Glatfelter Corporation

Good day and welcome to the Gladfelters Quarterly Earnings Release Conference Call. Today's conference is being recorded. At this time, I'd like to turn the call over to Mr. Ramesh, your speaker for today. Please go ahead, sir.

Thank you for those. Good morning and welcome to Gladfelters 2022 Second Quarter Earnings Conference Call. This is Ramesh Shedegar, Senior Vice President, CFO, and Corporate Treasurer. On the call to present our second quarter results is Dante Perini, Gladfelter's Chairman and CEO, 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.

Thank you, Ramesh. Good morning, and thank you for joining us today. In the second quarter, Glatfelter reported adjusted EBITDA of $27.2 million, which exceeded our expectations at the enterprise level. Our results were driven by strong performances in our air-laid materials and composite fiber segments, and were partly offset by weaker-than-expected earnings in our recently acquired spun-lace segment. Despite the ongoing challenges of raw material inflation, rising energy prices, and supply chain disruptions, we made important progress in closing the cost-price gap. As we headed into Q2, we were focused on a short list of imperatives critical to improving overall performance and delivering the quarter, which included actions to migrate more composite fibers customers to a cost pass-through mechanism to offset raw material and energy inflation, achieve meaningful progress in the integration and financial performance in our new spun lace segment, and execute a complex capital project in the air-laid segment designed to improve quality and increase throughput. As reflected in our second quarter results, we made visible and meaningful progress against these initiatives in air-laid materials and composite fibers, but candidly fell quite short in spun lace. In composite fibers, we have now converted 50% of our revenue base to a dynamic cost pass-through mechanism well ahead of our year-end goal. This important initiative, combined with other pricing actions and energy surcharges, enabled the segment to make significant progress toward mitigating the impacts of continuing inflation. On the air-laid materials side, we fully offset incremental inflation for the quarter due to the effectiveness of our existing cost pass-through mechanisms and energy surcharges. A favorable product mix was generated by higher shipments of colored tabletop and hygiene products. And we executed the planned capital project in Falkenhagen ahead of schedule and below budget. In Spunlace, even though we made important progress on the integration cost reduction efforts, the segment was not able to return to profitability, which was our expectation for the quarter. This shortfall was largely due to escalating raw material and energy inflation that far outpaced our pricing actions, and lower volume driven by supply chain disruptions and some labor constraints at one of our U.S. sites. thereby limiting production and shipments. During my closing remarks, I will speak more to the additional actions being taken to improve the spun lace segment. Now I'll turn the call over to Ramesh to provide more details on our second quarter results. Ramesh? Thank you, Dante.