Nov 03, 2006. /Lesprom Network/. Glatfelter reported on November 2 net sales of $277.5 million for the third quarter ended September 30, 2006, compared with $146.8 million for the third quarter of 2005. Net income for the 2006 third quarter was $5.4 million, or $0.12 per diluted share, up 46.5% from $3.7 million, or $0.08 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. Third-quarter 2006 net income includes shutdown and restructuring charges of $1.9 million, acquisition integration costs of $3.6 million along with $0.3 million in gains on dispositions of timberlands, all after taxes. Net income for the previous year’s third quarter included $0.3 million of tax expense related to previous dispositions of timberlands. Excluding these items from each period’s results, adjusted earnings per share, which constitute a non-GAAP financial measure, increased 156% to $0.23 per diluted share for the 2006 third quarter, compared with $0.09 per diluted share for the prior-year period. For a reconciliation of adjusted earnings to GAAP earnings, see the tabular presentation at the end of this release. “We are pleased with the results from our legacy operations, especially the composite fibers business unit which saw substantial volume improvements. Within the specialty paper business unit, our Chillicothe operation did not generate the level of earnings that we had expected. While we are disappointed in the performance of this facility, we are confident the Chillicothe acquisition will create meaningful long-term value for shareholders. We are intensely focusing our efforts at this facility on an operations improvement plan to achieve productivity and yields that are in line with our long-term targets. As previously announced, our Lydney acquisition is in a phase II review by the European Commission, and therefore, we have not progressed with our planned integration initiatives on this front.” said George H. Glatfelter II, chairman and chief executive officer. Outlook “We continue to proceed with our strategy to improve our legacy business, grow our business through the successful integration of acquisitions, and maximize the value of our timberland assets,” Mr. Glatfelter said. “Chillicothe plays an important role in that strategy and we are confident that we are on the right path for long-term profitable growth for our company. We are determined to overcome the short-term challenges we have experienced with our acquisitions to gain the synergies expected.” For the fourth quarter of 2006 and into 2007, the company expects a stable pricing environment in both specialty papers and composite fibers. Downtime is expected to be higher in the fourth quarter during the holiday period compared to the third quarter, but consistent with levels experienced in the fourth quarter of 2005. Shipping volumes are expected to be lower in the fourth quarter compared to the third quarter due to seasonality. Based on its revised estimates, the company expects the Chillicothe acquisition to be neutral to slightly accretive for full-year 2006, and $0.45 to $0.50 accretive in 2007. In the fourth quarter of 2006, the company expects to incur pre-tax integration and shutdown charges aggregating approximately $2 million. In 2007, integration costs are estimated to total $2.0 million. 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.