Glatfelter Corporation

Good day, and thank you for standing by. Welcome to GUTS Felter's Quarterly Earnings Release Conference Call. At this time, all participants' lines are in 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 0. I would now like to hand call over to your speaker today, Mr. Ramesh Shetigar. Please go ahead.

Thank you, Buena. Good morning and welcome to Gladfelter's 2021 Second Quarter Earnings Conference Call. This is Ramesh Shetigar, Vice President of Investor Relations and Corporate Treasurer. On the call today to present our second 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 risk and uncertainties. Our 2020 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 today. Gladfelter delivered positive overall results versus expectations, despite entering the quarter anticipating softer demand and market-related downtime associated with customer destocking for the air-laid segment. These outcomes were driven by a recovery in demand for tabletop products and strong performance from Mount Holly. Also, consistent with the execution of our ongoing transformation and growth strategy, We announced the pending acquisition of Jakob Holm, a leader in the nonwoven sector. I'll provide more details about this important acquisition throughout the call. As for second quarter results, we reported adjusted earnings per share of 18 cents and adjusted EBITDA of $28 million. Slide three of the investor deck provides the highlights for the quarter. Air-laid materials performed above expectations, driven by a rebound in the tabletop category, as in-person dining began to recover globally. Mount Holly contributed favorably to the quarterly results, following the team's excellent execution in closing the transaction, standing up a new integrated system, and restarting production and shipping, all within 48 hours after closing. We're excited for the ongoing opportunities we see with the addition of Mount Holly to the Gladfelter portfolio. While overall volume growth was healthy, we did experience lower than anticipated demand in hygiene products as customers continued to destock from elevated inventory levels maintained during the pandemic. We expect the buying patterns in this category to return to more normalized levels during the third quarter and positively impact segment profitability in the second half of the year. Composite fiber's results were below expectations as unfavorable mix and higher than anticipated energy prices negatively impacted profitability. And while shipping volume was up meaningfully, inflationary headwinds proved to be challenging for this segment. The pricing actions announced in the first quarter helped to address some of the raw material input cost pressures, but not enough to offset the higher than anticipated energy prices and logistics costs during the second quarter. we expect a more meaningful benefit from the price increases to take effect in the third quarter. At an enterprise level, our focus remains on the health and safety of Gladfelter people. Our efforts continue to keep all facilities operational, as they did in the quarter, while ensuring uninterrupted supply of essential products to our customers, despite the current evolving nature of the pandemic. It goes without saying that 2021 has been a momentous year thus far in executing Gladfelter's ongoing transformation and growth strategy. In May, we closed on the acquisition of Mount Holly, which has strategically positioned us to more fully benefit from the long-term growth in the health and hygiene category, while also being immediately accretive to earnings. And as I mentioned in my opening remarks, on July 22nd, we announced the acquisition of Jakob Holm, a global leading manufacturer of premium quality nonwovens, with an attractive platform to expand Gladfelter's scale, technologies, product portfolio, and global reach. I'll provide additional commentary on the Jakob Holm acquisition after Sam completes his review of our second quarter results. Sam?