Glatfelter net income up 40%, sanitary wipe shipments up 6%

by Michael Tilley ([email protected]) 302 views 

Shipments of products like those made at the Glatfelter plant in Fort Smith were up 6% year-over-year as the demand by consumers for sanitizing wipes grew amid the COVID-19 pandemic, according to the first quarter earnings report from the York, Pa.-based company.

Glatfelter reported Tuesday (May 5) that first quarter net income was $7.406 million, better than the $5.286 million during the same quarter of 2019. Revenue in the quarter was $231.56 million, just ahead of the $229.133 million in the first quarter of 2019.

“Although a decline in global economic activity is projected, demand for most of Glatfelter’s products remains strong. We are on very solid footing from a liquidity and leverage perspective following the successful cost optimization initiatives and debt refinancing completed in 2019. With a stable and defensible product portfolio, leaner cost structure, and more agile and efficient operating model, Glatfelter remains deeply committed to supporting its customers and maintaining industry-leading positions even in these uncertain times,” Dante Parrini, chairman and CEO, noted in the report.

The company’s airlaid segment, with which the Fort Smith plant belongs, posted first quarter sales of $98.849 million, down from the $100.416 million in the same quarter of 2019. Operating income in the sector was $12.022 million, up 19.7% from the $10.038 million in the first quarter of 2019. Airlaid material use includes baby wipes and sanitary wipes.

“In Airlaid Materials, shipments were up approximately 6% year-over-year, driven by robust demand for table top, home care and wipes products. This growth, coupled with solid operations, enabled Airlaid Materials to deliver a nearly 20% improvement in operating income and quarterly records for profitability and margins,” the company noted in the report.

Sales in the company’s composite sector was $132.711 million, up from $128.717 million, in the same quarter of 2019. Operating income in the sector was $15.102 million, up from $11.349 million in the 2019 quarter.

“We are well-positioned to supply our customers high-quality engineered materials necessary to manufacture a variety of consumer staples, including wipes, health and hygiene products, and food and beverage items during this challenging time,” Parrini said.

Glatfelter acquired in March 2016 what was then the empty 232,000-square-foot Mitsubishi building at Chaffee Crossing. The company invested $90 million to transform the facility into a specialty materials production plant that employed around 65 when it opened in June 2018. The largest customers for products made in Fort Smith include Walmart and Rockline Industries.

The first quarter income gain follows a healthy 2019. The company posted net income of $33.15 million in 2019, well ahead of the $9.198 million in 2018. Full year revenue in 2019 was $927.673 million, up 7.08% from the $866.286 million in 2018.

Glatfelter is a global manufacturer of fiber-based engineered materials used in coffee filters, baby wipes, adult diapers, feminine hygiene products and a wide range of other products. The company’s annualized net sales approximate $925 million with customers in more than 100 countries and approximately 2,600 employees worldwide. Operations include 11 manufacturing facilities in the United States, Canada, Germany, France, the United Kingdom and the Philippines.

Glatfelter shares (NYSE: GLT) closed Wednesday at $13.96, down $1.33. During the past 52 weeks the share price has ranged between $19.03 and $9.44.

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