0001564590-17-008061.txt : 20170502 0001564590-17-008061.hdr.sgml : 20170502 20170502122900 ACCESSION NUMBER: 0001564590-17-008061 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20170502 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20170502 DATE AS OF CHANGE: 20170502 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: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-03560 FILM NUMBER: 17803894 BUSINESS ADDRESS: STREET 1: 96 S GEORGE ST STREET 2: STE 500 CITY: YORK STATE: PA ZIP: 17401 BUSINESS PHONE: 7172252709 MAIL ADDRESS: STREET 1: 96 S GEORGE ST STREET 2: STE 500 CITY: YORK STATE: PA ZIP: 17401 8-K 1 glt-8k_20170502.htm FORM 8-K - 2017 Q1 glt-8k_20170502.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of Earliest Event Reported):

 

May 2, 2017

 

P. H. Glatfelter Company

 

(Exact name of registrant as specified in its charter)

 

Pennsylvania

001-03560

23-0628360

 

 

 

 

 

 

 

 

 

(State or other jurisdiction

(Commission

(I.R.S. Employer

of incorporation)

File Number)

Identification No.)

  

 

 

96 S. George Street, Suite 520, York, Pennsylvania

 

17401

 

 

 

 

 

 

 

(Address of principal executive offices)

 

(Zip Code)

 

 

 

Registrant’s telephone number, including area code:

 

717 225 4711

Not Applicable

 

Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company  

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

 


Item 2.02 Results of Operations and Financial Condition.

On May 2, 2017, the Company reported its results of operations for the three months ended March 31, 2017. A copy of the press release issued by the Company is furnished herewith as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits.

d) Exhibits.

99.1 Press release dated May 2, 2017, to report results of operations for the three months ended March 31, 2017.

The information furnished in this Current Report on Form 8-K and Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.


SIGNATURES

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 hereunto duly authorized.

 

 

 

P. H. Glatfelter Company

  

 

 

 

 

May 2, 2017

 

By:

 

/s/ David C. Elder

 

 

 

 

 

 

 

 

 

Name: David C. Elder

 

 

 

 

Title: Vice President, Finance


Exhibit Index

 

Exhibit No.

 

Description

 

 

 

99.1

 

Press release issued May 2, 2017, to report results of operations for the three months ended March 31, 2017


 

EX-99.1 2 glt-ex991_6.htm EX-99.1 glt-ex991_6.htm

 

 

Exhibit 99.1

 

 

 

 

 

NEWS RELEASE

 

Corporate Headquarters

 

96 South George Street

 

York, Pennsylvania 17401 U.S.A.

 

www.glatfelter.com

 

 

For Immediate Release

Contacts:

 

 

Investors:

Media:

 

John P. Jacunski

Eileen L. Beck

 

(717) 225-2794

(717) 225-2793

 

 

GLATFELTER REPORTS FIRST QUARTER 2017 EARNINGS

 

YORK, Pennsylvania – May 2, 2017 – Glatfelter (NYSE: GLT) today reported first quarter of 2017 net income of $11.6 million, or $0.26 per diluted share compared with $16.2 million, or $0.37 per diluted share in the first quarter of 2016.  Adjusted earnings for the first quarter of 2017 were $17.2 million, or $0.39 per diluted share compared with $16.3 million, or $0.37 per diluted share, for the same period a year ago.  Adjusted earnings is a non-GAAP measure for which a reconciliation is provided within this release.

 

Consolidated net sales totaled $390.7 million and $402.2 million for the three months ended March 31, 2017 and 2016, respectively. Lower selling prices and foreign currency translation unfavorably impacted the quarter-over-quarter comparison by $6.8 million each.

 

“Glatfelter’s overall results for the first quarter were in line with expectations,” said Dante C. Parrini, Chairman and Chief Executive Officer.  “Our engineered materials businesses reported a strong opening to 2017.  Composite Fibers returned to growth after a challenging 2016, as demand improved in all market segments, including tea, single-serve coffee and wall covering products.  This improved demand, when combined with our cost optimization program, drove a 29% increase in Composite Fibers’ operating income over the prior-year period.  Advanced Airlaid Materials continued to show healthy margin expansion as volumes improved over the previous year and further production efficiencies from continuous improvement initiatives resulted in an 8% increase in operating income.  The Specialty Papers business unit’s performance continues to be challenged by highly competitive market conditions, despite improved productivity and cost reduction actions.”

