|Glatfelter Reports Improved Third Quarter 2013 Earnings
Oct. 29, 2013 - Glatfelter (GLT) today reported third-quarter 2013 net income of $34.1 million, or $0.77 per diluted share, and adjusted earnings of $24.4 million, or $0.55 per diluted share. These results compare with third-quarter 2012 net income of $20.1 million or $0.46 per diluted share and adjusted earnings in the prior year quarter of $19.4 million or $0.44 per diluted share.
Consolidated net sales for the third quarter of 2013 totaled $456.6 million, a quarterly record and a 12.9 percent increase compared with $404.4 million in the third quarter of 2012 reflecting organic growth on a constant currency basis of 1.5 percent and acquisition growth of 9.9 percent.
“We continue to generate healthy growth in our key markets of tea and single-serve coffee, nonwoven wall covering and feminine hygiene,” said Dante C. Parrini, chairman and chief executive officer.
“Our Composite Fibers business delivered a very strong quarter with operating profit increasing 84 percent driven by the Dresden acquisition and organic operating profit growth of 17 percent. Our Advanced Airlaid Materials business grew revenue by 14 percent while operating profit declined slightly compared to last year due to two fires at its facilities during the quarter that disrupted operations. Adjusting to exclude the impact of the unplanned outages, Advanced Airlaid Materials business improved operating profit by 23 percent. Our Specialty Papers business continued to experience difficult market conditions that led to a 16 percent decline in operating profit. However, we expect recent announcements of industry capacity closures to improve the market environment as we move into 2014.”
Mr. Parrini continued, “As we approach the end of 2013, I am encouraged by the performance of our two growth businesses and believe we are well positioned to finish this year strong and with momentum heading into 2014. During the year, we made significant investments to expand our ability to serve attractive global markets where we have leadership positions that I believe will continue to drive improved earnings and healthy free cash flows.”
On a year-over-year basis, Specialty Papers’ net sales decreased $6.9 million, or 3.0 percent, primarily due to a $3.6 million impact of lower average selling prices, slightly lower shipping volumes and mix changes in the comparison to the third quarter of 2012.
Operating income declined $3.3 million in the year-over-year comparison primarily due to lower average selling prices.
Composite Fibers’ results include the financial results of Dresden prospectively from the April 30, 2013 acquisition date.
Net sales for this business increased $50.6 million, or 45.7 percent, primarily due to the inclusion of Dresden. On an organic and constant currency basis, Composite Fibers’ net sales increased $6.5 million or 5.9 percent, primarily due to stronger shipments of single-serve coffee and technical specialties products.
Composite Fibers’ third-quarter 2013 operating income increased by $8.6 million including $6.8 million from the Dresden acquisition, improved product mix, and lower depreciation. Dresden’s results were adversely affected by approximately $2.2 million due to an annual maintenance outage completed in August 2013 during which we successfully increased capacity by 10 percent.
Foreign currency translation favorably impacted operating income by $0.9 million compared with the prior-year quarter.
Advanced Airlaid Materials
On a year-over-year basis, Advanced Airlaid Materials’ net sales increased $8.6 million, or 14.1 percent, primarily due to an 8.8 percent increase in shipping volumes and a $2.2 million benefit from foreign currency translation.
The Company’s facilities in Gatineau, Quebec, Canada and Falkenhagen, Germany incurred downtime as a result of fires at each mill in August and September, respectively. The fires resulted in a limited loss of shipments during the quarter as customer orders were fulfilled by utilizing other available capacity. The fires adversely affected operating results for the third quarter of 2013 by $1.7 million, net of insurance.
Third quarter 2013 operating income decreased $0.6 million, or 14.0 percent, compared with the year-ago quarter due to the impact of the fires.
For Specialty Papers, the Company expects shipments to be slightly lower in the fourth quarter of 2013 compared to the third quarter reflecting normal seasonality. Overall selling prices are expected to increase slightly and input costs are expected to be in line with the third quarter.
Composite Fibers’ shipments are anticipated to be approximately 5 percent lower in the fourth quarter of 2013 compared to the third quarter due to seasonality and weakness in metallized products. Selling prices are expected to be generally in line with the third quarter levels and input costs are expected to increase slightly.
Shipping volumes in the Advanced Airlaid Materials business unit in the fourth quarter of 2013 are expected to be down approximately 5 percent reflecting normal seasonality, and selling prices and input costs are expected to generally be in line with the third quarter.
Headquartered in York, Pennsylvania, 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. Glatfelter's sales approximate $1.6 billion annually. For further information, visit: www.glatfelter.com.