Glatfelter (US:GLT)2023-05-04 20:06Financial 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]