 

Mr. Parrini continued, “We are making significant progress in our initiatives to manage costs and drive continuous improvement throughout our organization.  Specifically, our Composite Fibers business is on track to deliver $10 million in savings this year through the cost optimization program we began in the fourth quarter of 2016.  We also remain committed to investing in our growth platforms.  The build-out of our new facility in Fort Smith, Arkansas, is proceeding as expected and is positioned to support the growth opportunities for our Advanced Airlaid Materials business, with start-up expected late this year.”

 

 

 

 

- more -


Glatfelter Reports First Quarter 2017 Earnings

page 2

 

The following table sets forth a reconciliation of net income on a GAAP basis to adjusted earnings, a non-GAAP measure:

 

 

Three months ended March 31

 

 

 

2017

 

 

2016

 

In thousands, except per share

 

Amount

 

 

Diluted EPS

 

 

Amount

 

 

Diluted EPS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

11,603

 

 

$

0.26

 

 

$

16,168

 

 

$

0.37

 

Adjustments (pre-tax)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Specialty Papers' environmental compliance

 

 

2,264

 

 

 

 

 

 

 

37

 

 

 

 

 

Airlaid capacity expansion costs

 

 

1,958

 

 

 

 

 

 

 

56

 

 

 

 

 

Cost optimization actions

 

 

2,013

 

 

 

 

 

 

 

88

 

 

 

 

 

Total adjustments (pre-tax)

 

 

6,235

 

 

 

 

 

 

 

181

 

 

 

 

 

Income taxes (1)

 

 

(682

)

 

 

 

 

 

 

(56

)

 

 

 

 

Total after-tax adjustments

 

 

5,553

 

 

 

0.12

 

 

 

125

 

 

 

-

 

Adjusted earnings

 

$

17,156

 

 

$

0.39

 

 

$

16,293

 

 

$

0.37

 

 

 

(1)

Tax effect on adjustments calculated based on the incremental effective tax rate of the jurisdiction in which each adjustment originated and the related impact of valuation allowances.

The sum of individual per share amounts set forth above may not agree to adjusted earnings per share due to rounding.

A description of each of the adjustments presented above is included later in this release.

 

 

First Quarter Business Unit Results

 

Composite Fibers

 

 

Three months ended March 31

 

Dollars in thousands

 

2017

 

 

2016

 

 

Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tons shipped

 

 

38,787

 

 

 

36,912

 

 

 

1,875

 

 

 

5.1

%

Net sales

 

$

125,104

 

 

$

123,542

 

 

$

1,562

 

 

 

1.3

%

Operating income

 

 

14,438

 

 

 

11,187

 

 

 

3,251

 

 

 

29.1

%

Operating margin

 

 

11.5

%

 

 

9.1

%

 

 

 

 

 

 

 

 

 

Composite Fibers’ net sales increased $1.6 million, or 1.3%, primarily due to a 5.1% increase in shipping volumes partially offset by a $5.7 million unfavorable impact from currency translation and $1.9 million from lower selling prices.  

 

Composite Fibers’ first quarter of 2017 operating income totaled $14.4 million, an increase of $3.3 million compared to the year-ago period primarily due to higher volumes and a $4.1 million benefit from improved operating efficiencies including the impact of the Company’s cost optimization program.  These favorable factors were partially offset by higher raw material and energy costs and foreign currency translation.

 

 

Advanced Airlaid Materials

 

 

Three months ended March 31

 

Dollars in thousands

 

2017

 

 

2016

 

 

Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tons shipped

 

 

24,826

 

 

 

24,543

 

 

 

283

 

 

 

1.2

%

Net sales

 

$

59,838

 

 

$

60,790

 

 

$

(952

)

 

 

(1.6

)%

Operating income

 

 

7,092

 

 

 

6,552

 

 

 

540

 

 

 

8.2

%

Operating margin

 

 

11.9

%

 

 

10.8

%

 

 

 

 

 

 

 

 

 

Advanced Airlaid Materials’ net sales decreased $1.0 million in the year-over-year comparison primarily due to a $1.1 million unfavorable impact from currency translation and $0.4 million of lower selling prices reflecting the impact of cost pass-through arrangements.  Shipping volumes increased 1.2%, primarily due to continued growth of wipes and personal hygiene products.  

