Net income and earnings per share for the first quarter 2001 were $15.4 million and $.36, respectively, an increase of 44% over net income and earnings per share in the first quarter 2000 of $10.6 million and $.25, respectively. The first quarter 2000 results included a one-time, after-tax restructuring charge of $2.1 million, or $.05 per share. Revenue in the quarter fell 1% to $185.6 million from $187.7 million in the quarter a year ago.

"I am pleased with our performance and the financial results we have achieved as we begin this year, particularly given the nation’s economic slowdown and the challenging conditions facing the broader paper industry overall," said George H. Glatfelter II, Chairman and Chief Executive Officer. "Our selling prices held up reasonably well although demand was somewhat weaker and shipments were below what we planned.

"Our efforts over the past year to transform P. H. Glatfelter Company have served us well," Mr. Glatfelter added. "We are in the early stages of implementing a business model that we believe is unique within the paper industry. This model reflects the application of leading edge business processes coupled with effective cost control and strong knowledge of the markets we serve. By providing value-added products and services to specialized niche markets, we are able to differentiate our Company from others by maintaining higher profit margins that are less susceptible to the downturns and upswings of shifting economic cycles.

"Our continuing cost containment initiatives, including the implementation of our DRIVE process improvement program, are working well and benefiting the Company. During the first quarter of 2001, cost savings from these efforts, as well as lower fiber prices, helped to offset higher energy costs."

Mr. Glatfelter said the Company continues to be cautious in its outlook and is managing its business with an expectation that industry conditions will continue to be challenging for the remainder of the year. The Company remains acutely focused on executing its business transformation initiatives. In the face of the weaker economy, Mr. Glatfelter stated the Company is looking for additional ways to contain costs and identify more areas for business and process improvement. The DRIVE program is on target to achieve sustainable, annual pre-tax cost savings of $53 million, and the Company has already implemented projects that will result in $30 million in such on-going savings. All DRIVE initiatives will be fully implemented by late 2002.

Looking ahead, the Company indicated that the scheduled annual maintenance shutdown at its Spring Grove mill would occur in the second quarter of 2001. This shutdown occurred during the third quarter of 2000. The shutdown will have an estimated negative effect on second quarter 2001 earnings of $.07 to $.09 per share compared to the second quarter 2000 results. Third quarter 2001 results will be positively impacted by a like amount compared to the third quarter 2000 results.

Any statements set forth in this press release with regard to the Company’s expectations as to industry conditions, its process improvements and cost reductions, its projected financial results or cash flow 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 that it believes to be reasonable, there can be no assurance that actual results will not differ materially from the Company’s expectations. Factors that could cause or contribute to actual results differing materially from such forward-looking statements are discussed in the Company’s Securities and Exchange Commission filings.

2001 The P.H. Glatfelter Company