YORK, Pennsylvania – May 3, 2016 – Glatfelter (NYSE: GLT) today reported first-quarter 2016 net income of $16.2 million, or $0.37 per diluted share compared with $13.9 million, or $0.32 per diluted share in the first quarter of 2015.  Adjusted earnings for the first quarter of 2016 were $16.3 million, or $0.37 per diluted share, a 23 percent increase compared with $13.4 million, or $0.30 per diluted share, for the same period a year ago.
Consolidated net sales totaled $402.2 million and $417.5 million in the first quarters of 2016 and 2015, respectively.  Currency translation adjustments unfavorably impacted the year-over-year comparison by $5.2 million.
“Glatfelter is off to a solid start in 2016 as a result of our focus on operational excellence and leadership positions in key markets,” said Dante C. Parrini, Chairman and Chief Executive Officer.  “Our Advanced Airlaid Materials and Specialty Papers businesses reported operating income increases of 25 percent and 58 percent, respectively, compared with the first quarter of 2015, with improved operations and increased shipping volumes.  The strong performance of these two businesses was partially offset by lower operating income in the Composite Fibers business, which was impacted by softer demand during the quarter for food and beverage products after a strong 2015.”
Mr. Parrini continued, “Glatfelter is fully committed to building upon our market leadership positions across all of our business units.  To accelerate our growth as a leading global engineered materials company, we have been making select, strategic investments – including a new, state-of-the-art Advanced Airlaid Materials production facility in Fort Smith, Arkansas, which is expected to be completed in late 2017.  Our airlaid business continues to grow with key customers in the feminine hygiene, adult incontinence and specialty wipes markets. In Specialty Papers, our manufacturing performance is improving, we expect to see the impact of recently announced price increases predominantly during the second half of the year, and we anticipate completing our environmental compliance projects by the end of the year.  Although Composite Fibers had a challenging first quarter, this business is core to our growth strategy due to its positions in growing markets and close relationships with a broad, industry-leading, customer base.” 
The following table sets forth a reconciliation of net income on a GAAP basis to adjusted earnings, a non-GAAP measure:
Adjusted Earnings
First-Quarter Business Unit Results
Composite Fibers
Composite Fibers Results
Composite Fibers’ net sales declined $11.8 million, or 8.7 percent, due to $3.0 million of lower selling prices, $4.5 million of unfavorable currency translation and lower shipping volumes. 
Composite Fibers’ first-quarter 2016 operating income decreased $3.5 million to $11.2 million compared to the year-ago period.  Operating results were adversely impacted by the impact of lower selling prices and $0.6 million from unfavorable mix and shipping volumes partially offset by a $1.3 million benefit from lower raw material and energy prices.  Changes in currency exchange rates unfavorably impacted operating income by $1.1 million.

Advanced Airlaid Materials

Advanced Airlaid Materials Results
Advanced Airlaid Materials’ net sales decreased $1.5 million in the year-over-year comparison as $3.8 million of lower selling prices from the pass through of lower raw material costs more than offset higher shipping volumes.  Shipping volumes increased 2.0 percent primarily due to higher shipments of adult incontinence and wipes products.
First-quarter 2016 operating income totaled $6.6 million, an increase of $1.3 million, or 24.5 percent compared to the same quarter a year ago and the operating margin widened 240 basis points.  Operating income includes $3.6 million of lower raw material and energy costs and improved operations offset by lower selling prices reflecting the impact of cost pass through arrangements.  Foreign currency translation favorably impacted the comparison by $0.9 million. 

Specialty Papers
Specialty Papers Results
Specialty Papers’ net sales decreased $2.0 million, or 0.9 percent due to a $4.2 million impact from lower selling prices partially offset by a 3.6 percent increase in shipping volumes.  The business unit’s shipments were a record for a first quarter and again outperformed the broader uncoated free sheet market which increased 1.7 percent.
Operating income totaled $15.0 million, an increase of $5.5 million, or 58.3% in the year-over-year comparison reflecting a $5.7 million benefit from lower raw material and energy prices and $4.8 million from improved operations.  The favorable factors were partially offset by the impact of lower selling prices as well as a $1.4 million decrease in energy and related sales.

Other Financial Information
Pension expense decreased to $1.2 million compared with $2.8 million in the year-earlier quarter reflecting the impact of higher discount rates partially offset by lower assumed returns on plan assets.  For 2016, full year pension expense is expected to be $4.6 million.  Because the Company’s qualified plan remains overfunded, a cash contribution is not expected for the foreseeable future.
The Company recorded an income tax provision of $5.1 million resulting in an effective tax rate of 23.9 percent compared with 24.5 percent on adjusted earnings in the same quarter a year ago. 

Balance Sheet and Other Information
Cash and cash equivalents totaled $70.3 million as of March 31, 2016, and net debt was $293.8 million compared with $255.4 million at the end of 2015.  (Refer to the calculation of this measure provided in the tables at the end of this release.) 

Capital expenditures during the quarter are summarized below:
Capital Expenditures
Capital expenditures are expected to total between $150 million and $170 million for 2016, including approximately $40 million to $45 million for each of the Airlaid capacity expansion and Specialty Papers’ environmental compliance projects.
Adjusted free cash flow for the first quarter of 2016 was a use of $8.1 million compared with a use of $18.4 million in the same quarter of 2015.  (Refer to the calculation of these measures provided in this release.) 

Composite Fibers’ shipping volumes are expected to be approximately 10 percent higher in the second quarter than the first quarter of 2016.  Selling prices and raw material and energy prices are expected to be in-line with the first quarter. 
Advanced Airlaid Materials’ shipping volumes, selling prices and average raw material prices in the second quarter of 2016 are expected to be in-line with the first quarter.
For Specialty Papers, the Company expects shipping volumes in the second quarter of 2016 to decline by approximately 5 percent compared with the first quarter.  Overall selling prices are expected to increase slightly compared with the first quarter of 2016 as the recently announced price increases begin to be realized.  Input costs are expected to be in-line with the first quarter.  The Company also plans to complete the annual maintenance outages at its U.S. facilities in the second quarter of 2016.  The outages are expected to adversely impact operating profit by approximately $25 million to $27 million, pre-tax, compared with $33.4 million in the second quarter of 2015.
Corporate costs in the second quarter of 2016 are expected to be approximately $2 million higher than the first quarter of 2016.
Conference Call
As previously announced, the Company will hold a conference call at 11:00 a.m. (Eastern) today to discuss its first-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 1st Quarter 2016 Earnings Release Conference Call
Tuesday, May 3, 2016, 11:00 a.m. (ET)
 US dial (888) 335-5539 
 International dial (973) 582-2857
Conference ID:
Rebroadcast Dates: 
May 3, 2016 through May 17, 2016 
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”, “plans”, and similar expressions to identify forward-looking statements.  Any such statements are based on the Company’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 the cost to construct the new facility, changes in tax legislation, governmental laws, regulations and policies, initiatives of regulatory authorities, technological changes and innovations, market growth rates, and availability and costs of a qualified workforce.  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
Income Statement
Business Unit Financials
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 workforce efficiency 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 workforce efficiency 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.

Cash Flow and Net Debt


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