Glatfelter Reports Fourth Quarter and Full-Year Results
Feb. 11, 2011 - Glatfelter today reported its financial results for the quarter and year ended December 31, 2010, including adjusted earnings of $0.31 per diluted share in the fourth quarter of 2010, compared to $0.33 per diluted share a year ago. Adjusted earnings for the 2010 fourth quarter were benefited by $0.09 per share from a favorable tax rate while the 2009 fourth quarter was aided by $0.13 per share from one-time items recognized in the Specialty Papers business unit.
“We are pleased to report another solid performance from our Composite Fibers and Specialty Papers business units in the fourth quarter of 2010, which caps a year of meaningful growth and operational advancement,” said Dante C. Parrini, president and chief executive officer.
“Our fourth-quarter results were led by the Composite Fibers business, which effectively leveraged its leading market positions into a 13 percent year-over-year increase in shipments and continued to realize operating efficiencies from its ongoing continuous improvement initiatives resulting in a 14 percent improvement in operating profit during the quarter. During 2010, Composite Fibers grew revenue by 7 percent and significantly expanded its margins resulting in a 50 percent increase in operating profit compared to 2009. Similarly, our Specialty Papers business finished the year with higher year-over-year shipments, again outperforming the broader uncoated free-sheet market, and generating increased operating profit for the sixth consecutive year.
"We made progress in a number of areas during the fourth quarter in our Advanced Airlaid business, but our results were impacted by low market demand which pushed shipments 10 percent lower than the third quarter. We are seeing better demand in the first quarter and we are aggressively implementing continuous improvement initiatives to improve operating efficiencies similar to those we have successfully instituted elsewhere in our company. In addition, we recently announced price increases that are expected to be more fully realized as we move through 2011,” said Mr. Parrini.
“During 2010 we grew adjusted earnings by 38 percent. This growth, combined with our disciplined fiscal approach, allowed us to generate another strong year of free cash flow with $31 million in the fourth quarter and $132 million for the year,” added Mr. Parrini. “As we enter 2011, our balance sheet is very strong and we are optimistic about opportunities for sustained growth, particularly in the growing tea, coffee, feminine hygiene and other consumer product related segments.”
Consolidated net sales for the 2010 fourth quarter totaled $376.2 million, a 24.9 percent increase compared with $301.1 million for the fourth quarter of 2009, reflecting the top-line contributions of the new Advanced Airlaid Materials business unit, share gains in core markets and stronger market conditions for the Company’s Composite Fibers and Specialty Papers products. Net sales grew 8.8 percent excluding the impact of acquisitions and foreign currency changes.
On a GAAP basis, the Company reported net income of $15.3 million or $0.33 per diluted share, for the fourth quarter of 2010, compared with net income of $46.0 million or $1.00 per diluted share in the same quarter a year ago which was favorably impacted by alternative fuel mixture credits. Adjusted earnings were $14.6 million, or $0.31 per diluted share, which excludes items of an unusual and non-recurring nature as presented below, compared with $15.3 million, or $0.33 per diluted share, in the 2009 fourth quarter. Adjusted earnings is a non-GAAP measure that excludes from the Company’s GAAP-based results certain non-core business items.
For Specialty Papers, the Company expects the first quarter of 2011 to benefit from approximately five percent higher shipping volumes and no machine downtime compared to the fourth quarter of 2010, reflecting normal seasonal patterns. Selling prices are expected to remain substantially unchanged while input costs are anticipated to be slightly higher.
For Composite Fibers, the Company anticipates shipping volumes in the first quarter of 2011 to be in-line with the fourth quarter, while selling prices and input costs are anticipated to be slightly higher. In addition, the Company expects this business’ results in the 2011 first quarter to benefit from the elimination of seasonal downtime and from ongoing benefits associated with its continuous improvement initiatives.
Shipping volumes for the Advanced Airlaid Materials business unit in the first quarter of 2011 are expected to be approximately 10 percent higher than the fourth quarter of 2010. Selling prices are expected to increase slightly and input costs are expected to be generally in line with fourth-quarter 2010 levels.
Headquartered in York, PA, Glatfelter is a global manufacturer of specialty papers and fiber-based engineered materials. U.S. operations include facilities in Spring Grove, Pennsylvania and Chillicothe and Fremont, Ohio. International operations include facilities in Canada, Germany, France, the United Kingdom and the Philippines, a representative office in China and a sales and distribution office in Russia.