Feb 16, 2007. /Lesprom Network/. Glatfelter reported on February 15 net sales of $268.6 million for the fourth quarter ended December 31, 2006, compared with $143.2 million for the fourth quarter of 2005. Net income for the 2006 fourth quarter was $15.0 million, or $0.33 per diluted share, compared with $26.9 million, or $0.61 per diluted share, for the prior year period. The 2006 results include the impact of the company’s Lydney and Chillicothe acquisitions, which were completed in March and April of 2006, respectively. Fourth-quarter 2006 net income includes $8.0 million in gains from the dispositions of the company’s timberlands, shutdown and restructuring charges of $1.2 million, and acquisition integration costs of $1.8 million, all after taxes. Net income for the previous year’s fourth quarter included $11.5 million of timberland gains, $11.3 million of insurance recoveries and $1.0 million of restructuring charges, all on an after-tax basis. Excluding these items from each period’s results, adjusted earnings per share, which constitute a non-GAAP financial measure, increased 83% to $0.22 per diluted share for the 2006 fourth quarter, compared with $0.12 per diluted share for the prior-year period. “Our fourth quarter results demonstrate the continued favorable performance of our legacy businesses and the actions we are taking to drive strong returns throughout the company. Our results benefited from improved pricing conditions and solid operating performance in the specialty papers business unit, and from increased demand and profitability in our composite fibers business unit,” said George H. Glatfelter II, chairman and chief executive officer. “We have made progress in integrating the Chillicothe facilities as evidenced by an 11% increase in production in the fourth quarter compared to the third quarter and we will maintain our focus on further improving these operations in the coming year. In December 2006, the company received unconditional regulatory clearance from the European Commission of our Lydney mill acquisition. We will be aggressively integrating this operation into the composite fibers business unit in the upcoming quarters to ensure that we realize the full benefits of this transaction.” Full-year results Net sales for 2006 were $986.4 million, up from $579.1 million a year earlier. The company reported a net loss of $12.2 million, or $0.27 per diluted share in 2006, compared with net income of $38.6 million, or $0.87 per diluted share in 2005. The 2006 full year results include, all on an after-tax basis, shutdown and restructuring charges of $35.2 million, acquisition integration costs of $8.6 million and a debt redemption premium of $1.8 million. Insurance recoveries and gains on the company’s dispositions of timberlands aggregated $8.9 million, after-tax. The reported results for the full year 2005 include after tax gains totaling $24.0 million from insurance recoveries and the sale of timberlands, as well as restructuring charges totaling $1.0 million after-tax. Excluding these items, adjusted earnings, which is a non-GAAP measure, increased 57% to $0.55 per diluted share for 2006, compared with $0.35 per diluted share for the prior year. For the specialty papers business unit, 2006 net sales increased to $693.7 million and operating income was $19.0 million, compared with $380.9 million and $10.5 million, respectively, for the previous year. Net sales for composite fibers were $292.8 million for 2006 and operating income was $17.5 million, compared with $198.1 million and $10.7 million, respectively, for 2005. Outlook “Our achievements in 2006 and the favorable pricing environment support our optimism for continued success in 2007,” Mr. Glatfelter continued. “With the integration of Chillicothe progressing and the Lydney transaction cleared, I am confident that we are on the right path to long-term profitable growth for our company and our shareholders.” For the first half of 2007, the company expects a stable pricing environment in both specialty papers and composite fibers. In addition, shipping volumes are expected to improve somewhat from the seasonally slower fourth quarter. In the second quarter, the company will complete annually scheduled maintenance outages at both its Spring Grove and Chillicothe facilities, with an estimated $0.22 to $0.24 per share impact. In the first half of 2007, Lydney and Chillicothe acquisition integration costs are estimated to total approximately $3.0 million to $4.0 million. The Chillicothe acquisition is expected to be $0.45 per share to $0.50 per share accretive in 2007 and the Lydney mill is expected to add, on an annual basis beginning in the fourth quarter of 2007, approximately $9 million of operating income, including $2 million of depreciation and amortization. Headquartered in York, Pennsylvania, Glatfelter is a global manufacturer of specialty papers and engineered products. U.S. operations include facilities in Spring Grove, Pennsylvania, and Chillicothe and Fremont, Ohio. International operations include facilities in Germany, France, the United Kingdom and the Philippines and a representative office in China. Glatfelter’s common stock is traded on the New York Stock Exchange.