CHARLOTTE, N.C., April 04, 2024 (GLOBE NEWSWIRE) -- Glatfelter Corporation (NYSE: GLT) announced today that it expects to issue its 2024 first-quarter results on Thursday, May 9, 2024. Management will hold a conference call at 11:00 AM (ET) that morning to discuss the Company’s results. Glatfelter’s earnings release and an accompanying financial supplement, which includes significant financial information to be discussed on the conference call, will be available on its Investor Relations website at https:// ...

```markdown [Part I](index=4&type=section&id=PART%20I) [Business](index=4&type=section&id=Item%201%20Business) Glatfelter, a global engineered materials supplier with $1.4 billion in 2023 net sales, is executing a turnaround strategy and pending merger - Glatfelter is a leading global supplier of engineered materials with 2023 net sales of approximately **$1.4 billion**, serving customers in over 100 countries from fifteen manufacturing sites[15](index=15&type=chunk) - In 2022, the company initiated a turnaround strategy focused on six key initiatives: portfolio optimization, margin improvement, fixed cost reduction, cash liberation, operational effectiveness, and returning the Spunlace segment to profitability[16](index=16&type=chunk)[17](index=17&type=chunk) - On February 7, 2024, Glatfelter announced a definitive agreement for a Reverse Morris Trust transaction with Berry Global Group, Inc to merge with its Health, Hygiene and Specialties segment (HHNF) Post-merger, Glatfelter shareholders will own approximately **10%** of the new combined company[21](index=21&type=chunk)[92](index=92&type=chunk) Net Sales Contribution by Segment (2021-2023) | Operating segment | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Airlaid Materials | 42.3% | 40.4% | 43.4% | | Composite Fibers | 34.8% | 35.1% | 51.3% | | Spunlace | 22.9% | 24.5% | 5.3% | Metric Tons Sold by Segment (2021-2023) | Metric tons | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Airlaid Materials | 156,442 | 164,844 | 148,134 | | Composite Fibers | 94,742 | 103,092 | 132,196 | | Spunlace | 61,618 | 72,725 | 12,514 | | Total | 311,544 | 340,661 | 292,844 | [Airlaid Materials](index=6&type=section&id=Item%201%20Business%23Airlaid%20Materials) The Airlaid Materials segment, with $586.5 million in 2023 net sales, leads in absorbent nonwovens for consumer products - The segment's 2023 net sales were approximately **$586.5 million** The feminine hygiene category accounted for **37.0%** of its net sales in 2023[23](index=23&type=chunk)[24](index=24&type=chunk) Airlaid Materials Production Overview | Attribute | Value | | :--- | :--- | | Estimated Annual Production Capacity | 190,000 metric tons | | Principal Raw Material (PRM) | Fluff pulp | | Estimated Annual Quantity of PRM | 130,000 metric tons | - Approximately **77%** of the segment's 2023 net sales were under contracts with pass-through provisions for key raw material costs[25](index=25&type=chunk) [Composite Fibers](index=7&type=section&id=Item%201%20Business%23Composite%20Fibers) The Composite Fibers segment, with $483.5 million in 2023 net sales, leads in specialty fiber products like coffee filtration - The segment's 2023 net sales were approximately **$483.5 million**, with a market leadership position in single-serve coffee/tea filtration and wallcover base material[28](index=28&type=chunk) - The company's Philippine pulp mill produces abaca pulp, a key specialized raw material, providing a unique advantage The company also sells excess high-quality abaca as part of its cash liberation initiative[31](index=31&type=chunk) - Approximately **50%** of the segment's 2023 net sales were under contracts with pass-through provisions for key raw material and energy costs[32](index=32&type=chunk) [Spunlace](index=8&type=section&id=Item%201%20Business%23Spunlace) The Spunlace segment, with $317.9 million in 2023 net sales, manufactures premium nonwovens for personal care and medical uses - The segment's 2023 net sales were approximately **$317.9 million** It was formed following the acquisition of Jacob Holm[33](index=33&type=chunk) Spunlace Production Overview | Attribute | Value | | :--- | :--- | | Estimated Annual Production Capacity | 91,000 metric tons | | Key Raw Materials | Synthetic fibers, Pulp-based fibers, Fluff pulp, Non-wood fibers, Base paper | - Approximately **48%** of the segment's 2023 net sales were under contracts with pass-through provisions for key raw material costs[35](index=35&type=chunk) [Concentration of Customers](index=9&type=section&id=Item%201%20Business%23Concentration%20of%20Customers) The company has significant customer concentration, with Procter & Gamble as a major customer in Airlaid Materials and Spunlace - In 2023, sales to Procter & Gamble Company accounted for approximately **16%** of consolidated net sales[36](index=36&type=chunk) - The top three customers accounted for approximately **57%** of Airlaid Materials' and **42%** of Spunlace's net sales in 2023[37](index=37&type=chunk) [Capital Expenditures](index=9&type=section&id=Item%201%20Business%23Capital%20Expenditures) Capital expenditures were $33.8 million in 2023, projected to be $35 million to $40 million in 2024 Capital Expenditures (2021-2024E) | Year | Amount (in millions) | | :--- | :--- | | 2021 | $30.0 | | 2022 | $37.7 | | 2023 | $33.8 | | 2024 (Est.) | $35 - $40 | [Human Capital](index=9&type=section&id=Item%201%20Business%23Human%20Capital) As of December 31, 2023, Glatfelter employed 2,920 people globally, with 68.3% unionized, emphasizing safety - As of December 31, 2023, the company employed approximately **2,920 people** worldwide[40](index=40&type=chunk) - Approximately **68.3%** of employees are represented by local works councils or trade unions in Europe, the United Kingdom, Canada, and the Philippines[40](index=40&type=chunk) - The company's Total Case Incident Rate (TCIR) has consistently ranked in the top quartile for safety performance in its industry[44](index=44&type=chunk) [Risk