P.H. Glatfelter Company Announces Completion of Comprehensive Strategic Planning Effort.
York, PA March 16, 2000: P. H. Glatfelter Company (NYSE: GLT), a global manufacturer of engineered papers and specialized printing papers, announced today that it has recently completed an extensive review of its business to validate and refine the Company's vision and strategy. This process represents the most comprehensive strategic planning effort in the Company's history.
"The vision of P. H. Glatfelter Company is to become the global supplier of choice in Specialty Papers and Engineered Products. Our success will be measured by achieving revenue of $1 billion by 2004, through both internal and external growth, with a sustainable return on capital employed of 17%," stated George H. Glatfelter II, President and Chief Executive Officer.
"We are excited about our vision because we believe it will guide our employees to make decisions that will ultimately help us reach our goals. Our vision is focused on improving shareholder value. It is aggressive yet attainable," said Mr.Glatfelter.
The Company said that to make the vision a reality, it will change the way it is currently doing business. To that end, it has launched five comprehensive action plans.
The "DRIVE" Project is focused on identifying and realizing $50 million in sustainable annual cost savings for the Company. The cost savings generated by this project will help the Company attain the return on capital employed objective of its vision. Specifically, the Company will focus on improving the efficiency and effectiveness of everything it does at each of its locations.
A component of the savings to be generated from the DRIVE Project will come from a corporate-wide Procurement and Transportation initiative. The Company will reduce the total cost of purchased materials and improve vendor responsiveness and the transportation network of the goods it buys. The development of a corporate-wide procurement strategy is an integral part of the plan.
The Company said that attainment of its vision will require effective management of human resources. The Company will build operational excellence and provide its people with clarity of purpose. With its Organization Design and Development initiative, the Company will review its organizational structure, beginning with a plan to identify the skills and responsibilities for the senior levels of its management organization. From there, it will redesign the remainder of the organization.
The Customer Responsiveness initiative will improve the Company's customer processes. It will include a review of best practices from each division and a plan to apply such practices, if appropriate, across the Company. A primary focus of this initiative will be to develop an "e-business" model to better position its business for future success.
The Company will develop a long-range corporate-wide Information Systems Strategy as it recognizes that effective information systems are critical in enabling it to succeed in achieving its vision and in implementing its strategy. This process will provide a template for aligning information technology with the business objectives of the Company.
The Company said that in the future, its plans include the development of a facility utilization strategy, a corporate product development strategy, detailed business plans by business unit and a framework for designing and implementing faster and more accessible financial systems that are consistent across the organization.
"Complacency is not a formula for business success. These action plans reflect an unprecedented level of change within our Company. We have prioritized the implementation of our action plans based upon our current people resources and by reviewing which plans will yield the greatest immediate benefit. We anticipate the completion of these plans will generate significant improvement in our operating results, provide enhancements to our product lines and provide our workforce with the skills necessary to identify and incorporate future business growth opportunities. We are excited about the challenges ahead of us and we are confident in our abilities to be successful," Mr. Glatfelter said.
Mr. Glatfelter also commented that the Company expects that its operating results for the quarter ending March 31, 2000 will fall short of current First Call estimates due primarily to escalating fiber and energy costs, which the Company has not yet been able to pass along in increased prices for its products, and start-up difficulties following a scheduled maintenance shut down at one of its facilities.
At its regularly scheduled Board of Directors meeting on March 15 the Board declared a quarterly dividend on its outstanding common stock as follows:
Any statements set forth in this press release with regard to the Companys goals for revenues, cost reductions and return on capital, expectations as to industry conditions and the Companys operating results, demand for or pricing of its products, development of new products and other aspects of its business may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although the Company makes such statements based on assumptions which it believes to be reasonable, there can be no assurance that actual results will not differ materially from the Companys expectations. Factors that could cause or contribute to actual results differing materially from such forward-looking statements include, but are not limited to, (i) variations in demand for or pricing of its products, (ii) the Companys ability to identify, finance and consummate future alliances or acquisitions, (iii) the Companys ability to develop new, high value-added engineered products; and (iv) the Companys ability to identify and implement its planned cost reductions. Reference is made to the Companys Securities and Exchange Commission filings for a discussion of additional factors.
2001 The P.H. Glatfelter Company