 

 


Glatfelter Reports First Quarter 2017 Earnings

page 3

 

Operating income for the first quarter of 2017 totaled $7.1 million, or 8.2% higher than the comparable period a year ago.  Results benefited by $1.2 million from higher volumes and improved productivity required to meet growing demand.  Foreign currency translation reduced operating income by $0.3 million.

 

 

Specialty Papers

 

 

 

Three months ended March 31

 

Dollars in thousands

 

2017

 

 

2016

 

 

Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tons shipped

 

 

197,223

 

 

 

205,783

 

 

 

(8,560

)

 

 

(4.2

)%

Net sales

 

$

205,772

 

 

$

217,887

 

 

$

(12,115

)

 

 

(5.6

)%

Energy and related sales, net

 

 

1,129

 

 

 

666

 

 

 

463

 

 

 

69.5

%

Operating income

 

 

13,249

 

 

 

14,975

 

 

 

(1,726

)

 

 

(11.5

)%

Operating margin

 

 

6.4

%

 

 

6.9

%

 

 

 

 

 

 

 

 

 

Specialty Papers’ net sales decreased $12.1 million, or 5.6%, due to a 4.2% decrease in shipping volumes and a $4.5 million impact from lower selling prices.

 

Specialty Papers’ operating income totaled $13.2 million in the first quarter of 2017, a decrease of $1.7 million compared with the same period a year ago.  A $3.6 million benefit from improved operations and cost control initiatives was more than offset by the adverse impact of lower selling prices and $1.2 million of higher raw material and energy costs.

 

 

Other Financial Information

 

In the first quarter of 2017, the Company recorded a provision for income taxes of $6.0 million on pre-tax income of $17.6 million.  On adjusted earnings, the provision for income taxes totaled $6.7 million on adjusted pre-tax earnings of $23.9 million.  The effective tax rate on adjusted earnings was 28.1% in the first quarter of 2017 compared to 23.9% in the same quarter a year ago.  The higher effective tax rate reflects the adverse impact of an increase in unrecognized tax benefits and valuation allowances for deferred tax assets.

 

 

Balance Sheet and Other Information

 

Cash and cash equivalents totaled $57.2 million as of March 31, 2017, and net debt was $352.7 million compared with $317.2 million at the end of 2016.  (Refer to the calculation of this measure provided in the tables at the end of this release.)  

 

Capital expenditures during 2017 and 2016 are summarized below:

 

Capital Expenditures

 

Three months ended

March 31

 

In thousands

 

2017

 

 

2016

 

 

 

 

 

 

 

 

 

 

Specialty Papers' environmental compliance projects

 

$

7,694

 

 

$

14,393

 

Airlaid capacity expansion

 

 

9,550

 

 

 

13,686

 

Other capital expenditures

 

 

19,539

 

 

 

15,215

 

Total capital expenditures

 

$

36,783

 

 

$

43,294

 

 

Specialty Papers’ environmental compliance projects were completed during the first quarter of 2017.  

 

Adjusted free cash flow for the first three months of 2017, was $(12.0) million compared with $(8.1) million in 2016.  (Refer to the calculation of these measures provided in this release.)  

 

 

 


Glatfelter Reports First Quarter 2017 Earnings

page 4

 

Outlook

 

Composite Fibers’ shipping volumes in the second quarter of 2017 are expected to be approximately 5% higher than the first quarter.  Selling prices are expected to be in-line with the first quarter and raw material and energy prices are expected to increase slightly.

 

Advanced Airlaid Materials’ shipping volumes are expected to be slightly higher than the 2017 first quarter.  Selling prices and raw material and energy prices are expected to be in-line with the first quarter.

 

Specialty Papers’ shipping volumes in the second quarter are expected to be slightly below the first quarter of 2017. Selling prices are expected to decline slightly.  We anticipate raw material and energy prices to increase slightly.  The Company also plans to complete the annual maintenance outages at its U.S. facilities in the second quarter of 2017, which are expected to adversely impact operating income by approximately $22.0 million to $24.0 million compared with $26.3 million in the second quarter of 2016.  In addition, to manage inventory levels, the Company expects to incur approximately $3 million of costs due to market related downtime in excess of the first quarter of 2017.