Factors](index=11&type=section&id=Item%201A%20Risk%20Factors) Glatfelter faces significant risks from economic downturns, volatile costs, geopolitical issues, high indebtedness, and merger uncertainties - Approximately **46%** of 2023 net sales were from shipments to customers in Europe, making the company susceptible to economic conditions in that region[53](index=53&type=chunk) - The Russia/Ukraine conflict has adversely impacted the business, leading to a significant reduction in wallcover revenues and a **$117.3 million** non-cash asset impairment charge in Q1 2022[61](index=61&type=chunk)[62](index=62&type=chunk) - The company has significant foreign currency exposure, with euro-denominated net sales exceeding euro expenses by an estimated **€170 million** annually[65](index=65&type=chunk) - A few large customers represent a significant portion of sales for the Airlaid Materials and Spunlace segments In 2023, the top three customers accounted for **57%** of Airlaid Materials' and **42%** of Spunlace's net sales[73](index=73&type=chunk) - The company has substantial indebtedness, with approximately **$370.7 million** of secured debt and **$501.0 million** of unsecured debt as of December 31, 2023 This could make it difficult to satisfy obligations and obtain future financing[88](index=88&type=chunk) - The pending Reverse Morris Trust transaction with Berry's HHNF Business is subject to shareholder approval and other conditions, and failure to complete it could adversely impact Glatfelter's stock price and business operations If terminated under certain circumstances, Glatfelter may owe Berry a **$10 million** termination fee[92](index=92&type=chunk)[93](index=93&type=chunk)[95](index=95&type=chunk) [Unresolved Staff Comments](index=17&type=section&id=Item%201B%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None[96](index=96&type=chunk) [Cybersecurity](index=17&type=section&id=Item%201C%20Cybersecurity) Glatfelter implements a NIST-aligned cybersecurity program with Board oversight to manage threats and prevent harm - The company's cybersecurity program is aligned with the National Institute of Standards and Technology (NIST) Cybersecurity Framework and includes periodic risk assessments, vulnerability scans, and penetration tests[97](index=97&type=chunk) - Cybersecurity governance is managed by the Board's Audit Committee, a Cybersecurity Steering Committee, and an IT security management team The Senior IT Director over Cybersecurity holds a CISSP certification and has over 25 years of experience[99](index=99&type=chunk) [Properties](index=18&type=section&id=Item%202%20Properties) Glatfelter owns most manufacturing facilities globally, with some leased properties, all considered adequate for current operations - The company owns substantially all land, buildings, and equipment at its manufacturing sites in the United States, Canada, the United Kingdom, Germany, France, Spain, and the Philippines[100](index=100&type=chunk) - Leased properties include the metallized paper production facility in Wales, land at the Mount Holly, NC site, and the corporate offices in Charlotte, North Carolina[100](index=100&type=chunk) [Legal Proceedings](index=18&type=section&id=Item%203%20Legal%20Proceedings) The company is involved in ordinary lawsuits not expected to materially affect its financial position, liquidity, or operations - The company does not expect ongoing lawsuits to have a material adverse effect on its consolidated financial position, liquidity, or results of operations[101](index=101&type=chunk) [Executive Officers](index=18&type=section&id=Executive%20Officers) This section lists Glatfelter's executive officers as of February 28, 2024, including the President & CEO and SVP, CFO & Treasurer Executive Officers (as of Feb 28, 2024) | Name | Age | Office with the Company | | :--- | :--- | :--- | | Thomas M. Fahnemann | 62 | President & Chief Executive Officer | | Boris Illetschko | 51 | Senior Vice President, Chief Operating Officer | | Eileen L. Beck | 61 | Senior Vice President, Global Human Resources & Administration | | Ramesh Shettigar | 48 | Senior Vice President, Chief Financial Officer & Treasurer | | David C. Elder | 55 | Vice President, Strategic Initiatives, Business Optimization & Chief Accounting Officer | | Jill L. Urey | 57 | Vice President, General Counsel & Compliance | [Mine Safety Disclosures](index=19&type=section&id=Item%204%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not Applicable[109](index=109&type=chunk) [Part II](index=19&type=section&id=PART%20II) [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=19&type=section&id=Item%205%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Glatfelter's common stock trades on the NYSE under 'GLT'; the company suspended its quarterly cash dividend in Q3 2022 - The company's common stock is traded on the New York Stock Exchange under the symbol "GLT"[109](index=109&type=chunk) - The Board of Directors suspended the quarterly cash dividend in the third quarter of 2022 No cash dividends were declared in 2023[110](index=110&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=20&type=section&id=Item%207%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2023, Glatfelter reported a $78.1 million loss from continuing operations on $1.39 billion net sales, with improved operating cash flow [Results of Operations](index=21&type=section&id=Results%20of%20Operations) In 2023, Glatfelter's net sales decreased to $1.39 billion, with operating income turning positive to $2.7 million Consolidated Results of Operations (2023 vs. 2022) | In thousands, except per share | 2023 | 2022 | | :--- | :--- | :--- | | Net sales | $1,385,516 | $1,491,326 | | Gross profit | $129,707 | $148,802 | | Operating income (loss) | $2,712 | $(163,951) | | Loss from continuing operations | $(78,103) | $(194,117) | | Loss per share from continuing operations | $(1.73) | $(4.33) | Reconciliation of Net Loss to Adjusted Earnings (2023 vs. 2022) | In