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 Companys
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 Ecustas 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 Companys 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 Companys 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 Companys expectations. Factors that could cause or contribute to actual results
differing materially from such forward-looking statements are discussed in the
Companys Securities and Exchange Commission filings.
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