-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, InnHeYxQ3qZxQotSJVpRw/fOssWjhVHGQ2nJuGfz7+NTWiLEL2a0WryFTqdWcMP3 ULSa04u/gfVRtwFY/NROiA== 0001036050-99-001321.txt : 19990625 0001036050-99-001321.hdr.sgml : 19990625 ACCESSION NUMBER: 0001036050-99-001321 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990624 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GLATFELTER P H CO CENTRAL INDEX KEY: 0000041719 STANDARD INDUSTRIAL CLASSIFICATION: PAPER MILLS [2621] IRS NUMBER: 230628360 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: SEC FILE NUMBER: 001-03560 FILM NUMBER: 99651647 BUSINESS ADDRESS: STREET 1: 228 S MAIN ST CITY: SPRING GROVE STATE: PA ZIP: 17362 BUSINESS PHONE: 7172254711 MAIL ADDRESS: STREET 2: 228 S MAIN ST CITY: SPRING GROVE STATE: PA ZIP: 17362 10-Q/A 1 P. H. GLATFELTER COMPANY FORM 10-Q/A AMENDMENT NO. 2 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-Q/A Amendment No. 2 (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1999 -------------- [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________________to______________________ Commission File No. 1-3560 ------ P. H. GLATFELTER COMPANY - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) PENNSYLVANIA 23-0628360 - -------------------------------------------------------------------------------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 228 SOUTH MAIN STREET, SPRING GROVE, PENNSYLVANIA 17362 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (717) 225-4711 -------------- (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No[ ]. Shares of Common Stock outstanding at May 12, 1999 were 42,157,784. P. H. GLATFELTER COMPANY INDEX Note: This quarterly report is being refiled to incorporate signature page. PART I - FINANCIAL INFORMATION ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS PART II - OTHER INFORMATION ITEM 6.(a) EXHIBIT 27 - FINANCIAL DATA SCHEDULE PART I - FINANCIAL INFORMATION ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This discussion and analysis contains forward-looking statements. See "Cautionary Statement" set forth in Item 5. Effective January 2, 1998, the Registrant acquired all of the outstanding common stock of S&H Papier-Holding GmbH ("S&H"), the specialty paper division of the Schoeller and Hoesch Group, for DM 268,900,000 (approximately $150,000,000) in cash. The purchase price was finalized in the fourth quarter of 1998. The Registrant accounted for the S&H acquisition under the purchase method of accounting, and S&H was consolidated with the Registrant beginning in January 1998. RESULTS OF OPERATIONS A summary of the period-to-period changes in the principal items included in the Condensed Consolidated Statements of Income is shown below. Comparison of Three Months Ended March 31, 1999 and March 31, 1998 ---------------------- Increase (Decrease) (dollars in thousands) Net sales (27,370) (14.2)% Other income - net (65) (1.8)% Cost of products sold (14,124) (9.3)% Selling, general and administrative expenses 363 2.8% Interest on debt - net (1,633) (25.4)% Income tax provision (4,854) (50.4)% Net income (7,187) (46.9)% NET SALES Worldwide net sales decreased $27,370,000, or 14.2%, for the first quarter of 1999 compared to the first quarter of 1998. This decrease was a result of a decreased average net selling price per ton as well as relatively weak demand. The Registrant classifies its sales into two product groups: specialized printing papers and engineered papers. Total net sales of specialized printing papers decreased by 18.6% in the first quarter of 1999 compared to the first quarter of 1998 as the impact of an 8.1% decrease in net sales volume was compounded by an 11.5% decrease in average net selling prices. The decreased sales volume of specialized printing papers was largely due to weaker demand for many of the Registrant's products in the first quarter of 1999 compared to the first quarter of 1998. The Registrant lost approximately 3,000 tons, or approximately 2%, of its volume due to lack of orders early in the first quarter of 1999 compared to a loss of 1,000 tons, or approximately 1%, in the first quarter of 1998. In addition, the Registrant completed the installation of inclined wire technology on an existing paper machine. This installation in Gernsbach, Germany allowed the Registrant to transfer some of its production capacity previously dedicated to specialized printing papers to more profitable engineered papers. Although sales volume of the Registrant's specialized printing papers decreased in the first quarter of 1999 compared to the first quarter of 1998, demand for such products considerably improved throughout the first quarter of 1999. To date in the second quarter of 1999, the Registrant has not taken significant market-related downtime related to its specialized printing papers operations. The Registrant expects that demand for its specialized printing papers will remain relatively strong for the remainder of 1999 and does not anticipate the need for market-related downtime at any of its specialized printing papers production facilities in the near future.
