Glatfelter to cut expenses following recent sale
Glatfelter intends to eliminate between $14 million and $16 million in corporate expenses by the end of 2019, including a potential cut to its workforce.
The York-based company said in its third quarter earnings report that it wants to bring down costs on the corporate side of the business following the sale of its largest division and a decision to focus on engineered materials.
Early in November,Glatfelter closed on a sale of its specialty papers division to New York investment firm Lindsay Goldberg. Glatfelter CEO and Chairman Dante Parrini said the sale was a part of plan to focus on globalizing the engineered materials portion of the business.
"We’ve taken meaningful steps to evolve Glatfelter from a United States focused paper business to a global leading player in engineered materials," Parrini said.
Glatfelter's engineered products include airlaid non-woven fabrics used in hygiene and personal care products, home care and food packaging, and composite fibers for products like tea bags and coffee filters.
Glatfelter posted a $705,000 loss from continuing operations in the third quarter of 2018. In a statement, Parrini said Glatfelter will begin to cut costs from continuing operations now that it has finished the sale of the specialty papers business, its largest unit by sales volume.
CFO John Jacunski said in a conference call with investors and analysts that the cuts will come from a variety of places.
"It ranges from professional services, office costs and, of course, personnel," Jacunski said.
Glatfelter did not provide additional details as of press time.
Glatfelter reported that sales for its composite fiber products were $139 million in the third quarter of 2018, down from $142 million for the same period in 2018.
Parrini said that the company felt a number of outside pressures that caused the loss.
"From an earnings perspective, the third quarter was challenging," he said. "n particular composite fibers is being handicapped by the escalation of raw material prices."
For the fourth quarter, Parrini said Glatfelter increased the price of its composite fiber products by 7 percent to offset inflation.
Glatfelter saw an increase in sales for its advanced airlaid materials, rising to $70 million for the third quarter of 2018, up from $67 million for the year-ago period.
As an outcome of the sale of its specialty papers division, Glatfelter recorded a one-time impairment charge of $97.5 million, which led to a net loss of about $95 million in the third quarter.