

 

Corporate headquarters relocation

 

 

610

 

 

 

 

 

 

 

 

 

 

 

 

Pension settlement expenses, net

 

 

389

 

 

 

 

 

 

 

 

 

 

 

 

COVID-19 incremental costs

 

 

586

 

 

 

 

 

 

 

 

 

 

 

 

Strategic initiatives

 

 

843

 

 

 

 

 

 

 

 

 

 

 

 

Timberland sales and related costs

 

 

(412

)

 

 

 

 

 

 

(233

)

 

 

 

 

Total adjustments (pre-tax)

 

 

3,343

 

 

 

 

 

 

 

1,503

 

 

 

 

 

Income taxes (1)

 

 

(375

)

 

 

 

 

 

 

(415

)

 

 

 

 

CARES Act of 2020 tax benefit (2)

 

 

(2,454

)

 

 

 

 

 

 

 

 

 

 

 

Total after-tax adjustments

 

 

514

 

 

 

0.01

 

 

 

1,088

 

 

 

0.02

 

Adjusted earnings from continuing operations

 

$

7,041

 

 

$

0.16

 

 

$

9,731

 

 

$

0.22

 

 

 

(1)

Tax effect on adjustments calculated based on the incremental effective tax rate of the jurisdiction in which each adjustment originated.

 

(2)

Tax benefit recorded in connection with passage of the Coronavirus Aid, Relief, and Economic Security Act (“CARES”) related to provisions that modified the “net operating loss” provisions of previous law to allow certain losses to be carried back five years.

The sum of individual per share amounts set forth above may not agree to adjusted earnings per share due to rounding.

A description of each of the adjustments presented above is included later in this release.

 

 

Composite Fibers

 

 

Three months ended September 30

 

Dollars in thousands

 

2020

 

 

2019

 

 

Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tons shipped (metric)

 

 

35,009

 

 

 

33,394

 

 

 

1,615

 

 

 

4.8

%

Net sales

 

$

132,419

 

 

$

127,704

 

 

$

4,715

 

 

 

3.7

%

Operating income

 

 

10,464

 

 

 

11,129

 

 

 

(665

)

 

 

(6.0

)%

Operating margin

 

 

7.9

%

 

 

8.7

%

 

 

 

 

 

 

 

 

 

Composite Fibers’ net sales increased $4.7 million or 3.7%, compared to the year-ago quarter driven by higher shipments in the wallcover, technical specialty, and food and beverage product categories and favorable currency translation of $5.3 million. These increases were partially offset by lower selling prices of $3.0 million as well as lower metallized shipments following our exit of the more commoditized parts of this business at our Gernsbach, Germany facility earlier this year.

 

Composite Fibers’ operating income of $10.5 million was $0.7 million lower, or approximately 6% unfavorable, compared to the third quarter of 2019. Higher shipping volumes in most product categories improved operating profit by $0.3 million. A benefit of $2.0 million from lower input prices, primarily wood pulp, was offset by a $3.0 million impact from lower selling prices. Improved operations and strong cost control actions were offset by machine downtime previously planned to manage inventory and reduce labor costs.

 

 


Glatfelter Reports Third Quarter 2020 Results

page 3

 

Airlaid Materials

 

 

Three months ended September 30

 

Dollars in thousands

 

2020

 

 

2019

 

 

Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tons shipped (metric)

 

 

34,752

 

 

 

35,907

 

 

 

(1,155

)

 

 

(3.2

)%

Net sales

 

$

101,054

 

 

$

104,811

 

 

$

(3,757

)

 

 

(3.6

)%

Operating income

 

 

12,917

 

 

 

11,595

 

 

 

1,322

 

 

 

11.4

%

Operating margin

 

 

12.8

%

 

 

11.1

%

 

 

 

 

 

 

 

 

 

Airlaid Materials’ net sales decreased $3.8 million in the year-over-year comparison. Despite the 98% sequential quarter improvement in tabletop volumes, shipments overall for the segment were lower by 3.2% on a year-over-year basis due to continued softer demand for tabletop products as restaurants remained operating at dramatically limited capacity. This shortfall in demand was mostly offset by strong orders for home care, feminine hygiene and wipes products. Selling prices were $3.5 million lower due to contractual cost pass-through arrangements but mostly offset by favorable currency translation of $2.9 million.