12 In February 1999, the Registrant announced a price increase for its envelope papers. This price increase was fully implemented by the middle of April. Based upon the assumption of continued strong demand for the remainder of 1999, the Registrant believes that modest price increases may be implemented on certain of its specialized printing papers later this year. Net sales of engineered papers for the three months ended March 31, 1999 were $9,395,000 lower than in the corresponding 1998 period. This decrease was primarily the result of pricing and demand erosion for the Registrant's tobacco papers. Net sales of the Registrant's engineered papers, excluding tobacco papers, increased by a modest 0.3% in the first quarter of 1999 versus the first quarter of 1998. A decrease in net average selling prices of 9.3% was more than offset by an increase in net sales volume of 10.6%. Volume increased due to a variety of factors, including the transfer of production capacity from certain grades of less profitable specialized printing papers to engineered papers. In addition, the Registrant is selling certain new grades of engineered papers that had not yet developed in the first quarter of 1998. Despite these increases in volume, average selling prices were 9.3% lower in the first quarter of 1999 versus the first quarter of 1998. The average net selling price decrease was largely due to a mix of products sold with lower average selling prices within this product group as pricing remained relatively steady. The Registrant continues to strive to improve its overall product mix by concentrating its efforts on maximizing sales of more profitable engineered papers. As noted above, installation of inclined wire technology will allow it to produce more profitable engineered papers, including tea bag, porous plug wrap and overlay papers. In addition, its Spring Grove, Pennsylvania facility continues to pursue aggressively the development and marketing of new engineered paper products produced with its gravure coater and expects that this new piece of equipment will have an increasing positive impact on its future results of operations. Net sales of tobacco papers declined in the first quarter of 1999 compared to the first quarter of 1998 by 21.9% as net sales volume decreased by 14.7% and average net selling prices declined by 8.4%. Volume and pricing for tobacco papers were lower in the first quarter of 1999 in the U.S. and international markets as compared to the first quarter of 1998. The Registrant has finalized the negotiations of supplier contracts with most of its customers which resulted in pricing concessions. The Registrant does not expect its tobacco papers business to show significant recovery in the foreseeable future due to worldwide production overcapacity. The Registrant expects a modest increase in demand for its products overseas, as the global economy recovers, especially in Asia and Russia. Such increase will largely be offset by a decrease in U.S. tobacco paper demand. The Registrant has taken aggressive steps to remove costs from its tobacco papers operations. OTHER INCOME - NET The Registrant's other income - net decreased $65,000, or 1.8%, for the first quarter of 1999 compared to the corresponding period of 1998. Interest on investments and other - net was $1,158,000 lower for the first three months of 1999 versus the first three months of 1998. During the first quarter of 1998, the Registrant recognized interest income on $150,000,000 held in a defeasance trust which was ultimately used to repay in full principal and interest on its 5-7/8% Notes on March 1, 1998. No such trust interest income was recognized in the first quarter of 1999. Largely offsetting this decrease was a gain resulting from the sale of a tract of timberland located in Delaware. From time to time the Registrant divests of certain tracts of its timberlands such as this as it is offered attractive prices. The Registrant does not actively solicit the sale of its timberlands so as to maintain its own sources of raw materials. No significant land sales occurred in the first quarter of 1998. 