Glatfelter Corporation

Good day and thank you for standing by. Welcome to the Gradfelter's Quarterly Earnings 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 0. I will now hand the conference over to your first speaker today, Ramesh Shedegar from Glatfelter. Sir, you may begin.

Thank you, Peter. Good morning and welcome to Glatfelter's 2022 First Quarter Earnings Conference Call. This is Ramesh Shedegar, Vice President of ESG, Investor Relations, and Corporate Treasurer. On the call today to present our first quarter results are Dante Perini, Glatfelter's Chairman and Chief Executive Officer, Sam Hillard, Senior Vice President and Chief Financial Officer, and myself. 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 2021 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.

Good morning, and thank you for joining us today. Vladfelter has experienced a challenging start to the year, stemming from the Russia-Ukraine military conflict. and the various impacts this conflict is having on our business, including the unprecedented escalation of energy prices in Europe and severe sanctions instituted by the United States, G7, and EU, impacting both the financial system and commercial activities in the region. While energy price inflation was partially reflected in our guidance for the first quarter, the breakout of the conflict exacerbated this headwind and introduced new geopolitical complexities. The Russia-Ukraine military conflict, which began in February, and its associated implications resulted in non-cash asset and goodwill impairment charges taken in the first quarter within our composite fiber segment. Despite the significant impact of these external factors, we continue to forge ahead to mitigate their effects and focus on the most critical areas within our span of control. Along these lines, we made meaningful progress on two high-priority initiatives. converting more customers to cost pass-through models, primarily for the composite fiber segment, and improving the performance of the newly acquired spun lace segment, where we expect this business to return to profitability in the second quarter. Slide three of the investor deck provides the key highlights for the first quarter. We reported a loss of $23 million and an adjusted earnings per share loss of 14 cents. Composite fiber's results were lower than expectations driven by continued escalation of energy, raw materials, and logistics costs, as well as lower shipments of wall cover products. On a more positive note, by the end of the first quarter, we had converted 35% of our revenue base to a cost pass-through model and are tracking well toward achieving our previously announced goal of 50% conversion for the year. We also implemented price increases and energy surcharges for many other customers. Air-laid materials demand was strong for the quarter, with legacy volume up 22%, driven by growth in tabletop, hygiene, and home care products. And Mount Holly contributed incremental revenue of $27 million over the prior year quarter. Our investments in building this business over time into a high-performing industry leader have been exciting and rewarding. Our spun lace segment results were above expectations, driven by better than projected demand generation. Input costs and energy prices continued to impact profitability as we were unable to fully recover these costs through selling price increases and energy surcharges. We are turning the corner with this business as we continue to deliver strong customer orders and expect our intensive to significantly improve profitability in the second quarter. While our net leverage increased in the first quarter, we were compliant with all financial covenants. However, in response to the current economic and geopolitical environment, driven in large part by the conflict between Russia and Ukraine, we recently began working with our bank group to amend our debt covenant framework to ensure we have sufficient financial flexibility for the future. I will now turn the call over to Sam and Ramesh to provide more details on our first quarter results.