YORK, Pennsylvania – August 2, 2016 – Glatfelter (NYSE: GLT) today reported second-quarter 2016 net income of $2.0 million, or $0.04 per diluted share compared with $2.8 million, or $0.06 per diluted share in the second quarter of 2015.  Adjusted earnings for the second quarter of 2016 were $2.8 million, or $0.06 per diluted share compared with $1.8 million, or $0.04 per diluted share, for the same period a year ago.  Adjusted earnings is a non-GAAP measure for which a reconciliation is provided within this release.
Consolidated net sales totaled $406.4 million and $410.8 million in the second quarters of 2016 and 2015, respectively.  Currency translation adjustments favorably impacted the year-over-year comparison by $0.7 million.
“Glatfelter’s second-quarter performance was in line with our expectations and reflects higher shipments in all three of our business units,” said Dante C. Parrini, Chairman and Chief Executive Officer.  “Advanced Airlaid Materials’ operating profit more than doubled driven by our continued ability to improve efficiencies to meet growing demand in key market segments.  In Composite Fibers, shipments improved 3 percent, and 10 percent on a sequential quarter basis as we continued to see signs of stability in the wallcover markets.  Our Specialty Papers business unit effectively executed its annual maintenance outages and continued to outperform the broader uncoated freesheet market.”
Mr. Parrini continued, “Overall, Glatfelter delivered a solid first half of 2016 with adjusted earnings increasing 25 percent.  We remain focused on continuous improvement and achieving operational excellence to support our growth as a leading global engineered materials business.  I am pleased with the progress towards completing the significant investment we are making in a new airlaid facility to meet growing demand in key specialty wipes and hygiene markets.  The strength of our balance sheet and consistent cash flow profile provide the flexibility to make targeted investments to support the business and pursue our growth strategy.”

The following table sets forth a reconciliation of net income on a GAAP basis to adjusted earnings, a non-GAAP measure:
Net Income
Second-Quarter Business Unit Results
Composite Fibers Results
Composite Fibers’ net sales declined $4.0 million, or 2.9 percent, primarily due to $1.6 million from lower selling prices.  Shipping volumes were higher in the comparison primarily due to improved demand for wallcover.
Composite Fibers’ second-quarter 2016 operating income totaled $15.3 million, a decrease of $1.4 million compared to the year-ago period.  Operating results were adversely impacted by lower selling prices and a $1.0 million negative impact from currency exchange rates.  Improved shipping volumes and lower raw material and energy prices benefited operating results by $1.5 million.

Advanced Airlaid Results
Advanced Airlaid Materials’ net sales increased $3.3 million in the year-over-year comparison as shipping volumes increased 7.8 percent primarily due to higher shipments of hygiene products.  Lower selling prices impacted the comparison by $1.8 million.
Second-quarter 2016 operating income totaled $6.8 million, more than double the same quarter a year ago.  Operating income benefited by $2.3 million from lower raw material and energy costs partially offset by lower selling prices reflecting the impact of cost pass through arrangements. In addition, improved operational efficiency, largely due to lower downtime, and foreign currency translation favorably impacted the comparison by $2.2 million and $0.3 million, respectively.

Specialty Papers Results
Specialty Papers’ net sales decreased $3.7 million, or 1.7 percent, due to a $3.7 million impact from lower selling prices.
Specialty Papers’ operating loss narrowed by $4.2 million in the year-over-year comparison and totaled $5.8 million in the second quarter of 2016.  Operating results for both quarters reflect the cost of annual maintenance outages at the Company’s Chillicothe, OH and Spring Grove, PA facilities.  The outages adversely impacted second-quarter 2016 results by $26.3 million, which was $7.1 million less than the cost of the outages in 2015.  In addition, operating results were favorably impacted by $5.2 million of lower raw material and energy costs.  These favorable factors were partially offset by lower average selling prices, lower pulp production and an increase in incentive compensation and other costs.
Other Financial Information
Pension expense totaled $1.6 million in the second quarter of 2016 and 2015.  For 2016, full year pension expense is expected to be $5.5 million.  Because the Company’s qualified plan remains overfunded, a cash contribution is not expected for the foreseeable future.
The Company’s effective tax rate on adjusted earnings was 14.7 percent in the second quarter of 2016.  In the second quarter of 2015, the Company recorded an income tax benefit of $1.5 million on adjusted pre-tax earnings of $0.3 million, primarily reflecting the release of reserves related to the completion of tax audits.
2016 Year-to-date Results
The Company reported net income of $18.1 million, or $0.41 per diluted share, for the first six months of 2016 compared with $16.8 million, or $0.38 per diluted share, in the first six months of 2015.  Adjusted earnings totaled $19.1 million, or $0.43 per diluted share in 2016, compared with $15.2 million, or $0.35 per diluted share, in 2015.  The following table sets forth a reconciliation of results determined on a GAAP basis to adjusted earnings:
Adjusted Earnings

Balance Sheet and Other Information
Cash and cash equivalents totaled $58.5 million as of June 30, 2016, and net debt was $308.9 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 2016 and 2015 are summarized below:
Capital Expenditures
Capital expenditures are expected to total between $150 million and $170 million for 2016, including approximately $45 million to $50 million for Specialty Papers’ environmental compliance projects and approximately $40 million to $45 million for the Airlaid capacity expansion project.
Adjusted free cash flow for the first six months of 2016 was $7.6 million compared with a use of $12.7 million in the same period of 2015.  (Refer to the calculation of these measures provided in this release.) 

Composite Fibers’ shipping volumes in the third quarter are expected to be slightly higher than the second quarter.  Selling prices and raw material and energy prices are expected to be in-line with the second quarter. 
Advanced Airlaid Materials’ shipping volumes are expected to increase slightly in the third quarter.  Customer selling prices and raw material and energy prices are expected to be in-line with the second quarter.
For Specialty Papers, the Company expects shipping volumes in the third quarter to increase by approximately five percent compared with the second quarter.  Selling prices are expected to be slightly higher while increases in raw material and energy prices are expected to slightly outpace selling price increases.  The Company also expects maintenance spending to decrease by approximately $23 million reflecting normal patterns of maintenance expense.
Corporate costs are expected to be approximately $1 million to $2 million lower in the third quarter than in the second quarter.

Conference Call
As previously announced, the Company will hold a conference call at 11:00 a.m. (Eastern) today to discuss its second-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 2nd Quarter 2016 Earnings Release Conference Call
Tuesday, August 2, 2016, 11:00 a.m. (ET)
 US dial (888) 335-5539 
 International dial (973) 582-2857
Conference ID:
Rebroadcast Dates: 
August 2, 2016 through August 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 airlaid 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 Financials
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, costs related to Specialty Paper’s environmental compliance and Advanced Airlaid Materials capacity expansion projects, 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, the environmental compliance and capacity expansion projects are unique items that do not represent direct ongoing 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

Learn More
Investor Relations