13 COST OF PRODUCTS SOLD The Registrant's cost of products sold decreased by $14,124,000, or 9.3%, in the first three months of 1999 versus the first three months of 1998. This was primarily a result of lower production volumes due to the weaker demand for the Registrant's products in the first quarter of 1999 versus first quarter of 1998. The cost of products sold per ton was down 3.2% over this same period. The Registrant has seen prices for its principal raw material, market pulp, decrease over the past four quarters thereby reducing its cost of products sold per ton in the first quarter of 1999 versus the same quarter of 1998. In addition, as outlined below under the heading, "Early Retirement Program and Other Cost Control Measures," the Registrant has taken initiatives to remove costs from its business which have also had a positive impact in reducing its cost of products sold per ton. Although the cost of products sold per ton decreased, the average net selling price per ton also decreased, resulting in a decrease in gross margin per ton of 27.9% in the first quarter of 1999 compared to the first quarter of 1998. The Registrant expects that over the last three quarters of 1999, market pulp prices will increase modestly. Since pricing for certain of the Registrant's products typically follows that of market pulp, the Registrant also expects corresponding improved pricing for such products. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES The Registrant's selling, general and administrative expenses for the first quarter of 1999 were $363,000, or 2.8% higher than for the comparable period of 1998 largely due to increased legal and professional expenses. INTEREST ON DEBT - NET The Registrant's interest on debt - net decreased by $1,633,000, or 25.4%, for the three months ended March 31, 1999 versus the comparable period of 1998. On March 1, 1998, $150,000,000 principal amount of the Registrant's 5-7/8% Notes matured and were retired. As a result, the average borrowings in the first quarter of 1999 were lower than the first quarter of 1998, resulting in the lower interest on debt - net. INCOME TAX PROVISION The Registrant's income tax provision decreased by $4,854,000, or 50.4%, for the first quarter of 1999 versus the first quarter of 1998. The decrease was almost entirely due to the reduction of net income in 1999 versus 1998. FINANCIAL CONDITION LIQUIDITY Cash and cash equivalents decreased by $2,675,000 during the first three months of 1999. Net cash provided by operating activities of $10,670,000 was more than offset by cash used in investing activities of $4,963,000 and financing activities of $8,002,000. Significant cash activities during the first three months of 1999 included the payment of $7,365,000 of dividends and $5,914,000 for plant, equipment and timberlands. To finance the acquisition of S&H, on December 22, 1997, the Registrant entered into a $200,000,000 multi-currency revolving credit facility ("Revolving Credit Facility") with a syndicate of major lending institutions. The Revolving Credit Facility enables the Registrant to borrow up to the equivalent of $200,000,000 in certain currencies in the form of revolving credit loans with a final maturity date of December 22, 2002 and with interest periods determined, at the Registrant's option, on a daily or one to six-month basis. Interest on the revolving credit loans is at variable rates based, at the Registrant's option, on the Eurocurrency Rate or the Base Rate (lender's prime rate), plus applicable margins. Margins are based on the higher of the Registrant's debt ratings as 14 published by Standard & Poor's and Moody's. As of March 31, 1999, the Registrant's outstanding borrowings were DM 282,200,000 (approximately $155,100,000) under the Revolving Credit Facility. To offset some of the variable rate characteristics of the total borrowing under the Revolving Credit Facility, effective in January 1998, the Registrant entered into two interest rate swap agreements, each having total notional principal amounts of DM 52,600,000 (approximately $28,868,000 as of March 31, 1999). Under the agreements, the Registrant pays fixed rates of 4.18% and 4.45% for periods of two and three years, respectively, and receives a floating rate of the six-month DM London Interbank Offered Rate ("LIBOR"). The composite six-month DM LIBOR applicable for the first half of 1999 is approximately 3.3%. The Registrant recognized net interest expense of $329,000 in the first quarter of 1999 related to these agreements. In January 1999, the Registrant entered into two additional interest rate swap agreements, each having a total notional principal amount of DM 50,000,000 (approximately $27,500,000 as of March 31, 1999). Under one agreement, which was effective April 6, 1999, the Registrant receives a floating rate of the DM LIBOR plus twenty basis points, which is 3.2% for the first three months of the agreement, and pays a fixed rate of 3.4075% for the term of the agreement. Under the second agreement, which is effective July 6, 1999, the Registrant will receive a floating rate, which is also the DM LIBOR plus twenty basis points, and will pay a fixed rate of 3.425% for the term of the agreement. These agreements convert a portion of the Registrant's borrowings under its Revolving Credit Facility from a floating rate to a fixed rate basis. The Registrant has other various interest rate swap agreements outstanding, which did not have a material impact on the Registrant's consolidated financial statements. Although the Registrant can pay to terminate any of its swap agreements at any time, the