Glatfelter Reports Operating Results (10-Q)

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Nov 09, 2010
Glatfelter (GLT, Financial) filed Quarterly Report for the period ended 2010-09-30.

Glatfelter has a market cap of $577.8 million; its shares were traded at around $12.61 with a P/E ratio of 14 and P/S ratio of 0.5. The dividend yield of Glatfelter stocks is 2.9%. Glatfelter had an annual average earning growth of 0.3% over the past 10 years.GLT is in the portfolios of Third Avenue Management, Donald Smith of Donald Smith & Co., Donald Smith of Donald Smith & Co., Paul Tudor Jones of The Tudor Group, Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

Our reported results of operations for the first nine months of 2010 when compared with the same period of 2009 are lower primarily due to the amount of tax-related credits recorded in each period associated with cellulosic or alternative fuel mixtures. For the first nine months of 2010 net income included $23.1 million benefit from cellulosic biofuel credits compared to $63.3 million alternative fuel mixture credits for the first nine months of 2009.

In addition, our 2010 year to date results include an aggregate of $10.4 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 Concert acquisition. The loss on the hedged purchase price was $3.4 million, net of realized currency translation gains, and is presented under the caption Other-net in the accompanying condensed consolidated statements of income for the nine months ended September 30, 2010.

The above items increased earnings by $12.7 million, or $0.28 per diluted share, in first nine months of 2010 and increased earnings by $63.3 million, or $1.38 per diluted share, in the first nine months of 2009.

In the Specialty Papers business unit, net sales for the first nine months of 2010 increased $38.2 million, or 6.4%, to $633.8 million. The increase was primarily due to higher volumes shipped and a $15.3 million benefit from higher selling prices.

In Composite Fibers, net sales for the first nine months of 2010 were $307.2 million, an increase of $20.0 million, or 6.9%, from the same period of 2009. The improvement reflects strengthening demand in each of its product lines as volumes shipped increased 12.9%. On a constant currency basis, average selling prices were lower by $2.0 million, and the translation of foreign currencies unfavorably affected net sales by approximately $8.3 million.

Lower raw material and energy costs, primarily natural gas, favorably affected this business units profitability by $4.0 million. In addition, improving market conditions and business development increased production volumes eliminating market-driven down time. On a net basis, Composite Fibers operating profit increased $10.0 million, or 67.6%, in the period-to-period comparison.

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