Financial Quarterly Reports
P. H. Glatfelter Company Announces First Quarter 2001 Earnings of $.36 per share York, Pennsylvania, Tuesday, April 17, 2001 P. H. Glatfelter Company (NYSE: GLT) today reported its financial results for the first quarter 2001.
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 nations 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 Companys 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 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.
York, PA, July 18, 2001: P. H. Glatfelter Company today reported its financial results for the second quarter 2001.
Second quarter net income and earnings per share for the three months ended June 30, 2001 were $11.1 million and $.26, respectively, before unusual items compared with net income and earnings per share in the year-ago quarter of $14.0 million and $.33, respectively. Second quarter 2001 results were negatively impacted by an estimated $.09 per share due to the scheduled annual maintenance shutdown in June at the Spring Grove, Pennsylvania mill. The annual shutdown occurred during the third quarter of 2000. Net sales in the quarter were $170.3 million compared with $184.4 million in the quarter a year ago.
"Our second quarter results were good considering the challenging business conditions that continue to impact some of our markets," said George H. Glatfelter II, Chairman and Chief Executive Officer. "We are pleased that the new business model we have been implementing throughout our organization is generating improved performance that is both real and sustainable. Today, despite difficult market conditions that continue to challenge our industry, we are experiencing greater predictability and are less impacted by shifting economic cycles than our more commodity-oriented competitors."
While declining pulp prices created pressure to decrease product pricing in certain markets, the Companys mill operations performed above budgeted levels, according to Mr. Glatfelter. Demand for its printing and converting business was weaker in the second quarter of 2001, however demand is expected to strengthen during the third quarter. Demand for engineered products remained consistent and the Company realized an increase in sales volume, particularly in products with higher average selling prices. Demand and pricing for the Companys long fiber and overlay papers remained stable.
Mr. Glatfelter indicated that the Company will continue to focus aggressively on its business transformation initiatives to achieve its Vision, adding that the Companys DRIVE process improvement program and IMPACT initiative are proceeding on target. The DRIVE program, which is expected to achieve sustainable annual pre-tax cost savings of $40 million by late 2002, has been a major factor in offsetting cost increases affecting the business.
The second quarter included a one-time, after-tax charge against earnings of $33.6 million, or $.79 per share, primarily related to the impairment of assets in connection with the previously announced sale of the Companys Ecusta Division in North Carolina. After unusual items, the Company reported a net loss and loss per share of $22.5 million and $.53, respectively, for the second quarter 2001.
The sale of the Ecusta Division will not be completed until the third quarter of 2001 and is subject to certain normal closing conditions. Adjustments to the purchase price, if any, will be recorded in the third quarter, along with any accounting credits or charges associated with consummating the transaction. The Company expects to recognize a net benefit to earnings, primarily related to the settlement of pension obligations upon completing the transaction in the third quarter of 2001. This net benefit is expected to reduce the loss recognized in the second quarter of 2001 by an estimated $.15 to $.20 per share.
For the first six months of 2001, net income and earnings per share before unusual items were $26.5 million and $.62, respectively, versus net income and earnings per share of $26.8 and $.63, respectively, for the like period in 2000. The six-month 2001 results were also negatively impacted by the estimated $.09 per share due to the scheduled annual maintenance shutdown at the Spring Grove mill. After unusual items, the Company reported a net loss and loss per share of $7.1 million and $.17, respectively, versus net income and earnings per share of $24.7 million and $.58, respectively, in the year-earlier period. Net sales for the first six months of 2001 were $355.9 million versus $372.1 million in 2000. The Companys return on capital employed for the first six months of 2001 before unusual items and the impact of the annual shutdown was approximately 13% compared to approximately 12% for the like period in 2000.
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, Neenah, WI, and Pisgah Forest, NC. International operations include facilities in Germany, France, Canada, Australia 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 expectations as to industry conditions, demand for or pricing of its products, its profit improvements and cost reductions, its projected financial results or cash flow, the impact of the Ecusta transaction 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.
2001 The P.H. Glatfelter Company