Registrant intends to hold all of its swap agreements until their maturities. On July 22, 1997, the Registrant issued $150,000,000 principal amount of 6-7/8% Notes due July 15, 2007. The 6-7/8% Notes are redeemable, in whole or in part, at the option of the Registrant at any time at a calculated redemption price plus accrued and unpaid interest to the date of redemption. The 6-7/8% Notes are unsecured and unsubordinated indebtedness of the Registrant. Interest on the Notes is payable semiannually on January 15 and July 15. The Registrant expects to meet all its near and long-term cash needs from a combination of internally generated funds, cash, cash equivalents, marketable securities, the Revolving Credit Facility or other bank lines of credit and, if prudent, other long-term debt. INTEREST RATE RISK The Registrant uses its Revolving Credit Facility and 6-7/8% Notes to finance a significant portion of its operations. These on-balance sheet financial instruments, to the extent they provide for variable rates of interest, expose the Registrant to interest rate risk resulting from changes in the DM LIBOR. The Registrant uses off-balance sheet interest rate swap agreements to partially hedge interest rate exposure associated with on-balance sheet financial instruments. All of the Registrant's derivative financial instrument transactions are entered into for non-trading purposes. To the extent that the Registrant's financial instruments expose the Registrant to interest rate risk and market risk, they are presented in the table below. The table presents principal cash flows and related interest rates by year of maturity for the Registrant's Revolving Credit Facility and Notes as of March 31, 1999. For interest rate swap agreements, the table presents notional amounts and the related reference interest rates by year of maturity. Fair values included herein have been determined based upon (1) rates currently available to the Registrant for debt with similar terms and remaining maturities, and (2) estimates obtained from dealers to settle interest rate swap agreements. 15
Year of Maturity ---------------------------------------------------------------- (dollar amounts in thousands) Total Due at Fair Value at 1999 2000 2001 2002 2003 Thereafter Maturity 3/31/99 -------- -------- -------- -------- ------- ---------- --------- ---------- Debt: Fixed rate principal $ 1,983 $ 1,660 $ 1,660 $ 1,481 $ 1,302 $151,555 $ 159,641 $158,828 Average interest rate 6.85% 6.85% 6.85% 6.86% 6.87% 6.87% Variable rate principal $ -- $ -- $ -- $155,055 $ -- $ -- $ 155,055 $155,055 Average interest rate 3.71% 3.53% 3.30% 3.30% -- -- Interest rate swap agreements: Variable to fixed swaps principal amount $ 3,529 $ 33,324 $ 28,902 $ 54,945 $ -- $ -- $ 120,700 $ (990) Average pay rate 4.39% 4.09% 3.84% 3.42% -- -- Average receive rate 3.43% 3.35% 3.25% 3.25% -- --
CAPITAL RESOURCES The Registrant invested $5,914,000 in capital expenditures for the first three months of 1999 compared to $9,818,000 for the first three months of 1998. The Registrant estimates a total of approximately $34,000,000 will be spent on capital projects during 1999, approximately 15% less than 1998. ENVIRONMENTAL MATTERS The Registrant is subject to loss contingencies resulting from regulation by various federal, state, local and foreign governmental authorities with respect to the environmental impact of air and water emissions and noise from its mills, as well as its disposal of solid waste generated by its operations. To comply with environmental laws and regulations, the Registrant has incurred substantial capital and operating expenditures over the past several years. During 1998, 1997 and 1996, the Registrant incurred approximately $17,700,000, $14,800,000 and $15,200,000, respectively, in operating costs related to complying with environmental laws and regulations. The Registrant anticipates that environmental regulation of the Registrant's operations will continue to become more burdensome and that capital and operating expenditures will continue, and perhaps increase, in the future. In addition, the Registrant may incur obligations to remove or mitigate any adverse effects on the environment resulting from its operations, including the restoration of natural resources, and liability for personal injury and damage to property, including natural resources. In particular, the Registrant continues to negotiate with the State of Wisconsin and the United States regarding natural resources damages and response costs related to the discharge of polychlorinated biphenyls ("PCBs") and other hazardous substances in the lower Fox River, on which the Registrant's Neenah mill is located. The cost of such damages and response costs is presently unknown but could be substantial and perhaps exceed the Registrant's available resources as discussed in Note 7 to the Registrant's condensed consolidated financial statements. Management's current