thousands, except per share | 2023 | 2022 | | :--- | :--- | :--- | | Net loss | $(79,053) | $(194,208) | | Adjustments (pre-tax) | $35,307 | $200,140 | | Income taxes & Other tax adjustments | $4,113 | $(25,058) | | **Adjusted earnings from continuing operations** | **$(38,683)** | **$(19,035)** | | **Adjusted EPS from continuing operations** | **$(0.86)** | **$(0.42)** | Adjusted EBITDA (2023 vs. 2022) | In thousands | 2023 | 2022 | | :--- | :--- | :--- | | Net loss | $(79,053) | $(194,208) | | EBITDA | $55,408 | $(104,869) | | **Adjusted EBITDA** | **$92,597** | **$98,853** | Segment Operating Income (Loss) (2023 vs. 2022) | In thousands | 2023 | 2022 | | :--- | :--- | :--- | | Airlaid Material | $43,207 | $54,809 | | Composite Fibers | $21,347 | $16,923 | | Spunlace | $(2,068) | $(9,289) | [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains solid liquidity with $50.3 million cash and $85.1 million credit capacity, improving operating cash flow Summary of Cash Flows (2023 vs. 2022) | In thousands | 2023 | 2022 | | :--- | :--- | :--- | | Cash used by Operating activities | $(25,616) | $(40,820) | | Cash used by Investing activities | $(37,101) | $(33,098) | | Cash (used) provided by Financing activities | $(949) | $46,919 | - At December 31, 2023, the company had **$50.3 million** in cash and cash equivalents and **$85.1 million** of capacity under its revolving credit facility[161](index=161&type=chunk)[170](index=170&type=chunk) - The decrease in cash used by operating activities was primarily due to a **$31.9 million** improvement in working capital usage, partially offset by a **$26.0 million** increase in interest paid[162](index=162&type=chunk) - As of December 31, 2023, the company's leverage ratio was **3.4x**, which was within the maximum limit of **4.25x** allowed under its amended Credit Agreement[165](index=165&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=31&type=section&id=Item%207A%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risks are interest rate and foreign currency fluctuations, particularly with the euro, and asset valuation estimates - As of December 31, 2023, **11.4%** of the company's **$853.2 million** in long-term debt was at variable interest rates A hypothetical 100 basis point increase in rates would increase annual interest expense by **$1.0 million**[174](index=174&type=chunk) - The company has significant foreign currency risk, particularly with the euro, as annual euro-denominated net sales are estimated to exceed euro expenses by approximately **€170 million**[176](index=176&type=chunk) - In 2022, the company fully impaired the goodwill for its Composite Fibers and Spunlace segments[181](index=181&type=chunk)[182](index=182&type=chunk)[183](index=183&type=chunk) - During the Q4 2023 annual impairment test, the fair value of the Airlaid Materials segment exceeded its carrying value by approximately **19%**[181](index=181&type=chunk) [Financial Statements and Supplementary Data](index=34&type=section&id=Item%208%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements for 2023, including management's effective internal control report and unqualified audit opinion [Management's Report on Internal Control Over Financial Reporting](index=34&type=section&id=Management's%20Report%20on%20Internal%20Control%20Over%20Financial%20Reporting) Management concluded that the company's internal control over financial reporting was effective as of December 31, 2023, based on the COSO framework - Management concluded that the Company's internal control over financial reporting was effective as of December 31, 2023[191](index=191&type=chunk) [Report of Independent Registered Public Accounting Firm](index=35&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Deloitte & Touche LLP issued unqualified opinions on Glatfelter's 2023 financial statements and internal controls, noting Airlaid Materials goodwill valuation as a critical audit matter - The auditor, Deloitte & Touche LLP, expressed an unqualified opinion on the consolidated financial statements as of and for the year ended December 31, 2023[197](index=197&type=chunk)[202](index=202&type=chunk) - The auditor also expressed an unqualified opinion on the effectiveness of the company's internal control over financial reporting as of December 31, 2023[196](index=196&type=chunk)[203](index=203&type=chunk) - The valuation of the Airlaid Materials reporting unit's goodwill was identified as a Critical Audit Matter due to the subjectivity and judgment required in management's estimates for the discounted cash flow model[207](index=207&type=chunk)[208](index=208&type=chunk) [Consolidated Financial Statements](index=38&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements for 2023 show a net loss of $79.1 million on $1.39 billion net sales, with total assets of $1.56 billion Consolidated Statement of Income (Loss) Highlights - Year Ended Dec 31, 2023 | Metric (in thousands) | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Net sales | $1,385,516 | $1,491,326 | $1,084,694 | | Operating income (loss) | $2,712 | $(163,951) | $28,614 | | Net income (loss) | $(79,053) | $(194,208) | $6,937 | Consolidated Balance Sheet Highlights - As of Dec 31 | Metric (in thousands) | 2023 | 2022 | | :--- | :--- | :--- | | Total current assets | $605,967 | $679,484 | | Total assets | $1,563,796 | $1,647,353 | | Total current liabilities | $280,368 | $360,406 | | Total liabilities | $1,306,942 | $1,329,349 | | Total shareholders' equity | $256,854 | $318,004 | Consolidated Statement of Cash Flows Highlights - Year Ended Dec 31, 2023 | Metric (in thousands) | 2023 | 2022 | 2021 | | :--- | :--- | :--- | | Net cash used by operating activities | $(25,616) | $(40,820) | $70,977 | | Net cash used by investing activities | $(37,101) | $(33,098) | $(489,766) | | Net cash (used) provided by financing activities | $(949) | $46,919 | $462,352 | [Notes to Consolidated Financial Statements](index=43&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail 2022 goodwill impairments, 2023 debt restructuring, environmental liabilities, and the subsequent Berry Global merger agreement - In 2022, the company recognized a goodwill impairment charge of **$42.5 million** for the Spunlace segment and **$76.4 million** for the Composite Fibers segment, writing off the entire goodwill balance for both[252](index=252&type=chunk)[259](index=259&type=chunk)[260](index=260&type=chunk) - On March 30, 2023, the company entered into a new **€250.0 million** Term Loan with affiliates of Angelo, Gordon & Co., L.P at a fixed rate of **11.25%**, maturing in 2029 Proceeds were used to extinguish the existing **€220.0 million** Term Loan[328](index=328&type=chunk) - The company has a remaining liability for the Fox River environmental site, with a reserve of **$13.7 million** as of December 31, 2023, for long-term monitoring and government oversight costs[361](index=361&type=chunk) - On December 9, 2023, a tornado damaged a leased Spunlace facility in Tennessee The company accrued an estimated **$29 million** for repairs, with an expected insurance recovery of approximately **$27 million**, net of a **$5 million** deductible[316](index=316&type=chunk) - Subsequent to year-end, on February 6, 2024, Glatfelter entered into a definitive agreement for a Reverse Morris Trust transaction with Berry Global Group, Inc to merge with its HHNF business[371](index=371&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosures](index=74&type=section&id=Item%209%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosures) The company reports no changes in or disagreements with its accountants on accounting or financial disclosures - None[373](index=373&type=chunk) [Controls and Procedures](index=74&type=section&id=Item%209A%20Controls%20and%20Procedures) The CEO and CFO concluded that disclosure controls and procedures were effective as of December 31, 2023, with no material changes in Q4 - The chief executive officer and chief financial officer concluded that as of December 31, 2023, the company's disclosure controls and procedures were effective[374](index=374&type=chunk) - There were no changes in internal control over financial reporting during the fourth quarter of 2023 that have materially affected, or are reasonably likely to materially affect, internal controls[376](index=376&type=chunk) [Other Information](index=74&type=section&id=Item%209B%20Other%20Information) No directors or officers adopted, modified, or terminated Rule 10b5-1 trading arrangements during 2023 - During 2023, none of the Company's directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement[377](index=377&type=chunk) [Part III](index=74&type=section&id=PART%20III) [Directors, Executive Officers and Corporate Governance](index=74&type=section&id=Item%2010%20Directors,%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the upcoming Proxy Statement - Information required under this item concerning directors and corporate governance is incorporated by reference from the company's Proxy Statement to be dated on or about April 1, 2024[380](index=380&type=chunk) [Executive Compensation](index=75&type=section&id=Item%2011%20Executive%20Compensation) Executive compensation information is incorporated by reference from the company's upcoming Proxy Statement - Information required under this item is incorporated by reference from the company's Proxy Statement to be dated on or about April 1, 2024[384](index=384&type=chunk) [Security Ownership of Certain Beneficial Owners and Management](index=75&type=section&id=Item%2012%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management) Security ownership information for beneficial owners and management is incorporated by reference from the upcoming Proxy Statement - Information required under this item is incorporated by reference from the company's Proxy Statement to be dated on or about April 1, 2024[385](index=385&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=75&type=section&id=Item%2013%20Certain%20Relationships%20and%20Related%20Transactions,%20and%20Director%20Independence) Information on related party transactions and director independence is incorporated by reference from the upcoming Proxy Statement - Information required under this item is incorporated by reference from the company's Proxy Statement to be dated on or about April 1, 2024[386](index=386&type=chunk) [Principal Accountant Fees and Services](index=75&type=section&id=Item%2014%20Principal%20Accountant%20Fees%20and%20Services) Information on principal accountant fees and services is incorporated by reference from the upcoming Proxy Statement - Information required under this item is incorporated by reference from the company's Proxy Statement to be dated on or about April 1, 2024[387](index=387&type=chunk) [Part IV](index=76&type=section&id=PART%20IV) [Exhibits, Financial Statement Schedules](index=76&type=section&id=Item%2015%20Exhibits,%20Financial%20Statement%20Schedules) This section lists the consolidated financial statements, schedules, and exhibits filed as part of the Form 10-K report - This item provides an index of all financial statements, schedules, and exhibits included with or incorporated by reference into the Form 10-K filing[388](index=388&type=chunk)[390](index=390&type=chunk) [Form 10-K Summary](index=76&type=section&id=Item%2016%20Form%2010-K%20Summary) This item is not applicable, and no summary is provided - None[389](index=389&type=chunk) ```

2023 Fourth Quarter Earnings Conference Call Forward Looking Statements and Use of Non-GAAP Financial Measures 2 • 2023 Full year EBITDA of ~$93 million, within guidance range • Spunlace EBITDA higher by ~$4 million versus Q4 2022 driven by higher volume, price-cost gap improvements, and turnaround strategy actions (cost and operational improvements) • On February 7, 2024, Glatfelter and Berry Global announced plans for tax-free spin-off and merger of Berry's Health, Hygiene and Specialties Global Nonwovens ...

