Glatfelter Reports Operating Results (10-Q)

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Aug 06, 2010
Glatfelter (GLT, Financial) filed Quarterly Report for the period ended 2010-06-30.

Glatfelter has a market cap of $532.9 million; its shares were traded at around $11.64 with a P/E ratio of 19.7 and P/S ratio of 0.4. The dividend yield of Glatfelter stocks is 3%. Glatfelter had an annual average earning growth of 0.3% over the past 10 years.GLT is in the portfolios of Third Avenue Management, Paul Tudor Jones of The Tudor Group.

Highlight of Business Operations:

Overview Our reported results of operations for the first six months of 2010 when compared with the same period of 2009 are lower primarily due to the benefit in 2009 from alternative fuel mixture credits totaling $30.4 million, after-tax. Our results for the first six months of 2010 also reflect an aggregate of $10.0 million, after-tax, of acquisition and integration costs, together with a loss on forward foreign currency contracts that hedged the Canadian dollar purchase price, of the February 12, 2010 acquisition of Concert Industries Corp. (Concert).

The above items reduced earnings by $10.0 million, or $0.22 per diluted share, in first six months of 2010 and increased earnings by $30.4 million, or $0.67 per diluted share, in the first half of 2009.

In the Specialty Papers business unit, net sales for the first half of 2010 increased $32.4 million, or 8.4%, to $416.4 million. The increase was primarily due to higher volumes shipped. Higher average selling prices favorably impacted net sales by $2.9 million in the period-over-period comparison.

In Composite Fibers, net sales for the first six months of 2010 were $203.5 million, an increase of $16.9 million, or 9.1%, from the same period of 2009. The improvement in Composite Fibers net sales reflects strengthening demand in each of its product lines. On a constant currency basis, average selling prices were lower by $1.1 million, and the translation of foreign currencies favorably affected net sales by approximately $0.3 million.

Selling, general and administrative (SG&A) expenses totaled $63.6 million, a $12.6 million increase primarily due to acquisition and integration related costs associated with the Concert transaction. For the remainder of 2010, integration costs are expected to approximate $1.0 million.

Income taxes For the first six months of 2010, we recorded a provision for income taxes of $0.8 million on $0.6 million of pretax income. The comparable amounts in the same period of 2009 were income tax expense of $11.4 million on $42.8 million of pretax income. The lower tax provision in 2010 was primarily due to $13.8 million of acquisition and integration costs incurred in the first half of 2010. There were no such costs in the same period of 2009. The higher tax provision in 2009 was primarily due to the $40.8 million of alternative fuel mixture credit earned in that period.

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