 

Airlaid Materials’ third quarter 2020 operating income of $12.9 million was $1.3 million favorable, or approximately 11% higher, when compared to the third quarter of 2019. Improved sales mix favorably impacted results by $0.4 million, while price declines due to contractual raw material pass-through provisions outpaced lower raw material and energy prices, reducing operating profit by a net $0.4 million. Disciplined cost control, complemented by efficient operations, positively impacted results by $0.1 million, and a more favorable foreign exchange environment benefited results by $1.2 million.

 

 

Other Financial Information

 

The amount of “Other and Unallocated” operating expense in the table of Segment Financial Information totaled $9.4 million in the third quarter of 2020 compared with $8.2 million in the same period a year ago. Excluding the items identified to present “adjusted earnings,” unallocated expenses for the third quarter of 2020 decreased $0.5 million compared to the third quarter of 2019.

 

In the third quarter of 2020, income from continuing operations totaled $10.1 million and income tax expense totaled $3.6 million. On adjusted pre-tax income of $13.5 million, income tax expense was $6.4 million in the third quarter of 2020. The comparable amounts in the same quarter of 2019 were $13.3 million and $3.6 million, respectively. The effective tax rate on adjusted earnings was 48% in the third quarter of 2020.

 


Glatfelter Reports Third Quarter 2020 Results

page 4

 

Year-to-Date Results

 

The following table sets forth a reconciliation of results on a GAAP basis to an adjusted earnings basis, a non-GAAP measure:

 

 

 

Nine months ended

September 30

 

 

 

2020

 

 

2019

 

In thousands, except per share

 

Amount

 

 

EPS

 

 

Amount

 

 

EPS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

11,517

 

 

$

0.26

 

 

$

23,341

 

 

$

0.53

 

Exclude:  (Income) loss from discontinued operations, net of tax

 

 

135

 

 

 

 

 

 

(3,802

)

 

 

(0.09

)

Income from continuing operations

 

 

11,652

 

 

 

0.26

 

 

 

19,539

 

 

 

0.44

 

Adjustments (pre-tax)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Restructuring charge - Metallized operations

 

 

11,111

 

 

 

 

 

 

 

 

 

 

 

 

Cost optimization actions

 

 

4,367

 

 

 

 

 

 

 

7,643

 

 

 

 

 

Corporate headquarters relocation

 

 

610

 

 

 

 

 

 

 

 

 

 

 

 

Pension settlement expenses, net

 

 

6,792

 

 

 

 

 

 

 

 

 

 

 

 

COVID-19 incremental costs

 

 

1,766

 

 

 

 

 

 

 

 

 

 

 

 

Asset impairment charge

 

 

900

 

 

 

 

 

 

 

 

 

 

 

 

Airlaid capacity expansion costs

 

 

 

 

 

 

 

 

 

1,014

 

 

 

 

 

Debt refinancing

 

 

 

 

 

 

 

 

 

992

 

 

 

 

 

Strategic initiatives

 

 

843

 

 

 

 

 

 

 

249

 

 

 

 

 

Fox River environmental matter

 

 

 

 

 

 

 

 

 

(2,509

)

 

 

 

 

Timberland sales and related costs

 

 

(1,013

)

 

 

 

 

 

 

(1,114

)

 

 

 

 

Total adjustments (pre-tax)

 

 

25,376

 

 

 

 

 

 

 

6,275

 

 

 

 

 

Income taxes (1)

 

 

(4,257

)

 

 

 

 

 

 

(348

)

 

 

 

 

CARES Act of 2020 tax benefit (2)

 

 

(5,023

)

 

 

 

 

 

 

 

 

 

 

 

Total after-tax adjustments

 

 

16,096

 

 

 

0.36

 

 

 

5,927

 

 

 

0.13

 

Adjusted earnings from continuing operations

 

$

27,748

 

 

$

0.62

 

 

$

25,466

 

 

$

0.57

 

 

(1)

Tax effect on adjustments calculated based on the incremental effective tax rate of the jurisdiction in which each adjustment originated.

 

(2)

Tax benefit recorded in connection with passage of the Coronavirus Aid, Relief, and Economic Security Act (“CARES”) related to provisions that modified the “net operating loss” provisions of previous law to allow certain losses to be carried back five years.

 

Balance Sheet and Other Information

 

Cash and cash equivalents totaled $59.2 million as of September 30, 2020, and net debt was $272.7 million compared with $233.7 million at the end of 2019. The increase in net debt primarily reflects the impact from foreign exchange and the funding of a 401(k) account to offset future company retirement contributions as part of the completion of the pension plan asset reversion. Net leverage on September 30, 2020 and December 31, 2019 was 2.4 times and 2.2 times, respectively. (Refer to the calculation of this measure provided in the tables at the end of this release.)  