 

Consolidated capital expenditures are expected to total between $125 million and $140 million for 2017.

 

The effective tax rate on adjusted earnings is expected to be approximately 28% in 2017 compared with 16.5% for 2016.

 

 

Conference Call

 

As previously announced, the Company will hold a conference call at 11:00 a.m. (Eastern) today to discuss its first 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 1th Quarter 2017 Earnings Release Conference Call

 

 

When:

Tuesday, May 2, 2017, 11:00 a.m. (ET)

 

 

Number:

US dial 888.335.5539

 

 

 

International dial 973.582.2857

 

 

Conference ID:

7452452

 

 

Webcast:

http://www.glatfelter.com/about_us/investor_relations/default.aspx

 

 

Rebroadcast Dates:

May 2, 2017, 2:00 p.m. through May 16, 2017, 11:59 p.m.

 

 

Rebroadcast Number:

Within US dial 855.859.2056

 

 

 

International dial 404.537.3406

 

 

Conference ID:

7452542

 

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.

 

Caution Concerning Forward-Looking Statements  

 

Any statements included in this press release which pertain to future financial and business matters are “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995.  The Company uses words such as “anticipates”, “believes”, “expects”, “future”, “intends”, “plans”, and similar expressions to identify forward-looking statements.  Any such statements are based on the Company’s current expectations and are subject to numerous risks, uncertainties and other unpredictable or uncontrollable factors that could cause future results to differ materially from those expressed in the forward-looking statements including, but not limited to: changes in industry, business, market, political and economic conditions in the U.S. and other countries in which the Company does business, demand for or pricing of its products, changes in the cost to construct the new airlaid facility and the availability and costs of a qualified workforce, changes in tax legislation, governmental laws, regulations and policies, initiatives of regulatory authorities, technological changes and innovations, and market growth rates.  In light of these risks, uncertainties and other factors, the forward-looking matters discussed in this press release may not occur and readers are cautioned not to place undue reliance on these forward-looking statements.  The forward-looking statements

 


Glatfelter Reports First Quarter 2017 Earnings

page 5

 

speak only as of the date of this press release and Glatfelter undertakes no obligation, and does not intend, to update these forward-looking statements to reflect events or circumstances occurring after the date of this press release.  More information about these factors is contained in Glatfelter’s filings with the U.S. Securities and Exchange Commission, which are available at www.glatfelter.com.

 

 

About Glatfelter

 

Glatfelter is a global supplier of specialty papers and engineered materials, offering innovation, world-class service and over a century and a half of technical expertise. Headquartered in York, PA, the company employs over 4,300 people and serves customers in over 100 countries. U.S. operations include facilities in Pennsylvania and Ohio. International operations include facilities in Canada, Germany, France, the United Kingdom and the Philippines, and sales and distribution offices in China and 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 www.glatfelter.com.

 

 

 

P. H. Glatfelter Company and subsidiaries

Consolidated Statements of Income

(unaudited)

 

 

Three months ended

March 31

 

In thousands, except per share

 

2017

 

 

2016

 

Net sales

 

$

390,713

 

 

$

402,218

 

Energy and related sales, net

 

 

1,129

 

 

 

666

 

Total revenues

 

 

391,842

 

 

 

402,884

 

Costs of products sold

 

 

334,913

 

 

 

345,041

 

Gross profit

 

 

56,929

 

 

 

57,843

 

Selling, general and administrative expenses

 

 

35,086

 

 

 

31,858

 

Losses on dispositions of plant, equipment

 

 

 

 

 

 

 

 

   and timberlands, net

 

 

32

 

 

 

24

 

Operating income

 

 

21,811

 

 

 

25,961

 

Non-operating income (expense)

 

 

 

 

 

 

 

 

Interest expense

 

 

(4,008

)

 

 

(4,116

)

Interest income

 

 

113

 

 

 

91

 

Other, net

 

 

(279

)

 

 

(700

)

Total other expense

 

 

(4,174

)

 

 

(4,725

)

Income before income taxes

 

 

17,637

 

 

 

21,236

 

Income tax provision

 

 

6,034

 

 

 

