On an adjusted basis, earnings from continuing operations for the first quarter of 2019 were $7.3 million, or $0.16 per share compared with $3.9 million, or $0.09 per share, for the same period a year ago, said the company in a press release.
Composite Fibers’ net sales decreased $12.9 million, or 9.1%, primarily due to a 13.2% decline in shipping volumes partially offset by higher average selling prices totaling $0.9 million. Food and beverage shipping volumes were up 4.5% but were more than offset by declines in wallcover and metallized products, which were lower by 27% and 22%, respectively. Currency translation was unfavourable by $8.2 million.
Advanced Airlaid Materials’ net sales increased $30.8 million primarily due to the Steinfurt acquisition and a 13.4 per cent organic increase in shipping volumes reflecting strong growth in wipes, hygiene and table top products. Higher average selling prices contributed $1.8 million and currency translation was unfavourable by $3.1 million.
“We reported solid results in the first quarter of 2019 delivering on growth targets for our Advanced Airlaid Materials business and making significant progress with the corporate cost reduction initiatives,” said Dante C Parrini, chairman and chief executive officer of Glatfelter. “Airlaid Materials’ shipments and operating income grew nearly 40 per cent compared with the first quarter a year ago, reflecting strong organic growth enabled by the Fort Smith, Arkansas capacity expansion in addition to the Steinfurt, Germany acquisition. In Composite Fibers, shipments of food and beverage products improved, driven by single-serve coffee; however, our results were negatively impacted by weak demand for our wallcover and metallised products as well as continued disruptions in the availability of a key fibre due to a fire at the supplier’s facility.”
“We remain on track to deliver the previously announced $14 million to $16 million of corporate cost reductions by the end of 2020. Additionally, the recently completed debt refinancing is expected to reduce annual interest expense by $6 million in 2019 and $8 million per year going forward, giving us the flexibility and liquidity needed to fuel organic and strategic growth initiatives. And, after many years of litigation, we are pleased the court has approved the consent decree we entered into to resolve our Fox River liability,” added Parrini.
“As we look ahead, in Airlaid Materials, we are confident in our growth prospects and believe we will deliver performance at the higher end of our legacy growth rate estimate of 8 per cent to 10 per cent, and the Steinfurt acquisition is on track to deliver the previously communicated $7 million to $9 million of operating profit in 2019. For Composite Fibers, we are encouraged by new business development activities and moderating pulp prices; however, we are monitoring the market dynamics and managing the risks in our wallcover segment and, as a result, we expect overall volumes for this business to be flat in 2019 versus 2018. We remain confident in the strategic direction of the new Glatfelter and are optimistic about our ability to enhance shareholder value as a more stable, higher-margin, growth-oriented engineered materials company,” Parrini concluded.
On October 31, 2018, the company completed the previously announced sale of its Specialty Papers business unit on a cash-free and debt-free basis to Pixelle Specialty Solutions LLC, an affiliate of Lindsay Goldberg for $360 million. (PC)
Fibre2Fashion News Desk – India