 

Capital expenditures during the first nine months of 2020 and 2019 totaled $20.2 million and $18.0 million, respectively. Adjusted free cash flow for the nine months of 2020 was $4.4 million compared with a use of $2.4 million in the prior year period. (Refer to the calculation of measure provided in the tables at the end of this release.)

 

 

 


Glatfelter Reports Third Quarter 2020 Results

page 5

 

Conference Call

 

As previously announced, the Company will hold a conference call today at 11:00 a.m. (Eastern) to discuss its third quarter results. The Company will make available on its Investor Relations website this quarter’s earnings release and an accompanying financial presentation which includes significant financial information to be discussed on the conference call including the Company’s outlook pertaining to financial performance. Information related to the conference call is as follows:

 

What:

Glatfelter’s 3rd Quarter 2020 Earnings Release Conference Call

 

 

When:

Monday, November 9, 2020, 11:00 a.m. (ET)

 

 

Number:

US dial 888.335.5539

 

 

 

International dial 973.582.2857

 

 

Conference ID:

5797672

 

 

Webcast:

https://www.glatfelter.com/investors/webcasts-and-presentations/

 

 

Rebroadcast Dates:

November 9, 2020, 2:00 p.m. through November 23, 2020, 12:00 p.m.

 

 

Rebroadcast Number:

Within US dial 855.859.2056

 

 

 

International dial 404.537.3406

 

 

Conference ID:

5797672

 

Interested persons who wish to hear the live webcast should go to the website prior to the starting time to register and ensure any necessary audio software is installed.

 

 

 

 

 

 


Glatfelter Reports Third Quarter 2020 Results

page 6

 

Glatfelter Corporation and subsidiaries

Consolidated Statements of Income

(unaudited)

 

 

 

Three months ended

September 30

 

 

Nine months ended

September 30

 

In thousands, except per share

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

233,473

 

 

$

232,515

 

 

$

681,216

 

 

$

696,701

 

Costs of products sold

 

 

195,222

 

 

 

194,494

 

 

 

574,100

 

 

 

585,563

 

Gross profit

 

 

38,251

 

 

 

38,021

 

 

 

107,116

 

 

 

111,138

 

Selling, general and administrative expenses

 

 

24,635

 

 

 

23,721

 

 

 

72,707

 

 

 

71,143

 

Gains on dispositions of plant, equipment and timberlands, net

 

 

(413

)

 

 

(235

)

 

 

(1,010

)

 

 

(1,327

)

Operating income

 

 

14,029

 

 

 

14,535

 

 

 

35,419

 

 

 

41,322

 

Non-operating income (expense)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(1,810

)

 

 

(1,902

)

 

 

(5,347

)

 

 

(8,513

)

Interest income

 

 

39

 

 

 

185

 

 

 

390

 

 

 

931

 

Pension settlement expenses, net

 

 

(389

)

 

 

 

 

 

(6,792

)

 

 

 

Other, net

 

 

(1,728

)

 

 

(1,034

)

 

 

(3,243

)

 

 

(3,547

)

Total non-operating expense

 

 

(3,888

)

 

 

(2,751

)

 

 

(14,992

)

 

 

(11,129

)

Income from continuing operations before income taxes

 

 

10,141

 

 

 

11,784

 

 

 

20,427

 

 

 

30,193

 

Income tax provision

 

 

3,614

 

 

 

3,141

 

 

 

8,775

 

 

 

10,654

 

Income from continuing operations

 

 

6,527

 

 

 

8,643

 

 

 

11,652

 

 

 

19,539

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Discontinued operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

 

 

 

 

 

1,062

 

 

 

(135

)

 

 

1,291

 

Income tax provision (benefit)

 

 

 

 

 

(2,519

)

 

 

 

 

 

(2,511

)

Income (loss) from discontinued operations

 

 

 

 

 

3,581

 

 

 

(135

)

 

 

3,802

 

Net income

 

$

6,527

 

 

$

12,224

 

 

$

11,517

 

 

$

23,341

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

0.15

 

 

$

0.19

 

 

$

0.26

 

 

$

0.44

 

Income from discontinued operations

 

 

 

 

 

0.09

 

 

 

 

 

 

0.09

 

Basic earnings per share

 

$

0.15

 

 

$

0.28

 

 

$

0.26

 

 

$

0.53

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

0.15

 