5,068

 

Net income

 

$

11,603

 

 

$

16,168

 

 

 

 

 

 

 

 

 

 

Earnings per share

 

 

 

 

 

 

 

 

Basic

 

$

0.27

 

 

$

0.37

 

Diluted

 

 

0.26

 

 

 

0.37

 

Cash dividends declared

 

 

 

 

 

 

 

 

per common share

 

$

0.13

 

 

$

0.125

 

Weighted average shares outstanding

 

 

 

 

 

 

 

 

Basic

 

 

43,583

 

 

 

43,521

 

Diluted

 

 

44,493

 

 

 

43,871

 

 

 


Glatfelter Reports First Quarter 2017 Earnings

page 6

 

Business Unit Financial Information

(unaudited)

 

Three months ended March 31

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dollars in millions

 

Composite Fibers

 

 

Advanced Airlaid Materials

 

 

Specialty Papers

 

 

Other and Unallocated

 

 

Total

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

Net sales

 

$

125.1

 

 

$

123.5

 

 

$

59.8

 

 

$

60.8

 

 

$

205.8

 

 

$

217.9

 

 

$

 

 

$

 

 

$

390.7

 

 

$

402.2

 

Energy and related sales, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1.1

 

 

 

0.7

 

 

 

 

 

 

 

 

 

1.1

 

 

 

0.7

 

Total revenue

 

 

125.1

 

 

 

123.5

 

 

 

59.8

 

 

 

60.8

 

 

 

206.9

 

 

 

218.6

 

 

 

 

 

 

 

 

 

391.8

 

 

 

402.9

 

Costs of products sold

 

 

99.6

 

 

 

101.2

 

 

 

50.5

 

 

 

52.2

 

 

 

180.1

 

 

 

191.1

 

 

 

4.7

 

 

 

0.5

 

 

 

334.9

 

 

 

345.0

 

Gross profit (loss)

 

 

25.5

 

 

 

22.3

 

 

 

9.3

 

 

 

8.6

 

 

 

26.8

 

 

 

27.5

 

 

 

(4.7

)

 

 

(0.5

)

 

 

56.9

 

 

 

57.8

 

SG&A

 

 

11.1

 

 

 

11.1

 

 

 

2.2

 

 

 

2.0

 

 

 

13.6

 

 

 

12.5

 

 

 

8.2

 

 

 

6.3

 

 

 

35.1

 

 

 

31.9

 

Losses on dispositions of plant, equipment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   and timberlands, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating income (loss)

 

 

14.4

 

 

 

11.2

 

 

 

7.1

 

 

 

6.6

 

 

 

13.2

 

 

 

15.0

 

 

 

(12.9

)

 

 

(6.8

)

 

 

21.8

 

 

 

26.0

 

Non operating expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4.2

)

 

 

(4.7

)

 

 

(4.2

)

 

 

(4.7

)

Income (loss) before income taxes

 

$

14.4

 

 

$

11.2

 

 

$

7.1

 

 

$

6.6

 

 

$

13.2

 

 

$

15.0

 

 

$

(17.1

)

 

$

(11.5

)

 

$

17.6

 

 

$

21.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplementary Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net tons sold (thousands)

 

 

38.8

 

 

 

36.9

 

 

 

24.8

 

 

 

24.5

 

 

 

197.2

 

 

 

205.8

 

 

 

 

 

 

 

 

 

260.8

 

 

 

267.2

 

Depreciation, depletion and amortization

 

$

6.8

 

 

$

7.1

 

 

$

2.3

 

 

$

2.3

 

 

$

7.2

 

 

$

6.7

 

 

$

1.0

 

 

$

0.5

 

 

$

17.3

 

 

$

16.6

 

Capital expenditures

 

 

4.7

 

 

 

6.3

 

 

 

10.6

 

 

 

14.7

 

 

 

18.3

 

 

 

22.0

 

 

 

3.2

 

 

 

0.3

 

 

 

36.8

 

 

 

43.3

 

 

 

 

The sum of individual amounts set forth above may not agree to the consolidated financial statements included herein due to rounding.

