YORK, Pennsylvania – November 4, 2014 – Glatfelter (NYSE: GLT) today reported third-quarter 2014 net income of $30.4 million, or $0.69 per diluted share, and adjusted earnings of $30.8 million, or $0.70 per diluted share.  For the third quarter of 2013, net income was $34.1 million, or $0.77 per diluted share, and adjusted earnings were $24.4 million or $0.55 per diluted share.
Consolidated net sales totaled $465.1 million in the third quarter of 2014, a 1.8 percent increase compared with $456.6 million in the third quarter of 2013.
"Our third-quarter adjusted earnings were strong and an all-time quarterly record of $0.70 per share,” said Dante C. Parrini, chairman and chief executive officer.  “Specialty Papers delivered significantly improved results led by excellent operational performance and top-line growth.  Advanced Airlaid Materials continues to perform very well, aided by strong demand and production efficiencies and Composite Fibers had a solid quarter when considering the market and economic pressures it is facing.”
Mr. Parrini continued, “As we look at the fourth quarter, we expect to build on the momentum of operational excellence across all of our businesses.  We believe Specialty Papers is well-positioned to deliver stable, reliable cash generation for the company.  Demand for our Advanced Airlaid Materials products is consistently strong, driven by global growth in adult hygiene markets.  Composite Fibers is operating well overall, but it continues to be impacted by economic uncertainty in Europe and the fluid economic and political situation in Russia and Ukraine.  On balance, we are pleased with our progress throughout 2014 and our leading market positions, while remaining mindful of the near-term macro-level challenges.”
The following table sets forth a reconciliation of net income on a GAAP basis to adjusted earnings, a non-GAAP measure:
The sum of individual per share amounts set forth above may not agree to adjusted earnings per share due to rounding.

Third-Quarter Business Unit Results
Composite Fibers
Composite Fibers
Net sales for this business unit declined $6.9 million, or 4.3 percent, primarily due to $4.9 million from lower selling prices.  Foreign currency translation favorably impacted the year-over-year net sales comparison by $1.2 million.
Composite Fibers’ third-quarter 2014 operating income decreased $0.8 million to $18.1 million compared to the year-ago period.  The adverse impact from lower selling prices was substantially offset by improved operating performance including the impact of market related downtime taken to reduce inventories.

Advanced Airlaid Materials
Advanced Airlaid Materials
On a year-over-year basis, Advanced Airlaid Materials’ net sales increased $4.9 million, or 7.0 percent, primarily due to a 5.9 percent increase in shipping volumes.
Third-quarter 2014 operating income increased $3.6 million, nearly double the year-ago quarter.  The third-quarter 2013 results were adversely impacted by $1.7 million of costs, net of insurance, related to fires at this business unit’s facilities.  Excluding these costs from the quarter-over-quarter comparison, 2014 operating income increased $1.9 million primarily due to higher shipping volumes and lower raw material and energy costs. 

Specialty Papers
Specialty Papers
On a year-over-year basis, Specialty Papers’ net sales increased $10.5 million, or 4.7 percent primarily due to an $8.3 million benefit from higher average selling prices together with higher shipping volumes. This business unit’s growth in shipping volumes again outperformed the broader uncoated free-sheet market which was down 8.0 percent in the third quarter of 2014 compared to the third quarter of 2013.
Operating income increased $9.7 million, or 53.6 percent primarily due to higher selling prices together with significant improvements in operating performance, including record quarterly pulp production, partially offset by higher incentive compensation and normal cost inflation.

Other Financial Information
During the quarter, the Company recorded a $3.3 million non-cash asset impairment charge related to a trade name intangible asset acquired in connection with the 2013 Dresden acquisition.  The charge was due to a change in the estimated fair value of the trade name, primarily driven by a substantial increase in discount rates related to Dresden’s business in Russia and Ukraine and this region’s political instability.
Pension expense totaled $1.7 million and $3.6 million for the third quarters of 2014 and 2013, respectively.  The decline reflects the benefit of higher discount rates and the amortization of deferred actuarial gains related to higher returns on assets in 2013.  Because the Company’s qualified plan remains overfunded, a cash contribution is not required to be made in 2014 nor is a contribution expected in the foreseeable future.

