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P. H. Glatfelter Company Completes Sale of its N. C. Tobacco Papers Business

York, PA, Thursday, August 9, 2001 – P. H. Glatfelter Company (NYSE: GLT) today announced the completion of the previously announced sale of its Ecusta Division to privately-held PURICO (IOM) Limited, an Isle of Man Company, and certain of its affiliates.

"This is an important milestone for the Company in transforming our business to realize our long-term strategic Vision," said George H. Glatfelter II, Chairman and Chief Executive Officer of P. H. Glatfelter Company. "With the sale of our tobacco papers business completed, we are now focused on pursuing opportunities in new areas of specialty papers and engineered products in order to contribute to revenue growth and increased returns for our shareholders," Mr. Glatfelter said.

The transaction involves the sale of the assets of P. H. Glatfelter Company’s Ecusta mill, which produces tobacco papers and lightweight printing papers, together with the stock of the Ecusta operating subsidiaries in Australia and Canada and certain Company receivables.

The Ecusta Division was sold for a reduced cash price of approximately $24 million, plus the assumption of certain liabilities related to the business. The cash price is $15 million lower than the amount announced on May 16, 2001 due to changes in certain segments of Ecusta’s business.

The Company recognized a pre-tax charge of $52.5 million, or $.79 per share, in the second quarter of 2001, primarily related to the impairment of the Ecusta Division assets. The Company believes that the consummation of this transaction will not have a significant impact on third quarter 2001 results. During the third quarter, a gain primarily related to the settlement of pension obligations will be approximately offset by the impact of the reduction of the cash price. Any post-closing adjustments to the purchase price required under the acquisition agreement will be recorded by year-end. The transaction will also be modestly dilutive to earnings exclusive of any one-time net charges.

Related to the transaction, P. H. Glatfelter Company said its Papierfabrik Schoeller & Hoesch GmbH & Co. subsidiary in Germany had entered into a three-year agreement to manufacture and supply tobacco papers to PURICO GmbH, also located in Germany. The Company indicated that Schoeller & Hoesch plans to transition its tobacco papers production to other products over the next three years. Schoeller & Hoesch also produces tea bag and other long fiber products, as well as overlay papers and metallized papers.

"The men and women of Ecusta are hardworking people dedicated to producing quality products for their customers. All of us at P. H. Glatfelter Company thank them for their commitment to our organization over the years and we wish them much success as part of their new team," said Mr. Glatfelter.

Headquartered in York, Pennsylvania, P. H. Glatfelter Company is a global manufacturer of specialty paper and engineered products. U.S. operations include mills in Spring Grove, PA and Neenah, WI. International operations include facilities in Germany, France and the Philippines. The Company’s common stock is traded on the New York Stock Exchange under the ticker symbol GLT.

Any statements set forth in this press release with regard to the Company’s goals for revenues and return on capital, 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