Glatfelter (GLT) Q2 2024 earnings summary

Executive summary

• Adjusted EBITDA reached $25.6 million in Q2 2024, up $8.3 million year-over-year, driven by improved profitability in Composite Fibers and Spunlace, and lower corporate costs.

• Net loss from continuing operations narrowed to $15.8 million in Q2 2024, or ($0.35) per share, compared to $36.6 million, or ($0.82) per share, in Q2 2023.

• Adjusted free cash flow improved by approximately $43 million year-over-year, mainly due to lower working capital usage.

• All required antitrust and IRS approvals for the merger with Berry Global's HHNF business have been obtained, with closing expected in the second half of 2024 and only shareholder approval pending.

• Settlement of a legal dispute related to the former Specialty Papers business will result in a $6.5 million gain in Q3 2024.

Financial highlights

• Q2 2024 net sales were $329.4 million, down from $357.0 million in Q2 2023, mainly due to lower selling prices and volumes in Airlaid Materials and Composite Fibers.

• Adjusted operating income rose to $11.7 million from $3.4 million year-over-year.

• Adjusted EBITDA margin improved to 7.8% from 4.8% year-over-year.

• Free cash flow turned positive at $7.2 million, compared to negative $30.3 million last year.

• Adjusted EPS for Q2 2024 was ($0.25), improved from ($0.45) in Q2 2023.

Outlook and guidance

• The merger with Berry’s HHNF business is expected to close in the second half of 2024, creating a leading specialty materials company with Berry shareholders owning 90% of the combined entity.

• Full-year adjusted EBITDA guidance reaffirmed at $110–$120 million, likely at the lower end.

• Capital expenditures for 2024 are projected at $30–$35 million.

• Management expects to meet near- and long-term cash needs through operating cash flow, cash on hand, and available credit.

• Working capital expected to be favorable in the second half, with Q4 typically the strongest for cash flow.