The Company completed the sale of 1,095 acres of timberlands during the third quarter of 2014 for $1.7 million and realized an after-tax gain of $1.0 million. 
In the third quarter of 2014, the Company recorded an income tax provision of $10.4 million on adjusted pre-tax earnings resulting in an effective tax rate of 25.2 percent.  In the comparable quarter a year ago, the income tax provision totaled $4.8 million and the effective tax rate was 16.3 percent.  The lower effective tax rate in 2013 was primarily due to changes in valuation allowances and the reduction of statutory tax rates in a foreign jurisdiction. 
Adjusted earnings in the third quarters of 2014 and 2013 excludes a benefit of $1.0 million and $9.9 million, respectively, from the release of tax reserves related to alternative fuel mixture credits earned in 2009, due to the lapse of the applicable statutes of limitation.

2014 Year-to-Date Results
For the first nine months of 2014, net income totaled $49.7 million, or $1.13 per diluted share, compared with $50.7 million, or $1.15 per diluted share, in the same period of 2013.  Adjusted earnings totaled $48.7 million, or $1.11 per diluted share, compared with $46.8 million, or $1.06 per diluted share, in 2013. The following table sets forth a reconciliation of results determined on a GAAP basis to adjusted earnings, a non-GAAP measure:
The sum of individual per share amounts set forth above may not agree to adjusted earnings per share due to rounding.
Consolidated net sales for the first nine months of 2014 were $1,366.2 million, a 6.1 percent increase compared with $1,287.8 million for the same period of 2013. 

Balance Sheet and Other Information
Cash and cash equivalents totaled $53.7 million as of September 30, 2014, and net debt was $356.5 million compared with $319.4 million at the end of 2013.  (Refer to the calculation of this measure provided in the tables at the end of this release.)
Capital expenditures totaled $47.0 million in the first nine months of 2014 compared with $86.1 million in the same period of 2013 which included $31.5 million for Composite Fibers’ capacity expansion project.  For 2014, total capital expenditures are estimated at $75 million to $80 million.

Adjusted free cash flow for the third quarter of 2014 was $27.6 million compared with $28.2 million in the same quarter of 2013.  For the first nine months of 2014, adjusted free cash flow decreased to $(22.8) million compared with $31.7 million in the same period of 2013 due to an increase in working capital and cash paid for income taxes.  (Refer to the calculation of these measures provided in this release.) 
During 2014, the Company repurchased 464,190 shares of common stock for $12.2 million under its share repurchase program.  On May 1, 2014, the Company announced that its Board of Directors approved a $25 million increase to the share repurchase program and extended the expiration date to May 1, 2016.  Under the revised program, the Company may repurchase up to $50 million of its outstanding common stock, of which $16.6 million had been utilized through September 30, 2014.
In the fourth quarter of 2014, Composite Fibers’ shipping volumes are expected to be approximately 5 percent lower than the third quarter of 2014 primarily due to seasonality.  Selling prices and raw material and energy prices are expected to be in-line with the third quarter.  The impact of downtime to reduce inventory levels in the fourth quarter is estimated to be $1 million to $2 million higher compared to the third quarter.
Shipping volumes for Advanced Airlaid Materials in the fourth quarter of 2014 are expected to decline by approximately 5 percent compared with the third quarter due to seasonality.  Average raw material prices are expected to be slightly higher than the third quarter of 2014 resulting in higher selling prices consistent with our pass-through arrangements.  In order to increase the production capacity of a line in Falkenhagen, the Company expects to incur approximately $1 million of costs related to lost production time from temporarily taking the line down.
For Specialty Papers, the Company expects shipping volumes in the fourth quarter of 2014 to decline by approximately 5 percent compared to the third quarter due to seasonality.  Overall selling prices are expected to be slightly lower than the third quarter of 2014 and input costs are expected to increase slightly.  Maintenance costs are expected to be approximately $2 million higher in the fourth quarter compared with the third quarter due to normal variations in the timing of certain work.
Conference Call
As previously announced, the Company will hold a conference call at 11:00 a.m. (Eastern) today to discuss its third-quarter results.  The Company’s earnings release and an accompanying financial supplement, which includes significant financial information to be discussed on the conference call, will be available on Glatfelter’s Investor Relations website at the address indicated below.  Information related to the conference call is as follows:
Glatfelter’s 3rd Quarter 2014 Earnings Release Conference Call
Tuesday, November 4, 2014, 11:00 a.m. (ET)
 US dial 888.335.5539 
 International dial 973.582.2857
Conference ID:
Rebroadcast Dates: 
November 4, 2014 through November 18, 2014
Rebroadcast Number: 
Within US dial 855.859.2056
International dial 404.537.3406
Conference ID: 
Interested persons who wish to hear the live webcast should go to the website prior to the starting time to register, download and install any necessary audio software.
Caution Concerning Forward-Looking Statements
Any statements included in this press release which pertain to future financial and business matters are “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995.  The Company uses words such as “anticipates”, “believes”, “expects”, “future”, “intends” and similar expressions to identify forward-looking statements.  Any such statements are based on management’s current expectations and are subject to numerous risks, uncertainties and other unpredictable or uncontrollable factors that could cause future results to differ materially from those expressed in the forward-looking statements including, but not limited to: changes in industry, business, market, political and economic conditions in the U.S. and other countries in which the Company does business, demand for or pricing of its products, changes in tax legislation, governmental laws, regulations and policies, initiatives of regulatory authorities, technological changes and innovations, market growth rates, and cost reduction initiatives.  In light of these risks, uncertainties and other factors, the forward-looking matters discussed in this press release may not occur and readers are cautioned not to place undue reliance on these forward-looking statements.  The forward-looking statements speak only as of the date of this press release and Glatfelter undertakes no obligation, and does not intend, to update these forward-looking statements to reflect events or circumstances occurring after the date of this press release.  More information about these factors is contained in Glatfelter’s filings with the U.S. Securities and Exchange Commission, which are available at

