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Glatfelter's Composite Fibers makes good progress in Q1

03 May '12

5 min read

Glatfelter reported 2012 first quarter net income of $18.9 million, or $0.43 per diluted share, compared with adjusted earnings of $16.0 million, or $0.34 per diluted share, in the first quarter of 2011. Adjusted earnings for the first quarter of 2011 exclude gains from timberland sales and acquisition and integration costs. Consolidated net sales for the first quarter of 2012 were $397.4 million compared with $396.8 million for the first quarter of 2011.

“We are off to a strong start in 2012 with solid performance from all three of our businesses,” said Dante C. Parrini, chairman and chief executive officer. “Specialty Papers delivered a 7 percent increase in operating income led by improved operating performance, new business development, and continuous improvement initiatives.”

“Our Advanced Airlaid Materials business continues to demonstrate progress with operating income more than doubling on a year-over-year basis and Composite Fibers also made good progress despite decreased production rates this quarter from two machine upgrades. As expected, both of these businesses experienced softer conditions in certain consumer-driven European market segments. Furthermore, our 2011 share repurchase program and the debt refinancing activities undertaken late last year are contributing to year-over-year earnings-per-share growth.”

Mr. Parrini continued, “With leading positions in our key markets, I believe we are well positioned to continue generating success from our growth strategies as we move through 2012. While economic risks persist, overall I expect market conditions in the second quarter to be consistent with the first quarter. We will continue our emphasis on customer satisfaction and operational excellence to reduce earnings risk from potential economic challenges as we did in the first quarter.”

On a year-over-year basis, Specialty Papers' net sales increased $3.3 million due to a $3.7 million benefit from higher selling prices and an improved mix of products sold, partially offset by a 1.5 percent decline in shipping volumes. Carbonless volumes benefited from increased demand in advance of our previously announced price increase effective at the end of March 2012.

Specialty Papers' 2012 first quarter operating income was $1.5 million higher than the same period of 2011 reflecting the benefit from higher selling prices and $1.8 million from continuous improvement initiatives, production efficiencies, and the timing of maintenance. These factors offset a $1.5 million adverse impact of higher input costs and $1.1 million of lower energy and related sales. Results for the 2011 first quarter benefited by $2.8 million from an insurance recovery and the resolution of a tax audit.

Composite Fibers' net sales decreased $3.3 million, or 2.9 percent, primarily due to the translation of foreign currencies which unfavorably impacted the comparison by $3.4 million partially offset by a $1.1 million benefit from higher selling prices.

Composite Fibers' first-quarter 2012 operating income decreased by $1.5 million as the benefit from higher selling prices was more than offset by unfavorable operating costs including higher energy costs, general inflation, and a $0.7 million impact from the completion of machine upgrades at two facilities. In addition, the translation of foreign currencies was $0.5 million unfavorable.

On a year-over-year basis, Advanced Airlaid Materials' net sales increased 0.9 percent and totaled $61.6 million. The increase was primarily due to a 3.7 percent increase in volumes shipped which more than offset a $0.4 million adverse impact of lower selling prices.

First-quarter 2012 operating income increased $2.1 million compared with the year ago quarter led by a $1.5 million benefit from continuous improvement initiatives including supply chain efficiencies, waste reduction, improved throughput, and benefits from a new festooner. In addition, lower raw material and energy costs benefited results by $1.0 million.

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Glatfelter's Composite Fibers makes good progress in Q1

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