 

$

0.19

 

 

$

0.26

 

 

$

0.44

 

Income from discontinued operations

 

 

 

 

 

0.09

 

 

 

 

 

 

0.09

 

Diluted earnings per share

 

$

0.15

 

 

$

0.28

 

 

$

0.26

 

 

$

0.53

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividend declared per common share

 

$

0.135

 

 

$

0.13

 

 

$

0.40

 

 

$

0.39

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

44,368

 

 

 

44,171

 

 

 

44,329

 

 

 

44,113

 

Diluted

 

 

44,636

 

 

 

44,442

 

 

 

44,549

 

 

 

44,405

 

 

 

 


Glatfelter Reports Third Quarter 2020 Results

page 7

 

Segment Financial Information

(unaudited)

 

Three months ended September 30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dollars in thousands

 

Composite Fibers

 

 

Airlaid Materials

 

 

Other and Unallocated

 

 

Total

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Net sales

 

$

132,419

 

 

$

127,704

 

 

$

101,054

 

 

$

104,811

 

 

$

-

 

 

$

-

 

 

$

233,473

 

 

$

232,515

 

Costs of products sold

 

 

112,031

 

 

 

106,024

 

 

 

83,699

 

 

 

88,442

 

 

 

(508

)

 

 

28

 

 

 

195,222

 

 

 

194,494

 

Gross profit (loss)

 

 

20,388

 

 

 

21,680

 

 

 

17,355

 

 

 

16,369

 

 

 

508

 

 

 

(28

)

 

 

38,251

 

 

 

38,021

 

SG&A

 

 

9,924

 

 

 

10,551

 

 

 

4,438

 

 

 

4,774

 

 

 

10,273

 

 

 

8,396

 

 

 

24,635

 

 

 

23,721

 

Gains on dispositions of plant, equipment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   and timberlands, net

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(413

)

 

 

(235

)

 

 

(413

)

 

 

(235

)

Total operating income (loss)

 

 

10,464

 

 

 

11,129

 

 

 

12,917

 

 

 

11,595

 

 

 

(9,352

)

 

 

(8,189

)

 

 

14,029

 

 

 

14,535

 

Non operating expense

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(3,888

)

 

 

(2,751

)

 

 

(3,888

)

 

 

(2,751

)

Income (loss) before income taxes

 

$

10,464

 

 

$

11,129

 

 

$

12,917

 

 

$

11,595

 

 

$

(13,240

)

 

$

(10,940

)

 

$

10,141

 

 

$

11,784

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplementary Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Metric tons sold

 

 

35,009

 

 

 

33,394

 

 

 

34,752

 

 

 

35,907

 

 

 

-

 

 

 

-

 

 

 

69,761

 

 

 

69,301

 

Depreciation, depletion and amortization

 

$

6,755

 

 

$

6,445

 

 

$

5,674

 

 

$

5,285

 

 

$

1,273

 

 

$

864

 

 

$

13,702

 

 

$

12,594

 

Capital expenditures

 

 

3,060

 

 

 

3,995

 

 

 

2,791

 

 

 

2,869

 

 

 

2,303

 

 

 

520

 

 

 

8,154

 

 

 

7,384

 

 

 

Nine months ended September 30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dollars in thousands

 

Composite Fibers

 

 

Airlaid Materials

 

 

Other and Unallocated

 

 

Total

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Net sales

 

$

387,267

 

 

$

389,002

 

 

$

293,949

 

 

$

307,699

 

 

$

-

 

 

$

-

 

 

$

681,216

 

 

$

696,701

 

Costs of products sold

 

 

319,403

 

 

 

322,152

 

 

 

243,526

 

 

 

262,256

 

 

 

11,171

 

 

 

1,155

 

 

 

574,100

 

 

 

585,563

 

Gross profit (loss)

 

 

67,864

 

 

 

66,850

 

 

 

50,423

 

 

 

45,443

 

 

 

(11,171

)

 

 

(1,155

)

 

 

107,116

 

 

 

111,138

 

SG&A

 

 

30,811

 

 

 

31,388

 

 

 

13,192

 

 

 

13,448

 

 

 

28,704

 

 

 

26,307

 

 

 

72,707

 

 

 

71,143

 

Gains on dispositions of plant, equipment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   and timberlands, net

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,010

)

 

 

(1,327

)

 

 

(1,010

)

 

 

(1,327

)

Total operating income (loss)

 

 

37,053

 

 

 

35,462

 

 

 

37,231