assessment, after consultation with legal counsel, is that such expenditures are not likely to have a material adverse effect on the Registrant's consolidated financial condition or liquidity, but could have a material adverse effect on the Registrant's consolidated results of operations in a given year; however, there can be no assurance that the Registrant's reserves will be adequate or that a material adverse effect on the Registrant's consolidated financial condition or liquidity will not occur at some future time. ENVIRONMENTAL ACHIEVEMENTS On April 20, 1999, the Registrant announced that its Spring Grove mill was the first pulp and paper mill in the United States to achieve ISO 14001 certification for its environmental management system and its commitment to environmental excellence. ISO 14001 requires that an organization have an environmental policy that includes commitments to prevention of pollution, compliance with environmental laws and regulations and continual improvements in its environmental management system. As a part of maintaining its certification, the mill's environmental management system will be audited by a third party on an ongoing, periodic basis. The Registrant's Gernsbach, Germany facility is also ISO 14001 16 certified. The Registrant plans to achieve ISO 14001 certification at all of its other mills by 2001. Also on April 20, 1999, the Registrant announced its New Century Project. The New Century Project is a commitment by the Registrant to participate in the EPA's Advanced Technology Incentive Program under the Cluster Rules at its Spring Grove mill. This project will include a capital investment of approximately $32,000,000 over the next six years. As a result of this capital investment, the Registrant expects to eliminate the use of elemental chlorine in its bleaching process, reduce odor emissions and improve water quality. The New Century Project demonstrates the Registrant's commitment to minimizing its impact on natural resources. EARLY RETIREMENT PROGRAM AND OTHER COST CONTROL MEASURES During the second quarter of 1998, the Registrant announced a Voluntary Early Retirement Enhancement Program ("VEREP") to certain of its salaried employees. The Registrant recognized one-time charges for this VEREP in the third and fourth quarters of 1998. During the first quarter of 1999, the Registrant estimates that it realized $1,700,000 of pre-tax cost savings as a result of the VEREP. When fully implemented by the third quarter of 1999, the Registrant expects to realize a favorable impact on its cost structure of approximately $2,100,000 per quarter. Early in 1999, the Registrant announced its intention to eliminate approximately 45 hourly positions by the end of 1999 at its Spring Grove mill. When these job eliminations are completed, the Registrant expects to realize annual pre-tax cost savings of approximately $2,500,000. The Registrant currently employs approximately 750 hourly employees at this location. The Registrant's procurement function has undertaken initiatives to reduce costs for certain purchased products and services. In addition, the Registrant is reevaluating its target inventory levels for maintenance supplies and raw materials, renegotiating certain freight contracts and critically reviewing its needs for routine outside contracting work. The Registrant expects to achieve significant cost savings as a result of these initiatives. YEAR 2000 READINESS DISCLOSURE The Registrant continues to make progress and, with the exception of some isolated systems at its Neenah mill, has achieved Year 2000 compliance for its mission critical systems. The Registrant expects to achieve Year 2000 compliance on its non-critical systems by the end of the second quarter of 1999. The Registrant has information technology systems and non-information technology systems. The Registrant's information technology systems include both internally and externally developed business systems. Nearly all of the Registrant's business systems have been developed internally. Non-information technology systems include computer process control equipment as well as embedded technology, such as micro-controllers, which are critical to the operation of production equipment and facilities. The Registrant's three-phase approach to achieve its internal Year 2000 compliance includes an inventory phase, an assessment phase and a modifications and testing phase. The Registrant has completed the inventory phase for all of its information technology and non-information technology systems. The Registrant has also completed both the assessment phase and modifications and testing phase for substantially all of its systems with the exception of a small number of non-critical systems which should be completed by the end of the second quarter of 1999. In addition, the assessment, modification and testing of some isolated critical systems at the Neenah mill will not occur until the third quarter of 