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q4 2023 was $25.1 million, consistent with Q3 results, and full-year EBITDA was approximately $93 million, within the guidance range [7][86] - Volume decreased by 5% year-over-year, primarily due to weaker shipments in the tabletop category, driven by market softness in Europe and competition from alternative substrates [8][39] - Cash taxes paid in 2023 were lower by $15 million, mainly due to changes in jurisdictional income and timing of payments [12] Business Line Data and Key Metrics Changes - Spunlace segment revenues were down 7% on a constant currency basis, with lower selling prices impacting earnings by approximately $7 million, although volume increased by 3% [10] - Airlaid Materials segment revenues decreased by 19% on a constant currency basis, driven by lower shipments and selling prices, with a net unfavorable price-cost gap of $1.7 million [39] - Composite Fibers segment revenues were down 18% on a constant currency basis, primarily due to lower shipments and selling prices, but EBITDA improved by approximately $2 million [40][75] Market Data and Key Metrics Changes - The company experienced pronounced competitive challenges in the Airlaid segment, particularly in feminine hygiene and European tabletop categories [73][54] - Foreign exchange and related currency hedging negatively impacted earnings by $900,000, primarily due to hedging gains from the prior year [22] Company Strategy and Development Direction - The company announced plans to merge with Berry Global's HHNF business, expected to close in the second half of 2024, creating a leading publicly traded company in the specialty materials industry [4][14] - The merger aims to leverage combined strengths in markets where Berry is stronger, such as Asia Pacific and Latin America, and enhance innovation and growth opportunities [29][30] - The company is focusing on diversifying its customer base and product portfolio to reduce customer concentration while expanding efforts in innovation and sustainability [6] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing market challenges and limited visibility, particularly in Europe, but expressed confidence in the company's fundamentals and the anticipated merger benefits [42][30] - The company expects 2024 EBITDA to be in the range of $110 million to $120 million, reflecting anticipated headwinds and macroeconomic volatility [13][42] Other Important Information - Corporate costs were approximately $1.9 million lower compared to Q4 of the previous year, and full-year corporate costs were in line with 2022 [11] - The company reported a leverage ratio of 3.4 times as of December 31, with available liquidity of approximately $135 million at year-end [26] Q&A Session Summary Question: What are the market shares of Berry HHNF and Glatfelter in overlapping key businesses? - Management indicated that while they operate in the same segments, their products are complementary rather than directly competitive, which is a positive aspect of the proposed merger [46] Question: How much CapEx does HH&S spend? - Management stated it is too early to provide a definitive answer regarding maintenance and normalized CapEx for the new company [34] Question: How much debt will be transferred from HHNF and repaid with NewCo credit facilities? - Approximately $1.5 billion will be raised from Spinco into the merger, with about $1 billion used to dividend up to Berry and $400 million to retire existing Glatfelter debt [49]

Financial Performance - Generated net sales of $320 million in Q4 2023 and $1.4 billion for the full year, with a loss from continuing operations of $8.6 million in Q4 and $78.1 million for the year[5] - Achieved Q4 Adjusted EBITDA of $25 million and full-year EBITDA of $93 million, consistent with full year guidance[5] - Total net sales for Q4 2023 were $320.4 million, down from $373.9 million in Q4 2022, representing a decrease of approximately 14.3%[30] - Operating income for Q4 2023 was $4.4 million, a significant improvement from an operating loss of $22.9 million in the same quarter of 2022[30] - The company reported a pre-tax loss from continuing operations of $15.0 million in Q4 2023, compared to a pre-tax loss of $35.8 million in Q4 2022, reflecting a reduction of 58%[24] - The net loss for Q4 2023 was $8.7 million, an improvement from a net loss of $34.3 million in Q4 2022[42] - The basic loss per share for Q4 2023 was $0.19, compared to a loss of $0.76 per share in Q4 2022[30] Segment Performance - Spunlace segment delivered $5.7 million Adjusted EBITDA in Q4 and $11.2 million for the full year, with a $9 million improvement in Adjusted EBITDA over twelve months[4] - Composite Fibers segment reported EBITDA of $11 million in Q4, up 19.1% year-over-year, driven by favorable input prices[19] - Airlaid Materials segment experienced a 17.2% decline in net sales year-over-year, primarily due to lower selling prices and a 4.8% decrease in tons shipped[16] - Spunlace EBITDA increased by $3.9 million year-over-year, despite lower selling prices and energy surcharges negatively impacting earnings by $7.1 