Glatfelter Corporation

Good day and welcome to the Glatfelter's Q1 2024 Earnings Release Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Romesh Shedegar. Please go ahead.

Thank you, Ruth. Good morning and welcome to Glatfelter's 2024 First Quarter Earnings Conference Call. This is Romesh Shedegar, Senior Vice President, Chief Financial Officer, and Treasurer. On the call to present our first quarter results is Thomas Fahneman, President and Chief Executive Officer of Glatfelter, 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 2023 Form 10-K, which has been filed with the SEC, and today's earnings release 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 first quarter 2024 investor call. I'm pleased to report that the business produced solid but mixed results at the segment level as we continue to face industry-wide market headwinds and challenges from the volatile global economic environment, with Europe representing our most difficult market currently. We achieved adjusted EBITDA of $23.8 million for the quarter, or approximately $1 million lower than the same quarter last year. In relation to the proposed merger of Clubfelder with Berry Global's HHNF business, we reached a significant regulatory milestone with the expiration of the HSR waiting period. I will speak more to the work that is underway related to the proposed merger toward the end of today's call. Turning now to the highlights of Clubfelder's first quarter performance, The spun lace segment continues to gain momentum, having generated $5 million higher EBDA versus the first quarter of 2023. This performance was driven primarily by ongoing price-cost gap improvements, combined with approximately $2.4 million of operational efficiencies throughout our spun lace sites. In addition, we continue to hold pricing benefits for our branded Sontara products, and realized further gains in our Sulz, France facility following the site's 2023 restructuring. Also in Spunlace, I'm pleased to report that our Tennessee facility is fully operational following the tornado that swept through the community in December. I commend the team for their hard work and dedication to restoring operations while ensuring customer commitments were met during the recovery efforts. Transitioning to our composite fiber business, this segment continues to demonstrate a positive trajectory based on steps we have taken to maintain solid performance against the backdrop of a difficult European market. The composite fibers team delivered approximately 2 million higher EBITDA compared to the first quarter of 2023. This performance was achieved primarily through price cost gap improvements despite a nominal volume increase. Overall, composite fibers continues to be managed using a combination of carefully targeted pricing actions to effectively balance volumes, inventories, and operational uptime while mitigating volatile raw material and energy costs. Our most challenging segment in the first quarter was Airlade, as its European markets remained quite tenuous. The segment generated $9 million lower EBITDA with approximately $8 million of the decline attributed to the prolonged European market weakness, which resulted in lower shipments and production, along with adverse pricing dynamics. In addition, Airlight continues to experience growing competition from producers of related substrates. Despite the segment's dynamics, we are accelerating our efforts with new, innovative products that have the potential to address customers' ongoing demand for sustainable, plastic-free alternatives and new, creative applications using Club Zelda's Airlight materials. And I'm excited to share that we recently qualified a key customer for a brand new air-led solution with production targeted for Europe. Shipping volume for this application, when fully ramped up, has the potential to generate meaningful volume annually. Also, we recently shipped our first commercial plant-based caps to Blue Ocean Closures for use by a Swedish manufacturer of nutritional supplements. These innovation initiatives are part of our overall allied business strategy to reduce customer concentration in the segment. I will now turn the call over to Ramesh.