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YORK, Pa, USA, Feb 7, 2013 - Glatfelter (NYSE: GLT) today reported 2012 full year adjusted earnings per diluted share of $1.25 (GAAP $1.36) compared with $1.01 per diluted share in 2011 (GAAP $0.93). For the 2012 fourth quarter Glatfelter reported adjusted earnings of $11.2 million, or $0.26 per diluted share, compared with $14.2 million, or $0.32 per diluted share, in the 2011 fourth quarter. On a GAAP basis, fourth quarter 2012 net income totaled $7.0 million, or $0.16 per diluted share, compared with $9.7 million, or $0.22 per diluted share, in the fourth quarter of 2011. The fourth quarter 2012 results were adversely impacted by costs related to strategic initiatives and a trial in December for the Fox River matter, a higher tax rate, and the impact of weaker economic conditions in Europe, each in nearly equal proportions.

Consolidated net sales in the fourth quarter of 2012 totaled $391.4 million compared with $391.9 million in the fourth quarter of 2011, however unfavorable foreign currency translation of $3.8 million adversely impacted the comparison. On a constant currency basis, net sales were slightly higher.

“While 2012 was another successful year for Glatfelter and our shareholders, fourth quarter earnings were weaker than we expected due to higher professional services costs and taxes, as well as sluggish European markets. In particular, the Composite Fibers business unit was impacted by the persistently soft economic environment in Europe and customer inventory reductions,” said Dante C. Parrini, chairman and chief executive officer. “On a more positive note, we are very pleased with both the continued progress of our Advanced Airlaid Materials business, which grew quarterly operating profit by 30 percent, and by another solid quarter from Specialty Papers, where shipments increased nearly 7 percent and again outperformed the broader uncoated free sheet market.”

Parrini continued, “During 2012, we saw substantial profit increases of 17 percent for Specialty Papers and 34 percent for Advanced Airlaid Materials, which, when combined with the benefits from our debt refinancing and share repurchase programs, drove a 24 percent increase in adjusted earnings per share. We also generated substantial free cash flow of $77 million. As we look out into 2013, we believe that customer inventory reduction programs have largely run their course, which should have a positive impact on our Composite Fibers business. Although there remains continuing economic uncertainty and potential volatility, we believe we are well positioned to again deliver improved earnings and healthy free cash flow.”

Balance Sheet and Other Information

Capital expenditures totaled $58.8 million in 2012, including $16.5 million for the Composite Fibers capacity expansion project. For 2013, capital expenditures are estimated to be $90 million to $100 million, including approximately $33.5 million of the $50 million investment to expand Composite Fibers’ capacity scheduled to be completed in the second quarter of 2013.

Cash and cash equivalents totaled $97.7 million as of December 31, 2012, and net debt was $152.3 million, compared with $188.7 million at the end of 2011. (Refer to the calculation of this measure provided in this release.)

Free cash flow was $77.3 million during 2012 compared with $58.0 million 2011. (Free cash flow is defined as cash provided by operations less capital expenditures and adjusted to exclude Composite Fibers’ capacity expansion project and the cash impact from alternative fuel mixture and cellulosic biofuel credits. Refer to the calculation of these measures provided in this release.)

In May 2012, the Company announced a two-year, $25 million share buyback program authorized by its Board of Directors. Through December 31, 2012, 291,120 shares of common stock were repurchased under this program for approximately $4.5 million.


For Specialty Papers, the Company expects shipping volumes and selling prices in the first quarter of 2013 to be in-line with the fourth quarter of 2012. Higher input costs and the absence of the fourth quarter favorable LIFO inventory valuation adjustment are expected to be offset by lower maintenance costs in the first quarter of 2013.

Composite Fibers’ shipping volumes are anticipated to be approximately 5 percent higher in the first quarter of 2013 compared to the fourth quarter of 2012 while selling prices and input costs are expected to be generally in line with the fourth quarter of 2012. The Company will be taking a paper machine down in late February to complete the previously announced upgrade. The machine is expected to be started up in May 2013. The downtime associated with the upgrade is expected to negatively impact operating profit by approximately $1 million to $2 million ($0.02 to $0.03 per diluted share) in each of the first and second quarters of 2013.

Shipping volumes for the Advanced Airlaid Materials business unit in the first quarter of 2013 are expected to be approximately 5 percent higher than the fourth quarter of 2012. Average selling prices are expected to be slightly lower due to pricing provisions in certain customer contracts. Input costs are expected to be generally in line with the fourth quarter of 2012.

Corporate costs in the first quarter of 2013 are expected to be approximately $1 million lower than the fourth quarter of 2012. The Company expects pension expense in 2013 to increase to approximately $15.7 million compared with $11.6 million in 2012 primarily due to the impact of lower discount rates.

On January 2, 2013, the President signed legislation that retroactively extended the federal research and development tax credit for two years, from January 1, 2012 through December 31, 2013. As a result, the Company expects that its income tax provision for the first quarter of fiscal 2013 will include a tax benefit of $1.2 million which will reduce its effective tax rate to approximately 25 percent.

Conference Call

As previously announced, the Company will hold a conference call at 11:00 a.m. (Eastern) today to discuss its fourth-quarter results. The Company’s earnings release and an accompanying financial supplement, which includes significant financial information to be discussed on the conference call, will be available on Glatfelter’s Investor Relations website at the address indicated below. Information related to the conference call is as follows:

What: Glatfelter’s 4th Quarter 2012 Earnings Release Conference Call

When: Thursday, February 7, 2013, 11:00 a.m. Eastern Time

Number: US dial 888.335.5539

International dial 973.582.2857

Conference ID: 87304324


Rebroadcast Dates: February 7, 2013 12:00 through February 21, 2013 11:59 p.m.

Rebroadcast Number: Within US dial 855.859.2056

International dial 404.537.3406

Conference ID: 87304324

Interested persons who wish to hear the live webcast should go to the website prior to the starting time to register, download and install any necessary audio software.

About Glatfelter

Headquartered in York, PA, Glatfelter is a global manufacturer of specialty papers and fiber-based engineered materials, offering over a century of experience, technical expertise and world-class service. U.S. operations include facilities in Spring Grove, PA and Chillicothe and Fremont, OH. International operations include facilities in Canada, Germany, France, the United Kingdom and the Philippines, a representative office in China and a sales and distribution office in Russia. Glatfelter’s sales approximate $1.6 billion annually and its common stock is traded on the New York Stock Exchange under the ticker symbol GLT. Additional information may be found at


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