million, which was offset by a $9.0 million reduction in raw material and energy costs[21] Cash Flow and Debt - Cash and cash equivalents decreased to $50.3 million as of December 31, 2023, from $110.7 million at the end of 2022, indicating a decline of 54.5%[25] - Total debt increased to $860.3 million as of December 31, 2023, compared to $845.1 million at the end of 2022, marking a rise of 1.8%[25] - Adjusted free cash flow for the year ended December 31, 2023, was a use of $40.3 million, an improvement from a use of $70.0 million in 2022[26] - Cash used by operations for the year ended December 31, 2023, was $(25.6) million, a reduction from $(40.8) million in 2022[41] - Total net debt as of December 31, 2023, was $810.1 million, up from $734.4 million at the end of 2022[41] Future Outlook - The company expects 2024 EBITDA to be between $110 million and $120 million, amid limited market visibility and macroeconomic volatility[5] - Plans for a merger with Berry Global's HHNF business are anticipated in the second half of 2024, aiming to create a leading specialty materials company[2] - Overall, the company is cautiously optimistic about its full-year guidance despite the challenging business environment[6] - The company anticipates continued operational improvements and strategic growth initiatives in the upcoming periods, although specific net income guidance is not provided due to unpredictability[39] Strategic Initiatives - The company incurred $12.9 million in turnaround strategy costs in 2023, reflecting ongoing efforts to drive operational and financial improvement[41] - Strategic initiatives costs amounted to $2.1 million in 2023, highlighting the company's focus on evaluating and executing growth strategies[41] - The company incurred a $5 million insurance expense related to tornado damage at the Spunlace facility, which was excluded from adjusted earnings[5] - The company reported $5.0 million in tornado insurance deductible costs related to a facility in Tennessee[40]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 company or emerging growth company. See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act. | Large Accelerated Filer | ☐ | Accelerated filer | ☒ | | --- | --- | --- | --- | | Non-accelerated filer | ☐ | Smaller reporting company | ...

PART I - FINANCIAL INFORMATION [Financial Statements](index=2&type=section&id=Item%201%20Financial%20Statements) The company presents unaudited condensed consolidated financial statements for the periods ended June 30, 2023 Condensed Consolidated Statements of Income (Unaudited) | In thousands, except per share | Three months ended June 30, 2023 | Three months ended June 30, 2022 | Six months ended June 30, 2023 | Six months ended June 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | **Net sales** | $357,005 | $363,963 | $735,213 | $745,643 | | **Gross profit** | $18,133 | $37,397 | $54,347 | $69,062 | | **Operating income (loss)** | $(10,485) | $8,924 | $(4,372) | $(106,965) | | **Loss from continuing operations** | $(36,631) | $(2,460) | $(49,813) | $(110,750) | | **Net loss** | $(36,940) | $(2,052) | $(50,524) | $(110,379) | | **Diluted loss per share** | $(0.83) | $(0.04) | $(1.13) | $(2.46) | Condensed Consolidated Balance Sheets (Unaudited) | In thousands | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Total current assets** | $614,494 | $679,484 | | **Total assets** | $1,576,563 | $1,647,353 | | **Total current liabilities** | $262,888 | $360,406 | | **Total liabilities** | $1,297,725 | $1,329,349 | | **Total shareholders' equity** | $278,838 | $318,004 | Condensed Consolidated Statements of Cash Flows (Unaudited) | In thousands | Six months ended June 30, 2023 | Six months ended June 30, 2022 | | :--- | :--- | :--- | | **Net cash used by operating activities** | $(53,021) | $(79,535) | | **Net cash used by investing activities** | $(16,723) | $(18,136) | | **Net cash provided by financing activities** | $10,515 | $33,546 | | **Net decrease in cash** | $(58,133) | $(67,712) | | **Cash and cash equivalents at end of period** | $53,864 | $71,476 | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(unaudited)) The notes detail accounting policies, facility closure costs, debt refinancing, and segment performance data - In Q2 2023, the planned closure of the Ober-Schmitten facility resulted in recognizing **$10.4 million in employee severance and benefit costs**[28](index=28&type=chunk) - No impairment charges were recognized in H1 2023, unlike Q1 2022 which saw a **$117.3 million non-cash asset impairment charge**[31](index=31&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk) - On March 30, 2023, the company amended its Credit Agreement, reducing the Revolving Credit Facility to **$250.0 million** and entering a new **€250.0 million Term Loan**[67](index=67&type=chunk)[72](index=72&type=chunk) Net Sales by Segment (Six Months Ended June 30) | In thousands | 2023 | 2022 | | :--- | :--- | :--- | | Airlaid Material | $311,952 | $293,172 | | Composite Fibers | $258,316 | $259,167 | | Spunlace | $166,143 | $193,304 | | **Total** | **$735,213** | **$745,643** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes