Glatfelter (GLT, Financial) filed Quarterly Report for the period ended 2009-03-31.
Glatfelter is a paper manufacturing company that manufactures printing papers and tobacco and other specialty papers. The company sells its products throughout the United States and in a number of foreign countries. Most of the company's printing paper products are directed at the uncoated free-sheet portion of the industry. The company's tobacco and other specialty papers are used for cigarette manufacturing and other specialty uses such as the manufacture of playing cards stamps labels and surgical gowns. Glatfelter has a market cap of $469.8 million; its shares were traded at around $10.33 with a P/E ratio of 10 and P/S ratio of 0.4. The dividend yield of Glatfelter stocks is 3.5%. Glatfelter had an annual average earning growth of 3.5% over the past 5 years.
In the Specialty Papers business unit, net sales for the first three months of 2009 decreased $1.3 million to $199.6 million. Operating income totaled $18.4 million, an increase of $6.9 million, or 60.5%, over the same quarter a year ago. The improved operating income is primarily due to increases in average selling prices outpacing increases in input costs and improved operating efficiencies at Chillicothe. Higher average selling prices contributed $7.5 million of the increase in operating profit and volumes shipped increased 1.6%. These price and volume increases were partially offset by expected mix changes between carbonless papers and uncoated papers. In addition, this business units results were adversely impacted by $3.3 million of higher input costs, largely driven by caustic soda and coal. Unplanned operating downtime at the Spring Grove and Chillicothe facilities further reduced operating results by approximately $1.6 million in the first quarter of 2009 compared to the first quarter of 2008.
In Composite Fibers, net sales were $91.9 million for the first quarter of 2009, a decline of $12.6 million from the year-earlier quarter. Operating income declined by $0.7 million in the comparison to $5.5 million. The translation of foreign currencies adversely impacted net sales by $14.3 million; however, higher average selling prices contributed $4.2 million. Total volumes shipped by this business unit declined 10.1% as lower shipments of composite laminates and metallized products, which declined 31.0% and 15.6%, respectively, more than offset a 4.4% increase in Food & Beverage paper product shipments.
Energy and raw material costs in the Composite Fibers business unit were $4.6 million higher than a year ago. Unplanned downtime, primarily in the Metallized market, adversely impacted operating results by $1.4 million in the first quarter of 2009 compared to the first quarter of 2008.
Selling, general and administrative (SG&A) expenses increased $0.4 million in the quarter-to-quarter comparison and totaled $24.5 million for the first three months of 2009. Benefits from our cost control initiatives were offset by $0.5 million of pension expense recorded in the first quarter of 2009 compared with $1.2 million of pension income in the same quarter of 2008. In addition, SG&A expenses for the first quarter of 2008 included a $1.5 million non-recurring benefit from a recovery in a litigation matter, net of legal fees.
Income taxes For the first three months of 2009 we recorded a provision for income taxes totaling $3.6 million resulting in an effective tax rate of 23.6%. The comparable amounts in the first quarter of 2008 were $10.5 million and 34.8%, respectively. The decline in the effective tax rate was primarily due to significantly lower timberland sales in the first quarter of 2009 compared with the first quarter of 2008.
Read the The complete ReportGLT is in the portfolios of Third Avenue Management.
Glatfelter is a paper manufacturing company that manufactures printing papers and tobacco and other specialty papers. The company sells its products throughout the United States and in a number of foreign countries. Most of the company's printing paper products are directed at the uncoated free-sheet portion of the industry. The company's tobacco and other specialty papers are used for cigarette manufacturing and other specialty uses such as the manufacture of playing cards stamps labels and surgical gowns. Glatfelter has a market cap of $469.8 million; its shares were traded at around $10.33 with a P/E ratio of 10 and P/S ratio of 0.4. The dividend yield of Glatfelter stocks is 3.5%. Glatfelter had an annual average earning growth of 3.5% over the past 5 years.
Highlight of Business Operations:
The above items increased earnings by $0.4 million, or $0.1 per diluted share, and $8.3 million, or $0.18 per diluted share, in the first quarters of 2009 and 2008, respectively.In the Specialty Papers business unit, net sales for the first three months of 2009 decreased $1.3 million to $199.6 million. Operating income totaled $18.4 million, an increase of $6.9 million, or 60.5%, over the same quarter a year ago. The improved operating income is primarily due to increases in average selling prices outpacing increases in input costs and improved operating efficiencies at Chillicothe. Higher average selling prices contributed $7.5 million of the increase in operating profit and volumes shipped increased 1.6%. These price and volume increases were partially offset by expected mix changes between carbonless papers and uncoated papers. In addition, this business units results were adversely impacted by $3.3 million of higher input costs, largely driven by caustic soda and coal. Unplanned operating downtime at the Spring Grove and Chillicothe facilities further reduced operating results by approximately $1.6 million in the first quarter of 2009 compared to the first quarter of 2008.
In Composite Fibers, net sales were $91.9 million for the first quarter of 2009, a decline of $12.6 million from the year-earlier quarter. Operating income declined by $0.7 million in the comparison to $5.5 million. The translation of foreign currencies adversely impacted net sales by $14.3 million; however, higher average selling prices contributed $4.2 million. Total volumes shipped by this business unit declined 10.1% as lower shipments of composite laminates and metallized products, which declined 31.0% and 15.6%, respectively, more than offset a 4.4% increase in Food & Beverage paper product shipments.
Energy and raw material costs in the Composite Fibers business unit were $4.6 million higher than a year ago. Unplanned downtime, primarily in the Metallized market, adversely impacted operating results by $1.4 million in the first quarter of 2009 compared to the first quarter of 2008.
Selling, general and administrative (SG&A) expenses increased $0.4 million in the quarter-to-quarter comparison and totaled $24.5 million for the first three months of 2009. Benefits from our cost control initiatives were offset by $0.5 million of pension expense recorded in the first quarter of 2009 compared with $1.2 million of pension income in the same quarter of 2008. In addition, SG&A expenses for the first quarter of 2008 included a $1.5 million non-recurring benefit from a recovery in a litigation matter, net of legal fees.
Income taxes For the first three months of 2009 we recorded a provision for income taxes totaling $3.6 million resulting in an effective tax rate of 23.6%. The comparable amounts in the first quarter of 2008 were $10.5 million and 34.8%, respectively. The decline in the effective tax rate was primarily due to significantly lower timberland sales in the first quarter of 2009 compared with the first quarter of 2008.
Read the The complete ReportGLT is in the portfolios of Third Avenue Management.
