Glatfelter (NYSE: GLT) today reported 2012 full year adjusted earnings per diluted share of $1.25 (GAAP $1.36) compared with $1.01 per diluted share in 2011 (GAAP $0.93). For the 2012 fourth quarter Glatfelter reported adjusted earnings of $11.2 million, or $0.26 per diluted share, compared with $14.2 million, or $0.32 per diluted share, in the 2011 fourth quarter. On a GAAP basis, fourth quarter 2012 net income totaled $7.0 million, or $0.16 per diluted share, compared with $9.7 million, or $0.22 per diluted share, in the fourth quarter of 2011. The fourth quarter 2012 results were adversely impacted by costs related to strategic initiatives and a trial in December for the Fox River matter, a higher tax rate, and the impact of weaker economic conditions in Europe, each in nearly equal proportions.
Consolidated net sales in the fourth quarter of 2012 totaled $391.4 million compared with $391.9 million in the fourth quarter of 2011, however unfavorable foreign currency translation of $3.8 million adversely impacted the comparison. On a constant currency basis, net sales were slightly higher.
“While 2012 was another successful year for Glatfelter and our shareholders, fourth quarter earnings were weaker than we expected due to higher professional services costs and taxes, as well as sluggish European markets. In particular, the Composite Fibers business unit was impacted by the persistently soft economic environment in Europe and customer inventory reductions,” said Dante C. Parrini, chairman and chief executive officer. “On a more positive note, we are very pleased with both the continued progress of our Advanced Airlaid Materials business, which grew quarterly operating profit by 30 percent, and by another solid quarter from Specialty Papers, where shipments increased nearly 7 percent and again outperformed the broader uncoated free sheet market.”
Parrini continued, “During 2012, we saw substantial profit increases of 17 percent for Specialty Papers and 34 percent for Advanced Airlaid Materials, which, when combined with the benefits from our debt refinancing and share repurchase programs, drove a 24 percent increase in adjusted earnings per share. We also generated substantial free cash flow of $77 million. As we look out into 2013, we believe that customer inventory reduction programs have largely run their course, which should have a positive impact on our Composite Fibers business. Although there remains continuing economic uncertainty and potential volatility, we believe we are well positioned to again deliver improved earnings and healthy free cash flow.”