financial results impacted by market softness, destocking, and turnaround strategy costs - H1 2023 operating results were significantly affected by **market softness, customer destocking, higher interest expense, and turnaround strategy costs**[115](index=115&type=chunk) Reconciliation of Net Loss to Adjusted Loss from Continuing Operations (Six Months Ended June 30) | In thousands, except per share | 2023 | 2022 | | :--- | :--- | :--- | | **Loss from continuing operations** | $(49,813) | $(110,750) | | **Total after-tax adjustments** | $23,497 | $102,995 | | **Adjusted loss from continuing operations** | **$(26,316)** | **$(7,755)** | | **Adjusted loss per share** | **$(0.58)** | **$(0.17)** | Reconciliation of Net Loss to Adjusted EBITDA (Six Months Ended June 30) | In thousands | 2023 | 2022 | | :--- | :--- | :--- | | **Net loss** | $(50,524) | $(110,379) | | **EBITDA** | $21,006 | $(73,824) | | **Adjusted EBITDA** | **$42,037** | **$50,230** | [Results of Operations](index=31&type=section&id=Results%20of%20Operations) H1 2023 results show slightly decreased net sales and gross profit, with varied performance across segments - **Airlaid Materials:** H1 2023 net sales increased by **$18.8 million YoY**, driven by higher selling prices that offset a 5.6% decline in shipment volumes[142](index=142&type=chunk)[143](index=143&type=chunk) - **Composite Fibers:** H1 2023 net sales decreased by **$0.9 million YoY**, as higher prices were offset by a 5.1% drop in shipments and unfavorable currency effects[144](index=144&type=chunk)[145](index=145&type=chunk) - **Spunlace:** H1 2023 net sales fell by **$27.2 million YoY**, driven by a 21.2% decline in shipment volumes[145](index=145&type=chunk)[146](index=146&type=chunk) - In Q1 2022, the company recorded a **$117.3 million impairment charge** on its Composite Fibers' Dresden facility and goodwill due to the Russia/Ukraine conflict[147](index=147&type=chunk)[148](index=148&type=chunk) [Liquidity and Capital Resources](index=46&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains sufficient liquidity through cash reserves and credit facilities after debt refinancing - The company has ample liquidity with **$53.9 million in cash** and **$89.6 million of capacity** under its revolving credit facility as of June 30, 2023[187](index=187&type=chunk) - The company's **leverage ratio was 3.4x** as of June 30, 2023, compliant with the amended credit agreement's maximum of 4.25x[184](index=184&type=chunk) - Capital expenditures are expected to be between **$30 million and $35 million in 2023**[182](index=182&type=chunk) - In Q3 2022, the Board of Directors **suspended the quarterly cash dividend** to focus on optimizing operational and financial results[185](index=185&type=chunk) [Quantitative and Qualitative Disclosures About Market Risks](index=47&type=section&id=Item%203%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risks) The company's primary market risks arise from interest rate fluctuations and foreign currency exposure - A hypothetical **100 basis point increase** in the interest rate on variable rate debt would increase annual interest expense by **$1.1 million**[195](index=195&type=chunk) - The company has significant foreign currency risk, particularly with the euro, with annual euro-denominated revenue exceeding euro expenses by an estimated **€190 million**[196](index=196&type=chunk) [Controls and Procedures](index=48&type=section&id=Item%204%20Controls%20and%20Procedures) Management confirmed the effectiveness of disclosure controls and noted new ERP system implementations - Management concluded that **disclosure controls and procedures were effective** as of June 30, 2023[203](index=203&type=chunk) - During Q2 2023, **new ERP and manufacturing systems were implemented** for Spunlace's Old Hickory, TN and Asturias, Spain locations[204](index=204&type=chunk) PART II – OTHER INFORMATION [Legal Proceedings](index=49&type=section&id=Item%201B%20Legal%20Proceedings) This section references Note 19 for details on legal matters, including the Fox River environmental liability - Legal proceedings information is incorporated by reference from Note 19 of the financial statements, detailing commitments and contingencies like the **Fox River environmental matter**[206](index=206&type=chunk) [Exhibits](index=49&type=section&id=Item%206%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including incentive plans and certifications - Exhibits filed include the **Amended and Restated 2022 Long-Term Incentive Plan** and certifications by the CEO and CFO[209](index=209&type=chunk)

Glatfelter Corporation (NYSE:GLT) Q1 2023 Earnings Conference Call May 4, 2023 11:00 AM ET Company Participants Ramesh Shettigar - Senior Vice President, Chief Financial Officer & Treasurer Thomas Fahnemann - President & Chief Executive Officer Conference Call Participants Josh Wool - Carlson Capital Roger Spitz - Bank of America Peter Galgay - Amitell Capital Operator Good day, and welcome to the Glatfelter's Q1 2023 Earnings Release Conference Call. Today's conference is being recorded. At this time I'd l ...

