Glatfelter Reports Third Quarter 2021 Results

Glatfelter Corporation (NYSE: GLT), a leading global supplier of engineered materials, reported income from continuing operations for the third quarter of 2021 of $8.1 million, or $0.18 per diluted share, compared with $6.5 million, or $0.15 per share, in the same period a year ago. The 2021 results include the acquisition of Georgia-Pacific’s U.S. nonwovens business (“Mount Holly”) prospectively from the May 13, 2021 acquisition date. Adjusted earnings from continuing operations for the third quarters of 2021 and 2020, were $9.5 million, or $0.21 per share, compared with $7.0 million, or $0.16 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, 2021 totaled $279.7 million, compared with $233.5 million for the same period in 2020. On a constant currency basis, net sales for Composite Fibers and Airlaid Materials (including Mount Holly) increased by 3.4% and 39.5%, respectively.

“Airlaid Materials delivered strong performance during the quarter due to improving demand for wipes and tabletop products, which exceeded expectations. Our contractual cost pass-through arrangements with customers offset most of the inflationary pressures while higher shipments, coupled with improved product mix, supported growth in operating profit and favorable margins,” said Dante C. Parrini, Chairman and Chief Executive Officer. “As inflationary headwinds dominated the global economic backdrop, our Composite Fibers segment continued to increase prices. While we successfully achieved price improvements of nearly $6 million to offset rising input costs, the third quarter brought about incremental inflation and significant increases in energy prices which negatively impacted profitability.”

Mr. Parrini added, “Heading into the third quarter, we were experiencing improved demand trends across most product categories and expected that the price increases we implemented in the Composite Fibers segment earlier in the year would be sufficient to offset the higher input costs. However, energy, raw materials, and freight prices continued to significantly escalate throughout the quarter, well beyond our expectations. In response, our commercial team took additional pricing actions in mid-September announcing an incremental 12% price increase across the Composite Fibers product portfolio. Additionally, for our Airlaid Materials' customers with no cost pass-through arrangements, we initiated a 10% price increase effective October 1. We intend to continue leveraging our global scale and integrated supply chain to manage costs and enhance manufacturing efficiencies while taking the necessary pricing actions during this dynamic and unprecedented macro-economic environment.”

Mr. Parrini concluded, “We recently executed a successful $500 million bond offering to finance the closing of the largest acquisition in Glatfelter’s history – Jacob Holm, a leading global manufacturer of premium quality spunlace nonwovens. This transaction marks another significant step forward in our transformation to further diversify our nonwovens portfolio and technology offerings, enhance overall innovation capabilities with a focus on sustainability and add meaningful scale to the Company. Our key near-term priorities for this acquisition are focused on successfully integrating Jacob Holm into the Glatfelter enterprise, achieving the announced $20 million synergies and actively de-levering the balance sheet.”