1999. This delay is due to the desire to coincide any machine downtime required to meet Year 2000 compliance with planned maintenance downtime to minimize disruption to the operation of the mill. The Registrant has used internal information technology personnel almost exclusively to inventory, assess, modify and test existing systems and has primarily incurred only normal wage, benefit and related costs for its normal complement of information technology personnel. The Registrant expensed 17 approximately $634,000 and $125,000 during 1998 and 1997, respectively, in such costs supporting its Year 2000 compliance efforts. The Registrant estimates it will incur $700,000 for these internal costs during 1999 to complete its Year 2000 efforts. The Registrant's use of its own information technology personnel to make its systems Year 2000 compliant has and will continue to delay some other strategic information systems development and implementation which would have otherwise benefited the Registrant in various ways and to various extents. The Registrant does not believe that it will be at a competitive disadvantage as a result of these delays. To date, the Registrant has made minor capital expenditures to replace certain systems or equipment which were not Year 2000 compliant. The Registrant incurred approximately $70,000 in capital related costs during the first quarter of 1999 to achieve Year 2000 compliance of its information and non-information technology systems. The Registrant estimates an additional $190,000 in capital costs will be incurred during the balance of 1999 related to Year 2000 compliance. The Registrant relies significantly on selected key vendors of raw materials, energy, telecommunications and other vital services. The Registrant also generates significant revenues from various key customers. The Registrant continues its efforts in addressing Year 2000 compliance by key third parties by making inquiries to all such third parties and assessing the responses received. Inquiries have been sent to all identified key third parties. To date, the Registrant has received the vast majority of responses and no significant issues have been discovered. The Registrant hopes to have received and assessed all remaining responses by the end of the second quarter of 1999. A contingency planning team, made up of key personnel from its corporate operations as well as its operating locations, is meeting regularly to assess current disaster recovery procedures as well as to assess and prioritize risks relating to Year 2000 noncompliance by its key vendors and customers. This team expects to have a complete plan in place by October 1999. Contingency planning for those critical systems which are subject to higher risk will be addressed prior to this date. Despite such contingency plans, it is reasonably possible that, in the worst case, some of the Registrant's key vendors or customers could experience operational interruptions as a result of non-compliance of their systems. As a result, the Registrant may be forced to interrupt the operation of one or more of its mills or be required to increase its costs or decrease its selling prices to remain operational. In such an event, the Registrant's business and results of operations could be materially adversely affected. SUBSEQUENT EVENT The January 2, 1998 acquisition of S&H included a 50% controlling ownership interest in Papeteries de Cascadec S.A. ("Cascadec"), a French company, along with the right to acquire the remaining 50% at a future time. The Registrant had expected to exercise this option in the first quarter of 1999 but did not receive final approval from the European cartel authorities until April 1, 1999. On April 9, 1999, the Registrant completed the exercise of its option and purchased the remaining 50% of Cascadec for FF 45,181,233 (approximately $7,400,000). As of March 31, 1999 and December 31, 1998, a minority interest of $9,842,000 and $10,032,000, respectively, associated with Cascadec is classified as "Other long-term liabilities" on the Registrant's Condensed Consolidated Balance Sheets. The excess of the minority interest balance over the amount paid for Cascadec will be recognized in earnings in future years. PART II - OTHER INFORMATION ITEM 6.(a) EXHIBIT 27 - FINANCIAL DATA SCHEDULE 18 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. P. H. GLATFELTER COMPANY Date: June 24, 1999 /s/ R.P. NEWCOMER ------------------------------------- R. P. Newcomer Executive Vice President and Chief Financial Officer 21 EX-27 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED MARCH 31 OF P. H. GLATFELTER CO. AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS DEC-31-1998 MAR-31-1999 48,232 0 81,446 1,594 112,679 242,999 1,277,923 668,651 973,083 120,599 312,713 544 0 0 344,254 973,083 165,846 169,374 138,163 151,672 0 62 4,790 12,912 4,772 8,140 0 0 0 8,140 0.19 0.19
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