− Higher incentive accruals Notes: (*) Corporate costs are primarily comprised of employee costs, legal fees, and professional services fees. The sum of individual amounts set forth above may not agree to the column totals due to rounding. Cash Flow − Adjusted EBITDA higher by ~$2 million − Interest paid increased by ~$3 million related to higher interest rates 10 • Expect full year 2023 EBITDA to be between $110 million and $120 million • Cash Interest estimated to be approximately $60 million, reflecting ...

Financial Performance - Net sales for Q1 2023 were $378,208,000, a decrease of 0.4% from $381,680,000 in Q1 2022[10] - Gross profit increased to $36,214,000 in Q1 2023, up from $31,665,000 in Q1 2022, representing a 14.4% improvement[10] - Operating income for Q1 2023 was $6,113,000, compared to a loss of $115,889,000 in Q1 2022[10] - The net loss for Q1 2023 was $13,584,000, significantly reduced from a net loss of $108,327,000 in Q1 2022[12] - Basic loss per share improved to $0.30 in Q1 2023 from $2.42 in Q1 2022[10] - Comprehensive loss for Q1 2023 was $6.1 million, improving from a comprehensive loss of $119.4 million in Q1 2022[36] - The company reported a net cash used by operating activities from discontinued operations of $0.4 million in Q1 2023, a decrease from $0.1 million in Q1 2022[34] Revenue Breakdown - Airlaid Materials revenue in Q1 2023 was $159.4 million, up 6.7% from $149.5 million in Q1 2022[28] - Composite Fibers revenue decreased to $132.6 million in Q1 2023 from $135.8 million in Q1 2022[28] - Spunlace revenue also declined to $86.7 million in Q1 2023, down from $96.4 million in Q1 2022[28] - Total tons shipped in Q1 2023 were 81,065 metric tons, a decrease of 11.8% compared to 91,999 metric tons in Q1 2022[105] Assets and Liabilities - Total assets as of March 31, 2023, were $1,651,471,000, slightly up from $1,647,353,000 at the end of 2022[15] - Cash and cash equivalents decreased to $88,641,000 from $110,660,000 at the end of 2022[15] - The current portion of long-term debt decreased to $3,955,000 from $40,435,000 at the end of 2022[15] - Total long-term debt increased from $844,232,000 on December 31, 2022, to $874,793,000 on March 31, 2023[64] - The carrying value of long-term debt as of March 31, 2023, was $874.8 million, with a fair value of $710.6 million, compared to a carrying value of $844.2 million and a fair value of $640.2 million as of December 31, 2022[85] Cash Flow and Expenditures - Operating cash flow used in continuing operations was $30,632,000 for Q1 2023, an improvement from $66,240,000 in Q1 2022[17] - Capital expenditures for the three months ended March 31, 2023, were $9.5 million, down from $12.3 million in the same period in 2022[105] - Expenditures for purchases of plant, equipment, and timberlands in Q1 2023 were $9,500,000, down from $12,349,000 in Q1 2022, a decrease of 23.0%[17] - Proceeds from disposals of plant, equipment, and timberlands in Q1 2023 were $713,000, compared to $3,160,000 in Q1 2022, a decline of 77.5%[30] Debt and Financing - The company entered into a €250,000,000 Term Loan on March 30, 2023, with an interest rate of 11.25% per annum, maturing on March 23, 2029[70] - The company issued $500,000,000 aggregate principal amount of 4.750% senior notes due 2029, with interest payable semi-annually[73] - As of March 31, 2023, the company met all requirements of its debt covenants[77] - The company guarantees all debt obligations of its subsidiaries, which are recorded in the consolidated financial statements[82] Tax and Valuation - The gross unrecognized tax benefits amounted to $57.2 million as of March 31, 2023, with approximately $54.1 million potentially affecting the effective tax rate if recognized[54] - The company recorded an increase in the valuation allowance of $3.1 million against net deferred tax assets for U.S. federal and certain foreign jurisdictions[53] - The effective income tax rate for the same period was negatively impacted by the jurisdictional mix of pretax results[54] Environmental and Other Obligations - The company has completed all remedial actions related to environmental claims at the Fox River site, with ongoing responsibilities for long-term monitoring and maintenance[99][100] - The company’s reserve for past and future government oversight costs and long-term monitoring and maintenance totaled $14.4 million as of March 31, 2023[103] - The escrow account balance as of March 31, 2023, was $8.9 million, which is included in "Other assets" on the balance sheet[102] - The company anticipates that oversight costs will decline as activities at the site transition from remediation to long-term monitoring and maintenance[102] Stock and Compensation - The balance of restricted stock units (RSUs) increased to 2,542,378 as of March 31, 2023, from 1,650,152 at the beginning of the year[45] - Share-based compensation expense for Q1 2023 was $931,000, slightly up from $909,000 in Q1 2022, an increase of 2.4%[19] - The company granted 1,190,206 Restricted Stock Units (RSUs) and Performance Share Awards (PSAs) in Q1 2023, increasing the total balance of RSUs and PSAs to 2,542,378[45]