About Glatfelter
Celebrating its 150th anniversary in 2014, Glatfelter is a global supplier of specialty papers and fiber-based engineered materials, offering innovation, technical expertise, and world-class service. Headquartered in York, PA, U.S. operations include facilities in Spring Grove, PA and Chillicothe and Fremont, OH. International operations include facilities in Canada, Germany, France, the United Kingdom and the Philippines, and sales and distribution offices in Russia and China.  Glatfelter’s sales approximate $1.8 billion annually and its common stock is traded on the New York Stock Exchange under the ticker symbol GLT. Additional information may be found at

P. H. Glatfelter Company and subsidiaries
Consolidated Statements of Income

Business Unit Financial Information

The sum of individual amounts set forth above may not agree to the consolidated financial statements included herein due to rounding.

Selected Financial Information

Reconciliation of GAAP Financial Information to Non-GAAP Financial Information

This press release includes a discussion of earnings before the effects of certain specifically identified items, which is referred to as adjusted earnings, a non-GAAP measure.  The Company uses non-GAAP adjusted earnings to supplement the understanding of its consolidated financial statements presented in accordance with GAAP.  Non-GAAP adjusted earnings is meant to present the financial performance of the Company’s core operations, which consists of the production and sale of specialty papers, composite fibers papers and airlaid non-woven materials.  Management and the Company’s Board of Directors use non-GAAP adjusted earnings to evaluate the performance of the Company’s fundamental business in relation to prior periods.  The performance of the Company’s operations is evaluated based upon numerous items such as tons sold, average selling prices, gross margins and overhead, among others.  Gains on the sale of timberlands, acquisition and integration related costs, and impairment charges, among others, are excluded from the Company’s calculation of non-GAAP adjusted earnings because management believes each of these items is unique and not part of the Company’s core business, and will only impact the Company’s financial results for a limited period of time.  Gains from timberland sales are distinct from revenues generated from product sales.  Unlike items such as cost of raw materials and overhead costs, acquisition and integration related costs, and impairment charges are unique items that do not represent direct costs incurred in the manufacture and sale of the Company’s products.

Unlike net income determined in accordance with GAAP, non-GAAP adjusted earnings does not reflect all charges and gains recorded by the Company for the applicable period and, therefore, does not present a complete picture of the Company’s results of operations for the respective period.  However, non-GAAP adjusted earnings provides a measure of how the Company’s core operations are performing, which management believes is useful to investors because it allows comparison of such operations from period to period.  Non-GAAP adjusted earnings should not be considered in isolation from, or as a substitute for, measures of financial performance prepared in accordance with GAAP.

Glatfelter (NYSE: GLT) is a leading global supplier of engineered materials. The Company’s high-quality, innovative and customizable solutions are found in tea and single-serve coffee filtration, personal hygiene and packaging products as well as home improvement and industrial applications. Headquartered in York, PA, the Company’s net sales approximate $950 million annually with customers in over 100 countries and approximately 2,300 employees worldwide. Operations include eleven manufacturing facilities located in the United States, Canada, Germany, France, the United Kingdom and the Philippines. Additional information about Glatfelter may be found at
Corporate Headquarters (York, PA)
York, PA
John P. Jacunski
(717) 225-2794

William T. Yanavitch
(717) 225-2747

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Investor Relations