Glatfelter Corporation

Ladies and gentlemen, thank you for standing by and welcome to the Glab Selfers third quarter 2020 earnings release conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded If you require any further assistance, please press star zero. I would now like to hand the conference over to Ramesh Shatigar. Thank you. Please go ahead.

Thank you, Jerome. Good morning, and welcome to Gladfelter's 2020 Third Quarter Earnings Conference Call. This is Ramesh Shatigar, Vice President of Investor Relations and Corporate Treasurer. On the call today to present our third quarter results are Dante Perini, Gladfelter's Chairman and Chief Executive Officer, and Sam Hillard, Senior Vice President and Chief Financial Officer. Before we begin our presentation, I have a few standard reminders. During our call this morning, we will use the term adjusted earnings as well as other non-GAAP financial measures. A reconciliation of these financial measures to our GAAP-based results is included in today's earnings release and in the investor slides. We will also make forward-looking statements today that are subject to risks and uncertainties. Our 2019 Form 10-K filed with the SEC and today's release, both of which are available on our website, disclose factors that could cause our actual results to differ materially from these forward-looking statements. These statements speak only as of today, and we undertake no obligation to update them. I will now turn the call over to Dante.

Thank you, Ramesh. Good morning and thank you for joining us. In the third quarter, Glidefelter continued its track record of delivering results that meet or exceed expectations as both segments safely produced and shipped high-quality engineered materials amid a volatile environment created by the pandemic. We generated better than expected adjusted EBITDA of $29 million and adjusted earnings per share of 16 cents, which was in line with expectations. Airline Materials posted another record quarter by achieving adjusted EBITDA of $18.6 million, boosted by a stronger Euro and favorable product mix. Profitability was better than expected as shipments grew 4% versus the prior quarter, driven by an improvement in tabletop products in Europe and healthy demand for hygiene-related products. Composite fiber shipments increased 21% on a sequential quarter basis, driven by a recovery in wall cover products after a severe contraction in the second quarter due to the pandemic. At the start of the third quarter, we began to see demand gradually return in this discretionary category, which remained stable throughout the quarter. However, profitability in this segment was unfavorably impacted by manufacturing downtime taken to manage inventory levels, reduce labor costs, and optimize cash flow. At an enterprise level, we maintained our focus on keeping Gladfelter people safe while ensuring uninterrupted supply of essential products to our customers. Consistent and solid execution, coupled with strong earnings, resulted in year-to-date adjusted free cash flow improvement of $7 million and net leverage of 2.4 times at quarter end. From a governance standpoint, we recently elected Darrell Hackett to our Board of Directors. Darrell brings to Gladfelter deep financial acumen, capital markets expertise, and a wealth of experience from his various leadership roles at Bank of Montreal, and his tenure in management consulting at McKinsey & Company. We look forward to his contributions in guiding the strategic direction of the company. Also, concurrent with our recent name change to Gladfelter Corporation, we completed the relocation of our corporate headquarters to Charlotte, North Carolina, with the opening of our new corporate office. At this point, I'll turn the call over to Sam to give an in-depth review of our third quarter results. I will then provide closing remarks before opening the call for questions.