 Another record quarter for Airlaid Materials profitability All Glatfelter production facilities remain operational under extensive health and safety protocols YORK, Pa., Aug. 04, 2020 GLOBE NEWSWIRE -- Glatfelter NYSE: GLT, a leading global supplier of engineered materials, today reported its results for the second quarter of 2020 which are summarized in the following table: Three months ended June 30 2020 2019 In thousands, except per share Amount EPS Amount EPS Net income loss 2,416 0.05 5,831 0.13 Income loss from continuing operations 2,281 0.05 6,293 0.14 Adjusted earnings from continuing operations 9,897 0.22 8,452 0.19 On an adjusted basis, earnings from continuing operations for the three months ended June 30, 2020 and 2019, were 9.9 million, or 0.22 per share, compared with 8.5 million, or 0.19 per share, respectively. Adjusted earnings is a non-GAAP financial measure for which a reconciliation to the nearest GAAP-based measure is provided within this release. Consolidated net sales totaled 216.2 million and 235.1 million for the three months ended June 30, 2020 and 2019, respectively. On a constant currency basis, Composite Fibers and Airlaid Materials net sales decreased by 6.3 and 7.2, respectively.Glatfelters solid second quarter results, in the midst of a global pandemic, demonstrate the resiliency of our new business model and continued demand for our portfolio of engineered materials that are essential for producing a variety of consumer staples, said Dante C. Parrini, Chairman and Chief Executive Officer. Composite Fibers outperformed expectations for the quarter, due in part to strong shipments in the food and beverage category and better than expected demand for wallcover products. Profitability for this segment relative to guidance was also better than expected, driven by lower downtime and continued cost control.In Airlaid Materials, we saw exceptional growth in home care and health and hygiene products, although overall shipments for the segment were hampered by the pandemics impact on tabletop demand as restaurants around the globe were either closed or operating at dramatically reduced capacity. Despite this headwind on volumes, Airlaid Materials achieved record quarterly EBITDA with margin of 19.Mr. Parrini added, I am proud of how Glatfelter PEOPLE are responding to the challenges related to COVID-19 and are successfully continuing to operate globally while keeping our workforce safe. Glatfelters ongoing transformation into a more agile and cost-effective business, coupled with a portfolio of essential consumer staples, have enabled us to optimize performance in this unprecedented and volatile year. The trust and confidence of our customers have been further strengthened in these uncertain times by consistently and reliably delivering premium quality products. Due to the strength of our improved balance sheet, the Board demonstrated its commitment to a steady return of capital to shareholders by increasing the dividend in the second quarter.Second Quarter ResultsThe following table sets forth a reconciliation of results on a GAAP basis to an adjusted earnings basis, a non-GAAP measure: Three months ended June 30 2020 2019 In thousands, except per share Amount EPS Amount EPS Net income loss 2,416 0.05 5,831 0.13 Exclude: Loss from discontinued operations, net of tax 135 462 0.01 Income loss from continuing operations 2,281 0.05 6,293 0.14 Adjustments pre-tax Restructuring charge - Metallized operations 5,067 Cost optimization actions 1,349 1,984 Pension settlement expenses, net 6,330 COVID-19 incremental costs 1,180 Asset impairment charge 900 Strategic initiatives 142 Timberland sales and related costs 601 423 Total adjustments pre-tax 14,225 1,703 Income taxes 1 2,047 456 Total after-tax adjustments 12,178 0.27 2,159 0.05 Adjusted earnings from continuing operations 9,897 0.22 8,452 0.19 1 Tax effect on adjustments calculated based on the incremental effective tax rate of the jurisdiction in which each adjustment originated. The sum of individual per share amounts set forth above may not agree to adjusted earnings per share due to rounding.A description of each of the adjustments presented above is included later in this release.Composite Fibers Three months ended June 30 Dollars in thousands 2020 2019 Change Tons shipped metric 29,032 34,523 5,491 15.9 Net sales 122,137 132,581 10,444 7.9 Operating income 11,487 12,985 1,498 11.5 Operating margin 9.4 9.8 Composite Fibers net sales decreased 