 

 

Selected Financial Information

(unaudited)

 

 

Three months ended March 31

 

In thousands

 

2017

 

 

2016

 

 

 

 

 

 

 

 

 

 

Cash Flow Data

 

 

 

 

 

 

 

 

Cash provided (used) by:

 

 

 

 

 

 

 

 

Operating activities

 

$

7,561

 

 

$

11,441

 

Investing activities

 

 

(36,783

)

 

 

(43,561

)

Financing activities

 

 

30,479

 

 

 

(4,098

)

 

 

 

 

 

 

 

 

 

Depreciation, depletion and amortization

 

 

17,282

 

 

 

16,646

 

Capital expenditures

 

 

36,783

 

 

 

43,294

 

 

 

March 31

 

 

December 31

 

 

 

2017

 

 

2016

 

Balance Sheet Data

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

57,227

 

 

$

55,444

 

Total assets

 

 

1,574,766

 

 

 

1,521,259

 

Total debt

 

 

409,886

 

 

 

372,608

 

Shareholders’ equity

 

 

668,786

 

 

 

653,826

 

 

 

 

 


Glatfelter Reports First Quarter 2017 Earnings

page 7

 

Reconciliation of GAAP Financial Information to Non-GAAP Financial Information

 

This press release includes a measure of earnings before the effects of certain specifically identified items, which is referred to as adjusted earnings, a non-GAAP measure.  The Company uses non-GAAP adjusted earnings to supplement the understanding of its consolidated financial statements presented in accordance with GAAP.  Non-GAAP adjusted earnings is meant to present the financial performance of the Company’s core operations, which consists of the production and sale of specialty papers, composite fibers papers and airlaid non-woven materials.  Management and the Company’s Board of Directors use non-GAAP adjusted earnings to evaluate the performance of the Company’s fundamental business in relation to prior periods.  For purposes of determining adjusted earnings, the following items are excluded:

 

 

Specialty Papers environmental compliance. These adjustments reflect non-capitalized, one-time costs incurred by the business unit directly related to the compliance with the U.S. EPA Best Available Retrofit Technology rule and the Boiler Maximum Achievable Control Technology rule.  This adjustment includes costs incurred during the transition period in which the newly installed equipment was brought on-line.

 

 

Airlaid capacity expansion costs. These adjustments reflect non-capitalized, one-time costs incurred related to the start-up of a new airlaid production facility in Ft. Smith, Arkansas.

 

 

Cost optimization actions. This adjustment reflects charges incurred in connection with initiatives to optimize the cost structure of certain business units in response to changes in business conditions.  The costs are primarily related to headcount reduction efforts, asset write-offs and certain contract termination costs.

 

 

Unlike net income determined in accordance with GAAP, non-GAAP adjusted earnings does not reflect all charges and gains recorded by the Company for the applicable period and, therefore, does not present a complete picture of the Company’s results of operations for the respective period.  However, non-GAAP adjusted earnings provide a measure of how the Company’s core operations are performing, which management believes is useful to investors because it allows comparison of such operations from period to period.  Non-GAAP adjusted earnings should not be considered in isolation from, or as a substitute for, measures of financial performance prepared in accordance with GAAP.

 

Calculation of Adjusted Free Cash Flow

 

Three months ended

March 31

 

In thousands

 

2017

 

 

2016

 

 

 

 

 

 

 

 

 

 

Cash from operations

 

$

7,561

 

 

$

11,441

 

Less: Capital expenditures

 

 

(36,783

)

 

 

(43,294

)

     Add back: Airlaid capacity expansion

 

 

9,550

 

 

 

13,686

 

     Add back: Specialty Papers' environmental compliance projects

 

 

7,694

 

 

 

14,393

 

     Exclude: Cellulosic biofuel/Alternative fuel mixture credits

 

 

 

 

 

(4,277

)

Adjusted free cash flow

 

$

(11,978

)

 

$

(8,051

)

 

 

Net Debt

 

March 31

 

 

December 31

 

In thousands

 

2017

 

 

2016

 

 

 

 

 

 

 

 

 

 

Current portion of long-term debt

 

$

9,416

 

 

$

8,961

 

Long term debt

 

 

400,470

 

 

 

363,647

 

Total

 

 

409,886

 

 

 

372,608

 

Less: Cash

 

 

(57,227

)

 

 

(55,444

)

Net Debt

 

$

352,659

 

 

$

317,164

 

 

 

 

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