On a year-over-year basis, Specialty Papers segment’s net sales increased $3.3 million, or 1.5%, primarily due to a 3.4% increase in shipping volumes.
Specialty Papers’ 1Q operating income totaled $18.3 million, which was $5.4 million lower than the same quarter of 2012. As expected, operating income was adversely impacted by lower average selling prices, and higher maintenance spending and other cost inflation.
Composite Fibers segment’s net sales totaled $111.8 million in the 1Q 2013, essentially unchanged from the same quarter a year ago, on slightly lower shipping volumes. Lower average selling prices adversely affected the comparison to the year-earlier quarter by $0.9 million and foreign currency translation favorably affected the comparison by $0.4 million.
1Q 2013 operating income increased $0.7 million, or 6.6%, primarily due to lower depreciation expense and improved operating efficiencies. In addition, operating income was adversely impacted by approximately $0.7 million due to downtime associated with the rebuild of a machine at the Gernsbach facility. Foreign currency translation unfavorably impacted operating income by $0.5 million compared with the prior-year quarter.
“We had a solid start to 2013 with our Composite Fibers business improving dramatically from the weakness experienced during the fourth quarter, and our Advanced Airlaid Materials business generating a 7% increase in revenue compared to the year ago quarter,” said Dante C. Parrini, chairman and CEO. “This led to improved operating profit for these businesses totaling 9% in the year over year comparison and allowed us to generate results that were generally in-line with our expectations. As expected, operating profit from Specialty Papers declined due to lower selling prices and operating cost inflation. In addition, our results benefited from a favorable tax rate.”
Mr. Parrini continued, “I believe the growth we have generated in our Composite Fibers and Advanced Airlaid Materials businesses is sustainable and that we can continue to build on our market success. I also believe our Specialty Papers business can continue to outperform the broader uncoated free sheet market. This should allow us to generate improved earnings and solid cash flows in 2013. I am also excited about the opportunity we have to accelerate our growth with the addition of Dresden Papier to our portfolio of growing fiber-based materials businesses.”
Glatfelter is a global manufacturer of specialty papers and fiber-based engineered materials, offering over a century of experience, technical expertise and world-class service. U.S. operations include facilities in Spring Grove, PA and Chillicothe and Fremont, OH. International operations include facilities in Canada, Germany, France, the United Kingdom and the Philippines, a representative office in China and a sales and distribution office in Russia.