Glatfelter Corporation

Good day and welcome to the Glatfelder's Q3 2023 Earnings Release Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Ramesh Shedegar. Please go ahead, sir.

Thank you, Lisa. Good morning and welcome to Glatfelder's 2023 Third Quarter Earnings Conference Call. This is Ramesh Shedegar, Senior Vice President, Chief Financial Officer and Treasurer. On the call to present our third quarter results is Thomas Fahneman, President and Chief Executive Officer of Gladfelter, 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 2022 Form 10-K filed with the SEC and today's release are available on our website and 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 Thomas.

Thank you, Ramesh. Hello, everyone, and welcome to Gladfelder's third quarter conference call for 2023. I'm pleased to begin today's call by sharing that our third quarter results improved over the second quarter. Our team took very concerted actions to address the one-time operational issues that occurred during the previous quarter, which contributed to our improved results in the third quarter. Overall, we posted adjusted EBITDA of $25.5 million for this quarter, reflecting a strong sequential recovery as our turnaround strategy continues to deliver benefits and improved earnings through operational efficiencies and organizational rightsizing. Equally important, our enterprise EBITDA margin profile is trending in a positive direction, with a third-quarter margin achieving the highest level in the past eight quarters. Our third-quarter performance also benefited from the accelerated sale of Oberschmitten which allowed us to mitigate the site's previously anticipated future losses and drag on our overall performance. And most notably, our segments performed well overall with composite fibers posting sequential EBITDA gains, air-laid materials achieving sequential volume growth, and spun lace delivering operational improvements and disciplined cost control. These outcomes were a direct result of important key turnaround initiatives such as completing the broad reorganization of our Sulz, France facility, improving our Asheville, North Carolina operation, and expanding the commercial resources dedicated to increasing the profitability of our Santara business. While I continue to be quite pleased with the team's ability to deliver these important achievements, we cannot minimize the ongoing negative impacts from the difficult market conditions that have been plaguing our industry and Gladfelder's business throughout all of 2023. The unsettled geopolitical situation created by the Russia, Ukraine, and Middle East conflicts continue to wreak havoc on the global economy, including overall consumer confidence, energy stability, raw material pricing, and labor inflation. For these reasons, we are lowering our annual EBITDA guidance by $10 million. This change reflects the downward pressure from the prevailing headwinds we continue to experience and anticipate for the foreseeable future. When we last issued guidance, we previously believed that market conditions and customer destocking would improve beginning with the third quarter based on market insights available at that time. However, these improvements have been slower to materialize than originally anticipated. Despite this environment, we remain confident in the fundamentals of our business and our ability to deliver ongoing improvements that will position our business to capture the benefits from an improved market in due time. I will now turn the call over to Ramesh.