10.4 million or 7.9, compared to the year-ago quarter driven by lower shipments of wallcover products, which were down 49, as well as unfavorable foreign currency translation of 2.0 million.Composite Fibers operating income of 11.5 million was 1.5 million lower, or approximately 12 unfavorable, compared to the second quarter of 2019. Lower shipping volumes impacted results by 2.1 million driven predominantly by lower wallcover demand. The downtime required to manage inventory levels for nonwoven wallcover products was mostly offset by improved operations, strong cost control actions and higher production to meet strong demand in our food and beverage category. A benefit of 3.1 million from lower input prices, primarily wood pulp, was partially offset by 2.0 million impact from lower selling prices. Currency unfavorably impacted results by 0.2 million compared to the year-ago quarter.Airlaid Materials Three months ended June 30 Dollars in thousands 2020 2019 Change Tons shipped metric 33,277 34,041 764 2.2 Net sales 94,046 102,472 8,426 8.2 Operating income 12,292 10,362 1,930 18.6 Operating margin 13.1 10.1 Airlaid Materials net sales decreased 8.4 million in the year-over-year comparison. Shipments were lower by 2.2 due to weak demand for tabletop products as restaurants globally were closed or operated at dramatically limited capacity. This shortfall in demand was mostly offset by strong orders for home care and health and hygiene products. Selling prices were 4.6 million lower due to contractual cost pass-through arrangements, while currency translation was unfavorable by 1.1 million.Airlaid Materials second quarter 2020 operating income of 12.3 million was 1.9 million favorable, or approximately 19 higher, when compared to the second quarter of 2019. Improved sales mix favorably impacted results by 0.6 million, while price declines due to contractual raw material pass-through provisions were more than offset by lower raw material and energy prices, adding net 0.5 million of profit. Efficient operations complemented by disciplined cost control favorably impacted results by 0.9 million, driven by higher demand for essential product categories and improved performance in both North American facilities compared to the year-ago quarter.Other Financial InformationThe amount of Other and Unallocated operating expense in the table of Segment Financial Information totaled 14.7 million in the second quarter of 2020 compared with 8.2 million in the same period a year ago. Excluding the items identified to present adjusted earnings, unallocated expenses for the second quarter of 2020 increased 0.3 million compared to the second quarter of 2019.As previously reported in 2019, the Company terminated its qualified pension plan. During the second quarter of 2020, the Company recorded a 6.3 million charge for excise taxes, net of post settlement adjustments, in connection with the completion of the reversion of 55.5 million of excess pension plan assets. After transferring 14.1 million to a suspense account to fund future 401k contributions and accruing 8.3 million of excise taxes, approximately 33.1 million became available for general corporate purposes.During the second quarter of 2020, the Company recorded non-cash asset impairment charges of 0.9 million related to a trade name intangible asset acquired in connection with the 2013 Dresden wallcover acquisition. The charge was due to a change in the estimated fair value of the trade name, primarily driven by lower forecasted wallcover revenues associated with economic instability in Russia and Ukraine and incremental impacts from the COVID-19 pandemic on this business.In the second quarter of 2020, income from continuing operations totaled 0.3 million and income tax expense totaled 2.6 million. On adjusted pre-tax income of 14.5 million, income tax expense was 4.6 million in the second quarter of 2020. The comparable amounts in the same quarter of 2019 were 13.7 million and 5.2 million, respectively. The effective tax rate on adjusted earnings was 32 in the second quarter of 2020.Year-to-Date ResultsThe following table sets forth a reconciliation of results on a GAAP basis to an adjusted earnings basis, a non-GAAP measure: Six months ended June 30 2020 2019 In thousands, except per share Amount EPS Amount EPS Net income 4,990 0.11 11,117 0.25 Exclude: Income loss from discontinued operations, net of tax 135 0.01 221 Income from continuing operations 5,125 0.12 10,896 0. 